IBM’s Corporate Policy on Environmental Affairs calls for environmental leadership in all of the company’s business activities.
Our corporate environmental affairs policy objectives range from workplace safety, pollution prevention and energy conservation, to product design for the environment and the application of IBM’s expertise to help address some of the world’s most pressing environmental problems.
IBM’s corporate environmental affairs policy calls for environmental affairs leadership in all of the company’s business activities. This leadership is implemented through a global environmental management system (EMS) that integrates corporate directives that govern IBM’s conduct and operations worldwide. These directives cover areas such as pollution prevention, chemical and waste management, energy management and climate protection, environmental evaluation of suppliers, product stewardship, and incident prevention and reporting. It is through the consistent implementation of this global EMS that IBM ensures operations are executed with the same high standards all across the world.
As noted in IBM’s Business Conduct Guidelines, all IBMers have a role to play in protecting the environment. IBM’s corporate policy on environmental affairs and its supporting global EMS provide more specificity on IBM’s environmental requirements. Every employee is expected to follow IBM’s corporate environmental policy and report any environmental, health or safety concern to IBM management. Managers are expected to take prompt action when faced with a potential violation of the policy or its directives. IBM executives are responsible for the environmental performance of their organizations or locations.
Our environmental programs and performance are routinely monitored and results are reviewed annually by all levels of management up to the Directors and Corporate Governance Committee of IBM’s Board of Directors. Formed in 1993, this committee was assigned the ongoing responsibility of reviewing IBM’s position and practices on significant issues of corporate public responsibility, including protection of the environment.
Environmental goals are an important part of IBM’s global EMS. We maintain environmental goals covering the range of our environmental programs, including climate protection, energy and water conservation, pollution prevention, waste management, and product stewardship. These goals and our performance against them are discussed in their respective sections of this report, and are provided in the listing of IBM’s environmental Key Performance Indicators.
In 1997, IBM became the first major company in the world to earn a single global registration to the ISO 14001 Environmental Management Systems standard. We achieved this credential within just one year of the finalization of the standard.
The initial registration covered IBM’s manufacturing, product design, and hardware development operations across our business units worldwide. We have since expanded our global ISO 14001 registration to include our research locations that use chemicals, several country organizations with their non-manufacturing locations, our product development function, our Global Asset Recovery Services, and our Integrated Supply Chain organization.
As our business model evolves to include ever more services offerings, we continue to update our EMS to appropriately address new environmental opportunities and challenges in the services area.
IBM’s energy management program dates back to 1974, when our CEO issued a formal corporate policy calling for the conservation of energy and materials in all of IBM’s activities. Over the intervening years, we sustained our global energy management program and integrated it into the company’s global EMS.
Upon the issuance of the ISO 50001 standard on energy management systems in June 2011, IBM set forth a strategy to achieve verification of conformity of our EMS against this newly published standard.
Within one year of the issuance of this standard, we achieved ISO 50001 registration of our energy management program at the corporate level and as an integral component of IBM's global EMS. Our approach recognizes and leverages the fact that IBM’s existing EMS addresses both environmental and energy management.
Consistent with our global ISO certification strategy and following our successful ISO 50001 EMS registration at the corporate level, IBM’s major energy-consuming locations are now receiving registration audits of their site-specific energy programs under IBM’s single global ISO 50001 certification. Nine locations—seven in the United States and one each in Mexico and Canada—have successfully concluded their registration audits thus far. Additional IBM locations are undergoing ISO 50001 registration audits during 2014 as we continue the demonstration of conformity of our global EMS, inclusive of our energy program, against the requirements of the ISO 50001 standard.
IBM’s Corporate Policy on Environmental Affairs also calls for the company to publicly disclose information on our environmental programs and performance. This report marks IBM’s 24th consecutive year of annual corporate environmental reporting.
In addition to providing information on our environmental programs and performance in this report, which we have been publishing annually since 2002, we provide a report based on the Global Reporting Initiative (GRI) and provide information through a number of other voluntary reporting programs and tools, such as the Carbon Disclosure Project, EcoVadis and the OneReport Sustainability Reporting Network. For more details on IBM's environmental reporting, see the IBM Environmental Reporting, Disclosure and Verification webpage.
IBM has a variety of outreach programs through which we engage with various groups and individuals on the subject of the environment. Our community environmental outreach programs range from open houses and emergency preparedness drills with local organizations to the support of and participation in local environmental projects and environmental education efforts.
IBM has ongoing dialogues with many stakeholders, including socially responsible investors and other shareholders, environmental nongovernmental organizations (eNGOs), governments, employees, clients, suppliers, and others on a range of environmental issues. We consider these relationships to be very valuable, as they allow us to share ideas and obtain various perspectives, input and feedback regarding our programs, activities and performance. They also inform our reporting, enabling us to better meet the information needs of a wide variety of interested people and entities.
In addition, IBM Stockholder Relations holds an annual Corporate Responsibility Financial Analysts Call and Webcast during which executives from various areas of corporate responsibility in IBM—including Corporate Environmental Affairs, Global Supply Chain, Corporate Legal/Governance, Global Human Resources, and Corporate Citizenship & Corporate Affairs—present a brief update on our programs and performance and invite questions from analysts on any of the areas of corporate responsibility in IBM.
The executives participating on this annual analyst call are on IBM’s Corporate Responsibility Executive Steering Committee. Corporate responsibility is not a separate, standalone organization in IBM. Consistent with our century-long commitment to being a good corporate citizen, corporate responsibility is integrated throughout IBM. We coordinate across the company through our Corporate Responsibility Executive Steering Committee, which consists of executives responsible for the various relevant functions in IBM. The Committee is supported on a day-to-day basis by a Corporate Responsibility Working Group of representative experts from these various IBM functions.
Another example of IBM engagement is collaborative innovation. We believe that integrating different expertise and unique perspectives can accelerate new solutions to longstanding problems. You will find examples of IBM’s collaborative innovation—in research and solutions, with business partners, clients, universities and other entities—throughout this report and in the section on Solutions for Environmental Sustainability.
IBM is strongly committed to participation in voluntary programs and we have founded or joined many voluntary initiatives and partnerships with governmental and nongovernmental organizations (NGO) over the years.
Some current governmental examples include the United States Environmental Protection Agency’s (EPA) ENERGY STAR, SmartWay and WasteWise programs and the European Community’s EU ENERGY STAR program and EU code of conduct for energy-efficient data centers.
Examples of partnerships with eNGOs include membership in the Center for Climate and Energy Solutions (C2ES), Best Workplaces for Commuters, and the Wildlife Habitat Council. We also work with and support organizations such as The Conservation Fund, the Environmental Law Institute, the World Environment Center (WEC) and the WEC’s Innovations in Environmental Sustainability Council.
In addition, we partner with other companies and institutions to foster solutions for environmental sustainability. For example, IBM is a founding member of the GridWise Alliance, an organization representing a broad range of the energy supply chain—from utilities and technology companies to academia and venture capitalists. Its mission is to transform the electric grid to achieve a sustainable energy future.
The Eco-Patent Commons provides a unique opportunity for business to share innovation that can foster sustainable development. It was designed to facilitate the use of existing innovation that is protective of the environment, and encourage collaboration for new innovation through an online collection of environmentally beneficial patents pledged by the member companies for free use by anyone.
Examples of the environmental benefits of patents that may be pledged to the Eco-Patent Commons include:
Since the launch of the Eco-Patent Commons by IBM, Nokia, Pitney Bowes, Sony, and the World Business Council for Sustainable Development in January 2008, more than 100 patents have been pledged by 11 member companies representing a variety of industries worldwide: Bosch, Dow, Fuji-Xerox, HP, IBM, Nokia, Pitney Bowes, Ricoh, Sony, Taisei and Xerox. The Environmental Law Institute became the host organization in 2013.
The Nature Conservancy is one of the world's premier conservation organizations. As a nonprofit eNGO with work in 30 countries and all 50 US states, it addresses pressing conservation threats at a large scale. The Latin America Conservation Council (LACC) was conceived in 2011 by a group of leading business thinkers and conservationists who wanted to apply their expertise, influence and resources to the task of putting Latin America on a sustainable path.
In partnership with The Nature Conservancy, LACC members aim to help conserve Latin America’s “natural capital”—its healthy rivers, forests and seas—as well as to solve environmental challenges across the region and develop innovative, pragmatic, and scalable solutions to three widespread environmental challenges: water security, sustainable food security, and smart infrastructure.
In early 2013, IBM CEO Ginni Rometty joined the LACC on behalf of IBM. Since then, IBM has been leveraging its deep expertise with Smarter Planet solutions and sharing IBM’s point of view about the role technology can play for solving these three grand environmental challenges.
For a more complete listing of our voluntary partnerships and initiatives, see IBM's voluntary environmental initiatives webpage.
We also encourage our employees to support environmental efforts. For example, through our Matching Grants program IBM matches contributions made by our US employees to a wide variety of environmental organizations including The Nature Conservancy and the World Wildlife Fund, as well as smaller groups dedicated to preserving lands and habitats in local communities.
In addition, our employees can support environmental organizations in their local communities through IBM’s On Demand Community program. This first-of-its-kind global initiative encourages and sustains corporate philanthropy through volunteerism. It provides our employees and retirees with a rich set of IBM technology tools they can use to help schools and nonprofit organizations with which they volunteer, including environmental organizations. The program combines the expertise, interests and skills of our employees with the power of IBM’s innovative technologies and solutions to help nonprofit organizations more effectively address community needs.
Over the past five years, IBM has spent $74.7 million in capital and $479.5 million in operating expense to build, maintain and upgrade the infrastructure for environmental protection at our plants and labs, and to manage worldwide environmental programs.
($ in Millions)
*IBM modified its methodology for estimation of operating expenses in 2011 to collect information on expenses associated with compliance with worldwide environmental legal requirements for products, including costs associated with compliance with worldwide product takeback and recycling requirements.
IBM has tracked environmental expenses related to our facilities, corporate operations and site remediation efforts for more than 25 years, and began publicly disclosing this information in our environmental report for 1992. In 2011, we expanded our tracking of environmental expenses to include expenses associated with compliance with environmental legal requirements related to products, including those costs incurred for compliance with product takeback and recycling requirements. In 2013, total environmental expenditures associated with IBM’s operations were $109.3 million.
IBM also estimates savings that resulted from our policy of environmental leadership. These include savings that come from energy, material and water conservation; recycling; packaging improvement initiatives; reductions in chemical use and waste, and process improvements from pollution prevention. Ongoing savings from the previous years’ initiatives are not carried over in this comparison, resulting in very conservative estimates.
In addition, IBM realizes the avoidance of costs that likely would occur in the absence of our environmental management system. These savings are not measurable in the same way that expenses are, but avoiding these environmental costs does result in savings for IBM, and a reasonable attempt has been made to estimate them. In 2013, IBM’s estimated environmental savings and cost avoidance worldwide totaled $125.2 million.
IBM’s experience has shown that annual savings from our focus on conservation, pollution prevention and design for the environment consistently exceed environmental expenses, thus demonstrating the value of proactive environmental programs and performance.
($ in Millions)
|Consultant and legal fees||2.7|
|Waste treatment and disposal||7.1|
|Surface water and wastewater management operations||8.7|
|Air emission control operations||0.3|
|Groundwater protection operations||0.7|
|Product takeback and recycling costs||0.9|
|Waste and materials recycling||4.2|
|Superfund and former IBM site remediation||16.2|
|Other environmental operations||9.0|
($ in Millions)
|Location pollution prevention operations*||$32.5|
|Environmentally preferable materials usage||0.2|
|Energy conservation and cost avoidance||49.5|
|Superfund and site remediation efficiencies||1.0|
|Spill remediation cost avoidance**||4.9|
|Compliance cost efficiency***||18.5|
|Potential fines, penalty and litigation avoidance****||6.5|
* Savings or costs avoided by having internal professional staff and tools versus using external consultants and tools.
** These savings are estimates based upon certain assumptions. The figure for spill remediation cost avoidance is estimated considering IBM's actual experience with remediation costs.
*** Compliance cost efficiency considers costs avoided through proactive efforts to stay ahead of environmental regulations and requirements.
**** The estimation for the avoidance of potential fines, penalties and litigation does not include cost avoidance of potential business interruption or fines related to noncompliance with product environmental laws and regulations (e.g., EU REACH or RoHS requirements).
Estimated environmental savings and cost avoidance worldwide in 2013
IBM established the Chairman's Environmental Award Program in 1991 to encourage leadership and recognize achievement and progress in environmental affairs on the part of IBM's organizations. This annual award promotes contributions of IBM's business units toward the objectives of IBM's Corporate Policy on Environmental Affairs. The focus of the 2013 competition was on elements of the policy that call for IBM to:
IBM organizations were asked to address their accomplishments in these areas over the past three years, with a winner selected based on its degree of leadership, initiative, and results. Performance against these criteria is evaluated against each nominee's opportunity to contribute, given its mission and operations.
IBM's Integrated Supply Chain (ISC) organization received the 2013 award. ISC encompasses procurement, manufacturing, logistics, engineering, hardware operations, and sales transaction support for all IBM software, hardware, and services offerings globally. It also oversees $35 billion of supplier expenditure with strategic focus on creating smarter value chains, driving effectiveness and enabling growth that implements IBM's high standards for environmental leadership.
The selection of ISC recognizes its comprehensive and outstanding contributions to product environmental stewardship and excellent environmental results across its diverse activities. Since 2010, ISC has achieved:
While only one organization is selected each year to receive the Chairman's Environmental Award, the competition generates an integrated picture of the company's worldwide efforts to demonstrate exceptional commitment to environmental affairs leadership.
IBM Chairman, President and CEO Ginni Rometty presents the 2013 IBM Chairman's Environmental Award to Tom Rosamilia, senior vice president, IBM Systems & Technology Group and IBM Integrated Supply Chain.