JD.com is a leading Chinese supply-chain-based technology and service provider, and is one of the largest e-commerce companies in the world with over 580 million annual active customers.
In engagements with the company from 2018, we have raised our expectation for the separation of the roles of CEO and chair of the board, and questioned if the company had a succession plan for these two roles held by the founder, Mr Liu.
On climate-related disclosure, we engaged with the company in early 2021 on our expectation for the disclosure of a Task Force on Climate-related Financial Disclosures (TCFD) report. This is important given that there has been an increase in market pressure and expectation following the Chinese government’s publication of the 14th five-year plan in 2020 and commitment to carbon neutrality by 2060. We shared with the company some examples of TCFD reporting in China.
The company announced in early 2020 that the founder and combined chair and CEO, Mr Liu, had stepped down from his key management roles from its subsidiary companies. Further to this, in 2021, the company confirmed that Mr Liu will be stepping away from the operational role and Mr Xu will be his replacement as CEO. In 2022. the company formally announced the Mr Liu had stepped down from the CEO position but remained as chair of the board in Q2 2022, a change we welcomed. We continue to encourage the company to consider board refreshment as well, given the long tenure of the independent directors and also consider the appointment of a lead independent director.
On climate change, we were pleased that the company had incorporated climate-related disclosure in its first ESG report which was released in 2021. Within the report, JD.com incorporated Scope 1, 2, and 3 emissions figures along with reporting in line with the TCFD that included scenario analysis. The company has also set science-based targets for its subsidiary, JD Logistics, committing to reduce its absolute Scope 1, 2 and 3 greenhouse gas emissions by 50% by 2030, however it is yet to set science-based targets for JD.com itself.
We recognised that the company has made improvements in its corporate governance and minority shareholder rights in recent years. However, we continue to engage on other aspects of minority shareholder rights, including its multi-share class structure, and we will continue to encourage the company to adopt a ‘one share, one vote’ structure, as well as hold director elections at its AGM. On climate change, we will continue to encourage JD.com to obtain science-based targets for its emissions reduction.