Virtue Signaling Or A Game- Changer?

Yesterday, Amazon announced the purchase of the rights to rename Seattle’s Key Arena (which will host Seattle’s NHL Team and WNBA’s Seattle Storm) as the Climate Pledge arena. In making this announcement, Jeff Bezos noted that “instead of naming the arena after Amazon, we’re calling it Climate Pledge Arena as a regular reminder of the importance of fighting climate change.”

In September 2019, Amazon “co-founded” the Climate Pledge with the objective to meet the Paris climate targets of zero net emissions by 2040, ten years ahead of schedule. In recent weeks, companies such as Verizon, Infosys, and Reckitt Benckiser have joined the Pledge.

The arena renaming announcement comes at an interesting time. Early this week, Amazon released its 2020 Sustainability Report, where it noted a 15% increase in emissions since last year. Moreover, Amazon is getting bad press on COVID-19 and the firing of some employees affiliated with Amazon Employees for Climate Justice.

But giving Amazon the benefit of the doubt, we should ask whether this renaming exercise will change policy and behaviors. Will it tear down the barriers to climate action?

Barriers to Climate Mitigation

The modern industrial economy relies on the availability of cheap fossil fuels. Not surprisingly, climate mitigation faces several challenges. Actors believe climate policies will increase energy and transportation bills and kill jobs. Further, these costs are immediate while their climate benefits come in the long term. Finally, individuals resist pro-climate behavioral changes because they believe that their actions will not make a difference in solving such a massive global problem.

Renaming the Key Arena might address these challenges in two ways. First, it could enhance the policy salience of climate issues. This could be important because climate change competes for policy attention with other societal challenges, including COVID-19. Because renaming the Key Arena has a shock value, it could refocus the media spotlight on climate change, which in turn could motivate pro-climate action.

Second, given Amazon’s prestige, the renaming could become a template for other corporations to adopt similar policies to create everyday reminders—in buildings, arenas, prizes, and events—about the climate crisis.

We suspect renaming did generate some media interest, but probably not in the way Amazon wanted. Of course, if Amazon had called it the “Green New Deal Arena,” the renaming would have truly shocked everybody! This would have showed that Amazon believes in drastic climate action. But Climate Pledge Arena is a bit unexciting, to put it mildly.

The climate challenge is about translating issue salience into public policy, business choices, and individual behavioral changes. Amazon could really help here. Not by arena renaming but by becoming the leader in “deep decarbonization,” as we discuss below.

What would Deep Decarbonization for Amazon Look Like?

In a previous commentary, we suggested that if Amazon is really serious about climate change, it should do two things. First, it should stop helping fossil fuel companies to drill and extract oil and gas. Second, it should insist on the best and measurable climate outcomes from its suppliers. 

It is not clear how Amazon is deploying the tremendous leverage it has over its supply chain for climate action. A recent article in The Atlantic  noted: “To sell through the site is to be subjected to a system of discipline and punishment. Amazon effectively dictates the number of items that a seller can place in a box, and the size of the boxes it will handle. (To adhere to Amazon’s stringent requirements, a pet-food company recently reduced its packaging by 34 percent).” Given this sort of leverage, imagine the climate progress that could be achieved if Amazon imposed stringent climate requirements on all firms in its value chain.

To conclude, we welcome any action that reinforces the climate message. Yet, symbolic acts might provide Amazon the cover to not address deeper and more substantive climate issues. As it stands now, renaming the Key Arena is coming across as virtue signaling, “conspicuous but essentially useless action ostensibly to support a good cause but actually to show off how much more moral you are than everybody.” It would be a shame if the Climate Pledge gets used as a PR tool to deflect from the lack of adequate progress Amazon is making on the climate front.