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Alibaba Group has released its 2022 Environmental, Social and Governance (ESG) report, which reveals that the company cut a total of 619,944 tonnes of carbon emissions from changing its energy mix to include more clean energy in the fiscal year that ended on the 31st of March 2022 (FY2022) as it strives to hit its carbon neutrality target.

Over this time period, 21.6% of the electricity for Alibaba Cloud, Alibaba’s digital technology and intelligence backbone was from clean energy while its data centres reached an annual average power usage effectiveness (PUE) of 1.247, an Asia-leading standard.

The report states that Alibaba was the largest buyer of renewable energy among Chinese companies according to a BloombergNEF 2021 ranking. In the first half of 2022 alone, Alibaba purchased more than 800 million kWh of clean energy, a 150% increase over the full year of 2021.

In FY2022, Alibaba’s logistics arm Cainiao applied smart algorithms to optimise package sizes, cutting the uses of packing materials by 15% on average, while its logistics warehouses installed 24.9 MW of solar power capacity, accounting for 16,000 tonnes of carbon dioxide equivalent.

“Alibaba’s vision is to be a good company that will last for 102 years,” said Daniel Zhang, Chairman and Chief Executive Officer at Alibaba Group, in a letter in the ESG report. “This will require resilience to overcome major economic cycles and unexpected challenges. Our original vision is a testament to this long-term thinking and shows our commitment to addressing issues faced by our communities and to creating value beyond only commercial outcomes. For us to last for 102 years in a healthy and sustainable fashion, we must manage our impact on the environment, our relationship with society at large, and our long-term corporate governance.”

“The design of our ESG strategy is critical to the realisation of our vision. ESG not only offers businesses an action framework to address universal risks and challenges but is also increasingly important as a global standard for evaluating a good company,” added Zhang.

The ESG report also highlights that as a technology company in this new era, Alibaba aims to help shoulder the responsibility to mitigate environmental degradation and socioeconomic inequality. Digitalisation has brought unprecedented connectivity and collaboration, extending the benefits of global trade and economic development to more and more regions of the world. Alibaba intends to bring to bear the full force of digital innovation, while also ensuring that every person and community that it serves can fully enjoy its benefits.

The company is committed to focusing on seven ESG strategic dimensions: restoring the green planet, supporting its people, enabling a sustainable digital life, fuelling small businesses, enhancing community inclusion and resilience, facilitating participatory philanthropy and building trust.

Alibaba’s 2022 ESG report is its first progress update since it announced its pledge to achieve Scope 1 and 2 carbon neutrality and 50% carbon intensity reduction for Scope 3 by 2030, in its Carbon Neutrality Action Report published last December. The company also added a new Scope 3+ dimension to its targets to facilitate an additional 1.5 gigatons of decarbonisation across the Alibaba Ecosystem by 2035.

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