Amazon isn’t a name most clients expect to see in ESG investment portfolios, and for good reason. From warehouse conditions to union disputes, it’s long been a frequent source of controversy in sustainable investing discussions.
But recently, some ESG fund managers have revisited the stock, pointing to progress in areas like renewable energy, small business support and workforce engagement. Their argument: given Amazon’s huge scale, even incremental ESG improvements can drive meaningful environmental and social impact.
For instance, Amazon Web Services (AWS) allows companies to reduce reliance on energy-intensive infrastructure, helping lower carbon emissions. It’s also the world’s largest corporate buyer of renewable energy – a title it’s held for five consecutive years.
Socially, the third-party marketplace supports thousands of small businesses, with many generating significant revenue and employment through the platform.
Workforce practices, of course, remain under scrutiny, and criticism is far from quietening. However, some sustainable investment managers argue that the company is taking measurable steps forward - increasing wages and upskilling programmes and addressing human rights issues in its supply chain.
This isn’t an ESG endorsement – but it does show how some ESG fund managers are taking a more pragmatic, engagement-led approach to ESG investing.
A prompt for deeper client conversations
Examples like Amazon can help advisers talk about ESG in a practical, relatable way - offering a gateway to client conversations:
- How do your clients define sustainability in practice?
- Should ESG strategies prioritise progress over purity?
- Is active engagement more impactful than exclusion?
If clients are surprised by companies they see in their portfolios, it can be a valuable opportunity to explore what ESG means to them, and how that aligns with their broader investment goals and values.
Where our solutions stand
For advisers, examples like Amazon can be a useful way to open up practical conversations about ESG: how clients define it, where their priorities lie, and how different strategies approach the balance between ethical values and long-term returns.
That’s why it’s important to know how Parmenion ESG solutions are constructed. Amazon is currently held in small amounts in some of our ESG Growth portfolios, specifically Responsible Growth and Sustainable Growth, where fund managers take an engagement-led approach to responsible investing. There’s a smaller exposure in Ethical Growth, which applies more selective screening. Screened Growth and Passive ESG Growth have no exposure, reflecting stricter exclusions and index-based construction.
As ever, ESG isn’t black and white. But conversations like these can help bring clarity to a complex area, and confidence to your client recommendations.
Want to hear more?
Sign up to our fortnightly 'Adviser Insight' newsletter for expert insights - scroll down and use the 'Sign up' button below to receive our updates.
This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity. Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.
