Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Culture
• Innovation
• Services Science
• Regulation Compliance
• Workforce Diversity
• Environmental Protection
• Corporate Governance
• Community Involvement
• Supply Chain Management
• Data Governance
• Product Stewardship
• Employee Well-being
• Human Rights

Environmental Achievements

• Reduced CO2 emissions by 65.8% since 1990 (35.4% due to energy conservation)
• Exceeded 4% corporate energy conservation goal, conserving approximately 7.2% of total energy use in 2003
• Reduced PFC emissions from semiconductor manufacturing by 40% worldwide (indexed to production against a base year of 1995) by August 2002
• Recycled 77% of nonhazardous waste in 2003
• Achieved 11% water savings rate (against a goal of 2%) at Microelectronics in 2003, saving more than 600,000 cubic meters of water
• Reduced total TRI chemical quantities worldwide by 86.3% since 1993

Social Achievements

• Spent $1.6 billion on goods and services from diverse-owned businesses in 2004
• Launched On Demand Community program to support employee volunteer efforts
• Contributed $142.8 million (market value) in equipment, technical services, and cash to nonprofits and educational institutions in 2003
• Implemented various employee well-being programs, including health promotion, stress management, and work/life balance initiatives
• Received numerous awards for diversity and inclusion initiatives

Governance Achievements

• Majority of board members independent since 1994
• Established a committee devoted exclusively to corporate governance
• Implemented premium-priced stock options for senior executives to align executive and shareholder interests
• Never failed a single one of its 670 audits since 1965

Climate Goals & Targets

Environmental Challenges

• Maintaining a balance between cost containment and revenue growth
• Improving collaboration across large multinational enterprises
• Addressing the growing volume of data for compliance purposes
• Integrating data across diverse enterprise technology systems
• Managing the evolving regulatory environment for compliance
• Addressing micro-inequities in the workplace for women
• Maintaining a culture of inclusion
• Addressing the challenges of globalization for women around the world
• Sustained top-level executive commitment to volunteerism
• Managing expectations for long-term community investment
• Addressing potential adverse health effects associated with chemicals in cleanrooms
• Reducing energy consumption and greenhouse gas emissions
• Ensuring compliance with environmental regulations and voluntary initiatives
• Managing the environmental responsibility of suppliers
• Increasing diversity in the supply chain

Mitigation Strategies

• Investing in people and creating a culture of innovation
• Promoting and rewarding collaborative behavior
• Implementing up-to-date records management policies and systems
• Building on standards-based technology for integration
• Developing and implementing comprehensive diversity and inclusion programs
• Creating the On Demand Community program
• Implementing a global environmental management system
• Conducting environmental evaluations of suppliers
• Establishing supplier conduct principles
• Implementing energy conservation programs
• Participating in voluntary performance initiatives and partnerships
• Implementing a comprehensive program to reduce lead in products
• Developing and implementing product end-of-life management programs
• Implementing a global crisis management team

Supply Chain Management

Supplier Audits: Audits conducted with first-tier suppliers in Mexico and other countries

Responsible Procurement

• Supplier Conduct Principles
• Electronic Industry Code of Conduct (EICoC)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Energy-efficient servers
• Products using recycled materials
• Products designed for recyclability

Awards & Recognition

• Numerous awards for environmental leadership, diversity and inclusion, and community involvement

Environmental Metrics

ESG Focus Areas

• Environmental Sustainability
• Space Use Efficiency
• Data Management

Environmental Achievements

• Reduced carbon emissions per workstation through space optimization and energy-efficient building design.
• Minimized environmental impact of outsourced FM services through practices like cleaning during office hours and use of non-polluting consumables.

Social Achievements

• Improved employee well-being and productivity through flexible work arrangements and mobile working technologies.
• Enhanced collaboration through high-speed connectivity and flexible workspace design.

Governance Achievements

• Implemented a property performance management system to track and manage sustainability data across 800 properties.

Climate Goals & Targets

Environmental Challenges

• Lack of detailed environmental data due to outsourced service delivery and inconsistent data management practices.
• Difficulty in aligning incentives between occupiers and FM providers to encourage sustainable practices.
• Need for effective data management to support sustainability-related decision-making and reporting.

Mitigation Strategies

• Developed a property performance management system to consolidate data from various sources.
• Advocated for FM contracts that fairly reward providers for taking on responsibility for sustainability.
• Proposed strategies for optimizing space use efficiency and promoting mobile working.

Supply Chain Management

Responsible Procurement

• Minimizing environmental impact of outsourced FM services

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Opportunities

• Reduced energy consumption through building design and technology

Environmental Metrics

Social Achievements

• In 2005, IBM became the first corporation to guarantee its employees’ genetic privacy.
• The way IBM develops leaders was ranked number one in the world by Fortune.
• IBM received widespread recognition for its diversity, work/life, environmental and collaboration policies and programs.
• In one example alone — our Centennial Celebration of Service — more than 300,000 IBMers performed more than 4 million hours of service across 120 countries.

Climate Goals & Targets

Environmental Challenges

• The global economic downturn
• The challenging credit environment
• Revenue declines in Japan and in the Public Sector
• Potential exposures in Portugal, Italy, Ireland, Greece and Spain due to the economic environment in Europe.

Mitigation Strategies

• Disciplined execution by more than 400,000 IBMers and the strategic repositioning of the company over the past decade.
• Shifting the business mix to higher-value areas such as services, software and integrated solutions.
• Acquiring over 120 companies since 2000.
• Implementing a consistent set of processes and standards worldwide to reduce inefficiencies and improve collaboration.
• Global integration to improve overall productivity and drive investment and expanding participation in the world’s fastest growing markets.
• Applying rigorous credit policies and analysis, and continuing to monitor the current economic environment, particularly in Europe.
• Increasing its allowance for credit losses.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Social Achievements

• Opened 144 new branch offices in growth markets in 2012.
• Increased its skill base in analytics by more than 8,100 experts over the past three years.
• Added nearly 9,500 sellers in key areas of industry expertise.

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Communities
• Employees
• Environment
• Supply Chain
• Public Policy

Environmental Achievements

• In 2014, IBM’s energy conservation projects globally delivered savings equal to 6.7% of its total energy use vs goal of 3.5%.
• In 2014, IBM procured 14.2% of its electricity consumption from renewable sources

Social Achievements

• Expanded and deepened efforts to help governments, nonprofits, educators and communities transform themselves by helping solve their toughest challenges.
• Investing in workforce through programs like Watson Ambassadors, Think 40, social business, and employee well-being initiatives.
• Focus on employee inclusion (LGBT workplace equality) and leadership development.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• EICC Code of Conduct is an integral part of Procurement strategy – Social responsibility: Labor, Health & Safety, Environmental, Ethics, and Management Systems – Robust supplier audit program
• Conflict Minerals program deployed following electronic industry standard practices

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced operational CO2 emissions by 42.9 percent against the 2005 baseline.
• Achieved 22.9 percent renewable electricity procurement, exceeding the goal.
• Improved server energy efficiency up to three times higher with POWER9 servers compared to POWER8.
• Recovered and recycled 87.8 percent of nonhazardous waste, surpassing the 75 percent goal.

Social Achievements

• P-TECH program reached nearly 120 schools, preparing over 75,000 students for new-collar jobs.
• Teacher Advisor with Watson registered over 10,000 users in its first seven months.
• Launched "Digital Nation Africa" initiative to build digital skills.
• Veterans Employment Accelerator Impact Grant program certified over 500 veterans in IBM software.

Governance Achievements

• 100 percent employee participation in Business Conduct Guidelines program.
• Expanded participation in EU Cloud Code of Conduct to cover 24 additional services.
• Launched Principles of Trust and Transparency for data and AI.

Climate Goals & Targets

Environmental Challenges

• Increasing concerns over data handling, technology misuse, and AI's impact on jobs.
• Addressing bias in AI systems.
• Meeting evolving data privacy regulations (GDPR).

Mitigation Strategies

• Developed IBM’s Principles of Trust and Transparency.
• Investing in employee training and skills education.
• Implementing a global program to prepare for GDPR compliance.
• Actively working to establish industry standards for data safeguarding.

Supply Chain Management

Supplier Audits: 79 audits (45 full-scope, 34 re-audits) in 2017

Responsible Procurement

• RBA Code of Conduct requirement for first-tier suppliers.
• Supplier social and environmental management system requirement.
• Conflict minerals due diligence.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Energy efficiency improvements, renewable energy procurement.

Reporting Standards

Frameworks Used: GRI G4 Sustainability Reporting Guidelines

Certifications: ISO 14001, ISO 50001, OHSAS 18001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• POWER9-based servers, IBM z14 server, Storwize V7000 storage product.

Awards & Recognition

• Numerous awards listed in the report (see Performance Summary and Awards section).

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• On track to achieve a 40 percent reduction of carbon dioxide emissions associated with our own energy consumption by 2025
• Developed a breakthrough method of recycling polyethylene terephthalate (PET)

Social Achievements

• Achieved record diversity across all representation groups and best-in-class inclusion scores
• Substantially expanded our 21st-century apprenticeship program and P-TECH six-year high school education model in 2019
• Call for Code and Code and Response programs continue to scale, tapping the talents of developers to address some of society’s most intractable challenges

Governance Achievements

• Principles for Trust & Transparency have become the global ethical standard of digital responsibility

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Good Tech
• Social Justice
• Climate Change
• Data Privacy
• Ethical AI

Environmental Achievements

• Setting a new goal to reach net zero greenhouse gas emissions by 2030.

Social Achievements

• Launched several social justice initiatives including Emb(race), a program highlighting the experiences of Black IBMers, and a program increasing partnerships with historically Black colleges and universities (HBCUs).
• Created the position of SVP of Transformation and Culture, strengthening transparency around and commitment to fostering a culture of diversity and inclusion.
• CEO letter to the US Congress outlining policy proposals to advance racial equality and announcing that IBM has sunset its general-purpose facial recognition and analysis software products.
• Sponsorship of OneTen, a startup that will focus on training Black candidates to fill 1 million professional corporate roles over the next 10 years.
• Call for Code for Racial Justice—an activation of IBM’s ecosystem of partners, advocates and employees to develop open source projects focusing on Police & Judicial Reform and Accountability, Diverse Representation and Policy & Legislation Reform.
• Launch of Open P-TECH—a free digital education platform for workplace and digital skills including AI, cloud computing, cybersecurity and design thinking—and committed to 1,000 paid IBM internships for US P-TECH students.
• IBM Quantum Computing education partnership with HBCUs as part of a $100 million investment in developing a diverse and inclusive quantum workforce.
• IBM Policy Lab calls for a risk-based approach to AI regulation, resulting in the Vatican’s nomination of IBM as one of two primary signatories to the Rome Call for AI Ethics advocating a human-centered approach to AI.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• The COVID-19 pandemic and broader macroeconomic uncertainty.
• Client priorities shifted to maintaining operational stability, flexibility and preservation of cash.
• Clients moved to shorter term duration engagements and prioritized operational expenditures over capital expenditures.

Mitigation Strategies

• Took mitigation actions to preserve liquidity as well as strategic actions to optimize our capital structure.
• Re-focused Global Financing portfolio reducing external debt needs.
• Reduced total debt by $1.4 billion from prior year end and $11.5 billion since the second quarter of 2019.
• Continued to strengthen position as a hybrid cloud platform and AI company through strategic organic investments and acquisitions.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Sustainability
• Diversity and Inclusion
• STEM skills gap

Environmental Achievements

• Announced a goal of net-zero greenhouse gas emissions by 2030 across all operating countries.
• Launched the IBM Environmental Intelligence Suite.

Social Achievements

• Added a diversity modifier to the executive compensation program.
• Designated as a “Best Place to Work for LGBTQ+ Equality” with a 100% rating by the Human Rights Campaign Foundation.
• Committed to providing 30 million people with critical skills by 2030 through the IBM SkillsBuild program.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• IBM Environmental Intelligence Suite

Awards & Recognition

• Named the most just company in its industry by JUST Capital

Environmental Metrics

ESG Focus Areas

• Environment
• Ethics
• Education

Environmental Achievements

• Achieved a 63% reduction in greenhouse gas emissions against base year 2010

Social Achievements

• Announced a new program to train 1,000 suppliers in technology ethics by 2025
• Committed to training two million learners in AI by the end of 2026 to address the technology skills gap
• Maintained strong employee engagement, with more than eight out of ten employees feeling engaged at work for the third year in a row.
• Women make up more than one-third of our workforce

Governance Achievements

• Built powerful AI governance into our watsonx platform
• Developed quantum-safe cryptography to secure sensitive data
• Advocate for smart AI regulation

Climate Goals & Targets

Environmental Challenges

• Difficulty managing complex hybrid cloud environments for businesses deploying generative AI across multiple clouds
• Escalating labor and component costs
• Strong U.S. dollar

Mitigation Strategies

• Developed industry-leading hybrid cloud platform based on Red Hat OpenShift
• Productivity initiatives including digitally transforming business processes and scaling AI within IBM
• Hedging programs to defer the impact of currency fluctuations

Supply Chain Management

Responsible Procurement

• Program to train 1,000 suppliers in technology ethics by 2025

Climate-Related Risks & Opportunities