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Driving performance through sustainability
The IBM Institute for Business Value interviewed executives about sustainability strategies their businesses are pursuing and the benefits they're gaining.

 
Environmental Sustainability Council
Global companies join to address business strategy and corporate practices


People for Smarter Cities

No matter what your business, sustainability is your business


The greenest city in North America, which already sends only 22 percent of its waste to its landfills, is going for zero by 2020. San Francisco's resource recovery company, Recology, takes a smarter computing approach to waste collection, using an analytics-based strategy to save landfill space—as well as energy, oil and millions of trees.

IBM looked at our own water usage at plants and labs and set a goal for savings. As noted in the Corporate Responsibility Report, water conservation initiatives in our microelectronics manufacturing operations achieved a 2.6 percent savings rate over the past five years.

Government agencies, retailers, financial institutions and other organizations worldwide are assessing the current and future impact of their activities. And that includes their impact on the planet. For example, by 2025, buildings will use more energy than any other category of "consumer." (Already, in the United States, they represent 72 percent of energy use.) And 40 percent of the world's current output of raw materials goes into buildings. That's about 3 billion tons per year.

Given increasingly finite resources, businesses depend on balanced natural ecosystems for raw materials, water, energy and the physical health of their employees and customers. They depend on thriving community systems for labor, customers and new sources of innovation. An enterprise committed to practicing sustainability considers both the immediate and far-reaching consequences of any any action it takes. However, developing a sustainable business approach has its challenges.

Benefits of eco-efficiency to organizations. Participants at the 2010 IBM eco-efficiency jam ranked the benefits of sustainability. 18.2% Regulatory compliance, 15% Other, 7.6% Shareholder expectations, 59.1% Competitive differentiation.Source: Poll of Jam participans.

Benefits of eco-efficiency to organizations. Participants at the 2010 IBM eco-efficiency jam ranked the benefits of sustainability. 18.2% Regulatory compliance, 15% Other, 7.6% Shareholder expectations, 59.1% Competitive differentiation.
Source: Poll of Jam participans.


To be sustainable, organizations must embrace a new objective: optimize operations to minimize environmental impact and improve social outcomes in a manner that also maximizes performance.

To be sustainable, organizations must embrace a new objective: optimize operations to minimize environmental impact and improve social outcomes in a manner that also maximizes performance.


 

Collecting operational information in timely manner

Since the initial poll in the 2009 Corporate Social Responsibility Report, businesses have continued to increase the amount of information they collect about their operations in at least eight sustainability areas: energy management, carbon management, waste management, water management, sustainable procurement, product composition, ethical labor standards and product life cycle.

(Percent responses)Energy management 64% 24% 11% Waste management 56% 31% 11% Carbon management 53% 24% 22% Water management 49% 35% 14% Sustainable procurement(ethical environmental) 49% 37% 12% Ethical labor standards 49% 42% 7% Product composition 46% 37% 15% Product lifecycle 39% 39% 20% Increased Stayed the same Decreased Not applicable(includes don't collect) Source:IBM Institute for Business Value 2009 CSR Study

Seeing into the supply chain

Still, some organizations aren’t asking their suppliers for information in any of the eight categories. Surprisingly, in the carbon and water categories, where cross-ecosystem “footprinting” is becoming more common, many aren’t collecting information from their suppliers. And, despite a long history of brand-damaging scandals in the area of labor, some aren’t collecting information about ethical labor from their suppliers.

Outperforming organizations, on the other hand, are collecting more information from their suppliers in each of the eight categories, as compared to their peers.

Including customers as part of sustainability efforts

Most organizations understand expectations for transparency with regard to corporate social responsibility initiatives. Many business leaders consider the open sharing of information a high priority. However, until recently, organizations have tended to share information reactively—in response to stakeholder demands. Those that expect to gain business advantage from corporate social responsibility are developing new ways to inform and educate their stakeholders, whether they are customers, employees or partners.


 

Sustainable practices begin at home

IBM believes that sustainability is more than a worthy goal, and has proven that energy efficiency, conservation and other environmentally protective practices make good business sense.

Newsweek magazine
In its 2012 Green Rankings of big companies' sustainability measures, Newsweek magazine rated IBM first of 500 in the United States. Criteria included environmental footprints, management (policies, programs, initiatives, controversies) and transparency (reporting practices).

As Newsweek notes, IBM has been “measuring, managing and voluntarily reporting on its environmental impact for more than 20 years," conserving 5.4 million kilowatt-hours of electricity, cutting CO2 emissions and saving more than US$400 million in the process.

The European Union
In January 2012, the European Union recognized 27 IBM data centers in the EU for their energy efficiency—the largest group of data centers from a single company to receive this award.

 

Based on energy-saving standards set by the European Union Code of Conduct for Data Centers, the recognition affirms IBM's efforts to meet its goal of doubling IT capacity within three years without increasing power consumption. The centers employ analytics and environmental sensors to help regulate temperatures and reduce energy use.

World Environment Center
Only one company has twice received the Gold Medal for International Corporate Achievement in Sustainable Development in the 28-year history of the World Environment Center's annual award.

IBM's long-term commitment to integrating sustainable development into business strategy and operations were cited in 1990, and again in 2012 both for business practices and for specific efforts toward developing IT products and services for sustainable cities as part of the Smarter Planet initiative.