09-091
June 1, 2009
Environmental Management at IBM (B): Energy
Conservation and Climate Stewardship
Rebecca M. Henderson and Paulina Ponce de León Baridó
In 1974, IBM’s Corporate Policy on Conservation was established by then CEO F.T. Cary. The
policy, based on lessons from the oil crisis of 1974 – basically, that responding to a crisis was not
enough – gave IBM the responsibility to follow an ongoing practice of conservation:
It is the policy of IBM to conduct all activities in such a manner that conservation of energy, raw
materials and commodities remains a permanent way of life for the Company… The 1973-74 oil
crisis forcefully demonstrated that with planning and imagination we were able to reduce our fuel
and power consumption significantly. This, in turn, led us to develop ways to make a more
efficient use of raw materials and commodities which were in short supply. It is not enough,
however, to react to a crisis situation. Conservation must be a deliberate and continuing policy of
management. 1
Since then, there had been a consistent focus on energy conservation within IBM – or, in the words of
Jay Dietrich, IBM’s Corporate Environmental Affairs (CEA) Program Manager for Energy & Climate
Stewardship, “a constant drumbeat [reminding everyone] that this is something important for IBM.”
1
Cary, F.T. “IBM Corporate Policy on Conservation,” September 9, 1974.
This case was prepared by Rebecca M. Henderson and Paulina Ponce de Leon Barido. Professor Henderson is the Eastman
Kodak Leaders for Manufacturing Professor of Management.
Copyright © 2009, Rebecca M. Henderson. This work is licensed under the Creative Commons Attribution-Noncommercial-No
Derivative Works 3.0 Unported License. To view a copy of this license visit http://creativecommons.org/licenses/by-nc-nd/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
ENVIRONMENTAL MANAGEMENT AT IBM (B): ENERGY CONSERVATION AND CLIMATE STEWARDSHIP
Rebecca M. Henderson and Paulina Ponce de Leon Barido
Goals
In 1992, IBM announced a 4% annual cost-based conservation goal and expressed its intention to use
internal audits to monitor progress. 2 In 1996, the corporate goal changed “from a cost- to a
consumption-based goal with the objective of achieving energy conservation savings each year
equivalent to 4% of IBM’s annual electricity and fuel use.” 3 This change shifted the focus from
savings achieved in dollars to savings achieved in kWh and CO2 emission reductions. Dietrich
explained that this change made sense to IBM since energy use and GHG emissions went hand-inhand, and “the only way to deal with one issue is to deal with the other as well.” In 2001, IBM’s goal
grew to include “improving energy efficiency and giving credit to renewable energy use” 4 thus
including the contribution of any renewable energy purchases into IBM’s performance. In 2006, the
goal was modified to exclusively cover energy conservation actions so that GHG reductions due to
use of renewable energy would not be accounted toward progress from energy efficiency projects.
Finally, and also in 2006, the numerical target was adjusted from 4% to 3.5% as leased buildings
began to be included in the computation. When calculating energy conservation results IBM did not
include energy-use reductions resulting from consolidations, downsizings, or cost avoidance.
Excluding these particular reductions had been a practice since IBM began tracking this metric
because those actions, while producing reductions in energy use and cost, were not driven by the
motive of conservation.
IBM also participated in a variety of energy conservation and climate protection programs. (See
Exhibit 1.) Dietrich believed this gave IBM the opportunity to further its leadership stance by
committing, publicly, to its conservation goals, preparing itself for future regulation, participating in
policy development, and opening itself to the scrutiny of external audits. As Diana Lyon, CEA’s
Program Director of External Relations, explained, IBM was committed to participating in voluntary
partnerships with organizations which were devoted to issues of strategic importance to IBM, and to
which “IBM can contribute its expertise to make a difference.” The goal was both to participate in
“meaningful partnerships” and to be recognized for the company’s leadership in addressing
environmental issues.
Implementation
The reach of IBM’s energy and climate stewardship programs is illustrated in Figure 1. The Real
Estate & Sites Operations (RESO) organisation, in charge of operations, was responsible for
managing IBM’s energy, from procurement to consumption. The Systems & Technology Group
(STG) was responsible for product development. Its focus included improving the energy efficiency
of hardware products such as servers, storage products, and microprocessors. Global Technological
2
Grimm, Ed. “Update on Safety, Energy And the Environment.” Think, 1992, Special Report.
3
IBM CEA 1996, 19
4
IBM CEA 2002, 31
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ENVIRONMENTAL MANAGEMENT AT IBM (B): ENERGY CONSERVATION AND CLIMATE STEWARDSHIP
Rebecca M. Henderson and Paulina Ponce de Leon Barido
Services (GTS) and its Integrated Technology Delivery (ITD) function were responsible for IBM’s
services offerings and delivery, and in this case were largely focused on data center energy
management – the so called “green” or energy efficient data centres. Finally, IBM’s Global
Procurement drove collaboration with suppliers. CEA’s role was to connect each of these areas, thus
facilitating joint efforts and driving integrated approaches. It was also responsible for the strategy and
monitoring of IBM’s energy conservation and climate stewardship programs.
Figure 1
Span of Energy & Climate Stewardship Program
Source: IBM Internal Documents
IBM’s approach to reducing GHG emissions was two-fold. First, it sought to reduce direct and
indirect emissions associated with its own operations – Scope 1 and Scope 2 emissions, which fell
under the responsibility of RESO, STG, and ITD. Scope 1 emissions, as defined by the GHG
Protocol, an international accounting tool for estimating GHG emissions, were “direct GHG
emissions [that] occur from sources that are owned or controlled by the company.” Scope 2 emissions
were “GHG emissions from the generation of purchased electricity consumed by the company.”
These were considered indirect emissions since they originated from where electricity was generated
rather than consumed. The GHG Protocol defined Scope 1 and Scope 2 emissions in a way that
prevented different companies from accounting for a particular set of emissions under the same
Scope. The GHG Protocol Corporate Standard required companies report a minimum of Scope 1 and
Scope 2 emissions. Scope 3 emissions were also indirect, and were “a consequence of the activities of
the company, but occurred from sources not owned or controlled by the company.” 5 Reporting of
Scope 3 emissions was optional.
Second, IBM encouraged its carriers and suppliers to understand, and where appropriate take actions
to reduce their emissions by participating in programs such as the Carbon Disclosure Project (CDP)
5
“The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard,” World Business Council for Sustainable Development, 2004.
June 1, 2009
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ENVIRONMENTAL MANAGEMENT AT IBM (B): ENERGY CONSERVATION AND CLIMATE STEWARDSHIP
Rebecca M. Henderson and Paulina Ponce de Leon Barido
and USEPA SmartWayTM. In addition, IBM also had a suite of collaborative IT tools that enabled the
reduction of business travel by facilitating real time collaboration anywhere (e.g., e-meeting,
“SametimeTM” Web conferencing, messaging, voice suite, broadcast suite, etc). These IT capabilities
were widely used throughout the company and had enabled reduction in business travel. For example,
in 2006, the daily average of use of IBM’s “SametimeTM” Web conferencing capabilities was of 1,042
meetings involving a daily average of approximately 4,687 participants. These specific activities
notwithstanding, accounting for Scope 3 emissions was not a focus of the company.
Operations
According to Greg Peterson, Manager of IBM’s Global Energy Program, RESO was responsible for
managing IBM’s energy demand and supply. The energy conservation programs he was in charge of,
therefore, sought to decrease the company’s demand and to increase the use of energy from
renewable sources. While execution of IBM’s energy management program was centralized within
RESO, it wasn’t always so. When Peterson joined IBM in 1999, each site across the corporation was
responsible for meeting the energy conservation goal, and, as he explained, “efforts were
decentralized.” There was a reason behind this: until the late 1990s, IBM was largely a vertically
integrated hardware manufacturer with many large plant sites around the world. These sites were
large energy users, and each had a commensurate energy management team.
As the company transformed away from a vertically integrated hardware manufacturer and divested
manufacturing sites, it made sense to centralize energy management under RESO. As Peterson
explained, “to manage energy end-to-end, matching supply and demand, the program needs to be
globalized. You need to have an organization [that has sole accountability] working on execution.”
Bringing execution under one organization required getting over some inertia given IBM’s business
model and an organizational structure that included hundreds of sites around the world. He first
targeted IBM’s energy supply, taking over buying decisions and bringing more energy industry
experts into IBM. With greater control over IBM’s energy supply, Peterson began to focus on the
company’s demand, and moved the site and regional employees working on energy management
under his management. He described this as “an evolutionary process that took time.” Having RESO
as the organization responsible for energy management enabled the company to leverage expertise at
larger plant sites, share best practices, and increase participation by smaller locations, thus enabling
significantly greater efficiency and effectiveness. As Peterson noted, “It is one of the main reasons we
are able to make continual improvements” in energy management.
Though IBM’s corporate energy conservation goal was set at 3.5%, RESO’s internal goal was to
reduce energy consumption by 7% to further reduce cost and drive energy conservation. The
challenge, Peterson explained, was to reduce energy consumption and associated costs while the
business was experiencing growth, such as in the data center area which was a core business for IBM.
Steps could be taken, however, to minimize demand for energy due to growth. In addition, because
IBM had been focusing on energy conservation for a long time and was “continuously pushing the
June 1, 2009
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ENVIRONMENTAL MANAGEMENT AT IBM (B): ENERGY CONSERVATION AND CLIMATE STEWARDSHIP
Rebecca M. Henderson and Paulina Ponce de Leon Barido
envelope”, it was very difficult for RESO’s energy management team to meet IBM’s conservation
goal year in and year out. For Peterson, IBM’s goals were a challenge by themselves. He said, “The
goals keep me up at night – I am looking at what we can do in the next two years” to meet them.
Peterson’s team tracked and analyzed energy use on a real-time basis using the Enterprise Energy
Management System (EEMS), a series of meters located across IBM’s largest facilities connected to a
central data collection and display system. 6 The data that had been collected indicated that:
1. The top 20 sites for energy use accounted for 51% of IBM’s total electricity consumption.
2. The top 100 accounted for 76% of IBM’s total electricity use.
3. The top energy drivers of energy use by functional cluster (i.e. manufacturing, data centres,
offices, lab & research, etc) were: heating, ventilating & air conditioning (HVAC), data
centre equipment, the central utility plant, lighting, manufacturing, and plug load.
See Exhibits 2 and 3 for more detailed results.
Drawing on this information, the Global Energy team put together teams of experts – including
outside experts and suppliers – that could address energy issues related to HVAC, data centres,
central utility plants, and lighting. The team leads were responsible for carrying out a gap analysis,
building a comprehensive checklist of energy conservation activities for all sites to follow through by
a particular date, and for creating global standards to ensure the consistent implementation of
measures for energy management. Each team lead’s performance was evaluated based on these set of
activities and these responsibilities were integrated in to their personal business commitments (PBCs).
In order to get funding RESO generated a list of energy conservation projects and project
descriptions, together with estimates of total costs, savings and payback time. Recently, for example,
Peterson approached RESO Finance with a list for 150 different projects, with a total cost of $10
million, and a payback time of teo years. He was able to get 135 projects accepted, with a total cost of
$8 million and a payback time of 1.5 years. The key, Peterson explained, was to build a business case,
aggregating the various projects for energy conservation together. He noted that while he had seen
other companies disaggregate projects, the packaging together of these initiatives provided invaluable
flexibility, including the ability to push through certain projects that had a payback time of more than
three years – when usually the payback needed to be three years or less, and most of the time the
company asked for two. To build the business case, he highlighted all the positive potential outcomes
of the project. In the case of purchasing a particular light bulb, for example, he focused on the fact
that it used half the energy than traditional light bulbs, that it would improve comfort for users, and
6
“IBM Enterprise Energy Management System.” World Business Council for Sustainable Development, 2008
June 1, 2009
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ENVIRONMENTAL MANAGEMENT AT IBM (B): ENERGY CONSERVATION AND CLIMATE STEWARDSHIP
Rebecca M. Henderson and Paulina Ponce de Leon Barido
would reduce maintenance costs because of its longer lifetime. He would also highlight how such a
light bulb would further IBM’s energy conservation goals, thus providing an additional benefit to the
company. He would try to make the case that “it’s the right thing to do [for] IBM as an environmental
leader,” asking, “how much better is it if you don’t have to generate an extra 1 kWh?,” and, if “IBM
prides itself in being a driver of efficiency [and] we sell those services, why not be the best example?”
Peterson acknowledged, however, that in the end it was “money that gets people.” Nonetheless, there
were certain projects with considerably long payback times that he had been able to push through by
finding creative financing approaches. For example, he was able to secure approval for a small solar
project with a longer payback time by utilizing incentive funding from the local utility company.
Renewable energy projects had a longer payback time than other projects, which, as Peterson
explained, pushes you to be more creative. For example, one approach was the use of so-called power
purchase agreements where the energy provider (e.g., a solar energy company) would be responsible
for the capital investment associated with producing energy, and recovered that investment over the
years by selling the power to the customer.
For other projects that also had a long payback time,, for example replacing an air conditioning chiller
(from an old one which consumes 0.75KW/ton, for a new one that uses 0.55KW/ton 7 ) which has a
payback time of 10 years, Peterson discovered that there needed to be a set of reasons other than
those related to energy conservation to gain support for a project. These could include, for example,
reliability, maintenance cost, age, etc.
In addition to securing sufficient funding, one of the biggest challenges for RESO was that though it
was responsible for the operations within each site, it didn’t always have access to “sub-sites” such as
research labs and data centres. “If [RESO] is paying the bill,” said Peterson, “we manage it.” In
spaces owned by someone else, however, as was the case with the tightly-controlled data centres, the
RESO energy management team needed to ask for access. The key, Peterson explained, was to build
good relationships with the owners of that space, and part of this was to ensure you could talk to
them. Jean-Michel Rodriguez, Program Office Manager of Montpellier’s Products & Solutions
Support Centre (PSSC) and worldwide leader of the Energy Efficient Data Centre for STG, agreed:
“It’s difficult to get two groups to talk to each other,” he said. “While IT is not RESO’s core area of
expertise, [we need to understand that] RESO is not just about cabling and IT is not just PCs.” While
RESO may not fully understand the machines used, or what the manufacturing process was, Peterson
noted the energy teams should be able to draw in enough expertise to address problems in each
specific setting. While it was difficult to integrate all the right people around energy conservation
projects, today’s energy costs and IBM’s “drive to be greener” had encouraged people to collaborate
7
Chiller efficiency may be specified in kilowatts per refrigeration ton, the latter which is the cooling power of one ton (907 kgs) of ice melting in a 24 hour
period.
June 1, 2009
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ENVIRONMENTAL MANAGEMENT AT IBM (B): ENERGY CONSERVATION AND CLIMATE STEWARDSHIP
Rebecca M. Henderson and Paulina Ponce de Leon Barido
more readily. Another reason, as Peterson explained, was that he had been “knocking on the door
long enough.”
Services & Product Use
“Green is as much about the economics as it is about the environment,” said Chris Molloy,
Distinguished Engineer in the Integrated Technology Delivery (ITD) group of IBM’s Global
Technology Services (GTS). “It is our responsibility to have a low cost solution for our customers.
We have to be innovative to bring costs down and deliver more application workload in less space.
Use of data centre best practices, more efficient hardware and better energy utilization offers us an
environmentally preferable way to deliver business value.” Molloy was referring to the increasing
cost of running data centres, and the need to provide companies with some “tactical breathing room”
or, in other words, quick, inexpensive, easy-to-implement solutions to optimize resources in existing
facilities while the client company developed and implemented a longer range data centre strategy
using virtualization techniques and more efficient cooling approaches. He felt that “focus on ‘green’
data centers […] didn’t pick up because of the environment, it didn’t pick up because of [Al Gore’s]
Oscar, it picked up because of the [increasing] demand for IT, and the cost associated with it.
[Companies are] using conservation of the environment as a way to enhance business value.”
In 2007, IBM announced Project Big Green, an annual investment commitment of $1 billion to
increase energy efficiency in IT, and in particular, to introduce products and services that would
significantly reduce energy consumption in data centres. 8 This announcement was followed by a
disconcerting EPA report on Server and Data Centre Energy Efficiency which found that energy
demand for power and cooling resources had approximately doubled from 2001 to 2006, making data
centre energy consumption approximately 1.2% of total electricity consumption in the United States. 9
Meanwhile, the report found that 50% of the energy used didn’t even reach IT equipment and was
lost as heat.
IBM had “responsibility beyond following rules,” explained Brad Brech, Distinguished Engineer in
STG Software Strategy & Architecture, “[because it needs to keep] trying to come up with ways to do
things better.” In Molloy’s view, green was synonymous with sustainability. It was about “playing in
an environment with limited resources, and since IBM wants to be in business for the long term, [it]
needs to provide products [and services] in a sustainable way.” IBM was helping customers and
companies around the world to address this [green] issue. In Molloy’s mind, “IBM’s reputation is at
stake.”
8
IBM Annual Report, 2007
9
“IBM Data Center Energy Efficiency,” World Business Council for Sustainable Development, 2008,
June 1, 2009
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ENVIRONMENTAL MANAGEMENT AT IBM (B): ENERGY CONSERVATION AND CLIMATE STEWARDSHIP
Rebecca M. Henderson and Paulina Ponce de Leon Barido
The Supply Chain
IBM was encouraging its suppliers to participate in the Carbon Disclosure Project’s Supply Chain
Leadership Collaboration. 10 In addition, IBM was involved in the EICC’s 11 Environmental
Workgroup, which was working on a methodology for data collection or disclosure of supply chain
GHG emissions. Its goal was to have EICC members agree on, first, how suppliers could best identify
and communicate their emissions impact to their clients, and second, how the EICC could best
convince suppliers to set goals to manage their energy use and emissions.
IBM had also become an active participant in the USEPA SmartWayTM program that sought to
identify “products and services that reduce transportation-related emissions”. 12 As Eric St Amand,
Manager of Global Logistics Operations for the Americas, explained, “SmartWayTM was part of our
life now. We want suppliers to be environmentally savvy... my hope is that two years from now you
won’t be able to sit at the table with IBM if you’re not a SmartWayTM carrier.”
Results
There were various drivers behind IBM’s energy management and climate protection programs. At a
basic level was the rate of return of projects involved. In an example provided by Dietrich, every
dollar of energy savings achieved in a data centre through virtualization and consolidation projects
resulted in $6 to $7 dollars of savings in operation costs – a significant figure given that 20% of
RESO’s spend was energy related, and a third of that supported data centre operations. In addition,
investing in renewable energy gave the company the opportunity to gain experience using it and
helped reduce the future costs of that particular technology. A third driver stemmed from the belief
that energy concerns were not going away. Customers’ needs would continue to be driven by energy
conservation and by potential increases in energy prices. IBM also expected the legislative
environment to incorporate measures that addressed climate change. Finally, IBM wanted to uphold
its longstanding commitment to be an environmental leader, and therefore wanted to begin addressing
today the issues that would be important tomorrow.
To date IBM had both reduced and / or prevented a significant amount of carbon dioxide emissions
(Exhibits 3 and 4) and the company had earned awards and international recognition for its
environmental protection efforts. These included, among others, the US EPA Climate Protection
Award in 1998 – the Award’s inception year – and again in 2006 (IBM thus became the first
company to win this award twice), being praised by CERES as one of the greatest reported GHG
emissions reductions, recognition by the WWF and the WRI in 2005, and the US-EPA SmartWayTM
10
The Carbon Disclosure Project encourages private and public sector organizations to measure, manage and reduce emissions and climate change impacts
(http://www.cdproject.net/index.asp)
11
The Electronic Industry Corporate Citizenship is a group of companies working together to create a comprehensive set of tools and methods that support
credible implementation of the Code of Conduct throughout the Electronics and Information and Communications Technology (ICT) supply chain.
(http://www.eicc.info/)
12
USEPA. SmartWay - Basic Information. July 2, 2008. http://www.epa.gov/smartway/basic-information/index.htm (accessed December 5, 2008)
June 1, 2009
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ENVIRONMENTAL MANAGEMENT AT IBM (B): ENERGY CONSERVATION AND CLIMATE STEWARDSHIP
Rebecca M. Henderson and Paulina Ponce de Leon Barido
Excellence Award in 2007. Most recently, in 2008, CERES ranked IBM as #1 in climate change
governance practices among 63 of the world’s largest consumer products and IT companies in 11
industry sectors. 13
While these awards were tremendously gratifying, IBM was not a company that was comfortable
resting on its laurels. Jay Dietrich could not help asking himself “Is there more we could/should be
doing?” If so, what would it be?
13
CERES, RiskMetrics Group. Corporate Governance and Climate Change: Consumer and Technology Companies. Boston: CERES, 2008.
June 1, 2009
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ENVIRONMENTAL MANAGEMENT AT IBM (B): ENERGY CONSERVATION AND CLIMATE STEWARDSHIP
Rebecca M. Henderson and Paulina Ponce de Leon Barido
Exhibit 1
1992!
1995!
1996!
2000!
Sample of IBM’s Participation in Climate Change Initiatives
IBM! became! a!charter!member!of!the!US!EPA’s!Energy!Star!Computer!Program,!whose!criteria!it!
helped!develop!
IBM! $%s! one! of! three! in/ustri%1! co34%nies! to! 5e6in! 7o1unt%ry! re4ortin6! its! 6reenhouse! 6%s! 9:H:<!
e3issions! un/er! the! US! ?e4%rt3ent! of! Ener6y! 9US! ?AE<! Bo1unt%ry! :reenhouse! :%s! E3issions!
Ce4ortin6!4ro6r%3!in!its!ince4tion!ye%r,!%n/!h%s!continue/!to!/o!so!%nnu%11y!e7er!since.!
IBM! si6ns! %! Me3or%n/u3! of! Un/erst%n/in6! 9MAU<! $ith! the! EPA! to! 7o1unt%ri1y! re4ort! %n/! re/uce!
e3issions! of! 4erf1uoroco34oun/! 9PHC<,! %! c1%ss! of! che3ic%1s! th%t! %re! ! st%51e! in! %t3os4here! $ith!
61o5%1!$%r3in6!4otenti%1!th%t!is!se7er%1!thous%n/!ti3es,!or!3ore!%s!hi6h!%s!th%t!of!CAJ!
IBM! 5eco3es! %! ch%rter! 3e35er! of! the! Kor1/! Ki1/1ife! Hun/! 9KKH<! C1i3%te! S%7ers! 4ro6r%3,!
co33ittin6! to! %chie7e! CAJ! e3issions! re/uctions! eLui7%1ent! to! MN! of! IBMOs! 61o5%1! CAJ! e3issions!
e%ch!ye%r!5et$een!PQQR!%n/!JSSM.!
!
2002!
2003!
2006!
2008!
IBM! Toins! the! Kor1/! Cesources! InstituteOs! 9KCI<! :reen! Po$er! M%rket! ?e7e1o43ent! :rou4,! $hich!
seeks!to!5ui1/!cor4or%te!3%rkets!for!6reen!4o$er.!
IBM!5ec%3e!%!ch%rter!3e35er!of!the!EPAOs!C1i3%te!Ve%/ers!Pro6r%3,!co33ittin6!to!%7er%6e!%nnu%1!
CAJ!e3issions!re/uctions!eLui7%1ent!to!MN!of!the!e3issions!%ssoci%te/!$ith!IBMOs!%nnu%1!fue1!%n/!
e1ectricity! use! 5et$een! JSSS! %n/! JSSW,! %n/! %n! %5so1ute! PSN! re/uction! in! PHC! e3issions! fro3! the!
co34%nyOs!se3icon/uctor!3%nuf%cturin6!4rocesses!5y!JSSW!%6%inst!the!5%se!ye%r!of!JSSS.!
IBM!5eco3es!%!ch%rter!3e35er!of!the!Chic%6o!C1i3%te!EXch%n6e!9CCY<,!the!$or1/Os!first!%n/!Zorth!
A3eric%Os!on1y!%cti7e!7o1unt%ry,!1e6%11y!5in/in6!inte6r%te/!tr%/in6!syste3!to!re/uce!e3issions!of!%11!
siX!5%skets PM !of!3%Tor!:H:s.!
The!Co34%ny!Toins!the!USEPAOs!S3%rtK%yTM!Tr%ns4ort%tion!P%rtnershi4!Pro6r%3,!$hich!encour%6es!
shi44ers!%n/!c%rriers!to!i34ro7e!ener6y!efficiency!%n/!re/uce!:H:!%n/!%ir!4o11ut%nt!e3issions.!
IBM! Toins! the! C1i3%te! :rou4,! %! co%1ition! of! 6o7ern3ents! %n/! inf1uenti%1! 5usinesses! co33itte/! to!
t%ck1in6!c1i3%te!ch%n6e.!
Source: IBM Internal Documents
14
The six baskets of GHGs are carbon dioxide, methane, nitrous oxide, HFCs, PFCs, and SF6,
June 1, 2009
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ENVIRONMENTAL MANAGEMENT AT IBM (B): ENERGY CONSERVATION AND CLIMATE STEWARDSHIP
Rebecca M. Henderson and Paulina Ponce de Leon Barido
Exhibit 2
Top 100 IBM Sites by Electrical Usage
Out of over 1600 sites worldwide, IBM’s top 20 sites in electrical usage represent half of the
company’s worldwide electrical usage, and the top 100 sites represent three quarters of IBM’s total
electrical usage. Note that over 500 IBM locations report their energy use and spend. Data is from
September 2005 to August 2006.
Source: IBM Internal Documents
Exhibit 3
Energy Drivers by Cluster
Manufacturing
HVAC
Data Centers
Office Spaces
Labs & Research
Total Spend
20%
10%
50%
30%
27%
-
65%
-
25%
22%
Central Utility Plant
25%
20%
-
20%
16%
Manufacturing
45%
-
-
-
14%
10%
5%
25%
10%
13%
-
-
25%
15%
8%
30%
28%
28%
13%
100%
Data Center
Equipment
Processes & Tools
Lighting
Plug Load
Total Spend
Source: IBM Internal Documents
June 1, 2009
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ENVIRONMENTAL MANAGEMENT AT IBM (B): ENERGY CONSERVATION AND CLIMATE STEWARDSHIP
Rebecca M. Henderson and Paulina Ponce de Leon Barido
Exhibit 4
IBM Electricity Use and CO2 Emissions from Operational Energy Use
(1988-2007)
Year
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
CO2 Emissions from
Operational Energy Use
(est, Thousand tons)
(Million kWhrs)
8,563
--8,916
7,331
9,370
7,650
9,130
7,538
8,948
7,059
7,871
6,137
7,067
5,475
6,412
4,437
6,187
4,280
5,820
4,031
5,898
4,085
5,800
3,951
5,325
3,412
5,228
3,247
5,031
2,902
4,446
2,573
4,390
2,416
4,952
2,744
5,061
2,667
5,343
2,801
Electricity Use
Source: IBM Internal Documents
June 1, 2009
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ENVIRONMENTAL MANAGEMENT AT IBM (B): ENERGY CONSERVATION AND CLIMATE STEWARDSHIP
Rebecca M. Henderson and Paulina Ponce de Leon Barido
Exhibit 5
IBM Electricity and Fuel Use and Related CO2 Emissions (2001-2007)
Year
Electricity and Fuel Use
(Thousand MMBTU)
2001
2002
2003
2004
2005
2006
2007
26,190
25,044
21,695
21,360
22,630
22,426
23,649
CO2 Emissions
(est, Thousand
tons)
3,247
2,902
2,573
2,416
2,744
2,667
2,801
Source: IBM Internal Documents
Exhibit 6
IBM Energy Conservation and Avoided CO2 Emissions (2001-2007)
The following annual figures represent results from each year’s new conservation programs, plus
results from programs of previous years (which are discounted by 25% per year). Savings prior to
1999 are not included (Source: IBM Report on Innovations in Corporate Responsibility 2006 - 2007).
Year
2001
2002
2003
2004
2005
2006
2007
Cumulative Electric Savings Cumulative Avoided CO2
(Million kWhrs)
(est, Thousand tons)
944
442
1,139
505
1,290
560
1,412
603
1,294
609
1,249
750
1,116
685
Source: IBM Internal Documents
June 1, 2009
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