Description:
The Climate Pledge is a commitment to achieve net-zero carbon emissions by 2040. But it is not clear how the initiative is funded. This study investigates whether Amazon, the co-founder of the Climate Pledge, transfers the costs of achieving the commitment to consumers, who typically pay a price premium for sustainability. Using ground coffee data from Amazon.com, I show that Amazon’s Climate Pledge Friendly label commands a price discount of 16.9% instead. This result contradicts prevailing incentives to adopt sustainable practices, which may deter other profit-maximizing firms from committing to the Climate Pledge