What and how big are these risks? Investors need transparency on Amazon's risk assessment and management plans.
Amazon may not be a fossil fuel company, but that doesn't mean it's safe from the inevitable carbon bubble and a large-scale market correction.
Let's unpack (1) and (2) as it relates to Amazon, shall we?
If Amazon is identified as being attached to & dependent on fossil fuels, they will also suffer though not as much. Let's say 5% of a correction cost. That’s a TON of money.
Sure, energy may get cheaper, but there're political changes that might implement charges, fees, carbon taxes, etc which can happen faster than an unprepared company can respond to.
Other expenses that don't get cheaper: the cost to buy expertise.
What are the competitive disadvantages risks? What are Amazon’s financial risks and transition costs compared to its competitors if it comes to this late in the game?
Shareholders need transparency on climate stress tests. This kind of mechanism is a big thing being used in Europe right now.
But Amazon shareholders need more stresses tested.
—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
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.
Investors want transparency wrt these risks and opportunities.