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Chairman’s Letter

A commitment to corporate responsibility pervades IBM, from new hires to the chairman’s office. In this year’s letter, Chairman, President and Chief Executive Officer Sam Palmisano describes IBM’s long-term approach to corporate responsibility, and the IBMers that make it possible.

IBM’s Approach

Through the years, IBM has consistently expanded the definition of corporate citizenship, pushing the boundaries of what is required to be considered a responsible enterprise. In this section of IBM’s 2010 Corporate Responsibility Report, you will find more detail on our approach to corporate responsibility, and some examples of how that approach manifested itself during the past year.


At IBM we engage with communities around the world by offering our technology, services and expertise to help solve some of the world’s most complex problems. While the monetary value of these contributions is great, we eschew checkbook philanthropy whenever possible. We believe that this approach is the most efficient, effective and sustainable way to practice good corporate citizenship. And we believe it is helping to make the world work better. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of the contributions IBM made to the global community this past year.

The IBMer

For the last 100 years, IBM has pioneered innovative approaches to hiring, managing and retaining our work force. From some of the earliest thinking on work force diversity to progressive programs for employee well-being and leadership development, this ongoing commitment to our employees is critical to the success of IBM and IBMers. And as the nature of our business changes, we will continue to apply the same innovation and creativity we use to develop products and services to our relationship with employees. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of the commitments IBM made to its work force this past year.


IBM has long maintained an unwavering commitment to environmental protection, which was formalized by a corporate environmental policy in 1971. The policy calls for IBM to be an environmental leader across all of our business activities, from our research, operations and products to the services and solutions we provide our clients to help them be more protective of the environment. Download this section of the report (2.2MB)

Supply Chain

IBM manages a supply chain of more than 27,000 suppliers in nearly 100 different countries. We understand that managing a supply chain of this size carries with it considerable social responsibility. Even so, we are continually expanding the definition of what it means to run a responsible supply chain, challenging ourselves and our suppliers to reach ever higher standards of social and environmental compliance. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of IBM’s supply chain responsibility efforts over the past year.

Ethics and Integrity

Both the size and nature of IBM’s business necessitate that it adhere to the highest standards of conduct. IBM employs more than 400,000 employees, and provides services and technology that support businesses, governments, schools, hospitals and highways. As such, integrity, transparency, privacy and risk management are all crucial parts of our business, and our commitment to making the world work better. In this section of IBM’s 2010 Corporate Responsibility Report, you will find examples of how IBM is setting the modern standard for business ethics.

Product Stewardship

IBM’s Product Stewardship program was established in 1991 as a proactive and strategic approach to the company’s environmental design and management of products. The program’s mission is to develop, manufacture and market products that are increasingly energy efficient; can be upgraded and reused to extend product life; incorporate recycled content and environmentally preferable materials and finishes; and can be recycled and disposed of safely.


IBM’s product stewardship objectives and requirements are implemented through IBM’s Environmental Management System (EMS), internal standards, product specifications and other requirements in IBM’s Integrated Product Development process. Product environmental attributes such as energy efficiency, materials content, chemical emissions testing, design for recycling, end-of-life management plans and packaging data must be documented and reviewed in IBM’s Product Environmental Profile (PEP) tool at various checkpoints during the development process. Compliance management tools like the Product Content Declaration for IBM Suppliers support the assessments required for a complete PEP prior to product release. IBM’s design and compliance controls, including a specification for baseline environmental requirements for supplier deliverables to IBM, Product Content Declarations, and compliance assessment protocols are managed through an interdisciplinary team with representatives from all IBM organizations that design, manufacture, procure, deliver and service IBM’s product offerings. The team’s activities are coordinated by IBM’s Center of Excellence for Product Environmental Compliance.

Driving Product Design

In 2010, IBM’s product development and supply chain organizations reviewed all products that are expected to be available beyond 2012 in order to investigate their use of lead (Pb) in certain solder applications defined in exemptions under the European Union’s Restriction of Hazardous Substances (RoHS) Directive (2002/95/EC). Unlike less complex consumer products, IBM still relies on the use of lead in certain solders for its unique high-end, mission-critical mainframe computer servers. With the goal to eliminate these uses long before the expiration of the relevant exemptions, IBM worked with its suppliers during the year to jointly define transition plans for affected parts. This process included education of suppliers on the technical aspects of the current exemptions as well as on comprehensive changes to the exemption definitions that were published in the European Commission’s September 2010 revision of the RoHS Directive Annex. Through its initiatives to further eliminate lead from its products, IBM continues to spur capability in the global supply chain to redesign current lead-based applications.

IBM continues to investigate alternatives to polyvinyl chloride (PVC) plastic for wire and cable applications. In 2010, working with the High Density Packaging User Group (HDPUG) project on halogen-free cables, IBM’s materials experts examined prototypes developed by several compounders, but deficiencies in flame retardant performance and moldability remain to be solved for some applications. IBM will continue work to identify and evaluate more environmentally preferable materials for these applications.

Managing Compliance Data

Assessing the compliance of products to environmental regulations around the world demands a robust management system for product data requirements. Particularly challenging is the frequency of changes in those data requirements. For example, new substance disclosure or reporting requirements tied to the European Union’s Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) Directive (EC 1907/2006) must be vetted with the supply chain as often as every six months. In 2010, IBM developed, tested and implemented a new supply chain communication tool to automate notifications of requirement changes to suppliers and track their responses. In addition to communicating new requirements relative to REACH substance regulations, IBM used the tool to inform 650 suppliers of the RoHS exemption roadmap strategies, IBM’s Supplier Conduct Principles and other improvements in IBM’s product compliance data collection process.

IBM product compliance reporting for global markets is facilitated by an IT solution called the Environmental Reporting Tool (ERT), developed by IBM as a system for collecting and organizing information and data required to meet all compliance activities for worldwide environmental regulations. ERT monitors regulatory submissions and deadlines, automatically alerts activity owners of scheduled responsibilities and extracts data through interfaces to other repositories to create actual submission forms for a myriad of environmental reports, registrations and product take-back plans required to conduct IBM business in various geographies around the world. As an example, ERT provided a central dashboard for IBM’s global team working on worldwide battery requirements. The tool manages documentation related to the development and deployment of supplier requirements, manufacturing processes, end-user communication, registration, reporting, product take-back processes and management plans. IBM’s ERT was recognized with a 2011 Progressive Manufacturing 100 (PM100) Award in the Data & Integration Mastery category.

2010 Product Stewardship Goals and Performance
Recycled Plastics The recycled content of plastics used in IBM’s products can range from 25 to 100 percent by weight of the commercial resin. In 2010, 31.5 percent of the total weight of plastic resins procured by IBM and its suppliers through IBM’s corporate contracts for use in IBM’s products had recycled content ranging from 25 to 100 percent. Comparing only the weight of the recycled fraction to the total weight of plastics (virgin and recycled) purchased, 11.5 percent of IBM’s total weight of plastic purchases in 2010 was recycled plastic versus the corporate goal of 5 percent recyclate.
Use of Landfills IBM’s product end-of-life management operations worldwide processed over 36,600 metric tons of end-of-life products and product waste, and sent only 0.6 percent of the total to landfills or to incineration facilities for treatment, versus IBM’s corporate goal of minimizing its combined landfill and incineration rate to no more than 3 percent of the total amount processed.
Product Energy Efficiency
Servers* IBM System p®: IBM released four models of Power Systems servers for which previous models or generations existed. These new servers provide reductions of 58 to 70 percent in the typical power consumption per unit of relative performance compared to their previous generation system.

IBM System x®: The six System x servers announced in 2010 for which comparison models existed provide reductions in watts/MTOPS** (the Japan Energy Saving Law metric) of 87 to 98 percent over the previous generation server.

IBM System z®: The new IBM zEnterprise 196 (z196) offers 74 percent more capacity per kilowatt for the air cooled version and 86 percent for the water cooled version, than its predecessor, the System z10, while using the same amount of electricity.
Point-of-Sale Terminals* In 2010, IBM introduced the SurePOS 700, which delivers a 56 percent reduction in the maximum power consumption of the system per composite theoretical performance (CTP) over its previous generation model. It also provides a 98 percent reduction in power use when the system is idle.
Storage Subsystems* Two new storage systems having previous generation models were released in 2010. They deliver 88 percent and 85 percent more storage capacity per watt of power consumed than their predecessor models.

Product Energy Efficiency

Product energy efficiency has long been one of IBM’s environment and climate protection objectives. It was formalized as one of the company’s corporate objectives when IBM’s Product Stewardship program was established in 1991. IBM has initiated and invested in innovations and integrated solutions through collaboration between IBM’s Research and Product Development teams. These teams have also combined hardware and software innovations to improve the energy efficiency of IT equipment and data centers.

In addition to its internal focus, IBM continues to actively assist in the development of external product energy efficiency standards. As it did in 1992 when the company helped to develop and was a charter member of the U.S. Environmental Protection Agency (EPA) ENERGY STAR® Computer program, IBM is currently participating in the development of the ENERGY STAR specifications for server and storage devices, providing technical assistance and equipment operating data to assist in the development of criteria.

In 2009, the U.S. EPA finalized ENERGY STAR program requirements for computer servers. As of April 2011, IBM had qualified 10 server product families to the ENERGY STAR requirements—four System p and six System x enterprise server systems. These servers meet the U.S. EPA’s requirements for power supply efficiency, idle power limits or power management capability, and data reporting. IBM is currently working to qualify other enterprise server systems to the ENERGY STAR requirements. A list of IBM ENERGY STAR qualified servers may be found on the IBM and ENERGY STAR Web page.

New Advancements for Increased Product Energy Efficiency Performance

The following are examples of new IBM technologies, software and solutions that have enabled the increased energy efficiency of IBM’s servers and storage products:

  • IBM engineers have utilized power management capabilities provided by the x86 and POWER7® processors and memory and I/O components to reduce the power drawn by the server when no workload is present (idle power) by 20 to 50 percent when compared to the power used by the system at full workload.
  • Storage systems are utilizing various software-based data management capabilities such as Easy Tier, thin provisioning and storage virtualization which can reduce the number of terabytes required to accomplish a given storage task.
  • Many IBM products are incorporating high efficiency power supplies, with the x3850 X5 server utilizing an 80 PLUS® Platinum power supply, the highest power supply efficiency designation currently achievable under the 80 PLUS program.
  • IBM continues to innovate in semiconductor, hard drive, storage and networking technologies, utilizing virtualization and other software solutions to improve server and storage system performance for each unit of power consumed by the equipment and reduce the quantity of equipment required to deliver a specified set of workloads.
8 of the top 20

most energy efficient supercomputers
in the world are built on IBM high-performance computing technologies.

High Performance Computers (HPC)

IBM has a full menu of HPC systems: the Productive, Easy-to-Use, Reliable, Computing System (PERCS), IBM System Blue Gene®, iDataPlex®, and the Roadrunner supercomputer programs. IBM’s supercomputer solutions are prevalent on both the TOP500® and Green500 supercomputer lists. Today, eight of the top 20 most energy efficient supercomputers in the world are built on IBM high-performance computing technologies, with the Blue Gene/Q prototype supercomputer leading the November 2010 Green500 List. Technologies developed through IBM’s HPC development efforts are leveraged across the entire IBM Systems and Technology Group product line to improve performance and energy efficiency.

Blue Gene has been identified as a leader in “green” supercomputing for available solutions every year from 2007 through 2010. Blue Gene®/P, converted from an air cooled (previous generation Blue Gene system) to a hydro-air cooled system, delivers a 9-percent savings on total data center power. The relative cooling cost for a Blue Gene/P system decreased by 50 percent.

Blue Gene’s speed and expandability have enabled business and science to address a wide range of complex problems and make more informed decisions—not just in the life sciences, but also in astronomy, climate, simulations, modeling and many other areas. Blue Gene continues its leadership performance in a space-saving, power-efficient package for the most performance demanding applications.


The IBM iDataPlex system was designed to meet the needs of high-performance, large-scale Internet and cloud computing workloads at up to 40-percent lower energy consumption than 1U industry standard servers and BladeCenter® servers. Reduced energy use is achieved due to significantly lower air flow requirements and shared cooling fans, high-efficiency power supplies and a double-wide water cooled IBM Rear Door Heat eXchanger solution that can absorb 100 percent of the heat generated by the rack and virtually eliminate the need for air conditioning. The iDataPlex system is also designed for material efficiency and longevity, with a server motherboard into which upgrade cartridges can be inserted to easily utilize new technologies.


of server heat absorbed by the water-cooled IBM Rear Door Heat exchanger, virtually eliminating the need for air conditioning.


IBM offers a variety of software and system solutions that enable companies, governments and other entities to improve the energy efficiency of their operations and systems. IBM has responded to climate change, energy management and operational efficiency opportunities with a suite of offerings from products to services to help clients plan and develop greenhouse gas (GHG) inventory processes and management strategies to improve the efficiency of their data centers, buildings, core business processes, logistics and other operations. Three examples of IBM’s suite of “intelligent” products and services are described below.

Route Planning and Goods Management

IBM hardware and software solutions, including ILOG® Supply Chain Applications and IBM WebSphere® Sensor and Business Events, can be combined to solve complex planning, scheduling or logistics management problems while tying these operations to corporate objectives to reduce costs, increase revenues, improve service quality and reduce environmental impact. Using these capabilities:

  • Two clients optimized their supply chain networks, one removing 4,000 truckloads of goods off the road annually and the other realizing a 23 percent reduction in logistics costs and a 15 percent reduction in logistics driven CO2 emissions.
  • A third client reduced annual transport mileage growth, and attendant fuel use and GHG emissions by two percentage points.

Vehicle to Grid Charging and Storage

This solution involves developing the hardware and software components of the infrastructure system required to facilitate large-scale adoption of electric vehicles. IBM is working with partners in utilities, automobile manufacturers, academics and governments to determine the outline of the infrastructure system required to enable large-scale adoption of electric vehicles. IBM’s activities include research and development work in vehicle telematics, embedded software, battery performance, network security, roaming and transaction management, smart grid integration, network optimization, renewables charging dispatch and infrastructure planning.

Details of IBM’s efforts to develop the infrastructure required to support electric cars and renewable energy generation can be found on our Smart Grid page.

Energy Efficient Buildings

Green Sigma is an IBM solution that applies Lean Six Sigma principles and practices to energy, water, waste and GHG emissions throughout a company’s operations—transportation systems, data centers and IT systems, manufacturing and distribution centers, office facilities, retail space, research and development sites. It combines real-time metering and monitoring with advanced analytics and dashboards that allow clients to make better decisions that improve efficiency, lower costs and reduce environmental impact.

The smarter buildings solution—which combines the company’s software, research and services expertise together with industry-leading business partners—enables IBM and its clients to better achieve the following:

  • Manage energy use, lower costs and decrease emissions by monitoring and analyzing heat, air conditioning and power consumption;
  • Maintain equipment proactively, identifying emerging problems and trends to prevent breakdowns and confirm that critical assets will work as needed; and
  • Lower maintenance and building management costs and extend asset life through preventive maintenance, greater insight into asset conditions and automated notification when assets are performing outside of specifications.
Smarter Buildings Smarter Buildings

Discover how IBM is working to redesign buildings from the earth up.

Product Recycling and Reuse

As part of its product end-of-life management (PELM) activities, IBM began offering product take-back programs in Europe in 1989 and has extended and enhanced them over the years. IBM’s Global Asset Recovery Services organization offers Asset Recovery Solutions to commercial customers in countries where IBM does business, including:

  • Management of data security and disk overwrite services
  • Worldwide remarketing network for product resale
  • State-of-the-art refurbishing and recycling capability for IT equipment
  • Optional logistic services such as packing and transportation

In addition, in many countries and individual U.S. states, IBM offers solutions to household consumers for the end-of-life management of computer equipment, either through voluntary IBM initiatives or programs in which the company participates.

In 2010, IBM’s PELM operations worldwide processed over 36,600 metric tons of end-of-life products and product waste. This represents 50 percent of the estimated 73,000 metric tons of new IBM IT equipment manufactured and sold in 2010.

Product End-of-Life Management (PELM)
Goal: 3%, Result: 0.6%

Reuse or recycle end-of-life products such that the amount of product waste sent by IBM’s PELM operations to landfills or to incineration for treatment does not exceed a combined 3 percent of the total amount processed.


In 2010, IBM’s PELM operations sent only 0.6 percent to landfills or to incineration facilities for treatment.

Product End-of-Life Management Operations

2010: percentage by weight

Product End of Life Chart

of end-of-life products and product waste processed by IBM's PELM operations in 2010.

IBM’s PELM operations reused or recycled 96.5 percent of the total amount of product and product waste they processed.

Since 1995, when IBM first began including in its annual corporate environmental report the volumes of product waste it collects and recycles, IBM has documented the collection and recovery of approximately 1.8 billion pounds (over 807,000 metric tons) of product and product waste worldwide through year-end 2010.

1.8 Billion pounds, 807,000 Metric tons

of product and product waste worldwide collected by IBM since 1995.

Product Packaging

IBM has had a program focused on the environmental attributes of its product packaging since the late 1980s. Under the program, IBM packaging engineers design solutions that minimize toxic substances and packaging waste by specifying nontoxic materials and inks. They also keep packaging to a minimum while continuing to provide protection to the product being shipped to clients, and collaborate with suppliers to use recycled and recyclable materials and promote reuse.

IBM’s environmental requirements for packaging are included in its Environmental Packaging Guidelines, first published in 1990 and updated as needed over the years. Key elements of IBM’s Packaging Guidelines have also been embedded in various engineering specifications and procurement documents, which extend their reach beyond IBM to include its supply chain and other business partners. These documents may be found on our information for suppliers page.

In 2010, the integrated worldwide packaging engineering team saved 842 metric tons of packaging material from the implementation of 38 packaging redesign projects worldwide. These projects delivered an annual cost savings of $8.8 million. The following highlights a few of the projects implemented in 2010:

  • IBM System Storage® DS3000 package redesign project: After an audit of the package design for this product, IBM’s packaging engineers determined that it could be redesigned to reduce its size and weight. In 2010, the package was redesigned to hold eight units per pallet, rather than the original one. This redesign assessment project eliminated the use of an estimated 300 metric tons of corrugated fiberboard and wood annually and saves $450,000 in annual transportation costs.
  • IBM Retail Store Systems 4800 logic unit packaging reduction project: The package for the 4800 logic unit was redesigned to utilize several units per pallet, versus the traditional one unit per pallet, for our Latin America and Mexican markets. The result was a considerable decrease in overall package size and weight per unit shipped. This project saved $1.3 million annually in materials and transportation costs, while saving an estimated 70 metric tons of packaging materials annually.
  • IBM Green Sigma DOX power packaging reuse project: In the past, IBM’s suppliers and IBM manufacturing sites had different packaging solutions for each step in the manufacturing process, which resulted in additional operational costs and wasted material. IBM packaging engineers designed a package and process that would eliminate the need to use separate packaging solutions for each manufacturing step in the supply chain. The result was an efficient, robust and reusable package that eliminated over 90 metric tons of packaging materials annually from the waste stream while achieving a cost reduction of $355,000 annually.

of corrugated fiberboard and wood per year eliminated from IBM System Storage DS3000 packaging in 2010.

In 2010, the IBM packaging team also implemented 19 packaging design projects with its suppliers. The resulting packaging solutions reduced the packaging materials from incoming parts by 204 metric tons and saved $1.7 million in both material and transportation costs. Examples may be found on our protective product packaging page.

When suppliers apply the design improvements achieved through collaboration with IBM to packaging designs for other customers, the environmental benefits and cost savings can be far-reaching.

Voluntary Environmental Goal for Packaging Materials

IBM’s voluntary environmental goal for packaging materials states that paper-/wood-based packaging directly acquired by the company will be procured from suppliers who source from sustainably managed forests where such sources exist.

In 2002, when IBM first established this goal, sufficient quantities of sustainable sourced packaging materials were not yet available for much of the company’s needs. With a continued focus on this objective by IBM and its suppliers over the years, in 2010, 99 percent of the paper-/wood-based packaging IBM procured came from suppliers who contractually warranted that the source was derived from forests managed in an ecologically sound and sustainable manner.

Product Safety

IBM’s product safety requirements are included in various steps of the product development, manufacture and test process, and include the supply chain for both IBM hardware and solutions. Required reviews by IBM Product Safety Review Boards assure that product and project managers comply with applicable standards and national regulations, and obtain third-party certifications where required.

Programs for continual improvement include internal and third-party assessment of IBM’s products’ safety design and process implementation. These assessment results are continually fed back into the evaluation and planning cycle. This process is augmented by incident management tools that provide effective capture and manage any product safety-related incident or customer complaint.

IBM plays a leading role in the development of national, regional and international standards for product safety for information technology products.