Year in review

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IBM’s commitment to continuous transformation shapes our approach to corporate responsibility. We seek meaningful, productive change through sustained and purposeful effort. And we believe that through the actions we take, the examples we set and the priorities that guide us, we can have a distinct and positive impact that benefits society. Our commitment is evident in the relationships we build with all stakeholders, from our clients and employees to our business partners and shareholders. Each year we strive to evolve our corporate responsibility goals as the needs of the world around us continue to evolve, and 2015 was no exception.

Five aspects of IBM’s corporate responsibility activities are of particular interest to our stakeholders:

  1. The ability of IBM to positively affect societal progress in communities
  2. The support of our employees and communities
  3. The impact of IBM’s products and operations on the environment
  4. The management of our global supply chain
  5. The governance, ethics and integrity of our company

This section highlights our activity in 2015 in these five key areas of corporate responsibility. For more detailed information, please visit our corporate responsibility website.


Communities

Throughout 2015, IBM continued our global collaborations with governments, cities, nonprofit service providers and others to develop new ways to improve the human condition. We forged and expanded essential partnerships in citizen diplomacy, disaster response, economic development, education, humanitarian research and social services to achieve what individual entities cannot accomplish alone. And as always, we called upon our innovative technologies, our expertise and the skills of our people to broaden and deepen our commitment to service. Below are selected examples of IBM’s corporate responsibility efforts in 2015:

IBM launched the innovative P-TECH grades 9 — 14 program in 2011 with a single school in Brooklyn, New York. By the time this report is published, more than three dozen P-TECH students — all from low-income families — will have finished their high school diplomas and associate degrees either one or two years ahead of schedule. And by fall 2016, the initiative plans to have 60 schools and serve thousands of students across six U.S. states and Australia. P-TECH graduates already have taken entry-level professional jobs at IBM while working toward their four-year degrees at major colleges and universities — or both.

The need to address the skills gap while assisting military veterans led to the creation of the Veterans Employment Initiative (part of the IBM Impact Grant portfolio) to train transitioning service members to become certified as advanced data analysts. To date, IBM expert software trainers have coached 98 percent of program participants to successful certification — with 25 percent of that cohort accepting positions with IBM or other participating employers.

IBM Cognitive Computing is reshaping all aspects of our company — including our approach to corporate citizenship. Teacher Advisor, powered by IBM Watson, is being launched to function as a virtual mentor to help teachers learn more, create more effective lesson plans and refine their classroom skills — confidentially and free of charge. The newly launched IBM Health Corps will employ cognitive and analytical technologies — along with IBM’s global consulting expertise — to solving the world’s toughest community health challenges.

In 2015, IBM Corporate Service Corps forged a historic partnership with the Peace Corps to share expertise and access to influencers for projects in Ghana, the Philippines and Mexico. The initial collaboration — the Let Girls Learn initiative in Ghana — seeks to tackle some of the barriers keeping Ghanaian girls out of classrooms. Our pro bono consultants also worked with the Global FoodBanking Network to increase donated food supplies in Argentina, Colombia, Ecuador and Mexico — helping to drive a 41 percent increase in food donors to help feed 15,000 people each month.

Hunger and poor nutrition also plague low-income communities in the United States, and in 2015 an IBM Smarter Cities Challenge engagement in Birmingham, Alabama, addressed that problem head-on. To help alleviate “food deserts” — neighborhoods from which low-income residents lack transportation to suburban supermarkets — Smarter Cities consultants and city leaders used data analytics to design efficient delivery routes for a mobile food market program to transport groceries to the area’s neediest residents.

The ability of nonprofit organizations to improve their service for those most in need was IBM’s focus in developing and deploying SafetyNet software through settlement house partners in New York City. The software allows those on the front lines of service to improve their effectiveness via access to better client data. SafetyNet also automates record keeping and reduces the costs for back-office tasks, while ensuring that outreach organizations are able to remain in compliance with funding regulations more easily.

In a turbulent year, IBM provided essential aid to survivors of natural disasters and political upheaval in Nepal, India and the Middle East. IBM technologies and skills-based volunteering played critical roles in assisting the governments of India and Nepal after last year’s massive and deadly earthquakes. Experts from across our business designed and donated an installation of one of the world’s most sophisticated disaster recovery solutions — a cloud-based IBM Intelligent Operations Center for Emergency Management (IOC-EM) — following unprecedented disasters in Asia. And IBM responded to the global refugee crisis by developing custom applications for nonprofits in France, Germany and Italy to use in critical areas of service delivery to migrants from Syria, Afghanistan and countries in northern Africa. In each instance, our contributions of technology and expertise were complemented by volunteer service from IBMers around the world.


The IBMer

Throughout 2015, IBM launched or furthered a number of programs to help IBMers reimagine how they work and innovate. With input from IBMers around the world, we co-created Checkpoint, a new approach to performance management aligned with more agile ways of working and frequent feedback. To make it easier for IBMers to discover and navigate career opportunities at IBM, we launched Blue Matching, which uses analytics to provide targeted potential job opportunities to anyone who opts in. We also launched the ACE (Appreciation, Coaching and Evaluation) app, which lets IBMers easily give and receive feedback any time, any place. In line with our long-standing commitment to helping IBMers grow their skills and develop new ones, we also expanded our Think Academy courses to 29.

We continued our commitment to innovative wellness incentives with the launch of new benefit options in 2015 for U.S. employees by offering both no-cost Apple Watches or Apple Watches at a reduced price, depending on the health plan selected. In conjunction, we launched two Watson-powered programs, making it easier for employees to ask questions about their benefit plan; access information on fitness, nutrition and local activities; and ask health-related questions, as well as a pilot program for employees to get connected to second opinion and expert physician services.

Appreciating that differences help drive innovation, in 2015, IBM continued to demonstrate leadership in support of constituent groups. We received prestigious awards for lesbian, gay, bisexual, transgender (LGBT) workplace equality and the advancement of women. We continued to support our recruiting team in identifying and interviewing skilled people with disabilities with a new training module and recruitment guide. We also introduced new workshops and other offerings to educate IBMers on unconscious bias.

With a focus on the critical role IBMers play in the company’s transformation, in 2015 IBM introduced landmark innovations in leadership development. We launched the Transformational Leadership Framework (TLF) to our top executives to encourage a set of behaviors that are essential to building an agile culture and pivoting our company to cloud and cognitive solutions. Supporting the TLF, we created the IBM Leadership Academy, a portal to all leadership development content and activities. IBMers can personalize this cutting-edge content designed to help them thrive in an increasingly collaborative and self-directed environment.


Environment

Our comprehensive environmental programs range from energy and climate protection to pollution prevention, chemical and waste management, resource conservation, and product design for the environment. IBM’s energy conservation and climate protection programs are highlighted here because of the global interest in this topic. In 2015, we achieved outstanding operational results in this area and continued to leverage our research, technologies and solutions to help clients and the world advance in ways that are more energy-efficient and protective of our planet.

Energy conservation across the enterprise
In 2015, IBM’s energy conservation projects delivered savings equal to 6.3 percent of our total energy use, surpassing our annual goal of 3.5 percent. These projects saved and avoided the consumption of 272,000 megawatt-hours (MWh) of electricity and 172,000 million British thermal units (MMBtu) of fuel oil and natural gas, avoiding 122,000 metric tons of carbon dioxide (CO2) emissions. Our 2015 conservation measures also saved $28.9 million in energy expenses. Between 1990 and 2015, IBM saved 7 million MWh of electricity consumption, avoided 4.3 million metric tons of CO2 emissions (equal to 63 percent of the company’s 1990 global CO2 emissions) and saved $579 million through energy conservation actions.

Renewable electricity
In 2015, IBM contracted to purchase over 679,000 MWh of renewable energy over and above the quantity already included in our electricity purchases from the grid. The 679,000 MWh represented 16.2 percent of our global electricity consumption and resulted in the avoidance of 252,000 metric tons of CO2 emissions. IBM works with its electricity providers to directly procure renewable electricity for IBM’s facilities, making a clear connection by matching purchases to consumption as opposed to purchasing renewable energy certificates as offsets. Our goal is to procure electricity from contracted renewable sources for 20 percent of IBM’s annual electricity consumption by 2020.

Third-generation CO2 emissions reduction goal
We continue to make progress toward our third-generation CO2 emissions reduction goal: to reduce emissions associated with our energy consumption 35 percent by year-end 2020, against base year 2005 and adjusted for acquisitions and divestitures. This goal 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. Adjusting the baseline to remove emissions from the recently divested semiconductor manufacturing operations, IBM has reduced its CO2 emissions by 28.7 percent since 2005, and we are on track to achieve the 35 percent reduction by 2020.

Leveraging analytics for further efficiencies
IBM energy management and data center teams are expanding their use of analytics to minimize energy use and optimize building and data center operating performance. Over 50 percent of 2015 conservation projects at IBM’s top 10 energy-consuming sites resulted from projects involving analytics to drive energy savings. IBM’s TRIRIGA® Real Estate Environmental Sustainability (TREES) Impact Manager has been deployed at more than 145 buildings, representing 45 percent of IBM’s global energy consumption. Annual savings of 32,300 MWh of energy and $1.7 million were realized from these deployments in 2015. IBM has sustained an average 10 percent reduction in energy use annually since 2011 for the building and systems monitored and managed by the TREES Impact Manager solution. We offer this and other energy management solutions to our clients to help them achieve greater operational efficiencies.

Energy solutions for a more sustainable future
Our solutions have enabled our clients to improve their efficiency and reduce their environmental impact. Moving forward, cognitive technology is creating opportunities for an ever-more-instrumented planet — what some call the Internet of Things (IoT).

The IBM Building Management Center solution combines cognitive computing and IoT to mine and aggregate data from multiple sources across an enterprise, providing operators new insights to manage operations, energy use and space within and across facilities while reducing cost and associated greenhouse gas emissions. This solution, delivered via the IBM SoftLayer® cloud platform, has been implemented at a major U.S. university. It currently covers nine buildings and monitors thousands of data points from building automation and control systems made by several different manufacturers. After only four months of work focusing on 60-plus air handling units, annualized energy savings of 16,000 MWh of electricity and over $135,000 have been identified through the solution.

IBM researchers are working with academic, government and industry collaborators to develop a self-learning weather model and renewable forecasting technology, known as SMT, through a program supported by the U.S. Department of Energy’s SunShot Initiative. The SMT system uses machine learning, big data and analytics to continuously analyze, learn from and improve solar forecasts derived from a large number of weather models. These refined forecasts, when combined with a grid management system that balances supply and demand, can be used to increase and optimize the output of solar and other renewable resources. By using state-of-the-art machine learning and other cognitive computing technologies, IBM scientists are generating solar and wind output and demand forecasts that are up to 30 percent more accurate than ones created using conventional approaches, whether minutes or days in advance.


Supply Chain

IBM incorporates social and environmental responsibility in our relationships with approximately 14,000 suppliers in nearly 100 countries. We understand the potential for progress in a supply chain of this scale, and invest in a range of initiatives to promote sustainable performance as a shared objective. Our global supplier spending was nearly $26 billion, distributed geographically in support of clients and their needs for hardware, software and services. The supply chain section of this report presents details of our varied social responsibility initiatives, their results, and challenges we face in the global marketplace. Here are a few highlights from 2015:

  • We continue to promote social responsibility throughout our supply chain, through our active participation in the Electronic Industry Citizenship Coalition (EICC) and by engaging with a range of local and nongovernmental organizations worldwide. Assessment activities are essential for evaluating compliance and promoting improvement among our supplies, and the 63 full-scope supplier audits in 2015 brought the total to 1,858 from 2004 through 2015.
  • Diversity among our suppliers is a formal priority for IBM, because it adds to our competitive advantage while stimulating growth in a global marketplace. Although our spending with diverse suppliers declined in 2015, reflecting the reduction in overall spending, IBM purchased $2.6 billion in goods and services from first- and second-tier diverse suppliers globally — including $1.3 billion with first-tier suppliers in the United States and $718 million with first-tier suppliers in other countries.
  • IBM continued working with other members of the EICC, in conjunction with companies from seven business sectors, to achieve a supply chain free of minerals mined and processed in the conflict regions of the Democratic Republic of the Congo. At year-end 2015, we determined that 73 percent of the smelters and refiners identified by our upstream suppliers were conflict-free — up from 49 percent at year-end 2014. Our ongoing efforts toward a conflict-free supply chain are detailed in the conflict minerals section of this report.

Governance

In 2015, we continued to enhance how we govern the conduct of the company, manage risk and contribute our expertise to public discourse. Through online courses, integrity summits and seminars, and our Global Integrity survey, we foster a culture of ethics and integrity that extends to our employees and leaders, and our IBM Business Partners and suppliers.

We are furthering our leadership in privacy and data protection as we transform into a cognitive solutions and cloud platform company. For example, IBM’s Watson Health Cloud is HIPAA-enabled, allowing us to maintain and curate health data in accordance with HIPAA security requirements.

Key enterprise risk management (ERM) activities this year included driving a higher level of collaboration across IBM business units, functions and geographies. We enhanced our identification and management of emerging risks, and expanded the analytics to assess the risks to our business partners within their respective countries. Raising the general level of risk awareness to all employees, we began regular video blogging.

Building on our rich history of healthcare innovation, many of IBM’s public policy efforts this year were focused on working collaboratively to educate influencers and policy makers on the strengths and capabilities of exciting health cognitive technologies centered on the needs and safety of patients and consumers.