Climate change poses a growing, systemic risk to the economy. If global climate goals are not met, workers face the likelihood of significant negative impacts to their retirement portfolios. Swiss Re estimates a 4% decline in global GDP by 2050 if global temperature increases are kept below 2 degrees Celsius, but up to an 18% decline without effective mitigation.
Amazon has taken actions to address climate change by committing to achieve net-zero Scope 1 and 2 greenhouse gas emission reductions by 2040 and 100% renewable energy use by 2025.[2] Yet, even while it transitions its business away from fossil fuels, our Company’s 401(k) retirement plan (“Plan”) invests significantly in companies that contribute to climate change, jeopardizing workers’ life savings.
Employee retirement funds are automatically invested in the Plan’s default investment option unless employees proactively choose different investments. Thus, the majority of the Amazon Plan’s $17.4 billion in assets are invested in the default option.[3]
Amazon has selected Vanguard Target Retirement funds as the Plan’s default offering, which invest significantly in fossil fuel companies and companies contributing to deforestation.[4] By investing employees’ retirement savings in companies with outsized contributions to climate change, Amazon is generating climate risk, including transition risk and long-term systemic risk, to workers’ portfolios.
Amazon’s default 401(k) choice risks compromising its obligation to select retirement plan investment options in the best interests of its plan participants, including those with retirement dates more than a decade out.

In the increasingly competitive employee recruitment and retention landscape, failing to minimize material climate risk in its default 401(k) plan option may make it more difficult for Amazon to attract and retain top talent. Employee polling indicates that firms’ environmental records are an important consideration in choosing a job.[5] Employee polling also reveals increasing demand for climate-safe retirement plan options.
Given the threat that climate change poses to employee’s life savings, our Company can help ensure employee loyalty and satisfaction, and demonstrate that it is actively safeguarding all employee retirement savings, no matter when they are set to retire, by minimizing climate risk in its Plan offerings, especially the default option. The federal government recently clarified that fiduciaries may appropriately consider climate risk in the selection of plan offerings, including in the default option.