On June 13, 2024, Ant Group released its 2023 Sustainability Report, fully disclosing the latest progress in its development to create a sustainable future.
In the report, Jing Xiandong, chairman and CEO of Ant Group, systematically reviewed the history of Ant Group in the 20 years since its founding, including the use of technology to help sustainable social development of Alipay.
In 2004, Alipay was born out of an original intention to solve the problem of trust for society: to allow consumers and small and micro enterprises to equally enjoy inclusive technology and financial services. Twenty years ago, Alipay founded and solved the problem of transaction trust in e-commerce, and witnessed the vigorous development of e-commerce in China. Ten years ago, Ant Financial was founded to lower the barrier to entry for financial services with technologies such as big data. Nowadays, every ordinary person can enjoy inclusive financial services regardless of region, age or status; Mom-and-pop shops on the street, as long as they are honest and trustworthy, can easily and conveniently obtain loan support without any collateral; People with disabilities can bridge the digital divide and enjoy the convenience of digital life as usual.
2024 is not only the 20th anniversary of Alipay's birth, but also the third year of Ant Group's four-in-one ESG sustainability strategy.
Legacy of Mission
At present, a new round of scientific and technological revolution and industrial transformation is developing in depth, and the wave of digitalization is sweeping the world, constantly promoting the formation and development of new quality productivity, and countries around the world are also facing new problems and challenges brought about by the development of data and digital technology. Digital technology is being fully integrated into the whole process of economic, political, cultural, social and ecological civilization construction with new ideas, new forms of business and new models, profoundly changing the mode of production, lifestyle and social governance.
The construction of digital China has made a better life more accessible. Digitalization is a key means to efficiently and accurately achieve public policy goals and continuously meet the needs of public services in the future. Alipay's real-name authentication, face scanning, mini programs, blockchain and other technologies are important supports for realizing "one network for all" and promoting the rapid development of "Internet + government services". In 2018, unified government service platforms were launched across the country, so that citizens and enterprises can handle various government affairs and convenience matters in one stop, avoiding repeated downloads and installations, registration and certification, uploading information and running back and forth, that is, "one network for all". In 2019, with the rapid development of "Internet + government services", 442 cities across the country (including county-level cities and counties directly under the central government) have moved government services to the Alipay platform. At present, 31 provinces (autonomous regions and municipalities directly under the central government) and the Xinjiang Production and Construction Corps have built provincial-level government service mobile terminals, and completed the docking with the mobile terminal of the national government service platform, and more than 80% of the regions use Alipay or WeChat mini programs to provide services.
On the other hand, with the rapid development of technology, how to strike a balance between promoting innovation and effective regulation to achieve sustainable development has become an important issue. How can we ensure that technology works for people and for people?
In 2013, impact investor Paul Miller proposed the term "Technology for good", which was quickly recognized and responded to by technology companies.
Due to the fact that platform enterprises have both economic and social attributes, some excellent platform enterprises have established the concept of "responsible operation and sustainable development" at the beginning of their establishment.
Genetically speaking, Ant's mission at the beginning of its establishment was to make it easy to do business in the world. After nearly two decades of rapid development, Ant Group has grown into an influential technology company. From the perspective of user volume, the number of Alipay users has exceeded 1 billion, and opening Alipay every day has become a part of the daily life of many ordinary people; Ant Forest, which has been in operation for more than seven years, is the alarm clock that wakes up more than 690 million people every morning.
How can we use this hard-won trust to solve more social problems, bring more small but beautiful changes to the world, and drive more sustainable development of enterprises? How can we better integrate our own development into the overall social situation, and assume the role of practitioners and contributors to national strategies such as scientific and technological innovation, low-carbon development, and common prosperity? How can products and services continue to contribute to more inclusive, greener and more sustainable economic and social development and industrial needs, and promote harmony and win-win results in a broader and more diverse social ecology?
All these issues continue to prompt Ant's management to think more systematically about the relationship between the company, society, and the environment, to examine and continuously improve the company's value creation in a more holistic way, and to establish more clearly the coordinates for future sustainable development.
In 2022, which is also the 18th year of Ant Group's establishment, Ant Group gave its own answer and officially released its four-in-one ESG sustainable development strategy of "digital inclusion", "technological innovation", "green and low-carbon" and "open ecology".
Regarding the ESG sustainability strategy, Jing Xiandong, chairman and CEO of Ant Group, believes that the ESG sustainability strategy is an endogenous demand and active choice of Ant Group, not a "gold-plated" option to cater to short-term trends, but a natural choice to achieve the vision of "being a good company with healthy growth for 102 years".
Ant Group believes that the new ESG sustainability strategy is not only a continuation of the mission of "making business easy to do in the world", but also a solemn commitment and action for a better future. Among them, digital inclusion is the original intention, and digital finance and digital life can benefit more ordinary people and small and micro enterprises; Green and low-carbon is the future, and promoting green production and lifestyle can better promote the harmonious coexistence of man and nature; Scientific and technological innovation is the driving force, and science and technology are the best solutions to solve social problems and promote social progress. Only by working together can we bring more small and beautiful changes to the world.
In order to refine the ESG sustainability strategy into an actionable and executable "strategic map", Ant Group has fully studied the macro environment and policy trends at home and abroad, learned from leading practical experience, combined with its own development characteristics and the needs of various stakeholders, identified 4 major themes and 19 material issues, and comprehensively analyzed and screened the material issues. In addition, Ant Group has also established an ESG core team of about 100 people to ensure that there are specific corresponding responsible persons behind the 19 issues.
It can be said that the ESG sustainable development strategy is not only the inheritance of the mission of "making the world no difficult business", but also the road map for ants to bring small but beautiful changes to the world.
The top and bottom have the same desire
The direction is clear, and how to promote the implementation of ESG strategy and integrate cutting-edge concepts into the actual operation of the company will not only test the management level of Ant Group, but also test the execution of Ant Group.
Good corporate governance is a necessary condition for enterprises to promote and implement corporate strategies and practice sustainable development, and it is also the basis for enhancing the company's development resilience and protecting the interests of all stakeholders. With the approval of the Board of Directors, Ant Group has established an ESG Sustainability Committee under the Board of Directors and an external ESG Sustainability Advisory Committee to ensure the scientific nature of the strategy. At the corporate level, we have set up an ESG sustainability leadership group led by the CEO and CSO (Chief Sustainability Officer), as well as an implementation group for various issues, to ensure that ESG goals are integrated into the business and drive the business.
As a company that hopes to move towards a "102-year-old history", Ant Group has pioneered a unique approach to issue advancement: the "No. 1" position of ESG issues is given to business presidents, all business presidents are responsible for ESG issues, and the CEOs set OKRs (goals and key results) for their respective issues, and are responsible for achieving the results.
In 2023, Ant Group will also benchmark the advanced practices of large international companies such as Apple and Starbucks, and link sustainability assessment to executive compensation.
How to make employees agree with ESG and sustainable development is another dimension that needs to be paid attention to in the implementation of ESG strategy. Ant Group's approach is to distinguish between different levels of understanding and mastery of ESG, and to provide different guidance to employees.
From the perspective of cognitive curve, the cognitive process of the average person is from knowing, understanding, recognizing, trying, and finally integrating. Training and communication are the foundation of knowledge and understanding: Ant has established an ESG learning community internally, and held lectures, workshops, online courses and other forms to let employees at different levels understand the context and implementation of sustainable development, such as setting up a "Sustainable Summer" summer theme course series, inviting external ESG benchmarking companies to visit Ant to share.
Recognition requires more incentives and rewards: By building different internal ESG issue sharing platforms, employees can be motivated and rewarded, and more people will be encouraged to join in sustainable development.
Experimentation and integration must be based on hands-on practice and innovation: Ant's sustainability team collaborates with internal project innovation competitions to encourage employees to come up with innovative solutions and enable more employees to understand relevant issues.
From senior executives to grassroots product managers, cross-departmental coordination mechanisms have been encouraged and promoted, and Ant Group has continuously improved its entire ESG governance system through continuous review and adjustment.
Issue improvements
The inherent duality of innovation is that innovation contains opportunities and risks, and the two are inseparable. The S-shaped curve of innovation explains how it was initially driven by a small number of people, then went through expanded adoption, diffusion, and growth, reached maturity and saturation, and finally declined or was replaced with the emergence of the next wave or the next generation. In the innovation diffusion curve proposed by Rogers in the 60s of the 20th century, the inverted V-shaped curve represents the percentage of the population who accepts new technologies in different periods, and the rising curve is the cumulative percentage of the population who embrace innovation over time. Over time, almost everyone has embraced the innovation.
It takes time for innovation to diffusion, and so does the promotion and implementation of the concept of sustainable development. Based on in-depth observation and discussion of related issues, Ant Group began to think about how to turn "test-oriented education" into "quality education", and introduced the perspectives of "risks and opportunities", "positive and negative externalities" and "stakeholders" to improve the awareness and practical capabilities of 19 teams working on sustainability issues closely related to the business, and deeply integrate ESG sustainability into business operations from top to bottom.
In terms of risks and opportunities, in order to better meet the risk management needs of the digital era, Ant Group has set up a risk management committee under the board of directors to comprehensively coordinate the management of various risk areas, continue to pay attention to changes in the external environment and internal development demands, and improve the risk appetite management system. In 2023, Ant Group will make reference to the framework of the International Financial Reporting Sustainability Disclosure Standard 2 – Climate-related Disclosures (IFRSS2) issued by the International Sustainability Standards Board (ISSB) to carry out Ant Group's climate-related disclosures. For example, in terms of the impact of extreme weather on its business and its response, Ant Group has procured climate risk data and built a database, integrated climate risk data into the database, and carried out regular updates and maintenance to support climate risk management and opportunity identification. At the same time, Ant took the scenario of offline merchants and small and micro operators as the starting point, and built a multi-level meteorological disaster indicator system and early warning model by analyzing the correlation between online transaction volume and extreme weather events, and built a geospatial visualization platform for climate risk for the first time to provide better service guarantee for platform merchants.
From the perspective of positive and negative externalities, Ant Group launches responsible products and services from the perspective of preventing problems before they occur and contributing to social development. As an integral part of society, business activities will have an impact on the surrounding society and environment, positive externalities are the positive effects generated, while negative externalities refer to the waste of resources or negative impacts generated.
From the perspective of positive externalities, it is more typical that Ant Group has developed the core innovative application products of the Ant Bailing model, "Life Butler", "Medical Assistant" and "Financial Assistant", which continuously lower the threshold for ordinary people to use. The Zhejiang Provincial Health Commission and Alipay jointly launched the digital health person "Andiao'er", which can accompany the patient, which has been applied in nearly 100 hospitals in Zhejiang Province and served more than one million people. At the same time, in the past few years, Ant Group has continued to strengthen technological innovation in green computing, developed more efficient algorithms, and accumulated the ability to shave peaks and valleys, and the CPU efficiency has increased by 5 times in 6 years.
From the perspective of preventing and reducing negative externalities, Ant Group strengthens product specifications and management mechanisms, provides more inclusive products and services, and advocates financial health and universal financial education. In the field of consumption, Ant continues to help users consciously and proactively balance their daily income and expenditure, and continuously improve their ability to manage credit independently. In the field of financial management, in 2023, Ant proposed the concept of "wealth management score" to help users set financial goals through financial behavior health scores. In the field of insurance, the interpretation of product terminology and risk warnings has been enhanced, and professional actuaries have been introduced to analyze the characteristics and differences of products to help consumers better understand products.
From the perspective of stakeholders, Ant Group starts from the baseline of "regulation-oriented" and puts the way to win on "user-oriented". Take, for example, the issue of privacy protection. In terms of privacy protection, in 2023, Ant will take the initiative to carry out user privacy experience surveys, and continuously distribute general and special privacy survey questionnaires to users, starting from the specific concerns of users to improve the privacy experience. Products such as sensitive permission usage display, sensitive information disclosure, and screenshot reminders have been optimized, and scenario-based privacy protection measures have been improved for special groups and customer service groups. In addition, since the visually impaired group mainly uses sound to operate the APP, Ant has optimized the product to avoid the full-text broadcast of users' sensitive information and reduce the risk of inadvertent leakage. In scenarios where users need to provide personal information, automatic coding and friendly reminders are provided to increase the sense of security.
Symbiosis of dual values
Ant Group insists on seeking innovation opportunities from social issues and social values, and promotes sustainable development based on the integrated creation of social value and business value, which is the value pursuit of ESG sustainable development.
Since its inception, Ant has been driven by the need to serve the society, and today, the use of technology to enable more consumers and small and micro enterprises to benefit from digital development is still the direction of the company's continuous efforts. Ant Group has defined "dual value creation in one" as the core concept of Ant's sustainable development strategy, and hopes that Ant's business development and innovation, from the beginning of design and planning to the implementation of results, can be combined with the integration of commercial value and social value, and guaranteed through the corresponding organizational system and assessment mechanism.
By analyzing Ant Group's growth over the past two decades, it can be found that Ant Group has continued to promote technology inclusion in the fields of green, women, agriculture, livelihood services, and employment, and has adhered to a number of projects for more than 7 years.
Digitalization is an opportunity provided by the times, and it is also a responsibility entrusted by the times. Digitalization must solve social problems in order to create value, and use the concept of openness and sharing to do a good job for all.
As a new business civilization emerging in the world, ESG sustainable development has put forward new requirements for the operation mode, management ideas, and value creation model of enterprises, and the full implementation of ESG sustainable development strategy has become a comprehensive, profound, and future-oriented enterprise change.
In the face of change, Ant Group has explored its own methodology: stick to its original intention and clarify its strategic direction; improve governance and form a joint force for development; Issue operation and establish a closed loop of action; Value orientation, business value and social value are created in one.
Of course, change from concept to practice will not happen overnight, nor will it be immediate. In the future, we hope that Ant Group will continue to stick to its original aspiration and make long-term efforts to explore an effective path of ESG sustainable development for large-scale Internet platform enterprises.
Expert commentary
In June 2024, Ant Group's 2023 Sustainability Report arrived as scheduled, demonstrating Ant Group's four-in-one ESG sustainability strategy of "digital inclusion", "technological innovation", "green and low-carbon", and "open ecology", and also conveyed the concept of synergy between Ant Group's business and ESG sustainable development. ESG reporting should not be a collection of "good people and good deeds", one of the highlights of Ant Group's ESG sustainability practice is the integrated creation of business value and social value, using the commercial first-mover advantage in the field to create social value, and then feeding back its own business value, forming a virtuous circle of synergy.
One of the most impressive cases of Ant Group's ESG sustainability is "Big", which uses satellite remote sensing technology to monitor the planting and growth of farmers' agricultural products, and then provides farmers with pure credit and unsecured credit services to solve their urgent needs, which is a vivid embodiment of digital inclusion and the concept of "business altruism".
Green and low-carbon is an important dimension for mainland enterprises to practice ESG sustainable development, and Ant Group's digital carbon management tool (carbon matrix) is also a "potential stock" for the realization of the "dual value" of social value and commercial value.
- Jia Ming
Vice Dean and Professor of School of Management, Northwestern Polytechnical University
Director of the Research Center for High-quality Development of Enterprises in the New Era
Think tank expert of China Corporate Social Responsibility Research Center of Southern Weekly
China Corporate Social Responsibility Research Center of Southern Weekly
Editor-in-charge: Zou Li