International Business Machines (IBM) is one of the global companies engaged in various business processes particularly in the manufacturing of information technology products as well as offering related services. The major products that the company specializes include the production of software microchip systems, the IT hardware as well as a wide range of computing hardware. In terms of services, the company offers consultancy in information management, security services as well as the IT outsourcing (Goodman 2012, pp.3). With over $15 billion in revenue, IBM is a recognized international company in the IT industry (Goodman 2012, pp.3).
Over the last four decades, the company has made progressive efforts to be sustainable in various areas of its business processes. Some of these areas include water management, waste management as well as environmental management (IBM, 2010). These actions are taken by the company to attain the broader goal of sustainable social and environmental responsibility. In the recent past, the efforts of the company have focused towards attaining the sustainable environmental responsibility. The company, through several actions has shown commitment towards attaining the environmental sustainability across the globe.
The report seeks to realize a number of tasks. First, the report will explore the way the company management’s perceptions of community expectations in relation to issues of environmental sustainability have changed overtime as well as how the management’s perceptions about changing the community expectations have influenced the operating and accountability of its practices. Secondly, the report will discuss the social and environmental performance the company focuses on improving. Third, the report will look into the factors that appear to be motivating the company to produce detailed performance reports despite limited legal requirements. Finally, the report will examine how the governance policies of the company have changed due to changes in the community expectations regarding its corporate social and environmental performance and how as well as where these governance reports are being publicly disclosed.
The changes in the IBM management’s view according to the community expectations
Environment has been vital part of IBM’s social responsibility. The company’s commitments towards environmental sustainability are highlighted by its environmental policy that dates back to 1971 (IBM, 2010). The policy has changed overtime particularly with reference to the expectations of its stakeholders as well as the communities in which the company operates worldwide. In fact, while drafting the policy, the company takes into consideration the immediate needs of its major stakeholders and the communities. The major goal of the policy is to sustain its global environmental leadership in all its business processes ranging from research activities to services solutions.
Before, the company management focused its environmental policy towards the dictates of the major stakeholders particularly the government. The perception was that the government’s environmental programs take into consideration the immediate needs of the communities, which are part of its citizens. However, as the company internationalize, there was need to involve directly the communities into the activities that are geared towards the environmental sustainability. The company realized that direct community involvement has increased benefits that are long-term and sustainable (Henderson & De León Baridó, 2009). In effect, the company’s commitment to environmental leadership has to focus on two areas that includes linking the products and services with the environment as well as be innovative in all business activities. Through these aspects, the company improves its capability of meeting the societal expectations. Almost all the operations of the company affect the environment. For instance, the chemicals that the company uses for manufacturing, research and development are part of the fluorocarbons that have an increased effect on the global temperatures. The company manufacturing processes and data center operations are energy and water intensive. Therefore, the company must come up with strategies that would enable efficient utilization of these resources and ensure considerable reduction of the harmful effects resulting from their utilization.
However, these strategic actions are shaped by the expectations of the stakeholders and the communities in which the company operates. The current global environmental concern is how to reduce the CO2 and other fluorocarbons that contributes immensely to the increased world temperatures. The expectations is that both national and international companies that utilize materials believed to be the major cause of increased global temperatures must take the leading role in controlling their utilization and emissions to the atmosphere. Currently, the company have taken the leading role of the environmental concern by producing products that they believe are most energy efficient, have been manufactured by green recommended materials, can be re-used, recycled or disposed of safely (Henderson & De León Baridó, 2009). IBM has also shared this responsibility with its suppliers. The company’s suppliers are required to be environmental responsible in all their business processes and maintain the environmental attributes on goods they supply to the company.
In addition, the company has been innovative to tackle the environmental issues affecting the communities. IBM ensures that its technological and innovative capabilities provide solutions to the environmental problems affecting the communities as well as other stakeholders’ wellbeing. The innovative and technological capability would also be important in offering solutions to the world’s most demanding environmental issues such as the increased CO2 emissions (Defee et al., 2009).
How the changing community expectations have influenced the operating and accountability practices of the company
The commitment towards the global environmental leadership have enabled the company align its operations as well as its management policies with the expectations of the stakeholders and the communities. The expectations of the communities together with those of the major stakeholders on energy conservation, CO2 emissions, work place safety, waste management, pollution prevention and water conservation has enabled the company change its product design, improve on supply chain management as well as other business processes (IBM, 2010). The company’s operating directives are always contained in its global Environmental Management Systems (EMS).
The policy contains corporate directives that support operations in such areas as toxic waste prevention as well as other chemical waste management. In addition, the policy contains directives that support the company operations in energy and water conservation, climate protection, supply chain management, product stewardship as well as problem avoidance and exposure. As indicated, operations in these areas are designed according to the community as well as other stakeholders’ expectations.
The company expects those involved in the direct execution of the policy directives to abide by what is contained in the policy. In this policy, employees are also expected to account for matters in relation to environment, health and safety within their areas of operations. Further, the company management is expected to act quickly in case of potential violation of the environmental regulations and directives contained in the environmental affairs policy. Moreover, the business conduct guidelines are informed by the expectations of the communities. The business conduct guidelines provide directives on how the employees as well as the management should operate within the environmental programs. The business conduct guidelines also require employees to abide by the environmental regulations.
The decision-making organs and senior management of the company are responsible for the performance of their respective organizations regarding environmental sustainability. For instance, site executives are accountable for the ecological performance of the locations in which they operates (IBM, 2010). On a regular basis, the designated directors who are members of the Corporate Governance Committees (CGC) assess IBM performances regarding environmental programs. The committee evaluates the performances based on the company position and activities on important aspects of the corporate responsibility inclusive of the environment protection.
The aspects of social and environmental performance the company focuses on
The company’s social and environmental performance focuses on its environmental goals including increased energy and water conservation, reduced rate of pollutants and improvement of waste management (Defee et al., 2009). However, the current major focus on its climate protection performance is the reduction of major contributors of climate change including CO2 and other fluorocarbons.
Over the years, IBM has undertaken several measures aimed at making its operations environmental responsive through carrying out chemical researches as well as properly managing development and manufacturing processes. For instance, the corporation has achieved major developments in environmental sustainability through the application of energy efficient products and innovative service solutions. The company has been able to design energy-efficient products through the application of environmental friendly materials that are recycled as well safely disposed after use (IBM, 2010). Further, the organization has laid a strong emphasis that its suppliers must consider delivering environmental preferable goods and services to the company. IBM has also made major milestones in developing expertise that have seen solutions to the most challenging ecological predicaments.
In reducing the contributors of environmental degradation substances such as CO2 and other chlorofluorocarbons, the company has undertaken several measures that have been able to promote innovations for expanding environmental friendly operations. For instance, through the launch of Eco-Patent Commons together with other corporations, IBM has seen the promotion of innovative measures for sustainable ecological development. As a result, the organization has been able to achieve enhanced energy effectiveness. In addition, the firm has been able to use ecologically affable substances playing a critical role in the reduction of pollution and enhancing waste management. Moreover, the corporation has experienced the reduction in the utilization of water. Further, the augmented recyclability of the company’s resources has immensely led to the reduction of environmental pollution.
The organization has increased its investments on the infrastructural advancements focusing on ecological protection. For instance, over the recent past, there has been an increasing trend for capital invested in infrastructural developments on plants as well as labs to handle the ecological concerns around the globe. The expenditures have increased due to the ever-tightening legal conditions concerning environmental safety that must be met by corporations such as permit fees (Morhardt et al., 2002). In addition, IBM has increased its focus on rising savings on environmental expenses that are likely to occur because of unclear management policies. For example, the company has reduced expenditures on spill remediation costs as well as the costs involved in the usage of ecological responsive materials. Expenditures concerning the sites of pollution deterrence procedures have also been a major area of concern to the company thereby getting a large chunk of its capital to the sector.
IBM’s environmental sustainability was founded on principles that call for the application of advancement in the manufacturing procedures that are not only essential to environmental protection but also advocating for the application of ecologically friendly materials in the operations of other firms. Based on these ideals, the firm has registered massive successes as far as reductions of dangerous emissions are concerned. For example, the organization has increased its focus in regular evaluation of the substances used in manufacturing procedures by incorporating its worldwide ecological systems through scientific reviews. More specifically, the company, through incorporating the scientific findings on their operational procedures, has all the time undertaken positive restriction as well as substitution of the products that have the capability of posing dangerous effects on human health and the general environment. In this regard, IBM has been able to identify and devise means of restricting the substances in its operations that are of great concerns to human health as well as the general safety of the environment (IBM, 2010). For instance, the organization has seen major achievements in phasing-out the chlorofluorocarbons in its products’ build-up and improvement course. As such, the firm has realized significant gains in the reduction of the amount of ozone-exhausting material in the atmosphere.
IBM has also achieved great strides in enabling operations in a friendly environment. For instance, in its products’ design, IBM has taken measures to eliminate the application of harmful substances in its operations. On this note, the uses of ethylene-based glycols as well as polybrominated biphenyl have been prohibited in the design of IBM’s products (Morhardt et al., 2002).
The other vital aspect of IBM’s operations is based on the suitable ways of circumventing effluence into the environment. The firm has laid focus on the prevention of perilous wastes as well as non-hazardous destructions. The organization has continued to come up with tactics intended to enable sustained diminution of environmental pollution (Morhardt et al., 2002). For instance, the corporation has developed regular assessment of the correlated waste accrued from its operations and its manufacturing undertakings. In this regard, IBM has been capable of initiating wide-ranging and practical environmental degradation programs. Due to such wide-ranging initiatives, the company has seen a steady reduction in the generation of perilous wastes over the past four years by about thirty-three percent. IBM has also amplified initiatives geared towards the preclusion of producing non-perilous wastes through recycling and putting them into valuable uses. Consequently, the corporation has continued to register positive increases of wastes recycled to around seventy-nine percent in the year two thousand and eleven.
Further, IBM’s has all the time emphasized on the importance of regular reporting and releasing its chemical emissions in accordance with the Emergency Planning and Community Right to Know Act (EPCRKA). Through the reporting, the company has achieved significant success in the manufacturing processes by upgrading and re-designing its operations. The sustained reduction in the amounts of harmful compounds in production processes has been the result of regular voluntary releases by the organization. For instance, the amount of chemicals to the ecological indicators as compared to the total yield has been diminishing by a rate of about four percent. The results have enabled the organization to know the trend of the chemical use in its design and operations (IBM, 2010).
Maintaining and building a smart planet remains the focus of every firm in their day-to-day operations. IBM, just like the other international corporations continues to recognize the essential role played by water conservation in building friendly environment. Therefore, IBM has continued to improve its microelectronics manufacturing processes that form the bulk of water use (IBM, 2010). As such, the organization is initiating new water conservation programs that will prove useful in the increased conservation of water over the years. However, IBM has continued to experience a diminishing tendency in its aspirations to conserve water due to the insignificant gains accrued to the environment. Therefore, IBM is focusing more on this tendency to enable the development of alternative ways that ensure efficient water use at its manufacturing plants.
Factors that motivate IBM to produce its sustainability reports
Environmental conservation and sustainability is one of the social responsibilities in which the company engages. In fact, many factors contribute to the continuous production of annual sustainability reports despite limited regulations governing their exposure. Such reports are not only important for the company but also its stakeholders as well as the communities in which the company operates (Morhardt et al., 2002).
As indicated, IBM promotes its characteristics and brand name through environmental and social responsibility. Moreover, through engaging in the environmental conservation activities, the firm’s sales, customer dependability, and profitability have improved. In addition, IBM enhances its business operations through the application of environmental sustainability programs.
The reports are critical for the company to remain competitive and profitable in the current highly competitive global market. The initiation, implementation and reporting of appropriate social and environmental responsibilities increases the company’s capability of attaining its long-term goals. Reporting the output in relation to the environmental conservations engagement increases the relationship the business has with its stakeholders (Elliot, 2011). Further, the corporate environmental responsibility programs and the way such programs contribute to the well-being of the society influence the decisions made by various stakeholders.
Commitment to the environmental conservations initiative remains critical moral responsibility in all aspects the stakeholders and societies expect from the operations of the IBM. Reporting of the environmental conservation practices mirrors the relationship the corporation has with the stakeholders as well as the societies. Further, reporting on the environmental responsibilities to the stakeholders is one of the practices that have enabled the company to succeed in its activities. In other words, better practices in relation to the environmental sustainability goals enhance the firm’s globalized activities.
The firm has realized that engagement on environmental conservation programs as part of wider corporate responsibility remains critical to its growth and sustainability. IBM must be involved in environmental conservation activities as well as enhancing practices such as reporting to attain the long-run sustainability. In addition, its business processes must be oriented towards environmental conservation to sustain substantial growth and development in the long-term. In other words, all the IBM’s business operations must be based on environmental sustainability policy framework providing initiatives that are beneficial to the society. Regardless of the resources needed to attain such initiatives, IBM must thrive to put in place practices that enhance the attainment of the environmental goals that satisfy all its stakeholders including the communities. Moreover, the environmental program activities must be geared towards enhancing the company’s reputation, brand image and competitive advantage (Elliot, 2011).
The environmental affairs policy provides a framework through which the company builds its reputation and image to the stakeholders as well as the communities. The stakeholders and communities can only understand the firm’s environmental activities through the provision of the annual reports. Moreover, the company provides the sustainability reports to enable stakeholders and communities feel involved in all the business processes. In other words, most of the stakeholders including suppliers and consumers will tend to identify themselves with such initiatives (IBM, 2010). In essence, better environmental and social responsibility practices will enable the firm integrate good cultural values that will ensure increased and sustained growth together with consumer alignment to the company products.
Moreover, good reputation built on better social responsibility practices will enable the firm provide quality products and services to its consumers. IBM can only create products and services that are competitive in the market only if it adopts corporate responsible practices that are acceptable to all stakeholders. Adopting responsible practices that are environment oriented have enabled the firm becomes a market leader in the industry. The reason is that such practices are acceptable by all stakeholders across the board.
How IBM governance policies have changed overtime with changes in stakeholders expectations
IBM has initiated several programs in its operations considering the ever-changing anticipations of the stakeholders. Therefore, aligning its services to stakeholders’ expectations is a major strategy for IBM to gain the competitive advantage in the market not only through their prices and products but also by engineering changes in its reporting practices, remuneration plans as well as policies concerning waste management (Elliot, 2011). In addition, the company has initiated changes in its supply chain management and the social audit policies. The initiatives have been vital in developing new arrangements and systems that provide the necessary information concerning the stakeholders’ demands. Further, these initiatives have enhanced the flexibility of the company towards meeting the stakeholders’ needs.
IBM continued to engage with liable vendors over the years. As a result, the organization has been able to operate the largest and most sophisticated supply chains around the globe. In this regard, the company is undertaking several programs aimed at intensifying its supplier requirements. For example, the company has been able to strengthen its business decree obliging the suppliers to provide environmental affable services. In addition, IBM is continuously enhancing its supplier ecological appraisals on their products and services. Further, the corporation has shown its commitment to dealing with suppliers who value the importance of an ecologically affable atmosphere through joining the delivery ventures that have increased the suppliers’ understanding of the effects of the dangerous emissions linked to their undertakings.
Printing the principles of supplier conduct by the firm has seen increased articulation of the delivery series, social and ecological obligations (Goodman, 2012). Moreover, the establishment of the corporate responsibility and ecological management systems has seen an escalation of IBM’s environmental anticipations in the supply chain. In essence, IBM continued to assess its strong suppliers with a special focus on the impacts of their operations on the environmental safety. On this note, the company has experienced increased reduction of harmful emissions as well as enhanced energy conservation.
The company has also been able to initiate an environmental plan that has seen achievements and advancements in environmental conservation being recognized and rewarding. The organization gained success in rewarding its personnel based on the degree of leadership as well as outcomes on the matters concerning environmental conservation. Further, the workers’ innovations and incorporation of the initiatives in the energy conservation sectors have seen them remunerated. The company maintained competitive reward packages to the personnel who achieve success in the sector of environmental preservation. As such, IBM has experienced significant achievements in safeguarding the environment.
Moreover, the company has initiated a remuneration system that is connected to the company’s environmental output. In this regard, the company developed a long-term incentive program that sustains the interests of the personnel as well as the shareholders welfare (Goodman, 2012). Incidentally, the company has been able to maintain, inspire and attract its workforce. More interestingly, the company developed an annual incentive plan that rewards the employees based on their achievements in the conservation of environment. Further, the corporation also devised a salary system that that meets the conditions of the developments in the market economy.
IBM developed policy monitoring tools such as the master data management that have played a critical role in enhancing the company’s quality reporting of environmental conservation data. Further, the IBM’s social and environmental reports are prepared in conformity with the ecological conservation policy initiatives and principles. Moreover, the corporation has also embraced regular analysis of revenue from its environmental related services (Elliot, 2011). Consequently, the firm is able to determine the direction of its operations. Further, through the company’s environmental incident reporting system, it has been able to report the ecological occurrences around the globe.
Ecological management remains major concerns in the operations of IBM. For this reason, the company continues to undertake several measures relating to its waste policies. For instance, the company has undertaken an initiative of ensuring conscientious use of energy as well as safeguarding the environment. In addition, the company is embracing the use of renewable sources of energy as opposed to non-renewable sources. Further, the firm has increasingly stressed on the application of manufacturing procedures that have insignificant effects on the atmosphere. As such, the company has upgraded its technology thereby greatly reducing wastes as well as minimizing the health and safety hazards. The company also continues to lay emphasis on the manufacturing processes that are safe and efficient in energy consumption. Using such proceses, the company has been able to recycle and reuse of its products thereby protecting the degradation of atmosphere (Elliot, 2011). The company’s initiatives on the waste management have enabled it acquire the title “Responsible Neighbor” in various locations where it functions.
The company has continued to gauge the results of its environmental performance through complete evaluation of its worldwide environmental operations. The company has also continued to carry out annual evaluation by its corporate internal audit staff for ecological, health as well as shelter acquiescence. As a result, the company has been able to achieve high levels of answerability in its operations. In addition, the corporation has continued to register its worldwide sites to ISO that are checked by its internal audit team and the external ISO registrar regularly.
How and where these governance policies are publicly disclosed
These governance policy reports are published and announced during the annual general meeting. In these meetings, the company evaluates its performance over the past years and new strategies are devised to tackle the emerging challenges in the ecological sustainability (Morhardt et al., 2002). In this regard, the company has continuously undertaken comprehensive developments and upgrades on its existing strategies to avert the possible environmental challenges. Further, the stakeholders get the opportunity of assessing the company output in relation to the maintenance of ecological safety. Therefore, the organization is able to identify its points of weakness and strengths that need improvements.
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