Challenge: To achieve absolute reductions in carbon emissions
Carbon emissions from the IT sector are among the lowest of all industry sectors and Dell's intensity measurement is less than half its nearest competitor. Dell saw the way to improved targets was to reduce absolute emissions. The company's carbon management strategy took a fresh approach to evaluating up and down its business and evaluating the decision processes across the corporation which affect emissions.
Solution: A holistic approach and putting its own house in order
Dell's holistic view of GHG impacts across the entire business, including the supply chain and the use of its sold products. It encourages streamlined operations and the introduction of improved designs which help its customers achieve their sustainability goals. Dell's technology in its workstations, desktops and notebooks can dramatically reduce power consumption. Technologies have been developed that maximise work per watt, power and cooling best practices, management software that tunes operations for maximum energy efficiency and services that increase efficiencies in new and existing facilities which in turn improves Dell's overall emissions performance.
Not happy to ask supply companies to reduce their emissions before they were able to do so themselves, Dell made itself accountable and put its own house in order. The first step was to set an aggressive GHG intensity reduction goal as the business was growing fast, with a focus on maximising green power purchases. It now sources 26% of electricity from renewable sources worldwide, a 436% improvement in two years. Two years ago Dell set a target of 40% absolute emissions reduction by 2015 based on 2007 levels. Dell accounts for its carbon impacts by following four steps: maximise operational energy efficiencies, buy as much green power as you can, responsibly invest in the low carbon economy, and help suppliers and customers to be more efficient – good for them and Dell.
Results: Collaboration delivers targets and mutually beneficial energy savings
Ninety per cent of Dell's total scope one and two footprint is from electricity use (scope 2) and likewise the majority of their suppliers' footprints are from Scope 2 electricity use. This means that reducing carbon by focusing on improved efficiency can lower operating costs. In 2007 Dell decided to incorporate base line expectations for suppliers to include the management of GHG emissions in their quarterly business reviews. Suppliers were already required to comply to a recognised management system (ISO14001 or EMAS compliant), and the additional expectation was to include GHG impacts within the scope of these efforts.
The first in the ITC sector, Dell also recognised the opportunity to partner the CDP Supply Chain program and work collaboratively with suppliers, providing them with more resources and tools to enable reporting.
By 2009, eighty percent of Dell's suppliers were meeting its requirements so it raised its expectations and set the following guidelines for suppliers:
- report to CDP
- set public goals to reduce operational GHG impacts
- set expectations for Tier1 suppliers to establish GHG management and reporting requirements for their suppliers
Dell publicly states: "Failure to meet these requirements can impact your supplier ranking and potentially diminish your ability to compete for Dell's business".
Dell made the decision to ask suppliers to report through the CDP process because the questions asked go beyond the quantitative to include valuable information on the risks and opportunities from climate change. It is this information that drives strategic thinking about business impacts; a benefit that Dell discovered when completing the CDP questionnaire themselves.
In 2009, Dell asked the suppliers which made up 95% of its direct spend to respond to CDP and received a 94% response rate. Moving forward, the company is looking at how to set goals for further improvement and to encourage sub-tier suppliers to put in place reduction targets.