2015 IBM and the Environment Report 2 2015 IBM and the Environment Report 3 A message from the Vice President, Corporate Environmental Affairs & Product Safety, Wayne Balta 4 Commitment to environmental leadership 5 Global governance and management system 10 Energy conservation and climate protection 21 Product stewardship 28 Materials research and process stewardship 31 Pollution prevention 33 Water conservation 34 Solutions for environmental sustainability 40 Environmental requirements in the supply chain 43 Remediation 44 Audits and compliance 45 Awards and recognition 47 Performance summary 48 IBM environmental affairs policy IBM Corporate Environmental Affairs 3 A message from the Vice President, Corporate Environmental Affairs & Product Safety, Wayne Balta Over the last couple of years, IBM has been We sent 85 percent of the transforming itself for high-value innovation that approximately 53,000 metrics tons of nonhazardous waste meets the changing needs of its clients. generated by IBM worldwide to Transformation is nothing new to IBM. The be recycled, and processed company has previously transformed itself 29,800 metric tons of end-of-life through multiple eras of technology and through product waste while sending only 0.7 percent to landfills or different economic cycles. incineration for treatment. We have recently divested commoditizing businesses (including However, having achieved these IBM’s former x86 server business and semiconductor manufac- and other significant goals turing operations) while we have vastly accelerated the growth of related to our internal opera- strategic imperatives — Data and Analytics, Cloud, Mobile, Social, tions, we recognize that our greatest opportunities to contribute and Security. All of this has occurred as we not only help clients to the sustainability of our planet lies in our ability to use our become digital, but also as we lead the convergence of digital products and solutions to address the challenges of our clients business with digital intelligence. This is epitomized by Watson, and the world. and we call it Cognitive Business. Today, our solutions are Today, IBM is the world’s foremost cognitive computing and cloud cognitive and our platform is cloud. platform company. Through our products and solutions we can Much about IBM is clearly changing. What is not changing, help our clients improve their efficiency, conserving energy, water however, is IBM’s commitment to global environmental leadership. and other resources, and we can help governments address This report marks IBM’s 26th annual Corporate Environmental complex environmental problems such as climate change and air Report going back to 1990. That itself is the outcome of a and water pollution. Whether using advanced machine learning steadfast commitment which has stood the test of time and and Internet of Things technologies to improve prediction of air endured throughout many prior changes, both within our industry pollution, or analyzing enormous amounts of data from remote and across global societies and economies. Here is a preview of sensors to generate new insights for protecting lakes and other what you’ll find in this year’s report. freshwater sources, or using vast amounts of weather data to help forecast power generation at wind farms, IBM technologies are at In 2015, IBM’s energy conservation projects delivered savings the forefront of many of the world’s sustainability efforts. equal to 6.3 percent of our annual energy use, surpassing our goal of 3.5 percent. These projects avoided the consumption of This report highlights some of these technologies, along with 272,000 megawatt-hours (MWh) of electricity and 172,000 million results from IBM’s wide-ranging environmental programs. I hope British thermal units (MMBtu) of fuel oil and natural gas, repre- you enjoy reading it. As you do, please know that following more senting the avoidance of 122,000 metric tons of carbon dioxide than a century of accomplishment, innovation, and transforma- tion, IBM endeavors to be one of the world’s most essential (CO2) emissions. They also saved $28.9 million in energy expense. Between 1990 and 2015, IBM saved 7 million MWh of electricity companies and pursues that journey with a continual commit- ment to environmental leadership. consumption, avoided 4.3 million metric tons of CO2 emissions (equal to 63 percent of the company’s 1990 global CO2 emis- sions), and saved $579 million through its annual energy conser- vation actions. Wayne S. Balta Vice President, Corporate Environmental Affairs & Product Safety 4 2015 IBM and the Environment Report Commitment to environmental leadership IBM’s corporate environmental programs date In 2015, we established our third-generation CO2 emissions from the 1960s. In 1971, IBM CEO Thomas J. reduction goal, further building on more than 20 years of sustained results in this area. Watson Jr. formalized the company’s commitment with our Corporate Policy on IBM’s For more than four decades, we have demonstrated leadership Environmental Responsibilities. Updated a by prohibiting or restricting substances of concern from our processes and products before regulatory requirements were number of times over the years, that policy and imposed. the breadth of environmental programs supporting it have defined and driven IBM’s From 1995 through the end of 2015, IBM documented the collection and processing of approximately 2.15 billion pounds long-standing commitment to environmental of end-of-life products and product waste worldwide. leadership in all of our business activities. Our cognitive solutions, delivered on a cloud platform, are Throughout our operations — whether conserving energy in our helping clients discover how they can operate more efficiently data centers; developing environmentally preferable materials for and become more sustainable. use in our research, development and manufacturing processes; designing products with environmental considerations; or With the new cognitive era upon us — one that combines digital applying our products and solutions to solve environmental business with digital intelligence — we are discovering and problems and advance sustainability — we have seen first-hand developing cognitive-based technologies to help address our what can be achieved with a sustained focus on all aspects of the world’s environmental and sustainability challenges. We are able environment. to assess air emissions sources and profiles to recommend cost-effective approaches to reduce pollution in real time, Since 1990, IBM’s energy conservation actions have saved 7 forecast and balance energy demand and production to minimize million megawatt-hours (MWh) of electricity consumption, CO2 emissions associated with electricity generation, and explore avoided 4.3 million metric tons of carbon dioxide (CO2) better ways to identify less toxic materials to use in products. And emissions and saved the company $579 million. this is only the beginning. The combination of cognitive and Internet of Things technologies can be a difference-maker in addressing our world’s environmental and sustainability chal- lenges. It is indeed an exciting time, and we are proud to share highlights of our work with you. IBM Corporate Environmental Affairs 5 Global governance and management system IBM implements its environmental, energy and Our environmental programs and performance are routinely chemical management programs through a monitored and results are reviewed annually by all levels of management, up to the Directors and Corporate Governance global environmental management system that Committee of IBM’s Board of Directors, to ensure the ongoing integrates corporate directives that govern IBM’s suitability, adequacy and effectiveness of IBM’s global EMS for conduct and operations worldwide. IBM’s activities, products and services. Formed in 1993, the Directors and Corporate Governance Committee reviews IBM’s Global environmental management position and practices on significant issues of corporate respon- system sibility, including protection of the environment. Our corporate environmental affairs policy objectives range from workplace safety, conserving natural resources, pollution Environmental goals prevention, and energy conservation and sourcing, to product Environmental goals are an important part of IBM’s EMS. We design for the environment and the application of IBM’s technol- maintain a range of environmental goals designed to address ogy and expertise to help address some of the world’s most significant environmental aspects and impacts of our operations pressing environmental problems. and to drive continual improvement of our environmental perfor- mance, including goals on energy and water conservation, IBM’s corporate environmental affairs policy calls for environmen- renewable electricity sourcing, carbon dioxide emissions tal affairs leadership in all of the company’s business activities. reduction, product stewardship and waste management. These This leadership is achieved through implementation of a global voluntary goals and our performance against them are discussed environmental management system (EMS) that integrates in their respective sections of this report, and a summary of key corporate directives governing IBM’s conduct and operations goals and their outcomes are provided in the listing of IBM’s worldwide. These directives cover areas such as energy conser- environmental key performance indicators. vation and climate protection, product stewardship, pollution prevention,