1. Present three strong arguments that IBM might have used to justify the start of its sustainability programs in the 1970s.

2. What major goals has IBM achieved in environmental stewardship?

3. How might IBM leverage its leadership in sustainability to maintain its competitiveness in the IT market?

During the 1970s, IBM produced mainframe computers, adding machines, typewriters, and telephone routing systems—much of the advanced information technology of the time. The company was the one of the largest corporations in the world and ranked seventh in the 1976 Fortune 500 list of largest U.S. corporations.45 However, IBM’s component manufacturing processes produced large amounts of benzene-based materials that are carcinogenic. In an effort to take the lead in corporate responsibility, IBM established one of the first environmental programs of its kind in 1971.

The company implemented a three-pronged program that attempted to track waste from creation to disposal, to reduce IBM’s reliance on toxic chemicals, and to reduce the amount of toxic waste released during the manufacturing process. IBM incrementally reduced toxic waste by 220,500 tons from 1987 to 2011, a dramatic achievement. IBM has been able to accomplish this, in part, by recycling 44 percent of the hazardous chemicals used in its manufacturing processes. The company has also changed manufacturing processes to eliminate or reduce the use of hazardous materials.46

Throughout the late twentieth century, IBM was an industry leader in its efforts to address a variety of environmental issues. For example, in the 1980s, scientists noticed a hole in the ozone layer of the stratosphere over Antarctica that protects the earth from harmful ultraviolet radiation. In response, IBM worked to reduce its use of ozone-depleting chemicals, such as chlorofluorocarbons, and in 1989, IBM led the IT world in its reduction of such chemicals. Today, the company has expanded its initiative beyond toxic waste management. Its programs now seek to reduce energy use, conserve water resources, create energy efficient products, spearhead safety in the use of nanotechnology, and combat climate change. IBM has also focused on the use of environmentally preferable substances and materials, and it continues to work to reduce or eliminate its reliance on heavy metals and carcinogens. The company reduced greenhouse gas emissions in 2011 by 3.2 percent.47

IBM works with the International Organization for Standardization (ISO) to create international standards for toxic and nontoxic waste reduction, water purification, efficient energy utilization, and waste emissions. In many cases, IBM helped ISO to develop a specific standard and then became the first company to demonstrate compliance with that standard. In 2011, IBM became the first corporation to meet ISO standards on energy management systems. The practice of meeting sustainability standards helps IBM maintain market share because the European Union, the United States, and other countries often give preference in awarding contracts to companies that have ISO certification. Maintaining market share is more challenging for IBM than it was in the company’s early days because many companies now compete with IBM. Samsung, Hewlett- Packard, Nippon Telephone and Telegraph, Apple, Dell, and other companies have crowded the market. By 2012, IBM had dropped to 19 on the Fortune 500 list.48

Leveraging ISO certification helps IBM in its efforts to maintain market share and increase its revenue. In fact, the company has found that corporate responsibility has given it a better bottom line. During 2011, IBM spent $114.5 million on its environmental initiatives. During the same period, savings from environmental policies totaled at least $139 million.49 Company reports indicate that in each of the past 20 years, the savings from its sustainability and environmental stewardship programs have exceeded the costs.

IBM also has an expansive community and corporate citizenship program. For instance, the company has a program to match employees with community service needs. Over 220,000 IBM employees and retirees have participated in this volunteer program in areas such as education, economic development, health care, disaster relief, and environmental programs. IBM also provides employees to serve as teachers for inner city schools throughout the world. The company continues to pay its employees as they work in the schools. Finally, the company utilizes its technology in cities worldwide to help struggling governments find solutions to problems with traffic, emergency services, and infrastructure.50

As a company, IBM has set up a steering committee and working group to draft goals and implement CSR strategies. IBM built an electronic meeting platform called Jams, which facilitates online brainstorming and engages a wide range of stakeholders. Since 2001, this platform has not only facilitated the collaboration of 300,000 IBM employees from all over the world, but it has also brought thousands of people from government agencies, nonprofits, corporations, and educational institutions together to identify and address the world’s greatest challenges.51 IBM has been a front-runner in environmental stewardship, and the IT giant has set challenging goals for itself in other areas of CSR.