IBM has been demonstrably committed to addressing climate change through the company's energy conservation and climate protection programs for decades. As a founding partner, IBM helped the U.S. Environmental Protection Agency launch ENERGY STAR in 1992. The company began disclosing its carbon dioxide (CO₂) emissions in 1994 and set its first CO₂ emissions reduction goal in 2000. IBM made its first purchase of renewable electricity in 2001. The company published its policy position on climate change in 2007, long before today’s acute focus, recognizing that climate change is a serious concern that warrants timely, meaningful action on a global basis. IBM supported the Paris Agreement in 2015, and in 2017, the company publicly reiterated its support for the U.S. to remain a party to it. IBM became a founding member of the Climate Leadership Council in 2019, supporting its bipartisan plan for a carbon tax with 100% of the net proceeds returned to citizens as a carbon dividend.
In 2021, IBM established its third consecutive goal for the use of renewable electricity; its fifth consecutive goal to reduce greenhouse gas (GHG) emissions; a new goal to achieve net-zero GHG emissions by 2030; and new goals for energy conservation, data center cooling efficiency, individual fleet carbon intensity reduction targets with key carrier and shipment suppliers, GHG emissions reductions for key suppliers in emissions-intensive business sectors, and more. For details on our climate position and energy and climate goals, please see:
IBM recognizes climate change is a serious concern that warrants timely, meaningful action on a global basis to reduce the atmospheric concentration of GHGs in accordance with scientific judgment.
IBM first published its position on climate change in 2007, and our commitment remains steadfast today.
IBM supports putting a price on carbon
IBM endorses the plan outlined by the Climate Leadership Council that would put a tax on carbon dioxide emissions, with the proceeds of that tax — a "carbon dividend" — to be returned to citizens. The company believes this represents the most realistic and appropriate opportunity to get a majority of people to agree on a public policy towards carbon emissions that is mindful of both the environment and the economy. This plan would place an economy-wide USD 40/ton fee on carbon dioxide emissions, increasing by 5% above inflation every year, putting in place strong economic incentives for energy companies to reduce carbon emissions and for energy consumers to reduce their own energy consumption. To learn more, please visit:
Climate Leadership Council Plan (link resides outside ibm.com)
We recognize that the most effective way to reduce our GHG emissions is to make our operations more efficient and thereby reduce IBM's actual consumption of energy, which is the company's most significant source of GHG emissions. IBM established its global energy conservation program in 1973 and developed the methodology leading to its first energy conservation goal in 1975. The company continues to focus on ways to further reduce its energy consumption.
IBM’s energy use decreased by 1.5% in 2022 from 2021, adjusted for acquisitions and divestitures. Our global operations consumed approximately 2,448,000 megawatt-hours (MWh) of energy across all commodities, of which 80% was electricity. Ongoing consolidation of our real estate and improvements in operational efficiency, along with our continued focus on energy conservation contributed to the lower use of energy during 2022.
Energy conservation projects
During 2022, we implemented 519 energy conservation projects across more than 150 IBM locations globally, avoiding 71,000 MWh of energy consumption and 25,600 metric tons (MT) of CO₂ emissions, and saving USD 9.5 million. In measuring performance against IBM’s energy conservation goal, we only include the first year’s savings from projects. Accordingly, IBM’s total energy savings and CO₂ emissions avoidance from these projects are greater than this simple summation of the annual results. We do not include reductions in energy consumption resulting from downsizings, the sale of operations or cost-avoidance actions, such as fuel switching and off-peak load shifting, in our energy conservation results.
In 2021, we set a goal of 3,000 energy conservation projects by 2025. We have completed 1,455 as of year-end 2022, avoiding 161,000 MWh of energy consumption.
From 1990 through 2022, IBM conserved 10 million kWh of energy — equivalent to more than triple IBM's current annual energy consumption — saving $680 million and avoiding 4.63 million MT of CO₂ emissions. For more details on our energy conservation projects, please see the latest IBM ESG Report.
Data center energy efficiency
IBM's approach to managing and enhancing the energy efficiency of our data centers is comprehensive, encompassing various strategies such as optimizing existing space to improve workload per area, upgrading IT infrastructure to reduce energy consumption, and leasing new, more efficient spaces.
We measure the power usage effectiveness (PUE)¹ at the data centers we operate where possible and obtain PUE data from landlords of co-location data centers. For data centers where we are unable to obtain PUE data, we utilize industry average data. Using this approach, we calculated our 2022 weighted average PUE to be 1.52 compared to our baseline PUE of 1.55² in 2019. New requirements for co-location landlords implemented in our leasing strategy have begun to yield results, and our ongoing efforts to enhance the utilization of our data centers offer a viable route towards accomplishing our goal to improve the average cooling efficiency of our data centers by 20% by 2025 against our baseline.
¹PUE is the ratio of the total energy consumed by the data center divided by the energy consumed by the IT equipment. The closer the value is to 1, the more energy efficient the data center and its cooling delivery are.
²Our 2019 PUE baseline was updated to include only those data centers that remained with IBM after its managed infrastructure services business was separated.
Renewable electricity consumption
IBM made its first purchase of renewable electricity in 2001. In February 2021, the company established its third-generation renewable electricity procurement goal: to procure 75% of the electricity IBM consumes globally from renewable sources by 2025, and 90% by 2030. The amount includes renewable electricity in the grid mix IBM receives from utilities or energy retailers, and renewable electricity for which IBM specifically contracts over and above the renewables in the grid.
IBM increased its consumption of renewable electricity to approximately 1,299,000 MWh in 2022, representing 65.9% of its total electricity consumption, up from 62.7% in 2021. That includes 51.8% contracted directly from power suppliers or obtained via landlords, and 14.1% already in the electricity mix we received from the grid.
We remain on track to meet our current goal of 75% renewable electricity by 2025 through continued efforts to procure more renewable electricity. In 2022, we executed additional renewable electricity purchases for several IBM Cloud data centers, our manufacturing site in Mexico, and for office locations in the United States, India, and Australia.
Even though we strive to do so one day, it is not possible today or in the foreseeable future for IBM to actually consume 100% of electricity from renewable sources given our physical presence in more than 100 countries along with the need for uninterrupted power, which is usually only made possible today by the use of fossil fuel and nuclear generation sources.
Data center renewable electricity consumption
After the separation of IBM’s former managed infrastructure services unit, the quantity of data centers that we operate decreased. Today, the vast majority of IBM data centers reside in co-location data center facilities that are managed by third parties. These data centers continue to account for a significant share of IBM’s global electricity consumption. In 2022, 66% of the electricity consumed in our data centers came from renewable sources, including both contracted and grid-supplied. Approximately 30% of IBM data centers were supplied with 100% renewable electricity during 2022, although they still depend upon backup power from fossil fuels when renewable sources become interrupted.
To learn more about the company's progress toward its renewable electricity goal and sources of renewable electricity, please see the latest IBM ESG Report.
Our reporting of renewable electricity consumption counts only what is generated in the grid regions where our consumption actually occurs. We do not rely upon the purchase of unbundled renewable energy certificates to comprise any “percent renewable” if we cannot credibly consume the electricity those certificates represent. Our definition of “grid region” aligns with how the US Energy Information Administration defines power balancing authorities’ territories. We apply the same concept for other jurisdictions.
IBM's strategy is to purchase renewable electricity that is generated in the grid regions where our consumption of electricity occurs. Our definition of "grid region" aligns with how the US Energy Information Administration¹ defines power balancing authorities' territories. We apply the same concept for other jurisdictions. By aligning with this definition of grid region, we ensure that the renewable electricity we purchase can physically flow from point of generation to point of consumption when the time of its generation and our consumption coincides. This also creates incentives for our electricity suppliers to increase their renewable electricity offerings in the places where we actually have demand for such power.
This means IBM does not rely upon the purchase of unbundled Renewable Energy Certificates (RECs) to comprise any "percent renewable" if we cannot credibly consume the electricity those certificates represent. For example, we do not use purchases of renewable electricity generated in Texas to claim consumption of that electricity in New York because the two states are in different grid regions.
We are source agnostic, meaning IBM procures renewable electricity generated from wind, hydropower, biomass, solar and geothermal installations around the globe. We report all of our contracted renewable electricity purchases whether from new or existing generation sources, "additional" or otherwise, and without discriminating against large hydropower plants. All purchases signal to suppliers our desire for them to maintain and broaden their renewable electricity offerings. This approach also recognizes that all sources of renewable electricity contribute to decarbonizing our economy.
¹ US Energy Information Administration (link resisdes outside ibm.com)
IBM methodology to calculate its consumption of renewable electricity
IBM differentiates between two categories of renewable electricity consumption:
To quantify contracted renewable purchases, the company relies upon its contracts with its providers. Typically, IBM obtains bundled Renewable Energy Certificates (RECs) or Guarantees of Origin (GoOs) in corresponding quantities that confirm this information. In geographies where RECs or GoOs are not available, the company obtains other equivalent documentation as alternative evidence to RECs or GoOs.
IBM estimates the grid-supplied renewables using publicly available power generation data by source from the International Energy Agency¹, the U.S. Environmental Protection Agency² (at grid sub-region level) and the Canada Energy Regulator³ agency (at provincial level). This data is typically one to three years behind the actual reporting year. The company endeavors to obtain the most recent reliable data for any given reporting cycle. The following example illustrates how IBM calculates its total renewable electricity consumption from both categories:
Let's assume a hypothetical IBM site in 'grid region A' consumes 10,000 megawatt-hours (MWh) of electricity each year. That site signs a contract with its power supplier to purchase and consume 5,000 MWh of renewable electricity per year. Therefore, 50% of the site's electricity is being supplied by contracted renewable purchases. The rest of the site's consumption (the other 5,000 MWh) is being supplied by a mix of energy sources in 'grid region A'. According to the relevant authorities, the electricity produced in grid region A comes from the following sources, in percent of total power generation: coal (23%); natural gas (45%); nuclear power (10%); hydropower (3%); wind power (18%); and solar power (1%). That means, that in total, grid region A is composed of 22% renewables. This means that 22% of the site's remaining 5,000 MWh of electricity consumption – equal to 1,110 MWh – is coming from grid-supplied renewable electricity. The site's total consumption of renewable electricity that year was 5,000 MWh (contracted purchases), plus 1,110 MWh (grid-supplied), totaling 6,100 MWh or 61% of its total electricity consumption.
IBM does not arbitrarily assign the consumption of renewable electricity to certain types of operations to be able to show desirable metrics (e.g., assigning all of the company's renewables consumption to its data center operations). The company's approach is factual and transparent since it assigns renewables consumption proportionally to the operations consuming the electricity at a facility level.
Allocation of renewable electricity to physical consumption and matched consumption
IBM categorizes its procurement of renewable electricity as either physical consumption or matched consumption with bundled RECs. Both categories represent scenarios in which an IBM facility and a renewable generation asset are connected to the same grid region:
IBM allocates its renewable electricity consumption among these two categories using the following assumptions based upon the company's understanding of the sources and profiles of their output:
2022 Allocation of IBM's renewable electricity consumption: By delivery type
Total renewable electricity consumed: 1,299,000 MWh
79% Contracted purchases: 1,020,000 MWh
21% Grid-supplied: 279,000 MWh
0% On-site generation: 0 MWh
2022 Allocation of IBM's renewable electricity consumption: By category
Total renewable electricity consumed: 1,299,000 MWh
56% Physical consumption: 724,000 MWh
44% Matched consumption with bundled RECs: 575,000 MWh
0% Unbundled RECs: 0 MWh
¹ International Energy Agency (link resides outsides ibm.com)
² U.S. Environmental Protection Agency eGrid Summary Tables 2018 (link resides outsides ibm.com)
³ Canada Energy Regulator (link resides outsides ibm.com)
IBM has been a leader in addressing climate change through the company's energy conservation and climate protection programs for decades. The company has set and attained a series of GHG emissions reduction goals covering its operations.
IBM set its fifth-generation GHG emissions reduction goal in 2021: Reduce GHG emissions 65% by 2025 against base year 2010, adjusted for acquisitions and divestitures¹. It covers all of IBM’s Scope 1 and Scope 2 emissions, as well as Scope 3 emissions associated with IBM’s electricity use at co-location data centers.
The company's goal is based on science. The United Nations Intergovernmental Panel on Climate Change (IPCC), in its "Special Report: 1.5 C°," indicates that anthropogenic CO₂ emissions must decrease 45% between 2010 and 2030 to limit Earth's warming to 1.5 degrees Celsius above pre-industrial levels. This translates to an annual rate of reduction of 2.25%. IBM's goal achieves a rate of reduction of 4.3% per year.
In 2022, IBM reduced emissions 63.3% against base year 2010 adjusted for acquisitions and divestitures, placing IBM on track to meet its goal. These reductions occurred primarily due to our increase in renewable electricity purchases, our continued focus on operational efficiency and energy conservation, and our overall lower energy consumption.
IBM will continue to prioritize energy conservation and the use of renewable electricity to reduce GHG emissions as we pursue our goal to reach net-zero operational GHG emissions by 2030, using feasible technologies to remove emissions in an amount that equals or exceeds IBM’s residual emissions. We aim for IBM’s residual emissions to be 350,000 metric tons or less of CO₂-equivalent. Our net-zero goal covers Scope 1 and Scope 2 emissions, as well as Scope 3 emissions associated with our electricity consumption at co-location data centers. IBM included these specific Scope 3 emissions in our energy and climate goals because we know the actual quantity of electricity that we consume, and we have control over that consumption.
For more information, please see:
¹IBM does not take credit for a reduction of GHG emissions because of a significant divestiture. For those divestitures, we have removed the relevant GHG emissions from the base year of the calculation. For acquisitions, we have not adjusted the base year, but our current year data and performance against our goal includes the acquired GHG emissions.