Greenpeace released its first-ever renewable energy ranking of China’s biggest tech companies on Thursday. The conclusion? Companies like Alibaba and Tencent are taking steps in clean energy, but they need to do a lot more.
“Many of China’s biggest tech companies have made some progress on renewable energy procurement in recent years, but they still lag behind their global peers. They must scale up their ambition and action,” said Greenpeace East Asia climate and energy campaigner Ye Ruiqi.
E-commerce giant Alibaba—China’s largest company by market value—scored 60 out of a possible 100 points on the ranking. Tencent, China’s second largest publicly listed company, scored 52 on the report.
Huawei and Baidu each scored 46, while e-commerce company JD.com received just 12 points. Huawei was the only company on the list that has set a greenhouse gas emission reduction target.
Software firm Baosight Software, whose parent company is the state-owned Fortune Global 500 company Baowu Steel, made the bottom of the ranking, receiving just two points.
Internet companies across the globe consume huge amounts of electricity through their data centers, which house the computer servers that store and share website and cloud information.
In China, the electricity consumption of the data center sector is on track to increase by 66% between now and 2023, according to Greenpeace. The “dirty secret” of Internet companies is their massive energy consumption, and currently, China’s data centers run primarily on coal.
21Vianet, the operator for Microsoft data centers in China, scored 21 on the Greenpeace ranking, with zero points out of a possible 40 awarded for its renewable energy performance.
Still, there were exceptions in the data center sector. Chindata Group, a data center operator currently seeking an initial public offering with backing from Bain Capital, was the highest-scoring company on the report with 80 points.
Greenpeace recommendations
Greenpeace collaborated with the North China Electric Power University for the report, which analyzed 15 of China’s biggest cloud companies and data center operators and scored them based on their performance in renewable energy, carbon reduction, and energy efficiency.
The report also evaluated factors like government and industry influence—measuring company cooperation with local governments and national clean energy initiatives—and transparency (researchers only used publicly available information for the report).
The companies Greenpeace evaluated comprise more than 70% of China’s public cloud market and over 85% of its independent data center market. Four out of five companies analyzed, including Alibaba, Baidu, and JD.com, currently do not publicly disclose their total electricity consumption or greenhouse gas emissions data.
The report recommended that all data center operators and Internet companies set targets for 100% renewable energy use. Chindata, which committed to that target in December 2019, is the first China-based data center operator, and the only one on the Greenpeace ranking, to do so.
The data center market in China was worth around $12.3 billion in 2018. It makes up around 11% of the global data center market, the second-largest share after the U.S., and it’s growing. The need for power will only increase with the creation of more data and consumer demand for faster connection speeds and higher-definition video.
“Power consumption from China’s internet industry is skyrocketing, and it’s imperative that Chinese internet giants lead the sector to break away from its reliance on coal.” Ye said.
Greenpeace recommended that companies scale up their renewable energy usage, publicly disclose their energy and emissions data, and collaborate with local governments and grid companies to expand clean energy use. The report concluded, “In the face of the global climate crisis, the internet industry must increase its reliance on clean energy sources.”
Coal-powered electricity is just one climate issue that Chinese tech companies have had a hand in escalating and now face pressure to help solve. Alibaba’s annual Singles’ Day shopping extravaganza produces billions of dollars in sales, as well as millions of tons of packaging waste in a country where as much as 99% of plastic delivery packaging is not recycled.
