7/27/12 1:12 PM

IBM:	
  Green	
  or	
  Greenwashed?	
  By	
  Marla	
  Goodman	
  An Exploration and Analysis of IBM’s Sustainability Efforts
	
  	
  	
  	
  	
  	
  

IBM: Green or GreenwashedMarla Goodman

2

Introduction
IBM (International Business Machines) is a well-known company with a wide breadth ofservices and products. Some of these include information management, software systems,
security services, and IT outsourcing. With a net income of 14.8 billion dollars and 426,751
employees across the world1, IBM is truly an international player in the world of information
technology.

Over the past forty years, IBM has made progressive efforts to become a moresustainable company across a variety of different platforms. For example, in 1967 IBM issued a
corporate directive concerning pollution control and wastewater treatment2. This in fact predates
federal action in this area- the U.S. Federal Water Pollution Control Act was amended withsimilar requirements in 1972. However, though this action taken by IBM may appear candid on
the surface, it is essential to investigate these actions in order to validate that IBM is in fact held
accountable for their claims concerning sustainability. It is effortless to make statements
concerning one’s commitment to corporate social responsibility- it is much more difficult to
substantiate these claims with credible third party auditing and verifiable evidence.

This paper seeks to accomplish several tasks. First, I will explore why IBM has chosen to
portray itself as a socially conscious, sustainable corporation. I will also discuss which audience
they are trying to illustrate this message to and what costs they undertake in order to do this (andwhy they feel that these costs are worth it). Second, I will look at how IBM portrays itself to the1

http://www.ibm.com/ibm/us/en/?lnk=ftai

2“40 Years of IBM Environmental Leadership” ReportIBM: Green or GreenwashedMarla Goodman

3

public through its several different self-reporting mechanisms, and look at the goals IBM sets foritself. Third, I will look at the different third-party groups that have monitored IBM and whether
they have affirmed or condemned IBM’s efforts and how reliable these statements are. I will thenexplore IBM’s past environmental missteps and how IBM dealt with the situation. I will also
discuss a hypothetical environmental dilemma and explore how this possible situation would
play out and how IBM could mitigate it. I will then end with my own conclusion about how
successful I think IBM is at meeting the requirements that they place upon themselves comparedwith similar companies, and whether they could improve/further these goals.

Why Be Green? Reasoning Behind Green Standards
It is a commonly assumed that being environmentally responsible is a worthwhile
endeavor that all companies, large and small, should make one of their highest priorities.
However, if this assumption were true, we would live in a completely (or at least greatly)sustainable world. In reality, companies like IBM have a lot to gain in the short run -in terms oftangible profit-from taking shortcuts that may lead to environmental harm. It is therefore
essential to explore why IBM has chosen to portray itself as a green company and what concretegain they are making from this decision.

IBM has put a great deal of effort into branding itself as a green, sustainable company.
On their website, they have an entire section named “Let’s Build a Smarter Planet” where they
explore how their technology is actively improving our ecosystem and environment. This section
is divided into several different focuses including water, energy, and sustainability3.

3

http://www.ibm.com/us/en/

IBM: Green or GreenwashedMarla Goodman

4

Furthermore, IBM has published several environmental and corporate social responsibility
reports including: “40 Years of IBM Environmental Leadership”, “Attaining Sustainable Growththrough Corporate Social Responsibility”, “IBM and the Environment Report”, and “IBM
Corporate Responsibility Summary”. These reports range from sixteen to sixty two pages inlength and describe IBM’s concerns, practices, and goals in great detail. Clearly, IBM has put agreat deal of time, effort, and funds into presenting themselves as a green company. According toIBM’s Corporate Social Responsibility Report, the goal of IBM’s sustainable practices is tocreate a better world in terms of protecting our environment and bettering humanity as a whole.
A statement at the beginning of the report reads, “Corporations only prosper to the extent thatthey satisfy human needs. Profit is only the scoring system. The end is better living for us all”.4

However, if one delves deeper into IBM’s resources, this overarching goal becomes more
complex. Some of the further reasons listed for being sustainable (according to IBM) include
competitive differentiation, regulatory compliance, and shareholder expectations (as seen in thepie-chart on the following page).5 In other words, one could say that IBM is an agent of the U.S.
government, shareholders, and customers (both big businesses and individual consumers). This is
key to understanding IBM’s goals because now that we have identified their target audience, we
can explore their primary strategy. First, let’s look at the U.S. government. IBM works closelywith the government in the area of sustainability focusing on issues such as water management,
transportation, and carbon footprint.6 This relationship is very lucrative for IBM; IBM therefore
has the incentive to follow government regulations in order to stay in their good favor. In other

4

IBM Corporate Social Responsibility Report, 20105/www.ibm.com/httpsmarter planet/us/en/green_and_sustainability/overview/index.html?re=CS1

6

http://www-935.ibm.com/services/us/gbs/industries/government/IBM: Green or GreenwashedMarla Goodman

5

words, IBM is following environmental regulations for their own benefit since the government isa valuable costumer.

This line of reasoning is also applicable to IBM’s other important clients. IBM’s
shareholders are very important to IBM- these shareholders have the right to sell their shares orlobby for changes in company management if they are unhappy with how the company is being
run. In order to prevent this situation (which could lead to significant financial losses) fromoccurring, IBM has the incentive to take the shareholders’points of view (in terms of being environmentallyfriendly) into account. Lastly, IBM offers solutions,
technology, and services to customers as large as banks
and automotive companies and as small as individual
customers. All of these groups care about theenvironment to some extent- and it ultimately does notmatter if these groups are only interested in saving
money, appearing to be sustainable, or if they actually care about protecting the environment.
Regardless of these reasons, IBM has the incentive to offer more sustainable and greener
solutions. In fact, some companies are able to meet all of these goals, which is something that
IBM mentions. For example, on their website IBM states that one shipping company managed tosimultaneously lower carbon emission by fifteen percent and cut costs by twenty-three percent. 7
Clearly, it is apparent that IBM’s main reasons for being sustainable are financial gain (orpreventing financial loss), since by keeping the government, shareholders, and customers happy,

7

http://www.ibm.com/smarterplanet/us/en/green_and_sustainability/overview/index.html?re=CS1

IBM: Green or GreenwashedMarla Goodman

6

IBM can continue being a major supplier. Ultimately, these efforts are worthwhile for IBM
because, in the end, it’s all about the money.

Case studies: Criteria for Evaluation
In the following sections, I will explore several of IBM’s initiatives and the goals thatthey have (according to their own self-reporting mechanism) succeeded in. However, since IBM
has the incentive to portray itself in a positive light, I further investigate the third-party reportinggroups and whether these groups’ evaluations are credible. There are several different types ofthird-party organizations including private auditors, local governmental organizations (nationaland state), and global organizations. There are a variety of different criteria I use to judge
whether these groups and their claims are credible. For example, I try to ascertain whether thegroup is truly an independent, third party organization or if they have a relationship with IBM
that could positively skew their analysis (for example, if the chairs of the organization also workfor IBM). I also consider where the audits are being made- are they done on a plethora of randombuildings/ factories, or do they only concentrate on one specific geographic area? This issignificant because if the audits are only done in one area (for example, the U.S.), geographic
areas that may be less inclined to follow IBM’s environmental guidelines may not be represented
in IBM’s data. I also explore the results of these audits. For instance, if the results are publishedpublicly on the auditors or IBM’s website, this would be very credible because the results areopen to the public. However, if the results are only accessible to a limited group (such as only to
IBM leaders), then the findings are much less credible since IBM has the incentive to obfuscate
negative findings and only highlight the positive aspects of the audit. For example, even if IBM

IBM: Green or GreenwashedMarla Goodman

7

passed an audit done by a credible third party, if the requirements of passing only consisted of
IBM meeting its environmental goals by seventy percent, then this audit would not accurately
CO2 Emissions Reduction (Metric Tons x 1,000)
represent a one-hundred percent success rate (and the general public would have no way ofknowing this since the criteria and results of the audit are not available for public consumption).

Case Study One: CO2 Emissions Goals
IBM details several different
achievements in its Environment
Report. One of these is the elevenpoint five percent reduction in its
emissions compared to 2009.8 By theend of 2010, IBM had reduced its
emissions by a total of sixteen point seven percent. According to IBM’s report, this emissions
cutting goal was a clear achievement; in fact, it was higher than their initial reduction goal of
only twelve percent. IBM relies on three different third party mechanisms to verify their CO2
emissions accomplishments. These groups are the Financial Industry Regulatory Authority(FINRA), the U.S. Environmental Protection Agency, and the ISO 14001 standard.

8

IBM Environmental Report, 2010

IBM: Green or GreenwashedMarla Goodman

8

FINRA
FINRA is a non-governmental group that offers auditing services for businesses in order
to insure investor protection and market integrity. The IBM audit by FINRA was done under
IBM’s participation in the Chicago Climate exchange that takes place in Canada, the UnitedStates, and Mexico. The audit involved selecting a sample of IBM’s inventory data points in theareas of facility electricity, fuel, and PFC usage. After these samples were selected FINRA
reviewed the billing data in order to ensure that it matched the sampled inventory data. The data
was drawn from facilities in the above regions.9 This group seems credible- they are a private
third party organization-IBM employees have not served on the FINRA board of governors, andthey have not served as chairmen. 10 This implies that the audits made by FINRA are not tainted
by IBM’s objectives- namely, passing the audit with flying colors.

Though FINRA appears to be a truly independent third-party group, there are other areasof concern. For example, the audits are only done in Mexico, the United States, and Canada. This
does not seem credible in terms of IBM’s total CO2 emissions; even if the audits in these three
countries were successful; IBM operates in a variety of different countries and regions, including
less developed countries. 11 Furthermore, many of IBM’s manufacturing facilities are not locatedin the United States, and the CO2 and other waste that these factories produce is not being
accounted for in this audit. In order to make these statements more credible IBM should allow
these audits to be more geographically robust by allowing samples to be taken from theirfacilities around the globe. Lastly, the results of FINRA’s audit are not available to the public.

9

http://www.finra.org/AboutFINRA/

10

http://www.finra.org/AboutFINRA/Leadership/11

http://www.ibm.com/planetwide/IBM: Green or GreenwashedMarla Goodman

9

Perhaps some of the information sampled in the audit was grossly inaccurate in comparison toIBM’s claims, or perhaps some facilities were rated very poorly in terms of CO2 emission.
Without access to FINRA’s detailed results, there is no way of knowing how individual areas
within the U.S., Mexico, and Canada are doing in terms of their CO2 emission. FINRA could
easily remedy this issue by publishing their results online in an accessible location.

EPA
The Environmental Protection Agency (EPA) is a federal agency that has the goal of
ensuring the health and safety of U.S. citizens by protecting the environment12. This
governmental institution oversaw IBM’s carbon emissions goals through the EPA Global
Climate Leaders Program. This program involves the nomination of companies who demonstrate
excellent environmental practices. Upon nomination, the EPA, the Association of Climate
Change Officers (ACCO), the Center for Climate and Energy Solutions (C2ES), and otherindependent experts in the field audit these companies. The EPA Climate Leadership Program isvery aware of the necessity of third-party verification; in fact, they even specify that third-party
verification is, “an essential component for evaluating and ensuring the veracity of the nominee’s
application, as well as the consistency and quality of the data submitted”13.

While this program initially appears to be reputable since it is an independent
government organization, there are several aspects of this group and the award mechanism thatneed to be discussed in further detail. For example, there is the issue of whether having

12

http://www.epa.gov/

13

http://www.epa.gov/climateleadership/awards/questions.html

IBM: Green or GreenwashedMarla Goodman

10

governmental organizations verify a business is a more or less effective method in comparison
with private auditing. While those who mistrust the government may favor private verification, I
am more inclined to trust governmental organizations like the EPA. One good example that
illustrates this belief if the Food and Drug Administration’s (FDA) method of ascertaining thesafety of drugs. After private companies research and produce a drug, the FDA tests the drug toinsure its safety before the drug goes on the market. Some individuals may mistrust this methodby arguing that the FDA is too closely connected to the drug companies and that these companies
can easily influence the FDA’s decisions. However, the counter-argument is that there is no
better or more methodical way to test the safety of drugs (at least not one that we haveencountered), and that if a drug was not FDA approved most people would not be willing to takeit. In other words, governmental auditing is one of the best, most impartial methods of auditing.

On the other hand, though the EPA appears to be a reliable third-party, there are several
other issues that need to be addressed. For instance, the EPA does not disclose who the “industry
experts” that they gather information from are. This raises doubt in the authenticity of this award
program since there is no way to ascertain whether these industry experts are related to IBM or
not. This is troubling because if the experts are, in fact, also employed or associated with IBM,then they have an incentive to misrepresent IBM in a positive light. In order to remedy this use
the EPA should publish its list of experts and specify these experts’ company affiliation.

Another important issue with this program is that awards are given based on thesustainability goals that IBM sets for itself in terms of carbon emission. Because of this, IBMmight be motivated to set easier, more attainable goals for itself in order to make meeting thesegoals more likely. Perhaps it might be more credible if the EPA sets CO2 emissions goals itself

IBM: Green or GreenwashedMarla Goodman

11

and judges all companies by one standard (or several different standards based on the relative
size of the companies being judged). For example, a goal could be set that all companies would
need to reduce their emissions by 10%. This would ensure that companies do not set lower goals
for themselves. Lastly, the EPA program is done on a yearly basis; once a company is recognized
as being sustainable, the company does not need to participate in the audit at a later date. This isa possible issue because even if a company reaches a high level of sustainability one year, there
is no guarantee that this company will continue to uphold this behavior. One possible solution tothis issue is that the EPA could re-audit the companies every three to five years to ensure that thecompany is still operating by its earlier standards.

ISO 14001
The International Standard Organization (ISO) is a non-governmental, globalorganization that sets international standards for both the public and the private sector. 14 The
ISO 14001 is one of these standards; it is voluntary and focuses specifically on environmental
performance including CO2 emissions. In 1997, IBM was the first company to earn a global
Environmental Management System standard. In order to achieve and continue to hold thiscertification, twenty of IBM’s sites and registered entities are audited annually on a samplingbasis.15

Though this group appears to a reliable third-party since organizations that cooperatewith the ISO are international organizations as opposed to private companies- there are several

14

http://www.iso.org/iso/home.htm

15

http://www.ibm.com/ibm/environment/iso14001/

IBM: Green or GreenwashedMarla Goodman

12

other issues that need to be analyzed in further detail.16 For example, even though IBM has
achieved a single global registration, this does not entail that all of IBM’s products are certified
under this standard. According to the ISO website the, “ISO 14001 registration does… include
IBM's management system for developing and manufacturing products with improved
environmental attributes, but it does not certify the resulting products nor is it productspecific”.17 This is extremely relevant because a great deal of IBM’s activities include theproduction of technical equipment, which implies that an entire sector of IBM’s activities may
not meet the ISO 14001 standard of sustainability. Furthermore, this certification does not cover
the companies that produce parts for IBM, and therefore these companies are not evenconsidered in the ISO 14001 standard. This is troubling because these sectors are the ones that
may be in most need of environmental auditing. Another important issue is the fact that IBM
does not require these supplier companies to uphold the environmental standards specific by theISO 14001. The only step that IBM has taken to solve this issue is to send a letter to its suppliers
encouraging them to uphold these standards.18 In my opinion, this is a very halfhearted andfeeble attempt to appear sustainable- IBM does not outline any strict requirements and there is noform of punishment if its suppliers fail to espouse these environmental standards. If IBM
enacted strict environmental rules and guidelines to its suppliers and allowed the ISO to audit
these groups as well as IBM’s facilities, then the ISO 14001 would be much more credible.
Lastly, the fact that the ISO only audits twenty sites is another source of disquiet; IBM has
hundreds of offices, factories, and third-party suppliers across the globe. Furthermore, there is no16

http://www.iso.org/iso/about/organizations_in_liaison.htm?filter=I17

http://www03.ibm.com/procurement/proweb.nsf/ContentDocsByTitle/United+States~13+Apr+98:+ISO

14001?OpenDocument&Parent=Supplier+letters18

http://www03.ibm.com/procurement/proweb.nsf/ContentDocsByTitle/United+States~13+Apr+98:+ISO

14001?OpenDocument&Parent=Supplier+letters

IBM: Green or GreenwashedMarla Goodman

13

information given on which sites are being audited. Perhaps only sites in the U.S. are being
audited, which would not be a very geographically robust audit. This issue could be easily solved
if the ISO published which sites it audited and what the results of those audits were.

Case Study Two: ENERGY STAR Qualified Products
Another significant program that IBM works with is ENERGY STAR. The
Environmental Protection Agency (EPA) and the Department of Energy (DOE) set up thisprogram and its purpose is creating labeling and energy efficiency requirements that companies
can choose to meet.19 Once ENERGY STAR verifies that a company has met this requirement,
they receive ENERGY STAR’s environmental certification. Specifically, these products must
meet, “minimum standards for power supply efficiency, idle power use or enablement ofprocessor level power management”.20 A variety of different servers have been awarded with
ENERGY STAR’s certification, however, it is necessary to explore this certification process ingreater detail to ascertain its credibility.

ENERGY STAR follows specificguidelines when developing environmental
specifications (as seen in the following
chart). 21These are based on ENERGYSTAR’s guiding goals which include:19

http://www.ibm.com/ibm/environment/products/energystar.shtml

20

http://www-03.ibm.com/systems/hardware/energy_star/21

http://www.energystar.gov/index.cfm?c=prod_development.prod_development_spec_revIBM: Green or GreenwashedMarla Goodman

14

nationwide energy saving realization, product performance enhancement with increased energy
efficiency, effective labeling that allows customers to differentiate products, as well as a variety
of other standards. While ENERGY STAR is a credible third-party (see the above discussion
about government institutions like the EPA and their credibility), it is important to further
explore their method of testing. ENERGY STAR laboratories must follow a specific procedure
as outlined in the, “Standard Operating Procedure for Certification of Products to ENERGYSTAR Specifications”.22 These specifications are created by the EPA, and specifically outline thedifferent testing standards that need to be met by appliances, office equipment, lights, fans, andother equipment (with ranging levels of technical complexity). Furthermore, the DOE provides
laboratories with test templates that can be used when testing a variety of different products
including air conditioners, faucets, and freezers. 23 However, even though laboratories contracted
by DOE are required to use these templates in their certification procedure, EPA laboratories are
not required to do so.

Overall, I believe this certification program is very credible, though there are several
improvements that can be made. Namely, the EPA and DOE could cooperate to a greater extent
by ensuring that both the EPA guidelines and DOE guidelines are used in both facilities. This
would ensure that all IBM products are measured by the same environmental standards. Anotherpossible solution would involve the EPA and DOE creating a joint set of guidelines that can beused across the board. This is significant because after further investigation, it appears that DOE
guidelines are more stringent in comparison with EPA guidelines. This is less than ideal because22

http://energystar.supportportal.com/link/portal/23002/23018/Article/33284/Does-EPA-have-data-reporting-requirements-for-laboratories-testing-products-for-purposes-of-ENERGY-STAR-qualificationor-verification-testing23

http://www1.eere.energy.gov/buildings/appliance_standards/standardized_templates_for_reporting.html

IBM: Green or GreenwashedMarla Goodman

15

it implies that some ENERGY STAR certified products might have been judged under morelenient policies, which indicates that some products are less sustainable than others. Either of thetwo solutions indicated above would adequately mitigate this problem.

IBM’s Environmental Missteps and Reporting
Though IBM has a very good history in terms of sustainability and environmental
awareness, IBM has made several errors in the form of accidental chemical releases.24 For
example, in 2010 fourteen separate releases were noted through IBM’s Environmental Incident
Reporting System (EIRS).
According to IBM’s 2010
Environmental Report, the“root of the cause wasinvestigated for all releases,
and corrective actions weretaken as appropriate…none of the releases were of a duration or concentration to cause long-term
environmental impact”.25 These releases included refrigerants, treated industrial wastewater,
antifreeze, fuel oil, and untreated wastewater. Furthermore, according to the report IBM received
a total of one hundred and sixteen agency visits worldwide and IBM was not fined for any
environmental misconduct. Also, over the past five years IBM has only been fined three times,
and the fine amount totaled to thirty-one thousand dollars (as seen in the chart above).

24

http://www.ibm.com/ibm/responsibility/report/2010/environment/audits-compliance.html

25

IBM Environmental Report 2010

IBM: Green or GreenwashedMarla Goodman

16

Though IBM’s self-reporting efforts are admirable, there are several different issues withthis method of auditing and reporting. First, IBM does not explain or even outline the procedures
involved in its EIRS system. For example, it is unclear whether individuals are encouraged toanonymously report environmental incidents, or if department leaders are only permitted to do
this. This is extremely relevant because if this reporting mechanism was public, then employees
may be discouraged form reporting potential environmental incidents for fear of punishment(such as demotion or being let go from the company). Furthermore, if only supervisors or
department leaders are given the privilege reporting these incidents, they may have the incentive
to obfuscate these issues which would lead to fewer incidents being reported.

Another potential problem with this form of reporting is IBM’s statement that the errors
leading to these accidental releases were solved. These statements are broad and cannot be taken
at face value, namely because no proof is given. The specific information related to these
releases is not available to the public- in fact, only a general description of the form of these
releases is given. There is no way of ascertaining how much of these hazardous items werereleased- this is relevant because while one cup of wastewater may not be very dangerous,
several thousand tons released into a stream would be extremely detrimental. Furthermore,though IBM has specified the types of hazardous waste that was released, there is no third-party
group that can confirm or deny these statements. This is extremely significant because it ispossible that IBM has only reported a fraction of its releases. Lastly, the statement that these
releases did not lead to any long-term impact is very vague and not very credible. First, it isunclear how IBM defines long-term; is long-term ten years or one thousand years? We have no
way of knowing since this information is not given. Also, there is no way to verify what sort ofeffect these releases led to. Perhaps the chemicals contaminated drinking water and led toIBM: Green or GreenwashedMarla Goodman

17

sickness in an area adjacent to one of IBM’s factories. IBM could make these statements much
more credible if it detailed why and where the releases occurred, specifically outlined what steps
were taken to solve this situation, and include a credible third-party statement certifying what
actions took place and what the exact environmental impact was.

Hypothetical Situation: How IBM Should Respond
Imagine that journalists have discovered that one of IBM’s suppliers, “Computercon”,(note, this is a fabricated company) uses extremely toxic chemicals in its production of servers inIndonesia. Though these servers are safe upon completion, the assembly method of the servers
causes the release of tons of toxic chemicals to be released into the environment and has caused
the destruction of a forest in Indonesia that supported a great deal of plant and animal
biodiversity. How would this situation play out, and what could IBM do in response?

Under this hypothetical situation, consumers could respond by boycotting IBM products
and publishing more information about IBM’s poor environmental performance. While this
could seriously hurt IBM’s reputation it would probably not cause any serious financial loss forIBM. This is due to the fact that IBM is such a ubiquitous service and product supplier, and somany of its technologies are currently being used by thousands of private and public companies
across the globe. While individual consumers could choose to purchase another form ofcomputer, it is simply not feasible for companies to immediately discontinue their use of IBM
products. In other words, the type of products and services that IBM provide are make it very
different from the Nike case- it is much easier for individuals to stop buying Nike shoes and forathletic teams to break their contract with Nike in retaliation. Furthermore, while shareholders

IBM: Green or GreenwashedMarla Goodman

18

and governmental organizations could put pressure on IBM and threaten to withdraw IBM’scertifications, this process would most likely take a great deal of time and not lead to any
immediate effect. In fact, governmental organizations would probably warn IBM before theyattempt to annul any of IBM’s environmental certifications in order to give them time to resolvethese environmental issues.

Furthermore, it would probably take a very serious situation such as the one outlined
above to provoke any significant response from consumers. One comparable example is Apple’s
suppliers’ issues with human rights. There have been a great deal of articles published about
these suppliers, and consumers have gone as far as creating petitions encouraging Apple tochange its labor practices.26 However, these accusations have not seemed to affect Apple’s
continuing success and financial gain; in fact, Apple stock has continuously increased over the
past few months.27 Even though IBM may not suffer financially from accusations ofenvironmental misconduct among their suppliers, IBM could potentially suffer in terms of brandand reputation. IBM has spent a great deal of time and effort making themselves known as agreen, environmentally friendly company (see Why be Green? Reasoning Behind Standards on
page two of this report), and it is therefore in their best interest to respond to these accusations inorder to ensure the strength of their brand.

As seen in the Nike case, the initial response of most companies is denial. IBM, like
Nike, would probably make a statement that it was unaware of these harmful activities. IBM may
even go so far as to say that they are not culpable for these activities. This variety of response26

http://www.change.org/petitions/tell-apple-stop-slavery-practices-at-foxconns-manufactories27

http://investor.apple.com/

IBM: Green or GreenwashedMarla Goodman

19

would not be very surprising- when people are accused of doing something wrong, the engrained
human response is usually to deny these accusations. However, IBM should not take this courseof action. As seen in the Nike case, consumers believe that companies are responsible for all of
the actions of third-party suppliers. Furthermore, IBM should not argue that it has no way ofcontrolling what its suppliers do. This argument is also invalid in the eyes of consumers - since
IBM insures that the products made by third-party suppliers meet a certain level of quality, thenIBM clearly has the capability of ensuring that these same suppliers meet IBM’s environmental
standards. The best action that IBM could take in this situation would be to say that it was
unaware of these activities but is taking full responsibility for their supplier’s actions and taking
the steps to remedy the situation and insure that it does not happen again. Furthermore, IBM
could have these efforts audited by a credible third-party to verify that IBM’s actions.

Comparison and Conclusion
There are several companies in the technology and consulting industry that also havelarge environmental initiatives, most notably Cisco Systems. Cisco, like IBM, has published
CSR and Environmental Reports that highlight their progress. Some of these issues include thereduction of CO2 emissions, water conservation, electronic waste recycling, and value chain
management.28 Cisco even uses some of the same standards as IBM, including the ISO14001.
Cisco also undertakes a great deal of internal auditing, which IBM also extensively uses. After
researching Cisco’s method of auditing in greater detail, I came to the conclusion that while their
methods are widespread, they have not developed their efforts to the extent that IBM has. For

28

Cisco Environmental Report 2010

IBM: Green or GreenwashedMarla Goodman

20

example, IBM uses a variety of third party auditors for different aspects of its organization,
whereas Cisco seems to use fewer auditors in comparison29.

Overall, I feel that IBM’s environmental and sustainability efforts are very commendable.
They use a plethora of internal, national/governmental, and global auditing systems. While thesemethods have a variety of areas that could use improvement, I believe that their environmental
claims are very credible and cannot be identified as “Greenwashing”. Ultimately, if IBM
improves its third party auditing by making it more geographically robust, detailed, and available
to the public, then they will reach the epitome of sustainability.

29

Cisco Corporate Social Responsibility Report 2011

IBM: Green or GreenwashedMarla Goodman

A Selection of the Websites Used in Research
1. http://www.ibm.com/us/en/
2. http://www.apple.com/
3. http://www.finra.org/
4. www.nike.com/
5. http://www.epa.gov/
6. http://www.iso.org/iso/home.html
7. http://www.energystar.gov/
8. http://energy.gov/
9. http://www.cisco.com/

21