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Amazon faces activism, rising tide of ‘environmental justice’

ESG increasingly includes environmental treatment of minority groups

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Clarified June 11 | Amazon and other large companies are under pressure to reevaluate business operations that critics say concentrate pollution in communities of color, an issue gaining focus on the national stage under the Biden administration.

Environmental justice, a social movement that focuses on equality in the distribution of environmental benefits and burdens, is emerging as a corporate sustainability issue. Share-owning employees at Seattle-based Amazon have organized around it and are taking their case to fellow investors focused on environment, social and governance issues.

“The conversations about climate justice impacts on vulnerable communities are at a fever pitch that they haven’t been before,” said Stacey Sublett Halliday, a lawyer at Washington, D.C., firm Beveridge & Diamond, who advises companies on social responsibility. “These conversations are starting to intertwine in ways that can result in a combination of reporting obligations that bring [environmental justice] into the mix.”

Halliday, who worked at the EPA during the Obama administration, said in an interview that federal and state attention to environmental justice along with activism after the police killed George Floyd in Minneapolis last year can no longer be ignored.

The White House created an environmental justice advisory council, which issued a report recommending against nuclear energy and carbon capture projects due in part to their impact on disadvantaged communities. An executive order signed by President Joe Biden on May 20 directed officials to incorporate environmental mitigation in such communities when setting government climate-related financial risk strategy.

The Securities and Exchange Commission is collecting feedback on climate-related reporting and is expected to create rules. A bill that would direct the SEC to mandate disclosure of ESG metrics is slated for a House floor vote next week.

Halliday said that in response to pressure, companies are exploring ways to incorporate environmental justice into ESG programs, checking their risk levels, releasing public policies on the issue and making charitable donations.

The increased focus on environmental justice as an ESG issue could mean new buy-in for shareholder activism on the issue.

Susan Baker, director of shareholder advocacy at ESG-focused Trillium Asset Management, said in an interview that there’s more interest in companies’ decisions regarding where they operate following Black Lives Matters protests and attention from the Biden administration.

She said shareholder support has shifted since early measures submitted by Trillium, which oversees $2.8 billion in assets, asked companies to consider their impacts on communities. That includes an effort around facilities in Louisiana’s “cancer alley,” where a high concentration of petrochemical plants has been linked to cancer cases in Black and poor communities.

“Investors are playing a larger role and supporting some of these efforts when they didn’t a decade plus ago,” Baker said.

Environmental justice activists have opposed toxic waste sites and landfills in communities of color and poorer areas. They’ve also objected to the placement of facilities that increase air pollution or, in the case of petrochemical plants, have been linked to high rates of cancer and other diseases in surrounding communities.

“If we don’t address all of the things that got us here, then we’re just going to end up in the same place,” Maren Costa, a user experience designer and early member of Amazon Employees for Climate Justice, or AECJ, an organization of workers pressing the company to take action on the environment, said in an interview. “Because of the systems in place, we have been able to dump our pollution on to certain communities: Black and brown, low-income, Global South. That’s the only way that we’ve gotten into this situation in the first place.”

More than jobs

Amazon’s choices on where to build facilities, which the company once touted for bringing jobs to these areas, is now generating opposition from employees and community activists. The company announced its 14th fulfillment center in California’s Inland Empire in 2018, saying the move would bring 1,000 more jobs to the area where Amazon pays workers a $15 per hour minimum wage. The company is reportedly the largest private employer in the region east of Los Angeles.

Critics are not asking Amazon to move the facilities, but to make changes so that pollutants aren’t entering the air. Vehicle emissions from freight trucks like those constantly entering and leaving the centers are associated with asthma and other respiratory illnesses. Amazon also represents a large footprint for cargo shipping at the Inland Empire’s airport in Ontario.

The region is more diverse than California as a whole. Half or more of residents in the counties that make up the Inland Empire — parts of San Bernardino and Riverside — are Hispanic or Latino, according to the U.S. Census Bureau, compared to about 39 percent of the state at large.

The EPA’s Toxic Release Inventory tool shows that in San Bernardino County, which accounts for the majority of the Inland Empire, facilities releasing toxic chemicals are clustered in areas where at least half of the population consists of people of color and, often, where the majority of households have incomes less than twice the federal poverty level. Amazon’s warehouses are often located near those of other big retailers like Walmart.

Investors are also bringing the issue to other companies. Trillium asked Marathon Petroleum Corp. about ties between executive pay and community impacts in 2020, a request aimed at highlighting a refinery near a predominantly Black community in the Detroit area that local residents say exposed them to harmful chemicals.

The companies are responding. Amazon is building solar panels on top of warehouses and electrifying its delivery vehicle fleet, steps that could improve air quality around its facilities.

Employee activists

Costa worked at Amazon for over 15 years before the company fired her last year along with Emily Cunningham. The pair helped found and lead AECJ. In response to a complaint, the National Labor Relations Board recently determined that Amazon illegally retaliated against them.

This determination will lead to a hearing during which both sides will present their case before a ruling is made.

“We disagree with these preliminary findings,” company spokesperson Angie Quennell said in a statement to CQ Roll Call. “We support every employee’s right to criticize their employer’s working conditions, but that does not come with blanket immunity against our internal policies, all of which are lawful. We terminated these employees not for the reasons cited in the preliminary finding, but because they repeatedly violated internal policies.”

From the start, AECJ leveraged shareholder proposals for its cause thanks to stock Amazon included in compensation to employees. While workers have used shareholder meetings to raise labor rights issues before, Amazon employees’ use of requests to confront their bosses on greenhouse gas emissions and pollution in communities of color remains unique.

The group’s first shareholder proposal in 2019 sought information on Amazon’s plans to address climate change and won 31 percent backing. Last year, AECJ highlighted environmental racism with a request on reducing environmental and health harms to communities of color from Amazon’s fulfillment and shipping operations. It received 6.1 percent support.

This year, a broader item asked for an audit of Amazon’s impact on racial equity and civil rights. It found 44 percent approval, a high tally for a first-time proposal and considering founder, chairman and CEO Jeff Bezos’ 14 percent ownership. It cited the location of fulfillment and distribution warehouses in communities of color.

Similar audit proposals have received high tallies at other large companies this year, though Amazon’s had a clear connection to environmental concerns.

Amazon declined an interview for this report. Corporate sustainability spokesperson Luis Davila said in a statement to CQ Roll Call that Amazon has committed to have a net-zero carbon footprint by 2040, will deploy 100,000 electric delivery vehicles by the end of the decade that will reduce local air pollution, is installing solar rooftops, including 10 systems in the Inland Empire, and is investing in off-site renewable energy and carbon storage projects.

“We are committed to finding innovative solutions to reduce emissions and are transforming our transportation network with investments that help us deliver packages more sustainably to support the communities where we operate,” Davila said.

AECJ members say Amazon is risking its brand and ability to compete for tech talent in a tight market, outcomes that could eventually hit its bottom line. Amazon has profited from fast shipping times and the pandemic-fueled rise in online shopping.

Costa, who now works as a designer for Microsoft, remains involved with AECJ and will retain enough Amazon stock to keep submitting ballot proposals. She said she’s selling most of her other shares to make her investments more “green.”

This report has been clarified to reflect that the National Labor Relations Board procedure is ongoing.

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