Sustainability

In a lecture series at Columbia University in 1962, Thomas J. Watson Jr. laid out the tenets of his philosophy on corporate citizenry for a group of high-ranking academic and business leaders. In a far-ranging talk, he stressed the importance of being “open-minded and far-sighted in matters concerning the general public need,” and implored audience members to regard their communities, countries and the planet as ardently as their balance sheets. Watson held IBM, the corporation whose stewardship he inherited from his father, to the standard he was championing, saying “We want to be in the forefront of those companies which are working to make our world a better place.” IBM has never lost sight of that ethos.

Decades before ESG (environmental, social and corporate governance) policies became mainstream, IBM dedicated a department to publicly reporting environmental strategy, implementation and performance. It began reporting the company’s achievements annually to IBM’s board of directors near the turn of the 20th century.

IBM met its target to eliminate CFC (chlorofluorocarbons) use by 1993, exceeding the requirements of the Montreal Protocol, which had called for a 50% reduction from 1986 levels, two years ahead of the CFC phaseout date. In 1996, IBM launched its Corporate Standard for Environmentally Conscious Design to apply across all IBM products, and in 1992 it helped pioneer the EPA’s Energy Star program as a charter member.

The company’s achievements in recycling goods, reducing waste and energy requirements, conserving water, and improving packaging, design, development and manufacturing methods, have been substantial. From 1990 through 2010, IBM saved 5.4 billion kilowatt-hours of electricity consumption. The company avoided more than 3.6 million metric tons of carbon dioxide emissions — the equivalent of 52% of its 1990 global carbon dioxide emissions. And IBM was the first company, in 2003, to report recovering and recycling 1 billion pounds of IT products and product waste.

All of this adds up to real money. IBM estimates that the environmental savings and cost avoidance associated with its environmental policies has exceeded expenses by a ratio of approximately 1.6 to 1.

A commitment to the environment became a source of innovation. Institutional environmentalism has guided the company’s approach to basic research and product development. It has fostered new approaches to business analytics, revealing opportunities for clients and for the company itself to reduce costs and demand for resources. It also led to Smarter Planet.

In the fall of 2008, IBM CEO Sam Palmisano gave a speech at the Council on Foreign Relations in New York City. He articulated how a new generation of intelligent systems, technologies, and a trillion internet-connected devices would enable industries, infrastructures, cities and entire societies to become more productive, efficient and responsive. These new methods and processes would have profound environmental impact, he promised.

Smarter Planet became the overarching framework for IBM’s growth strategy, and it prompted forward-thinking leaders and citizens around the world to invest in innovative ideas surrounding traveler-centric transportation, consumer-centric electric power, and intelligent systems for managing healthcare, water, public safety and food. In 2010, IBM’s Smarter Planet initiative generated USD 3 billion in revenue from more than 6,000 client engagements. 

While many companies have trained their sights on climate change in recent years, IBM espouses a broader set of objectives in a “systems management” approach to environmental and safety issues. “Many people see climate change as the entirety of the environment and inadvertently link all environmental issues to it. That’s a mistake,” said IBM’s chief sustainability officer Wayne S. Balta. “If we focus on that one aspect entirely and avoid air pollution, water pollution and many other essential imperatives, we’re doing a disservice to our communities and our planet.”

In 2021, IBM announced 21 comprehensive, voluntary goals that address the ways in which IBM intersects with the environment. They include metrics relating to biodiversity, water usage, CO2 emissions, product and waste recycling, and renewable energy, among others. The company has pledged to improve average data center cooling efficiency and implement more than 3,000 energy conservation projects by 2025, and to procure 75% of electricity from renewable sources by 2025 and 90% by 2030. IBM has vowed to reduce greenhouse gas emissions 65% below 2010 levels by 2025. It also plans to reduce water withdrawals in water-stressed regions, procure paper and paper/wood-based packaging from sustainably managed forests, and plant 50 pollinator gardens by 2023 to encourage biodiversity.

Because IBM operates a vast global supply chain, some of its most powerful policies involve setting standards for partners. In 2010, the company required all first-tier suppliers to maintain an environmental management system, set goals and publicly disclose results. More recently, it announced intentions to require suppliers in emissions-intensive sectors to set emissions-reduction goals that align with the scientific recommendations from the UN Intergovernmental Panel on Climate Change to limit Earth’s warming to 1.5 degrees Celsius. Further, the company has pledged to host annual supplier symposiums to celebrate their successes.

As a global company operating in 170 countries with clients that touch nearly every industry, IBM has extended its environmental efforts from community programs all the way to planetary initiatives, just as Thomas J. Watson Jr. called for decades earlier. “A more modern digital economy can and should lead to a more sustainable economy,” said IBM chairman and CEO Arvind Krishna.