Commitment to Environmental Leadership

Energy Conservation & Climate Protection

IBM recognizes climate change as a serious concern that warrants meaningful action on a global basis to stabilize the atmospheric concentration of greenhouse gases (GHGs). We believe all sectors of society, the economy and governments worldwide must participate in solutions to climate change.


Climate change


IBM has been a leader in addressing climate change through our energy conservation and climate protection programs for decades. IBM’s leadership is defined by our:

A six-part strategy

We have a longstanding commitment to climate protection and execute a six-part strategy to reduce the GHG emissions related to our operations:

  1. Designing, building, updating and operating facilities, including data centers and manufacturing operations, that optimize their use of energy and materials and minimize GHG emissions
  2. Purchasing electricity generated from low carbon dioxide (CO2)-emitting and renewable energy-generating sources where it makes business and environmental sense
  3. Minimizing the use and emissions of GHGs in semiconductor manufacturing, including perfluorocompounds and other GHGs
  4. Requiring our suppliers to maintain an Environmental Management System which includes energy use and GHG emissions inventories and reduction plans
  5. Reducing employee commuting and business travel
  6. Increasing the efficiency of IBM’s logistics operations

In addition, for our hardware and software products and services, IBM's strategy includes designing energy-efficient products and providing clients with energy-efficient solutions that also help reduce their climate impact.

IBM considers energy and material conservation to be the cornerstone of our climate protection efforts. IBM does not have plans to use emissions offsets to become “carbon neutral” for all or part of our operations. Our efforts to reduce IBM’s GHG emissions are focused on delivering results in the areas where the company can make the greatest positive impact on climate protection—by devoting available resources to actions, products and solutions that actually increase energy efficiency and reduce GHG emissions for both IBM and our clients, rather than offsetting them.


Conserving energy


IBM’s commitment to energy conservation dates back to 1974 and has continued unabated ever since. Energy conservation is a major component of our comprehensive, multifaceted climate protection program because the release of CO2 by utility companies powering our facilities, or from the use of fuel for heating or cooling, represents the greatest potential climate impact associated with our operations.

In 2013, IBM’s energy conservation projects across the company delivered savings equal to 6.7 percent of our total energy use versus the corporate goal of 3.5 percent. These projects avoided the consumption of 334,000 megawatt-hours (MWh) of electricity and 275,000 million British thermal units (Btu) of fuel oil and natural gas, representing the avoidance of 152,000 metric tons of CO2 emissions. The conservation projects also saved $35.8 million in energy expense, an increase of $0.8 million over 2012 savings. These strong results are due to our continued, across-the-board focus on energy demand reduction, efficiency and the implementation of standard, global energy conservation strategies for facility operating systems.

IBM’s energy conservation goal recognizes only completed projects that actually reduce or avoid the consumption of energy in our operations. Reductions in energy consumption from downsizings, the sale of operations and cost avoidance actions, such as fuel switching and off-peak load shifting, are not included in the results for measuring performance against achieving this goal. Moreover, the conservation results discussed above are conservative in that they include only the first year’s savings from the conservation projects. Ongoing conservation savings beyond the first year are not included in the tally. Accordingly, the total energy savings and CO2 emissions avoidance from these conservation actions is actually greater than this simple summation of the annual results.

3.5%

Goal: Achieve annual energy conservation savings equal to 3.5 percent of IBM's total energy use

6.7%

Result: Energy conservation projects across the company delivered savings equal to 6.7 percent of IBM's total energy use in 2013

152,000

metric tons of CO2 emissions avoided through IBM's energy conservation projects in 2013

Electricity and Fuel Use and Related CO2 Emissions

Scope 1 and Scope 2 CO2 Emissions

    CO2 Emissions (estimated)
metric tons x 1,000
  Electricity and fuel use
(1,000 MMBtu)
Calculated with grid
emissions factors
Reduced by the CO2 avoided by
renewable electricity purchases
2009 21,507 2,895 2,436
2010 21,622 2,426 2,156
2011 21,758 2,397 2,182
2012 21,613 2,404 2,195
2013 21,190 2,186 1,962

IBM uses the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard developed by the World Resources Institute and the World Business Council for Sustainable Development for estimating and reporting its CO2 emissions.

CO2 emissions data includes the CO2 avoidance associated with IBM’s purchases of renewable energy.

Between 1990 and 2013, IBM saved 6.4 billion kWh of electricity consumption, avoided 4 million metric tons of CO2 emissions (equal to 59 percent of the company’s 1990 global CO2 emissions) and saved $513 million through its annual energy conservation actions.

Managing IBM’s energy program

Our global energy management program leverages the expertise of more than 50 IBM energy management professionals deployed around the world. The team has created best-practices checklists that set minimum expectations for building systems and operations, including controls and equipment for lighting, heating/ventilating/air conditioning (HVAC), central utility plants, compressed air, data center and IT systems, cafeterias, and office systems.

All IBM sites using 2,000 MWh/year or more of energy must complete the checklists, perform a gap analysis and develop an energy conservation implementation plan a minimum of every four years. The program is buttressed by several enterprise-level databases that collect, store and analyze energy-use data, conservation project results, completed checklists, and relevant key performance indicators. These analyses enable monthly metrics reporting to the management team and the identification of opportunities for improvement. The continuous review of energy use and conservation performance has driven the strong results noted above.

More than 2,600 energy conservation projects involving a full range of energy efficiency initiatives delivered savings at 364 IBM locations globally in 2013. Examples include:

Leveraging analytics for further efficiencies

As “standard” opportunities for incremental savings from typical energy conservation projects have diminished due to IBM’s decades-long focus on energy efficiency, we are increasingly leveraging analytics to uncover less obvious, embedded opportunities to achieve continual improvement in operational energy efficiency.

Smarter Buildings technologies such as IBM TRIRIGA® Energy Optimization (ITEO) are being deployed in IBM facilities to increase energy efficiency. IBM locations are updating and connecting existing sensor networks to analytics-based control systems to collect data and analyze individual events and system trends. The information gained is then used to optimize building energy consumption.

ITEO enables facility operations staff to continually inspect the building infrastructure and quickly correct problems—be they simple or complex. Two examples follow:

In the above instances, continuous monitoring of the system operations quickly revealed and allowed correction of the out-of-specification conditions, which likely would have lingered for an extended period of time on a traditional, manual preventative maintenance program.

IBM has deployed ITEO at 28 of our highest energy consuming sites, with deployment underway at three more locations in 2014. In 2013, the installed systems realized savings of 13,600 MWh of electricity and 76,000 MMBtu of fuel consumption, with a net savings of $1.5 million.

IBM has now introduced a new product, TRIRIGA Real Estate Environmental Sustainability Impact Manager (TREES), with increased functionality and capability to replace ITEO. IBM will begin upgrading ITEO to TREES in its internal operations in 2014.

Data centers

IBM manages a diverse portfolio of data centers, consisting of both IBM and IBM-managed customer facilities all over the world. IBM operates additional raised-floor space to support internal operations, as well as design and test centers, for our Systems and Technology Group and Software Group.

We take a holistic approach to managing our data center portfolio— building new, high-efficiency data center space where we need to expand our raised-floor space to meet the needs of existing and new customers, and retrofitting and improving existing data center space to increase utilization and derive more workload per area, equipment and energy resources. These efforts are accomplished through initiatives that include the following:

6.4 billion kWh

electricity conserved during 1990-2013 through IBM's conservation actions, avoiding 4 million metric tons of CO2 emissions and saving $513 million

Efficiency improvements in existing data centers

In 2013, we completed nearly 300 projects at more than 85 existing data center locations. These projects reduced energy use by over 53,400 MWh, and saved more than $5.2 million. This energy savings is equivalent to the total annual energy use of a 4,000-6,000-square-meter IBM strategic data center.

The IBM Measurement & Management Technologies (MMT) thermal management system has been installed at IBM’s major data centers representing more than 60 percent of the global raised-floor energy consumption for IBM’s internal and client IT operations. This innovative technology from IBM Research produces a real-time, three-dimensional thermal map of the detailed heat sources and sinks within a data center. Using the information provided by MMT, IBM has been able to take the following actions over the past three years:

MMT offers the additional benefit of rebalancing a data center’s thermal profile as equipment is removed and installed, enabling the early identification of developing problems to proactively mitigate their impacts.

System virtualization and cloud computing

Virtualizing workloads allows a single system to support multiple applications or images, making greater use of the full capabilities of the IT equipment and executing more workloads in less space with less energy.

IBM is utilizing virtualization to consolidate multiple workloads from servers and storage systems with low utilization onto single systems, reducing energy use and cost by more than 99,000 MWh and $11 million in 2013. IBM virtualized more than 30,000 applications in our owned/leased data centers in 2013 and plans to continue these projects in 2014 and beyond to continually improve utilization of IBM and client hardware assets and reduce data center operation energy use and space requirements.

We continued to expand IBM’s cloud computing programs through 2013, offering IBM Cloud Managed Services from 12 IBM data centers around the globe and, with our acquisition of SoftLayer in 2013, an additional seven data centers in the United States and six locations around the globe in third-party data centers. IBM and SoftLayer have announced a $1.2 billion investment to increase IBM’s global cloud data center portfolio to 40 global locations by 2014. Cloud computing is an efficient model for providing IT services that optimize hardware utilization and virtualization technologies. It allows us to further improve utilization of IT equipment assets, better balance workloads, adjust power consumption, and virtualize infrastructure in data centers to align processing and storage needs with power consumption.

Data center power usage performance

IBM measures, calculates or uses estimating protocols to determine the PUE of the data centers we manage. These data centers include recently constructed Leadership Data Centers as well as large legacy data centers. The average PUE for this raised-floor space is 1.73, based on data collected from 58 percent of the raised-floor space.

Because the majority of the data centers in IBM’s facility portfolio consists of spaces that are 10-30 years old and contain IT equipment varying in age from new to 10 years, improving the energy efficiency of these data centers requires thoughtful planning and execution to ensure that we meet both our operational objectives and our commitments to our customers.

The overall performance of these IBM data centers compares favorably with the average PUE of 1.65 as reported in the Uptime Institute 2013 Data Center Industry Survey of 1,000 data center users predominately located in North America and with an average PUE of 2.9, as reported by a Digital Realty Trust 2012 survey of 300 IT decision makers. IBM has made—and will continue to make—significant investments and improvements to reduce energy demand and improve energy efficiency in our data centers.

$5.2 million

saved by nearly 300 energy conservation projects at more than 85 existing data center locations that reduced energy use by a total of over 53,400 MWh

Voluntary data center energy efficiency initiatives

In January 2012, the European Commission awarded 27 IBM data centers in 15 European Union (EU) countries with “Participant” status in data center energy efficiency, based on the EU Code of Conduct (CoC) for Energy Efficiency in Data Centres. We subsequently registered an additional 16 data centers to “Participant” status later in 2012.

Three additional IBM data centers were awarded "Participant" status in 2013, bringing our total to 46 registered data centers across 19 countries—the largest portfolio of data centers from a single company to receive the recognition to date. These registered data centers represent more than 70 percent of IBM's IT delivery and business recovery data center space in the EU. The EU CoC for Energy Efficiency in Data Centres is a voluntary initiative that aims to promote energy efficiency performance standards for data centers.

IBM maintains energy efficiency leadership in data centers by deploying uniform practices across our global data center portfolio. In addition, IBM applies innovative solutions such as Measurement & Management Technologies (MMT) thermal monitoring and control system, virtualization technologies, dynamically managed air conditioning control systems, and development of alternate power systems such as the direct-current solar system at IBM’s software lab in India.

IBM data center and IT system professionals continue to be involved in governmental and professional data center energy efficiency initiatives, including the EU CoC for Energy Efficiency in Data Centres program, ENERGY STAR and The Green Grid initiatives. These programs set operating criteria or metrics that inform and encourage data center operators and owners to reduce energy consumption in a cost-effective manner while enabling operators to maintain the mission-critical functions of their data centers.

46

IBM data centers across 19 countries awarded “Participant” status in data center energy efficiency, based on the EU Code of Conduct for Energy Efficiency in Data Centres

An additional significant energy conservation goal

Since 2009, an integrated team from IBM’s environmental and finance staffs, real estate organization and business units have collaborated to realize energy conservation savings through a multi-disciplinary assessment of demand-side opportunities in manufacturing, data center, and IT test lab operations. The initial effort from 2009-12 saved 1,246,000 MWh of energy through conservation and efficiency. The projects involved the deployment of unique IBM technologies and know-how, as well as a strong management system supported by senior executives.

In early 2013, the same integrated team leveraged their skill and expertise, and established processes to set a new 2013-15 Energy Conservation and Efficiency Plan to save an additional 570,000 MWh of energy by year-end 2015. By year-end 2013, the team delivered 321,500 MWh of energy savings which exceeded the first-year target of 207,200 MWh by 55 percent.

The following provides a summary of the accomplishments achieved in 2013:


Renewable energy

In 2013, IBM contracted with its utility suppliers to purchase 580 million kWh of renewable energy over and above the quantity of renewable energy provided as part of the mix of electricity that we purchased from the grid. The 580 million kWh represented 11.8 percent of our global electricity usage and resulted in the avoidance of 224,000 metric tons of CO2 emissions.

IBM’s renewable energy purchases increased by 16 percent from 2012 to 2013. The increase was achieved through the addition of 2,178 MWh of wind-generated electricity in India and over 98,000 MWh of hydro power at our New York facilities. In addition, approximately five percent of IBM’s electricity purchases from the grid were electricity generated from renewable sources—bringing our total renewable energy purchases to approximately 17 percent of our consumption in 2013.

IBM continued to contract for defined renewable energy purchases above and beyond the renewable electricity supplied in our overall contracts in Australia, Austria, Belgium, Denmark, Finland, Germany, Italy, Japan, Netherlands, Spain, Sweden, Switzerland, the United Kingdom and the United States in 2013. We added 2,178 MWh of wind-generated electricity in India in 2013. These purchases enable 33 percent of IBM’s locations with data centers, IT labs, and/or product development labs and over 40 percent of its cloud data centers to source some or all of their electricity from renewable generation sources.

In addition, SoftLayer, which was acquired by IBM in April 2013, procured 10 percent of its electricity use, 6,500 MWh, in 2013 from wind-generation sources at three of its Texas data centers. It completed a contract in April 2014 to increase the procurement to 100 percent wind-generated electricity. SoftLayer’s energy use and CO2 emissions data is not included in this report for 2013, but we wanted to note the renewable electricity purchases that have been made at the three cloud facilities.

We procure renewable electricity generated from a mix of wind, large and small hydro, biomass, and solar installations around the globe. We report all of our contracted renewable electricity purchases and the associated CO2 avoidance, be they from new, “additional” or existing generation sources, and without discriminating large hydro installations. Our rationale is that all purchases signal to our suppliers our desire for them to maintain and broaden their renewable electricity offerings. We value all economically accessible renewable generation sources and their availability from our utility suppliers.

Our procurement of renewable energy must meet our business needs. Not only should the offerings be cost-competitive with market prices over time, but the electricity supply must also be consistently reliable to ensure uninterrupted power for our critical operations. IBM’s strategy of contracting for defined renewable energy has been successful in Europe and we continue to request the inclusion of electricity generated from renewable sources as an option in our contracts in all geographies.

Procuring electricity from renewable sources remains complicated by the relatively low energy density and intermittent nature of wind- and solar-generated electricity, limitations and chokepoints in the electricity transmission system, and international, national, state, and provincial treaty, regulatory and legislative requirements. Continued advances are needed in renewable electricity generation, distribution and storage technologies, and contracting and delivery mechanisms to increase the availability of economically viable renewable electricity in the marketplace to supply electricity directly to consuming locations. IBM is working with industry peers, utilities, NGOs and other renewable energy industry participants to identify, develop and capture opportunities to procure electricity generated from renewable sources where it makes business sense.

580 million

kWh of renewable energy purchased by IBM from our utility suppliers

11.8%

The amount of IBM’s global electricity usage represented by purchased renewable energy

IBM also endeavors to incorporate on-site solar energy, co-generation or tri-generation systems, or geothermal systems on an individual location basis. Some recent examples:

We are continuing to pursue additional opportunities to install on-site electricity generation systems at our facilities. These systems offer a means to diversify our electricity supply and increase our purchases of renewable energy, though they typically only generate 10-20 percent of our site energy demand because the majority of the energy consumed by IBM occurs at locations with energy-dense activities, such as data centers and semiconductor manufacturing sites.

Research and solutions to advance the use of renewable energy

As noted earlier, procuring electricity from renewable sources remains complicated for all but new-built facilities specifically located to be powered by renewable energy. In part, this is due to the relatively low energy density and intermittent nature of wind- and solar-generated electricity, and to limitations and chokepoints in the electricity transmission system. In addition to procuring renewable energy for our own use, IBM is working to further the availability and affordability associated with various forms of renewable energy by investing in IT-related research and development.

Two examples are provided here. Other examples may be found in the Solutions section of this report.


Operational CO2 emissions management

IBM’s operational CO2 emissions, those associated with IBM’s use of fuel and electricity at its locations, were reduced 10.6 percent from 2012 to 2013. There were three key factors that drove this year-to-year reduction:

IBM met its second-generation climate protection goal in 2012, reducing our operational CO2 emissions by 15.7 percent against the 2005 baseline and exceeding our commitment to achieve a 12 percent reduction over the period. The significant reductions achieved in the 2013 operational CO2 inventory are indicative of IBM’s continued commitment to addressing the challenges of climate change through energy conservation initiatives and the procurement of renewable energy for its operations.

10.6%

The reduction in operational CO2 emissions associated with IBM’s use of fuel and electricity at its locations from 2012 to 2013


PFC emissions management

IBM releases some perfluorocompounds (PFCs) from our semiconductor manufacturing operations, with PFC emissions representing approximately 10 percent of IBM’s Scope 1 and 2 emissions. IBM was the first semiconductor manufacturer to set a numeric reduction target for PFCs in 1998. We subsequently set a second-generation goal to achieve an absolute reduction in PFC emissions from semiconductor manufacturing of 25 percent by 2010 against a base year of 1995. We exceeded this goal by reducing IBM’s PFC emissions by 36.5 percent at the end of 2010.

We continue to take actions to reduce our PFC emissions and monitor performance. Between 2010 and 2013, we reduced our PFC emissions by 12.7 percent, emitting 194,300 metric tons of CO2e. The IBM semiconductor manufacturing plant in Vermont continued to convert from C2F6 to C4F8 on selected chamber cleaning processes, accounting for approximately half of the reductions. C4F8 has a much higher utilization rate and much lower global warming potential than C2F6, significantly reducing the GHG emissions from the process. The other half of the reductions can be attributed to reduced production for the year due to current market conditions.

IBM’s manufacturing facility in New York also continues to abate its PFC emissions associated with its semiconductor operations, minimizing the emissions from that facility.

IBM also monitors three other materials with global warming potential that are used in connection with manufacturing, lab, and office operations: nitrous oxide (N2O), which is used in manufacturing semiconductors but has a lower global warming potential than PFC gases; heat transfer fluids (HTFs) that are primarily used in tool-specific chiller units associated with manufacturing and lab processes; and HFCs which are used in chiller units used to cool manufacturing, lab, or office space.

IBM continues to evaluate replacements for the HTFs that have lower volatility and global warming potential. IBM has achieved reductions in these emissions through the use of lower GHG-emitting materials in some test operations and through the installation of solid-state chillers on some semiconductor equipment.

12.7%

reduction in PFC emissions between 2010 and 2013


Overall CO2 emissions inventory

IBM tracks and manages operational Scope 1 and 2 emissions across its operations, collecting and aggregating data from its data center, semiconductor research and manufacturing, hardware development and assembly and office operations. As discussed in the previous sections, IBM has a broad, effective set of programs and processes to inventory its energy use and GHG emissions and take action to increase the efficiency of its operations. IBM decreased our overall Scope 1 and 2 emissions by 10.6 percent from 2012 to 2013. The summary of its 2013 emissions inventory is provided in the following table:

IBM 2013 Scope 1 and Scope 2 Emissions Inventory

Metric tons (MT) of CO2 Equivalent

Scope 1 Emissions Emissions Type 2012 2013
Fuel Use Operational 220,851 225,514
Perflourinated Carbon Compounds PFC 231,832 194,301
Nitrous Oxide Other 24,037 23,150
Heat Transfer Fluids Other 57,436 61,747
HFCs Other 7,428 9,752
Total Scope 1 Emissions   541,584 514,464
Scope 2 Emissions      
Electricity: Using Grid and Location MT CO2/MWh Emissions Factors Operational 2,162,543 1,934,736
Purchased Energy Commodities Operational 45,916 43,858
Total Scope 2 Emissions   2,208,459 1,978,594
Total Scope 1 and 2 Emissions   2,750,043 2,493,058
CO2 Avoidance: Renewable Electricity Purchases Operational (211,819) (223,624)
Total Scope 1 and 2 Emissions adjusted for Renewable Electricity   2,538,224 2,269,434

Transportation and logistics initiatives

Employee commuting and leased/rental vehicles

IBM has been active in promoting programs that reduce employee work commutes for decades. Key contributors to this effort are IBM’s two flexible work programs:

In 2013, 105,000 of our 431,000 global employees participated in one of these two programs, which not only helps employees balance their work and personal responsibilities, but also benefits the environment. In the United States alone, IBM’s work-at-home program conserved approximately 5.6 million gallons of fuel and avoided more than 44,000 metric tons of CO2 emissions in 2013.

IBM is a member of the Center for Urban Transportation Research Best Workplaces for Commuters (BWC) program. Currently, 22 IBM locations are registered as BWC sites, which represent approximately 60 percent of the company’s US employees. Many locations actively work with their local or regional transit commissions to integrate IBM’s programs with regional programs to increase commuting options for the company’s employees. Globally, many of our locations provide support for the use of public transit systems, including shuttles from locations to mass transit stations and alternate transportation or “loaner” cars for business trips during the workday.

In some countries, IBM provides leased vehicles for employees that they may use for both business and personal purposes. For these vehicles, we continue our effort to move to more fuel-efficient models by setting standard guidelines for smaller engine sizes with lower emissions profiles. These guidelines enable reductions in average car emission levels as their car fleets are renewed. For the cars our employees rent while travelling for business, we have worked with rental car companies to require and/or offer more fuel-efficient vehicles for employee rentals.

Efficiency of logistics

IBM is reducing the CO2 emissions associated with transporting our products through the efficient design of our packaging, working with suppliers on their packaging designs and optimizing logistics. IBM has been an active participant of the US EPA’s SmartWay Transport Partnership since 2006. SmartWay is a voluntary initiative to improve fuel efficiency and reduce GHG emissions associated with logistics operations.

Since 2009, 100 percent of IBM’s spend for shipping goods within the United States and from the United States to Canada and Mexico went through a SmartWay logistics provider. IBM also voluntarily applies specific SmartWay requirements to our distribution operations globally.

IBM’s packaging programs also help reduce transport-associated CO2 emissions by reducing the volume and weight of the company’s product shipments through innovative packaging design. Accomplishments in this area are discussed in the Product Stewardship section of this report


Energy conservation and climate protection in the supply chain


As noted elsewhere in this report, IBM is committed to doing business with environmentally responsible suppliers. One of the supply chain areas on which we focus is our suppliers’ energy efficiency and climate protection programs.

We require that all of our "first-tier" suppliers—those firms with which we hold a direct commercial relationship—establish and sustain a management system to address their corporate and environmental responsibilities—including their use of energy and Scope 1 and Scope 2 GHG emissions. Our suppliers are also required to measure their performance, establish voluntary goals in these areas, and publicly disclose their performance against those goals. We manage this requirement through two processes: IBM’s own supplier environmental management system requirements, and our membership in the Electronic Industry Citizenship Coalition (EICC).

IBM has continued to work with Tier 1 suppliers to further our company’s requirement that all IBM suppliers have an environmental and social management system in place and disclose information on goals and performance. More information on this supplier program may be found in the Environmental Requirements in the Supply Chain section. The IBM Integrated Supply Chain organization assesses suppliers (existing and new) as to their compliance with the IBM Social and Environmental Management System Requirements as a component of its broader supplier management and assessment process.

IBM’s requirements for our suppliers rest on the foundational belief that real results in GHG emissions reduction are made possible by actionable information about a company’s energy use and GHG emissions, and that each company is best positioned to assess and implement actions to address its own emissions in a way that is meaningful and sustainable. In short, each enterprise must take responsibility to reduce its own energy use and GHG emissions.

IBM has been an active participant in the EICC Environmental Reporting Initiative, which asks EICC members and suppliers in the global electronics supply chain to measure and report key energy consumption, carbon emissions, water, and waste indicators. We believe, as do the other EICC members, that as companies gain an understanding of their energy use and GHG emissions, they are more likely to take actions to improve their performance. EICC and its member companies have developed education modules to assist suppliers in developing their energy use and GHG emissions inventories. Companies in the electronics industry share many suppliers, and the EICC GHG emissions disclosure process provides efficiency associated with information disclosure. We use the EICC reports completed by our component and parts suppliers to augment and validate our internal supplier assessment work.

IBM’s position on the determination of Scope 3 and product GHG emissions estimates

Gross approximations of Scope 3 GHG emissions can help entities recognize where the greatest amounts of GHGs may occur during the lifecycle of a typical process or general product or service on a macro level. This can be helpful when assessing, for example, what phases of a general product’s design, production, use and disposal are ripe for improved energy efficiency and innovation. However, IBM does not assert on a micro level what the Scope 3 GHG emissions are from the operations of our suppliers and external distribution partners in their work that is specific to IBM, or associated with the use of our products and services. The necessary estimating assumptions and corresponding variability simply do not allow for adequate credibility, let alone calculations that could be perceived as deterministic.

Like many manufacturers, IBM has thousands of suppliers around the world. They are in all types of businesses and very few, if any, work solely for IBM. Furthermore, the sources of energy used by these suppliers vary, and IBM does not believe we could determine a credible estimate or apportionment of the energy used by these suppliers that would be associated with the products or services provided to IBM, versus that associated with products or services provided to other companies and customers. In addition, IBM’s specific scope of business with any given supplier remains dynamic, as it is driven by business need.

Moreover, one company’s asserted Scope 3 emissions are another company’s Scope 1 and Scope 2 emissions. Since the ultimate goal for climate protection is for global societies to achieve demonstrable reductions in actual GHG emissions, IBM believes real results in GHG emissions reduction are directly achieved when each enterprise takes responsibility to address its own emissions and improve its energy efficiency. This is reinforced by IBM’s announcement in 2010 that all of our first-tier suppliers will be expected to develop a management system, inventory their key environmental impacts—including GHG emissions—and develop reduction plans for those key impacts.