Sustainability Assessment and Analysis: The Alibaba Group's Practices

This report provides a comprehensive analysis of the Alibaba Group's sustainability initiatives, examining various aspects of their business operations. It begins with an introduction to sustainability in business and provides an overview of the Alibaba Group, detailing its mission, customer base, and commitment to sustainable growth. The report then delves into the four key criteria for a sustainable business, followed by an in-depth discussion of Alibaba's approach to sustainability, including its policy and goals. The core of the report focuses on seven key areas of sustainability: corporate governance, intellectual property rights protection, cyber security, data protection, human capital, social impact, and environmental impact. Each area is examined in detail, highlighting the strategies and practices employed by Alibaba to ensure sustainability. The report references various academic sources and provides a detailed overview of the company's efforts to balance profit with environmental and social responsibility, making it a valuable resource for understanding sustainable business practices.

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Introduction
Sustainability has become an indisputable part of business. Most organizations that
are now growing and expanding depend upon sustainability in order to maintain their
competitive advantage (Benn, Edwards & Williams, 2014). A sustainable business, also
called a green business is an enterprise that leaves minimal impact and footprint on their local
as well as global environment, society, community and economy (Zhou, Chen, & Li, 2018).
Alibaba is one the largest e-commerce chain in China. Founded in the year 1999 by Jack Ma
and seventeen other co-founders, it has established extensive supply and distribution chain all
over China. The main target customers of the organization are the middle class people in
China. The middle class people in china alone cover 55% of online sale consumption
(Alibaba Group, 2019). Their mission has been to be able to make it easy to do business
anywhere. They integrate hundreds of sellers and manufacturers with the customers thus
maintaining and B2B and B2C business strategy. Being a company of significant impact,
Alibaba is committed to sustainable growth and business strategies in order to maintain their
competitive advantage (Alibaba Group, 2019). In this report, the sustainability aspects of the
Alibaba Group and how those aspects have been upheld has been analyzed. In light of that,
the enterprise has been evaluated in order to decide whether Alibaba Group can be considered
a sustainable organization.
Discussion
There are four criteria that a business needs to meet before it can be called a
sustainable business. These are: incorporation of principles of sustainability into each of the
business decisions that they take, supplying products or services that are environment
friendly and are able to replace the non-sustainable products or services, the product or

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services that they offer are better in sustainability issue than what their competitors offer and
their business operations are committed to environmental principles (Kiron et al., 2013).
Thus, a sustainable business engages in activities so that all of their processes, manufacturing
and products are able to address the present and emerging concerns related to environment
while earning a profit (SDG1. No Poverty | Global Compact Network Australia, 2019).
Company Overview
The business strategy of Alibaba has always been customer satisfaction (Choi, 2015).
They operate mostly in a collective culture and thus, this value is easier to uphold. In case of
individualistic cultures, the main importance is given on the stakeholders. The organization
aims to be able to do business at least for 102 years. The reason behind this aim is that the
company was established in 1999 and by doing business for 102 years they will be able to
touch all three centuries which cannot be claimed by most companies. The vision that they
have set for 2036 is to serve 2 billion global consumers, support 10 million businesses and to
create 100 million jobs (Alibaba Group, 2019).
Sustainability
When it comes to sustainability, Alibaba has created a sustainability policy and goals
in order to be able to impact positive change in the environment that they operate. In order to
learn the aspects that they need to maintain for sustainability, they gather input from their
shareholders, customers and employees. The shareholders and customers are able to share the
global environmental concerns that they need to focus on while the employees, as they are
locals are able to address the local sustainability issues and concerns that they need to look
after (Good, 2014). There are seven key areas of sustainability that Alibaba maintains. These
are:

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Corporate Governance
The corporate governance is the heart of Alibaba Group’s business. This strategy
helps them to ensure that their business remains sustainable. Alibaba has seen rapid growth in
the last 20 years and it was necessary to create a sustainable decision making system in order
to be able to retain their profit in an ever-changing market (Kim, Zhang & Zhang, 2016). The
Alibaba board of directors have 36 senior managers and partners that are involved in the
decision making process. The partners are dedicated to monitor the ethical conduct of the
employees of Alibaba, make personal contributions in order to solve investment requirements
and set the tone at the top. This is how the people on top maintain their social responsibility.
Due to the collective decision making process of the Alibaba Group, it is ensured every time
a decision is taken that the decision has been debated thoroughly and deliberated for a long
time. It is also ensured that in the decision making process, any single individual does not
hold the key decision making power. Thus choosing the correct leaders is extremely
important for the success of the business. While choosing the individuals that will direct the
company to its future, some key traits are always given importance. These are: Integrity,
Intellect, Emotional Intelligence, Ethical Conduct, Energy, Ability to Influence, Strategic
Mindset, Open-mindedness, resilience, self-awareness and Humility (Wang et al., 2018).
Intellectual Property Rights Protection
The very center of a healthy marketplace practice lies the rights to intellectual
property. Alibaba Group continuously tries to ensure that the products that they sell are
authentic and branded. They discourage the sale of unauthorized or fake goods, which is
detrimental to the good will that they have created and intend to maintain. The vendors that
they work with falls under the protections of copyright infringement (Alibaba Group, 2019).
Alibaba has even files law suits and won them when it comes to authenticity of a product.
The well-known brands like Adidas and Apple are their vendors and thus maintaining and

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protecting the intellectual property becomes important. This aspect also creates a sense of
trust within the employees. Alibaba works with different kinds of sellers and vendors. Some
are small ventures and are just emerging. They have no brand exposure or recognition. There
are some who are medium enterprise and have already gained some brand recognition. And
then there are others that have extensive brand image like Apple, Samsung, Sony, Canon, HP
and Adidas. These well-known brands have entered into an alliance known as Alibaba Anti-
Counterfeiting Alliance or (AACA). This protects them and their products from being copied
and if they face any copyright infringement issue they can file a lawsuit.
Cyber security
Another aspect of conducting a sustainable business is to provide protection to the
system that they use. The main platform that the organization uses is the e-commerce
platforms for the transaction (Tan et al., 2015). Protecting these transactions is important as
there are many merchants as well as all a large number of consumers who use that platform
for online payments. Without proper security, the system may be attacked by hackers and the
money paid by the consumers may fall into bad hands. In order to protect the interest of the
customers, the vendors as well as the company, premium cyber security is used in their
ecommerce sites. The multilayer security system that they use is designed in such a way that
it secures the data shared by the consumers and merchants, the business operations, online
transaction platform and the organizational infrastructure. Along with that, Alibaba ensures
best practice and meets the ISO 27001 international certification standards for information
security and ISO 22301 for protecting the business continuity system from any malicious and
disruptive threat. They also have introduced Alibaba Cloud and payment cards that are
protected by their unique security software. The logistics system that they use known as
Cainiao is first in the industry to have a SOCII report. In order to demonstrate the efficiency
of the security system, Alibaba held a Global shopping Festival which is the biggest online

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shopping festival held till date. On that day, they received more than 3 lakhs orders and more
than 2 lakhs transactions per second. This resulted in more than 160 billion RMB in payment.
Data Protection
The main motto of Alibaba is to put the customers first. In this regard, transparency is
the key. The users are informed about the kind of data that the company collects how they are
collected and their usage. There are also instructions regarding how to set data privacy and
opt out from sharing unwanted data (Lu et al., 2017). They also use their advanced security
system in order to protect the collected data. The data that are collected from the users are
only shared within the closed network of Alibaba, Ant financial Services and Cainiao
Network. There is also a framework that has been introduced to limit the sharing of data
among these partners. The data is shared in a controlled environment and there are strict rules
and protocols that prevent the affiliates to store any personal data as well as duplicate data.
There is a data oversight committee that oversees the data sharing and storage across the
affiliates. The safeguards and protocols that are at work includes, massive data usage
scenarios where the authorized personnel can only access that data and has to use their
proprietary data leakage tool so that local hosts cannot download any data and software
systems like Alilang, a mobile device management and Cloud Shell, a data leakage
prevention software prevents data leakage and employee abnormal behavior in order to
protect data and gives timely alerts to the managers (Ter Chian, Tan & Pan, 2016). Moreover,
they improve their data flow tracing capability and embed traceable watermark in the
company data files and encrypt level 3 and 4 data before they are transferred to the authorized
sellers.
Human Capital
It necessary to be able to recruit able employees, train them, reward them and retain
them for a long time for the success of the organization. It is also necessary to be able to

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maintain a diverse workforce to promote cross cultural values. The main reason that people
join an organization is the opportunity that they will get to practice and enhance their skills
and competencies. Alibaba group has more than 86,000 employees across their different
centers. There are six core values on which the employees of the organization are evaluated,
customer service, teamwork, embracing change, integrity, passion and commitment. The
extents to which an employee possesses these qualities affect the promotions and rise in
compensation that they receive. The organization also aims to have positive impact on the
society. They support small businesses to grow through their channels. They also have
created numerous jobs that have helped thousands of people. In their organization, they
promote women empowerment and more than 40% of the employees are women. Moreover,
among the founders of the company and the present board of directors, more than 45% are
women (Alibaba Group, 2019).
Social impact
Alibaba’s vision is to do business but in a responsible way. This idea of responsibility
extends to environmental as well as social aspect. The first step that they have taken is that
they have created numerous jobs. While working in Australia, it has helped employable
youths to secure a job in a reputed company. Alibaba support start-up enterprises with
funding (Du et al., 2013). There are also several non-profit ventures that they support. Apart
from monetary support they also support these ventures with their digital economy platform,
cloud computing and logistic services. Alibaba has created software that has helped the law
enforcement of china to locate missing children (Fan et al., 2018). Till now, they have shown
immensely high success rate. Apart from that, the employees are expected to invest certain
hours for some philanthropic work. It enhances their performance record and also helps
people in distress. Jack Ma himself runs a fund that helps people living in village. This fund

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gives them opportunity to learn industrial skills and work so that they can come out of the
poverty.
Environmental impact
It is necessary for every organization to be responsible towards environment and
should operate in such a way that they are able to reduce the environmental impact to a
minimum. The main aim of Alibaba is create a sustainable business and growth and
environmentally sustainable practices help them realize that goal in the long-term. The
logistics network Cainiao has been able to reduce the amount of packaging materials used
exponentially in the year 2018 (Lau & Su, 2016). They use an optimizing algorithm that
enables them to reuse and recycle the packaging material. They are also making 100% eco-
friendly and biodegradable packaging material in future. Along with these initiatives, they are
also actively improving the condition of the environment by planting trees in many areas. The
organization is also building business centers that run on complete solar and wind power in
order to save the non-renewable sources of energy.
Evaluation of Alibaba as a Truly Sustainable Organization
There are many aspects that make a company truly sustainable. Sustainability for an
organization comes from their strategies and processes that are created in such a way that
they will have reduced negative impact on the environment and will be able to uphold the
operations and profit earning at a stable condition in long-term. In case of Alibaba Group,
they have seven aspects where they have adopted strategies that will ensure their
sustainability in the market (Kiron et al., 2013). These initiatives can be broadly categorized
to three aspects: human related, security and privacy and environmental.
The human related aspects like promoting equality in workplace, working with a
diverse workforce, valuing able employees and rewarding them as well as the philanthropic

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aspects are commendable and make the company a leader in the industry. This also has made
the organization one of the most sought after in case of job opportunities. The growth and
exposure that they provide to individuals along with the development of skills and
competencies makes the individuals extremely able to perform their jobs and they become
highly employable in future. The privacy and security initiatives that they have taken have
created a sense of trust among its users and thus make the company much more likely to
survive in a constantly shifting world. The environmental initiatives that they have taken are
necessary steps. Every organization that are presently doing business should take steps that
would stop further environmental degradation. Due to the bulk nature of their business along
with the transportation and waste generation in these businesses, it is mandatory that the
leading organizations take serious steps so that they can reduce the carbon footprint that they
leave due to their operations. They should also ensure that they are reducing their water and
energy consumption. Alibaba has shown noticeable steps in this regard. Many of their
business centers run on solar power, have state-of-the-world cooling system that uses
considerable less energy and water usage. They have also planted trees on several acres of
land in northern China in order to actively participate in improving the condition of the
environment. Along with that they are consuming less packaging materials thus inadvertently
saving trees of the planet. Through recycling and reusing they have been able to make an
efficient packaging system (Liu et al., 2018). Their logistics partner has been much help in
this regard. They are also using greener products for packaging so that the impact of their
operations are lesser on the environment. Thus, Alibaba can be regarded as a truly sustainable
organization and are likely to improve their standing in the market in future.

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Conclusion
From the above discussion, it can be concluded that the organization, Alibaba group
has been able to keep the aspects of sustainability and social responsibility on the forefront of
each of their initiatives and operations. In spite of that, they have been able to secure
immense profit from the market and expand their business in many places thus maintaining
all the characteristics of a truly sustainable organization. Hence, Alibaba Group can be
regarded as an organization that practices sustainability successfully and are expected that
they will be able to create many such milestones.
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