Environmental governance and risk management

Governance process

The Vice President of Corporate Environmental Affairs and Product Safety, and Chief Sustainability Officer, is the top environmental executive at IBM. This person is authorized to set IBM's strategy for environmental affairs, including matters related to climate change, and to establish the company's environmental requirements, goals, and management system to drive consistent execution across IBM's global operations and achieve results consistent with environmental leadership.

The Directors and Corporate Governance Committee of the IBM Board of Directors oversees IBM's environmental programs and performance and is responsible for reviewing and considering IBM's position and practices on significant public policy issues, such as protection of the environment, corporate social responsibility, sustainability, and philanthropic contributions. The Vice President of Corporate Environmental Affairs and Product Safety meets with the board committee annually to discuss IBM's environmental programs, performance, challenges and emerging issues.

Risks related to environmental matters

Climate change is a serious concern that warrants meaningful action on a global basis. IBM's Enterprise Risk Management (ERM) program considers environmental risks, including those related to climate change. IBM's consistent, systemic, and integrated approach to ERM is designed to identify, mitigate, and manage significant risks. Our ERM function assesses risks across the organization to develop a holistic, enterprise-level view of risks arising from evolving regulatory or financial environments, operations, or strategic planning and execution, including environmental and climate-related risks. The program also assesses interdependencies between risks and collaborates with risk owners to optimize actions across IBM.

Oversight of risk management begins with IBM's Board of Directors, which is responsible for assessing our ERM approach and overseeing management's execution of its risk responsibilities. IBM, like other companies, is subject to potential climate-related risks and costs such as those resulting from increased severe weather events, prolonged changes in temperature, new regulations affecting hardware products and data centers, carbon taxes, and increased environmental disclosures requested or required by clients, regulators and others.

We do not expect climate change or compliance with environmental laws and regulations focused on climate change to have a disproportionate effect on the company or its financial position, results of operations and competitive position. Conversely, we believe that there is opportunity to use IBM's AI, hybrid cloud, and other technologies to assist clients with managing their environmental and climate-related risks, and we continue to invest in solutions such as the IBM Environmental Intelligence Suite and Envizi to enhance IBM's capabilities in this area.