Alibaba Group has revealed its 2022 Environmental, Social, and Governance (ESG) report, which states that the company has successfully reduced its carbon emissions by a total of 619,944 tons through a shift in energy sources, utilizing more clean energy in the fiscal year ending March 31, 2022 (FY2022), reinforcing the company's commitment to achieving carbon neutrality.

During this period, 21.6% of the electricity used in the Alibaba Cloud (Alibaba Cloud), the core of Alibaba's digital technology and intelligence, came from clean energy. Meanwhile, the company's data centers maintained an average Power Usage Effectiveness (PUE) of 1.247 per year, which is a leading standard in Asia.

Alibaba Cloud is committed to operating entirely on clean energy by 2030.

The report also highlighted the ranking from Bloomberg New Energy Finance in 2021 (Bloomberg NEF) which identified Alibaba as the largest corporate buyer of renewable energy among all Chinese companies. In the first half of 2022 alone, Alibaba purchased no less than 800 million kilowatt-hours of clean energy, a 150% increase from the total for 2021.

In FY2022, Cainiao, Alibaba's logistics company implemented smart algorithms to analyze product sizes, optimizing packaging selection. This process allowed the company to reduce packaging material usage by an average of 15%. Additionally, the company installed solar energy sources in its warehouses, generating up to 24.9 megawatts of solar power, equivalent to a reduction of 16,000 tons of carbon dioxide emissions.

Cainiao has encouraged customers to recycle their packaging.

“Alibaba's vision is to be a good company that lasts for 102 years,” Daniel Zhang, Chairman and CEO of Alibaba Group stated in the chairman's message in the ESG report. “This mission requires the ability to adapt quickly to continuously changing economic conditions and unforeseen challenges. Our initial vision proves that we look ahead and are committed to addressing the issues our community faces, creating value that makes us more than just a company focused on commercial outcomes. Therefore, to ensure our organization remains healthy and sustainable for 102 years, we must manage our environmental impact, our relationship with society as a whole, and the long-term governance of the company.”

 

“Strategic ESG planning is crucial to achieving the company's mission because ESG not only provides a framework for business operations and activities to manage various risks and challenges but is also increasingly important as a global standard for assessing good corporate governance,” Daniel Zhang added.

The ESG report emphasizes that as a technology company of the modern era, Alibaba aims to take on the responsibility of mitigating environmental degradation and economic and social inequality. Digital transformation has created unprecedented connections and collaborations, allowing global trade benefits and economic development to be more widely distributed across various regions of the world. Alibaba is committed to driving digital innovation to ensure that everyone and every community using the company's innovations fully benefits.

The company has set seven strategic ESG dimensions, including restoring a green world, supporting human resources, sustainable digital living, empowering small businesses, building cohesive and resilient communities, fostering social engagement, and ultimately, building trust.

Alibaba's 2022 ESG report is a continuation to update progress from the first report, which announced the commitment in the Alibaba Carbon Neutrality Action Report published last December, stating that the company aims for carbon neutrality for Scope 1 and 2 and targets a 50% reduction in carbon intensity for Scope 3 by 2030. Additionally, the company has added a new dimension, Scope 3+, aiming for an additional carbon elimination of 1.5 gigatons across Alibaba's ecosystem by 2035.