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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.

Conflict Minerals

During the past 12 months, there has been a lot of attention placed on the topic of mining and use of minerals originating from the conflict regions of the Democratic Republic of Congo (DRC).

IBM and other member companies of the Electronic Industry Citizenship Coalition (EICC), in conjunction with the Global e-Sustainability Initiative Supply Chain Work Group (GeSI), have been working in a concerted effort to make progress to rid the electronic supply chain of DRC conflict region-originated minerals. Four minerals (tin, tantalum, tungsten and gold) originating in the DRC have been labeled as conflict minerals; however, it should be noted that these same materials are often found in other parts of the world or even from sources within the DRC that are not conflict-related.

Together EICC/GeSI (in collaboration with third-party audit firms and stakeholders) developed and deployed the Conflict Free Smelter (CFS) assessment protocol. This audit process is oriented toward smelters that play a key role in the extended supply chain, and serve as the point at which concentrated ores are refined into the higher level materials that ultimately are used in the majority of technology products. Starting in early 2011, smelters that pass a CFS audit (assuring that no conflict-sourced materials are being used) will be listed on the EICC Web site in order to assist companies in demonstrating their upstream suppliers are conflict-free.

IBM was also involved in the EICC/GeSI joint involvement with the International Tin Research Institute (ITRI) that created a pilot program in the DRC to track tin from artisanal mines to downstream smelters. IBM contributed financially to this pilot and provided a technical solution based on IBM’s Maximo Asset Manager to help track the tin ore in the supply chain.

We also engaged our direct material suppliers who provide the four minerals noted above for use in our technology sub-products, and we are working with our suppliers to identify the sources of the raw ores being used. We are poised to further expand this work in preparation for reporting that will be required by the U.S. Security and Exchange Commission relating to section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Maximo® Asset Management software

Maximo® Asset Management software, used to help track tin ore in the International Tin Research Institute, unifies comprehensive asset life cycle and maintenance management on a single platform.

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