Climate and energy

Our planet’s climate is changing, and greenhouse gases (GHG)¹ are the main culprit. The IPCC Fourth Assessment Report, published in 2007, shows that unmitigated climate change would likely trigger a range of environmental problems that would impact agriculture, natural habitats and many communities in low-lying coastal areas. The Stern Review on the Economics of Climate Change, published in 2006, also finds that the potential costs of responding and adapting to unmitigated climate change could rise up to between 5 percent and 20 percent of global gross domestic product (GDP) each year, putting global economic growth and development at risk. The report also estimates mitigating climate change would cost around 1 percent of global GDP each year.

Our business could be impacted by increased natural disasters attributed to climate change. For example, power shortages and blackouts could interrupt our operations or those of our suppliers, distributors and customers.

But we believe climate change also presents significant opportunities for HP. Rising energy prices, growing concerns about energy security and stricter regulations on consumption are heightening demand for energy-efficient and low-carbon products and services.

We are responding with a comprehensive strategy to minimize the impact of climate change associated with our operations and supply chain while innovating products and solutions for an energy- and carbon-constrained world. Our strategy includes four areas of emphasis:

• Cutting GHG emissions from our internal operations
• Reducing GHG emissions associated with our products and services throughout their life cycles
• Innovating to reduce GHG emissions in other parts of the economy
• Collaborating with others to combat climate change and influence public policy to devise and implement an effective response

	Taking action

Reducing energy use in our operations is important to our climate and energy strategy. Over the past year, we made good progress in our companywide initiative to consolidate HP facilities and install energy-efficient technologies. Our goal is to reduce energy consumption and the resulting GHG emissions from HP-owned and HP-leased facilities worldwide to 16 percent below 2005 levels, by 2010.²

Our products represent our greatest energy impact, well exceeding our operations (see Overview of climate impact graphic). We estimate the energy consumed by the products we sell in one year could be up to an order of magnitude greater than the energy we use in our internal operations annually.

The design stage offers the best opportunity to increase a product’s energy efficiency, a focus that has been core to our Design for Environment program since its inception in 1992 (see Product innovation). By adding energy-saving features to our products and services, we are helping customers reduce their GHG emissions and save money. We see the most potential to decrease product energy use through advanced power management and more efficient chipsets, power supplies and data center cooling. Last year, we set a goal to reduce the energy consumption of HP operations and products sold each year and their associated carbon dioxide equivalent (CO₂e) emissions to 20 percent below 2005 levels by 2010. We nearly met this goal by the end of October 2007—three years ahead of schedule—and have increased the target to 25 percent below 2005 levels (see Goals).

We are making strides in reducing the impact of product transport, as well. Where practicable, we are switching to more energy-efficient modes of transport, such as from air to ocean and road to rail. We are also increasing the number of products that can be loaded per pallet and utilizing lighter plastic pallets for shipping.

We are also working closely with our suppliers to quantify the energy they consume in manufacturing our products and the associated GHG emissions (see Supply chain — Approach). We estimate these GHG emissions are on the same order of magnitude as the emissions associated with the energy used by our products during customer use.

Additionally, HP is pursuing business opportunities to create new IT solutions that can help minimize the release of GHGs into the atmosphere. We are innovating to reduce the GHG emissions of existing products and services, substitute carbon-intensive activities with low-carbon alternatives and help to facilitate the world’s transition to a low-carbon economy.

Above all, we believe successfully addressing climate change requires broad collaboration between industries, governments and non-governmental organizations, as well as action by individual companies and consumers. HP participates in several energy standards and public policy initiatives and supports scientific research on climate change through our philanthropic investments. This broader approach enables us to amplify the impact of our efforts far beyond our own business.

¹ Throughout this report, “greenhouse gas” or “GHG” refers to all greenhouse gases emitted by human activities, and “CO₂e” refers to “carbon dioxide equivalent,” the unit used to measure greenhouse gases. CO₂ is the main, but not the only, man-made greenhouse gas.
² HP has revised the baseline year of our operations energy goal to 2005 from 2006 to align with our other energy goals. This is not a change in substance of the goal since we remain committed to the same 2010 energy use target; it is only a change in the baseline year. As HP operations energy use was approximately 1% higher in 2005 compared to 2006, this increases the goal’s percentage reduction to 16% below 2005 by 2010
³ Emissions from manufacturing vary widely by type of product.
⁴ According the the U.S. Environmental Protection Agency's WARM Tool.