Digital sustainability and the 2040 corporate pledge

Transcript

Lisa McNally: Every company in the world is going to face pressures to understand their carbon footprint, and there is no blueprint or off-the-shelf solution for any business to decarbonize what they do. Amazon made the ambitious pledge to achieve net-zero carbon emissions by 2040. What is AWS learning on its sustainability journey and how are they helping partners to achieve these goals in a complex sustainability world? Welcome to Pragmatism in Practice, a podcast from Thoughtworks, where we share stories of practical approaches to becoming a modern digital business. I'm Lisa McNally, head of Clean Tech and Sustainability at Thoughtworks.

Recently, at the AWS re:Invent conference, Thoughtworks sponsored Code Green, a sustainability data hackathon and workshop where attendees could Code Green to build solutions that empower a sustainable future. Afterwards, I had a chance to sit with Adrian Cockcroft, VP of Sustainability Architecture at Amazon, live at the conference. Listen ahead as he shares more about the pledge, learnings and challenges, and ways companies are embracing the commitment to sustainability.

Hi, Adrian. Thank you so much for taking the time to talk with us. We had so much fun yesterday at the hackathon. It's a real pleasure to be able to talk with you a little bit about AWS and your sustainability efforts. The first question I want to ask you is where is AWS in its sustainability journey? Can you share a little bit about your sustainability goals?

[00:01:36] Adrian Cockcroft: Amazon's sustainability goals were set quite a few years ago. We've got a team that was formed reporting to Kara Hurst as VP of sustainability who I now report to, and the team really looks at sustainability across the whole spectrum. There's, obviously, carbon and decarbonizing all of Amazon. There's circular economy, recycling and limiting single-use materials and things like that. There's social responsibility about our supply chain, and all of the different things we have going on there. Amazon is a huge company. How do we get all the different pieces of Amazon to act in a more sustainable way that's appropriate to them?

As you might imagine, solving that for AWS is a little bit different to solving that for Whole Foods, or the device business, or the retail side. They will have their own goals and their own approaches. The central sustainability team works across all of the different pieces of Amazon to establish the right goals, get everything aligned, and then work on all the programs we can put together to get those goals met. What we announced a couple of years ago is the climate pledge. A lot of you have probably heard about the Paris Agreement for 2050, for net-zero.

That's a good start but we want to do something more more aggressive than that. We decided that a 2040 commitment was a good place to go. We've been working with an organization called Global Optimism, and Amazon came together, announced this. So now we have over 200 companies signed up for the climate pledge, many large brand names.

It adds up to a good proportion of the world's carbon footprint, several percent of that footprint, and it's growing pretty rapidly as a commitment. A 2040 commitment means you have to accelerate your program to get there 10 years earlier. It's a lot of work to do that, and it includes science based targets, regular reporting. That's basically the program that we're on with Amazon right now.

[00:03:49] Lisa: AWS and ThoughtWorks have been partnering over the years, and especially that partnership really came together yesterday during the Code Green Hackathon. I'd love to hear a little bit more about how you see AWS working with your various partners especially when it comes to addressing many of the sustainability challenges our various customers are having today.

[00:04:15] Adrian: The need for sustainability is very custom right now. This is an emerging area and nobody has an off the shelf solution. There's a lot of customization. Because of that we are working with many partners including ThoughtWorks to figure out what do you need for this particular industry? Even if you're trying to do carbon accounting across a business, for example, parts of it are common but you you're interfacing to all the different internal systems. You tend to get an extremely customized space as soon as you start trying to do end-to-end carbon accounting, just an example.

Then as we try to decarbonize the product lines that the organizations have, obviously, there's a huge variation. If you're SaaS provider, most of your carbon footprint may actually be the computing that you have data center or on AWS. If you're working in the physical world most of your carbon footprint will be the energy used to move the atoms around is the way of thinking about it, and there's a lot of things that are extremely specific. If you're in finance there's very different rules and regulations and think standards to conform to, than if you're in other areas, if you're in public sector.

It's an extremely broad and confusing space, but one of the things to think about is that the way that the government regulations are going, really every company in the world is going to have to have an answer to what is their carbon footprint. Then they're going to get pressures from their supply chain and from regulations to decarbonize whatever it is they do. It's basically every company in the world and it's gradually merging. The regulations are more advanced in Europe than they are in the US and the rest of the world.

We're seeing this coming and many companies now are doing it voluntarily, and they're starting to get standards forming. Whenever there's this custom work that needs doing, we're looking at partners to get to do it. We're doing a lot of work with professional services, and our pro-serve team is doing a lot of really interesting work in this space.

They're actually working on internal Amazon projects, and what they're learning from that they're taking out to the customer base. The pro-serve builds things and generally doesn't operate them. Who are we handing this off to? In many cases that's actually a partner that will do the ongoing development once we bootstrap the project. That's the different ways that we've been working with partners in this space.

[00:06:51] Lisa: What are some of the challenges that your customers are coming to AWS to get help on?

[00:06:59] Adrian: One of the challenges is really understanding what your carbon footprint is, and there's three parts to that. What is the fuel you use, that's relatively easy to figure out. The electricity supply, again, relatively easy to figure out. When it gets to the scope three, it's called the supply chain, it's just so hard to understand that there's different rules for different industries. First, you have to understand that and just looking at some customers, like when you look at the climate pledge, we have a number of airlines in the climate pledge who've committed to our 2040 goal. We have, obviously a Prime Air in there since they're part of Amazon, but also JetBlue and Alaska.

I was talking to another airline, they said, "That's crazy. Sustainable jet fuel couldn't possibly be economic in 2040." So the challenge is, if you can lean into this and say, "Well, we're going to make it economic by 2040." Collectively, if we all just say we are going to buy sustainable air-fuel then the suppliers will figure out how to make more of it. You can't just take the way the economists say predict this is what the price of carbon is going to be in 20 years time, this is what the cost of materials is going to be in 20 years time. You're basically trying to guess what the world will look like in 20 to 30 years.

Alan Kay once said, "The best way to predict the future is to invent it." What we're trying to do is invent the future that meets these needs. There's this organization that was announced at the COP26 meeting by John Kerry, called the First Movers Coalition and Amazon's a member of this. It's to decarbonize the really difficult sectors like concrete, steel, shipping, jet fuel. We've got Airbus and Boeing and a bunch of airlines have joined this [unintelligible 00:08:56] shipping. We need to be able to ship stuff by air or by sea by 2040 with net zero carbon.

What it means is everyone's going to gather together and say, "We're going to need to buy this much sustainable air-fuel." The suppliers can have a much stronger understanding that they can go and convert the factories and plants that build this stuff to create the supply that we need. If you're just waiting for the demand to appear, and we're waiting for the supply to appear, it's that deadly embrace where no one gets there. We're trying to break that by setting up this consortium that says as a coalition we are going to say, "Well, there is going to be demand so you better start supplying it." That's the challenge really to move things.

Most of the reasons people can't get into the climate pledge is they just actually don't have enough confidence to say, "What does it mean to have a 2040 commitment?" Some of the people that we've helped there are like, "Well, AWS is partnering with you with maybe a bunch of other partners and suppliers to say, 'We together can find a path,'" that lets your CEO say, "Okay, we're just going to put a stake in the sand and say we're going to do our best effort to get there," and that we have help to get there. You're not just doing it on your own. We're doing it as a group. I think that's really the challenges that I think that we're helping address with the climate pledge as a group that are being the innovators and leaders in getting 10 years early. That offsets all the people that are going to be late, hopefully.

[00:10:40] Lisa: Given everything you were just talking about are around sustainability, in what ways does responsible tech come into the conversation? When you start thinking through social impact, responsible tech, sustainability solutions, what are some of the ways that we should as technology companies be bringing in those various ways of thinking through impact, and how we solve these problems for our customers? Where does responsible tech play into the equation?

[00:11:11] Adrian: One of the things I've been working on for the last decade or so is digital transformation. The way I talk about digital transformation my definition of it is, well, the internet happened and now you're connected to your customers. You have to deal with that and optimize for it. Netflix is an example of a TV station that's been digitally transformed because most TV stations didn't really know who was watching TV. Netflix knows what you're watching and can build some things you watch. I was at Netflix a decade ago and we moved to cloud so we could move faster. We connected to our customers, we did personalization, we did extremely rapid agile development.

Along the way, things like microservices, DevOps, chaos engineering, all these things came out which are now lots of people talking about those. I spent many years explaining these things to people. After a decade of this, I figured everyone should have figured out. I don't need to be telling people what Netflix did a decade ago anymore. What I saw emerging was this need for sustainability transformation which is you're using this agility which you got driven to figure out because the pace of development was so fast in digital transformation.

But we're refocusing it on decarbonizing your-- The building and operating of whatever product it is that your company produces. Sustainability transformation, I think, is the new emerging, interesting area that I am personally trying to understand, develop, find the leaders in, find the patterns that work, and then tell those stories so that other people can find the paths to get there. That's part of why the climate pledge is interesting. Those are the companies who have figured out a path, and then it's the people that want to do climate pledge, but can't see a path to get there that I'm interested in talking to and finding out. How do we find that path and who are you following?

What's the most relevant sort of example for your industry that we can find to decarbonize? We're doing a talk at re:Invent with Starbucks. There's just interesting, fascinating insights that they have, like most of their carbon footprint is from milk. [laughs] If you want to help Starbucks decarbonize, use oat milk. Specify use oat milk instead of real milk for your lattes or whatever. There's things like that. You'd think it would be something else, but looking at the raw materials, your sense of proportion tends to be wrong until you do the math and figure out really, where is all the carbon going? You have to go through this process of doing a first approximation.

Roughly, where is the carbon going almost by doing it in dollars first. Where are you spending your money? How is that affecting your carbon? Then you find the big area there and you focus in. You do a much more process-based model where you start understanding the processes in your business. What is the carbon footprint of that? Finally, you get down to something looks more like an IoT problem, where you're optimizing the activity of a specific building or a room in a building or turning lights off because there's no one in there, or optimizing the truck that's delivering your Amazon packages at the behavior of that truck rather than the overall behavior of the fleet.

This kind of very detailed IoT thing, suddenly now you've got a flood of data that you're trying to do and you're back into personalization. It starts looking very much like the digital transformation thing. We're connected. You know where that delivery truck is while it's on the way to you bringing that parcel you ordered yesterday. That kind of thing means that we can start optimizing the carbon footprint of all of these behaviors and really understand the detail. These things are coming together, digital transformation, and we're using them for sustainability.

[00:15:07] Lisa: That mental mindset makes me think of another way of really thinking about the culture at an organization and really building sustainability into that culture from the ground up early on even if we don't have all of the solutions as we go into that work. It's critical that we get in front of that work today and really start to address really hard challenges, especially in the scope three domain because that's where we expect to see the biggest impact, especially for our technology customers.

Can you talk a little bit more about infrastructure, reducing emissions from data centers specifically, and how that plays into some of the broader work that AWS is looking to do when we talk through supply chain and really trying to bring a comprehensive solution to the sustainability goals that you all are driving towards?

[00:16:04] Adrian: The impact of data centers is a few percent of the carbon footprint globally. Now, if you are a software company or a SaaS provider, it's really a 100% of your business, which is why we need to solve for it. Buildings is 40% of the carbon footprint globally. I think it's something 25% of building them and 15% operating them. Numbers are something like that. Everyone has buildings. Most of your carbon footprint may actually be in the buildings that you occupy, and then figuring out how do you renovate them using low carbon concrete and steel? How do you operate them efficiently to reduce the carbon? We're doing things like the climate pledge arena near Seattle.

It's an ice hockey rink. They're using collected rain water for the ice. There's no gas supply to the building anymore. Our professional services team has actually been working with them to build a carbon tracking calculator. Those are the things where everybody has buildings. We need to solve for buildings. That is a much larger proportion than the electricity usage and the data center usage for many organizations. The sense of proportion has to be right. It's no good focusing on something that's just a few percent of your footprint when you are ignoring something that's much bigger. Sometimes making a small difference to the big footprint is bigger.

Some of the low carbon concrete is only 5%, less carbon or 10% less carbon, but it's such a big footprint that that 5%, 10% is better than 100% reduction somewhere else in terms of where you're investing your time. One of the things I've been working on is trying to understand the new mental models that you have to understand, like how all this fits together and as developers and operators and builders at AWS, how are the products that our company builds, how do all these things tie in and relate? Until you've developed the mental model, you'll start optimizing the wrong way. That's something I've been learning very intensively over the last year or so as I've been moved to a sustainability role, and I'm trying to write up and communicate what are these mental models people need to understand?

[00:18:27] Lisa: We had a brilliant team of builders yesterday contribute and participate in the Code Green Hackathon, and I'd really love to get your thoughts on what you were most excited about at the hackathon, and what were you wanting to see come out of that hackathon yesterday?

[00:18:46] Adrian: I was very happy to see the Code Green Hackathon on Monday of re:Invent, and we had a great set of teams in there working and huge thanks to ThoughtWorks for sponsoring it. It was built around accessing climate data from both the Amazon sustainability data initiative and the Amazon data exchange services that we have. The sustainability data initiative actually reports into me.

When I moved into that organization, my new role at Amazon is actually to be part of the bridge between the central sustainability team and the AWS organization, and this is a service which bridges those two organizations. We have a real climate scientist running it, and she reports to me and she's been building out ASDI for the last few years with help from a team on the AWS side who have been running the open data program for a number of years, which includes data beyond climate data for this. We have the subset of that. STI is a huge amount of data. Think about all the satellite data.

There were so many more satellites going up and they're providing data. It's being dumped into some computer somewhere. What we found was that NASA and organizations like that were ready to share that data, but what we did, if we put it in an S3 bucket, the bucket is owned by the organization. NASA owns a bucket, they put Landsat data in there or whatever it is. We zero out the cost of that bucket to NASA, that's the program. We make the data free for them to share as long as it's publicly shareable to the world. Now we have the reference data, the actual original raw data, and various processed forms of it sitting on AWS in a bucket where it's free for everybody to use.

That's the way the program works. If you have free data, you can offer it up, and with a little bit of like, do you really own the data and promise to keep it up to date? That's the agreement, and then we zero out the cost for you for sharing that with the world. Then we have the data exchange program which is a marketplace for data, which is commercially offered data. Some of it's free, some of it's at cost, so there's a number of different models there.

We brought all this together and we provided those as the baselines for the hackathon for people to build things on top of. We saw a whole pile of interesting ideas about what could be done joining this data. Joining data sets that have never seen each other before is always the interesting and problem and cleaning things up. It's always 80% of the work in data science, is just massaging the data before you finally get the result you want. We saw some good projects there. We're judging them and we'll be announcing the winners, hopefully, soon.

[00:21:36] Lisa: Adrian, thank you so much for sharing your time and you're thinking around sustainability, your thought leadership and I and ThoughtWorks look forward to continuing to partner with AWS and continuing to work with you on this journey towards bringing sustainability solutions to our customers. Thank you so much for your time.

[00:21:54] Adrian: Well, thanks, Lisa. It's been a great conversation and really appreciate your support for re:Invent and the Code Green Hackathon and look forward to working together with you and the ThoughtWorks team in the future.

[00:22:07] :Thanks for listening. If you are an ambitious company interested in signing the pledge, visit sustainability.aboutamazon.com. Tune back into Pragmatism in Practice for more stories on becoming a modern digital business at thoughtworks.com\podcast.