Overview of Ant Forest Initiative’s Environmental and Social Performance

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  • Overview of Ant Forest Initiative’s Environmental and Social Performance

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    Ant Group started Ant Forest initiative within its mobile payment platform, Alipay, in August 2016. The in-app program records Alipay users’ carbon emission reduction through living a greener lifestyle such as walking instead of driving, and making online payments and settlements instead of printing extra paperwork and receipts. Users receive corresponding green energy points for each of their low-carbon actions, which can be exchanged for Alipay to plant a real tree in areas experiencing desertification.

    Moreover, Ant Group is extending its tree-planting program to more fields in order to build a broader system for ecological protection. In September 2017, Ant Forest added a feature allowing users to claim five square meters of forestland. On behalf of its users, Ant Forest works with nonprofit organizations to protect the area. Recently, on October 25, 2020, Ant Group, Huatai Securities [601688:CH], and China Environmental Protection Foundation jointly launched a nonprofit project to set up a “Philanthropic Preserved Area”, which aims at local biodiversity restoration and conservation in a forest park in western Beijing. To be part of the project, individual Alipay users can redeem one square meter of the reserved land by achieving a certain green energy point minimum.

    Ant Forest pledges for carbon reduction

    Ant Group’s CEO Eric Jing in 2018 announced a plan to increase investment in the Ant Forest initiative, expecting to plant 500m trees with coverage of 400,000 hectares over the next five years. According to Alipay’s 2019-2020 sustainability report, the Ant Forest program recorded over 550m users as of this May, and has planted more than 200m actual trees in China’s driest areas, covering 182,666 hectares. This equals to a carbon emission reduction of over 12m tons.

    By collecting and recording users’ green energy points, Ant Forest is developing an individual carbon accounting scheme. This is in line with China’s pledge to improve the carbon trading market, which involves not only enterprises and institutions but also individuals, and hence will boost its green finance development. In essence, Ant Forest encourages users to participate in carbon reduction efforts by rewarding them with the feeling of ownership and accomplishment in planting tree saplings. Such a philanthropic approach makes the program relatively more attractive than platforms that need individuals to purchase quota to offset their carbon emissions, such as the one launched under the China Beijing Environment Exchange.

    Separately, the Chinese government has been piloting emissions trading schemes (ETS) in seven provinces and cities, including Beijing, Tianjin, Shanghai, and Guangdong province. The seven regional pilot programs recorded a combined 406m tons of carbon dioxide emissions in trading volume with total turnover standing around RMB9.28bn as of August 2020. China is also eyeing the establishment of a nationwide ETS from 2021 to 2025.

    Ant Forest has provided job opportunities for lower-income communities

    Ant Forest program is seeing concurrent progress in poverty alleviation and ecological conservation. With the Alipay platform, users have access to products that come from protected forestland and preserved areas. This hence will generate more income and boost economic development in regions that are often China’s most poverty-stricken areas.

    Also, Ant Group has collaborated with multiple non-governmental organizations (NGOs) to create employment opportunities for citizens in poor areas. Specifically, the program reported that 100% of its staff for planting, patrolling protected areas, and reserving trees are local farmers and herdsmen. As of August 2019, Ant Forest has offered 400,000 local jobs and increased labor income by over RMB60.59m.

    Insights

    Amid the prevalence of low-carbon development, Ant Forest is calling for the public to live a green lifestyle. Specifically, the initiative records carbon emission reduction and energy savings through practices such as buying electronic tickets or making online payments to reduce paper waste. Users can then have a clearer understanding of what low-carbon practices are and how to change their behavior to offset daily emissions. Moreover, by converting the online records of users’ green behavior to actual tree-planting and other environmental protection practices, the program also contributes to biodiversity enhancement in protected areas, and wind and sand control in combating desertification, etc.

    Internet companies with strong digital capabilities and large customer groups have an advantage in disseminating information over online platforms and boosting public interest to engage in green practices.Ant Forest is an example of a large company that has applied social and environmental practices into its digital platform to influence its users and local communities.

    Data showed that, after the launch of Ant Forest, Alipay saw its daily active users grow by 40% in 1Q17. Although such data is not directly linked to user growth, Ant Forest still played a significant role in the increase. The service is a social networking program by nature, given its game-like services that allow users to follow each other on the Alipay app so that they can receive more green energy points to raise virtual trees. Due to the nature of this platform, users of Alipay who also participate in Ant Forest will naturally increase the amount of time they spend on the platform, and thus increase the number of opportunities to engage with other parts of the Alipay platform. Since Ant Forest participants strive to have more low-carbon practices recorded onto their account, they will intentionally use in-app programs within Alipay to fulfill their daily demand for ordering takeout, paying for living expenses, etc. Consequently, Alipay, which primarily offers mobile payment services, can thus retain users through more services, and increase the stickiness of its platform through its ecosystem of services.

    References:

    https://www.yicai.com/news/100784513.html

    https://ideacarbon.org/news_free/49218/

    http://energy.people.com.cn/n1/2020/1030/c71661-31911730.html

    https://chinadialogue.net/zh/1/44303/

    https://www.hbrchina.org/2018-11-01/6835.html

    https://finance.sina.com.cn/tech/2020-10-25/doc-iiznctkc7601191.shtml

    http://www.xinhuanet.com/gongyi/2018-12/04/c_1210008670.htm

    http://www.xinhuanet.com/fortune/2019-09/29/c_1125054293.htm

    https://news.un.org/zh/story/2019/06/1035541

    http://www.prcee.org/yjcg/yjbg/201909/W020190909692854952540.pdf

    http://www.xinhuanet.com/fortune/2019-09/29/c_1125054293.htm

    http://www.fx361.com/page/2020/0706/6837919.shtml

    http://www.prcee.org/yjcg/yjbg/201909/W020190909692854952540.pdf

    http://www.chanpin100.com/article/110314

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