Notably, in 2023, Tencent Holdings (00700:HK) saw an increase in its ESG rating in the S&P Global Sustainability Assessment, surpassing industry giants such as Google and Meta to secure a position among the top five globally.
On April 8, Tencent released its 2023 Environmental, Social, and Governance (ESG) report, marking significant advancements in its corporate responsibility initiatives. In environmental conservation, the company has made substantial progress towards carbon neutrality, significantly increasing the proportion of renewable energy while actively engaging in biodiversity conservation efforts. In the realm of social value innovation, Tencent has been proactive in promoting barrier-free environments and integrating digital technology into fields such as healthcare, education, and emergency support. With a focus on technological security, Tencent has continued its long-term investment in research and development while emphasizing the reinforcement of AI systems and data security. Furthermore, in enhancing governance capabilities, Tencent joined the United Nations Global Compact in 2023 and actively promoted the green transformation of its supply chain.
These initiatives have led to Tencent's inclusion in the S&P Global Dow Jones Sustainability World Index and Emerging Markets Index in December of last year, reflecting the widespread recognition of Tencent's effective ESG management within the capital markets.
Emphasizing a "people-centered" approach to technology, Tencent aims to continue advancing digital technological innovation and alleviating societal pain points through innovative exploration. As one of the earliest tech companies to address information accessibility, Tencent has dedicated significant technological resources to assist persons with disabilities in bridging the digital divide and integrating more fully into everyday society. By the end of 2023, Tencent had accumulated over 80 patents related to accessibility, involving over 40 products and features, with core products having undergone accessibility optimization. Moreover, Tencent has open-sourced four accessibility-related technological patents, promoting collective progress within the industry in the field of information accessibility. In 2023, Tencent, in collaboration with the China Disabled Persons' Federation, established the Accessibility Joint Innovation Lab, facilitating the construction of barrier-free environments and supporting individuals with physical disabilities and the elderly in participating independently and equally in social and economic activities.
In addition to focusing on accessibility for vulnerable groups, the report also outlines solutions for other societal issues. Within digital healthcare, Tencent has continued to explore inclusive medical development. Leveraging accumulated expertise in medical image AI recognition and processing, Tencent has developed the "Seeking Shadow Intelligent Medical Imaging Platform" and multiple auxiliary diagnostic systems, facilitating large-scale screening and timely treatment of certain diseases at the societal level.
Moreover, in 2023, Tencent introduced the self-developed "Tencent Hybrid" medical large-scale model, applicable across various product matrices such as intelligent Q&A, home medical assistants, and the intelligent medical imaging platform. These products can be integrated into the entire medical process, aiding in department guidance, physician recommendations, pre-diagnosis, doctor-patient dialogues, automated medical record generation, and intelligent hospital customer service, ultimately enhancing the level and quality of medical services.
Simultaneously, in response to sudden disasters, Tencent has utilized its information technology capabilities to assist social institutions in establishing emergency rescue platforms and disaster warning systems. The company has contributed to urgent support in earthquake warnings, snow disaster relief, AED assistance, and other areas, thereby improving the success rate of emergency support.
The report not only reflects a focus on "people" but also mentions the protection of "nature." "We continue to advance our carbon neutrality plan through energy management to reduce emissions. Our fourth-generation data center technology, T-block, enhances data center energy efficiency, while we promote the transition to renewable energy for operations," stated James Mitchel and Luo Shuohan, co-chairs of the ESG Working Group. In 2023, the proportion of renewable energy usage increased from 7.2% in 2022 to 12.4%, attributed to the expansion of self-built renewable energy facilities to 52.2 megawatts and the procurement of renewable energy reaching 600 million kWh. These figures represent a 166.3% and 79.6% increase compared to 2022, respectively.
In the realm of energy efficiency, AI has assumed a new role. Leveraging AI algorithmic models, Tencent optimized the operation of various devices by integrating IT data, end-point environmental data, and outdoor weather data. This optimization achieved overall energy efficiency while meeting cooling requirements. In 2023, Tencent further expanded the application scope of AI optimization technology. Modules utilizing this technology reduced electricity consumption by approximately 5000 megawatt-hours, preventing the emission of 2851.5 tons of carbon.
Turning to ecological preservation, Tencent initiated the "Natural Risk Assessment" in 2023, analyzing the company's business operations' impact, dependence, risks, and opportunities on natural ecosystems and biodiversity. This analysis serves as a crucial reference for the company's future planning. Additionally, Tencent's "Birdwatcher" WeChat mini-program comprises a database of 1500 bird species. Leveraging GPS and AI image recognition, it tracks birds' locations and migration paths, encouraging the public to photograph and upload images of migratory birds, thereby aiding research institutions in studying bird migration.
Acknowledging the dual nature of technology, especially within the wave of generative artificial intelligence, Tencent has articulated its approach to steering technology towards benevolence. "Our technology and business teams make benevolent decisions before allocating resources, clearly defining 'to do' and 'not to do' in line with our mission vision of 'Technology for Good,'" stated Ma Huateng in the report.
Consequently, Tencent places significant emphasis on biases, discrimination, privacy, misuse, ethics, and values within the field of artificial intelligence. Adhering to the principles of "knowable," "controllable," "usable," and "reliable," Tencent has established a dedicated AI Technology Committee focusing on areas including but not limited to large AI models, natural language processing (NLP), optical character recognition (OCR), image recognition, recommendation algorithms, deep learning training, and inference. Furthermore, the company has introduced new requirements for AI-related data processing in relevant regulations to ensure comprehensive data control, adherence to secure compliance principles, and the establishment of trustworthy AI systems, thereby ensuring the healthy development of technology and the protection of user privacy.
By the end of 2023, Tencent had accumulated over 3600 authorized patents to safeguard users' digital rights. With AI's widespread and deepening application in social, advertising, gaming, and other products and services, Tencent has intensified third-party data processing controls, completed technical upgrades for zero trust, API security, honeypot services, and threat intelligence, forming an active defense security capability system comprising "intelligence-defense-management-planning." Additionally, Tencent Cloud has opened some basic security capabilities to small and medium-sized enterprises free of charge.
"Digital technology and artificial intelligence are the core competitive strengths for Tencent to achieve sustainable development," stated Ma Huateng, Chairman and CEO of Tencent, in the report, emphasizing that advanced technology is fundamental to Tencent's creation of user value, business value, and innovative social value.