Amazon and EIT Climate-KIC Offer Financial Boost to Sustainable Startups

This announcement is for UK and EU startups who are building physical products with ecological impact in mind.

Amazon has recently reported that sales of Climate Pledge Friendly items in the UK and EU have doubled in January 2022 (versus the same month last year), a strong indication of growing demand for sustainable products. And if this trend continues, it can only mean one thing: more and more buyers seeking out goods with eco-friendly packaging and reduced carbon footprints.

So, to provide customers with more sustainable products, Amazon has teamed up with EIT Climate-KIC (the European Institute of Innovation and Technology Climate Knowledge and Innovation Community) to help eco-minded startups scale fast by offering them a short-term growth program and £30,000 in grants and credits.

Amazon Launchpad Sustainability Accelerator

This startup accelerator offers 12 weeks of expert-led training and mentorship along with a bespoke curriculum to help early-stage companies face the challenges of starting and growing a sustainable business.

Selected startups will also use the Climate Impact Forecast tool to measure and improve their environmental impact. Additionally, they will be given an opportunity to network with other like-minded founders, as well as access to office space in Amazon’s headquarters in London.

Financial Boost

Aside from the 12-week growth program, selected startups will also receive:

• $25,000 worth of AWS business support credits
• £10,000/€12,000 equity-free grant
• £5,000/€6,000 sponsored advertising credits to help boost revenue
• Free account management for 12 months

They may also benefit from their products being featured on the Amazon Launchpad storefront.

How to Apply

Sustainable startups who meet the following key eligibility requirements are encouraged to apply:

• Stage: Early-stage companies
• Product: Eco-friendly physical products that are beyond the prototyping stage
• Location: UK, Switzerland, or Economic European Area (European countries, including Iceland, Norway, and Liechtenstein)
• Themes: Amazon is looking to work with startups who can help make it easier for customers to find and purchase sustainable products. Examples include reusable everyday items, environmentally-friendly gadgets, sustainable apparel, recycled and upcycled materials/products, and more.

Click here to start your application.

Why Is Amazon Adamant in Pushing Climate Pledge Initiatives?

The move to launch a 12-week sustainable startup growth program with EIT Climate-KIC may be Amazon’s attempt to improve their climate change strategy to continue positioning themselves as a climate leader. During the launch of The Climate Pledge in 2019, founder Jeff Bezos said: “​​We want to use our scale and our scope to lead the way,”, framing Amazon as a role model for sustainable development.

However, a 2022 study by the New Climate Institute, a group that evaluates the integrity and transparency of companies’ climate pledges, showed that Amazon’s climate initiatives lack transparency and many of their reports of climate progress have been unsubstantiated. Reveal News’s Center for Investigative Reporting also reported that the company is undercounting their carbon footprint.

If that’s the case, the eComm giant is likely failing to meet its own targets on reducing carbon emissions – they hope to reach net-zero carbon (achieving the balance between the amount of greenhouse gas emitted and the amount eliminated from the atmosphere) by 2040.

So, perhaps, one way to improve their environmental impact is by enticing more sustainable startups to join Amazon through growth programs and monetary grants. This move will allow them to expand their catalog of Climate Pledge Friendly items and attract more eco-minded consumers while trying to reduce their carbon footprint.

Why Should You Apply for Amazon’s Sustainability Accelerator?

1.  Receive Expert-Led Training and £30,000 in Grants and Credits

It’s no secret that it can be costly for small businesses to build new green products or switch to green. This is why Amazon and EIT Climate-KIC have included financial incentives and expert guidance.

When measuring your company’s carbon footprint, you have to look at the carbon that goes into making your products (using a lot of energy, water, or petroleum generates considerable amounts of greenhouse gasses) and the emissions that will end up in the planet’s atmosphere when people use and throw them away (e.g., products that consume a lot of power to run and are non-recyclable are less sustainable).

So, in most cases, big investments in green technology (e.g., developing recyclable and renewable raw materials for your inventory) are needed to minimize overall environmental damage. This is also why green products are usually more expensive, but the good news is that…

2.  Consumers Will Pay Premium for Eco-Friendly Products 

More than a third of consumers from around the world are willing to pay more for sustainable products and services, according to a recent study. People are starting to actively seek out these kinds of products because they’ve become more aware of the state of the environment through social media and video blogs.

For instance, #climateemergency, a stream of content that educates people about the devastating impacts of global warming and frames the environment’s poor condition as a global issue that affects all of us, has got many American adults spending more time thinking about the climate crisis than they did before the pandemic. This also motivates them to buy from stores that are actively minimizing their environmental impact.

Simply put, a growing awareness about climate change combined with a desire to take action on environmental issues is heavily influencing consumers’ buying decisions.

If you’re thinking about building a new sustainable product or switching your business to green, now is the time to do it.

But if you’re concerned about the costs, and you’re just planning to sell on Amazon anyway, you can start by simply reducing your product packaging.

Amazon’s Compact by Design

Compact by Design is Amazon’s own Climate Pledge Friendly certification program. It aims to identify (or badge up) products with less packaging. For example, reducing excess air from snack pouches can create smaller unit dimensions, making them more efficient to ship. Resizing your product packaging can help reduce product size and weight, resulting in more efficient shipments and, thus, lower carbon emissions.

Note: Those that qualify for Compact by Design will receive a “Climate Pledge Friendly” badge and will appear in Amazon’s dedicated sustainable products page, making it easy for customers to shop sustainably. Read Is Amazon Climate Pledge Certification Worth It For Sellers to learn more.

Smaller Unit Weight and Dimensions Can Lead to Lower FBA Fulfillment Fees

Effective March 31, 2022, Amazon FBA fee changes will apply to UK, France, Italy, Germany, Spain, Sweden, Netherlands, and Poland stores.

Part of this fee change involves subjecting small oversize, standard oversize, and large oversize products to dimensional weight pricing, aka DIM weight pricing. Amazon will use the greater of the unit weight or DIM weight of your oversize product to determine your fulfillment costs. If the dimensional weight is greater than the unit weight of the item, then the DIM weight is utilized to calculate the price.

The downside of that is being charged based on DIM weight can lead to a significant price increase for some sellers. A few sellers in our community have reported an increase in fees by over $1 per unit.

Check out the table below to see the upcoming size and weight tier changes. Also, scroll down this page to see the updated fees.

To reduce or avoid DIM weight fees, shrink your product packaging and boxes as much as possible. Talk with your supplier and 3PL to figure out a way to optimize your packages, including carton and pallet load capacity. Optimizing your carton and pallet efficiency can help to cut per unit costs to help offset any added fees you may now be paying due to DIM weight fees.

With dimensional weight pricing, the bulkier your packaging, the more you end up paying in shipping and storage fees. Therefore, it’s crucial to reduce your package sizes and cost per unit wherever possible.

Related: New FBA Fee Calculator With Dimensional Weight Factor

Final Thoughts

Overall, going green creates both opportunities and challenges for businesses. But as consumers start to change their lifestyles to fight climate change, and as Amazon stays committed to going net-zero carbon by 2040, companies who’ll answer the people’s call for sustainability transformation will be able to protect their long-term success and profitability.

Related: Is Amazon Climate Pledge Certification Worth It For Sellers, Master Carton Calculator to Optimize Packaging and Reduce Costs, New Dimensional Weight Fees Placing Further Strain on Profit Margins