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CHIEF SUSTAINABILITY OFFICER
Report created by Katerina Vargova
Alibaba Group Holding Limited, also known as Alibaba Group and as Alibaba.com, is a Chinese multinational technology company specializing in e-commerce, retail, Internet, and technology. Founded on 28 June 1999, in Hangzhou, Zhejiang, the company provides consumer-to-consumer (C2C), business-to-consumer (B2C), and business-to-business (B2B) sales services via web portals, as well as electronic payment services, shopping search engines and cloud computing services. It owns and operates a diverse portfolio of companies around the world in numerous business sectors.
Alibaba Group enables businesses to transform the way they market, sell and operate and improve their efficiencies. Alibaba Group provides the technology infrastructure and marketing reach to help merchants, brands and other businesses to leverage the power of new technology to engage with their users and customers and operate more efficiently.
Alibaba Group’s businesses are comprised of core commerce, cloud computing, digital media and entertainment, and innovation initiatives. In addition, Ant Group, an unconsolidated related party, provides payment services and offers financial services for consumers and merchants on its platforms. A digital economy has developed around its platforms and businesses that consists of consumers, merchants, brands, retailers, third-party service providers, strategic alliance partners and other businesses.
The Alibaba digital economy generated US$1 trillion in gross merchandise value (GMV) in the 12 months ended March 31, 2020, which mainly included GMV of US$945 billion transacted through Alibaba Group’s China retail marketplaces, as well as GMV, transacted through its international retail marketplaces and local consumer services.
Company Sustainability Activity
Alibaba Group’s mission is to “make it easy to do business anywhere.” Having a positive social impact has always been embedded in Alibaba Group’s organizational DNA. Alibaba Group believes that a profitable and prosperous business can only be achieved and sustained by solving large-scale societal problems.
Since its founding, Alibaba Group has been highly committed to supporting and participating in charitable and socially responsible projects that align with its core values and mission, and to establishing a technology-driven charitable ecosystem to extend the benefits of its technological capabilities to the community at large.
Today, the Alibaba Digital Economy not only supports the infrastructure of commerce but also serves hundreds of millions of consumers and tens of millions of enterprises, most of them small businesses. This economy extends far beyond its immediate customers to impact the lives and businesses of all stakeholders in its ecosystem.
ESG priorities that Alibaba Group has identified as most important are: Corporate governance, Intellectual property rights protection, Cybersecurity, Data protection, Human capital, Social impact, and Environmental impact. All these priorities are included in Alibaba’s Vision by 2036.
- 34% of women in Alibaba’s top management
- Alibaba encourages each employee to dedicate three hours per year to social impact causes. Since the establishment of the “3 hours” program in 2015, Alibaba employees have accumulated a total of 482,601 hours for social services.
- Alibaba supported over 1.7 million merchants and over 360 million users to donate to domestic and international charitable projects
- Alibaba enabled charitable organizations to raise approximately US$50 million in donations in the fiscal year 2018, which benefited approximately 3.3 million disadvantaged individuals.
- Cainiao Network, Alibaba’s logistics business, is working towards a goal of replacing 50% of all packaging materials on Alibaba related platforms with 100% eco-friendly or biodegradable packaging materials.
- Goal to build green logistics parks powered by solar energy which will avoid more than 1 million tons of carbon emissions annually
- Support 10 million businesses to operate profitably
- Help create 100 million jobs
- Cainiao Network reduces packaging materials by approximately 15% by using its packaging optimization algorithm. This technology was applied in over 250 million delivery boxes and courier bags in the fiscal year that ended in March 2018.
- Alibaba launched a “green packaging” program and pushed it to its courier service partners. Under the program, biodegradable bags, tape-free boxes and package recycling bins are used.
- Cainiao Network teamed up with 500 global brands, including Kiehl’s, Wrigley Company, Mondelez International and Colgate-Palmolive, to establish the “Green Brand Alliance” that commits to using green packaging
- Zhangbei Data Center in Hebei province in Northern China is powered by 100% renewable energy including solar and wind
- Alibaba invested significant resources in green warehouses powered by solar panels and using green energy vehicles
- 55 million trees planted in Northwest China as part of the Ant Forest program
- The Qiandao Lake Data Center adopts a state-of-the-art deep lake water cooling system. This saves 300 million kWh of electricity and reduces CO2 emissions by 300,000 tons per year compared to other conventional data centres. The technology lowers its annual average Power Usage Effectiveness (PUE) to as low as 1.17, considerably lower than many leading Chinese data centre companies. The system also reduces the annual average Water Usage Efficiency (WUE) to reach 0.197, which is also below China’s industry average.
- Alibaba Group launched an immersion liquid cooling technology that further enhances the energy efficiency of its servers. Using non-conductive cryogenic liquid to achieve a cooling effect, this technology brings the PUE close to 1.0
- Alibaba integrates green building features into its logistics parks by using energy-saving materials to reduce energy consumption and greenhouse gas emissions. In 2016, the energy savings rate of Alibaba’s logistics parks reached 10% due to its optimization of energy use, use of more energy-efficient equipment, and promotion of paperless invoice and tracking systems.
- Alibaba created 36 million jobs in 2017 via its retail ecosystem, including 14 million jobs for online retailers and 22 million jobs for upstream and downstream sectors such as R&D, design, manufacturing and logistics.
The company does not have any sustainability-related certificates.
UN Sustainable Development Goals
UN SDGs Compliance
The Impakter Index team aligns current company-wide sustainability initiatives with the UN Sustainable Development Goals in the following section.
- Alibaba connects rural merchants and sellers to the global marketplace through its platform, giving them additional income channels and helping people who live in rural areas move out of poverty.
- Alibaba’s Rural Taobao program involves Alibaba establishing business infrastructure and e-commerce services in rural areas that enable rural residents and businesses to sell high-quality agricultural products to urban consumers. The program generates business and employment opportunities and establishes a two-way distribution infrastructure to connect commerce between cities and rural areas in China. The Rural Taobao program has established service centres in over 30,000 villages and 730 counties in China, including 300 state-designated impoverished counties.
- The Lakeside Modou Foundation was collectively established by the 12 women partners in the Alibaba Partnership to provide care and a better future to women and children in rural and underdeveloped areas of China. The Foundation started a program, the “Model Mom Entrepreneurship Competition”, to highlight female entrepreneurs from disadvantaged backgrounds with the purpose of inspiring other women to start entrepreneurial ventures.
- Alibaba as a representative platform enterprise has created an ecosystem of employment. Apart from the employment inside Alibaba Group, it also provides work opportunities for other businesses, supporting services and jobs in both upstream and downstream.
- An important way to promote sustainable economic growth is to combine digital economy with traditional industries and to reshape existing economic models. Alibaba helps to transform offline physical stores into online shops. Alibaba also involves Tao Factory, new retails, new logistics, and new media.
- Inclusiveness and empowerment are a fundamental part of Alibaba’s business concepts. Taobao e-commerce has the characteristics of inclusive development, which significantly reduce the difficulties for SMEs, women and people with disabilities to start their own business. Apart from these, Alibaba designs specific charity projects to support women to start their own business, and through establishing global e-commerce platform eWTP, it provides other developing countries with opportunities to join in global e-commerce.
- 55 million trees planted in Northwest China as part of the Ant Forest program
- Since 2010, Alibaba has established a special fund to encourage environmental awareness and conservation as well as other corporate social responsibility initiatives.
- In 2011, they established the Alibaba Foundation, a private charity fund that focuses on supporting environmental protection in China and helping the disadvantaged. In the fiscal year 2018, the Alibaba Foundation made approximately $37 million in donations.
Secondary SDGs: 4
Alibaba Group has no certificates, is not listed in leading indices and has no sustainable awards. The United Nations Sustainable Development Goals are not implicitly mentioned in Alibaba’s reporting. Sustainable reporting also lacks specific targets and key performance indicators.
Alibaba has a good climate trajectory and is improving in some areas – renewable energy, eco-friendly and biodegradable packaging materials. Alibaba Group is rated C.
Analyst Outlook: Negative
For a giant company and tech leader such as Alibaba, sustainability should be a priority with clear targets and policy. Alibaba Group has just a few targets, is not in compliance with the UN SDGs and is operating mostly in China.
- Started ESG reporting in 2018
- Jack Ma has also been allocating 0.3% of the company’s annual revenue to an environmental fund
- Carbon intensity per dollar made by Alibaba is going down, but total emissions are going up
- Alibaba is forcing merchants to sign exclusive deals which prevent them from offering products on rival platforms