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Global Governance and Management System

IBM’s Corporate Policy on Environmental Affairs calls for environmental affairs leadership in all of the company’s business activities.

Global Environmental Management System

Our policy objectives range from workplace safety, pollution prevention and energy conservation to product design for the environment, continual improvement and the application of IBM’s expertise to help address some of the world’s most pressing environmental problems.

The policy is supported by corporate directives that govern IBM’s conduct and operations worldwide. These directives cover areas such as pollution prevention, chemical and waste management, energy management and climate protection, environmental evaluation of suppliers, product stewardship, and incident prevention and reporting.

IBM’s commitment to environmental protection is implemented through our global Environmental Management System (EMS).

Employee and Management Responsibility

Every employee is expected to follow IBM’s corporate environmental affairs policy and its directives and report any environmental, health or safety concern to IBM management. Managers are expected to take prompt action when faced with a potential violation of the policy or directives.

In addition, all of our employees are required by the company’s Business Conduct Guidelines to comply with environmental laws and with IBM’s own environmental requirements.

IBM executives are responsible for the environmental performance of their organizations. Site location executives are responsible for the environmental performance of their sites.

Our environmental programs and performance are reviewed annually by the Directors and Corporate Governance Committee of IBM’s Board. Formed in 1993, the Charter for this committee established its responsibility for reviewing IBM’s position and practices on significant issues of corporate public responsibility, including protection of the environment.

Environmental Goals

Environmental goals are an important part of IBM’s EMS. We maintain environmental goals covering the range of our environmental programs, including climate protection, energy and water conservation, pollution prevention, waste management and product stewardship. These goals and our performance against them are discussed in their respective sections of this report, and are provided in the listing of IBM’s environmental Key Performance Indicators.

ISO 14001 Standard on Environmental Management Systems

In 1997, IBM became the first major company in the world to earn a single global registration to ISO 14001. We achieved this credential within just one year of the finalization of the standard.

The initial registration covered IBM’s manufacturing, product design and hardware development operations across its business units worldwide. We have since expanded our global ISO 14001 registration to include our research locations that use chemicals, several country organizations with their non-manufacturing locations, our product development function and our Global Asset Recovery Services.

As our business model has evolved to include more services offerings, we have updated our EMS to appropriately address environmental opportunities and challenges in the services area.

ISO 50001 Standard on Energy Management Systems

Upon the issuance of the ISO 50001 standard on energy management systems by the International Organization for Standardization in June 2011, IBM set forth a strategy to achieve verification of conformity of its Global Environmental Management System (EMS) against this newly published standard.

Within one year of the issuance of this standard, we successfully achieved certification of IBM’s energy management program at a corporate level and as an integral component of the company’s Global EMS against the requirements of the ISO 50001 standard. Our approach recognizes and leverages the fact that IBM’s existing global EMS addresses both environment and energy management.

IBM’s energy management program dates back to 1974, when a formal corporate policy was issued calling for the conservation of energy and materials in all of IBM’s activities. In the intervening years, IBM has sustained its energy management program and integrated it into the company’s Global EMS, which became certified to the ISO 14001 standard in 1997.

Public Disclosure

IBM’s Corporate Policy on Environmental Affairs also calls for the company to publicly disclose information on its environmental programs and performance. This report marks IBM’s 22nd consecutive year of annual corporate environmental reporting. We also participate in a number of other voluntary reporting programs, such as the Carbon Disclosure Project and the OneReport® Sustainability Reporting Network.

Environmental Evaluations of Suppliers

IBM has long been committed to doing business with environmentally responsible suppliers and was an early leader in providing requirements addressing this topic in its global EMS. Below are a few milestones of our leadership in this capacity.

1972
Established a corporate directive requiring the environmental evaluation of suppliers of hazardous waste services
1980
Expanded our environmental evaluations of suppliers by establishing a second corporate directive that required the environmental evaluation of certain production-related suppliers
1991
Further expanded our environmental evaluations of suppliers, adding a requirement that product recycling and product disposal suppliers be evaluated
2002
Nongovernmental organizations raised a concern about electronic waste being exported to some non-OECD countries. Though we confirmed that IBM was not shipping electronic waste products to non-OECD countries, we added a requirement to assess our suppliers and certain subcontractors they may use to handle recycling and/or disposal operations in non-OECD countries

2010

IBM established a requirement that all first-tier suppliers establish a management system to address their social and environmental responsibilities. Our objective in establishing this requirement was to help our suppliers build their own capability to succeed in this area.

These suppliers are required to:

  • Define, deploy and sustain a management system that addresses their intersections with their employees, society and the environment;
  • Measure performance and establish voluntary, quantifiable environmental goals;
  • Publicly disclose results associated with these voluntary environmental goals and other environmental aspects of their management systems; and
  • Cascade these requirements to their suppliers who perform work that is material to the products, parts and/or services being supplied to IBM.

More information on these new supplier requirements may be found in the Supply Chain section of this report and on IBM’s Supply Chain Environmental Responsibility website.

Stakeholder Engagement

IBM has a variety of outreach programs through which we engage with various groups and individuals on the subject of the environment. Our community environmental outreach programs range from open houses and emergency preparedness drills with local organizations to the support of and participation in local environmental projects and environmental education efforts.

We also have ongoing dialogues with many stakeholders, including socially responsible investors and other shareholders, environmental nongovernmental organizations (eNGOs), governments, employees and others on a range of environmental issues. These dialogues are valuable, as they allow us to share ideas and obtain feedback about our programs, activities and performance.

Another example of engagement is collaborative innovation. We believe that integrating different minds and different perspectives can accelerate new solutions to longstanding problems. One avenue by which we have embraced this ideal is through IBM’s Jams, an online collaborative brainstorming platform that enables global conversations on strategic business and societal issues across industries, disciplines, stakeholders and national borders. We have hosted more than 30 internal and external Jams, with results used to inform values, strategy and agendas for change and innovation.

In April 2011, IBM held the “Start Jam”, which brought together hundreds of leaders from the UK and Ireland to explore how businesses can put sustainability at the heart of their strategies. Start Jam built on the success of the IBM Summit at Start, a nine-day business summit held in September 2010 in association with Start—a national initiative inspired by HRH The Prince of Wales to promote and celebrate sustainable living. The objective was to move forward from examining the value and importance of sustainability in business to determining how to affect the strategic and cultural changes required to drive a genuine transformation in sustainability.

Another outcome of the Start summit was Energy Aid. In December 2011, IBM and the international development charity Practical Action announced the launch of Energy Aid, a new global charity with the goal of providing sustainable universal energy access for those who have limited or no access to energy for heating, lighting, cooking, communications and mechanical work. Energy Aid will provide investment and resources including data, technology, skill and research across the world’s poorest areas.

As a founding partner of Energy Aid, we provided early development support from IBM employees to help get the charity off the ground and technology input to the IT and data infrastructure to support the Open Knowledge Base. This resource is aimed at increasing public awareness; sharing best practices and matching resources; and facilitating and encouraging long-term investment, all in support of achieving the goals of Energy Aid. We will continue to develop Open Knowledge Base projects utilizing our analytical and technological capabilities alongside our Smarter Energy® expertise.

Voluntary Partnerships and Initiatives

IBM is strongly committed to participation in voluntary programs and we have founded or joined many voluntary initiatives and partnerships with governmental and nongovernmental organizations over the years.

Some current governmental examples include the United States Environmental Protection Agency’s (EPA) ENERGY STAR®, SmartWay® and WasteWise programs, and the European Union (EU) Code of Conduct for Energy Efficient Data Centers.

Examples of partnerships with eNGOs include our charter membership in the World Wildlife Fund’s Climate Savers program and membership in the Center for Climate and Energy Solutions (the successor to the Pew Center on Global Climate Change). We also work with and support organizations such as The Conservation Fund, the Environmental Law Institute, and the World Environment Center (WEC).

In addition, we partner with other companies and institutions to foster solutions for environmental sustainability. For example, IBM is a founding member of the GridWise® Alliance, an organization representing a broad range of the energy supply chain—from utilities and technology companies to academia and venture capitalists. Its mission is to transform the electric grid to achieve a sustainable energy future.

In January 2012, IBM and the WEC announced the formation of the Innovation in Environmental Sustainability Council. Its purpose is to explore how innovation in business process and technology can enable strategic solutions to major challenges involving materials, energy, water, infrastructure and logistics. Charter members of the Council also include Boeing, CH2M HILL, The Coca-Cola Company, The Dow Chemical Company, F. Hoffmann-La Roche AG, General Motors, Johnson & Johnson Family of Consumer Companies and The Walt Disney Company.

A more complete listing of our voluntary partnerships and initiatives may be found on IBM’s Voluntary Environmental Initiatives website.

We also encourage our employees to support environmental efforts. For example, through our Matching Grants program, IBM matches contributions made by its US employees to a wide variety of environmental organizations ranging from international organizations such as The Nature Conservancy and the World Wildlife Fund to smaller groups dedicated to preserving lands and habitats in local communities.

In addition, our employees can support environmental organizations in their local communities through IBM’s On Demand Community (ODC) program. ODC is a first-of-its-kind global initiative to encourage and sustain corporate philanthropy through volunteerism. It provides our employees and retirees with a rich set of IBM technology tools they can use to help schools and the nonprofit community organizations in which they volunteer, including environmental organizations. The program combines the expertise, interests and skills of our employees with the power of IBM’s innovative technologies and solutions to help nonprofit organizations more effectively address community needs.

The Eco-Patent Commons

In July 2011, Hitachi Ltd. became the latest company to join the Eco-Patent Commons launched by IBM, Nokia, Pitney Bowes, Sony and the World Business Council for Sustainable Development in January 2008. Other members include Bosch, Dow, DuPont, Fuji Xerox, Hewlett-Packard, Ricoh, Tasei and Xerox.

The Commons provides a unique opportunity for global business to share innovation that can foster sustainable development. It was designed to facilitate the use of existing innovation that is protective of the environment, and encourage collaboration for new innovation through an online collection of environmentally beneficial patents pledged by the member companies for free use by anyone.

Examples of the environmental benefits of patents that may be pledged to the Eco-Patent Commons include:

  • Energy conservation or improved energy or fuel efficiency
  • Pollution prevention (source reduction, waste reduction)
  • Use of environmentally preferable materials or substances
  • Water or materials use reduction
  • Increased recyclability

To date, the member companies have pledged more than 100 patents to the Eco-Patent Commons, 28 of which were pledged by IBM.

28 of the more than 100 patents pledged to the Eco-Patent Commons were pledged by IBM.

Environmental Investment and Return

Over the past five years, IBM has spent $106.9 million in capital and $508.5 million in operating expense to build, maintain and upgrade the infrastructure for environmental protection at its plants and labs, and to manage its worldwide environmental programs.

Environmental Capital and Expenses Worldwide
($ in millions)
2007 2008 2009 2010 2011
Capital $30.0 $31.7 $14.3 $12.5 $18.4
Expense $108.2 $111.3 $102.3 $90.6 $96.1*
Total $138.2 $143.0 $116.6 $103.1 $114.5

IBM tracks environmental expenses related to the operation of our facilities worldwide, as well as environmental expenses associated with our corporate operations and site remediation efforts. In 2011, we expanded our tracking of environmental expenses to include expenses associated with compliance with environmental legal requirements related to products, including those costs incurred for compliance with product takeback and recycling requirements. Total environmental expenses associated with IBM’s operations in 2011 were $114.5 million.

We also estimate the savings that have resulted from IBM’s policy commitment to environmental leadership including savings from energy, material and water conservation; recycling; packaging improvement initiatives; reductions in chemical use and waste; and process improvements from pollution prevention. Ongoing savings from the previous years’ initiatives are not carried over in this comparison, yielding very conservative estimates.

In addition, IBM realizes avoidance of costs that likely would occur in the absence of our Environmental Management System. These savings are not quantifiable in the same way that expenses are, but avoiding these environmental costs does result in savings for IBM, and a reasonable attempt has been made to estimate them. In 2011, IBM’s estimated environmental savings and cost avoidance worldwide totaled $139.1 million.

Our experience has shown that annual savings from IBM’s focus on conservation, pollution prevention and design for the environment consistently exceed environmental expenses, demonstrating the value of proactive environmental programs and performance.

$139.1 million estimated environmental savings and cost avoidance worldwide in 2011.

2011 Environmental Expenses Worldwide
($ in millions)
Personnel $38.0
Consultant fees 3.0
Laboratory fees 3.2
Permit fees 1.2
Waste treatment and disposal 7.0
Surface water and wastewater management operations 8.9
Air emission control operations 0.7
Groundwater protection operations 1.1
Product takeback / recycling costs 1.3
Waste and materials recycling 1.7
Superfund and former IBM site remediation 21.7
Other environmental operations 8.3
Total $96.1
2011 Estimated Environmental Savings and Cost Avoidance Worldwide
($ in millions)
Location pollution prevention operations* $38.0
Corporate operations* 5.9
Packaging improvements 4.3
Environmentally preferable materials usage 0.3
Energy conservation and cost avoidance 61.5
Superfund and site remediation efficiencies 0.9
Spill remediation cost avoidance** 4.9
Compliance cost efficiency*** 19.2
Potential fines, penalty and litigation avoidance**** 4.1
Total $139.1