BEIJING, 6 January, 2021 – Analyzing climate change-related policies and actions from Alibaba, JD.com, Pinduoduo, Vipshop, Suning.com, NetEase, and Xiaomi, Greenpeace East Asia’s latest ranking of China’s e-commerce companies showed major shortcomings in the industry’s uneven response to what has become a major playing field for companies to be judged.
“China’s net-zero pledge turned climate commitments into one of the major lenses for these companies’ social impact to be judged. At the same time, capital markets require stronger information disclosure on climate-related risks. The result is greater scrutiny. Still, not even industry leaders like Alibaba and JD.com actually cover their value chains when they make climate commitments. Emissions in the value chain are actually greater than emissions in the company’s corporate operations,” said Tang Damin, project leader in Greenpeace East Asia’s Beijing office.
Greenpeace developed a rubric to identify and rank companies on their climate commitments, what actions they have taken so far, information disclosure as it relates to climate and environment, and the steps they’ve taken to manage platforms responsibly and sustainably. The ranking system took into account, for example, whether responses accounted for the entirety of corporate operations, only a portion of the corporate grouping, or excluded the upstream and downstream business ecosystem that these e-commerce giants support.
Alibaba’s latest climate commitment leads it to outperform JD.com. But Alibaba only commits to carbon neutrality in its own operations (scope 1 and 2 emissions). For scope 3 emissions¹ in its value chain, the company only has a weak target of cutting carbon intensity by half. In its commitment, Alibaba did coin the term “scope 3+” to refer to emissions from participants of its online platforms, but has not yet created a clear path to reduce emissions there. Scope 3 emissions normally makes up the majority of all emissions from across the three scopes.
JD.com’s relatively high score comes from its subsidiary JD Logistics’ climate commitment and actions taken so far. Overall, JD.com’s response to climate change is limited, and it has made no full commitment for low-carbon transition across the group’s operations.
Pinduoduo scored zero points for climate commitments or information disclosure, and close to no points in actions taken so far or platform management. Despite their size, neither Pinduoduo or Suning.com have disclosed relevant information through official channels.
Overall, there is a lack of accountability for the supply chain, including incomplete commitments, weak actions, or insufficient information disclosure for the supply chain.
Establishing complete climate commitments as soon as possible is the clear first step for JD.com and others. Greenpeace demands that climate response include scope 3 emissions, which is the most urgent gap for Alibaba. The focus for scope 1 and 2 emissions needs to be 100% renewable energy and electric vehicle deployment by 2030. The focus for scope 3 emissions needs to be quantifiable packaging reduction targets and emissions reduction management targets among suppliers.
“E-commerce companies have completely changed the landscape of daily life in China. They are responsible for these new systems. Some companies have noted climate response as a way to show social consciousness. They need to respond fully and avoid greenwashing,” Tang added.
In addition to climate change policy, the report found that none of the seven companies has environment-related standards for third-party sellers. Their online marketplaces are potentially open to rampant distribution of products that damage the environment, including products that contain hazardous chemicals or involve illegal wildlife trade. Greenpeace calls upon the brands to fix this loophole as soon as possible.
English research briefing available here (in English).
Full report available here (in Chinese).
August Rick, Greenpeace East Asia, Beijing, [email protected]
Greenpeace International Press Desk: [email protected], +31 (0) 20 718 2470 (available 24 hours)