Energy and Climate

IBM has been demonstrably committed to addressing climate stress 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. 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 energy and climate goals, please see:

IBM's 21 goals for environmental sustainability

IBM recognizes climate stress as 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 believes all sectors of society, the economy and governments worldwide must participate in solutions to climate stress.
• IBM supports joint efforts by the private and public sectors to reduce global GHG emissions. These initiatives are most effective when they are implemented through market-driven mechanisms and are economically efficient, environmentally effective, and sustainable.
• IBM believes a diverse energy portfolio is necessary to achieve an orderly adaptation to a world in which GHG emissions are constrained while maintaining successful economies and secure supplies of energy, and also meeting the needs of humanity.
• IBM considers energy conservation to be a cornerstone of climate protection. IBM will continue to conserve energy and continually improve the energy efficiency of its operations, products and services while collaborating with and encouraging its global suppliers to do likewise.
• Consistent with its values, IBM will continue to collaborate with clients, governments and other partners to create innovations and solutions to address climate challenges.

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

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.

Energy consumption

IBM’s energy use decreased by 6.6% in 2023 from 2022, driven by increased operational efficiencies and a continued focus on energy conservation. Our global operations consumed approximately 2,287,000 megawatt-hours (MWh) of energy across all commodities, of which 82% was electricity. 

Energy conservation projects

During 2023, we implemented 675 energy conservation projects across more than 130 IBM locations globally, avoiding an estimated 95,000 MWh of energy consumption and 33,000 metric tons of CO₂-equivalent emissions (mtCO₂e), and saving approximately USD 11 million.¹

In 2021, we established a goal to implement a minimum of 3,000 energy conservation projects to avoid the consumption of 275,000 MWh of energy from 2021 to 2025. As of year-end 2023, we completed 2,130 energy conservation projects towards our 2025 goal, avoiding an estimated 256,000 MWh of energy consumption.

From 1990 through 2023, IBM conserved an estimated 10.1 million MWh of energy — equivalent to more than four times IBM's current annual energy consumption — saving an estimated USD 691 million and avoiding an estimated 4.66 million mtCO₂e. For more details on our energy conservation projects, please see the latest IBM Impact Report.

Data center energy efficiency

IBM's comprehensive approach to reducing the environmental footprint of our data centers prioritizes energy efficiency and includes the following strategies: space optimization, technology upgrades, and leasing more energy-efficient co-location data centers.

In 2021, we established a goal to improve the average data center cooling efficiency 20% by 2025 against base year 2019.² In 2023, our weighted average Power Usage Effectiveness (PUE)³ was 1.46, an improvement of 16.4% in cooling efficiency when compared to our baseline of 1.55 in 2019.
 

¹ 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 GHG emissions avoidance from these projects are greater than the 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.

² To determine our performance against this goal, we actively measure PUE in all data centers under our direct control in which we have metering. For co-located facilities, we use PUE data provided by landlords. In cases where direct PUE data is unavailable, we utilize industry benchmark data to track progress and measure our overall energy efficiency performance.

³ PUE 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.

Renewable electricity consumption

IBM made its first purchase of renewable electricity in 2001 and we are now working toward the company's third-generation renewable electricity procurement goal which was established in 2021: 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 1,322,000 MWh in 2023, representing 70.6% of our total electricity consumption, up from 65.9% in 2022. That includes 56.6% contracted directly from power suppliers or obtained via landlords, and 14.0% already in the electricity mix we received from the grid.

We remain on track to meet our current goal of procuring 75% of our worldwide electricity consumption from renewable sources by 2025, and 90% by 2030. Performance in 2023 was primarily driven by an increased use of renewables in our offices in India and in two IBM Cloud data centers in the United States.

Data center renewable electricity consumption

Overall, 74% of the electricity consumed in our data centers came from renewable sources in 2023, including both contracted and grid-supplied, compared to 66% in 2022. Globally, 28 data centers were supplied with 100% renewable electricity in 2023.

To learn more about the company's progress toward its renewable electricity goal and sources of renewable electricity, please see the latest IBM Impact Report.

Renewable electricity procurement strategy and reporting

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 from other grid regions to comprise any “percent renewable” if we cannot credibly consume the electricity those certificates represent. Our definition of “grid region” aligns with how the U.S. 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.

We are source agnostic, meaning IBM includes renewable electricity generated from wind, hydropower, biomass, solar and geothermal sources in our reported renewable electricity consumption. 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.

IBM methodology to calculate its consumption of renewable electricity

IBM differentiates between two categories of renewable electricity consumption:

1. Contracted renewables: purchases of renewable electricity for which IBM enters into a direct contractual relationship with a utility, power supplier or landlord to specifically procure and consume renewable electricity.
2. Grid-supplied renewables: quantity of renewables that is part of the mix of electricity our facilities automatically receive from the grid.

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 Agency², the U.S. Environmental Protection Agency³ (at grid sub-region level) and the Canada Energy Regulator⁴ (at provincial level). 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 to assign renewables consumption proportionally to the operations consuming the electricity at a facility level.
 

¹ U.S. Energy Information Administration

² International Energy Agency

³ U.S. Environmental Protection Agency eGrid Summary Tables 2018

⁴ Canada Energy Regulator

IBM's GHG emissions reduction goals

IBM has set and attained a series of GHG emissions reduction goals covering its operations.

We set our fifth-generation GHG emissions reduction goal in 2021: Reduce operational GHG emissions 65% by 2025 against base year 2010, adjusted for acquisitions and divestitures.¹ 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. 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.

The company's goal is based on science. The United Nations Intergovernmental Panel on Climate Change (UN 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 addition, we set a new goal to reach net-zero operational GHG emissions by 2030, using feasible technologies to remove emissions in an amount which equals or exceeds IBM’s residual emissions. The company aims for residual emissions of 350,000 mtCO₂e or less by 2030. This goal also 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. 

In 2023, we reduced IBM's operational GHG emissions 68.5% against base year 2010, adjusted for acquisitions and divestitures, meeting our 2025 goal two years early. These reductions occurred due to our increase in renewable electricity purchases, our continued focus on operational efficiency and energy conservation and lowered energy consumption.

We plan to maintain and improve performance by continuing to use energy responsibly and efficiently and by purchasing more renewable electricity. Our focus remains to reach net-zero operational GHG emissions by 2030, with residual emissions of no more than 350,000 mtCO₂e. This will require both further emissions reductions and the use of feasible technologies to remove our residual emissions by 2030.

For more information, please see:

GHG emissions inventory

GHG Limited Assurance Statement and ISO 14064-1 Certificate

IBM's approach to addressing value chain GHG emissions

Scope 3 emissions occur in the value chain of a reporting company – both upstream and downstream. These emissions result from the activities of a reporting company’s suppliers, clients and employees. Estimating Scope 3 emissions accurately can be challenging due to a lack of primary data and the complexity of value chains.

To promote a long-lasting impact, our upstream efforts focus on capacity building across our supply chain. For example, IBM requires all first-tier suppliers to set GHG emissions reduction goals and publicly disclose their results. Key suppliers in emissions-intensive industries are further required to set science-based goals that align with the recommendations of the UN IPCC. To address downstream emissions, one of IBM’s longstanding goals is to continually improve the energy efficiency of our server products. We are also committed to using IBM offerings to help clients gain operational efficiencies and applying our technologies to accelerate solutions to global environmental challenges.

Many of our other voluntary goals, including those associated with resource conservation, pollution prevention and waste management, also help to reduce emissions within our value chain. 

To learn how IBM tools can help automate the calculation of GHG emissions, please see our IBM Envizi Suite.

¹ Figures have been adjusted to account for the separation of IBM's managed infrastructure services unit that was completed on November 3, 2021. IBM 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 include the acquired GHG emissions.

IBM calculates its greenhouse gas (GHG) emissions according to The Greenhouse Gas Protocol Corporate Accounting and Reporting Standard and follows procedures aligned with the ISO 14064-1 standard. 

With few exceptions, IBM does not estimate Scope 3 GHG emissions associated with its value chain because the necessary gross assumptions associated with such estimates simply do not enable credible, factual results. 

¹Figures have been rounded to the nearest thousand.

²Description of Scope 3 emissions:

• Purchased goods and services

  These are the emissions associated with IBM's use of electricity in data centers located in facilities managed by third parties where IBM does not procure the electricity (also referred to as co-location data centers).
   

• Use of sold products

  These are the emissions associated with the electricity consumption of our sold products when they are used by our clients. In estimating emissions from the use of our sold products, we only capture products sold during the reporting year and account for 12 months of estimated consumption. We use product specifications such as nameplate power, quantity of products sold every year, we make assumptions around typical client hardware utilization rates, and use industry average Power Usage Effectiveness and global electricity GHG emission factors to estimate these emissions. We do not extrapolate this data to estimate emissions around a hypothetical lifetime of our products because that would require gross assumptions based on lifetime and specific client applications.
   

• Upstream leased assets

  In some countries, IBM provides leased vehicles for employees that they may use for personal purposes. For these vehicles, we have set standard guidelines that require leasing of vehicles with lower emissions profiles. These guidelines enable reductions in average car emission levels as the car fleets are renewed.
   

• Business travel

  These emissions are associated to business air travel on commercial carriers and car rentals. Business travel is a necessary and important part of ensuring that IBM understands our clients' needs and delivers the best client experience possible. We have worked with rental car companies to require that they offer more fuel-efficient vehicles to our employees while traveling for business. IBMers can reduce the need for travel by taking advantage of strategic collaboration and meeting tools that allow them to easily engage with clients and their colleagues to have productive meetings, without the need for travel.
   

• Employee commuting
  
  Our reported figure for employee commuting emissions only includes estimations made for our U.S. employees since this is the population for which we can make credible assumptions around their commuting behavior and we have access to reliable third-party data to estimate emissions. IBM has been active for decades in promoting programs that reduce employees' work-related commutes and associated GHG emissions. For example, many locations promote biking to work by having bicycle lockers, racks and showers available on-site. At several larger locations, IBM sponsors shuttle services to transport employees to mass transit stations and also between IBM campuses and buildings Also, many IBM locations are within reach of the public transportation system, giving employees the choice to use more energy-efficient mass transit to commute to work. Globally, many of our locations partner with local public transit authorities to develop ride-sharing programs and negotiate subsidized transit passes for IBM employees.

³CO₂ emissions associated with IBM's use of biofuels. In line with the Greenhouse Gas Protocol, these emissions are reported separately and not accounted for as Scope 1 emissions because they are considered part of the natural CO₂ cycle.