1. Environmental Affairs © 2003 IBM Corporation ENVIRONMENTAL MANAGEMENT IN A GLOBAL COMPANY ONE POSSIBLE WAY Andrea Sarudi Environmental Health and Safety Manager, IBM SSD, ISC Székesfehérvár, Vác, Hungary NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary

2. Contents: IBM and the Environment Long term environmental strategies Corporate Policy from 1967 Worldwide EMS - worldwide aspect analysis Worldwide objectives Outlined programs: Energy saving Environmental design Product take back NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary

3. l increased productivity l increased population - consumer society l reduced natural resources l continual waste discharge l increased energy consumption l global warming l green house effect ò Not only local but global symptoms HELP : ò Global collaboration, authorization, execution * Multinational companies: global environmental management Preface: Characteristic of the environment without numbers

4. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary l The world largest information technology company l Employees app. 320 000 employees worldwide in over 160 countries l YE 2002 ==> 81,2 Billion $ revenue l Major business segments: IT hardware, software, services and global financing l IBM is committed to the environmental leadership in all business activities, from its operation to the design of its products and use of its technology. l IBM first formalized this commitment in a Corporate policy on environment protection in 1967 l 1997: worldwide environmental management system - worldwide certification IBM and the Environment

5. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary l Communications l Organization l Management systems l Chemical management l Remediation l Conservation and pollution prevention l Environmentally conscious products l Energy management l Assessment l Environmental responsibility l Financial reporting l Public policy l Education l Knowledge sharing & technology transfer Long term environmental strategies:

6. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary corporate policy objectives (examples): l improve environmental protection, pollution prevention technology, knowledge and methods..... l be an environmentally responsible neighbor... l conserve natural resources..... l responsible use of energy, l Develop, manufacture and market products that are safe for their intended use, efficient in there use of energy, protective of the environment, and that can be reused, recycled or disposed safely. Utilize IBM products, services and expertise to assist in the development of solutions to environmental problems Corporate Policy from 1967

7. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary Worldwide EMS - worldwide aspect analysis l Common aspect analysis on products, manufacturing, services l corporate significant aspects for products: l product energy consumption l product size and weight l product chemical emission l potentially hazardous parts and assemblies (e.g.,batteries) l product protective packaging ( for shipping ) l product supplies and/or consumable ( e.g., toners, cartridges, paper, storage media) l reuse and/or recyclability ( design for disassembly, product return, reuse, upgradeability and /or modularity )

8. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary World wide objectives: 1. Pollution prevention 2.Recycling and nonhazardous waste management 3. Energy conservation - CO2 emissions reduction 4. Reduce perfluorocompound emissions 5. Develop products - provide improvements in energy efficiency and/or reduced energy consumption 6. Develop and manufacture products that use recycled materials 7. Develop products which minimize environmental impacts by selecting environmentally preferred materials and finishes. 8. Reduce VOC emissions and solid waste generation during the manufacturing 9. PELM Landfill Use Minimization

9. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary Optimize Materials life cycles OUTLINED PROGRAMS: l Environmental Conscious Products l Energy Saving l Product End of Life Mamagement - Product take back

10. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary Environmental Conscious Products (ECP)

11. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary To meet Policy objectives, IBM has established its Environmental Conscious Products (ECP) program in 1991 in order to development of products ( IBM manufactures or sell) ä with improved energy efficiency, ä products that incorporate recycled content and ä products that can be recycled and disposed of safely. Established standards / Engineering specification: IBM Environmental Requirements for Materials, Parts and Products l prohibited hazardous materials in products ( asbestos, polychlorinated biphenyl's (PCBs), ozone depleting solvents) l restricted potentially hazardous materials ( lead, chromium, cadmium, mercury in non-critical application: plastic housing, paints, packaging) Product Design to Facilitate Reuse and Recycling

12. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary n Continually Assess and Identify Opportunities to Improve Environmental Attributes of IBM's Products è Make environmental and business sense è Address applicable requirements è Meet customer needs è Maintain competitiveness n Plan and Execute è Proactive è Cost effective / efficient è Consistent with strategy of integrating ECP in business è Maintain credibility and leadership Ongoing Focus

13. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary l Lead (Pb)-Reduction l Global Inventory of Product End-of-life Management Activities and IBM Metric Update l Implementation of Recycled Resin Metric l ECP Information Needs / Product Environmental Profile l Global ECP Skills Assessment 2002 ECP Focus Items - Top Five

14. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary Energy Program

15. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary IBM Energy Program 1. : Energy conservation ( YtoY: 4%) IBM Energy Program 2. : Product with energy efficiency "responsible use of energy throughout our business" l IBM Corporate Instruction about Energy Management l Nominated Energy Manager for major locations l Signed Energy Master Plan (Major Locations) l Quarterly (M&D) / Semiannually reports l Energy efficient design for large projects l Energy primary focus for internal audits l Energy significant aspect for ISO 14001 l Promotion through voluntary partnerships l Yearly target setting by Corporation l Target to be met by location l Part of facility management contracts

16. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary Optimization of pumps in location - 13.537 kWh Set-point optimization - 80.367 kWh Lighting- 40.498 kWh (cost ~ 700 ¼ ) Air conditioning- 597.945 kWh (cost ~20 000 ¼)(Savings ~38 000 ¼) Non-territory workplace (2003 vs 1999) - 5.144.535 kWh Energy-Saving Projects (examples)

17. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary Objective:. Develop products that will provide improvements in energy efficiency and/or reduced energy consumption ENERGY STAR target is applicable to Personal Computers, monitors, desktop printers and multifunctional devices (MFD) Qualify 100% of new models introduced each year to ENERGY STAR criteria. "Generation to Generation" energy efficiency improvement and/or reduced energy consumption target is applicable to servers (z-, p-, i-, x-Series), workstations, retail terminals, storage subsystems and tape/optics/CSP, PCs, and monitors. Decrease operating power consumption per unit of work (functional unit defined by operating unit) versus previous generation products for those products with a valid upgrade path; Decrease power saving mode consumption (watts) for those products having power management capabilities and a valid upgrade path; Decrease the lowest power consumption or off-mode (watts), while being connected to a main power source (plugged into wall outlet). Laptop computers may use AC adapter values. Ultimate goal is 1 watt or less forapplicable products for which no product safety requirements are jeopardized. ENERGY STAR PROGRAM

18. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary 2001, 2002 E NERGY S TAR Performance IBM Achieved 100% for new product introductions in 2001 and in 2002 meeting ENERGY STAR criteria. Model/Configurations offered in 2001 include:  Personal computers - 399 total 231 Desktop 168 ThinkPad  15 Monitors  41 Printers (applicable)

19. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary Examples: Monitors CRT Improvements I Inf I I Examples: Printer Improvements (printer desktop models)

20. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary Canada OE-2001 Taiwan OE - 1999 Australia OE -1996 New Zealand OE - 1997 EU OE -2000 USA OE 1993 ENERGY STAR GLOBALIZATION Office Equipment (OE) Japan (OE -1995)

21. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary Product takeback n Resale of machines "as-is" n Resale of refurbished machines n Demanufacturing n Part recovery n Part sales n Part reuse n Materials recycling n Incineration w/energy recovery n Incineration as treatment n Landfill for disposal

22. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary IBM's experience & vision on takeback and recycling systems IBM’s Product End- of- Life / Asset Recovery: l Product- End- of- Life Management (PELM) activities since 1989 l IBM operates 9 major Asset Recovery Centers around the world ( 2 in Europe : Mainz, Montpelier) l 38 295 metric tons recycled till the end of 2003, only 2. 88% of this amount was sent to landfills by IBM. l Asset Recovery Centers share recycling and dismantling expertise. l Experiences and recommendations are also shared with IBM product development teams to impact the design of new products.

23. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary Present IBM’s system - B2B Business to Business (B2B) offers in place, and a part of the internal procedure l Sources of EOL Equipment: l End- of- lease equipment, l Warranty replacements, l Trade- in machines, l IBM owned assets, l Customer product returns l EOL Processing Capabilities: l Return centers, l Refurbishment, l Secondary sales, l Parts recovery & reutilization, l Recycling of materials, l Environmental disposal More information about product recycling programs for consumers, small businesses & enterprises at http:// www. ibm. com/ ibm/ environment/ products/

24. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary Present IBM’s Systems – B2C Examples of IBM’s participation to Business to Consumer "B2C" programs, and various types of Financing models n Belgium – Customer pays a visible advance disposal fee, based on product category n Switzerland – Customer pays a visible advanced disposal fee at time of purchase; fees based upon product price n Norway & Sweden & Nederlands - IBM pays fee based on market share of total weight of products placed on market during previous year n Taiwan - IBM pays fees directly based upon product category;prices of products uplifted to include fee; fees invisible to customer n Canada, Denmark, France, UK & US - Last owner pays EOL fee n Germany - Last owner pays transport; IBM pays processing IBM’s Strategy for B2C l Collective systems where costs can be shared among a large number of manufacturers are preferred. l Separate and / or independently funded takeback system for IT products l Collective financing systems based on current share - Determination of current share based on product unit sales by category or product weight l Systems based on "Generation Contract" where current Product Takeback costs are financed with revenue from current sales. l Use of visible fees to break out cost of recycling

25. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary PELM Landfill Metric Results

26. NATO Advance Research Workshop "Life Cycle Energy and Environmental Implications of Information Technology September 1-3, 2003. Budapest, Hungary Thank you Any question?