Chinese e-commerce giant Alibaba has made significant strides towards reducing its net carbon emissions, achieving a 13% reduction in the past financial year. This achievement is part of Alibaba’s ambitious goal to achieve carbon neutrality by 2030. The company unveiled this accomplishment in its 2023 Environmental, Social, and Governance (ESG) report, which also highlighted Alibaba’s progress towards its Scope 3+ goal. This goal aims to eliminate 1.5 gigatons of carbon emissions across its digital ecosystem by 2035, and it marks the first time the company has reported on this sustainability effort.
Alibaba’s outgoing CEO and Chairman, Daniel Zhang Yong, noted in the report that despite challenges in the macro environment, geopolitical uncertainties, and new trade-offs between sustainable development and economic growth, the company has made notable progress in its ESG initiatives. One of these achievements is the reduction of almost 23 million metric tons of CO2 emissions throughout the value chain, including Scope 3 emissions.
In 2021, Alibaba made three climate pledges. The first is to decarbonize its operations (Scopes 1 and 2) and achieve carbon neutrality in its own operations by 2030. The second is to green the value chain (Scope 3) by cutting emission intensity by 50% from 2020 levels in collaboration with value chain partners. Alibaba Cloud, the company’s cloud computing subsidiary, will also reach Scope 3 carbon neutrality by 2030. The third pledge is to enable a low-carbon circular digital ecosystem (Scope 3+) and achieve 1.5 gigatons of carbon reduction over 15 years across the digital ecosystem. Alibaba plans to leverage its digital platforms to attract more participation from stakeholders in reducing emissions.
In the 2023 financial year, Alibaba took significant steps towards meeting these targets. The company emitted around 4.7 million metric tons (Mt) of CO2 equivalent, a 13% reduction from the previous year. By cutting 1.4 million Mt of CO2e with clean energy and smart energy management, carbon reduction increased by 129%. Alibaba also decreased its Scope 3 emissions by 400,000 MtCO2e through various measures, including digital optimization, energy transition in logistics, more energy-efficient data centers, and adoption of low-carbon business traveling.
One notable achievement is the reduction of packaging materials by 184,000 tons in 2023 through recycling used packages. Alibaba’s logistics subsidiary, Cainiao, urged consumers to reuse cardboard boxes at pick-up points, resulting in 23 million boxes being recycled. Alibaba also partnered with Nike to do door-to-door recycling across thirty Cainiao campus stations nationwide in China. These efforts, combined with the company’s projects on carbon removal and carbon credits, reduced Alibaba’s Scope 3 carbon intensity by almost 6%. The company is also focused on supporting nature-based climate solutions.
What sets 2023 apart as a groundbreaking year for Alibaba is the introduction of its Scope 3+ initiative. This effort goes beyond Scopes 1, 2, and 3 and aims to reduce a total of around 23 million MtCO2e. Alibaba introduced a group-level carbon ledger called Carbon88, which encourages consumers to adopt low-carbon behaviors on the company’s platforms. More than 187 million users participated in CO2 emission reduction efforts through the carbon ledger program. Carbon88 allows users to showcase the actions they’re taking to reduce their carbon footprint, such as bringing their own cups and using reusable bags. Alibaba’s navigation platform, Amap, saw over 30 million people opting for low-carbon travel options like walking, resulting in a reduction of 215,000 MtCO2e. Additionally, the company’s food delivery platform, Ele.me, helped save resources by allowing users to opt out of cutlery on over 1.4 billion orders.
Alibaba’s cloud computing subsidiary, Alibaba Cloud, also plays a significant role in the company’s climate goals. The report states that the proportion of clean electricity used in its self-built data centers in China increased from 21% in 2022 to an impressive 54% in 2023. This achievement is due to the improved implementation of energy-saving technologies. Alibaba Cloud’s efforts to replace traditional IT with cleaner and greener cloud computing have increased corporate users’ efficiency and reduced emissions. The cloud’s AI-driven sustainability platform has also assisted thousands of enterprises worldwide in monitoring, analyzing, and optimizing their CO2 emissions.
Overall, Alibaba Cloud achieved over 1 million MtCO2e of emission reduction in the company’s own operations (Scopes 1 and 2) and 0.4 million MtCO2e throughout its value chain (Scope 3). These results, stated in the company’s ESG report, emphasize Alibaba’s commitment to environmental responsibility and set an example for other companies to follow in their pursuit of a greener future.