Chinese Tech Giants’ Quest for Environmental Sustainability

Alibaba logistics arm Cainiao’s green packaging dedicated to Earth Day (Source: Alizilla)

As the teenage eco-activist Greta Thunberg scolded the UN over environmental protection in New York, on the opposite side of the globe, in Beijing, people were going about their lives as usual – riding bikes and electric scooters, receiving deliveries in biodegradable packaging and preparing to learn how to sort garbage from their southern neighbors in Shanghai. Within the past decade or so China turned from one of the world’s biggest polluters to the world’ largest market for sustainable goods. Electric vehicles, solar panels, biodegradables – China has it all.

Beijing’s road to sustainability might not have been the most conscious – after all, the country only realized the value of clean environment having accidentally almost ruined it – but it has made staggering steps towards correcting its mistakes and encouraging environmental friendliness. Interestingly, Chinese tech companies have also made strenuous efforts to put the country and the world on the right track.

Meituan-Dianping’s headquarters is not much of a spectacle, a glass and concrete office building at the eastern end of Beijing, it’s a monument to the arduous Chinese work culture. One thing worth seeing there – outside the hordes of Chinese white-collars working towards building the next local tech behemoth – is a tiny souvenir store that boasts a selection of trivial objects that would be nothing special if most of them were not made out of recycled take-out packaging.

However, Meituan’s ecological reach extends way outside cutesy gimmicks. Mobike, one of China’s largest dockless bike-sharing companies, acquired by Meituan last year and being currently rebranded as Meituan bike is possibly one of the most visible examples of ecological consciousness that’s been taking China by storm.

Aware of the threat that scores of unattended bicycles could have to the environment, the company has developed a comprehensive recycling process that involves reusing bicycle wheels and smart locks as well as melting and repurposing the metal parts. An orange Mobike with yellow wheels form a Meituan bicycle, an old lock and a brand-new seat has become a common occurrence on Beijing’s streets illustrative of the company’s efforts.

Mobike recycling process

However, Meituan’s ecological reach extends way outside cutesy gimmicks. Mobike, one of China’s largest dockless bike-sharing companies, acquired by Meituan last year and being currently rebranded as Meituan bike is possibly one of the most visible examples of ecological consciousness that’s been taking China by storm.

Aware of the threat that scores of unattended bicycles could have to the environment, the company has developed a comprehensive recycling process that involves reusing bicycle wheels and smart locks as well as melting and repurposing the metal parts. An orange Mobike with yellow wheels form a Meituan bicycle, an old lock and a brand-new seat has become a common occurrence on Beijing’s streets illustrative of the company’s efforts.

Chinese companies dealing in more frequent goods are also taking steps towards sustainability. Alibaba has infamously committed to using only biodegradable packaging in its logistics arm Cainiao’s operations in 2017, a move met with a degree of contention, since the biodegradability of the packaging was debatable. To right its wrongs Alibaba announced on August 2019 that it would be installing 1,000 recycling boxes in Shanghai for the reuse and recycling of parcel packaging.

Jack Ma’s offspring has also been allocating 0.3% of its annual revenue to an environmental fund, donating over $47 million in 2016 alone. Additionally, in 2017, Alibaba Foundation teamed up with several environmentalist entities to form an alliance dedicated to the protection of water resources.

Alibaba’s nemesis Tencent has also been fairly active on the ecological front, joining hands with WWF on “digital-driven ecological protection” and investing over $1.9 billion in American cleantech start-ups among a flurry of other ventures dealing with sustainability. Not to mention that both Tencent and Alibaba, as well as China’s search powerhouse Baidu, have been the country’s most prominent investors in electric vehicle companies.

Huawei, another giant on the hardware side of the tech spectrum, has also professed its dedication to environmental protection on numerous occasions. The company has even set up a whole section on its official website dedicated to the matter. Huawei sees sustainability as one of the features of the developing global ICT infrastructure propelled by the rapid digitization of the world.

Surely, it is not just the swelling eco-consciousness that’s pushing China’s tech giants to embrace sustainability. Part of it is the desire to do right by the government, the government that’s been nurturing those companies like children, protecting them from outside threats, subsidizing and encouraging them to go global. Adhering to the government’s stringent ecological regulations is the least the companies can do to pay it back and stay on good terms.

While the pivot to sustainability is beneficial for China, it also reflects on the Chinese companies’ international image. Nowadays going global requires not only massive capital but also a commitment to improving living conditions on the planet, not least in the ecological sense. For Chinese companies this postulate is ever more prescriptive, since Beijing is still struggling to fend off the image of the world’s severest polluter that at times mires the reputation of the local enterprises, too.

What is more important than government relations and international image, however, is customer demand. According to a report by the Hong Kong Trade Development Council published in 2017, 71% of Chinese consumers increased their spending on green products within just one year. Among the more affluent households with a monthly income of over 20,000 yuan, that figure soars to 76%.

According to another report by the China Chain Store and Franchise Association based on interviews with 9,370 consumers in ten Chinese cities in 2016, over 70% of them understood sustainable consumption, with 30% firmly believing that personal consumption had a direct impact on the environment.

In 2017, 94.4% of respondents to a national survey stated that climate change was happening. Over 66% believed it was to a large degree caused by human activities. Over half of the respondents were willing to put their money where their mouths were by spending more than 100 yuan ($15) annually to offset carbon emissions, a seemingly small amount, that, given the size of China’s population, could turn into colossal environmental aid.

The rise in popular consciousness pushes Chinese tech companies to increase their ecological efforts, which in turn influences even more people to take a stance on environmental issues. This virtuous cycle could be what will make China not just the world’s biggest economy, but the world’s biggest sustainable economy.