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HSBC Green Link | JD.com: Green is the Colour of High-Quality Growth

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Businesses must now take proactive measures in support of China’s decarbonisation strategy for sustainable development and high-quality growth. Stay tuned for “HSBC Green Link” series on real-life “green stories” of businesses across sectors.

Each year, JD.com’s 618 Shopping Festival sees a frenzy of activity, and this year no exception. Perhaps for online consumers, buying a product simply means three steps: pay, wait and receive. However, for JD, there is a whole supply chain involved: circulation, warehousing, data processing, packaging, logistics and recycling.

Every link in this long chain is essential. In order to accurately and efficiently deliver products to consumers’ doorsteps in the fastest and safest manner possible, JD, for the past 19 years, has been improving its supply chain by leveraging innovative technologies such as data intelligence and artificial intelligence.

In the build-up to its 2022 618 Shopping Festival, JD made a point of “Responsible Supply Chain”, pledging to shoulder more responsibility and bring more value to society in terms of decarbonisation and sustainability. In fact, this was not the first time that JD had mentioned the green supply chain and the responsibility of leading companies for low-carbon development and green transition.

JD.com Headquarter Building

In the narrowest sense, the green supply chain refers to minimising the impact on the environment of supply chain financing, and thus balancing a company’s profits with its social and environmental responsibilities. In the broader sense, the green supply chain means the combination of green financing, supply chain finance and green supply chain to minimise negative impacts, while creating environmental, social and economic benefits for all stakeholders.

Back in 2017, JD officially launched its “Qingliu Initiative”, which was followed by partnerships with multiple brands including P&G, Unilever and players across the supply chain, seeking to break down the silos of fragmented decarbonisation measures, deliver synergies across the entire supply chain system, and build a supply chain that is green and environmentally-friendly end-to-end. There are now over 150 million categories of green products available on JD.com, with over 100,000 merchants and hundreds of millions of consumers working together to drive low-carbon and green development.

Compared to platform companies, new real-economy based companies like JD have a unique advantage in terms of building a green and low-carbon business model. For many years, JD has fully played to its strengths in this regard and has taken the initiative in leveraging green infrastructure and green tech innovation to unleash the immense potential for carbon reduction at every link in the chain including warehousing, data processing, packaging and transportation. Via its green and low-carbon data centre, green procurement, green offices and green mobility, JD is accelerating its own transition to green and low-carbon operations.

In terms of data processing, JD Cloud's next-generation green data centres have been leveraging a wide range of technologies developed in-house including the company’s tech architecture and product innovation, green energy generation, high-performance servers and leading liquid cooling and heat reuse tech, AI smart thermostat and robotic inspection technology, and have thus achieved green and swift computing.

In terms of green infrastructure, as of the end of 2021, JD had completed installing its first batch of PV power systems for 12 smart industrial parks and deployed a fleet of 20,000 new energy logistics vehicles across over 50 cities nationwide. In particular, the company’s “Asia One” Intelligent Industrial Park in Xi’an has been accredited as the first net-zero logistics park in China. In 2021, Building II, which is partially in use, at JD’s headquarters acquired Green Building Evaluation Label (China Three Star), while JD Cloud’s East China Data Centre made the list of “China’s Green Data Centres for 2020”. Furthermore, BMW’S Regional Distribution Centre, built and customised by JD, has become the auto company’s first LEED-certified “green warehouse” for aftersales and spare parts in China.

JD.com’s Xi’an Asia No.1 Logistics Industrial Park

“Green is the colour of high-quality growth.” This is how one JD manager describes JD’s green efforts; constructing green office buildings and low-carbon data centres is just part of the JD Group’s drive on green operations. Furthermore, JD is also aggressively rolling out a low-carbon supply chain, including green packaging, green warehousing, and green transport, as well as promoting sustainable consumption, including green products and services, and an advocacy campaign around sustainable consumption and green lifestyles.

In late 2021, JD began to further accelerate its green development drive.

In December 2021, the JD Group made an announcement on its entry into a five-year $2.0 billion unsecured term and revolving loan facility with five lead arrangers, the company’s first ever green loan facility whose proceeds will be used to finance one or more of its existing eligible green projects. The facility is subject to the final registration with relevant regulators in China.

This marks the first time that the JD Group has issued a green syndicated loan; it is also the company's first foray into green financing instruments in the open market. JD’s green loan facility is the first green syndicated loan issued overseas by a Chinese retailer. It is also the largest green syndicated loan issued overseas by a Chinese company as of now.

As one of the lead arrangers and green coordinators for the issuance, HSBC sent its ESG team to assist JD in preparing and releasing the group’s first green financing framework. With the bank’s well-rounded and seamless coordinating efforts, JD successfully passed the third-party ESG assessment by Sustainalytics and received a positive rating, a significant boost to the retailer’s bid to enhance its ESG social impact and demonstrate its responsibility as a corporate citizen.

HSBC noted that JD had entered into a five-year US$2.0 billion unsecured term and revolving loan facility, including green loans. The proceeds will mainly be used to finance a series of green projects under the JD Group. HSBC acted as green structuring advisor, joint lead arranger and bookrunner, to plan and design the green structuring for the transaction, and provide support for the use of proceeds among other services.

In particular, by coordinating and communicating with the globally-renowned green certification organisation, HSBC’s teams in China and beyond were able to assist the JD Group in designing the company’s green financing framework, and thus gaining green certification, which not only serves JD’s need for large-scale, multi-dimensional green business, but also contributes to the green transition of the company, its customers, and the retail industry in general.

Corporates are the key driver of sustainability. When a company establishes a green and low-carbon business model, it not only creates low-carbon operations for the company itself, but also creates a ripple effect across the supply chain that drives other companies as well as the general public to put low-carbon concepts into practice. As a leading international bank, HSBC has always been committed to supporting businesses in their green transition. We were delighted to be a part of this green syndicated loan deal, and we provided specialist support at every stage, from concept, to product design, financing review and approval, and coordination of the transaction.

Joseph Ma | Executive Vice President and Country Head of Commercial Banking, HSBC China

China’s low-carbon transition and green development have created brand-new opportunities for the financial industry. More importantly, the prevailing trend has also brought more responsibilities for financial institutions. HSBC has been a keen advocate of green finance, leveraging the power of finance to drive more funds towards green and low-carbon industries. HSBC Group has announced to provide between USD750 billion and USD1 trillion of finance and investment by 2030 to help corporate customers transition towards net zero

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