HP has long recognized the importance of energy efficiency in our own operations and in product performance. For the past three years, we have expanded this work to include suppliers’ energy use. HP became the first major information technology (IT) company to publish aggregated supply chain greenhouse gas (GHG) emissions in 2008, and we have continued working with suppliers and industry bodies to improve energy management within our supplier base.
HP’s strategy is to encourage transparency, accountability, and performance improvement throughout our supply chain. We want suppliers to manage energy as effectively as we do—setting targets, disclosing their performance, and engaging their own suppliers. Improving energy efficiency and increasing the use of renewable energy will help reduce their operating costs and GHG emissions.
China energy efficiency program
In 2010, we became the only information and communications technology (ICT) company to join a year-long pilot program engaging major suppliers in China, working with Business for Social Responsibility (BSR). The aim is to help suppliers reduce energy use, GHG emissions, and costs, as well as to measure their progress. Eight companies with 12 factories in China joined the initiative, which began by providing training in energy management. The program has helped the suppliers to develop energy improvement plans, and convenes the group every quarter to share best practices and meet with energy-efficiency experts and providers of technical and financial services. Based on the results, we will consider extending this program to more suppliers in China and other countries in the future.
Several suppliers, including Flextronics (see sidebar), already have strong energy improvement programs in place, and we are working with them to identify initiatives specific to HP product manufacture.
We are working to standardize tools and methodologies to facilitate consistent, reliable, and comparable reporting among suppliers and establish a robust process throughout HP’s supply chain.
HP co-chaired (until October 2010) the Environmental Sustainability Work Group of the Electronic Industry Citizenship Coalition, which has developed a tool for suppliers to report GHG emissions. In 2010, a revised version of the tool, which makes it easier for suppliers to respond while maintaining a high quality of information, helped to significantly increase the number of participants. This year, 251 suppliers responded to the Electronic Industry Citizenship Coalition request for information—more than three times the number in 2009.
HP was also a member of a working group sponsored by the World Business Council for Sustainable Development and World Resources Institute to develop a GHG reporting protocol for supply chain emissions, which fall under the category of Scope 3 emissions. The GHG Protocol Scope 3 is expected to be published in Spring 2011.
During the last three years, we have increased the level of engagement of first-tier suppliers, and have seen improvements in reported emissions and an increase in the number of suppliers disclosing reduction goals. Aggregate estimated emissions in 2009 (the most recent year data are available, see table) were 3.5 million tonnes of carbon dioxide equivalent (CO2e). This is the same as we reported for 2007, despite being attributable to a higher proportion of our supplier spend, and it is also a 4% increase in absolute dollar spend covered by the data. A growing number of suppliers (representing more than three-quarters of our supplier spend in 2009) have set performance goals. Although these vary in scope and timeframe, typical targets equate to a 2–3% reduction per year in absolute emissions. In addition, more of our first-tier suppliers are estimating their suppliers’ emissions.
|Coverage [% of first-tier supplier spend captured]*||81%
|Aggregate first-tier emissions [tonnes CO2e]
|% of supplier spend with reduction goals
|% of supplier spend of first-tier estimating GHG emissions of their suppliers (HP's second-tier suppliers)
- * Percentage of first-tier spend captured refers to the percentage of first-tier suppliers for manufacturing, material, and component spend only. Emissions are estimated based on suppliers' dollar volume of HP business compared with their total revenue. The majority of these companies report on a calendar year basis, with some exceptions.