The path to a carbon neutral future through digital technology and platform innovation

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By Daniel Zhang

The sky is not the limit. As organizations around the world chart the best course of action to reduce greenhouse gas (GHG) emissions, the greatest of us have not only the opportunity, but also the responsibility to make a far greater impact than we do to the climate crisis. to help limit. We can’t just comply with established guidelines. We have to go above and beyond.

As a global digital infrastructure provider and platform company, Alibaba represents millions of brands and billions of consumers. That puts us in a unique position to build a robust sustainability framework that fits our size and market presence and can lead us to meaningfully address climate challenges and help build a sustainable future.

The Greenhouse Gas Protocol is the world’s most widely used greenhouse gas accounting standard for businesses. In this accounting system, which guides the carbon neutrality actions of thousands of companies, the independent World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) have defined three scopes that recommend operational limits for organizations to account for and monitor their GHG. reduce emissions:

Scope 1 focuses on direct GHG emissions from company-owned sources such as vehicles, boilers and furnaces, and production machinery. Scope 2 takes into account the emissions of electricity that a company purchases from external sources and consumes. Scope 3 takes into account other indirect emissions throughout a company’s value chain from activities such as the extraction of resources, the transportation of fuels and the use of its products and services.

While these three scopes provide organizations with a strong framework for meeting their greenhouse gas emissions targets, the largest global organizations can – indeed, we must – move beyond this carbon neutrality blueprint to effect significant change.

Alibaba has pledged to join the Science-Based Targets initiative (SBTi) to help limit global temperature rise to 1.5°C (2.7°F). In formulating our targets, Alibaba initiated a comprehensive GHG emission level analysis for the first time.

Given the diversity and variance of our business ecosystem, including digital commerce, local services, logistics, cloud computing, entertainment and more, the analysis was extremely complex. Still, we are convinced that the increased penetration of digitization and platform innovation is driving Alibaba Group to help deliver a robust transition to a low-carbon circular economy that will help decarbonize not only our own operation, but the entire value chain.

We have set an ambitious target to achieve Scope 1 and 2 carbon neutrality and to halve the Scope 3 emissions intensity by 2030. We expect to achieve Scope 1, 2 and 3 targets by 2030 through digital transformation, taking measures such as reducing our emissions through more efficient processes and energy-saving technology; shifting our energy consumption to renewable sources; and to prioritize carbon reduction over removal, and removal over compensation.

The Scope 3+ targets

But Alibaba’s plans go beyond scope 3.

We expanded our ambitions to exceed those goals with Scope 3+, our commitment to reduce greenhouse gas emissions in our digital platform ecosystem by 1.5 gigatons from 2021 to 2035. Scope 3+ priorities include sustainable consumption, smart transportation, digitization of the re-commerce market, low carbon operations and management, and green logistics and recycling.

As we strive to further define, measure and reduce emissions in our ecosystem, Alibaba invites our colleagues from the business and public sectors to join us, our partners and our community in achieving the ambitious Scope 3+ carbon neutrality targets.

We fully recognize that taking action as bold as Scope 3+ requires more than scrutinizing environmental, social and governance (ESG) policies. It means a complete transformation – changing the missions, cultures and the way we work.

“This goes beyond the typical responsibility companies take for emissions reduction – indeed it is intended to measure emissions that are at the boundaries of their value chain, not directly within it,” said Peter Lacy, Global Sustainability Services Lead and Chief Responsibility Officer at Accenture. “No company has yet fully delivered the potential to reduce ecosystem emissions and transform an entire end-to-end value chain at the scale that Alibaba is pursuing.”

While it may seem daunting at first, the sweeping change of Scope 3+ CO2 reduction is clearly achievable if we see it as the total result of increasing digitization efforts involving all stakeholders – our employees, partners and customers. These efforts can start small and still inspire us to think bigger by:

working with brands on our platform to build a dedicated channel promoting green consumption and advocating a sustainable eco-forward lifestyle supporting the circular economy to encourage reuse of used products on Idle Fish, the digital platform for Alibaba’s second-hand marketplace that encourages increased recycling and use of recycled packaging through Cainiao, Alibaba’s smart logistics platform that helps workplaces go more fully digital — reducing workplace energy consumption and promoting green transportation — via Alibaba and DingTalk’s robust cloud computing infrastructure , the smart collaboration platform that leverages Alibaba Cloud’s product and technology innovations to help our customers find greater energy efficiency, such as with our proven energy-efficient, liquid-cooled data center technology and other proprietary products that deliver high performance with lower power consumption.

While these programs collectively contribute to the Scope 3+ mission, each program is still an early exploration, even an experiment. No one can solve the climate crisis alone. In our own goal to reduce CO2 emissions by 1.5 gigatons by 2035, we do not offer Scope 3+ as an answer, but as a question.

That’s why we encourage every leading organization on the planet to join us in taking a stand in a united fight to preserve our global ecosystem together.

Every big change starts at home. For Alibaba, expanding Scope 3+ to its fullest aspirations means working with all of our partners – merchants, institutions, employees and consumers – to reduce our environmental footprint and develop bold business innovations and initiatives.

We’re not alone in this – we can’t be. But we want to help inspire action for change that heralds a greener future for the planet.

Learn more about fighting the climate crisis in the latest Carbon Neutrality Action Report from the Alibaba Group.

Daniel Zhang is Chairman and Chief Executive Officer of Alibaba Group.


This post The path to a carbon neutral future through digital technology and platform innovation was original published at “https://hbr.org/sponsored/2022/03/the-path-to-a-carbon-neutral-future-through-digital-technology-and-platform-innovation”

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