GHG emissions inventory and reductions

IBM has been a leader in addressing climate change through the company's energy conservation and climate protection programs for decades. We have been tracking our energy consumption since 1973, and GHG emissions since the late 1990s. The majority of GHG emissions associated with IBM's operations, 84.9 percent, come from the use of electricity and fuel in our operations. The remaining GHG emissions are largely associated with the use of PFCs and heat transfer fluids in our semiconductor manufacturing operations. IBM has longstanding programs to implement energy conservation and PFC reduction initiatives to reduce GHG emissions from our use of energy and PFCs. We have set and attained a series of PFC and CO2 emissions reduction goals over the past 15 years. In February 2015, IBM set two new goals to further reduce its greenhouse gas (GHG) emissions: a new renewable electricity use goal; and a third-generation GHG emissions reduction goal.

Overall CO2 emissions inventory

IBM tracks and manages operational Scope 1 and 2 emissions across its operations, collecting and aggregating data from its data center, semiconductor research and manufacturing, hardware development and assembly and office operations. IBM has a broad, effective set of programs and processes to inventory its energy use and GHG emissions and take action to increase the efficiency of its operations. IBM decreased its overall Scope 1 and 2 emissions by 3.6 percent from 2013 to 2014. The summary of our 2014 emissions inventory is provided in the following table:

Table 1: IBM 2014 Scope 1 and Scope 2 Emissions Inventory

Metric tons (MT) of CO2 equivalent

Scope 1 emissions Emissions type 2013 2014
Fuel use Operational 225,514 226,187
Perflourinated carbon compounds PFC 194,301 215,893
Nitrous oxide Other 23,150 23,724
Heat transfer fluids Other 61,747 83,566
HFCs Other 9,752 7,283
Total Scope 1 emissions   514,464 556,653
Scope 2 emissions      
Electricity: Using grid and location MT CO2/MWh emissions factors Operational 1,934,736 1,847,141
Purchased energy commodities Operational 43,858 34,871
Total Scope 2 emissions   1,978,594 1,882,012
Total Scope 1 and 2 emissions   2,493,058 2,438,665
CO2 avoidance: Renewable electricity purchases Operational (223,624) (250,345)
Total Scope 1 and 2 emissions adjusted for renewable electricity   2,269,434 2,188,320

Operational CO2 emissions reductions

IBM's energy conservation program has been the cornerstone of the company's climate protection program, since our energy use represents the greatest potential climate impact associated with IBM's operations. Our ongoing focus on minimizing energy use in our operations through energy conservation and efficiency projects reduces our CO2 emissions inventory and delivers business value through more efficient operations and reduced operating costs. Since 1996, IBM has had a corporate wide energy conservation goal which currently requires IBM's business units to reduce or avoid 3.5 percent of the current year's energy use. IBM considers its energy conservation goal to be its "first generation" CO2 emissions reduction goal since energy use reductions result in the reduction of CO2 emissions associated with the use of fuels and electricity. In aggregate, IBM's energy conservation program has reduced or avoided annualized CO2 emissions of 4.2 million metric tons from 1990 to 2014, an amount equivalent to 61 percent of IBM's global CO2 emissions in 1990. Changes due to acquisitions, divestitures and downsizing are not included in those results; they represent the benefits of the many energy conservation and efficiency projects implemented for over two decades across our operations.

In 2006, IBM established a second generation goal, which set an absolute operational CO2 emissions reduction objective. Between 1990 and 2005, IBM reduced or avoided CO2 emissions by an amount equivalent to 40 percent of its 1990 emissions through its global energy conservation program. To further extend this achievement, IBM set itself an aggressive "second generation" goal: to reduce the CO2 emissions associated with its energy use 12 percent by 2012 against a 2005 base year through energy conservation and the procurement of renewable energy.

IBM met its second generation climate protection goal in 2012, reducing our operational CO2 emissions by 15.7 percent against the 2005 baseline.

Building on this accomplishment, IBM established a third-generation CO2 reduction goal in February 2015 to reduce CO2 emissions associated with our energy consumption 35 percent by year-end 2020 against a base year of 2005, adjusted for acquisitions and divestitures. This represents an additional 20 percent reduction, from year-end 2012 to year-end 2020, over the reductions achieved from 2005 to 2012 under IBM's second-generation goal.

IBM plans to achieve this new goal through continued focus on energy conservation and a shift to greater use of renewable electricity. With ongoing efforts, IBM's 2014 CO2 emissions were already more than 25 percent below the 2005 baseline.

IBM's operational CO2 emissions, those associated with IBM's use of fuel and electricity at its locations, were reduced 6.1 percent from 2013 to 2014. There were four main factors that drove this reduction:

PFC emissions management

IBM releases some perfluorocompounds (PFCs) from its semiconductor manufacturing operations. PFC emissions represented approximately 10 percent of IBM's Scope 1 and 2 emissions during 2014. Although the releases are in relatively small amounts (in carbon dioxide equivalents, when compared to the company's indirect CO2 emissions), IBM was the first semiconductor manufacturer to set a numeric reduction target for PFCs in 1998 and was one of the industry leaders in Semiconductor Industry Association (SIA) and EPA collaboration for voluntary industry emissions reporting and reduction initiatives. This collaboration resulted in two Memorandums of Understanding:

After completion of our first corporate goal in 2002, we set a second generation goal to achieve an absolute reduction in PFC emissions from semiconductor manufacturing of 25 percent by 2010 against a base year of 1995. We exceeded this goal by reducing IBM's PFC emissions by 36.5 percent at year-end 2010.

We continue to take actions to reduce our PFC emissions. In 2014, our PFC emissions were approximately 215,900 metric tons of carbon dioxide equivalents (CO2e), a reduction of 10.8 percent from 2010. Our reported emissions increased by 11.1 percent from 2013 to 2014 as a result of using revised emissions factors required by the US EPA for estimating emissions associated with semiconductor manufacturing processes. In 2014, IBM's semiconductor manufacturing plant in Vermont continued to convert from hexafluoroethane (C2F6) to octafluorocyclobutane (C4F8) on selected chamber cleaning processes, reducing the CO2 emissions associated with chamber clean operations by 40 percent. Because C4F8 has a much higher utilization rate and much lower global warming potential than C2F6, it significantly reduced the GHG emissions from the process. In addition, IBM's manufacturing facility in New York continues to abate PFC emissions associated with its semiconductor operations, minimizing the emissions from that facility.

Using absolute metrics to assess GHG reductions

IBM uses absolute metrics as opposed to intensity metrics to assess the effectiveness of its GHG emissions reductions programs. We do not establish intensity metrics against which to assess our progress toward emissions reductions because the diverse nature of IBM's business activities precludes the development of a meaningful correlation between IBM's emissions and activities, and typical emissions normalizers such as revenue, employee population or a measure of output. IBM's diverse range of business activities include, but are not limited to, software labs, consulting services, data center operations, data center services, hardware design, hardware manufacturing and assembly, and semiconductor manufacturing. Often, these activities are co-located at a single facility. There is no effective methodology to disaggregate operations or to allocate the overhead energy use and GHG emissions associated with centralized activities.