Greening IBM's Supply Chain

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While the Senate labors over climate change legislation, corporations including IBM and Wal-Mart are attempting to make sense of what it actually means to retool for a more energy-efficient economy. That starts with an understanding of how a product's carbon emissions can be traced through an often lengthy supply chain.

IBM told the New York Times that it will start requiring its network of 28,000 suppliers to install management systems to track data on energy use, greenhouse gas emissions, waste, and recycling. Subcontactors must do the same if their products or services make up a significant portion of IBM's supply chain.  Additionally, the company is asking that suppliers establish specific environmental goals and publicly disclose results.

Wayne Balta, IBM's VP of corporate environmental affairs and public safety, told the company's Smarter Planet blog that IBM's immense purchasing power significantly impacts environmental policies in the 90 countries it sources from. He said the company began working with suppliers in environmental management as early as the 1970s.

While IBM is not imposing specific numerical targets for suppliers, it is attempting to institutionalize data-gathering systems. The system helps "suppliers build their own capacity in a way that's not only good for the environment but their business," Balta told the Times. "It's about creating a system that works regardless of who is in leadership and what's in green vogue."

IBM's announcement comes after Wal-Mart's decision in February to require its more than 100,000 suppliers to answer a questionnaire about their carbon footprints. This marks the first steps in an initiative to get suppliers to cut greenhouse gas emissions, save energy, and reduce water consumption. According to Wal-Mart CEO Mike Duke, this would amount to a reduction of 20 million metric tons of greenhouse gas emissions by the end of 2015--one-and-a-half times the company's project carbon footprint growth over the next five years. Wal-Mart, long the bane of environmentalists and corporate social responsibility activists, has been attempting to change its image with initiatives like a supplier packaging scorecard and big moves into the organic foods market.

Does IBM's initiative have a slight whiff of corporate greenwashing? As the environmental blog Treehugger notes, IBM's are just "baby steps...no dates, and no numbers, means this could be simply a lot of lip service and not much action."

John Paterson, IBM's vice president for global supply and chief procurement officer, has already acknowledged that the biggest challenge will be working with suppliers in emerging markets like China, Brazil, and India, where sustainability is not as big an issue and where IBM spends a third of its supply chain budget. As Swedish furniture giant IKEA famously learned when its suppliers in India used child labor to make carpets, transparency is not always easy.

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