Hewlett-Packard has measured the greenhouse gas emissions of its supply chain partners since 2008, when it started reporting on their aggregate impact.
It really was only a matter of time before it started doing something about that footprint, and that day has arrived. In late September, HP became the first high-tech company to set specific greenhouse gas (GHG) emissions reduction goals across its suppliers and business partners and an aggressive one at that: 20 percent by 2020, compared with 2010 levels.
"HP has one of the largest supply chains in the industry. It's imperative to manage it not just efficiently, but also ethically and in an environmentally sustainable way," said Tony Prophet, HP's senior vice president of operations, printing and personal systems, when the goal was announced.
How big? We're talking more than 1,000 production suppliers and "tens of thousands" of non-production suppliers across six continents and more than 45 countries and territories.
Over the past five years, HP has adopted a number of initiatives that have helped reduce emissions from product transport by 190,000 metric tons of carbon dioxide (CO2) equivalents. One example is the innovative freight rail route that HP negotiated to haul products out of China into markets in Europe. Although that project was put in place several years ago, one benefit is that this mode of transportation carries one-thirtieth of the carbon footprint associated with air freight.
But HP believed that it needed to address its Scope 3 footprint more specifically, explicitly and systematically -- instead of just monitoring them.
"We realize that the emissions of our partners are not strictly under our control, but we can have an impact," said Zoe McMahon, director of global social and environmental responsibility, HP. "We needed to look harder beyond our four walls."
There are a number of activities, incentives and guidelines it will embrace immediately to drive toward its new goal. These include:
Why would a supplier agree to do these things?
For one thing, whether or not an organization is taking action will be accounted for within HP's supplier selection criteria and performance scorecards. It will become part of business as usual. Poor performance could result in a reduction of business for that supplier, according to the guidelines that the company has issued.
This really shouldn't surprise them: HP has been pushing social and environmental responsibility within its supply chain for at least a dozen years. "It's not separate from what we're asking them from a business perspective," McMahon said.
It also makes good business sense. "The good thing about GHG and energy efficiency is that they are financially beneficial for suppliers," she said. "We have already seen a return from the ones that have taken a part in our earlier programs."
HP developed its supply chain goal in consultation with the World Wildlife Fund (WWF) Climate Savers Program, which helped it figure out what sorts of results were achievable and where it might consider focusing first, McMahon said.
"This is a significant commitment that will have a measurable impact on HP value chain emissions, furthering WWF's objective of overall climate protection," said Matthew Banks, WWF's senior program manager of business and industry, in a statement. "We hope others follow the lead of HP in realizing the cost and emissions savings for their suppliers."
Based on WWF's input, you probably won't be surprised to hear that China will represent a particular focus: not only is the country is a big part of HP's supply chain strategy, but HP believes it can benefit from the focus on emissions and sustainability that is becoming a bigger piece of China's government policy, McMahon said.
Image inside a factory via HP