IBM's Environmental Management System- ISO NC DPPEA Workshop August 24, 1999

IBM's Business Develop, Manufacture and Sell Information Technology Products, Including Computers and Microelectronic Technology, Software, and Networking Systems and Information Technology-Related Services Worldwide.

IBM’s Business (Cont.) IBM Product Units –Server Group –AS 400; RS 6000; System 390 –Personal Systems Group –Printing Systems Company –IBM Microelectronics Division –Networking Hardware Division –Storage Systems Division –Retail Store Solutions –Display Business Unit IBM Product Units

RTA's Manufacturing and Development Mission Manufacture/assembly of computer and networking hardware products Computer refurbishing operations Hardware/software development activities Human Resources for US Customer call centers for software/hardware support

IBM's EMS IBM has one EMS with a tiered approach Corporate Locations and/or Division Operating Units Develop Common System Provide Feedback for Continual Improvement

IBM's EMS Corporate's Role –Set environmental policy –Develop IBM WW environmental strategy –Define requirements of IBM's EMS –Establish environmental Corporate Instructions and Environmental Practices –Set Corporate level environmental objectives and targets

IBM's EMS Corporate's Role (cont.) –Provide guidance to locations and/or –Division/Operating Units –Measure environmental performance –Perform environmental affairs audits at locations –Review status of environmental affairs with top management –Communicate environmental affairs progress to interested parties

IBM's EMS Location and/or Division/Operating Units' Role –Develop and implement programs to conform with IBM's EMS –Identify legal requirements and apply for permits –Develop location and/or Division/Operating Unit procedures –Monitor compliance to legal and IBM requirements

IBM's EMS Location and/or Division/Operating Units' Role (cont.) –Report compliance to agencies –Perform self-assessment –Review EMS with Location and/or Division/Operating Unit management –Report key characteristics to Corporate

IBM's EMS Control Primary control point of environmental management for Locations and/or Divisions/Operating Units: –Locations control manufacturing processes, activities, and services –Divisions/ Operating Units control products

Core Elements of IBM's EMS Environmental Policy Corporate Instructions Environmental Practices Worldwide EMS Manual

IBM's Environmental Policy IBM has a single corporate-wide environmental policy, which –Commits IBM to Environmental Affairs Leadership –Contains 11 elements addressing a wide array of environmental concerns for IBM's business activities, products and services –Commits to striving for continual improvement of the EMS and performance –Requires every employee and every contactor on IBM premises to follow it

IBM's Corporate Instructions Applicable to all business units and locations Specify broad requirements on environmental subjects, such as: –energy management –hazardous materials transportation –environmentally conscious product design – supplier evaluation of environmental considerations – incident reporting – environmental impact assessment – and others

IBM's Environmental Practices Applicable to all business units and locations Specify detailed requirements for air emissions, water discharges, waste management, transfer and storage of liquids, and chemical management

IBM Worldwide EMS Manual Aligns IBM's existing EMS with ISO Re-emphasizes and delineates EMS requirements for Corporate Environmental Affiars and Locations and/or Operating Units Used ISO as a tool to improve the effectiveness, efficiency, and consistency of IBM's EMS

Additional Core Elements at RTA RTA EMS Manual Product EMS Manuals (RSS, NHD, PSG) Program Manuals Emergency Planning Manual

Environmental Aspects Process –Team of environmental experts –Criteria used for identification of significant environmental aspects Environmental impact of the aspect Legal /regulatory requirements IBM environmental requirements Good neighbor (activities and services) Customer views (products)

Examples of Environmental Aspects Activities and Services –Chemical use –Hazardous waste generation –Air emissions –Waste recycling –Hazardous materials transportation –Energy consumption –Groundwater/soil remediation/cleanup

Examples of Environmental Aspects Products –Product energy consumption –Recyclability/reuse –Product chemical emissions –Recycled/recyclable materials –Product protective packaging (shipping) –Supplies/consumables

Significant Aspects Focused at RTA Product Aspects –Three product groups: Networking Hardware, Personal Systems Group, and Retail Store Solutions Key Significant Aspects Related to Activities and Services –Solid waste mgmt/recycling –Air emissions (including employee vehicle emissions) –Energy consumption

Objectives and Targets Objectives and Targets established at both Corporate and Location/Division levels Locations/divisions may establish additional product specific targets, but must adopt Corporate's Primary Considerations Legal / regulatory requirements IBM Corporate requirements Other requirements (e.g., Energy Star) Significant environmental aspects Technological options Financial, operational & business requirements Views of interested parties

IBM Corporate Objectives and Targets (Activities and Services) Hazardous waste reduction –Year to year overall reduction Energy Conservation –4% overall consrvation savings Nonhazardous waste recycling –67% solid waste –35% industrial waste Perfluorocompounds Reduction –40% reduction by YE 2002

IBM Corporate Objectives and Targets (Products) Energy efficiency –Energy Star –Power consumption per unit of function Materials Recovery Centers landfill reduction –10% reduction in 1999 versus 1998 Plastics recycling –Purchase 10% recycled plastics by 2001 Design for Environment –Assessments on at least 80% of products released in 1999

Engineering Center for ECP (RTP, NC) ECP design, assessment & metrics Material selection Plastics recycling Regulatory tracking& interpretation Product end-of-life management programs Support of materials recovery, reutilization operations ISO14001 support Life cycle assessment studies Environmental packaging ECP communications

IBM’s Registration to ISO 14001

Goal Achieve Single Worldwide Registration to ISO Covering IBM's Manufacturing and Hardware Development Locations Across All Business Units –Complete registration audits at 30 Locations in 14 Countries Plus Corporate Environmental Affairs –Location populations: <1,000 to 20,000 –Business Units include Microelectronics, Storage Systems, S/390 Servers, AS/400 Servers, RS/6000 Servers, PC Servers, Personal Computers, Networking Hardware

Reasons for Goal It Reinforces the Integration of Environmental Considerations Throughout IBM's Business It Positions IBM to be Competitive It is Consistent with Our Quest for Environmental Leadership A Single Worldwide Registration is Consistent with Our Long-standing EMS and it is the Most Efficient Approach

How We Proceeded Completed Worldwide Gap Analysis Published Worldwide EMS Manual Consistent with ISO Developed Common Solutions –Training –Identification of Significant Aspects –EMS Audit Methodology Retained a Single Worldwide Registrar Transferred Existing Site Registrations (through Surveillance) and Began Audits at New Locations

Advantages of Our Approach Capitalizes on IBM's Existing Global EMS An Outstanding Way to Help Ensure We Execute the Same EMS No Matter Where in the World We Do Business Consistency Yields Efficiency and Effectiveness Least Cost Approach –Avoids Multiple Registrations by Multiple Registrars –Enables Ongoing Audits to Proceed According to Sampling Plan

Challenges with Our Approach Significant Worldwide Coordination Required Would be Very Difficult to Integrate with Existing ISO 9000 Registrations Single Registrar Expects a Well-Structured, Mature, and Consistent EMS at all IBM Locations -- Even those that are New in the Business

Current Results Earned First Edition of Worldwide Registration in December, 1997 –Supported by successful registration audits at 11 of 26 (original number) locations plus Corporate Environmental Affairs staff –12 Months from decision to proceed –3 Months ahead of plan To Date, all 30 M&D Locations Worldwide are on our Registration

Value to Our Business Environment is Clearly Being Further Integrated -- Employees and Managers are Much More Aware of the Environmental Policy and Their Role in it EMS is "System Dependent" rather than "Person Dependent" It Helps Drive Continual Improvement Customer Inquiries are Handled Efficiently Strengthening our Record of Leadership

Continual Improvement Activities Integration of functions traditionally not thought of as having a major environmental impact: –Procurement –Transporation and distribution –All on-site contractors The list of significant aspects has been expanded and objectives and targets are being enhanced

Continual Improvement Activities Off-site suppliers are being encouraged to implement and register to ISO IBM is working with the U.S. Technical Advisory Group to TC 207 on ISO revisions On-line environmental training is being developed for environmental professionals new to IBM

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