2017 IBM and the Environment Report
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2017 IBM and the Environment Report
03 Actions and results 04 Year in review 08 Commitment to environmental leadership 10 Global governance and management system 15 Energy conservation and climate protection 28 Product stewardship 35 Materials and process stewardship 37 Pollution prevention 39 Water conservation 40 Solutions for environmental sustainability 45 Environmental requirements in the supply chain 48 Remediation 49 Audits and compliance 50 Awards and recognition 52 Performance summary 54 IBM environmental affairs policy
2017 IBM and the Environment Report 3
Actions and results
Corporate responsibility regarding the environment
is an imperative. A company’s environmental stature,
however, depends upon not only aspiration but also
actions and results.
Corporate environmental sustainability must also tran- • 41.4 percent of IBM’s global electricity supply across
scend changes in public policy, personnel, business cycles, its managed spaces came from renewable sources. We
and — in the IT industry — constant changes in technology. procured electricity from renewable sources for 22.9
All of this must occur while understanding and addressing percent (exceeding our goal of 20 percent by 2020). The
the ways in which a company’s global operations intersect remaining 18.5 percent came from the grid mix IBM rou-
with diverse environmental challenges. To do this well, it’s tinely receives. This does not rely upon purchasing
essential to routinely work with leaders across government, unbundled Renewable Energy Certificates.
business, nongovernmental organizations, and academia.
• In March 2018, IBM earned the Climate Leadership
The people of IBM have dependably pursued environmen- Award from the Center for Climate and Energy Solutions
tal leadership in this manner for decades. Numerous and The Climate Registry. This is the sixth time in the
milestones along IBM’s journey attest to this. It was in award program’s seven-year history that IBM has
1971 that IBM issued its first formal corporate policy for been recognized.
environmental protection. And it was in the early 1990s
that IBM pioneered the practice of voluntary corporate You’ll also read about ways in which IBM applies its exper-
environmental reporting. tise in business and technology to help clients with
solutions to environmental problems. As the world’s pre-
Today, I am proud to say this is the 28th consecutive year mier enterprise technology company, IBM’s cognitive
in which IBM has published a voluntary annual corporate solutions and cloud platform enable analytics, Internet of
environmental report. This year’s report, like those which Things, artificial intelligence and blockchain to be deployed
preceded it, contains extensive information about IBM and for innovative solutions.
the environment. Here are a few highlights:
More than anything else, however, it is the people of IBM
• We recertified our global environmental management who deliver our company’s environmental performance,
system to the updated 2015 edition of the ISO 14001 solutions and results. We are continually grateful to them.
standard. (Twenty years ago, in 1997, IBM became the
first major company in the world to earn a single global
registration to ISO 14001.)
Wayne S. Balta
• We achieved our third carbon dioxide (CO2) emissions Vice President
reduction goal four years early. As of year-end 2017, we Corporate Environmental Affairs & Product Safety
reduced the CO2 emissions attributable to IBM at its June 2018
managed locations by 42.9 percent versus 2005 —
compared to our goal of 35 percent.
4 2017 IBM and the Environment Report
Year in review Audits and compliance
In 2017, IBM received 73 governmental agency inspec-
In 2017, IBM continued to tions at facilities worldwide with no resulting fines or
penalties. IBM locations reported eight accidental releases
demonstrate environmental of substances to the environment related to IBM opera-
leadership through strong execution tions through our Environmental Incident Reporting
System — five releases to air, two releases to land and one
of its environmental management release to water. None of the releases was of a duration
system (EMS) and continued or concentration sufficient to cause long-term environ-
mental impact.
improvement against key
Metrics and key performance indicators
performance goals and metrics.
IBM monitors its performance across a range of environ-
Environmental management system mental issues that have been determined to be significant
for IBM’s business, and has established environmental tar-
IBM’s single global ISO 14001 EMS accreditation includes gets associated with several key issues.
its manufacturing and chemical-using research locations
as well as several IBM organizations at the individual Energy conservation, renewable electricity
country level. IBM also has 16 entities worldwide certified and CO2 emissions reduction
to the ISO 50001 standard on energy management In 2017, IBM’s energy conservation projects across the
systems. In 2017, we completed an update to our global company delivered annual savings equal to 4.2 percent of
EMS to transition our certification to the 2015 edition of our total energy use at IBM-managed locations, surpassing
the standard. the corporate goal of 3.5 percent. IBM-managed locations
are places where IBM is responsible for procuring energy
and managing facilities infrastructure and operations.
These projects, numbering more than 2,000 and imple-
mented at over 500 global locations, avoided the
consumption of 173,000 megawatt-hours (MWh) of
energy, an associated 64,000 metric tons of carbon diox-
ide (CO2) emissions, and saved $16.1 million in expense.
Electricity sources at IBM-managed locations 2% Solar
29% Biomass
77.1% Grid-purchased electricity (GPE)
18.5% Grid-supplied renewables (part of GPE) 29% Wind
22.9% Contracted renewable purchases
40% Hydropower
2017 IBM and the Environment Report 5
IBM’s energy conservation projects
delivered annual savings equal to
4.2 percent of its total energy use
in 2017 — surpassing our goal of
3.5 percent.
IBM contracted with its utility suppliers to purchase
approximately 779,000 MWh of renewable electricity, rep-
resenting 22.9 percent of our global electricity
consumption at IBM-managed locations in 2017. These
purchases once again exceeded IBM’s goal to procure 20
percent of the electricity it consumes from renewable
sources by 2020, over and above the renewable electricity
that was part of what IBM received via the grid. When we
include what IBM received via the grid, 41.4 percent of the Lynn Guest was the
electricity consumed in IBM’s managed locations was first of many IBMers to
sourced from renewable assets. implement Smarter
Buildings, a solution
From 2016 to 2017, IBM reduced CO2 emissions attribut- that analyzes data from
able to IBM at its managed locations by 96,000 metric tons control systems —
(7.7 percent) to 1,158,000 metric tons. As of year-end like these automated
2017 (as shown below), we reduced CO2 emissions attrib- louvers at our Silicon
utable to IBM at its managed locations by 42.9 percent Valley lab — to spot
versus 2005, compared to our goal of 35 percent by 2020. wasted energy.
Operational CO2 emissions reduction against 2005 baseline at IBM-managed locations
3rd-generation
goal
2012 2013 2014 2015 2016 2017 2018 2019 2020
15.7%
24.7%
27.7%
28.7%
35%
38.1%
42.9%
6 2017 IBM and the Environment Report
IBM recovered and sent 87.8 percent Hazardous and nonhazardous waste management
IBM’s total hazardous waste generation in 2017 increased
(by weight) of its nonhazardous waste by 7 percent (by weight) from 2016, to 1,460 metric tons.
to be recycled — surpassing our goal This increase was caused by the disposal of hazardous
waste generated by a water leak from a fire suppression
of 75 percent. system at one of our facilities. The water was contami-
nated with diesel fuel from an emergency generator
Water conservation located within the area where the leak occurred. The con-
In 2016, IBM established a new water conservation goal to taminated water was contained, avoiding any release to
achieve year-to-year reductions in water withdrawals at 45 the environment. If hazardous waste generated as a result
data centers and other large IBM facilities located in of this incident were removed, IBM would have seen a 16
water-stressed regions. In 2017, withdrawals at these percent reduction in hazardous waste generation in 2017.
locations were reduced by 2.9 percent versus 2016.
In 2017, our worldwide operations generated approxi-
mately 36,900 metric tons of nonhazardous waste, a
decrease of about 7,600 metric tons from 2016. IBM recov-
ered and sent 87.8 percent (by weight) of its nonhazardous
waste to be recycled — surpassing our goal of 75 percent.
2017 water use at IBM locations in water-stressed regions
45% Domestic water use
31% Heating, ventilation and air conditioning (HVAC) systems
19.5% Landscape irrigation
4.5% Manufacturing processes
2017 total generated nonhazardous waste worldwide by treatment method
(% by weight of 36,900 metric tons processed)
87.8% Recycle Note: Total generated nonhazardous
waste excludes sanitary wastewater
10.8% Landfill and incineration
sent to publicly owned treatment
1.4% Other treatments systems.
2017 IBM and the Environment Report 7
Product end-of-life management (PELM) IBM has a goal to qualify its new server and storage prod-
IBM’s global PELM operations processed 26,500 metric ucts to the U.S. Environmental Protection Agency’s
tons of end-of-life products and product waste in 2017. Of ENERGY STAR program criteria where practical, and where
this total, we sent 0.7 percent directly to landfill or inciner- criteria have been developed for the specific server or
ation as a disposal treatment, better than our goal of storage product type. As of May 2018, IBM had five Power
not-to-exceed 3 percent (by weight). In addition, 52.2 per- Systems servers and seven storage products certified to
cent was sent for recycling as materials, 39.6 percent was the ENERGY STAR requirements.
resold as products, 4.4 percent was product reused by
For more information on IBM’s products and solutions,
IBM, and 3.1 percent was incinerated for energy recovery.
please see the product stewardship and the solutions for
Products and solutions environmental sustainability sections of this report.
IBM’s innovative products, services and solutions enable
our clients to conserve natural resources and reduce the
environmental impacts associated with their operations.
In 2017, IBM released its POWER9™-based Power
Systems™ Accelerated Compute (AC922) server for
high-performance computing analytics and artificial intelli-
gence. When compared to comparable IBM POWER8®
products, IBM POWER9-based servers have Server
Efficiency Rating Tool (SERT) weighted geomean active
efficiency scores up to three times higher — which rep-
resents three times the performance or work delivered
without any increase in power use. The SERT was created
by the Standard Performance Evaluation Corporation. IBM
also introduced its next-generation mainframe, the IBM
z14™ server, in 2017. On average, the IBM z14 server
delivers 23 percent or more work per kilowatt depending
on the choice of components and cooling method.
IBMers Chi Xiong, Norma Sosa and Will Green prepare a methane
sensor to detect leaks in natural gas production systems.
2017 product end-of-life management operations
(% by weight of 26,500 metric tons processed)
52.2% Recycled 3.1% Waste-to-energy
39.6% Resold 0.7% Landfill and incineration
4.4% Reused
8 2017 IBM and the Environment Report
Commitment to 1972 — IBM issued a corporate directive requiring the envi-
ronmental evaluation of suppliers of hazardous waste
environmental
services. That directive was later expanded to include
product recycling and disposal suppliers, and certain pro-
leadership
duction-related suppliers.
1973 — IBM established its global energy conservation
program and developed the methodology leading to its
A decades-old commitment to environmental leadership is
first conservation goal in 1975.
an impressive legacy. And, at IBM, we are very proud of
our past accomplishments. But we also take pride in sus- 1974 — IBM issued a corporate policy on energy and mate-
taining this legacy, and we are always looking to enhance rials conservation and recycling.
what IBM began half a century ago with the issuance of our
first corporate directive regarding pollution control. 1978 — IBM began a global program to monitor groundwa-
Thomas J. Watson, Jr. was the CEO at the time, and his ter quality at its manufacturing and development locations
vision for the future of the business and its relationship to and to perform groundwater remediation as needed.
the environment remains our guidepost.
1988 — IBM established its first nonhazardous waste
Today, we have a new Watson — a set of cognitive applica- recycling goal.
tions helping clients achieve remarkable outcomes and
accelerating discovery using innovative, unique data con- 1989 — IBM set a goal to eliminate chlorofluorocarbons
nections. We have come a long way in this journey and we (CFCs) and carbon tetrachloride from all its products and
embrace the future with great anticipation for creating manufacturing processes by the end of 1993.
solutions and technologies to improve the environment
1990 — IBM began its annual corporate environmental
and our quality of life.
reporting which has continued annually since that date.
In our own operations, we have seen first-hand what can
1991 — IBM established its product stewardship program
be achieved with a sustained focus on the environment.
as a proactive and strategic approach to the environmental
That focus has driven impressive and quantifiable results.
design and management of our products.
The following highlights demonstrate our history of com-
mitment and leadership: 1991 — IBM began the Chairman’s Environmental Award
Program recognizing achievement and progress in environ-
1967 — IBM issued its first formal directive on pollution
mental affairs on the part of IBM’s organizations. The
control, disposal of liquid wastes, and wastewater
award is presented annually by IBM’s chairman.
treatment.
1992 — IBM became a charter member of the U.S.
1971 — IBM CEO Thomas J. Watson Jr. formalized the
Environmental Protection Agency’s ENERGY STAR com-
company’s commitment to environmental protection in our
puter program and helped to develop the first ENERGY
first Corporate Environmental Policy.
STAR criteria for personal computers.
2017 IBM and the Environment Report 9
1997 — IBM was the first major multinational company to
earn a single global registration to the ISO 14001 environ-
mental management system standard.
2000 — IBM established a water conservation goal, which
was first focused on the significant use of water in our
microelectronics manufacturing operations, then in early
2016 focused on reductions in water withdrawals at IBM
locations in water stressed regions.
2000 — IBM established its first operational carbon dioxide
(CO2) emissions reduction goal when we helped the World
Wildlife Fund create its Climate Savers program.
2004 — IBM established environmental and social require- Ann McCabe, interim executive director, The Climate Registry,
ments for all IBM suppliers via IBM’s Supplier Conduct Andres Rodriguez, program manager, IBM Corporate
Principles and supporting audit program. Environmental Affairs, Wayne Balta, vice president, IBM Corporate
Environmental Affairs and Product Safety, and Bob Perciasepe,
2010 — IBM eliminated perfluorooctane sulfonate (PFOS) president, Center for Climate and Energy Solutions.
and perfluorooctanoic acid (PFOA) in its manufacturing,
development and research processes.
2016 — IBM achieved and exceeded its third-generation
CO2 emissions reduction goal four years early.
2016 — IBM achieved and exceeded its 2020 renewable
electricity goal four years early.
2018 — IBM earned a Climate Leadership Award from the
Center for Climate and Energy Solutions and The Climate
Registry, in partnership with Bloomberg Philanthropies.
This was the sixth time in the award program’s seven-year
history that IBM was recognized.
10 2017 IBM and the Environment Report
Global governance highlighting employee responsibilities for protecting
the environment.
and management Our environmental programs and performance are rou-
tinely monitored, and results are reviewed annually by all
system levels of management, up to the Directors and Corporate
Governance Committee of IBM’s Board of Directors, to
ensure the ongoing suitability, adequacy and effectiveness
IBM implements its environmental, energy and chemical
of IBM’s global EMS for IBM’s activities, products and ser-
management programs through a global environmental
vices. Formed in 1993, the Directors and Corporate
management system that governs IBM’s conduct and
Governance Committee reviews IBM’s position and prac-
operations worldwide.
tices on significant issues of corporate responsibility,
Global environmental management system including protection of the environment.
Our corporate environmental policy provides the strategic Environmental goals
framework for the company’s global environmental man- Environmental goals are an important part of IBM’s EMS.
agement system (EMS). This policy calls for environmental We maintain a range of environmental goals designed to
leadership in all of the company’s business activities. address significant environmental aspects and the impacts
Achieving leadership is enabled through the implementa- of our operations, and to drive continual improvement of
tion of our EMS, which integrates corporate directives our environmental performance, including goals on energy
governing IBM’s conduct and operations worldwide. These and water conservation, renewable electricity, carbon
directives cover areas such as energy conservation and cli- dioxide emissions reduction, product stewardship and
mate protection, product stewardship, pollution waste management. These voluntary goals and our perfor-
prevention, chemical and waste management, and envi- mance against them are discussed in their respective
ronmental evaluation of suppliers — as well as incident sections of this report, and a summary of key goals and
prevention, preparedness, response and reporting. It is their outcomes are provided in the list of IBM’s environ-
through the consistent implementation of this EMS that mental key performance indicators.
IBM ensures operations are executed with the same pro-
ISO 14001 standard on environmental
tective standards for the environment in every country
management systems
where IBM conducts business. Highlights of our manage-
ment system and resulting environmental performance are IBM formalized its environmental programs and commit-
outlined below. ment to leadership with the issuance of its Corporate
Policy on IBM’s Environmental Responsibilities in 1971, a
Employee and management responsibility quarter-century before the first International Organization
Every employee is expected to follow IBM’s corporate for Standardization (ISO) 14001 environmental manage-
environmental policy and report any environmental, health ment systems standard was published in September 1996.
or safety concerns to IBM management. Managers are In 1997, IBM became the first major multinational com-
expected to take prompt action when faced with a poten- pany to earn a single global registration of its EMS to the
tial violation of the policy or directives. IBM executives are ISO 14001 standard. We achieved this credential within
responsible for the environmental performance of their just one year of the finalization of the first edition of the
businesses’ functions or locations. In addition, IBM’s standard, in part due to the results already delivered under
Business Conduct Guidelines, our code of business con- our environmental policy and the early implementation of
duct and ethics for all IBM employees, includes a section our environmental management programs.2017 IBM and the Environment Report 11
IBM formalized its environmental Following our successful ISO 50001 EMS registration at
the corporate level, many of IBM’s major energy-consum-
programs in 1971 with the issuance ing locations and one country organization received
of its Corporate Policy on IBM’s registration of their specific energy management programs
under IBM’s single global ISO 50001 certification. As of
Environmental Responsibilities. year-end 2017, 16 entities were registered under IBM’s
global ISO 50001 certification — 12 in the Americas, three
The initial registration covered IBM’s manufacturing, prod- in Europe and one in the Asia Pacific region.
uct design and hardware development operations across
Public disclosure
our business units worldwide. We have since expanded our
global ISO 14001 registration to include additional entities IBM has long supported public disclosure of information on
such as our research locations that use chemicals, several our environmental programs and performance. This report
country organizations and their non-manufacturing loca- marks IBM’s 28th consecutive year of annual corporate
tions, as well as our Global Asset Recovery Services, environmental reporting.
Global Procurement and Global Logistics organizations.
In addition to disclosing information on our environmental
As our business model has evolved to include more ser- programs and performance through this report and IBM’s
vices offerings, we have updated our EMS to address annual Corporate Responsibility Report, we also provide
environmental opportunities and challenges in the services a report based on the Global Reporting Initiative and
area. IBM’s single global ISO 14001 EMS accreditation, supply information through a number of other voluntary
with a complete list of registered entities worldwide, can reporting platforms such as CDP, EcoVadis and OneReport.
be viewed on IBM’s ISO 14001 webpage. For more details on IBM’s environmental reporting, see
the IBM environmental reporting, disclosure and verifica-
We have sustained this certification for 20 years. In 2017, tion webpage.
we completed an update to our global EMS to transition
our certification to the 2015 edition of the ISO standard. Stakeholder engagement
ISO 50001 standard on energy management systems At IBM, engaging and collaborating with stakeholders from
a cross-section of nongovernmental organizations (NGOs),
IBM issued a formal corporate policy in 1974 that called
governments, investors and other interested parties are
for the conservation of energy and materials in all of IBM’s
integral to our worldwide EMS. We publicly disclose infor-
activities. Since the issuance of that policy, we have
mation on our environmental strategy, goals and targets,
improved our global energy management program and
performance, and continual improvement activities widely
integrated it into the company’s global EMS.
through our voluntary reporting programs. In addition, IBM
When ISO issued the ISO 50001 standard on energy man- has a formal system for tracking and responding to inqui-
agement systems in June 2011, IBM initiated activities to ries from interested parties on environmental issues.
achieve verification of conformity of our EMS against this
IBM’s community outreach programs include support of
newly published standard. Within one year of the issuance
and participation in local environmental projects and edu-
of the ISO standard, we achieved ISO 50001 registration
cation efforts, including Earth Hour, Earth Day, and World
of our energy management program at the corporate level
Environment Day, as well as site environmental awareness
as an integral component of IBM’s global EMS. Our
events and local clean air activities focused on the use of
approach recognizes and leverages the fact that IBM’s
public transportation.
existing EMS addresses both environmental and energy
management programs.12 2017 IBM and the Environment Report
IBM also engages companies in its supply chain on envi- IBM has also been a longstanding member of the Wildlife
ronmental initiatives. For example, IBM is a founding Habitat Council (WHC), a nonprofit organization dedicated
member of the Responsible Business Alliance (RBA), for- to protecting and enhancing wildlife habitat. The WHC
merly the Electronic Industry Citizenship Coalition, a helps large landowners, particularly corporations, manage
nonprofit industry group that helps manufacturers support their open lands in an ecologically sensitive manner for the
continuous improvement in the social, environmental benefit of wildlife. Five IBM sites in the United States cur-
and ethical responsibility of their supply chains. IBM rently have their wildlife habitat management and
requires its suppliers to adhere to the RBA Code of conservation education program certified by the WHC —
Conduct, which contains environmental requirements as IBM sites in Boulder, Colorado, and Research Triangle
well as provisions on labor, health and safety, ethics, and Park, North Carolina; two sites in San Jose, California (IBM
management systems. Research–Almaden and our Silicon Valley Laboratory); and
our corporate headquarters in Armonk, New York.
Another important element of IBM’s stakeholder engage-
ment strategy is our collaborative work with business Environmental investment and return
partners, clients, universities and other organizations to
apply IBM technologies and solutions to solve environmen- Over the past five years, IBM has spent $65.8 million in
tal problems. You will find examples of IBM’s collaborative capital and $441.3 million in operating expense to build,
innovation throughout this report and in this report’s sec- maintain and upgrade the infrastructure for environmental
tion on solutions for environmental sustainability. protection at its plants and labs, and to manage its world-
wide environmental programs.
Voluntary partnerships and initiatives
Environmental capital
IBM is strongly committed to participation in voluntary and expense worldwide ($M) 2013 2014 2015 2016 2017
environmental programs, and we have founded or joined Capital cost 17.0 20.3 16.7 7.3 4.5
many voluntary initiatives and partnerships with govern- Operating expense 92.3 86.4 83.1 68.6 110.9
ments and environmental NGOs over the years.
Totals ($M) 109.3 106.7 99.8 75.9 115.4
Some current examples of government partnerships IBM has tracked environmental expenses related to our
include the U.S. Environmental Protection Agency’s (EPA) facilities, corporate operations and site remediation efforts
ENERGY STAR program and the EU Code of Conduct for for more than 30 years, and began publicly disclosing this
Energy Efficiency in Data Centres. information in our IBM and the Environment Report in
1992. In 2017, total environmental expenses and capital
Examples of partnerships with environmental NGOs
costs associated with IBM’s operations were $115.4 mil-
include our membership in the Center for Climate and
lion. Operating expense went up by 61.7 percent from 2016
Energy Solutions, the Business Renewables Center, The
to 2017, primarily due to a payment of approximately $38
Green Grid, our participation in Best Workplaces for
million to cover the disposal of polychlorinated biphenyl
Commuters, and the Clean Power Council. We also work
(PCB)-containing capacitors and ballasts in Japan over the
with and support organizations such as The Conservation
next five years. IBM stored these locally generated PCB-
Fund, the Environmental Law Institute, and the World
containing wastes for over 17 years until disposal facilities
Environment Center. During 2017, IBM joined the U.S.
in Japan could be constructed and put into operation. The
Water Partnership whose mission is to address global
government-approved facilities in Japan have now become
water challenges, with a special focus on developing coun-
operational, allowing IBM to begin proper disposal.
tries where needs are greatest.2017 IBM and the Environment Report 13
IBM estimates savings it has realized from its environmen- 2017 estimated environmental savings
tal leadership practices. These include savings from and cost avoidance worldwide ($M)
recycling; packaging improvement initiatives; waste reduc- Energy conservation and cost avoidance 48.6
tion programs; and from energy, material and water Compliance cost efficiency* 22.2
conservation. Ongoing savings from previous years’ initia-
Location pollution prevention operations 12.4
tives are not carried over in this calculation, yielding
Potential fines, penalty and litigation avoidance** 8.5
conservative estimates.
Corporate operations*** 5.1
In addition, IBM estimates the avoidance of costs that Spill remediation cost avoidance**** 2.6
likely would have occurred if IBM’s EMS were not in place. Superfund and site remediation efficiencies 2.2
This cost avoidance is difficult to quantify, so a reasonable Packaging improvements 1.0
attempt has been made to estimate. In 2017, IBM’s com-
Total 102.6
bined, estimated environmental savings and cost
* Compliance cost efficiency considers costs avoided
avoidance worldwide totaled $102.6 million.
through proactive efforts to stay ahead of
environmental regulations and requirements.
IBM’s experience has shown that annual savings from its
** The estimation for the avoidance of potential fines,
focus on conservation, pollution prevention and design for
penalties and litigation does not include potential
the environment typically exceed environmental expenses, business interruption or fines related to noncompliance
thereby demonstrating the value of proactive environmen- with product environmental laws and regulations (e.g.,
tal programs and leadership performance. EU REACH or RoHS requirements).
*** Savings or costs avoided by having internal
2017 environmental expenses worldwide ($M) professional staff and tools versus using external
consultants and tools.
Superfund and former IBM site remediation 30.3
**** These savings are estimated considering IBM’s
Personnel 24.1
actual experience with remediation costs.
Waste and materials recycling 5.7
Waste treatment and disposal 3.4 Chairman’s Environmental Award Program
Surface water and wastewater management operations 3.3
IBM established the Chairman’s Environmental Award
Consultant and legal fees 1.1
Program in 1991 to encourage leadership and recognize
Laboratory fees 0.9
achievement and progress in environmental affairs by
Permit fees 0.4 IBM’s internal organizations. For more than 25 years, the
Groundwater protection operations 0.1 Chairman’s Environmental Award has promoted the contri-
Other environmental operations* 41.6 butions of IBM’s business units toward the objectives of
Total 110.9 IBM’s Corporate Environmental Policy.
* Includes the payment of approximately $38 million to
cover the disposal of PCB-containing capacitors and Recipients of the Chairman’s Environmental Award are
ballasts in Japan. selected based on their degree of leadership, initiative and
results in contributing to IBM’s environmental policy
objectives. Performance against these criteria is evaluated
against each nominee’s opportunity to contribute given its
mission and operations.14 2017 IBM and the Environment Report
IBM Research received the 2017 Chairman’s ––Liquid Gold wastewater project in Spain — Deployed
Environmental Award. With 12 labs located across six data and mathematical optimization to improve
continents, IBM Research achieves industry-leading wastewater treatment. A pilot project for a Spanish
breakthroughs and drives the development of technologies water management company achieved a 13.5 percent
that enable and deliver innovative solutions for IBM and its reduction in electricity use, a 14 percent reduction
clients, including innovations to help address in chemical use, and a 17 percent reduction in
environmental challenges. sludge production.
During the previous three years covered by its Chairman’s ––SuperMUC Phase 2 supercomputer in Munich,
Environmental Award nomination, IBM Research achieved Germany — Invented a new hot-water cooling technol-
the following results: ogy that allowed the supercomputer to be built in a
more compact manner while consuming 40 percent
• Demonstrated exceptional application of IBM’s strategic less energy and saving $1.25 million in annual
imperatives — especially our data, cloud and cognitive energy costs.
capabilities — to target the critical issues of air quality,
renewable energy forecasting, energy optimization, ––The Jefferson Project at Lake George, New
and resilience. York — Employed Internet of Things, analytics, cloud,
and cognitive technologies to understand the resilience
• Executed innovative and repeatable solutions that of this large freshwater lake to circulation and environ-
address a broad range of environmental issues and mental stresses from weather, adjacent land use, and
societal concerns: contaminants based upon over 100 million data points
collected across a network of sensor platforms.
––Green Horizons — Enabled the municipal government
of Beijing, China, to improve air quality and forecast • Earned five external awards, filed 36 patent applica-
the dependability of renewable energy. Expanded to tions, and published 21 papers on environmental
New Delhi, India, Johannesburg, South Africa, and sustainability and innovation.
additional cities across China.
While only one organization is selected each year to
receive the Chairman’s Environmental Award, the competi-
tion highlights the company’s worldwide commitment to
environmental leadership.
IBM Chairman Ginni Rometty presents the 2017 Chairman’s
Environmental Award to IBM Research Director Arvind Krishna.2017 IBM and the Environment Report 15
Energy conservation 2. Purchasing electricity generated from renewable
sources where it makes both business and environ-
and climate protection
mental sense
3. Requiring our suppliers to maintain an environmental
In 1973, IBM began its formal energy conservation pro- management system that includes inventories of
gram and in 2000 set its first carbon dioxide (CO2) energy use and GHG emissions, reduction plans and
emissions reduction goal when we helped the World public reporting of results
Wildlife Fund create its Climate Savers program. In 2007,
4. Managing business travel
IBM published its position on climate change: IBM recog-
nizes that climate change is a serious concern that 5. Increasing the efficiency of IBM’s logistics operations
warrants meaningful action on a global basis to stabilize
the atmospheric concentration of greenhouse gases In addition, IBM’s strategy includes designing energy-
(GHGs). We believe that all sectors of society and the efficient products and providing services and solutions
economy, as well as governments worldwide, must partici- that help our clients reduce their own energy use and
pate in solutions to climate change. climate impacts.
Climate change We consider energy and material conservation to be the
cornerstone of our climate protection efforts. IBM does
IBM has been a leader in addressing climate change not use emissions offsets to become “carbon neutral”
through our energy conservation and climate protection for our operations. Our efforts to reduce IBM’s GHG
programs for decades. IBM’s leadership is defined by our: emissions are focused on delivering results by devoting
available resources to actions, products and solutions that
• Long-standing global commitment
actually increase energy efficiency and reduce GHG
• Comprehensive and multifaceted programs covering the emissions for both IBM and our clients, rather than merely
company’s operations, products and services offsetting them.
• Leading-edge innovations and client solutions Conserving energy
• Significant results, both early and ongoing, benefiting IBM formalized its energy conservation and management
IBM, our clients and the world program in 1974 and has continued it unabated ever since.
Energy conservation is a major component of our compre-
A five-part strategy hensive, multifaceted climate protection program because
We have a long-standing commitment to climate protec- the release of CO2 by utility companies powering our facili-
tion and execute a five-part strategy to reduce the GHG ties, or from our use of fuel for heating and cooling,
emissions related to our operations: represents the greatest potential climate impact associ-
ated with our operations.
1. Designing, building, updating and operating facilities,
including data centers and product development and In 2017, IBM’s energy conservation projects across IBM-
manufacturing operations, that optimize their use of managed locations globally delivered annual savings equal
energy and materials and minimize GHG emissions to 4.2 percent of our total energy use, surpassing the cor-
porate goal of 3.5 percent. IBM-managed locations are
places where IBM is responsible for procuring energy and
managing facilities infrastructure and operations.16 2017 IBM and the Environment Report
From 1990 through 2017, IBM through 2017, IBM conserved 7.4 million MWh of electric-
ity, avoiding 4.4 million MT of CO2 emissions and saving
conserved 7.4 million MWh of $616 million.
electricity, avoiding 4.4 million metric IBM energy consumption
tons of CO2 emissions. In 2017, IBM consumed 3,405,000 MWh of electricity and
2,300,000 MMBtu of fuels to operate its managed facili-
These projects saved and avoided the consumption of ties. Year-to-year, energy consumption was down 6.5
143,000 megawatt-hours (MWh) of electricity and percent due to our conservation projects, implementation
105,000 million British thermal units (MMBtu) of fuel oil of standard, global energy conservation strategies at our
and natural gas, and an associated 64,000 metric tons facilities, movement of client workloads to more efficient
(MT) of CO2 emissions. The conservation projects also infrastructure, and other operational improvements.
saved $16.1 million in energy expense.
IBM also has operations in co-location spaces where IBM
In measuring performance against IBM’s energy conserva- installs and operates server, storage and network informa-
tion goal, we recognize only completed projects that tion technology (IT) equipment, and a landlord manages
actually reduce or avoid the consumption of energy in our the facilities infrastructure and procures and supplies
operations. Reductions in energy consumption from down- commodities such as electricity and chilled water. Energy
sizings, the sale of operations, and cost-avoidance actions consumption in these spaces was 581,000 MWh of elec-
such as fuel switching and off-peak load shifting are not tricity in 2017.
included in the results for measuring performance against
Managing IBM’s energy program
achieving this goal. Moreover, the results cited above are
Our global energy management program leverages the
conservative in that they include only the first year’s sav-
expertise of more than 50 IBM energy management pro-
ings from projects. Ongoing conservation savings beyond
fessionals deployed worldwide. The team has created
the first year are not included in the results. Accordingly,
best-practices checklists that set minimum expectations
the total energy savings and CO2 emissions avoidance from
for building systems and operations, including controls and
these conservation actions is actually greater than this
equipment for lighting, heating/ventilation/air conditioning
simple summation of the annual results. From 1990
Energy use and net operational CO2 emissions associated with IBM-managed locations
20,000 2,000
Electricity and fuel use
15,000 1,500 Net operational CO2
Metric tons x 1,000
emissions
MMBtu x 1,000
10,000 1,000
Note: Energy use and CO2
5,000 500 emissions from 2013 to
2015 do not include data
from the divested semi-
0 0 conductor manufacturing
2013 2014 2015 2016 2017 operations.2017 IBM and the Environment Report 17
(HVAC), central utility plants, compressed air, data center • IBM installed its Smarter Buildings solution at 72 addi-
and IT systems, cafeterias and office systems. tional buildings, reducing annual energy use by 35,000
MWh and saving $1.7 million. The Smarter Buildings
All IBM-managed locations using 2,000 MWh per year or solution has now been installed at 24 major IBM cam-
more of energy must complete the checklists, perform a puses, encompassing 227 buildings responsible for 36
gap analysis and develop an energy conservation imple- percent of our global energy consumption.
mentation plan a minimum of every four years. The energy
management program is buttressed by several enter- • Data center cooling projects and server and storage
prise-level databases that collect, store and analyze virtualization and consolidation projects reduced
energy-use data, results of conservation projects, com- annual energy use by nearly 90,000 MWh and saved
pleted checklists and key performance indicators. The $9.6 million.
analyses from these databases enable monthly metrics
reporting to management and the identification of oppor- Applying analytics to drive further efficiencies
tunities for improvement. The continuous review of energy The IBM energy management and data center teams lever-
use and conservation performance has facilitated attain- age analytics-based monitoring to minimize energy use
ment of the strong results noted above. and optimize operating performance at many IBM-
managed locations. By looking at the whole data set
More than 2,000 energy conservation projects involving a through a single lens, the IBM Smarter Buildings solution
range of energy efficiency initiatives delivered savings at enables early identification of individual faults and broader
more than 500 locations around the globe in 2017. patterns of equipment- or manufacturer-specific problems
Examples include: or root causes that transcend multiple system types (e.g.,
inappropriate maintenance schedule). This holistic view of
• Projects to match building lighting and HVAC with occu-
the energy-consuming systems allows resources and
pancy schedules, or to upgrade equipment efficiency
investment to be prioritized for further optimization of
through recommissioning equipment or installing new
energy performance. Overall, the solution saves 5 to 15
equipment, were implemented at 200 locations, reduc-
percent of the overall energy operating costs at the loca-
ing annual energy use by 40,700 MWh and saving
tions and buildings where it is used.
$4 million.
Data centers
• Central utility plant projects were implemented at 51
IBM manages a diverse portfolio of data centers worldwide
locations, reducing annual energy use by 15,200 MWh
in support of our clients and our internal operations. We
and saving $1.3 million.
also operate IT labs that support our hardware and soft-
ware development and testing operations.
2017 energy conservation savings by project category
52% Data centers 7% Lighting
16% Heating, ventilation 2% Continuous commissioning
and air conditioning
3% Other
11% Building controls
9% Central utility plant18 2017 IBM and the Environment Report
We take a holistic approach to managing our data centers — Data center power usage performance
improving existing space to derive more workload per area, IBM collects meter readings or uses estimating protocols
equipment and energy resources utilized, and building to calculate the PUE at many of the data centers we
new, high-efficiency space required to meet the needs of manage. Using data reported from IBM’s managed data
our clients. center locations, representing over 60 percent of data
center energy consumption, we calculated the average
In 2017, we completed 299 projects to improve cooling
PUE for IBM’s raised-floor space to be 1.66, a 2 percent
efficiency at 89 data center locations, reducing energy use
reduction from 2016. The PUE range for the reporting
by nearly 20,000 MWh while saving over $2.3 million.
facilities was 1.3 to 2.64. Data centers are highly complex
Some examples of projects included:
systems. As client accounts move in and out of the data
• Installed thousands of blanking panels, wall panels center and increase or decrease their workloads, and as
between racks, cable cutout plugs, and cold-aisle con- existing server, storage and network equipment is
tainment systems, reducing the mixing of hot and cold refreshed with new technologies, data center equipment
air and increasing cooling efficiency. layout changes. Depending on how cooling delivery is
adjusted in response to these changes, PUE can increase
• Shut down 140 Computer Room Air Conditioning (CRAC) or decrease.
units, reducing energy use. For the period 2011-2017,
IBM increased the average raised-floor temperature As one of the longest-term providers of service in the IT
in its data centers by more than 2.5 degrees Celsius industry, IBM’s data center portfolio consists of spaces
by shutting down CRAC units and rebalancing data and equipment of varying vintages. Improving the energy
center airflow. efficiency of these data centers requires thoughtful plan-
ning and execution to meet operational objectives and
Achieving these savings while maintaining the reliability of commitments to clients. IBM has made — and will continue
the data center operations required the use of analytics- to make — significant investments to reduce energy
based IT systems to monitor the data center temperature demand and improve energy efficiency in our
profile and identify and mitigate hot and cold spots. data centers.
IBM also continues to expand its cloud computing offer- Voluntary data center energy efficiency initiatives
ings. At year-end 2017, IBM operated nearly 60 cloud data In January 2012, the European Commission awarded 27
centers in 19 countries. IBM is building its cloud data cen- IBM data centers in 15 European Union (EU) countries
ters using standard installation templates for a highly “Participant” status in the EU Code of Conduct (CoC) for
efficient IT infrastructure. These data centers are typically Energy Efficiency in Data Centres program. Over the last
designed to operate at a power usage effectiveness (PUE) five years, we have registered additional data centers,
of 1.5 or lower at full IT capacity. PUE is the ratio of the bringing the total number of data centers participating in
total energy consumed by the data center, divided by the this program to 38 in 18 countries. IBM’s registered data
energy consumed by the IT equipment. The closer the centers represent the largest portfolio from a single com-
value is to 1, the more efficient the cooling delivery. The pany to receive this recognition. The registered locations
templates address cold-aisle containment to optimize include more than 60 percent of IBM’s IT delivery and
cooling delivery, and are updated with each new genera- resiliency services data center space in the EU. The EU CoC
tion of IT technology. for Energy Efficiency in Data Centres is a voluntary initia-
tive that aims to promote energy efficiency performance
standards for data centers.2017 IBM and the Environment Report 19
In addition to the EU CoC for Energy Efficiency in Data In 2017, 41.4 percent of our global
Centres program, IBM is involved with the U.S.
Environmental Protection Agency’s ENERGY STAR and The electricity supply for IBM-managed
Green Grid (industry collaboration) data center energy effi- locations was generated from
ciency initiatives. These initiatives have established
recommended operating criteria and metrics that inform renewable sources.
and encourage data center operators and owners to reduce
energy consumption in a cost-effective manner without Renewable electricity
compromising the objectives of mission-critical operations.
In 2017, IBM contracted with its utility suppliers to pur-
System virtualization and cloud computing chase approximately 779,000 MWh of renewable
Virtualizing server and storage systems allows individual electricity, representing 22.9 percent of our global electric-
systems to support multiple applications or images, making ity consumption by IBM-managed locations. These
greater use of the full capabilities of the IT equipment and purchases exceeded IBM’s goal to purchase 20 percent of
executing more workloads in less space with less energy. its electricity consumption from renewable sources by
2020, over and above the quantity of renewable electricity
Storage and server virtualization consolidation projects
provided as part of the mix of electricity that we purchase
avoided nearly 70,000 MWh and $7.3 million of annualized
from the grid. IBM avoided 275,000 MT of CO2 emissions
consumption and cost in 2017. IBM continues to virtualize
through these purchases.
and consolidate workloads from multiple servers and stor-
age systems with low utilization onto new or underloaded We purchased contracted renewable electricity in 20
systems, reducing energy use and expense. In 2017, we countries: Australia, Austria, Belgium, Brazil, Chile,
increased the number of virtualized images by more than Denmark, Finland, France, Germany, India, Ireland, Italy,
13 percent, the average number of images per virtualized the Netherlands, Peru, Portugal, Spain, Sweden,
server by 15 percent, and the number of virtualized serv- Switzerland, the United Kingdom and the United States.
ers by 6 percent — improving the overall efficiency of our
installed base of servers. Implementation of server and In March 2018, IBM finalized a power purchase agreement
storage virtualization has been a key contributor in reduc- to acquire all of the electricity — roughly 10,000 MWh per
ing the overall electricity consumption of our data centers year — generated by a 6-megawatt solar array to be con-
and labs over the past five years. structed at IBM’s Boulder, Colorado, facility. The array is
expected to go into production by early 2019.
Cloud computing can also be an efficient model for provid-
ing IT services, optimizing hardware utilization and We procure renewable electricity generated from wind,
virtualization technologies across the server, storage and large and small hydro, biomass, and solar installations
network infrastructure. In 2017, the IBM software devel- around the globe. We report all of our contracted renew-
opment organizations responsible for IBM Watson®, able electricity purchases — whether from new or existing
blockchain, artificial intelligence and other IBM soft- generation sources, “additional” or otherwise, without dis-
ware-based solutions completed the transition of their criminating against large hydro installations — and their
work to a cloud-based platform, reducing the number of associated CO2 avoidance. Our rationale is that all pur-
data center locations by three-quarters and energy con- chases signal to suppliers our desire for them to maintain
sumption by 29 percent, while increasing the workloads and broaden their renewable electricity offerings. We value
they manage. In addition, many IBM enterprise clients are all economically accessible renewable generation sources
moving some of their applications to the IBM Cloud plat- and their availability from our utility suppliers.
form to take advantage of improved energy efficiency.20 2017 IBM and the Environment Report
Total consumption of renewable electricity IBM’s strategy and approach regarding renewable
Combining our contracted renewable electricity purchases electricity purchases
and the amount of renewable electricity IBM received as IBM’s strategy is to procure renewable electricity that is
part of the grid mix, 41.4 percent of our global electricity generated in the grid regions where IBM’s facilities are
supply for IBM-managed locations was generated from located. When possible, we match our purchases to the
renewable sources in 2017. The percentages of the elec- physical consumption of our facilities so that we are con-
tricity we consumed, both contracted and grid-supplied suming the electricity at the same time that the renewable
purchases that came from renewable sources were: electricity is being generated. However, output from wind
Europe 67 percent, Latin America 63 percent, North and solar facilities varies depending on the time of day and
America 28 percent, and Asia Pacific 18 percent. the weather conditions. As such, we must rely on electric-
ity generated from conventional sources (i.e., fossil fuels)
Purchases of renewable electricity for data centers to ensure business continuity. When our consumption
IBM locates most of its IT operations in data centers man- exceeds the output from renewable sources, we may use
aged by the company. Overall, one-third of IBM’s managed “bundled” Renewable Energy Certificates (RECs) to offset
data centers obtained some or all of their electricity from the CO2 emissions associated with the electricity we con-
contracted renewable-generation sources in 2017. sume from conventional sources. Our intent is to procure
Including both contracted and grid-supplied renewables, renewable electricity and its zero-emissions attributes
nearly 50 percent of the electricity procured for IBM’s from the grid regions in which our facilities operate, either
managed data center operations came from renew- by directly matching our physical consumption or using
able-generation sources. bundled RECs to offset emissions.
IBM also locates some data center operations in co-loca- We do not use “unbundled” RECs, supplied from renew-
tion data centers. For these co-location data centers, 14.5 able generation projects in grid regions outside of our
percent of electricity supply came from renewable-gener- energy consuming locations, to offset the emissions from
ation sources in the grid in 2017. Combined with the our use of conventionally generated electricity. The reason
landlord-contracted renewable purchases at the facilities is simple: IBM would not actually be using the renewable
that support our operations, IBM co-location data centers electricity that the purchase of unbundled RECs helped to
received a total of 27.4 percent of their total electricity fund. It also obfuscates the need for hard public policy
consumption from renewable-generation sources in 2017. decisions and investments across the energy value chain
that must be made to genuinely increase the quantity and
availability of renewable electricity delivered to the grid.
Electricity sources at IBM-managed locations 2% Solar
29% Biomass
77.1% Grid-purchased electricity (GPE)
18.5% Grid-supplied renewables (part of GPE) 29% Wind
22.9% Contracted renewable purchases
40% Hydropower2017 IBM and the Environment Report 21
We would certainly like to be able to power our operations transition to low-carbon energy supply and enabling tech-
with 100 percent renewable electricity, and we are com- nologies to reduce the GHG emissions associated with
mitted to expanding our procurement of renewable power generation. We are also members of the Business
electricity for our global operations. However, we recog- Renewables Center and the Renewable Energy Buyers
nize that it is not possible in today’s market or in the Alliance, groups committed to broadening and expanding
foreseeable future to actually power IBM’s operations reli- the availability of renewable electricity to corporate buyers.
ably with 100 percent renewable electricity, given the
company’s vast and diverse presence in over 170 countries Transparency in communicating our use
along with the need for uninterrupted power usually made of renewable electricity
possible by fossil fuels. There is a difference between purchasing RECs and
actually using renewable electricity. A complete
Our strategy and approach make it clear to our electricity understanding of a company’s use of renewable electricity
suppliers that we want them to increase the quantity and requires a high degree of transparency in how renewable
availability of renewable electricity in their offerings. IBM electricity and REC purchases are reported. IBM supports
continues to work with industry peers, utilities, NGOs and and exercises full transparency in disclosing its use of
other renewable energy industry participants to develop renewable electricity. We believe renewable electricity
new contracting methods and to identify and capture new purchases may logically be broken down and reported
opportunities to procure electricity generated from renew- under three categories:
able sources. In 2017, we were active in the World
Resources Institute’s Special Clean Power Council. The • Physical or matched consumption: Renewable
Council, comprised of leading U.S. electric utilities and sev- electricity is generated in the grid region where the
eral of their major commercial and industrial customers, consuming facility is located and at the same time that
began engaging in a two-year effort to facilitate the the facility is consuming electricity. The electricity can
Use of renewable electricity as a percent of global electricity consumption at IBM-managed locations
45%
40% Contracted
renewables
35%
Grid-supplied
30% renewables
25%
20% Goal: Procure
20% of IBM’s
15% global electricity
consumption
10% from contracted
renewable
5% sources by YE
2020
0%
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