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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.

Water Conservation

IBM’s evaluation of water use at its worldwide facilities shows that microelectronics operations are the company’s most water-intensive ones. For example, in 2010, IBM’s microelectronics manufacturing operations represented 82 percent (nearly 9,800 thousand cubic meters [TCMs]) of the total water used (approximately 11,900 TCMs) at IBM’s manufacturing operations and laboratories worldwide.

Though IBM’s microelectronics operations are not located in areas of water scarcity, in 2000, IBM established an annual water savings goal of 2 percent of total annual water usage in its microelectronics manufacturing operations, based on the water usage of the previous year and measured as an average over a rolling five-year period. The goal measures annual water conservation activities from actual year-over-year reductions from conservation savings projects, reuse (e.g., from the ultra-pure water process for semiconductor manufacturing) and recycling (e.g., from treated wastewater).

In 2010, annual water conservation for the microelectronics manufacturing operations from reduction, reuse and recycling activities was 710 TCMs of water. Of the 710 TCMs of water, 590 TCMs (6 percent of the total water used at IBM’s microelectronics manufacturing operations) was provided through on-site water reuse, and wastewater and groundwater recycling projects. Conservation savings projects avoided the use of another 120 TCMs.

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Water Conservation in Microelectronics Manufacturing Operations
Goal: 2% - Result: 2.8%
Goal:

To achieve an annual water savings equal to 2 percent of total annual water usage in its microelectronics manufacturing operations, based on the water usage of the previous year and measured as an average over a rolling five-year period.

Result:

As of year-end 2010, IBM’s microelectronics manufacturing operations had achieved an average annual water savings of 2.8 percent over the past five years versus the 2 percent goal.

These new water conservation and ongoing reuse and recycling initiatives in IBM’s microelectronics manufacturing operations achieved an annual 1.8 percent savings in water use in 2010. The avoided withdrawals were achieved through ongoing efficiency enhancements that reduced water usage in designated operations. Over the past five years, new water conservation and recycling initiatives at IBM’s microelectronics manufacturing operations have achieved an average 2.8 percent savings versus the 2 percent goal.

Despite this conservation activity, total annual water withdrawals for these operations increased by 3 percent or 325 TCMs from 2009, primarily due to expanded production at the facilities. The total accumulated conservation activities over the past five-year period avoided withdrawals of 8,885 TCMs of water resource.

Annual Water Savings in Microelectronics Manufacturing Operations

Savings as percentage of previous year’s total water use

Annual water savings in microelectronics manufacturing operations 2006 to 2010 against the five-year rolling average