We will see market corrections on fossil fuel evaluations, that's coming. @AlexSteffen relayed 14 world banks are saying this is a serious, imminent risk.
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Underscore: NONE OF THE RISKS AND TRANSITION COSTS GET BETTER FOR AMAZON BY DELAYING ACTION. There’s no business case argument for delay, if we assume Amazon is going to have to change—and it will. Delaying only increases risk, cost, and vulnerability. 23/
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On the flip side, many parts of transitioning can be made profitable with a broad accounting of the true costs and benefits of transitioning quickly. Clean energy can be profitable. Definitely not expensive even with a company that has a lot of high energy systems. 24/
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Except for planes. But other transportation— EV cars, trucks, etc lead to operational savings.
@RockyMtnInst has done a lot of work into the many ways companies can save while decarbonizing. 25/Show this thread -
What are the maximum risks Amazon has that investors need to know? Shareholders need transparency on climate stress tests. This kind of mechanism is a big thing being used in Europe right now. 26/
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In Europe, climate stress tests mostly dive into holdings and assets. Ex: "If there were to be a sudden adjustment—a carbon bubble—would you still be a solvent bank if all fossil fuel companies lost 40% of their value?" But Amazon shareholders need more stresses tested. 27/
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Amazon shareholders and investors need strategic assessment of valuation: —If there were a carbon bubble and a market adjustment —If a serious carbon tax was imposed —If there were a 20 point shift in public opinion on the climate issue 28/
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Again: CLIMATE IS A FUNDAMENTAL, STRATEGIC DRIVER OF AMAZON'S RISKS AND OPPORTUNITIES. This is an emerging awareness, but now that we understand, we have to act. We must also do these climate stress tests to understand it more clearly. 29/
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An added benefit of acknowledging that climate is a fundamental driver of risks and opportunities: it puts pressure on related industries to acknowledge the same thing. This is happening with real estate investments. 30/
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Real estate investor institutions are having to acknowledge that climate change is a major risk, because someone else has already said it. 2017 saw close to $300B in damages for the real estate industry. The more people admit risk, the more everyone has to. 31/
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Considering all of this, Amazon Board's recommendation “AGAINST” the climate change resolution seems... ridiculous and extremely short sighted. 32/
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Their first sentence in explaining their recommendation against the climate resolution says they agree with the "importance of planning for potential disruptions posed by climate change and on reducing our dependence on fossil fuels" 33/ https://www.sec.gov/Archives/edgar/data/1018724/000119312519102995/d667736ddef14a.htm …
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But then they follow that sentence saying, "We have a history of commitment to sustainability, through innovative programs such as Frustration Free Packaging..." Really, you're going to lead with... packaging? 34/
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There's clearly a ways to go for Amazon to understand climate as a strategic driver for the business in terms of the very real, near, and significant risks it poses, and also the opportunities it offers. Investors want transparency wrt these risks and opportunities. 35/
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Before I end, I again want to thank
@AlexSteffen for taking the time to chat and share his thinking with me, which this entire thread is based on. /finShow this thread
End of conversation
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