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IBM Energy Conservation Saves $50 Million in Electricity Expenses

When companies like IBM invest in good social practices such as conserving energy, it benefits not only financially, but their actions trickle down and pay dividends for humanity.

IBM’s Corporate Responsibility Report for 2010 shows that Big Blue’s socially responsible corporate practices yielded a range of benefits. Among the benefits include reductions in energy use, more managerial opportunities for women and smarter cities. IBM employees were also healthier and safer on their jobs, received greater training skills and joined the company in donating time, money, effort and expertise to social causes through community development and partnerships.

According to the report, IBM achieved strong results in sustainability and environmental responsibility last year when it saved over US$50 million in electricity expenses and conserved 523,000 megawatt hours of electricity since 2008. The conservation was enough to power 47,000 average US homes for a year.

How did IBM do it? IBM has been initiating an ambitious ongoing program which involves 3,100 conservation projects at more than 350 IBM facilities in 49 countries. Building on decades of environmental leadership, IBM continues these conservation efforts and aims to eliminate 1.1 million megawatt hours of energy consumption by the end of 2012 next year.

A global strategy

IBM is saving energy across its data centers and real estate portfolio using a global strategy that taps into the company’s R&D expertise and technologies. It includes a technology that produces real-time, 3D images to pinpoint so-called “heat sinks” and cooling leaks. Virtualization technology is also used to ensure energy-hungry servers are operating at peak efficiency. IBM Research uses analytics software that manages electricity consumption across data centers, much as a conductor tunes up an orchestra. Such innovations make their way into IBM Smarter Buildings technology sold to clients.

The company was also successful conserving in 2010 when it recycled 79 percent of the nonhazardous waste it generated. It reduced water use in the manufacturing process by nearly two percent and completed a multi-year program to eliminate perfluorooctane sulfonate and perfluorooctanoic acid compounds from its chip manufacturing processes. As a result, IBM won recognition from the U.S.’ National Pollution Prevention Roundtable.

More than turning your lights off

IBM’s sustainability policies are paying off. Its estimates that its focus on environmental leadership has realized savings and avoided costs at a rate of approximately US$1.60 for every US$1.00 spent. Its decades-long energy conservation program has avoided 5.4 million megawatt hours in energy use, and nearly $400 million in associated direct energy expense from 1990-2010.

“Saving millions in electricity expenses takes more than turning off lights,” said Wayne Balta, vice president, environmental affairs and product safety, IBM. “It takes the combined efforts of IBM experts working in data center operation, manufacturing, hardware, software, R&D and real estate management. It also includes a combination of analytics technology and integrated management systems to find patterns and trends in energy consumption to improve efficiency. IBM doesn’t support sustainability because it’s trendy or popular – we do it because it makes good business sense and is good for the environment.”

Corporate volunteerism

More than 170,000 IBM employees in more than 84 countries had volunteered 11.5 million hours of community service since 2003. Community service makes for more motivated, loyal, and skilled employees and more stable communities. IBM believes that it is an investment that yields greater productivity and prosperity.

“There is a perception that ethical practices and profitability are mutually exclusive,” said Stanley S. Litow, vice president of Corporate Citizenship & Corporate Affairs at IBM and president of IBM’s International Foundation. “In fact, they are dependent on one another. Responsible corporate behavior builds trust.”

“It is an investment like any other sound business practice – and it pays substantial, measurable dividends for our shareholders. Today’s report bears this out. IBM has pioneered many of the voluntary, ethical practices that have become standard operating procedure in the business community, and we couldn’t be more proud of that fact. We intend to continue to be at the forefront of corporate responsibility for years to come,” he added.

The accomplishments detailed in the report are part of a century of progress at IBM. As the company celebrates its Centennial this year, IBM’s environmental leadership is one of 100 milestones in IBM’s history of innovation, which can be found at www.ibm100.com/icons.

IBM’s volunteerism, quantified in the 2010 Corporate Responsibility Report, was a prelude to a massive “Celebration of Service” in 2011, an effort that is helping to mark IBM’s Centennial this year. Given the company’s traditional emphasis on public service, volunteerism was chosen as one of the major ways to celebrate the impact IBM has made on society globally. So far this year, more than 320,000 IBMers around the world – three-quarters of its global workforce – have committed 2.6 million hours of their time and expertise this year in 5,200 projects in 120 countries, meeting civic challenges and societal challenges, and serving at least 10 million people in need. That is equivalent to approximately 900 years of volunteerism, valued conservatively at $100 million. These numbers continue to grow as 2011 progresses.

These and other accomplishments were detailed in IBM’s 2010 Corporate Responsibility Report, a year-to-year comparison of the company’s citizenship and philanthropic projects, community partnerships, environmental stewardship, and employment policies and practices. It was prepared according to the highest standards established by the Global Reporting Initiative (GRI).

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