May 05, 2021 02:20 PM

Opinion: How Chinese Tech Companies Can Rise to the Green Challenge

Yang Yuanqing. Photo: Caixin
Yang Yuanqing. Photo: Caixin

2020 has been a remarkable year with the Covid-19 pandemic, a global economic recession and increased geopolitical uncertainty. Throughout the year, we also witnessed aggravated climatic risks with a high frequency of extreme weather phenomena under the impact of global warming.

These events speak loud and clear, telling us that extreme weather has no borders. If we are to truly realize sustainable development, the world needs to accelerate its low-carbon transformation, turning post-pandemic reconstruction into real opportunities to improve global ecology.

Amid all the bad, there has also been good news. A global consensus on carbon neutrality seems to be on the horizon as more countries formulate national carbon strategies and set specific goals for net-zero emissions or carbon neutrality.

This year will be crucial for the global response to the climate crisis and consolidation of the green transformation. We all know that carbon neutrality is a long-term goal, not something that can be realized overnight. Carbon dioxide emissions must be guided to peak and supported by a green and low-carbon transformation before they can gradually approach zero.

The developed countries have generally designated a transition period of 50–70 years between their peak emissions and carbon neutrality. China aims to complete this stage in just 30 years. Considering China’s total emissions, population size, pace of development, economic scale and resources currently at hand, it faces a monumental task. But not an impossible one.

Innovative Solutions

As both major emitters of carbon and the new force in tech innovation, high-tech manufacturing enterprises must actively participate in the megatrend of carbon neutrality. This will also maximize their own competitive strength and benefits.

High-tech manufacturing enterprises must put their innovative strength to full use. Compared with traditional high-energy consuming enterprises, high-tech manufacturing enterprises may not be the most energy-intensive or produce the most environmental pollution per point, but they have strong supply chains and relatively high power consumption overall.

Research from Canada’s McMaster University predicts that by 2040 information and communications technology (ICT) will account for 14% of global emissions, up from 1.6% in 2007. China’s carbon neutrality goal will serve as a rigid check on its technology companies, forcing them to find ways to maintain competitiveness in the future.

Many such firms around the world have taken action to reduce carbon emissions by disclosing emissions data, setting their own neutrality goals, utilizing renewable energy and through other means. They are also applying intelligent technology and solutions to improve operational efficiency and reduce their environmental impact.

Secondly, high-tech manufacturing enterprises — especially certain leading enterprises — have the power to build manufacturing and supply chain systems that are not only green but also digital and intelligent, thereby driving the entire industry chain’s transformation. These can be set up across the entire lifecycle of products and services by implementing green purchasing, launching ecological designs, developing green products, accelerating green manufacturing and guiding green consumption, ultimately facilitating the industry’s low-carbon and sustainable development.

They can actively promote these green and eco-friendly solutions and practices to enterprises up and down the chain, and in other industries too. The push for carbon neutrality is already restructuring China’s economic growth pattern, forcing all sectors to improve their quality and efficiency, to conserve energy and to reduce emissions.

We used to hear a certain objection that environmental protection and emissions mitigation work could only generate social value, and that it had no bearing on economic value. Practice has proved that wrong.

By using more green technologies, processes, equipment and materials, companies can increase the utilization rate of raw materials, reduce energy consumption and reduce costs while improving product quality, technological innovation and brand-added value.

More and more consumers prefer green products too, and they’re willing to pay more for them. Green and low-carbon development can actually help enterprises both gain reputation and create economic value.

Green innovation at Lenovo

Lenovo has long recognized that corporate innovation and growth must improve lives, make society more diverse and inclusive and make the environment more sustainable.

We issued the Lenovo Climate Change Policy as early as 2010, and the Lenovo Sustainability Policy two years later.

We have already fully integrated the concept of Environmental, Social, and Governance (ESG) into our accountability for routine operations.

Lenovo propels the circular economy by providing energy-saving and eco-friendly products, using clean energy and recycling electronic waste. It actively engages in energy conservation, environmental protection and the innovation of green technology, following Lenovo’s innovative low-carbon development path.

We developed liquid cooling technology that has become one of the most reliable and feasible solutions for data centers to reduce energy consumption. The use of our liquid cooling reduces energy consumption by up to 40% without uncompromising performance. The hot water released can be recycled to heat the data center workspace or nearby communities.

On one green indicator — Energy Reuse Effectiveness (ERE) — Lenovo leads the industry. By integrating science with intelligent computing, Lenovo is ushering in a new era of intelligent, green and high-performance computing.

Lenovo is driving the low-carbon transformation — both within the company and outside, through clients in all social and economic sectors.

That’s clear at Lenovo’s manufacturing base in Hefei of East China's Anhui province — Lenovo’s largest personal computer manufacturing base worldwide, where one out of every eight PCs sold globally is made. The base uses our Lenovo Advanced Production Scheduling System (LAPS). With a current production volume of over 30 million laptops per year, LAPS improves production efficiency and reduces idle production lines, saving more than 2,696 MWh of electricity annually. Through our analysis, the annual saving of electricity reduced the emissions of more than 2,000 tons of carbon dioxide, which equals planting 110,000 trees per year. LAPS was recently nominated for the Franz Edelman Award, which is regarded as the highest honor in global operations and management, sometimes called the “Oscars of operations research”.

Lenovo’s intelligent solutions are empowering thousands of industries, widely improving corporate quality and efficiency, and thereby actively contributing to energy conservation and emissions reduction. Over the past few years, we have provided intelligent transformation services for nearly 200 large companies, including Sinopec Group, State Grid Corp. of China and Dongfeng Motor Corp.

In one case, we created a predictive maintenance solution for the energy industry. It uses industrial internet technology to achieve remote sensing for the improvement of wind turbine utilization and power generation efficiency, reducing companies’ operation and maintenance costs by 5%.

Lenovo achieved a 10-year reduction of 92% of greenhouse gas emissions in the 2019/2020 financial year, dramatically exceeding the emissions target we set a decade ago. We have now set goals for the next 10 years to decrease greenhouse gas emissions throughout operations and value chain. We aim to reduce scope 1 and 2 greenhouse gases by an additional 50 percent by 2030 and have developed intensity emission targets for three key categories of its scope 3 emissions.

Lenovo is also exploring net-zero emissions by 2050 and make greater contributions to the global initiative for greenhouse gas control.

As an old Chinese saying goes: “Heaven does not speak, but the four seasons follow one another in turn; Earth does not speak, but from it all things grow.” The Earth is our common home and our only home. China’s commitment to carbon neutrality not only demonstrates a sense of responsibility in response to global climate change; it is also a key strategy for China’s long-term development.

I therefore call on all of you in the business and finance world to engage in practical impact investing and let technological innovation thrive and go to good use. Together we can accelerate the low-carbon transformation and approach carbon neutrality.

Yang Yuanqing is chairman and CEO of Lenovo Group. This is adapted from his speech at Caixin Roundtable: Rethinking Impact Investing in China on April 27

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