The Path to a Carbon-Neutral Future Through Digital Technology and Platform Innovation

By Daniel Zhang

The sky is not the limit. As organizations worldwide chart the best course for mitigating greenhouse gas (GHG) emissions, the largest among us have not only the opportunity but also the responsibility to make a far bigger impact than we have to help limit the climate crisis. We can’t merely meet established guidelines. We must 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 establish a robust sustainability framework appropriate to our size and market presence that can guide us to meaningfully address the climate challenges and help build a sustainable future.

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

• Scope 1 targets direct GHG emissions from such company-owned sources as vehicles, boilers and furnaces, and production machinery.
• Scope 2 accounts for emissions from electricity a company purchases from external sources and consumes.
• Scope 3 accounts for other indirect emissions up and down throughout a company’s value chain resulting from such activities as resource extraction, transportation of fuels, and the use of its products and services.

While these three scopes provide a strong framework for organizations to meet GHG emission goals, the largest global organizations can—indeed, we must—push beyond this blueprint for carbon neutrality to help achieve significant change.

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

Given the diversity and variance of our business ecosystem—encompassing digital commerce, local services, logistics, cloud computing, entertainment, and more—the analysis has been unusually complex. Yet we are confident that the increased penetration of digitization and platform innovation sets up Alibaba Group to help achieve a robust transition into a low-carbon circular economy that will help decarbonize not only our own operation but the entire value chain.

We made an ambitious target to achieve Scope 1 and 2 carbon neutrality and halve Scope 3 emission intensity by 2030. We expect to meet Scopes 1, 2, and 3 targets by 2030 through digital transformation, taking such measures as reducing our emissions through more efficient processes and energy-saving technology; shifting our energy consumption to renewable resources; and prioritizing carbon reduction over removal, and removal over offsetting.

The Scope 3+ Goals

But Alibaba’s plans go beyond Scope 3.

We have expanded our ambitions to exceed those goals through Scope 3+, our commitment to reduce GHG emissions across our digital platform ecosystem by 1.5 gigatons from 2021 to 2035. Scope 3+ priorities include sustainable consumption, smart transportation, digitalizing the recommerce market, low-carbon operations and management, and green logistics and recycling.

As we endeavor to further define, measure, and reduce the emissions across our ecosystem, Alibaba invites our global corporate and public-sector peers to join us, our partners, and our community in meeting the ambitious carbon-neutrality goals of Scope 3+.

We fully recognize that adopting measures as audacious as Scope 3+ requires more than taking a closer look at environmental, social, and governance (ESG) policy. It means a full transformation—changing entire organizational missions, cultures, and the way we work.

“This goes beyond the typical scope of responsibility that companies take for emissions reduction—indeed, it seeks to measure emissions that are adjacent to their value chain, not directly within it,” says Peter Lacy, Global Sustainability Services Lead and Chief Responsibility Officer at Accenture. “No one company has yet fully delivered on the potential of reducing ecosystem emissions and transforming an entire end-to-end value chain at the scale Alibaba aspires to.”

While it may seem daunting at first, the sweeping change of Scope 3+ carbon reduction is clearly achievable when we view it as the aggregate result of incremental digitization efforts that involve the collaboration of 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 that promotes green consumption and advocates for a sustainable eco-forward lifestyle
• supporting the circular economy to encourage the reuse of preowned products on Idle Fish, Alibaba’s secondhand-marketplace digital platform
• encouraging more recycling and the use of recycled packaging through Cainiao, Alibaba’s smart-logistics platform
• helping workplaces go more fully digital—reducing energy consumption in workplaces and promoting green transportation—through Alibaba’s robust cloud-computing infrastructure and DingTalk, its smart collaborative-work platform
• using Alibaba Cloud’s product and technology innovations to help our customers find greater energy efficiency, such as with our proven energy-efficient, liquid-cooling datacenter technology and other proprietary products that deliver high performance with lower power consumption.

Collectively, while these programs contribute to the Scope 3+ mission, each is still an early exploration, even an experiment. None can solve the climate crisis on its own. In our own target of reducing carbon emissions by 1.5 gigatons by 2035, we offer Scope 3+ not as the answer but as a question.

For that reason, we encourage every leading organization on Earth to take a stand with us in a unified fight to preserve our global ecosystem together.

Every big change begins at home. For Alibaba, expanding Scope 3+ to its fullest ambitions means teaming up with all our partners—merchants, institutions, employees, and consumers—to reduce our carbon footprint and develop bold business innovations and initiatives.

We’re not in this alone—we can’t be. But we want to help inspire measures of change that herald a greener future for the planet.

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

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