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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.

Corporate
Citizenship

EthicalQuote, Switzerland

IBM ranked #1 in Covalence’s EthicalQuote Q1 2010 Ranking, besting 581 large companies across 18 sectors. Covalence, based in Switzerland, runs EthicalQuote, the ethical reputation scoring system and corporate social responsibility news database tracking the world’s largest companies. It is one of the most influential rankings used by socially responsible investment funds.

Global 1000: Sustainable Performance Leaders

IBM ranked #2 on Justmeans “Global 1000: Sustainable Performance Leaders” list. The list measures performance on financial, environmental, social and governance factors among the 1,000 largest publicly traded companies.

100 Best Corporate Citizens

IBM ranked #4 on CR Magazine’;s 12th Annual “100 Best Corporate Citizens” list. The list is based on the Russell 1000 listing of large public corporations. The list is based on publicly available information and is recognized by PR Week as one of America’s top three most important business rankings.

World’s Most Respected Companies

IBM ranks #4 on Barron’s World’s Most Respected Companies list. This survey of money managers produces a ranking of businesses with strong leaders, good governance, quality products and services, and solid market returns.

Five Star Outstanding Corporate Citizen, China

IBM China was awarded the “Five Star Outstanding Corporate Citizen in China” award late last year. Only four other companies received five stars among the almost 100 Outstanding Corporate Citizen companies selected nationwide by the Ministry of Civil Affairs. IBM was recognized for its extraordinary corporate social responsibility (CSR) achievements supporting local governments’ agendas in the areas of disaster relief, community services, closing the digital divide, and education in remote and minority regions.

Award for Ethics and Values in the Industry, Mexico

For the seventh time, IBM Mexico received the “Award for Ethics and Values in the Industry” from the Confederation of Industrial Chambers (CONCAMIN). The award recognizes best business practices and the corporate values of the company.

Multiple Awards, Poland

In Poland, IBM received the top CSR award for the IT and telecommunications sector from the Responsible Business Forum, and was runner up for the American Chamber of Commerce award for the most socially responsible company in Poland.

Multiple Awards, India

In India, IBM received the Golden Peacock Award for Corporate Social Responsibility in February 2010 and the Bombay Stock Exchange Award for Best Corporate Social Responsibility Practice in September 2010.

Caring Company Award, Hong Kong

In Hong Kong, IBM received the Caring Company award from the Hong Kong Council of Social Service.

100 Most Valuable Global Brands

IBM was awarded the #2 position by BrandZ in its list of “100 Most Valuable Global Brands.” One of the deciding factors was the inclusion of new CSR-related criteria, which helped move IBM into this slot.

Leadership

Outlook Business, India

IBM’s Corporate Service Corps was praised as a one-of-a-kind program for leadership development in a feature story in Outlook Business, one of India’s top business magazines.

Industry Innovation Award, China

In China, IBM received the Industry Innovation Award for Corporate Services Corps and related CSR activities, and the 2010 Corporate Social Responsibility Award from the China Business Journal.

2010 Best Volunteer Project Award, Turkey

In Turkey, IBM was awarded the “2010 Best Volunteer Project Award” by the Corporate Volunteer Association (OSGD) for the Corporate Service Corps program.

Education

Childhood Education Reform, China

China’s Ministry of Education Counselor, Mr. Xuming, visited the KidSmart center in Guangzhou and praised IBM as the only major corporation to make a long-term commitment to early childhood education reform in China. 2010 is the 10th anniversary for China’s KidSmart program. In 2010, IBM donated 200 KidSmart Young Explorer units to preschool education centers in minority areas across China.

Certificate of Outstanding Contributions, China

The China Ministry of Education (MoE) awarded IBM the certificate of outstanding contributions to China’s education system for seven consecutive years at its Spring Festival Reception for representatives from more than 30 multinational companies in China.

Ministry of Education & Training, Vietnam

In Vietnam, IBM was recognized by the Ministry of Education & Training for our 10-year contribution to early IT learning in education.

Disaster Relief
& Recovery

Chilean Innovation Discovery Workshop, Chile

The IBM/Red Cross project for Chile relief was highlighted as an example of a smart solution at the Chilean Innovation Discovery Workshop for government. Chile’s Minister of Housing and Urban Development participated in the workshop.

 

Employee
Engagement

Global Views Magazine, Taiwan

IBM Taiwan was recognized by Global Views Magazine with a major CSR award—the only “foreign company” to win the award three consecutive times. The judging group, comprising eight prestigious thought leaders from academia, not-for-profits and government, recognized IBM’s achievements in “volunteerism for community services” and its “work-life integration program for the workplace.”

 

Environment

#1 Green Ranking, Newsweek

IBM ranked #1 in the Newsweek “Green Ranking” of the biggest publicly traded companies in developed and emerging world markets. The criteria include environmental impact, green policies and reputation.

Green500 List, The Green500

IBM was ranked #1 in the latest Supercomputing Green500 List announced by Green500.org. The Green500 ranks the top 500 supercomputers in the world by energy efficiency. The list shows that 13 of the top 25 most energy efficient supercomputers in the world are built on IBM high-performance computing technology. IBM also holds over half of the top 100 positions on this list.

Low-Carbon & Environmental Leadership, Gartner/World Wildlife Fund

IBM was ranked #1 in all-around performance and was in the top 3 in all five categories in Gartner/World Wildlife Fund’s recent “Low-Carbon & Environmental Leadership Findings Report.” The report evaluated 28 ICT companies on their all-around performance, transformation by IT, transformation of IT, internal environmental performance and supply chain.

ISM Award for Excellence in Supply Management, Institute for Supply Management

IBM received the ISM Award for Excellence in Supply Management (the “R. Gene Richter Award”) from the Institute for Supply Management in the Sustainability category for 2011. The award recognized IBM for three initiatives including its Center of Excellence for Environmental Compliance/Social and Environmental Management System, Supply Chain Social Responsibility Initiative and Green ISC Initiative.

PM100 Awards

Three of the eight 2011 Progressive Manufacturing 100 (PM100) Awards IBM received related to its environmental leadership. The awards recognized IBM for its Supply Chain Environmental and Corporate Responsibility Management System Requirement, its Center of Excellence (CoE) for Product Environmental Compliance, and its Environmental Reporting Tool (ERT). The PM100 Awards recognize companies from around the world that have achieved significant breakthroughs in innovation, the use of advanced technologies and the effective management of their businesses.

LEED® Gold Certification, U.S.

In 2010, IBM’s new, 60,000 square foot, Leadership Data Center in Research Triangle Park, North Carolina, became the company’s first LEED(R) Gold certified data center. Other IBM LEED certified facilities include its Boulder, Colorado Data Center (LEED Silver) and its LEED Gold Certification for Commercial Interiors for its leased office space known as the Bay Area Lab in Foster City, California.

Advanced Enterprise Award, China

IBM International System and Technology Company (ISTC), Shenzhen, China, received an Advanced Enterprise Award from the Shenzhen Waste Reduction Action Program in 2010. The award is part of a voluntary program that encourages enterprises to reduce their waste volumes versus production.

Class of Excellence Wastewi$e Label Award, Hong Kong

IBM Hong Kong received the Class of Excellence Wastewi$e Label Award in August 2010 in the Hong Kong Awards for Environmental Excellence program. The Wastewi$e Label is a recognition scheme established to encourage Hong Kong businesses and organizations in adopting measures to reduce the amount of waste generated within their establishments or generated through the services and products they provide; and recognize their waste reduction efforts.

Environmental Excellence Award, Philippines

In the Philippines, at the 9th Asian Corporate Social Responsibility (CSR) Awards, IBM received the Excellence Award in the Environment Excellence category for IBM’s Corporate Service Corps, which helped create Interactive Flood Maps in support of a Smarter Philippines project.

Most Valuable Pollution Prevention Awards, National Pollution Prevention Roundtable

IBM received two 2010 Most Valuable Pollution Prevention (MVP2) Awards from the National Pollution Prevention Roundtable: one for the elimination of perfluorooctane sulfonate (PFOS) and perfluorooctanoic acid (PFOA) compounds from the company’s chip manufacturing processes in Burlington, VT and East Fishkill, NY, and one for chemical usage reductions at IBM’s 300mm manufacturing facility in East Fishkill. This is the second year in a row and the third time in four years that IBM has received an MVP2 Award.

Vermont Governor’s Awards, U.S.

IBM Burlington, Vermont, received two 2010 Vermont Governor’s Awards for Environmental Excellence & Pollution Prevention under the Environmental Excellence in Resource Conservation category for its “Solid Waste and Packaging Reductions at the IBM Burlington Facility” and “Cooling Load Reduction by Free Cooling in Cold Weather.” This marked 17 consecutive years that IBM has been recognized with at least one of these awards—which is every year the competition has been held.

Distinguished Service Citation, U.S.

IBM Burlington received a Distinguished Service Citation in the business/professional organization category of the 2010 Keep America Beautiful National Awards for Waste Reduction and Recycling for its solid waste and packaging reduction initiatives.

Distinction Award, Canada

IBM Canada’s Bromont site received the 2011 Distinction Award in the category of Energy Efficiency. The award was presented to IBM by the Agency for Energy Efficiency of Quebec and the Federation of Quebec Chambers of Commerce.

Excellence in Environmental Engineering Award, U.S.

IBM East Fishkill received a 2011 Excellence in Environmental Engineering Award in the small projects category from the American Academy of Environmental Engineers (AAEE) for the catalytic reduction of hydrogen peroxide in ammonia wastewater.

Internal
Environmental
Recognition

Chairman’s Environmental Award Program

IBM established the Chairman’s Environmental Award Program in 1991 to encourage leadership and recognize achievement and progress in environmental affairs on the part of IBM’s organizations.

Similar to the past three years, the 2010 Award Program focused on energy conservation and energy efficiency across IBM’s operations, products and services, and the competition continued to be among major business units.

The recipient was selected based on degree of leadership, results, and innovation and integration with regard to their programs and initiatives in the areas of energy conservation and energy efficiency. IBM Systems and Technology Group received the 2010 IBM Chairman’s Environmental Award.

The Systems and Technology Group (STG) has global responsibility for developing IBM systems hardware and operating systems software solutions as well as designing and manufacturing semiconductor technology for IBM systems and OEM clients. STG’s operations include 37 laboratories in nine U.S. states and 17 countries around the globe.

The selection of STG for the 2010 Chairman’s Environmental Award recognizes the organization’s outstanding leadership, innovation and results in energy efficiency and conservation as demonstrated by a comprehensive focus across its products and operations.

Energy efficiency results in STG’s product lines from processors to high–performance computing products include:

  • Enhanced power management functions in new server POWER7® and x86 processors, memory and I/O subsystems.
  • Innovative data management such as Easy Tier storage, data compression, data de-duplication, and thin provisioning supporting storage energy efficiency.
  • Low-power “sleep” mode for Retail Store Systems.
  • The first in the industry to qualify a 4-processor socket server to the new U.S. EPA ENERGY STAR® criteria for servers.
  • The IBM System Blue Gene® family of supercomputers achieved computing excellence with breakthroughs in energy efficiency, winning the National Medal of Technology.

In data center energy efficiency initiatives, STG:

  • Moved Measurement & Management Technologies (MMT) from Research to a data center thermal analysis customer service offering.
  • Partnered with Syracuse University to deploy a new data center with innovative energy-saving features.
  • Developed and offered Active Energy Management capabilities for IBM products.

In addition, STG achieved exceptional operational energy efficiency in its microelectronics manufacturing operations, significantly contributing to IBM’s overall energy conservation results over the last three years.

Diversity

Diversity Award, Austria

IBM Austria won the Diversity Award from the national Chamber of Commerce for the wide range of our diversity programs, including mentoring women, Bring your Daughter to Work Day, the GLBT network and the Women’s Leadership Forum.

Max-Spohr Award, Germany

In Germany, IBM received the Max-Spohr Award for leading practice in diversity. The award was made by Völklinger Kreis e.V., Germany’s professional association for gay managers.

Top 100 Hong Kong Leading Graduate Employers, Hong Kong

IBM is ranked #1 among the Top 100 Hong Kong Leading Graduate Employers. The survey explored key factors that influenced the decision-making process of final year students when selecting their first employer after graduation, as well as their career aspirations and motivations.

Employee Resource Group of the Year, U.S.

IBM HR won the Employee Resource Group of the Year award from The U.S. Business Leadership Network. IBM was selected because of our support for a broad array of cultures, people, thoughts and ideas. These are proving integral to the company’s success in the development of superior technology solutions that make a difference to our employees, clients and the world.

Leadership in Global Diversity, U.S.

DiversityInc named IBM the #1 company for leadership in global diversity based on our training, employee groups and strong cultural values across all boards.