'Purpose-Driven Transformation' and IBM's Culture of Service

IBM’s 2014 Corporate Responsibility Report talks about how “purpose-driven transformation” embraces a culture of service that dates to the company’s founding more than 100 years ago. This includes working to improve education, revitalize cities, address the challenges of economic growth, respond to disasters, and develop sustainable strategies for energy use and environmental protection.

The company makes a very valid point: Its long existence “speaks to the sustainability" of its business practices and to its "ability to transform [itself] as markets and industries change.” IBM employs nearly 400,000 people, does business in more than 170 countries and has a supply chain of more than 18,000 suppliers.

Such a huge and complex operation means that its definition of corporate responsibility includes environmen­tal responsibility; social responsibility to its workforce, clients and business partners; innovation to address critical societal needs in the communities in which it operates; and “a culture of ethics and integrity — guided by a rigorous system of corporate governance — that promotes transparency on a global basis.”

IBM’s responsibility portfolio is broad and innovative:

• The company collaborates with a group of entities in efforts to improve population health. Dr. Kyu Rhee represents IBM on the board of the Robert Wood Johnson Foundation and has worked closely with the foundation to build a “multi-stakeholder collaboration that focuses on public health in the communities where we live and work.”


• IBM continued its collaboration and partnership with The Nature Conservancy (TNC) in several ways last year, including partnering with it to develop and refine a technology system aimed at helping to preserve the Amazon rainforest.


• IBM’s World Community Grid “played an essential role in the Chiba Cancer Center’s (Japan) breakthrough in childhood cancer research.”


• Through more than 500 IBM Impact Grants, IBM delivered service capabilities to nonprofit organizations around the world, an “effort to identify, engage and overcome thousands of discreet global challenges, while empowering large and small organizations with essential insights and expertise to serve their beneficiaries better.”


• The IBM Smarter Cities Challenge achieved results in cities in Australia (improving infrastructure and its effectiveness), Ireland (integrating municipally owned solar energy into the existing power grid), Mexico (planning for economic development), and the United States (reversing neighborhood decline and increasing tax revenue).

Energy conservation

Last year, IBM’s energy conservation projects delivered savings equal to 6.7 percent of the company’s total energy use, surpassing its annual goal of 3.5 percent. “These projects saved and avoided the consumption of 325,500 megawatt-hours of electricity and 267,200 million British thermal units (MMBtu) of fuel oil and natural gas, avoiding 142,000 metric tons of carbon dioxide (CO2) emissions,” the report reads. Conservation measures in 2014 also saved $37.4 million in energy expenses; total savings amount to $550 million since 1990.

In February 2015, IBM established a new goal to procure 20 percent of its annual electricity consumption from renewable sources by 2020. To achieve this goal, the company plans to contract for over 800,000 MWh per year of renewable electricity — enough to power a city of 100,000 people.

Also in February, IBM established its “third-generation” goal to reduce CO2 emissions associated with its energy consumption by 35 percent by year-end 2020 against a base year of 2005, adjusted for acquisitions and divestitures.

Supply chain

IBM buys from suppliers in nearly 100 countries, with global purchases totaling nearly $3 billion in 2014. IBM says in the report that it works with suppliers to “encourage them to achieve improvements within their operations and to cascade this mindset throughout their upstream supply chain, across various aspects of corporate responsibility.” It requires suppliers to implement and sustain a Social and Environ­mental Management System, to embrace the elements of the Electronic Industry Citizenship Coalition (EICC) Code of Conduct, to set voluntary environmental performance goals, to measure performance, and to report publicly in order to increase the transparency of the IBM supply chain.

In 2014, IBM continued a 10-year assessment of supply chain activities by collaborating with suppliers on 107 full-scope audits and 69 re-audits in 21 countries. Also, IBM and other members of the Conflict-Free Sourcing Initiative (CFSI) made “significant progress” toward achieving a supply chain with socially responsible sources of tin, tantalum, tungsten and gold.

The 114-page report illustrates a comprehensive and refreshing commitment to people and the planet; it makes one look at Big Blue in a different way.

Image: CeBIT 2011 - IBM Logo by Patrick via Flickr CC