Climate change is becoming a high profile topic all around the world – it is a Pandora’s box that will continue to unleash complex consequences that are increasingly challenging for humanity to assess and cope with.
Responsible technology companies around the world should be pledging to become carbon neutral and act immediately, and in December 2021, Alibaba Group did just that. In the “Alibaba Group Carbon Neutrality Action Report”, the Group pledged to realise carbon neutrality for its own operations by 2030. In collaboration with stakeholders and partners across the Alibaba digital ecosystem, Alibaba aimed to reduce its value chain (Scope 3) emission intensity by half by 2030, using 2020 levels as a baseline. Moreover, as a digital infrastructure and service provider for a green economy, Alibaba Cloud, the digital technology and intelligence backbone of Alibaba Group, will take the lead and aim to achieve Scope 3 carbon neutrality by 2030.
Digitalisation is key for building a low-carbon circular economy
The world’s economy needs to move from a linear model of “take, make, dispose” and move towards a lower-carbon circular model of “refuse, reduce, reuse, refurbish, and recycle”. This is a non-negotiable way to achieve carbon neutrality and maintain a healthy environment that sustains human lives.
Achieving this robust transition to a low-carbon circular economy, Alibaba Group will incorporate the adoption of the following pillars for economic growth and environmental improvements:
- Energy transition from reliance on fossil fuels to universal uses of clean energy, focusing on renewables
- Science and technology innovations, focussing on low, zero and negative carbon technologies
- Stakeholder economy, focussing a collaborative governance model in which regulations and market mechanisms work hand in glove, where governments at every level work with small, medium and large enterprises, and where consumers, and other stakeholders are all motivated to transition to a new economic system with renewed social contracts and lifestyles
Increased digitisation will provide Alibaba Group with a great opportunity that will enable the transformation to a sustainable economy – a “win-win” economy in which every progress in the economy improves the environment. This will be possible by increasing the penetration of digitalisation to enhance the speed and efficiency of emission reduction. Adopting digital technologies that are reliable and scalable makes it much easier to measure and manage our carbon footprints.
Why Scopes are important
To ensure that Alibaba Group reaches carbon neutrality and looks into a greener future, the company has committed to join the Science-Based Targets initiative (SBTi) to help limit the global temperature increase to 1.5°C and has set the following targets:
- Decarbonising Alibaba
Scopes 1 and 2: By 2030, Alibaba will achieve carbon neutrality in its own operations.
- Greening the value chains
Scope 3: By 2030, Alibaba will collaborate with its upstream and downstream value chain partners to cut emission intensity by 50% in regard to the base year of 2020. Alibaba Cloud provides the key digital infrastructure and will achieve Scope 3 carbon neutrality during the same period.
- Enabling low-carbon circular digital ecosystem
Scope 3+: Beyond its own operations and direct value chains, Alibaba Group pledges to leverage its digital platforms to encourage even broader participation. The company commits to facilitate 1.5 gigatons of decarbonisation in its ecosystem by 2035.
While its own carbon neutrality plan is important, Alibaba Group has placed a large focus on “Scope 3+”, to influence and advocate for low carbon products, services and behaviour among a wider group of stakeholders in the Alibaba digital ecosystem.
How businesses can reduce their emissions
There are many ways that businesses can reduce their carbon emissions and reduce their carbon footprint, from changing transportation, a greater emphasis on green logistics and cloud computing. For example in 2017, China’s urban and rural residents directly and indirectly emitted about 4.15 billion tons of carbon dioxide, accounting for approximately 40% of total emissions. The ongoing challenge for businesses is to influence consumers to make more carbon-friendly purchases.
Transportation accounts for a large portion of a person’s carbon footprint. Decarbonising transportation systems won’t be successful without wide participation of businesses and consumers. For example, Alibaba’s Amap uses intelligent navigation technology and behavioural incentives to promote emission reductions in trillions of vehicle kilometres travelled and greener transportation choices by millions of urban residents. Scaling this further up and having the technology embraced by the bigger masses requires further coordinated efforts from public, private enterprises and the governments.
Parcel deliveries experienced a new round of sharp increase worldwide since the beginning of the pandemic, and China’s overall delivery exceeded 100 billion items in 2021. While these parcels bring convenience, they also result in larger carbon emissions. Alibaba is leading an effort for all its logistics participants to reduce emissions in every single express package, thereby moving the logistics industry closer to a low-carbon future. Working with both upstream and downstream partners will ensure businesses contribute to the sustainability transition of the entire logistics industry. This includes leveraging inventory data and intelligent algorithms, the optimisation of box design and establishing a standardised circulating box system, and cutting down on carton usage from warehouse to warehouse.
Cloud computing plays a pivotal role in facilitating energy efficient electrification and digitalisation processes, and thus is an important and cost-efficient emission reduction tool for both large and small businesses. Digital collaboration has completely changed the way organisations communicate and cooperate, greatly improving enterprise agility and efficiency.
For example, Alibaba’s carbon emission management SaaS (Software as a Service) product is based on clean energy power generation forecasting and load forecasting algorithms. It provides energy-saving suggestions for small and medium-sized enterprises, integrating a variety of low-carbon certification services on the product.