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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.

Process Stewardship

Environmentally Preferable Substances and Materials

Among its objectives, IBM’s environmental policy calls for the company to use development and manufacturing processes and provide products that are protective of the environment. As an integral part of its EMS supporting this objective, IBM routinely and consistently monitors and manages the substances it uses in its manufacturing and development processes and in its products.

The company’s precautionary approach includes the careful scientific review and assessment of certain substances prior to their use in IBM processes and products. In specific instances, IBM has chosen to proactively prohibit, restrict or substitute substances used in IBM processes and products when the weight of scientific evidence determines a potential adverse effect upon human health or the environment, even when law permits the use of the substance.

In addition, IBM conducts scientific assessments of existing approved substances when new processes or major modifications to existing processes are being developed. The objective of these scientific assessments is to identify potential substitutes that may be environmentally preferable. IBM believes that the same scientific rigor is required when investigating the human health and environmental effects of potential substitutes as was given to the investigation of the substance in use.

The following provides a sampling of IBM’s early leadership in prohibiting or restricting many substances of concern from its processes and products before regulatory requirements were imposed:

Chlorofluorocarbons (CFCs)
In 1989, IBM became the first major information technology (IT) manufacturer to announce a phase-out of CFCs, a Class I ozone-depleting substance, from its products and manufacturing and development processes.
Class I and II ozone-depleting substances
IBM completed the phase-out of Class I ozone-depleting substances in 1993. Subsequently, IBM eliminated Class II ozone-depleting substances from its products and processes in 1995.
Trichloroethene (TCE), ethylene-based glycol ethers and dichloromethane
Examples of other chemicals that IBM voluntarily prohibited from its manufacturing processes include TCE in the late 1980s, ethylene-based glycol ethers in the mid-1990s and dichloromethane in 2003.
Polybrominated biphenyls (PBBs) and polybrominated diphenyl ethers (PBDEs)
IBM prohibited PBBs and PBDEs from its product designs in the early 1990s and then extended the prohibition to purchased commodities through its procurement specifications in 1993.
Cadmium
IBM prohibited the use of cadmium in inks, dyes, pigments and paints in 1993; in plastics and plating in 1994; and in CRT monitors along with nickel cadmium batteries in the mid-1990s.
Polyvinyl chloride (PVC) and tetrabromobisphenol A (TBBPA)
IBM ceased the specification of PVC in its IT system enclosures in 2000 and prohibited the use of TBBPA as an additive flame retardant in IT system enclosures for newly released products in 2007.
Specific perfluorinated compounds (perfluorooctane sulfonate [PFOS] and perfluorooctanoic acid [PFOA])
IBM prohibited the compounds’ use in the development of new materials in 2005, in new manufacturing applications in 2007, and eliminated the use of PFOS and PFOA in manufacturing, development and research processes as of January 31, 2010.

A table summarizing IBM’s voluntary material prohibitions and restrictions from 1978 through 2010 may be found on our Materials use Web page.

IBM’s restrictions on specific substances and other environmental requirements for its products are identified in the company’s Engineering Specification: Baseline Environmental Requirements for Supplier Deliverables to IBM.

IBM Innovation and Leadership
in “Green” Chemicals

In early 2010, IBM became the first in its industry to eliminate all known uses of perfluorooctane sulfonate (PFOS) and perfluorooctanoic acid (PFOA) from its semiconductor manufacturing processes. IBM scientists also developed and patented several alternative PFAS-free (fluorine-free) photo acid generators in 2010.

In 2002, the U.S. Environmental Protection Agency placed restrictions on new applications for PFOS compounds due to scientific evidence showing that PFOS was persistent and bioaccumulative in the environment. However, PFOS compounds continued to be permitted by the EPA “as a component of a photoresist substance, including a photo acid generator or surfactant, or as a component of antireflective coating, used in a photolithography process to produce semiconductors or similar components of electronic or other miniaturized devices” since the semiconductor manufacturing industry demonstrated limited release and exposure.

Nevertheless, due to increasing concerns around the environmental impact of these compounds, IBM began a staged phase-out of PFOS and PFOA in 2003, a plan that required the work of dozens of IBM scientists and engineers, IBM partners and suppliers.

Developing alternatives for these chemicals was an ambitious technological challenge. The transition to the new formulations had to be implemented and qualified across a large array of processes without impacting customer product delivery commitments. IBM’s semiconductor fabricators located in Essex Junction, Vermont, and Hopewell Junction, New York, conducted multi-year qualifications of substitute manufacturing process chemicals to eliminate the use of both PFOS and PFOA compounds.

IBM prohibited the compounds’ use in the development of new materials in 2005 and in new manufacturing applications in 2007. IBM successfully eliminated PFOS and PFOA compounds in its wet etch processes at the end of 2008 and eliminated them from its photolithography processes as of January 31, 2010.

Although other semiconductor companies are working to this goal, to our knowledge, IBM is the only company in the world to have completely eliminated PFOS and PFOA compounds from semiconductor manufacturing.

As a continuation of this effort, IBM researchers announced another industry first in February 2010: development of new PFAS-free (fluorine-free) compounds for use as photo acid generators (PAGs) in 193-nm photoresists. The PAG is one of several components of a system of chemicals used in the photolithography process to transfer circuit patterns onto semiconductor wafers. This materials innovation is an example of “green chemistry” in action: applying molecular design to invent new, more environmentally benign compounds.

With two patent applications and one issued patent, IBM is currently in the process of engaging with photoresist supplier companies to commercialize its new materials innovation.

Nanotechnology

Nanotechnology is the application of scientific and engineering principles to make and utilize very small things (dimensions of roughly 1 to 100 nanometers). An important aspect of nanotechnology is creating materials where their unique properties enable novel and useful application.

Nanotechnology is already part of a wide variety of products—from cosmetics and sunscreens to paints, clothing and golf equipment. It can make products lighter, stronger, cleaner, less expensive and more precise, and has been critical to advancements in the IT industry.

IBM has been a pioneer in nanotechnology. Its scientists won a Nobel Prize for inventing the scanning tunneling microscope (STM), devised methods to manipulate individual atoms for the first time, developed logic circuits using carbon nanotubes and incorporated subnanometer material layers into commercially mass-produced hard disk drive recording heads and magnetic disk coatings.

Scanning Tunneling Microscope Icon of Progress: Scanning
Tunneling Microscope

Discover how IBM researchers Gerd Binnig and Heinrich Rohrer broke new ground with their invention of the scanning tunneling microscope.

The company was one of the first to create safe work practices, and health and safety training for its employees working with nanoparticles. In addition, IBM, along with ISMI (International SEMATECH Manufacturing Initiative) and other semiconductor companies, will be participating in a collaborative study with NIOSH (National Institute for Occupational Safety and Health) and the College of Nanoscale Science and Engineering (CNSE) of the University at Albany-SUNY to monitor potential workplace exposure to nanoparticles during chemical mechanical planarization (CMP) operation and maintenance.

IBM’s current nanotechnology research aims to devise new atom- and molecular-scale structures and methods for enhancing information technologies, as well as discovering and understanding their scientific foundations.

During 2010, IBM researchers developed a breakthrough technique that for the first time gives scientists the ability to record, study and “visualize” the extremely fast spin of electrons inside individual atoms. Similar to how a high-speed video camera captures each flap of a hummingbird’s wing, scientists at IBM's Almaden Research Center are using the Scanning Tunneling Microscope like a high-speed camera to record the behavior of individual atoms at a speed about 100,000 times faster than previously possible. This new technique could be a valuable tool to study solar cells, quantum computing and storage-class memory at the nanoscale.

IBM’s nanotechnology and nanoscience research and development involve interactions and collaborations with partners around the world.

Two environment-related examples:

  • The Saudi Arabian national research and development organization, King Abdulaziz City for Science and Technology (KACST), has established a Nanotechnology Center of Excellence in association with IBM Research that will explore and develop breakthroughs in applying molecular-scale engineering to critical energy and sustainable resource issues. Under this multi-year agreement, Saudi scientists and engineers are working side by side with IBM scientists and engineers on advanced nanoscience and nanotechnology programs in the fields of solar energy, water desalination and petrochemical applications such as recyclable materials.
  • IBM and the government of Egypt signed an agreement to establish the Egypt-IBM Nanotechnology Research Center as a sustainable world-class center in Egypt. Egypt is working with IBM on several initial projects in the following nanotechnology focus areas: Thin Film Silicon Photovoltaics; Spin-On Carbon-Based Electrodes for Thin Film Photovoltaics; Energy Recovery from Concentrated Photovoltaic for Desalination; and Computational Modeling and Simulation.