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HP FY06 Global Citizenship Report Web Content HP FY06 Global Citizenship Report Web Content HP FY06 Global Citizenship Report Table of Contents Introduction 3 » Letter from Mark Hurd 3 » HP profile 5 » Priorities and goals 7 » Economic value 8 Global citizenship at HP 13 » Managing global citizenship 14 » Timeline 18 » Stakeholder engagement 20 » Investors 23 » Customers and global citizenship 24 » Public policy 28 Ethics and compliance 31 Supply chain 38 » Approach 40 » Standards 46 » Conformity assessment 47 » Capability building 57 » Supplier diversity 66 Energy efficiency 70 » Products 72 » Operations 77 » Collaboration 85 Product reuse and recycling 91 » Reuse 94 » Recycling 95 Products 100 » Design for Environment 102 » Materials 103 » Packaging 109 » Logistics 112 » Accessibility 114 Operations 118 » Management system 120 » Sustainable building design 121 » Waste and recycling 122 » Hazardous waste 124 » Ozone 126 » Water 126 » Emissions to air 127 » Compliance 129 » Remediation 130 Privacy 131 Employees 137 » Diversity 138 » Compensation and benefits 142 » Communications 143 » Learning and development 144 » Work-life programs 146 » Health, safety and wellness 147 » Employee giving and volunteerism 150 Social investment 156 » Education 158 » Community 160 About this report 164 » Assurance 167 » Glossary See online » GRI index See online HP FY06 Global Citizenship Report - Web Content Letter from Mark Hurd In this section: HP made solid progress in 2006 toward our goal of becoming » Letter from Mark Hurd the world's leading IT company. To reach that goal, we are » HP profile focusing our broad portfolio of products and services on » Priorities and goals simplifying our customers' experiences with technology and » Economic value helping them do what they want to do from wherever they are. Being a leading company starts with strong financial performance. In fiscal 2006, HP revenue increased 6 percent to $91.7 billion and non-GAAP earnings per share increased 46 percent to $2.38. And we achieved the most balanced profit mix by business group and region that HP has seen in years. It also means leading in citizenship. HP has a long-standing commitment to operate with the highest standards of ethics and integrity. Our failure to meet our own principles during an HP investigation into leaks of sensitive company information has led us to redouble our commitment to adhere to our core values, high standards of ethics, privacy and other aspects of global citizenship. To that end, we will continue to build on our legacy of responsible conduct and sound corporate governance across the company and wherever we do business. The way we see it, global citizenship and business success go hand in hand. In fact, global citizenship is the "hidden component" in HP products – embedded in our design and engineering, including accessibility, energy efficiency and recycling. It's also an important part of how we operate our business, from responsible supply chain management to the steps we're taking to reduce our own environmental footprint. HP's global citizenship efforts – such as our Technology for Teaching grants, supplier diversity and stakeholder engagement programs – demonstrate the principles that guide these efforts. They are also reflected in our continued support for the UN Global Compact. 3 HP FY06 Global Citizenship Report - Web Content We're building on a long history of investing in communities around the world and addressing issues of concern to our customers and other stakeholders. For example, we launched our Design for Environment program in 1992, and we have been doing research on energy efficiency for more than a decade. Those investments have helped us develop innovative solutions for problems such as the growing cost of powering and cooling data centers (see Energy – Products). In 2006, HP introduced a new energy management system that significantly increases energy efficiency, cuts data center cooling costs by 15-40 percent and helps reduce greenhouse gas emissions. Our global citizenship program is constantly evolving to address the areas that are most important to our business and our stakeholders. Our priorities are supply chain responsibility, energy efficiency and product reuse and recycling. HP's success depends on our ability to create the best technology on the planet and to be the best at servicing and supporting that technology. Being a successful global business also means being a responsible global citizen – one that recognizes the responsibility we have to our customers, shareholders, partners, suppliers and employees. People want to work with companies that are environmentally and socially responsible, that practice good governance, that protect the privacy and security of their customers and that invest in the communities where they do business. That's the kind of global citizen we are and will continue to be at HP. Throughout this report you will find many examples of what we're doing to live up to that. Sincerely, Mark Hurd Chairman, Chief Executive Officer and President 4 HP FY06 Global Citizenship Report - Web Content HP profile HP is a leading information technology (IT) company. We apply new thinking and ideas to create simple, valuable and trusted experiences with technology. We continuously improve the way our customers live and work through technology products and services, from the individual consumer to the largest enterprise. We provide products and services to improve the lives and work of hundreds of millions of consumers, businesses and other organizations in more than 170 countries. Our offerings span business and home computing, imaging and printing, IT infrastructure and global services. The company is driven by long-established values and objectives that emphasize customer service, integrity, respect for individuals and global citizenship. HP employed approximately 156,0001 people worldwide at the end of October 2006 and earned revenues of $91.7 billion in 2006. Revenue by segment, fiscal year 2006 Personal Systems Group 32% Imaging & Printing Group 29% Enterprise Storage & 19% Servers HP Services 17% HP Financial Services 2% Software & Other 1% Revenue by region, fiscal year 2006 Americas 44% (Canada/Latin America 9%, United States 35%) Europe/Middle 40% East/Africa Asia Pacific and Japan 16% 5 HP FY06 Global Citizenship Report - Web Content How we deliver • Personal Systems: HP has a leading portfolio of business and consumer PCs, high- performance workstations, handheld devices, digital entertainment solutions, personal storage, and Internet services that create connected and compelling personal experiences. • Imaging and Printing: HP is moving beyond printers by simplifying and enhancing the experience of printing – whether in the home, office or commercial environment – with advances in printing supplies, digital photography, and graphics and imaging technologies. • Technology Solutions: HP has a world-class portfolio of servers, storage and software and delivers support, consulting and integration, and outsourcing services to help customers manage and transform their IT environments to optimize business outcomes. Our goal is to be the world's leading information technology company. We work to achieve this through the following: • Creating better ways to use technology solutions • Becoming best-in-class in the industry by achieving operational excellence, efficient cost structures and a world class sales model • Developing products and services that capitalize on three key industry trends: o Next-generation data centers o Always-on, always-connected mobile computing o Ubiquitous printing and imaging We will pursue this strategy through efficiency and targeted growth, supported by a capital strategy that aligns people and development spending with our goals. Corporate summary Chairman, Chief Executive Officer and President: Mark Hurd (for details of board responsibilities see Ethics and compliance) Employees: Approximately 156,0001 Ownership: HP is incorporated in Delaware, United States. HP is listed on the New York Stock Exchange with the ticker symbol HPQ. As of November 30, 2006, there were approximately 153,000 stockholders of record. Countries of operation: More than 170 Headquarters: Palo Alto, California, United States Regional headquarters: • Americas: Houston, Texas, United States • Europe/Middle East/Africa: Geneva, Switzerland • Asia Pacific including Japan: Singapore 1 As of October 31, 2006. 6 HP FY06 Global Citizenship Report - Web Content Priorities and goals Global citizenship at HP covers a wide range of issues, illustrated by the contents of this report. Leadership requires commitment across this spectrum of issues and focus on the most critical areas. In 2006, we reviewed our global citizenship strategy and revised our priorities for the coming year based on the strategic importance of issues to our business, stakeholder concerns and our ability to have a positive impact. Our revised priorities heighten the emphasis on environmental issues, in particular energy efficiency and product reuse and recycling. Supply chain responsibility has been a priority for several years and we maintain our focus in this area. We will continue our activities to increase access to information technology (IT) globally, although this is no longer one of our top three global citizenship priorities. These are our global citizenship priorities for the coming year: Supply chain responsibility In 2006, HP spent approximately $50 billion on materials, manufacturing and transportation, in one of the IT industry's largest supply chains.
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