Monday, 23 January 2023 12:15

Alibaba ‘blends retail with technology’ to build green supply chains Featured

By Gordon Peters

Chinese technology giant Alibaba Group says it is leveraging its platform and cloud computing capabilities to create “greener supply chains”.

Alibaba says its online grocery service Tmall Supermarket has teamed up with Energy Expert, with its Cloud’s AI-powered sustainability and energy management system, to help companies measure and reduce their carbon emissions.

“Besides communicating the product’s environmental impact to consumers, we also want to encourage suppliers and manufactures to adopt green measures,” Pei Yunlong, head of green supply chain at Tmall Supermarket, told Alizila.

Alibaba notes that supply chains generate more than 90% of an organisation’s greenhouse gas emissions and up to 70% of operating costs, according to consultancy Ernst & Young - and targeted carbon reduction at the source will help Alibaba cut both.

According to Alibaba, since launching in April, the initiative has led to the development of 20 eco-friendly own-branded consumer products on Tmall Supermarket, ranging from biodegradable cups to compostable baking paper.

And in the process, Hangzhou-based Alibaba is closer than ever to its goal of slashing carbon emissions by 1.5 gigatons across its digital ecosystem by 2035.

Alibaba says multinational consumer companies can strongly influence their suppliers’ business practices. Retailers including Unilever and Nestle have joined forces with Alibaba to transform operations along their supply chains - and the company has installed heat recovery systems and industrial waste recycling at a new factory as part of its efforts to achieve carbon neutrality.

But there’s still room for improvement, according to Yuan Can, technical manager at Energy Expert from Alibaba Cloud.

Aliababa says replacing old machinery in one production line with energy-efficient equipment helped save 140 tons of carbon dioxide emissions and 300,000 kilowatt hours (kWh) of electricity annually.

The company says the platform also recommended switching to biodegradable materials in packaging and phasing out old machinery for more energy-efficient ones - and Yuan’s team devised a plan to recover hot water from waste heat at the factory, while supporting them to make the shift to renewable energy by installing solar panels.

Alibaba says multinational retailers have tried a myriad of ways to push their suppliers to be sustainable, including launching codes of conduct, conducting onsite assessments, or inviting third-party audits.

“What holds companies from greening their supply chain is primarily the cost. But investment into energy-efficient infrastructure will pay off in the long run, said Wang.

“It will help lower operational costs and become part of its competitive advantage.”

Alibaba says Tmall Supermarket also incentivises suppliers to improve their sustainability performance by tagging products as “eco-friendly” - and consumers who purchase these products can earn points that can be redeemed for benefits on Alibaba’s carbon ledger platform.

Tmall Supermarket said it’s planning to expand its partnership with green suppliers to roll out more eco-friendly products in the coming months, and “taking a step towards embracing zero waste in production and would work with a retailer to collect used plastic bottles and remake them into consumer goods”.

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