Skip to main content
  •  

Chairman’s Letter

A commitment to corporate responsibility pervades IBM, from new hires to the chairman’s office. In this year’s letter, Chairman, President and Chief Executive Officer Sam Palmisano describes IBM’s long-term approach to corporate responsibility, and the IBMers that make it possible.

IBM’s Approach

Through the years, IBM has consistently expanded the definition of corporate citizenship, pushing the boundaries of what is required to be considered a responsible enterprise. In this section of IBM’s 2010 Corporate Responsibility Report, you will find more detail on our approach to corporate responsibility, and some examples of how that approach manifested itself during the past year.

Communities

At IBM we engage with communities around the world by offering our technology, services and expertise to help solve some of the world’s most complex problems. While the monetary value of these contributions is great, we eschew checkbook philanthropy whenever possible. We believe that this approach is the most efficient, effective and sustainable way to practice good corporate citizenship. And we believe it is helping to make the world work better. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of the contributions IBM made to the global community this past year.

The IBMer

For the last 100 years, IBM has pioneered innovative approaches to hiring, managing and retaining our work force. From some of the earliest thinking on work force diversity to progressive programs for employee well-being and leadership development, this ongoing commitment to our employees is critical to the success of IBM and IBMers. And as the nature of our business changes, we will continue to apply the same innovation and creativity we use to develop products and services to our relationship with employees. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of the commitments IBM made to its work force this past year.

Environment

IBM has long maintained an unwavering commitment to environmental protection, which was formalized by a corporate environmental policy in 1971. The policy calls for IBM to be an environmental leader across all of our business activities, from our research, operations and products to the services and solutions we provide our clients to help them be more protective of the environment. Download this section of the report (2.2MB)

Supply Chain

IBM manages a supply chain of more than 27,000 suppliers in nearly 100 different countries. We understand that managing a supply chain of this size carries with it considerable social responsibility. Even so, we are continually expanding the definition of what it means to run a responsible supply chain, challenging ourselves and our suppliers to reach ever higher standards of social and environmental compliance. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of IBM’s supply chain responsibility efforts over the past year.

Governance,
Ethics and Integrity

Both the size and nature of IBM’s business necessitate that it adhere to the highest standards of conduct. IBM employs more than 400,000 employees, and provides services and technology that support businesses, governments, schools, hospitals and highways. As such, integrity, transparency, privacy and risk management are all crucial parts of our business, and our commitment to making the world work better. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of how IBM is setting the modern standard for business ethics.

Energy and Climate Programs

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). IBM believes all sectors of society, economy and government worldwide must participate in solutions to climate change.

View IBM’s position and policy on climate change.

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

  • Longstanding global commitment
  • Comprehensive and multifaceted programs—covering the company’s operations, products and services
  • Leading-edge innovations and client solutions
  • Significant results, both early and ongoing, benefiting IBM, its clients and the world

A Five-Part Strategy

IBM has a five-part strategy to reduce GHG emissions:

  1. Designing, building, updating and operating facilities and manufacturing operations that optimize their use of energy and materials and minimize GHG emissions
  2. Purchasing electricity generated from low CO2-emitting and renewable energy-generating sources where feasible
  3. Minimizing the use and emissions of perfluorocompounds (PFCs—a family of GHGs) in semiconductor manufacturing
  4. Reducing employee commuting and business travel
  5. Increasing the efficiency of IBM’s logistics operations

In addition, in the area of hardware and software products and services, IBM’s strategy includes designing energy efficient products and providing its clients with energy efficient solutions that also help protect the climate.

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

Conserving Energy

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

In 2010, IBM’s energy conservation projects across the company delivered savings equal to 5.7 percent of its total energy use versus the corporate goal of 3.5 percent. These projects avoided the consumption of 272,000 megawatt-hours (MWh) of electricity and 352,000 million BTUs of fuel oil and natural gas, representing the avoidance of more than 139,000 metric tons of CO2 emissions. The conservation projects also saved $29.7 million in energy expense. These strong results are due to the increased, 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 identified projects that actually reduce or avoid the consumption of energy in its 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 energy conservation goal. Moreover, the above results 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.

Energy Conservation
Goal: 3.5% decrease, Results: 5.7%
Goal

Achieve annual energy conservation savings equal to 3.5 percent of IBM’s total energy use.

Result

In 2010, IBM’s energy conservation projects across the company delivered savings equal to 5.7 percent of its total energy use.

Between 1990 and 2010, IBM saved 5.4 billion kWh of electricity consumption, avoided nearly 3.6 million metric tons of CO2 emissions (equal to 52 percent of the company’s 1990 global CO2 emissions) and saved $399 million through its annual energy conservation actions.

Electricity and Fuel Use and Related CO2 Emissions
(Scope 1 and 2 CO2 Emissions)
Year Electricity and Fuel Use
(thousand MMBTU)
CO2 (EST)
(metric tons x 1,000)
2006 22,491 2,420
2007 23,638 2,541
2008 22,443 2,502
2009 21,507 2,436
2010 21,622 2,156
5.4 billion

of electricity consumption—and nearly 3.6 million metric tons of CO2 emissions—saved by IBM through its annual energy conservation actions between 1990 and 2010, resulting in a savings of $399 million.

IBM’s global energy management program leverages the expertise of more than 40 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, HVAC, central utility plants (CUPs), compressed air, data center and IT systems, cafeterias and office systems. All sites using more than 2,000 MWh/year of energy must complete the checklists, perform a gap analysis and develop an energy conservation implementation plan a minimum of every three years. The program is buttressed by several enterprise-level databases that collect and store energy use data, conservation project results and completed checklists enabling monthly metrics reporting to the management team. The continuous review of energy use and conservation results has driven the strong results noted above.

IBM uses a full range of energy efficiency initiatives in achieving its results. In 2010, more than 2,100 energy conservation projects were completed at 299 IBM locations around the world. Some examples:

  • 208 locations implemented projects to match building lighting and occupancy schedules or install more efficient lighting systems, reducing 17,200 MWh of electricity use and saving $1.9 million.
  • 165 locations modified HVAC systems or operating schedules to reduce 40,300 MWh of electricity use and 83,000 MMBTU of fuel use, and save $4.9 million.
  • 19 locations had continuous commissioning projects that delivered reductions of 11,200 MWh of electricity use and 86,800 MMBTU of fuel use, and savings of $1.6 million.
40,300

of electricity use and 83,000 MMBTU of fuel use saved by modifying HVAC systems or operating schedules at IBM locations in 2010, saving $4.9 million.

The IBM team is also implementing innovative, leading-edge technologies that enable real-time management of energy use.

  • IBM is deploying its Smarter Building technologies to increase the energy efficiency of its own facilities. The company is expanding its use of data monitoring and analytics, using “plug-in” analytics to collect sensor and operating data for analyzing both individual events and system trends. This information is then used to optimize building energy use. In 2010, IBM deployed this solution at its Armonk, New York, headquarters and selected buildings at its Rochester, Minnesota, site. It is expected to yield between 5 percent and 8 percent in annualized energy cost reduction at the buildings in which it is deployed. These results are particularly impressive for the Rochester location given its energy conservation history, having already delivered energy savings through conservation actions of between 5 percent and 6 percent of the site’s energy use each year over the past 10 years. IBM has plans to install Smarter Building solutions at additional locations during 2011 and 2012.
  • IBM implemented an Advanced Water Management solution at its semiconductor manufacturing facility in Burlington, Vermont. It utilizes an automated data system, Statistical Process Control (SPC), to transform large amounts of data into manageable useful information. The application of Advanced Water Management techniques has resulted in an energy savings of over 5,000 MWh/year.

Data Centers

IBM takes a holistic approach to managing its data center portfolio, building new, high-efficiency data center space where it needs to expand its raised floor inventory to meet the needs of existing and new customers, and retrofitting and improving existing data center space to better utilize and derive more workload from its existing space, equipment, and energy resources. These efforts are accomplished through the following initiatives:

  1. Building new high-efficiency data center space. IBM’s most recent data center expansions in the U.S. have achieved LEED® certification and use state-of-the-art design and system techniques to enable Power Usage Effectiveness (PUE, the ratio of the total power required at the data center divided by the power required to operate the IT equipment) measurements of 1.4 when the data center is fully populated.
  2. Implementing best practices and thermal monitoring programs at its existing data centers to optimize cooling delivery and minimize energy use and cost.
  3. Virtualizing and consolidating existing workloads for its internal operations and customer accounts. Virtualizing workloads allows a single server to support multiple applications or images, making use of the full capabilities of state-of-the-art IT equipment and executing more workload in less space with less energy.

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

New Data Center Construction

IBM’s new data centers in Boulder, Colorado, and Raleigh, North Carolina, utilize state-of-the-art technologies and are designed to operate at PUE of 1.4 when fully populated with IT equipment. The data centers are designed to accommodate high density IT equipment and utilize free cooling, variable speed fans and pumping systems. They also have the capability to install direct liquid cool systems on high-power density equipment, as well as high efficiency Uninterruptable Power Systems (UPS) and chiller systems.

Existing Data Centers

In 2010, 290 projects at 90 existing data center locations reduced energy use by over 32,000 MWh, saving more than $3.2 million.

  • IBM upgraded data center equipment and implemented data center best practices, including blocking cable openings, rebalancing air flow and shutting down air conditioning units, all of which generated 16,800 MWh of savings in IBM’s existing data centers. IBM’s Measurement and Management Technology, a thermal monitoring management system, was installed at five data centers, with installations underway or planned over the next 18 months for the remainder of the company’s owned and leased strategic data centers. 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, allowing for accurate identification and mitigation of data center hot spots, adjustment of cooling delivery as systems are removed and added, and increased data center operating temperatures, with attendant reductions in cooling requirements. Continuous thermal monitoring and the future use of analytics can further improve data center energy management beyond that achieved with the implementation of best practices alone.
  • IBM implemented 16 water-side free cooling projects, which utilize the temperature of the outside air rather than chiller systems to cool the chilled water, saving more than 16,000 MWh of electricity use. Most of those projects were installed at locations with data center operations.

Server and Storage Virtualization and Consolidation

IBM is utilizing virtualization technologies to consolidate multiple workloads from servers and storage systems with low utilization onto single systems, reducing energy use by more than 75,000 MWh in 2010. More than 28,000 images or applications were moved from single use servers to virtualized servers, utilizing existing, high capability systems to consolidate workloads or installing new systems and virtualizing several server or storage systems of workload on the new system. These projects increase the utilization of the virtualized server and storage systems, deliver more workload with less energy consumption, and reduce the quantity of IT equipment and the data center floor space required to perform a given workload. These projects also free up data center space for business growth or new business opportunities.

The World’s Greenest Data Center
Video: A Super Efficient Data Center

The data center at Syracuse University measures air velocity, power, flow rates and voltages to not only serve as a production data center, but as a testing ground for future data center technologies.

Cloud Computing

Over the course of 2010, IBM continued to reap the benefits of cloud computing to its data centers. Cloud computing is an efficient model for providing IT services. It allows IBM to better balance workloads, adjust power consumption and virtualize infrastructure in data centers to better align processing needs with power consumption. The result is balanced energy demands to help avoid high peak energy use and allow consolidation of workload on the minimum number of highly utilized servers, so unneeded equipment can be put to sleep or turned off. Through the introduction of an optimized infrastructure, the number of systems and networks in the data center can be reduced and optimized, cost efficiency improved and energy efficiency enhanced. IBM has established a globally integrated cloud delivery network with centers in Singapore, Germany, Canada and the U.S., along with 13 global cloud labs.

The benefits of cloud computing are demonstrated by IBM’s Technology Adoption Program (TAP), which supports the company’s software development community. For example, leveraging cloud computing, TAP reduced the number of servers required in a “typical” data center environment by nearly 90 percent. That translated into annual hardware savings of $1.3 million and energy savings of more than 500 MWh per year.

Voluntary Data Center Energy Efficiency Initiatives

IBM supported efforts by the U.S. EPA and the European Commission Directorate General Joint Research Centre—Institute for Energy to encourage improvements and innovations in data center energy efficiency. IBM has provided input, recommendations and data center energy use data to support the development of both the European Union Code of Conduct on Data Centres Energy Efficiency (CoC) and the U.S. EPA ENERGY STAR® Rating for data centers. 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 function of data centers. IBM registered all or parts of three data center operations to the EU CoC and is working to qualify one or more U.S. data center locations to the ENERGY STAR data center rating program.

IBM Cloud Computing

IBM is helping clients excel in cloud computing, providing secure and reliable Software as a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) solutions.

CO2 Emissions Reduction

In 2010, IBM’s procurement of renewable energy and significant energy conservation results were the primary factors for an 11.5 percent reduction in its energy-related CO2 emissions over 2009. The company’s procurement of renewable energy equaled 11.2 percent of IBM’s total 2010 electricity use.

As of year-end 2010, the company’s energy conservation results and procurement of renewable energy resulted in a 16.7 percent reduction in IBM’s energy-related CO2 emissions from the 2005 base year of this goal.

The reductions have been achieved through the following initiatives outlined below. In addition, improvements in the CO2 emissions profile of the electricity that IBM purchased also had a favorable albeit limited impact on the company’s performance.

  • IBM’s energy conservation efforts have reduced or avoided a total of 1.1 million MWh of electricity and 2.4 million MMBTU of fuel use (based on one-year savings associated with conservation projects) from 2006 to 2010, which represents a reduction in IBM’s electricity and fuel use of 3.5 percent and 22 percent, respectively, against the 2005 baseline use adjusted for acquisitions and divestitures.
  • IBM purchased 561,000 MWh of electricity generated from renewable sources in 2010, resulting in an avoidance of 247,000 metric tons of CO2 emissions associated with the generation of the electricity used by IBM. IBM contracts for these purchases through programs sponsored by suppliers or the responsible utility.
  • IBM has reduced its fuel use by 20 percent against the adjusted 2005 baseline. A portion of the reduction is weather-related, due to milder winters in some regions, and the remainder has resulted from projects to optimize boiler operation and reduce heating and humidification demand at facilities through room specification changes and time-of-day heating and ventilation settings.

The 16.7 percent reduction in CO2 emissions in 2010 surpasses IBM’s 2012 goal of a 12 percent reduction over the 2005 base year. These results were achieved through the commitment and execution of the business units responsible for IBM’s operational energy use. Because each of the factors cited as keys to this achievement will change as IBM grows its businesses, enters into new contracts for electricity and continues its focus on energy conservation, the company will continue to work to sustain its performance against its year-end 2012 goal.

CO2 Emissions Reduction

(Metric Tons x 1,000)

2010 Supplier Spending by Category
CO2 Emissions Reduction
Goal: 12%, Result 16.7%
Goal

Between 1990 and 2005, IBM’s energy conservation actions reduced or avoided CO2 emissions by an amount equal to 40 percent of its 1990 emissions. To further extend this achievement, IBM set itself an aggressive “2nd generation” goal: to reduce the CO2 emissions associated with IBM’s energy use 12 percent between 2005 and 2012 through energy conservation and the procurement of renewable energy.

Result

As of year-end 2010, the company’s energy conservation results and procurement of renewable energy resulted in a 16.7 percent reduction in IBM’s energy-related CO2 emissions from the 2005 base year of this goal.

PFC Emissions Reduction

IBM releases some perfluorocompounds (PFCs) from its semiconductor manufacturing operations. Although the releases are in relatively small amounts (in CO2 equivalents, when compared to IBM’s indirect CO2 emissions), IBM was the first semiconductor manufacturer to set a numeric reduction target for PFCs in 1998 and has set an absolute reduction goal through 2010.

IBM has achieved its PFC emissions reduction goal, reducing its PFC emissions by 36.5 percent against the 1995 baseline. These reductions have been achieved through IBM’s long-term focus on using process chemistries which utilize PFC gases with lower global warming potentials. The Burlington, Vermont, facility has been an industry leader in developing and implementing process substitutions using PFCs with lower global warming potential such as NF3 and C4F8 for its 200mm semiconductor manufacturing processes. The East Fishkill, New York, 300mm semiconductor manufacturing facility almost exclusively uses NF3 for its chamber clean processes and abates the majority of its PFC emissions.

PFC emissions increased year-to-year, primarily due to increased manufacturing volumes in 2010 compared to 2009. Some of the increases in emissions during 2010 were mitigated by further conversion of some C2F6 based process cleans to C4F8 process cleans; C4F8 has a lower global warming potential than C2F6.

PFC Emissions Reduction

(in Carbon Dioxide Equivalent)

PFC Reduction Goal by 2010

IBM also has begun tracking two other materials: 1) nitrous oxide (N2O), which is used in the manufacture of semiconductors; and 2) heat transfer fluids that are used in tool-specific chiller units associated with manufacturing processes.

  • IBM emitted 17,400 metric tons of CO2e of nitrous oxide, which has a lower global warming potential than the PFC gases from its semiconductor operations.
  • Chiller systems at the IBM semiconductor operations used 18,300 pounds of heat transfer fluids. These materials are released as fugitive emissions and had a CO2e of 32,000 metric tons.

IBM has been replacing some of the heat transfer fluid-based chiller units with solid-state chiller units as an energy conservation measure. These chillers use solid-state components and heat to alternately excite and unexcite electrons to trap and release heat energy. The new style chiller replaced an old Freon-based chiller that used more electricity. Each replacement reduces electricity use by 40 MWh/year and eliminates the fugitive loss of the heat transfer fluids.

PFC Emissions Reduction
Goal: 25%, Result: 36.5%
Goal

To reduce PFC emissions from semiconductor manufacturing 25 percent by 2010 against a base year of 1995.

Result

As of year-end 2010, IBM’s emissions were 36.5 percent below the 1995 baseline amount of 381,000 metric tons of CO2 equivalent.

Renewable Energy

In 2010, IBM purchased 561 million kWh of renewable energy. These purchases represented 11.2 percent of the company’s global electricity usage and a CO2 emissions avoidance of 247,000 metric tons. IBM continued to contract for renewable energy purchases in Australia, Japan, Austria, Belgium, Denmark, Finland, Netherlands, Sweden, Switzerland, the United Kingdom and the United States in 2010. Purchases of electricity generated from renewable resources increased in Australia, Finland, Sweden and Switzerland.

IBM’s energy conservation efforts and its procurement of renewable energy in 2010 combined to avoid the emissions of more than 390,000 metric tons of CO2.

Renewable Energy Procured

(Percentage of Total Electricity)


renewable energy
390,000 metric tons

of CO2 emissions avoided through IBM’s energy conservation efforts and procurement of renewable energy in 2010.

Research to Advance Solar Energy

In addition to procuring renewable energy for its own use, IBM is working to further the availability and affordability of renewable energy by investing in IT-related research and development. One focus area is advancing solar technology:

New solar cell manufacturing approach:
In February 2010, IBM announced it had built a solar cell in which the key layer that absorbs most of the light for conversion into electricity is made entirely of readily available elements and is manufactured using a combination of solution and nanoparticle-based approaches, rather than the popular, but expensive, vacuum-based technique. This solar cell set a new world record for efficiency and holds the potential for producing low-cost energy that can be used widely and commercially.
Ultra-high concentrator photovoltaic technology:
In April 2010, IBM announced that it is collaborating with the King Abdulaziz City for Science and Technology (KACST), Saudi Arabia’s national research and development organization, on a research project aimed at creating a water desalination plant powered by solar electricity, which could significantly reduce water and energy costs. A new, energy efficient desalination plant with an expected production capacity of 30,000 cubic meters per day will be powered with the ultra-high concentrator photovoltaic (UHCPV) technology that is being jointly developed by IBM and KACST. This technology is capable of operating a CPV system at a concentration greater than 1,500 suns. Inside the plant, the desalination process will hinge on another IBM-KACST jointly developed technology, a nanomembrane that filters out salts as well as potential toxins in water while using less energy than other forms of water purification.
Climate Modeling:

In October 2010, IBM and Universiti Brunei Darussalam (UBD) announced an agreement to collaborate on climate modeling research that will investigate the impact of climate change on flood forecasting, crop yields, renewable energy and the health of rainforests in southeast Asia. The collaboration will help Universiti Brunei Darussalam accelerate its research capabilities in biodiversity, energy and agrotechnology. The university will acquire an IBM Blue Gene® supercomputer—the first of its kind in the region—to provide high-performance computing power for the collaborative work.

Researchers from UBD and IBM will work together to develop climate models based on regional climate data. The new hydrological models will be incorporated into the weather models to enable flood forecasting and predict climatic impact on the rainforests.

Voluntary Climate Partnerships

IBM was a charter member of the Chicago Climate Exchange (CCX), a voluntary emissions reporting and trading system with binding commitments for GHG emissions reduction by its member companies. IBM’s participation in CCX covered Scopes 1 and 2 GHG emissions from the company’s operations in Canada, Mexico and the U.S.

Over its eight-year participation in CCX (2010 was the final year for the CCX program), IBM reduced its GHG emissions 19.9 percent against the 1998–2001 CCX baseline, compared to the commitment of a 6 percent reduction by 2010. CCX provided an effective means to document and verify GHG emissions reduction activities for IBM’s North American operations.

IBM continued its participation in the World Wildlife Fund’s Climate Savers program in 2010, working toward the committed reduction goal: Between 1990 and 2005, IBM reduced or avoided CO2 emissions by an amount equivalent to 40 percent of its 1990 emissions through its global energy conservation program. To extend this achievement, IBM intends to reduce CO2 emissions associated with its operational energy (electricity and fuel) use by 12 percent between 2005 and 2012 through energy conservation and the purchase of renewable energy.

Under Climate Savers, IBM has also committed to improving the energy efficiency and energy utilization of its internal and clients’ data centers through activities and offerings for data center best practices, measurement and monitoring programs, and virtualization and consolidation programs. Activities in support of this commitment are detailed in the Data Centers section.

Though the U.S. EPA discontinued the Climate Leaders program in 2010, IBM intends to meet the second generation GHG reduction commitment it set under the Climate Leaders program: To reduce total global GHG emissions by 7 percent from 2005 to 2012. IBM achieved its initial goal by reducing total global energy-related GHG emissions by an average of 6 percent per year and PFC emissions by 58 percent from 2000 to 2005.

Transportation and Logistics Initiatives

Employee Commuting and Leased/Rental Vehicles

IBM has been active in promoting programs that reduce the commute to work for its employees. Key contributors to this effort are IBM’s two flexible work programs:

  • Work-at-home: Enables many employees to work from a home office
  • Mobile employees: Enables many other employees to work from home a designated number of days each week

In 2010, more than 122,000 employees (29 percent) globally 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 U.S. alone, IBM’s work-at-home program conserved approximately 6.2 million gallons of fuel and avoided more than 48,000 metric tons of CO2 emissions in 2010.

6.2 million

gallons of fuel conserved and 48,000 metric tons of CO2 emissions avoided by IBM’s work-at-home program in the U.S. in 2010.

IBM joined the reconstituted U.S. Best Workplaces for CommutersSM (BWC) program in 2009. Currently, 22 IBM locations are registered as BWC sites which represent more than 60 percent of the company’s U.S. 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 IBM 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. Where IBM provides leased vehicles for employees, the company continues its effort to move to more fuel-efficient vehicles. Standard guidelines for smaller engine sizes and lower emissions have been established for leased vehicles globally. These guidelines are the framework for selecting car models offered under IBM car plans which reduces average car emission levels as the car fleets renew.

Business Travel

In 2010, IBM expanded the use of collaboration tools, both internally and externally, to reduce our impact on the environment. As a company, we conducted more than 790,000 online meetings and exchanged more than 10 billion instant messages. Collaborating in this fashion is fundamental to IBM and has allowed us to save on travel costs and impacts, boost productivity by connecting our global workforce 24/7, and avoid CO2 emissions. We also have increased our use of video conferencing to help reduce the need for travel and improve team interactions. In addition to more than 400 video-equipped IBM rooms globally, we completed work on an IBM Sametime® desktop video pilot to extend video capability to employees’ desktops. Expansion of this capability is planned for 2011.

790,000

meetings held virtually via IBM Web conferencing tools.

Efficiency of Logistics

IBM is reducing the CO2 emissions associated with transporting its products through the efficient design of its packaging, working with suppliers on their packaging designs and optimizing logistics. In the area of logistics, IBM has been an active member of the U.S. EPA’s SmartWaySM 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 U.S. and from the U.S. to Canada and Mexico went through a SmartWay logistics provider. IBM also voluntarily applies specific SmartWay requirements to its 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.

100%

of IBM’s shipped goods within the U.S. and to Canada and Mexico went through a SmartWay logistics provider.

Energy and Climate Protection in the Supply Chain

IBM is also focusing on the energy and climate programs of its suppliers to understand where they are with regard to having energy conservation and GHG reduction programs and to encourage their action and leadership in climate protection.

The following are two specific initiatives the company has undertaken in this area:

  • IBM has been an active participant in the Electronics Industry Citizenship Coalition (EICC) environmental working group. This group is requesting that suppliers providing parts to EICC members disclose their operational energy use and GHG emissions to EICC through a spreadsheet tool developed by EICC, by responding to a Carbon Disclosure Project (CDP) Questionnaire, or through a company Global Reporting Initiative (GRI) report. Companies in the electronics industry share many suppliers and the EICC GHG emissions disclosure process is expected to provide efficiency associated with information disclosure. Where companies are not currently reporting through the CDP or GRI process, the EICC “spreadsheet reporting tool” offers a simplified, structured method for EICC members and their suppliers to inventory and disclose their energy use and GHG emissions, and their associated reduction plans. As companies gain an understanding of their energy use and GHG emissions we believe they are more likely to take actions to improve their performance. Member companies of EICC have also developed education modules to assist suppliers in developing their energy use and GHG emissions inventories.
  • Through the CDP’s Supply Chain program, IBM and other participating companies are focused on how suppliers are addressing climate change and working to reduce GHG emissions. As a participant in the program, IBM invited 131 of its suppliers to respond to the CDP’s Supplier Questionnaire in 2010. These 131 suppliers represented a cross-section of IBM’s supplier expenditures with services, general and production-related suppliers, including such suppliers as third-party data centers, logistic suppliers and rental car companies, all of which have higher levels of energy use and associated GHG emissions.

    Of the 131 IBM suppliers that received questionnaires, 113 responded. This 86 percent response rate exceeded the 71 percent average response rate for the companies participating in this CDP program. The following are highlights of the findings from the responding suppliers:

    • 71 percent report Scope 1 GHG emissions.
    • 71 percent report Scope 2 GHG emissions.
    • 67 percent have a board committee or other executive body responsible for climate change.
    • 45 percent have a GHG emissions reduction target in place.

IBM continues to participate in this endeavor because the company wants to work with suppliers who are responsible for the majority of IBM’s spend to gain an understanding of their operational impacts and assess where they are with regard to having a GHG emissions inventory and reduction plan. Survey responses showed that about one-third of production suppliers had reduction plans, and about one-half of non-production suppliers had plans.

In 2011, IBM is focusing on working with its total supply base to assist suppliers in developing and implementing a corporate responsibility and environmental management system, whereby all of IBM’s more than 27,000 suppliers are now required to assess and identify their significant environmental intersections, implement measurements and improvement targets for those areas, and provide public disclosure of the related programs and results. To complement this management system initiative, as well as enhance trend analysis on the supply base, IBM will again participate in the CDP Supply Chain Program in 2011. Approximately 107 suppliers, primarily those suppliers that responded to the 2010 questionnaire, will receive requests to participate.

IBM’s Position on the Determination of Scope 3 GHG Emissions

Gross approximations of Scope 3 GHG emissions can help entities recognize where the greatest amounts of GHGs may occur during the lifecycle of a general product or service on a macro level. This can be helpful when assessing what phases of a general product’s evolution, 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 its suppliers and external distribution partners in their work that is specific to IBM, or associated with the use of its 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 it 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 recent announcement that all of its 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.

In 2010, IBM collaborated with researchers at Carnegie Mellon University (CMU) on a case study to investigate the uncertainty and variability associated with calculation of the GHG emissions associated with the life cycle of a rack-mount server product (also referred to as the server’s “carbon footprint”). IBM provided CMU with technical details and information regarding the IBM server product evaluated by the study.

In addition to highlighting the high level of uncertainty in product carbon footprint calculations (+/- 35 percent for the product selected), the results of the study verified that GHG emissions associated with the operation of the server dominated the full life cycle carbon footprint. This “use phase” of the server accounted for an estimated 94 percent of the total GHG emissions associated with the product. It reconfirmed the importance of IBM’s ongoing efforts to increase the energy efficiency of its server products and the data centers where servers are used.

Coalition for Energy and Environmental Leadership in Leased Space

IBM’s leased space represents another area of its supply chain in which the company believes it can make a difference. Along with DuPont, Fluor Corporation, Pitney Bowes Inc. and the Switzer Group, IBM formed a coalition to drive an increase in the availability of competitively priced leased space that also provides energy efficiency and other environmental attributes. In 2010, Interpublic Group, Lenovo and MasterCard joined the Coalition. By joining together, the Coalition hopes to make more environmentally sustainable leased spaces increasingly the standard rather than the exception in the marketplace.

To aid in accomplishing its objective, the Coalition developed a baseline Environmental and Energy Efficiency Attributes Checklist. It addresses requirements in four areas: sustainable site management, water efficiency, energy efficiency, and materials and resources.

Members of the Coalition commit to:

  • Make the Environmental and Energy Efficiency Attributes Checklist a standard part of their requests for proposal (RFPs) for new leases and lease renewals for office space in the U.S.,
  • Include the providers’ response as a factor in making lease decisions, and
  • Develop appropriate metrics to measure progress.

Actions under this initiative are intended to complement, not replace, individual companies’ activities for improving building environmental and energy efficiency such as those pursuant to the U.S. Green Building Council’s LEED® green building certification program.