In-Depth Report: JD's Enhanced Commitment to ESG

In-Depth Report: JD's Enhanced Commitment to ESG

by Ella Kidron

For JD, ESG is not just a commitment to shareholders, but a commitment to society, and to the world we live in as a whole, to deliver trust.

JD’s annual report (Form 20-F) released on April 15th reveals the company’s enhanced commitment to ESG (Environment, Social responsibility, corporate Governance). While environmental issues like climate change and resources scarcity form an important element of this, the term is actually much more encompassing, and covers social issues like a company’s labor practices, talent management and more. JD’s efforts cover not only environmental sustainability and a commitment to responsible consumption of resources, but also the unrelenting pursuit of and management of top talent and its commitment to improving society through poverty relief and more.

 

Sustainability 

In 2019, JD launched the China E-Commerce and Logistics Packaging Standards Alliance together with several internationally recognized brands. The alliance aims to optimize the usage of packaging materials in China by establishing nationwide e-commerce packaging standards. JD also expanded its box recycling initiative across China with customer incentives provided in the form of rebates.

The rapid growth of e-commerce has meant that an unprecedented number of packages are in circulation. According to industry data, the number of annual delivery packages in China in 2012 was 5.7 billion. That number rose to 63 billion by 2019. To combat this, JD has introduced reusable packaging and box recycling programs, among other initiatives.

In 2019, JD used green recycling boxes and cold chain containers a total of 47 million times. The company also saved 600,000 tons of paper through using lighter-weight boxes and reusable boxes, going paperless, using electronic order slips and more. JD has also committed to the standardization of green logistics, promoting the tape used to be narrowed from 53 mm to 43mm (a reduction of 15%), banning layer by layer winding of tape as a standardized packaging process, and by reducing the use of tape by nearly 400 million meters throughout the year, setting the standard and benchmark. In 2013, JD issued the first ever digital invoice in China. Since then, the company has already issued more than 4.6 billion digital invoices across China, and replaced paper invoices with digital invoices for all retail orders.

These efforts are part of JD’s broader Green Stream Initiative launched in 2017, in partnership with brand designers, manufacturers, logistics companies, packaging companies and industry associations, with the goal of improving the utilization rate of supply chain resources and reducing carbon emissions.

JD’s reusable green logistics boxes

The World Economic Forum named JD’s Green Stream Initiative as one of its Lighthouse Projects for 2020. The Lighthouse Project initiative catalogues “lighthouse” examples, which show how innovation and investment across key areas of social, human, environmental and physical capital can be brought together to bring results for everyone. The Lighthouse Project initiative is very closely aligned with JD’s overall mission to promote sustainable development and to benefit society.

In 2019, JD also joined the Science Based Targets Initiative (SBTi), an ambitious global campaign aimed at driving corporate action on climate change. As part of its commitment to the initiative, sealed by a strategic partnership with WWF China and One Planet Foundation, JD Logistics plans to release comprehensive carbon emission targets regarding its operations. JD Logistics is the first company to join SBTi in the area of logistics in China. As part of joining the initiative, JD Logistics will provide an overview of its existing measures to combat climate change – including its self-developed “Green Stream Initiative” – as well as set new targets in accordance with SBTi’s goals, and explain how these targets will be met.

Further to its commitment to sustainable energy, JD Logistics is also gradually upgrading its nationwide fleet of delivery trucks, as well as those of its third party partners, to new energy vehicles.

 

Pursuit of top talent

In 2019, JD instituted employee surveys through its internal communication tools on a daily basis, covering a broad range of topics such as company culture, team cooperation, compensation satisfaction and other areas. The surveys enable employees to provide feedback on the state of their individual departments, allowing for a channel to turn the feedback into actionable changes. They also help the management team better understand employees’ needs and thus help to improve the health of the overall organization.

As a result of its efforts to continue improving its employee benefits and training programs, JD won a number of employer awards in 2019, among which the most influential ones include: Universum’s 2019 Campus Most Attractive Employer Award at the international level, Zhaopin.com’s 2019 Best Employer Award, and 58.com’s 2019 China Employer Brand Award in China. JD’s training program is also an important aspect of its employee benefits. In 2019, JD provided more than 7,925 training courses held online and offline for employees.

Among the highlights of JD’s talent management program is JD RUN, an internship program that includes training and a project competition. JD’s goal is to build the most valuable internship platform in the industry, and is also viewed as a pipeline to bring top quality, energetic talent into the company.

Alex Rudnicki is a current JD employee in the company’s International Logistics division. He reflects on his experience in the JD RUN program, “It is safe to say that if I had not received the JD RUN 2018 internship opportunity, I would likely be back home in America feeling my personal mission in China was unfinished.” Rudnicki moved with his wife from Silicon Valley to Beijing with just five hours of Chinese language study under his belt and a vision to help Chinese companies expand abroad, and began his first year of study at the Tsinghua-MIT Global MBA.

“I realized that my summer internship would be a critical factor in whether it would make sense to stay in China longer term. With barely conversational Chinese skills at that point and little to no reading ability, I needed the right company to take a chance on my long-term growth potential. After considering opportunities at many of the major Chinese tech companies, I decided that JD RUN was what I’d been looking for,” he said.

Alex Rudnicki and other JD colleagues

Following a successful internship, Rudnicki joined JD full time in a one-year rotational program. “The program helped me understand the big picture of where the company is going through close exposure to leadership, as well as the goals and challenges of employees across different departments. More importantly, it helped me find the team and boss that I wanted to work with. This is while earning compensation competitive with what I would expect if I had returned to work in Silicon Valley post-MBA,” he added.

 

Poverty relief

Leveraging its strong supply chain, cutting edge technologies and logistics network, JD has participated in extensive poverty alleviation efforts in rural areas. The company has pioneered its rural e-commerce strategy, aiming to make agricultural products in rural areas available online, while allowing authentic, quality products to reach residents in rural areas.

One of JD’s efforts is its Poverty Relief Malls – an important commitment to society. The malls help promote and market local agricultural products on a national scale, both benefitting disadvantaged farmers and providing access to more locally-sourced products for consumers. JD has helped launch over 279 specialty malls on its platform, selling over three million local specialty items, with sales exceeding RMB 75 billion, and contributing to helping 900,000 households earn a living so far.

JD helps farmers from poor regions sell their crops online, helping them earn a living and ensuring quality produce for customers

The company has also launched an initiative to support farmers in the poorest regions of China to raise livestock for sale on JD.com. One of these projects, JD’s “Running Chicken” initiative, launched in Wuyi County, Hebei province, was also named as a WEF Lighthouse Project this year. Through the initiative JD supports farmers to raise free-range chickens by offering interest-free loans, breeding experts, part-time jobs on farm maintenance and support on produce sales. Raised in an ethical and healthy environment, chickens can spend 50% of their time outdoors, and enjoy fresh air, free range and sunshine.

Each chicken takes one million steps, monitored by a specially designed pedometer before they are ready to be sold. Furthermore, a scan of the QR code on the poultry’s packaging allows buyers to view detailed information on sourcing, feeding intervals, and more. Sales of free range chickens on JD have been a resounding success in the past several years and the initiative has directly improved the farmers’ quality of life.

Another important element of JD’s support to society is JD’s trusted donation platform through which its hundreds of millions of customers can purchase products and donate them directly to non-profit organizations and groups in need across China, leveraging JD’s in-house logistics network. To ensure the transparency of the process, JD enables customers to track the delivery status of their donations online to make sure they reach the intended recipient. As of February this year, JD’s trusted online donation program had served more than 120 million NGOs, initiated more than 800 campaigns and collected more than 2.5 million items.

 

COVID-19 Support

Since the outbreak of COVID-19, JD has done its utmost to help people in Wuhan, Hubei provice, and throughout China. Immediately after the lockdown was announced in Wuhan, JD put together a task force to lead its epidemic relief efforts and took swift action to donate critically needed medical supplies to hospitals and charity organizations in Wuhan, including a large amount of face masks and protective medical supplies.

To ensure timely supply, JD opened up a dedicated channel for relief materials coming in from across the country. In doing so, JD galvanized resources across the business, leveraging its strength as a supply chain-based technology and service provider to deploy various technologies including AI, Big Data and IoT, to develop solutions to support the fight against the COVID-19.

At the same time, putting employee health and safety as its top priority, the company provided all frontline employees with masks and other protective equipment.

The company also introduced a series of new policies, such as subsidies, fee reductions and waivers, to help third-party merchants on its platform during COVID-19.

From ensuring sustainable operations to creating a work place where people are eager to collaborate and innovate, to including customers in the mission to support millions of people in need, there is one common thread that brings it all together. For JD, ESG is not just a commitment to shareholders, but a commitment to society, and to the world we live in as a whole, to deliver trust.

 

(ella@jd.com)

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