Alibaba Group pledges carbon neutrality by 2030
Asia Pacific’s e-commerce behemoth Alibaba Group has recently announced its goal for achieving carbon neutrality. This comes as the chief executive announced the tech giant’s long-term plan to quintuple GMV to US$100 billion across their Lazada e-Commerce platforms.
Complementing this ambition for industry growth and dominance, Alibaba is pledging to achieve carbon neutrality across its operations by 2030, the group said in a statement.
In their Alibaba Group Carbon Neutrality Report 2021, the organization has introduced a “Scope 3+” target, claiming it is a pioneering initiative aimed at facilitating 1.5 gigatons of decarbonization by 2035.
“We aspire to be a force for positive, innovative change in society. Our ESG strategy is predicated on our mission to be a good company that will live for 102 years and it is a vital foundation for Alibaba’s future development,” said Daniel Zhang, Chairman, and CEO of Alibaba Group.
On Alibaba’s Scope 3+ and carbon neutrality
Developed by the United States Environmental Protection Agency (US EPA), the Scope inventories are a set of tools and guidelines for organizations to develop action plans to lower carbon emissions.
The inventories provide tools and practices to deal with different sources of emissions, which are categorized under Scope 1, 2, or 3.
According to Alibaba, “Scope 3+,” refers to the emissions generated by a broader range of participants in the platform’s ecosystem, currently outside of Scopes 1, 2, and 3.
Scope 1 emissions are direct greenhouse (GHG) emissions that occur from sources that are controlled or owned by an organization, whereas Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling.
Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but where the organization indirectly impacts its value chain.
Alibaba Group’s green roadmap
The group is committed to carbon neutrality for Scope 1 and 2 emissions by 2030 and has set a 50% carbon intensity reduction target for Scope 3 by 2030 using 2020 levels as a baseline.
Alibaba Cloud will bear responsibility for a higher Scope 3 target and aims to achieve carbon neutrality by 2030 in all three scopes.
Alibaba Group has also committed to joining the Science Based Targets initiative (SBTi) and has aligned its decarbonization measures and strategy with the “Business Ambition for 1.5°C” pledge, a critical target to ameliorate the catastrophic impacts of climate change as outlined by the 2015 Paris Agreement.
The company will adopt a “systematic and science-based approach” to plan and manage decarbonization initiatives.
These include leveraging energy-saving and efficiency-improving technologies to reduce emissions; actively transforming the energy structure with progressive use of renewables; and exploration of carbon removal initiatives.
“We believe the use of digital platforms can play a significant role in empowering a low carbon circular economic model that can lead to achieving the 1.5-degree target of the Paris Agreement.
“The concept of ‘Scope 3+’ is based on the potential of leveraging our digital platforms to influence and advocate for low carbon products, services, and behavior among a wider group of stakeholders in our ecosystem.
“This is in addition to sharing our energy-efficient technologies and innovative business tools with customers and business partners to reduce the carbon footprint together,” said Dr. Chen Long, Vice President of Alibaba Group and Chair of Alibaba’s Sustainability Steering Committee.
As a general principle, the company prioritizes carbon reduction over removal, and removal over offset.
Alibaba will continue to improve its carbon reduction measurement and metrics in Scope 3+ by working and partnering with leading expert organizations globally.
Dedicated ESG Governance Body
The group also announced a new three-tier ESG governance framework to oversee, enable and support the achievement of its carbon neutrality targets and broader ESG goals.
Chaired by independent director Jerry Yang, the board-level Sustainability Steering Committee will be responsible for strategic planning, goal setting, and management of Alibaba’s carbon neutrality efforts.
An ESG cross-business action group comprising representatives from each business unit at the working level will be responsible for coordination and execution.
Meanwhile, Alibaba aims to continue to improve its information and data disclosure and reporting mechanism.
Starting 2022, the firm “aims to release its ESG report annually”, in which concrete and specific annual progress will be included.
All reports will adhere to the most reputable metrics laid out in domestic and international standards and will be verified by accredited auditors, said the statement.
Alibaba fintech arm pledged carbon neutrality too
In March this year, Ant Group, the fintech affiliate of Alibaba Group first detailed a roadmap to achieve carbon neutrality by 2030.
The fintech giant aims to neutralize direct and indirect emissions associated with the purchase of electricity from this year and seeks to fully cancel out carbon emissions generated from external sources it does not own or control by 2030.
This includes emissions within its supply chain and business travel. It also set up a carbon neutrality fund to support the research and development of renewable energy and other green technologies, as well as work with industry partners to promote green finance.
The Asia-Pacific, comprising 60% of the world’s population, consumes half the world’s power supply. China is Asia’s leader in the production, procurement, and utilization of sustainable and renewable energy.
However, nearly 60% of the Chinese economy is powered by coal, which has spurred President Xi to pledge carbon neutrality by 2060.