Sun Art Retail: Achieving Carbon Neutrality and Sustainable Initiatives by 2030

Sun Art Retail, a prominent Chinese hypermarket operator, is committed to achieving carbon neutrality by 2030, as stated in its ESG report for the fiscal year 2023. Demonstrating its dedication to sustainability, the company effectively reduced its carbon footprint by over 235,000 tonnes between April 1, 2022, and March 31, 2023. This reduction was accomplished through the implementation of energy-conserving best practices and waste reduction measures across its supply chain.

By adopting environmentally-friendly practices, Sun Art, which operates more than 500 digitally-enhanced grocery stores, managed to save an additional 50,000 tons of carbon emissions. This was achieved by purchasing approximately 84 million kilowatt hours of green and nuclear power.

Sun Art's CEO, Lin Xiaohai, expressed the company's ambition to become a leading green benchmarking enterprise within the retail industry in the foreword of their 2022/2023 Environmental, Social, and Governance Report published recently. In line with this vision, the company aims to achieve carbon neutrality not only in its operations but also in the gasoline and diesel consumption of its logistics fleet by 2030.

Having acquired a controlling stake in Sun Art in 2020, Alibaba Group is actively working towards carbon neutrality by 2030 and plans to reduce 1.5 gigatons of carbon emissions throughout its ecosystem by 2035. Furthermore, China, as a nation, is committed to environmental preservation, with a goal to reach peak emissions before 2030 and achieve carbon neutrality before 2060, as indicated through government-led legislation.

Sustainable development has become increasingly important for Chinese consumers, with a significant 97% expressing the belief that environmental concerns are crucial when purchasing grocery products, according to a survey conducted by research group Daxue Consulting last year. Recognizing Sun Art's efforts in sustainability, the company was acknowledged as the most advanced food and daily necessities retailing company in China in terms of sustainability initiatives by global rating agency S&P Global.

“In the past fiscal year, Sun Art Retail continued to practice the concept of sustainable development and steadily improved the level of corporate performance from the three aspects of environment, society and governance,” Sun Art’s CEO said in a statement following the publication of the ESG report.

As of March 31, 2023, the company operates a total of 486 hypermarkets, along with 12 larger RT-Super stores and 84 community-level RT-Mini locations, spread across 212 cities in China.

To address the issue of waste, Sun Art is implementing various measures, including optimizing garbage sorting, regulating water use more efficiently, and reducing kitchen waste. The global agrifood systems contribute to a third of greenhouse gas emissions, as reported by the Food and Agriculture Organization (FAO) of the United Nations in 2021. Additionally, approximately one-third of the food produced ends up being wasted annually, according to FAO estimates. In response, Sun Art expanded waste sorting to 156 stores in 35 cities during the 2023 fiscal year. Moreover, the company ensures that all cardboard boxes are recycled.

To conserve water, Sun Art has introduced wastewater storage and circulation systems for purifying and reusing clean water. Furthermore, the company has set a goal to reduce kitchen waste by 3% in its stores during the 2024 fiscal year.

Sun Art is actively transitioning its stores to rely more on sustainable energy sources, such as solar power, to reduce its dependence on fossil fuels. By the end of March, around 70% of Sun Art Retail stores had installed induction lamps in their stairwells, leading to an expected electricity consumption reduction of approximately 2 million kWh in the upcoming fiscal year. Additionally, the company saw a 17.6% year-on-year increase in its stores' consumption of renewable energy from solar power during the 2023 fiscal year, with usage rising from just over 11,000 mWh to over 13,000 mWh. To further enhance its renewable energy efforts, 22 stores installed solar panels on their roofs, collectively capable of generating more than 13,000 mWh each year, as reported in the ESG report.

“We have laid a solid foundation for enhancing our climate resilience by further identifying the risks and opportunities of climate change, proposing countermeasures, and performing impact assessments,” said Lin, Sun Art’s CEO in the report.