1. Hewlett-Packard:Sustainability as a Competitive AdvantageBy Eric M. Lowitt and Jim GrimsleyMay 2009Case Study

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Hewlett-Packard: Sustainability as a Competitive AdvantageHaving worked with thousands of corporate andgovernment clients around the world, Accenturehas long understood the special characteristicsthat enable organizations to outperform theirpeersto become high-performance businesses.for its customers to go green, andconducts high impact research onsustainability solutions.Historically, HP has placed a priorityon corporate citizenship, even as thecompany grew from its 1939 foundingin the iconic Palo Alto garage into adiversified $100 billion technologycompany operating in 170 countries.HPs first statement of corporateobjectives, The HP Way (a perennialcitation in management texts), waswritten in 1957 by founders BillHewlett and Dave Packard; by as earlyas 1966, it included a provision tomeet the obligations of good citizenshipby making contributions to the communityand to the institutions in our societywhich generate the environment inwhich we operate.1 Still, HPs approachto corporate citizenship had alwaysbeen very much an intramural affairand the company consciously avoidedtrading on its efforts in areas likesustainability, preferring to quietlyadvance its social agenda.Up until about five years ago, we hadthe Boy Scout and Girl Scout approach,as I call it, says Mark Heintz, HPsstakeholder relations manager, whoworks on HPs Social and EnvironmentalResponsibility (SER) team, managingrelationships with nongovernmentalorganizations (NGOs). We just reliedon our reputation as sort of the goodscouts of the industry, but we didntactively publicize any of our activitiesin this area to NGOs or other sustain-abilityorganizations. But as issueslike climate change and global supply-chainresponsibility became moreprominent in the mainstream press,HP soon realized, in the face of publicquestioning and competitive promotionHigh-performance businesses arethose that: effectively balance current needsand future opportunities, consistently outperform peers inrevenue growth, profitability andtotal return to shareholders, sustain their superiority across time,business cycles, industry disruptionsand changes in leadership.In this case study, we investigate howa genuine commitment to sustainabilitydefined as environmental and socialresponsibilityis helping HP to growits leadership in key markets. We lookat how HP translates its green credentialsinto profitable new businesses andbetter-performing existing ones, allwhile advancing its long-term positionas a model corporate citizen in theglobal arena.Transforming a good-citizenshipheritage into contemporarysustainability credibilityFor HP, building a global sustainabilityprogramone that is held to the samerigorous standards of accountabilityand profitability as its other businessinitiativesis an ambitious and ongoingchallenge. With little precedent in theIT sector and virtually none in organi-zationsof HPs size and complexity,the endeavor has required the companyto continually innovate, adjust itsstrategy, and regularly re-commit toits vision through an evolving processthat touches every level of the321,000-employee organization.For HP, sustainability, efficiency,and profitability go hand in hand.Among HPs values is a deep respectfor the environment, and an ingrainedcommitment to reducing our impacttoday and building a sustainable globaleconomy tomorrow, says BonnieNixon, Director of Sustainability forthe company. HP aligns its technology,environment, and business strategiesto reduce its carbon footprint, providespractical solutions to make it easy1 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved. 3. Hewlett-Packard: Sustainability as a Competitive AdvantagePrioritySupply chainHP is providing leadership to the electronicsindustrys efforts to raise labor and environmentalstandards in our supply chain through collaboration,supplier audits and capability buildingPriorityClimate and energyHP minimizes the impact of our operations andsupply chain on climate change while innovating todevelop products and solutions for an energy- andcarbon-constrained worldPriorityProduct reuse and recyclingHP provides customers efficient reuse and recyclingoptions, and we collaborate with other leadingorganizations to develop common standardsand solutionsSocial investmentHP supports communitieswherever we operate, focusingon educational achievement,economic development andenvironmental sustainabilityOperationsHP uses an environmentalmanagement system to assessand reduce the environmentalimpacts of our global operationswhile enhancing the workplaceand saving HP moneyEmployeesHP fosters a high-performing,diverse workforce and provides asafe, healthy and supportiveenvironment that helps employeesto achieve their potentialCustomersPrivacyUsing an accountability approachto privacy, HP reviews decisionsnot only for compliance with thelaw and our privacy policies, butalso against our values andpotential risksProductsHP designs products andpackaging to make the bestuse of resources and has along track record of substitutingmaterials to meet customer andlegislative requirementsSocietyEmployeesSuppliersHewlett-Packardof its various green initiatives that itneeded to raise awareness of itsdecades-long commitment.I think a challenge for HP, honestly,is that we have been working onenvironmental and sustainabilityinitiatives for quite a long time, wellbefore such issues were really ofinterest to customers, explainsShelley Zimmer, who is responsiblefor SER policy within all of HPs productgroups. Were only now beginning tounderstand how to communicate thedetails to customers. Now that theyare interested, its become a biggerissue for companies and for consumersacross the world.Source: HP company documents.But we still say a lot less than whatwe are capable of. Theres always theconcern about greenwashing and notwanting to over-promise. And so Ithink our Web site still reflects thatsomewhat modest approach to talkingabout our environmental achievementsand goals.In formally incorporating sustainabilityinto its overall corporate citizenshipprogram, HP identified three overarchingpriorities that every business unit isrequired to embrace: raising social andenvironmental standards in the supplychain, improving the energy efficiencyof operations and products in order toreduce carbon emissions, and promotingproduct reuse and recycling. (See Figure 1.)These priorities reflect HPs commitmentto balancing corporate values andbusiness goals with the companysimpact on society and the environment.Figure 1: Global citizenship at HP2 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved. 4. Hewlett-Packard: Sustainability as a Competitive AdvantageFigure 2: Five Elements of High Performance. Better positioning and performance relative to its peer set on the following elements:HighContinued value creation overindustry eras and life cyclesLongevitySpread (ROIC-WACC) performance(5 and 7 years)Greater-than-expectedreturns on investmentsPerformanceBusinessConsistencyReliable and predictableperformanceProfitabilityGrowthTop line revenue growthPositioningfor the FutureHigher future value growthEmpowering and organizing asustainability teamThe companys global citizenship agendais organized into five pillars withinthe organization, with senior managersassigned general oversight in thefollowing areas: Ethics and compliance Social and environmentalresponsibility (sustainability) Human rights and labor practices Privacy Social investment (philanthropy)Three primary bodies have been estab-lishedto help manage and advise onsustainability initiatives throughoutHP: the Supply Chain Council and theGlobal Marketing Council, both madeup of senior HP managers; and theStakeholder Advisory Council, a colla-borativegroup comprised of HP vicepresidents along with representativesfrom supplier organizations, environ-mentalactivist groups, labor-rightsgroups and other NGOs.We partner with a number of regionaland global organizations like the WorldWildlife Foundation (WWF), CSR Asia,even CEREAL, the labor NGO in Mexico,explains Bonnie Nixon. We hold twosummits a year with the StakeholderAdvisory Council to look at our goals,peek around corners, look at policiesand whats happening within the NGOcommunity, whats happening withinthe legislation and within customerenvironments. We find out what peoplecare about.Charged with overseeing HPs longterm vision and sustainability strategy,Nixon reports to the corporate marketingorganization. Im responsible for helpingto drive HPs sustainability strategyacross the company and for reportingagainst it, but a lot of the specifics ofimplementation are the responsibilityof the functions or product groups andthey, in turn, have responsibilities tohelp conceive and execute. So IT hasits mission, systems groups have theirmissions, everybody has their own partto play, Nixon says.3 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved.Total return to shareholders(3, 5, 7 and 10 years)Revenue growth(5 and 7 years)Variability in spread (ROIC-WACC)from one year to the nextover 10 yearsPercentage change in the future growth value* overa five year period* Future growth value equals enterprisevalue (market value of debt + equty)less current value (current profitabilityin perpetuity) 5. Hewlett-Packard: Sustainability as a Competitive AdvantageApplying the high-performancebusiness modelWhile every high-performance businesstravels a unique path, HPs sustainabilityeffort maps very clearly to Accenturesproven High-Performance Businessmodel. As defined by Accenture, ahigh-performance business showsquantitative superiority along five keydimensions (see Figure 2):Growthas measured by revenueexpansion;Profitabilityas measured by thespread between the return on capitaland the cost of capital;Positioning for the futureasrepresented by the portion of shareprice not explained by current earnings(what we call future value) and by theportion of the industry total each com-panysfuture value represents;Consistencyas measured by thenumber of years (out of seven) the peerset median in profitability, growth andpositioning for the future was beaten;Longevityas measured by the durationof out-performance in total returnto shareholders.The remainder of this case will examinehow HPs sustainability initiatives haveperformed along the five key high-performancebusiness dimensions.GrowthHP is using its sustainability strategyto drive real revenue growth throughfour approaches: by winning new busi-nesswhile retaining existing business,by expanding the companys distributionin Europe, by charging a premium pricefor energy-efficient products and byentering new markets.Winning new business whileretaining existing businessRecent requests for proposals (RFPs)have requested details about HPsinternal IT energy-savings plan andHPs own energy usage, broken downby nuclear, coal and renewable sources.The customers that are asking aboutsustainability represent some of thelarger contracts, creating the potentialfor significant sales. Indeed, onerecent customer, a mobile commu-nicationsgiant, made a major purchaseof personal computers after indicatingthat the primary consideration forawarding the contract was findingthe greenest units available.Our statistics show that more thantwo-thirds of the RFPs contain envi-ronmentalquestions. I would sayactually its 100 percent of the largeenterprises, says Klaus Hieronymi, HPsEurope, Middle East and Africa headfor SER. All of our major customershave contacted us in the last 12months on environmental questions.For example, the German governmenthad an off-site meeting in November2007 on climate change. And theycame up with 13 areas they want tofocus on. I think it was number 11which says that in every public tenderin Germany the cost of energy shouldbe included in the price comparison.So the German government now hasthe rule that says, For future procure-ment,we will consider not only thehardware price but the hardware priceplus lifetime electricity. I think thatwill be the future. And that will thenautomatically drive companies like HPinto more energy efficiency. I havealso seen one particular tender, based4 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved.on a recommendation from Gartner,that goes as far as asking HP aboutwhat energy-savings plans we haveinternally in our IT and how much ofthe energy we are buying is nuclear,how much is coal and how muchis renewable.Our sustainability efforts certainlyget us a seat at the table, says CarlEckersley, the manager of EnvironmentalProduct Stewardship for the PersonalSystems Group. Without them, wewouldnt even be able to bid on theseprojects. Many HP executives agreethat the weight being given to environ-mentalissues in the tendering processhas been significantand is growingin many cases, representing up to 25percent of the scoring on a bid.In an effort to quantify the stakes, HPdeveloped an internal tracking tool,informally known as Green Baby, tohelp value the revenue implications.The tool tracks the value of the deals,the value of the revenue at risk, typeof information and presentationsrequested, deals won and lost, and thejustification for the outcome. Oursales force is giving us feedback onwhich deals are successful or not.What were pressing to know is, whatwas the real contribution of the sustain-abilityaspects of our presentation tothe overall win? says John Frey, whois responsible for sustainability strategyplanning and execution across HP.Expanding the companysdistribution in EuropeHPs sustainability strategy has helpedthe company gain new distribution.A European customer proposing toresell retail HP products conducted avery thorough evaluation of HPssustainability program. They wanted 6. Hewlett-Packard: Sustainability as a Competitive Advantageto know who our suppliers were forthe particular products, how we evaluatethem, how we work with our supplierson corrective actions when needed.And it was only after that detailedreview that they viewed us as aqualified supplier and agreed to actuallybegin selling our products, recalls JudyGlazer, the director of Global Operations,Social and Environmental Responsibility.Charging a premium price forenergy-efficient productsHPs line of energy-efficient PCs andnotebooks command a price premiumof $10 to $20 compared with non-Energy Starrated products. However,the energy savings they offer providean attractive 24-month payback.According to HP, the average enterprisecustomer holds onto this type ofequipment for approximately threeyears. For customers looking to purchase1,000 or more units at a time, thats thekind of savings that makes a difference.Frey explains HPs head start in thisarea, as additional enterprise buyerswarm to the energy-savings message:Our enterprise customers generallytend to keep their gear for two tothree years. And if you can make a 24-month or better ROI, generally speakingtheyre willing to pay the price premiums.And increasingly, where that used tobe a differentiation point that onlyour most savvy customers wouldmake, its amazing now how wholeindustries, the financial industry forexample, has come on board in the lastyear or so and they have things likethat directly in their purchase criteria.Entering new markets and pursuingjoint venturesHP has entered into a solar-technologylicensing agreement for a revolutionarytransparent transistor technology withXtreme Energetics (XE), a developerof solar energy systems. Together, thecompanies are creating an energysystem designed to generate electricityat twice the efficiency and half thecost of traditional solar panels.The transparent transistor technologywas co-developed by HP and OregonState University and includes thin filmtransparent transistors made fromlow-cost, readily available materialssuch as zinc and tin. The materialsraise no environmental concerns andallow for higher mobility, better chemicalstability and easier manufacturing.Whats more, the transparent electronicstechnology allows solar panels to beartistically patterned to mimic theappearance of any building material orterrain for aesthetic appeal. The energysystems will serve both the centralutility and rooftop markets.Open innovation to foster collaborativeresearch is essential in todays fast-paced,innovation-fueled market, says JoeBeyers, the vice president of IntellectualProperty Licensing at HP. Through ourcollaborative research and by licensingHPs core intellectual property inelectronics, we are accelerating thepace of technology transfer so thatit can be applied more rapidly intocreating commercial, renewableenergy solutions.HP encourages other organizationsworldwide to leverage its vast researchand development network and portfolioof nearly 30,000 patents. As theseorganizations bring new technologiesto market through intellectual-propertylicensing agreements with HP, HP also5 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved.benefits from a return on its researchand development investments throughlicensing fees and royalties.ProfitabilityWithin HPs own operations, the com-panyis leveraging its sustainabilitystrategy to drive profitability througha wide range of effortseverything frommaking adjustments to shipping andlogistics and reducing the need forvirgin materials in manufacturing,to realizing cost savings through newefficiencies within data centers, toreplacing business travel withvirtual meetings.Making adjustments to shippingand logistics and reducing theneed for virgin materialsIn logistics, a simple move from usingwooden shipping pallets to environ-mentallyfriendlier plastic pallets (lessthan a quarter of the weight of thewooden ones) is saving 7,000 tons ofCO2 emissions per year in Asia-to-Europecamera and notebook PC shipments.The higher cost of the pallets themselvesis significantly outweighed by thesavings in air freight.HP is reducing its air freight as well,in favor of ocean freight, and movingmany truck shipments to railchangesthat are both saving money and reducingenvironmental impact. According toBlair Chikasuye, HPs environmentalprogram manager for the GlobalLogistics Group, this is a clearlyemerging corollary. Were finding thatany time theres a logistics cost savings,there is typically an environmentalsavings as well, says Chikasuye. Yes, 7. Hewlett-Packard: Sustainability as a Competitive Advantageshipping by ocean is cheaper than flyingit on a plane, but its also a significantCO2 emissions savings. Same with takingit off the road and putting it on rail.According to HP, each cargo containerof notebook PCs shipped by oceaninstead of air reduces GHG emissionsby the equivalent of an average cardriving 100,000 km. However, theseenvironmental gains also have a price:increased transit time and longertime-in-inventory during shipping.To counteract these effects, HP workswith its planning teams to adjusttheir forecasting process andoptimize coordination.The process of appropriately escalatingdecision making was also identified asa key component of HPs success inimplementing essential changes andovercoming organizational resistance.Sometimes a single issue (like theadditional cost of plastic pallets) couldpose a fatal roadblock in achievingimportant gains. Packaging engineerRandy Boeller explains the benefits ofassembling all the facts and then gettingto the right level of management:We got the people who negotiate airfreight and some finance people in thesame room to sit down and do the math.And then we did the math again todouble-check. We then followed themanagement chain to find the peoplewho own the materials costs and thepeople who own the air freight costsand then followed those managementchains up to find the one person theyall reported to. Then, we made thepresentation to that person and said,You want to save about $28 milliona year? We know how.In reducing consumption of newmaterials, HPs 2008 Global CitizenshipReport lays out some of the companysoverarching goals:HP works with suppliers to identifymaterials that will reduce the envi-ronmentalimpact of HPs productsand that of our customers.We evaluate the total life cycle,environmental impact and cost of anynew material, and we strive to identifysubstitute materials that have lowertotal environmental and health impactsthan the materials they replace. It canbe difficult to confirm claims for newmaterials because they may not havebeen researched as thoroughly asexisting materials. For example, wecannot yet be confident about materialsto replace PVC from wires and cables.Thermoplastic rubber/elastomer (TPR/TPE)and polyethylene-derived hybrids areemerging, but these materials are notsufficiently devel oped for wide-scaleuse. Long-term environmental impactassessments and safety approval forthese materials have yet to be finalized.HP has an extensive recycling net workthat is a potential source of recycledplastics for use in new products. WhileHP would like to take advantage of thisfact, the potential is limited for severalreasons. The greatest difficulty isthat most recycled plastics containsubstances that we have eliminatedfrom our current products. Also, mixedplastics do not have the mechanicalproperties necessary for use in new ITproducts, and it is difficult to separatedissimilar plastics during recycling toproduce a homogenous material.Finally, logistical constraints limit ourability to move large volumes of materialfrom the regions where recycling isconducted to the regions where most6 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved.new products are made. Recycling isan area in which we continue to lookfor improvements.Realizing new efficiencies withindata centersHP recently completed a three-yearprogram to consolidate 85 of its datacenters into just six high-efficiencylocations in the US. This move is nettingyearly energy savings from of up to350 million kilowatt hours and annualenergy cost savings of up to $30 million.The project has also served to eliminatemany older technologies while reducingHPs overall data center footprint byabout 35 percent. The consolidationhad its roots in a long-standingrecognition on the part of HP Labs(the exploratory and advancedresearch group of the company) thatthere was a significant opportunity inthis area. HP fellow and director ofthe Sustainable IT Ecosystem Laboratoryat HP Labs, Chandrakant Patel, recallstalking to colleagues about rethinkingdata centers as early as the mid-1990s:I came up with the idea that a datacenter can be thought of like a computerand that the walls of the data centerare akin to the walls of enclosure, andthat data center needs an operatingsystem, recalls Patel. So we proposedthis work on Smart Data Centerslooking holistically at everything fromchip systems, racks, data centers andcooling towers, all the way to the utilityproviding power to the data center.When I went to talk to my boss, he said,Chandrakant, why do you want to dofacility research? But our contentionwas the state of the art is lacking. Iconsider a data center akin to CarnegieHallbut with 100 to 150 people per 8. seat. And when you have that kind ofthing, surely state of the art needs tobe advanced. It became about sensingand more precisely controlling theprovision of resources so that we dontoverprovision and waste energy. Oneof the comments that came back was,Nobody ever gets fired for wastingenergy. But you could get fired if asite shuts down [due to insufficientpower]. But, as we are a research lab,going forward our contention was,You would get fired for both. So wecharged ahead and continued to workon developing products that providedefficiencies at a data center level.And as we developed a total cost ofownership model, we found that theburdened cost of power in the datacenter exceeded the depreciationof the industry standard hardware.Today, the company carefully examineseach data centers design for newefficiencies. This processalong withthe innovations it has generatedhas, in turn, created a large growthopportunity for HP products andservices. Lessons learned from its ownoptimized data centers have led tolarge consulting opportunitiesalongwith significant competitive advantagein positioning HPs hosted data centers.Data centers are an area of increasinginterest for HP because we manage alot of data centers for ourselves andfor our customers, explains Frey. Weredoing a lot of work around powermanagement software, the ability tocontrol those units more holistically.Then we take it a step higher to thework on the data center: How do youmeasure the heat put out by a datacenter? How do you minimize it?Because about 50 percent of thepower consumed by the average datacenter is used for coolingits notbeing used to process data. HP hasinvented a series of technologies torun data centers more efficiently. Theaverage server runs about 20 to 40percent of its rated capacity at anygiven time. Yet the power supply uses80 percent of its total draw, even fullyloaded when its idling. So if youreusing 80 percent of the energy andyet youre not processing any data,thats very inefficient as well. So theresa lot of work in that space, he says.In 2007, HP Labs built a 70,000-square-footdata center in Bangalore, India,concentrating the equivalent computingpower of 14 traditionally designedfacilities under one roof. The Bangaloredata center uses HPs new DynamicSmart Cooling (DSC) system, whichreduces energy and costs by coordinatingcooling with the real-time needs of theservers, using 7,500 sensors that monitorequipment environment temperaturesand adjust the air conditioningaccordingly. HP achieved initial savingsof 20 percent of cooling costs comparedwith legacy data centers, and expectsthose savings to reach 40 percent oncethe system is optimized. The newcenter is expected to save 7,500 MWhannually, equal to 7,500 tons of carbondioxide equivalent emissions. It repre-sentsthe largest implementation ofDSC to date and demonstrates that thesavings achieved in smaller data centersare possible in much larger facilities.HP is now focused on reducing datacenter energy costs. According toHieronymi, Many companies havestarted to show the electricity costs oftheir data centers as a separate costitem, which is then allocated to the ITcenter. Where, in the past, the electricitycost of companies was just distributedand allocated to everybody, now, allof a sudden, the IT center managerhas a new cost element which is quitesignificant, especially if you look intothe server business. There are serverswhere the cost of their energyconsumption for one year is morethan the hardware purchase prices.Beyond looking at energy use in datacenters, HP travels further back alongthe supply chain to uncover moreopportunities for savings and reengi-neering.We are looking at how muchenergy is used to extract material,manufacture it, use it and reclaim it,explains Patel. We look at the entirelife cycle. This way we are gettingcloser to the true cost. And we arebuilding data centers with just enoughmaterial so that it becomes a lower-cost,lower-energy provider of the same orgreater level of service.Reducing carbon footprintsby substituting business travelwith telepresenceIn other areas where HPs operationsserve a broader audience the companysSER efforts are also creating newbusiness opportunities.The evolution of videoconferencingas an alternative to corporate travelrepresents a fat target for reducingenvironmental impact. Here, HPsstate-of-the-art telepresence solution,called Halo studios, is now beingrolled out as a distinct product forinnovative customers.Halo studios bring meeting attendeesfrom around the globe into anenvironment that feels as if theyare in the same room. Halo alsoincludes energy-saving features, suchas displays and lights that automaticallyturn off when not in use.Hewlett-Packard: Sustainability as a Competitive Advantage7 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved. 9. Hewlett-Packard: Sustainability as a Competitive AdvantageSource: Battelle Media, http://Battellemedia.com/archives/003632.php.HP currently has 34 Halo studios in 14countries and plans to nearly quadruplethat number by the end of 2009. Thiseffort is expected to significantlyreduce HP travel and save at least32,000 tons of CO2 emissions per year,which translates into roughly $1.28million in bottom-line savings (assuming$40 for the price of carbon emissionsper ton).This is a good example of a solutionwhich itself has a fairly small footprint.Were talking about a few plasmascreens for a studio, which has a fewkW hours a day of consumption. Buton the other side of the equation, youare saving a significant amount ofbusiness travel. If each studio avoidseven a single business trip a year, thatsaves about 237 tons of carbon emissionsannually. And if you add that up, thatgets to very significant savings, saysPierre DelForge, HPs EnvironmentalSustainability Strategies manager. InEurope, we believe that we will save aminimum of 15 percent in travel coststhis year through the use of Halo. Weare also working with two major hotelchains to create virtual presencerooms that they can rent out likethey do conference rooms. So wemight see some of those in the future asa standard offer where you can go in,just rent it for half an hour and maybethere will even be a family reunion orsomething in between [thesemeetings], says DelForge.Positioning for the futureHPs sustainability strategy has alreadyestablished the company as a clearthought leader in the industryanadvantage that leads to first-moveropportunities and first pick of topsuppliers, employees and partners. AsHP retools its infrastructure and distri-butionstrategies, it further aligns itsoperations with emerging best practices,giving it a competitive edgeandopening new growth horizons.According to Nixon, The WWF reportsthat the IT industry contributes to 2percent of global warmingroughly onpar with the airline industry. But HPbelieves that, unlike the airlines, the ITindustry is unique in its ability tohelp reduce carbon emissions in other8 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved.industries. Nixon says: Through use oftechnology, we can influence orreduce that other 98 percent throughsmart controls and manufacturingprocesses, or in power plants or otherapplications of technology to reducegreenhouse gases, or also calculatethe impact of greenhouse gases.Delforge adds: We believe there isan opportunity for IT to be a significantpart of the solution in providing energyefficiency, reduction of resourceconservation and substitution of highcarbon by low-carbon processes. Thisis a whole area that we call the low-carbon-economy opportunity for HP.That means we will define what solutionswe can take to market or develop ordeploy further that have significantbenefits outside of just the energyused by IT. We can reduce the energyused and the carbon emissions fromother processes, for example, whetherits manufacturing, or transportationor buildings, or even just behaviorchange and consumption patterns.Hieronymi cites desktop printing as anexample where new technology cancombine with new behaviors to have awider impact on the environment:One of the trends in printing is thatcompanies are taking away the personalprinter from every desk, including thedesk of the CEO or the HR departmentor the legal department. If you haddone that five years ago, people wouldhave argued with you, saying thatsensitive documents should not be ableto be read by anybody who might bepassing by a common printer. Nowadays,you can go to a printer and the momentthe printer reads your ID badge, itstarts printing your documents. Andyou can do that with every printer inthe network. So even if you are, for 10. Hewlett-Packard: Sustainability as a Competitive Advantageexample, sitting in a boardroom andyou need certain documents, yoursecretary sends it to the printingnetwork and you just go to the nearestprinter to the boardroom, put your IDcard there and then its printed. Theseare all technologies that enable us toreduce paper.We recognize two aspects of energyconsumption: HPs internal operationsand the consumption of energy by HPproducts, Delforge says. We have anoverall energy consumption reductiongoal of 25 percent, of which 16 percentis expected to come from the operationsside. We wanted to have the mostcomprehensive goal that we could,so we included both the operationalsavings and the product savings inthat goal. Products and services is thesecond facet of the strategy thatincludes both the energy used by ourproducts along with other resourceslike paper for printing, for example. Soits the whole life cycle of our products.And if you look at that whole scope,our products and services footprint isan order of magnitude of between 20and 25 times bigger than ouroperations footprint.HPs expertise and innovation arealso pointing toward more servicebusiness, such as energy assessmentsof enterprise data centers for largecommercial customers.I remember one company in Austriawhere within a two-day consultingengagement, we identified a savingspotential of 1 million kW per year,which was about 15 percent of thetotal energy use of that clientworthabout EUR 80,000 per year, recallsHieronymi. And this is helping tochange, I think, the perception of envi-ronmentalinitiatives with enterprisecustomers. They are seeing, today, thatwhenever they do something toreduce their environmental footprint,they are realizing bottom-line savingsvery quickly.Leading the way inthe low-carbon economyOf course, IT-related carbon output isjust a small piece of the puzzle. Of allthe carbon emissions in the world, theIT industry generates only 2%, Nixonsays. HP wants to lower them, but itis also working on reducing the other98%. An assortment of energy-savingsolutions can help companies in allphases of their business. These rangefrom print management and print-on-demandservices that save energy andpaper, to solutions that let manufacturingplants operate more efficiently.Some of the areas in which HP is layingthe groundwork for leadership in thetransition to the low-carboneconomy include:The dematerialization of datacenters, including the implementationof a photonic interconnect to eliminatethe need for heat-producing, resource-intensivecopper cabling while improvingprocessing speed and loweringbandwidth costs;Low-carbon IT solutions to increaseresource efficiency across the enterprise;An aggressive materials recovery pro-gramthat goes well beyond traditionalrecycling; the program will create aprofit center from both refurbishmentand materials/ component sales intosecondary markets. (Through 2007, HPhas reclaimed more than one billionpounds of used hardware and is ontarget to process another billionpounds by 2010.)9 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved.ConsistencyTo ensure that its sustainability andcorporate social responsibility (CSR)efforts stay true to their aims and areproviding the kind of measurable returnsthis high-performing company insistson, HP has several processes in placeto regularly assess and revise thecompanys strategy. Some of the mosteffective processes have been theresult of a radical move towardtransparency, which has helped to co-optthe services of watchdogs and lever-agedthem to HPs long-term advantage.Building alliances and invitingdialogue with key groupsHPs leadership in CSR and sustain-abilityhas provided a powerful platformto work with industry peers, NGOs andgovernment agencies to influence theshape of future industry and nationalregulations. One of the first actionsrequired in the implementation of HPsSER strategy was to address the com-plexissue of an extended and diversesupply chaina lightning rod ofattention for many NGOs.While it has been a challenge tocoordinate everyone within HP toshare and support a unified vision ofsocial and environmental responsibility,it has been even more daunting to tryand elicit that same level of passionfrom the industrys most-envied list ofglobal suppliers, who together representa workforce of nearly 400,000 people.To begin, HP insisted that all its vendorsadopt the same supplier code of conduct.Having played a key role in the creationand adoption of the industrys ElectronicsIndustry Citizenship Coaltion (EICC)guidelines, HP used them to formulateclear policies that cover everythingfrom sourcing environmentally respon-siblematerials to ensuring that workersare treated with respect and dignity.2 11. Hewlett-Packard: Sustainability as a Competitive AdvantageMy ten-year vision is for consumersto know that when you touch an HPproduct, you are guaranteed it wasmade in a socially and environmentallyresponsible way, says Bonnie Nixonin her former role as HPs lead forSupply Chain, Social and Envi-ronmentalResponsibility.Since 1999, Nixon has been instru-mentalin ensuring that all of HPssuppliers meet expectations andadhere to the terms of the EICC. In2004, the Catholic Agency for OverseasDevelopment, a human-rights watchdoggroup, issued a withering report, allegingdire working conditions by overseascontractors serving the computerindustry. Nixon used the report as alever to ramp up HPs efforts, not justamong its own suppliers but across theentire electronics industry.To ensure the code would be uniformlyembraced, the company took unprece-dentedaction: In April 2008, HPreleased a comprehensive list of itstop-tier vendors in a bold move thatstunned many industry veteransinsideand outside of HP. Glazer recalls: Wereleased the names despite a long-standingoperational policy in thecompany that defined our supplychain as a source of significant com-petitiveadvantage. This list had neverbeen shared. And it was very counter-intuitivefor our senior managementwhen we put that forward. We spent alot of time talking about whether itwas the right thing to do. And weultimately concluded that the valuein doing it exceeded any possiblecompetitive loss that might go alongwith exposing that information.The response was almost universallypositivenot only among influentialanalysts, NGOs and consumer/advocacygroups but among suppliers as well,who viewed the move as a sign of along-term commitment from HP. Atthe same time, this radical transparencyput significant new demands on HPssuppliers, including intensive auditfrom the company to evaluate suppliersperformance in areas like environmentalresponsibility, energy efficiency andlabor policies. From May throughSeptember 2007, HP engagedEnvironmental Resources Management(ERM) and Verit to conduct verificationaudits of dozens of suppliers in Chinaand Thailand, including those suppliersidentified in NGO reports as havingpoor standards.The audits help suppliers understandexactly what were looking for, saysGlazer. They can read something thatsays, Working hours should be this.Then they answer six questions aboutit, and they gain a much deeper levelof understanding of what were lookingfor. After the written portion, an on-siteaudit is arranged by the person whonormally manages our business withthat supplier on an ongoing basis.Some of HPs suppliers bristled at thenew requirements, and others worriedthat implementing them would raisetheir costs; some even sought priceincreases or other guarantees from HP.Chi-Luen Lee, HPs SER supply chainlead for China, remembers explainingto suppliers, Look, this is part of thelaw and you ought to be meetingthese requirements anyway. And if youwish to continue working with HP, youwill have to comply because you areobligated to do so under our contract.But dont worrywell work with youto make improvements if you areinterested and committed. In twoChinese factories, HP tested a newapproach to taking corrective action.Verit conducted Management ActionPlanning sessions with these suppliers,10 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved.working with their managers to identifythe root cause of the violations andfix the issues. Both of these suppliershave made improvements in theirsystemsand understand now howto identify issues on their own anddevelop sustainable corrective actions.Here, too, sound social and environ-mentalstrategy proved to be goodbusiness. Lee and his team found thatwhen a supplier had a poor result onthe EICC audit, often they also hadproduct quality issues. This discoveryallowed HP to either adjust its supplierbase or take quick and efficient stepstoward remediationwith a clearfocus on measurable objectives. Wetreat a supplier as a partner. Its noteasy to become an HP-approved sup-plier,but once you become one it is notvery easy for us to terminate the rela-tionship.We always prefer to work withsuppliers for improvement, Lee says.Nixon agrees: You have to get outthere and manage your supply chain,engage with your suppliers and bewilling to share tools, people andexpertise to help them grow. CSRissues need to be embedded in yoursourcing organizations ethos, andyou have to go beyond the first tierof suppliers.HPs Stakeholder Advisory Council(SAC) is another means of keeping thecompanys sustainability strategy currentand on course. As Mark Heintz says,The NGO community is a much moretrusted body than business and alsothan government. So for us at HP,partnering with WWF adds a certainlevel of credibility to programs thatwere creating. WWF has got leadingclimate scientists working for themthat help advise us on being aggressive 12. Hewlett-Packard: Sustainability as a Competitive Advantageyet realistic about our goals. And Ithink the goals that we put togetheras a result are perhaps more crediblethan those of other companies thatdevelop them on their own. So myperception of shareholders and othersis they view this as a good partnershipand as something that legitimizesand adds credibility to HPssustainability program.While the company has often engagedstakeholdersinside and outside HPfor various projects or for informalinput, the SAC has a very broad, high-visibilitymission within HP but alsowith the public. From HPs perspective,the recruitment of key NGOs holds thepromise of ironclad credibility, alongwith a fresh viewpoint. HP has alwayshad a stakeholder engagement functionwith extensive inputs at the regionallevel, says Heintz. But now we bringoutside stakeholders in at the globallevel, to get them in front of the SVPcommunity in a way that they hadntbeen beforeby bringing them intostrategy sessions and into the goal-creationprocess and into developmentfrom an operations perspective. Wekind of use them as an advisory panel.Its a pretty big commitment fromEVPs, SVPs, as well as from the peoplewe bring in.Heintz remembers his recruitingefforts within HP getting a mixedreception, at least at first: A lot ofmanagers said, Great! No problem.Lets meet with these guys. I think thisis a great idea. This will help us managethese campaigns. Well find someproactive programs, well get someadvice and this will be great! And wellanswer their questions. But some ofthem were much more apprehensiveat the beginning. I think there aresome myths in the business communitythat NGO types are running aroundwith protest signs behind their backs,or shareholder resolutions in theirbreast pockets ready to whip out atany moment. And so one of the thingsthat has been fascinating as Ive putthis council together is the camaraderieand the teamwork thats been builtand the transformation of HP. A fewpeople were very surprised that theNGO folks behaved much more likeconsultants and advisers than any ofthese myths would have led them tobelieve. So one of the benefits of thiscouncil is the transformation ofperceptions within the HP executivecommunity. And Ive heard others talkabout this as well in other companieswhere theyve had meetings andengagements with the NGO communitysaying, Oh my God, this is not what Ithought. There really is, now, a sharedsense of mission around the transfor-mationof HP, Heintz says.The proximity of the NGOs has alsohelped HP monitor and redress lapsesmore effectively. Heintz recalls aparticular incident that took a muchdifferent turn than it might have, hadthe company not been as engaged andresponsive in its CSR efforts: There isa network of NGOs called the GoodElectronics Network. Their focus is onworking conditions in the supply chainfor the IT industry. They started acampaign in early 2007 called HighTechNo Rights? and graded five ITcompanies: HP, Dell, Apple, Acer andFujitsu Siemens. Fortunately, HP wasrated the highest. But in the evaluationcriteria we noticed that we had a redmark in China. And we were a littleconfused by that because weve donea lot of work in China. So we met withthis NGO, and we discovered theywere gathering their information bystanding outside one of the factoriesof our suppliers in China and inter-viewing11 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved.workers as they came out ofthe plant. These were large operationswith 10,000 to 20,000 employees and$100 million of revenue. And here theNGO was trying to assess the situationinside by just interviewing a few peoplecoming out the gate. At any rate, wegot wind of this and said, OK, thismay explain why youre giving whatwe consider to be an erroneous rating.Youre just not getting good information.So we actually helped the NGO peopleget inside our suppliers factory. Weintroduced them to the managementteam and allowed them to interviewworkers on the inside rather thanstanding outside the gates trying topiece something together. So we wereable to take a situation that was kindof negative and use our transparencyand HPs proactive approach to turnthe situation around. It resulted in abit of a competitive advantage for usas well because this group of NGOshas influence over what is said aboutour company and the perception of HPin the industry.The forum has also allowed HP tolearn from leaders in other industriesthat have dealt with these issuestheWWF, for example, and its methodsfor reducing greenhouse gas emissions(WWF helped HP develop realistic butaggressive goals) as well as Nike andits experience in addressing the socialissues of a diverse global supply chain.Other collaborations are blossomingas well. HP and the WWF now makejoint presentations at universitiesaround the world, discussing how ITcan help reduce energy emissionsand drive change. 13. Hewlett-Packard: Sustainability as a Competitive AdvantageIntroducing HP PavilionIn September 2008, Wal-Mart namedHP the winner of its Home EntertainmentDesign Challenge, singling out thetechnology company for its success atfurther reducing the environmentalimpact of personal computers.A radically redesigned product, theHP Pavilion dv6929 EntertainmentNotebook is the first ecocentricconsumer product to commandpremium pricing. The notebookfeatures an innovative design thatreduces product packaging by 97 per-cent,conserving fuel and reducingCO2 emissions by removing the equiv-alentof one out of every four truckspreviously needed to deliver thenotebooks to nearly 1,700 Wal-Martstores and 594 Sams Club locations.To package the Pavilion notebook,HP replaced conventional protectiveshipping materials and boxes with theHP Protect Messenger Bag, made from100 percent recycled materials. Thisallows for a dramatic reduction inoverall packaging content and sizewhile delivering equal, if not better,product protection compared withconventional packaging. Customerswho purchase the HP notebook leavethe store with the computer and itsaccessories cushioned safely in thenotebook bag. (See Figure 3.)Packaging engineer Randy Boellerdiscusses the mechanics of such aradical re-conception: We assembleda team that included the productmarketing group, a program managerwho handles sales and marketing forNorth American consumer products,the packaging engineer from thenotebook group, and then a number ofpeople from the manufacturing group.Youre talking about a pretty high-volumeproduct line, and anything youdo in the manufacturing operation thatcauses a change and could interruptproduction and shipment, youve gotto be real careful not to mess with that.12 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved.We also needed a number of productionpeople and ancillary support groupslike marketing communications forsome of the artwork as well as othermarketing people to make aestheticFigure 3: HP Pavilion Entertainment Notebook and AccessoriesSource: HP 14. Hewlett-Packard: Sustainability as a Competitive Advantagedecisions about the bag. Then weworked with the bag supplier to getthe preliminary samples, do the shockand vibration testing to make surethat the product was as protected asit was in conventional packaging.Boeller explains that an apples toapples comparison of packaging costs(cardboard and styrofoam versus adesigner messenger bag) was notrelevant, as the new bag also repre-sentedpart of the value of the productas welland part of the reason for thepremium pricing opportunity.To reinforce the products environmen-talappeal, HP made the notebook anEnergy Star product that uses a highpercentage of recycled materials.To date, it is HPs greenestconsumer computer.LongevityHP has always had a competencyin long-term planning and vision.Additional product and marketinginnovations (beyond the Pavilion/Wal-Mart collaboration) are in placefor the long-term as well, and thecompany has established ambitiousstretch goals in areas like carbonemissions. It is clear that HP aims toachieve and retain leadership positionsacross as many dimensions as possible,with strategies that take a very longview. Critical to executing these visionswill be the companys ability to maintaina white hat position amid growingpublic and regulatory scrutiny.Achieving long-term gains byinvesting in suppliers and partnershipsCentro de Reflexin y Accin Laboral(CEREAL) is a labor-rights organizationthat advances the rights of maquiladoraemployees in Mexico, includingelectronics workers in Guadalajara,where many HP suppliers are located.According to HP, this NGO communityof Catholic priests also operates severaluniversities in Mexico and is one ofthe more influential communitiesdedicated to improving working andliving conditions in the region. Overthe past several years, HP has takenwhat was potentially a highly adver-sarialrelationship with CEREAL andtransformed it into one of mutualtrust and cooperation.Julio Acevedo, HPs head ofGuadalajara operations, remembershow the collaboration began: Oursuppliers in the electronics sector weresaying, Dont even talk to them. Theyredangerous. They want to really damageour image. So four or five years ago,Bonnie Nixon came here to a meetingwith CEREAL in Guadalajara, and wewere pretty much the only attendeesfrom the industry. I think it was thefirst meeting when we found out thatthey were doing an analysis of theindustry. They were conducting inter-viewswith workers (some of whomwere probably fired for a reason andwho were mad at the electronicsindustry), and thats what they werewriting about. So I told the CEREALpeople, This is really hurting theelectronics sector because you are notgiving companies the chance to providethe other side of the story. So we satdown with CEREAL and worked out aplan to conduct systemized audits.Because HP was such an importantcustomer for many of these manufac-turers,13 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved.we had some clout. After acouple of years, as everybody beganto understand this was a very, veryimportant subject, people began to seethat implementing the code of conductwas something good for the industry,for the workers and for the people andto make better places to work. Andwe got commitments from all thecontract manufacturers.After two years, most manufacturershad adopted robust plans for commu-nicationand training for all their HRpeople and hired environmental healthand safety people to implement thecode of conduct. Bimonthly meetingswith representatives from the manu-facturersand CEREAL are now held.CEREAL has begun serving as afrontline resource for employees inresolving disputes, advising employeeswith problems, weeding out nuisancecases and taking advantage of theirimproved access to electronicsexecutives to negotiate satisfactorysolutions. Manufacturers that havechosen to ignore the industry standardsand fair practices have been droppedfrom HP contracts.HP now has a system of 70 auditorswho regularly inspect 200 factoriesowned by 150 key HP suppliersagreater number of auditors than anyother EICC member. HP says allegationsof labor problems contributed to itsdecision to break with three suppliersthat didnt make the grade, includingSouth Koreabased Trigem Computer.Trigem says it wasnt aware ofthe problems. 15. Hewlett-Packard: Sustainability as a Competitive AdvantageHPs suppliers have also reaped clearbusiness benefits from their improvedrelationships with NGOs like CEREALmainly, lower employee and customerattrition rates as well as better workersseeking employment because ofimproved conditions in the electronicssector. Our suppliers can spend lesson training because there is lowerturnover, says Acevedo. People alsofeel a lot more loyal to the company.For example, one of the companiesimplemented an employee suggestionto allow pregnant women to leave fiveminutes ahead of other employees sothey dont get so stuck in the eveningrush. And the company came back notonly with that, they also provided adifferent color of uniform, a pink color,so people can see that the women arepregnant and can put them in areasthat are less stressful to work in. Andeverybody was very happy. So I believethat the most important thing is thatwe have started a culture of doingbetter for both the worker and thecompany. And I think that this is greatto have this kind of culture. Employeesare now more likely to ask themselves,How can I be more productive? Howcan I do more with less? How can theytreat me better?Staying ahead of thesustainability curveTo outperform its peers, HP is using athreefold approach as part of its sustain-abilitystrategy: It ensures that itssuppliers adhere to a stringent code ofconduct (as discussed previously); keepsits finger on the pulse of trends in theenterprise business and individual con-sumermarkets; and educates employeeson expected behaviors that both driveperformance and are consistent withHPs sustainability objectives.Expanding the appeal of a sustainabilitymessage from a few forward-thinkingcompanies in the upper echelons ofglobal business to full-on ethicalconsumerism still represents a steepeducational and adoption curve. ButHP is in it for the long haul with itsSER programand its approach allowsHPs markets to drive the pace. Mostpeople have bought into the wisdomof energy reduction, concludes PierreDelforge. The problem we have isfiguring out how that is compatiblewith our business objectives in termsof market readiness or marketdemand. What are our customers reallyasking for? What are they ready to payfor? And how much does it cost us todeliver that? By having a consistent,long-view policyand mechanisms inplace to implement and quickly modifyits strategyHP ensures that its productand service development processesdovetail with the market, whilemaintaining industry thought leadership.John Frey says: We are seeing enterprisebuyers in general getting much moresophisticated around issues like theenvironment. We published a whitepaper that helps them spec greenerproducts, explaining the variety ofeco-labels and international standardsthat exist along with questions to askIT vendors. Its not HP-biased in anyway, but even when purchasers useobjective sustainability criteria, HPtends to win a lot of business. Andthough HPs energy-efficient, newlyeco-labeled products are commandinga premium price with enterprisecustomers due to an aggressive24-month payback period, themessage is still slow to resonatewith retail customers.14 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved.Weve figured out time and time againthat you can do market surveys andconsumers will tell you, Yes, absolutely,I want to buy an environmentallypreferable product, and Im willing tospend extra for it, says Frey. But thereality is, at point of purchase, its allabout price. Our enterprise customershave warmed up to more energy-efficientpower supplies and equipmentthat uses a lot less energyeven whenit has a price premium associated withit because those components are moreexpensivebut consumer customersare still unwilling to pay for that.Another danger is deliberate confusionin the market: It often takes a detailedexplanation to make the case for atruly greener product, says Frey. Meanwhile, its easy for others togreenwash or divert attention, talkingabout things like 3-watts-lower standbypower, which is a bit disingenuouswhen, really, 70 percent of theassociated energy use of a printeris in making the paper.Building on a culture of responsibilityHP is ensuring its ability to sustainitself long-term by maintaining acorporate culture built on CSR values,by investing in suppliers and partnersfor the long-term, and by encouragingideas about sustainability to bubbleup from employees at all levels.In a letter that accompanies HPsGlobal Citizenship Report for FY2007,HPs chairman, CEO and president,Mark Hurd, pledges to use the companysfocus, resolve and ingenuity (alongwith that of its partners, suppliers and 16. Hewlett-Packard: Sustainability as a Competitive Advantagecustomers) to help address some ofthe planets most critical challenges.The mission is not seen only as altruismbut also as savvy business strategyamessage that is reinforced at all levelswithin HP.You cant save the environment bylosing money, Nixon says. Thats alosing proposition because if you dothat, then youre not going to be aleader and if youre not a leader, yourenot influencing what is happening insociety. So I think we need to findwin-wins, where you can do well andyou can do good. And to have asuccessful environmental strategy,you need to be successful from abusiness perspective.To make sure that employees at everylevel of the company understand thiswin-win view, the company hosts anumber of internal sustainabilitynetworksgroups within each HPoffice where employees can sign upfor different distribution lists, coffeetalks and committees. There is acompanywide program called LiveGreen, where employees can availthemselves of programs such as solarpanel reimbursement. Live Green alsooffers access to a large database calledGreen Base, where all of HPs envi-ronmentaldocuments, customerpresentations and competitive researchare stored. One valuable businessbenefit of this universal focus andawareness is that many of the companysbest SER ideas have come from relativelyjunior employees. According to JudyGlazer, Almost all of our supply chainideas originate from more junior folksand work their way up to the SVPlevel. The three senior VPs who drivethis from a strategic standpoint arecollectively responsible for roughly$50 billion in expenditures for productmaterials and manufacturing and theentire fulfillment for HP products.So theyre not sitting around havingmeetings with each other decidingwhen we should eliminate whichmaterial or how we should resolvecompliance issues. Many valuableideas come to them in the form ofproposals that have been developedlower in the organization.Sharing lessons learnedAs pioneers, HPs SER executives arevery eager to share what theyrelearning with other organizations. Freyadvises aspiring sustainable companiesto find out what is meaningful to youand your customers. Focus on the thingswhere you can really make an impact.That sounds really obvious, but youdbe amazed at how many companiesput together a sustainability strategyand focus on things that are incidentalto their business or in the eyes of theircustomers, while ignoring opportunitiesthat are much bigger. Also, get a solidbaseline before you start so that youknow when youre making an impact.The final thing I tell companies is,measure your progress and be trans-parentabout it. Increasingly, on todaysworld stage, youre not credible ifyoure not transparent.Nixon counsels every company to takea realistic view of the near-term: Oneof the reasons we came out with oureco-attributes label is that we seewhats going on in the landscape andultimately its going to be regulated.So why not get out there and try toinfluence it and harmonize it and justbe transparent with your products?What were out there with now is kind15 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved.of a first step, but where were takingit is really going to be pretty innovativein terms of being just full open kimonoabout whats in our products.I think HP is lucky in the sense thatits founders believed in sustainability,continues Nixon. Its something thathas had visibility and has reallywithstood the test of time. It has tobe understood and endorsed fromthe top down. Mark Hurd is a prettypragmatic guy: Hes focused on thenumbers and has the most balancedview of sales, operations, products,technology, etc. that you could get.So being able to frame the dialogueand the programs and the initiativesin a way that makes business sensefor your customers is key. Thats HPat our core, a company that makessustainability make sense. 17. About the authorsEric Lowitt is a research fellowat the Accenture Institute for HighPerformance, where his researchfocuses on the connection betweensustainability and high performance.Lowitts most recent sustainabilityresearch has been published onprominent websites such as the WorldBusiness Council for SustainableDevelopment and Forbes.com.About the InstituteThe Accenture Institute for HighPerformance develops and publishespractical insights into criticalmanagement issues and globaleconomic trends. Its worldwide teamof researchers connects with Accenturesconsulting, technology and outsourcingleaders to demonstrate, through original,rigorous research and analysis, howorganizations become and remainhigh performers.Jim Grimsley is the AccentureSustainability Practice Lead for NorthAmerica. Based in Houston, Texas,Grimsley has significant experienceleading a number of successful reengi-neeringand transformation projects.Prior to his current role, he was theglobal managing partner for upstreamin Accentures energy industry group.His consulting background encompassesa broad range of leadership experiences,including major merger integrationefforts in the energy industry aswell as several significant supplychain projects.About AccentureAccenture is a global managementconsulting, technology services andoutsourcing company. Combiningunparalleled experience, comprehensivecapabilities across all industries andbusiness functions, and extensiveresearch on the worlds most successfulcompanies, Accenture collaborateswith clients to help them becomehigh-performance businesses andgovernments. With more than 186,000people serving clients in over 120countries, the company generated netrevenues of US$23.39 billion for thefiscal year ended August 31, 2008.Its home page is www.accenture.com.16 | Accenture Institute for High Performance | Copyright 2009 Accenture. All rights reserved.Notes1. Company History, the Fifties, HP MemoryWeb site, http://www.hpmemory.org/wa_pages/wall_a_page_08.htm,accessed December 5, 2008.2. The Electronic Industry Code of Conduct(Version 2.0, October 2005) outlines standardsto ensure that working conditions in theelectronics industry supply chain are safe, thatworkers are treated with respect and dignityand that manufacturing processes are environ-mentallyresponsible. The Code was initiallydeveloped by a number of companies engagedin the manufacture of electronics productsbetween June and October 2004] Participatingcompanies included Celestica, Dell, Flextronics,HP, IBM, Jabil, Sanmina-SCI and Solectron.Companies either adopting or endorsing thecode or joining the Implementation Groupinclude: Celestica, Cisco, Dell, Flextronics,Foxconn, HP, IBM, Intel, Jabil, Lucent, Microsoft,Sanmina-SCI, Seagate, Solectron and Sony.Hewlett-Packard: Sustainability as a Competitive Advantage 18. Copyright 2009 AccentureAll rights reserved.Accenture, its logo, andHigh Performance Deliveredare trademarks of Accenture.