Welcome to your CDP Water Security Questionnaire 2020 W0 ......International Business Machines (IBM)...

International Business Machines (IBM) CDP Water Security Questionnaire 2020 Wednesday, August 26, 2020

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Welcome to your CDP Water Security Questionnaire

2020

W0. Introduction

W0.1

(W0.1) Give a general description of and introduction to your organization.

IBM is a Cloud and Cognitive enterprise creating value for clients by providing integrated

solutions and products that leverage: data, information technology, deep expertise in industries

and business processes, with trust and security and a broad ecosystem of partners and

alliances. IBM solutions typically create value by enabling new capabilities for clients that

transform their businesses and help them engage with their customers and employees in new

ways. These solutions draw from an industry-leading portfolio of consulting and IT

implementation services, cloud, digital and cognitive offerings, and enterprise systems and

software which are all bolstered by one of the world’s leading research organizations. IBM is

unique in bringing innovative technology and industry expertise on a foundation of trust and

security as an integrated proposition to our clients.

IBM has a longstanding commitment to environmental leadership. IBM’s corporate

environmental programs date back from the 1960s and were formalized under a Corporate

Environmental Policy in 1971. IBM’s corporate environmental policy calls for environmental

leadership in all of IBM’s activities. The policy objectives cover workplace safety, pollution

prevention, natural resource conservation, product design for the environment as well as a call

for continual improvement and utilization of IBM products, services and expertise to assist in

the development of solutions to environmental problems. IBM has established and maintained

a strong worldwide Environmental Management System (EMS) for decades. Through this EMS,

we manage our operations around the globe to minimize their potential impact on the

environment.

More detailed information on our business is available from page 30 of the latest 2019 IBM

Annual Report at: https://www.ibm.com/annualreport/

W0.2

(W0.2) State the start and end date of the year for which you are reporting data.

Start date End date

Reporting year January 1, 2019 December 31, 2019


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W0.3

(W0.3) Select the countries/areas for which you will be supplying data.

Australia

Brazil

Chile

China

France

Germany

Greece

India

Indonesia

Ireland

Israel

Italy

Japan

Mexico

Peru

Philippines

Portugal

Singapore

South Africa

Spain

Sweden

United Kingdom of Great Britain and Northern Ireland

United States of America

Venezuela (Bolivarian Republic of)

W0.4

(W0.4) Select the currency used for all financial information disclosed throughout

your response.

USD

W0.5

(W0.5) Select the option that best describes the reporting boundary for companies,

entities, or groups for which water impacts on your business are being reported.

Companies, entities or groups over which operational control is exercised

W0.6

(W0.6) Within this boundary, are there any geographies, facilities, water aspects, or

other exclusions from your disclosure?

Yes


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W0.6a

(W0.6a) Please report the exclusions.

Exclusion Please explain

From the perspective of water use and

conservation, information from IBM locations

worldwide currently are not subject to our

Water Goal.

Our Water Goal focuses on specified IBM

locations in water stressed regions as defined

in the WRI Aqueduct Water Risk Atlas. In 2019

the goal covered 43 IBM locations, worldwide.

Our process includes an annual assessment of

the IBM locations worldwide over 25,000

square feet to ensure locations subject to the

goal are appropriate.

IBM's first water conservation goal was established

in 2000, focusing on the significant use of water in

our microelectronics manufacturing operations.

With the divestiture of IBM’s semiconductor

manufacturing operations in 2015, our water use

decreased significantly and became primarily

associated with cooling and humidity control of

buildings, domestic consumption at the workplace,

and building fire protection systems.

Given the above IBM prioritized its water

conservation focus and redirected its resources to

operations in water-stressed regions of the world

with a goal to continue to produce the greatest

desired outcome from our efforts. In 2016, IBM

established a water conservation goal to achieve

year-to-year reductions in water withdrawals at

larger IBM locations and data centers in water-

stressed regions. We used the World Resources

Institute’s Aqueduct Water Risk Atlas, which

highlights regions around the world where water

resources are stressed to meet human and

ecological demand, and our site specific

information and expert judgment to identify IBM

locations in areas of “high” or “extremely high”

baseline water-stress.

Our current water conservation goal covers 13% of

IBM's total utilized real estate space encompassing

43 IBM locations including data centers and other

large offices in water-stressed regions, worldwide.

IBM also monitors, measures and manages water

use and wastewater discharges at IBM locations

not in water-stressed regions for maintaining

operational conditions and compliance with

discharge permits. This is a requirement of IBM’s

global environmental management system.


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W1. Current state

W1.1

(W1.1) Rate the importance (current and future) of water quality and water quantity to

the success of your business.

Direct use

importance

rating

Indirect use

importance

rating

Please explain

Sufficient

amounts of good

quality freshwater

available for use

Important Important Direct: IBM utilizes fresh water in support of its

business operations primarily associated with

cooling and humidity control of buildings, domestic

consumption at the workplace, building fire

protection systems and limited development and

manufacturing activities.

Indirect: IBM requires all tier 1 suppliers to IBM to

have a corporate responsibility and environmental

management system of their own and that

suppliers require the same of those upstream

suppliers who perform work material to the goods

and services provided to IBM. IBM's suppliers are

to manage their responsibilities effectively,

systematically, and sustainability over the long-

term, including for water use and discharge as

applicable to their operations. IBM maintains a

supplier audit program to assess supplier

conformance with these requirements.

Sufficient

amounts of

recycled,

brackish and/or

produced water

available for use

Neutral Neutral Direct: IBM utilizes process water for reuse and

recycles industrial and sanitary wastewater to

reduce reliance on withdrawals from watersheds.

This reduces the demand on local water sources

and supplies utilized by IBM locations worldwide,

independent of whether the IBM location is in a

water stressed region. If such water sources were

not used IBM would primarily need to rely on

water supplied by municipal water supply utilities.

Indirect: IBM requires all tier 1 suppliers to have a

corporate responsibility and environmental

management system of their own and that

suppliers require the same of those upstream

suppliers who perform work material to the goods


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and services provided to IBM. IBM's tier 1

suppliers are to manage their responsibilities

effectively, systematically, and sustainability over

the long-term, including for water use and

discharge as applicable to their operations. IBM

maintains a supplier audit program to assess

supplier conformance with these requirements.

W1.2

(W1.2) Across all your operations, what proportion of the following water aspects are

regularly measured and monitored?

% of

sites/facilities/operations

Please explain

Water withdrawals –

total volumes

1-25 IBM's water goal is to achieve year-to-year

reductions in water withdrawals at specified IBM

locations in water-stressed regions.

Water data collected under the Water Goal

comes from 43 IBM locations including data

centers and other large offices in water-stressed

regions, comprising 13% of IBM's global utilized

real estate space.

In 2019 the total water withdrawals at these IBM

locations was 1,492,480 cubic meters.

Water withdrawals –

volumes by source





comes from 43 IBM locations including data

centers and other large offices in water-stressed

regions, comprising 13% of IBM's global utilized

real estate space.

In 2019 the total water withdrawals by source

for the IBM locations in water-stressed regions

was 1, 492,541 cubic meters, made up of 68.3%

(1,019,530 m3) from municipal supply; 25.4%

(378,541 m3) from fresh surface water; 6.3%

(93,368 m3) from fresh groundwater; and 0.1%

(1,040 m3) from bottled water.

Water withdrawals

quality

1-25 Water supplied for drinking at all IBM locations

worldwide is periodically sampled for quality as

part of our water, sanitation and hygiene


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(WASH) services in the workplace. Bottle water

is another quality product provided for access to

freshwater for drinking at IBM locations in India

in water-stressed regions.

Water discharges –

total volumes

100% IBM complies with the requirements in our site

water discharge permits issued by applicable

regulatory agencies, including submitting

required discharge reports to the agencies. Only

a small number of the IBM managed locations

with discharge permits discharge treated

wastewater directly to receiving waters globally.

In addition, IBM establishes its own

requirements for tracking, reporting and

managing discharges at applicable locations

including IBM locations in water-stressed

regions that are included in our water

conservation goal. While IBM does not publicly

disclose water discharge volumes from

locations managed by IBM globally, IBM does

publish its water management performance

through its annual environmental report.


volumes by

destination

1-25 IBM complies with the requirements in its water

discharge permits issued by applicable

















volumes by treatment

method

Not relevant


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Water discharge

quality – by standard

effluent parameters


















Water discharge

quality – temperature


















Water consumption –

total volume





comes from 43 IBM locations in water-stressed

regions that are subject to our water goal.

Collectively, in 2019 these locations comprised

13% of IBM's global utilized real estate space.


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In 2019 the total water used at these IBM

locations was 1,570,237 cubic meters.

Water

recycled/reused



locations in water stressed regions.

In 2019, we avoided water withdrawals

equivalent to 5 percent (78,192 m3) of total

annual water use mainly through process water

reuse for producing de-ionized water and for

on-site wastewater recycling in cooling tower

systems.

The provision of fully-

functioning, safely

managed WASH

services to all workers

100% IBM provides access to fresh drinking water,

sanitation and hygiene (WASH) services in the

workplace at all IBM locations globally. This is

an enterprise-wide precondition for selecting

locations and for maintaining a safe and healthy

workplace.

W1.2b

(W1.2b) What are the total volumes of water withdrawn, discharged, and consumed

across all your operations, and how do these volumes compare to the previous

reporting year?

Volume

(megaliters/yea

r)

Compariso

n with

previous

reporting

year

Please explain

Total

withdrawal

s

1,492.5 Lower IBM's first water conservation goal was established in

2000, focusing on the significant use of water in our

microelectronics manufacturing operations. With the

divestiture of IBM’s semiconductor manufacturing

operations in 2015, our water use decreased

significantly and became primarily associated with

cooling and humidity control of buildings, domestic

consumption at the workplace, and building fire

protection systems.

Given the above IBM prioritized its water conservation

focus and redirected resources to operations in water-

stressed regions of the world with a goal to continue to

produce the greatest desired outcome from our efforts.

In 2016, IBM established its latest water conservation

goal to achieve year-to-year reductions in water

withdrawals at larger IBM locations and data centers in


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water-stressed regions. We used the World Resources

Institute’s Aqueduct Water Risk Atlas, which highlights

regions around the world where water resources are

stressed to meet human and ecological demand, and

our site specific information and expert judgment to

identify IBM locations in areas of “high” or “extremely

high” baseline water-stress.

Our current water conservation goal covers 13% of

IBM's total utilized real estate space encompassing 43

IBM locations including data centers and other large

offices in water-stressed regions, worldwide.

IBM also monitors, measures and manages water use

and wastewater discharges at IBM locations not in

water-stressed regions for maintaining operational

conditions and compliance with discharge permits. This

is a requirement of IBM’s global environmental

management system.

In 2019, water withdrawals at these IBM locations

decreased by 2% versus 2018.

Examples are found in the section on water

conservation from page 36 of the latest 2019 IBM and

the Environment report at:

https://www.ibm.com/ibm/environment/annual/reporting.

shtml

Total

discharges

Lower Water discharges are managed at a location level and

discharge information is reported to regulatory agencies

where required. Internally, IBM also internally tracks,

reports and manages total water discharges from IBM

locations worldwide that have site regulatory wastewater

discharge permits. IBM measures and manages

wastewater discharges at applicable IBM locations

worldwide for maintaining operational conditions and

compliance with discharge permits. IBM’s corporate

program establishes treatment requirements applicable

to IBM locations where they discharge directly to

receiving waters. IBM locations with industrial or

sanitary wastewater treatment plants on site that are

processing industrial or sanitary wastewater must

adhere to these IBM corporate requirements. This is a

requirement of IBM’s global environmental management

system. IBM's global EMS is accredited to ISO14001:

2015 standard requirements, with the site's

management of wastewater discharges being including

in periodical internal and third party ISO 14001 EMS

auditing programs.


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Total

consumptio

n

1,570.2 IBM's water goal is to achieve year-to-year reductions in

water withdrawals at specified IBM locations in water-

stressed regions.

Water data collected under the Water Goal comes from

43 IBM locations including data centers and other large

offices in water-stressed regions, which in 2019

represented 13% of IBM's global utilized real estate

space. In 2019 the total water used at these IBM

locations in the water goal was 1,570,237 cubic meters.

W1.2d

(W1.2d) Indicate whether water is withdrawn from areas with water stress and provide

the proportion.

Withdrawals

are from

areas with

water stress

%

withdrawn

from areas

with water

stress

Comparison

with previous

reporting

year

Identification

tool

Please explain

Row

1

Yes 11-25 Lower WRI

Aqueduct

IBM's water goal is to achieve

year-to-year reductions in water

withdrawals at specified IBM

locations in water-stressed

regions.

Our current water conservation

goal covers 13% of IBM's total

utilized real estate space

encompassing 43 IBM locations

including data centers and other

large offices in water-stressed

regions, worldwide.

In 2019, water withdrawals at

these IBM locations decreased

by 2% versus 2018.

In 2016, IBM established its

latest water conservation goal to

achieve year-to-year reductions

in water withdrawals at larger

IBM locations and data centers

in water-stressed regions. We

used the World Resources

Institute’s Aqueduct Water Risk

Atlas, which highlights regions

around the world where water

resources are stressed to meet


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human and ecological demand,

and our site specific information

and expert judgment to identify

IBM locations in areas of “high”

or “extremely high” baseline

water-stress.

W1.2h

(W1.2h) Provide total water withdrawal data by source.

Relevance Volume

(megaliters/year)

Comparison

with

previous

reporting

year

Please explain

Fresh surface water,

including rainwater,

water from wetlands,

rivers, and lakes

Relevant 378.5 Lower IBM's water goal is to achieve

year-to-year reductions in

water withdrawals at

specified IBM locations in

water-stressed regions.

Our current water

conservation goal covers

13% of IBM's total utilized

real estate space

encompassing 43 IBM

locations, including data

centers and other large

offices, in water-stressed

regions worldwide.

In 2019 the water

withdrawals by source for the

IBM locations in water-

stressed regions were 1,

492,541 cubic meters, made

up of 68.3% (1,019,530 m3)

from municipal supply; 25.4%

(378,541 m3) from fresh

surface water; 6.3% (93,368

m3) from fresh groundwater;

and 0.1% (1,040 m3) from

bottled water.

In 2019, IBM locations in

water stressed regions used

378.5 ML of fresh surface

water, 5.4 ML less than 2018.


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Brackish surface

water/Seawater

Not

relevant

IBM does not source water

for use from brackish surface

water/seawater at any of the

43 IBM locations in water-

stressed regions worldwide.

Groundwater –

renewable

Relevant 93.4 Much higher IBM's water goal is to achieve

year-to-year reductions in

water withdrawals at

specified IBM locations in

water-stressed regions.

Our current water

conservation goal covers

13% of IBM's total utilized

real estate space worldwide

comprising 43 IBM locations

including data centers and

other larger offices in water-

stressed regions worldwide.

In 2019 the total water





up of 68.3% (1,019,530 m3)





and 0.1% (1,040 m3) from

bottled water.

In 2019, IBM location in

water-stressed regions used

93.4 ML of groundwater, 34.1

ML more than 2018.

Groundwater – non-

renewable

Not

relevant


stressed regions subject to

our water goal do not use

water from non-renewable

groundwater sources.

Produced/Entrained

water

Not

relevant


stressed regions subject to

our water goal do not

generate or use water from

produced/entrained sources.


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Third party sources Relevant 1,020.6 Lower In 2019, the total water





up of 68.3% (1,019,530 m3)





and 0.1% (1,040 m3) from

bottled water.

In 2019, IBM locations in

water-stressed regions used

1,020.6 ML of was supplied

by third party sources (utility

supplied and bottle water);

58.1 ML less than 2018.

W1.2i

(W1.2i) Provide total water discharge data by destination.

Relevance Volume

(megaliters/year)

Comparison

with previous

reporting

year

Please explain

Fresh surface

water

Relevant 5.9 Lower Water discharges are managed at

a site level where applicable and

as subject to regulatory discharge

permits.

Water accounting data including

wastewater discharges are

measured and tracked. Treated

wastewater directly discharged to

fresh surface waters is 1.2% of

the total quantity discharges by

the IBM locations in water-

stressed regions subject to our

water goal. Our latest water goal

covers 13% of IBM's total utilized

real estate space comprising 43

IBM locations in water-stressed

regions worldwide.

IBM’s corporate water discharge

program establishes treatment


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requirements applicable for IBM

locations where they discharge

directly to receiving waters. This is

a requirement of IBM’s global

environmental management

system. The majority of

wastewater effluent is sanitary in

nature and discharges to public

sanitary sewerage systems for

treatment prior to discharge.

Brackish

surface

water/seawater

Not

relevant

IBM does not have managed

locations worldwide that treat their

wastewater and directly discharge

to brackish surface water or

seawater.

Groundwater Relevant 7.1 Lower Water discharges are managed at



permits.

Water accounting data, including

discharge of wastewater is

measured and tracked under the

water conservation goal at specific

locations.

Groundwater being treated at

designated remediation sites is

cleaned and returned to the

groundwater according to

regulated remediation plans. For

example, the recharge of

groundwater at specific IBM

locations in water-stressed

regions comprise 1.5% of the total

quantity of water discharges from

the IBM locations in water-

stressed regions subject to the

water conservation goal.

Third-party

destinations

Relevant 406.5 Lower Water discharges are managed at



permits.

Water accounting data, including

discharge of wastewater is

measured and tracked under the

water conservation goal at the 43


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IBM locations in water-stressed

regions worldwide.

In 2019, 85.7% of the wastewater

discharged from the IBM locations

in water-stressed regions that are

subject to the water goal

discharged to third party

destinations / public wastewater

treatment plants, prior to final

discharge to receiving waters.

W1.4

(W1.4) Do you engage with your value chain on water-related issues?

Yes, our suppliers

Yes, our customers or other value chain partners

W1.4a

(W1.4a) What proportion of suppliers do you request to report on their water use,

risks and/or management information and what proportion of your procurement

spend does this represent?

Row 1

% of suppliers by number

76-100

% of total procurement spend

76-100

Rationale for this coverage

IBM is committed to doing business with environmentally responsible suppliers. In 2010,

IBM established a requirement that all first-tier suppliers establish a management

system to address their social and environmental responsibilities. Our objective is to

help suppliers build/enhance their capability to manage their responsibilities effectively,

systematically, and sustainability over the long-term, regardless of who their clients are.

While we do not require suppliers to directly report to IBM on their environmental

performance metrics, we do require all first-tier suppliers to publicly disclose their

environmental performance metrics.

Supporting information on supplier environmental responsibility is available at:

https://www.ibm.com/ibm/environment/supply/ms_requirement.shtml

Impact of the engagement and measures of success

IBM's supplier environmental management requirements are not being implemented

with a "one-size-fits-all" approach. Rather than requiring suppliers report to IBM the

suppliers metrics and progress (including water-related), IBM expects each first-tier


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supplier worldwide to deploy a management system, measure performance, set goals in

a way that reflects their intersections with their environmental responsibilities, and

publicly disclose their programs and results. IBM conducts review of its suppliers base

to track and drive conformance as part of our supply chain program.



Comment

W1.4b

(W1.4b) Provide details of any other water-related supplier engagement activity.

Type of engagement

Other

Details of engagement

Other, please specify

IBM requires tier 1 suppliers to implement a management system to effectively

manage their business's intersections with the environment. Refer to



76-100


76-100

Rationale for the coverage of your engagement

IBM is committed to doing business with environmentally responsible suppliers. We

work with our global suppliers to enhance their ability to manage their environmental

responsibilities and encourage them to report transparently on their environmental

impacts. IBM requires all new suppliers without an environmental responsibility

management system to create one during their first year of doing business with IBM.

For specific detail refer to



IBM engages with suppliers through a number of mechanisms including the on-boarding

process, reviews, training and education. Where gaps are identified, IBM works with its

suppliers to close the gap.

For further detail refer to page 51 of the IBM 2019 Corporate Responsibility report that

outlines our supply chain engagement and audit program:

https://www.ibm.org/responsibility/2019/IBM-2019-CRR.pdf

Comment


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Specific details of our supplier requirements are outlined on the website at:

https://www.ibm.com/procurement/sems#requeriments

Type of engagement

Onboarding & compliance

Details of engagement


IBM requires first tier suppliers to establish environmental programs and metrics,

(including water-related) and publicly disclose their performance. We expect these

suppliers to sets goals that reflects their intersections with the environment.


76-100


76-100

Rationale for the coverage of your engagement


IBM established a requirement that all first-tier suppliers establish a management

system to address their environmental responsibilities. Our objectives include helping

our suppliers build their own capability to succeed in this area and compelling actions.

IBM is a founding member of and requires full adherence by suppliers to the

Responsible Business Alliance (RBA) Code of Conduct that is part of IBM's

management system requirements for all first-tier suppliers. The RBA Code of Conduct

is a set of standards on social, environmental and ethical issues in the electronics

industry supply chain. Water management and stewardship is integrated into the

supplier evaluation process which is included in supplier audits conducted by RBA.


IBM expects each first tier supplier to deploy a management system, measure

performance, set goals in a way that reflects their intersections with their environmental

responsibilities, and publicly disclose their programs and results.

Refer to page 51 of the IBM 2019 Corporate Responsibility report on Ensuring supply

chain responsibility at: https://www.ibm.org/responsibility/2019/IBM-2019-CRR.pdf.

Further information on IBM's supply chain environmental management program is

covered at: https://www.ibm.com/procurement/sems

The Responsible Business Alliance (RBA) Code of Conduct can be referenced at their

website at: http://www.responsiblebusiness.org/standards/code-of-conduct/

Comment


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W1.4c

(W1.4c) What is your organization’s rationale and strategy for prioritizing

engagements with customers or other partners in its value chain?

IBM's corporate environmental policy provides the strategic framework for our global

environmental management system (EMS). This policy calls for environmental leadership in all

of the company’s business activities. Achieving leadership is enabled through the

implementation of our EMS, which integrates corporate directives governing IBM’s conduct and

operations worldwide. These directives cover areas such as energy conservation and climate

protection, product stewardship, pollution prevention, water conservation, chemical and waste

management, and environmental evaluation of suppliers — as well as incident prevention,

preparedness, response and reporting. The two applicable environmental policy objectives for

engagement of customers and other partners are to:

⦁ "Participate in efforts to improve environmental protection and understanding around the

world and share appropriate pollution prevention technology, knowledge and methods.

⦁ Utilize IBM products, services and expertise around the world to assist in the development of

solutions to environmental problems."

IBM's greatest opportunity to contribute towards the environmental sustainability of our planet

comes from the innovative technologies and solutions that we deploy to help our clients and

society address environmental challenges. IBM is working with governments and other

customers in applying IT solutions to agriculture, aquaculture and broader water resource

management challenges confronting communities globally. Refer to recent initiatives in the

2019 IBM and the Environment report on pages 52-57 at:

https://www.ibm.com/ibm/environment/annual/IBMEnvReport_2019.pdf

W2. Business impacts

W2.1

(W2.1) Has your organization experienced any detrimental water-related impacts?

No

W2.2

(W2.2) In the reporting year, was your organization subject to any fines, enforcement

orders, and/or other penalties for water-related regulatory violations?

No

W3. Procedures

W3.3

(W3.3) Does your organization undertake a water-related risk assessment?

Yes, water-related risks are assessed


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W3.3a

(W3.3a) Select the options that best describe your procedures for identifying and

assessing water-related risks.

Direct operations

Coverage

Full

Risk assessment procedure

Water risks are assessed as part of an enterprise risk management framework

Frequency of assessment

Annually

How far into the future are risks considered?

3 to 6 years

Type of tools and methods used

Tools on the market

Enterprise Risk Management

International methodologies

Tools and methods used

WRI Aqueduct

Environmental Impact Assessment


ISO 14001 2015 EMS standard requirements. Refer to:

https://www.ibm.com/ibm/environment/ems/

Comment

IBM’s enterprise risk management process considers relevant risks to our business

including those related to the environment, and helps ensure business continuity and

asset protection. In addition, our global EMS includes a process for identifying and

assessing significant environmental aspects of our business. Potential environmental

risks include extreme weather events, interruptions in the availability of energy, water

and other critical materials, which could affect IBM’s operations or supply chain; inability

to comply with environmental laws and regulations, which could impact manufacturing

operations or product deliveries; liabilities associated with inadequate or improper

disposal of wastes and other materials generated from operations, including end-of-life

products; and impacts to our reputation associated with perceived failure to responsibly

manage the environmental impacts of our operations. IBM manages its operations to

meet business objectives while minimizing these potential risks. IBM’s Chief

Sustainability Officer provide annual updates on matters related to the environment to

the Directors and Corporate Governance Committee of the Board. Our EMS establishes

responsibilities for identifying and complying with environmental laws and regulations —

responsibilities that are also specified in our environmental requirements for suppliers,


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as well as the IBM Business Conduct Guidelines certification that all IBMers must

complete annually.

Supply chain

Coverage

Full



IBM's requirements for first tier suppliers to implement social and environmental

management systems.


Annually


1 to 3 years


Other


National-specific tools or standards


Responsible Business Alliance (RBA) Code of Conduct for suppliers.

Comment


IBM established a new requirement that all first-tier suppliers establish a management

system to address their social and environmental responsibilities. IBM expects each

supplier to deploy a management system, measure performance, set goals that reflects

their business intersections with social and environmental responsibilities, and publicly

disclose their programs and results.

Other stages of the value chain

Coverage

Full



Business opportunities from the use of IBM technologies, services and solutions for

environmental outcomes for governments and clients.


Annually


1 to 3 years


21


Other


Internal company methods

Comment

IBM values innovation that matters, not just for our company, but also for our clients and

the world and this commitment includes the application of our expertise and

technologies to solve environmental challenges. Our products, services and solutions

enable our clients to conserve natural resources, reduce the environmental impacts

associated with their operations, and make informed decisions that drive improved

sustainability. We are enabling water agencies to monitor and manage environmental

stressors, cities to increase the accuracy of pollution forecasting, property managers to

conserve energy in buildings, farmers to improve crop yield and food safety, and more.

For example, with microscopes to monitor plankton, IBM researchers reprogrammed

imaging sensors from cell phones and used them to create underwater microscopes that

monitor plankton, the tiny organisms that are the foundation of the oceanic food chain

and produce at least half of our planet’s oxygen. Since plankton health is an indicator of

their environment, a global network of these devices could monitor aspects of water

quality that existing sensors miss. Refer to page 12 of the IBM Corporate Responsibility

report at: https://www.ibm.org/static/responsibility/cr/pdfs/IBM-2018-CRR.pdf

W3.3b

(W3.3b) Which of the following contextual issues are considered in your

organization’s water-related risk assessments?

Relevance

& inclusion

Please explain

Water availability at

a basin/catchment

level

Relevant,

always

included

Water availability is relevant for provision of water, sanitation and

hygiene (WASH) services in all IBM workplaces and in supply of

water, for example, for cooling and humidity control for buildings,

and for water used in manufacturing, hardware development and

research center processes. Water aspects are integrated into a

comprehensive and global risk assessment process

incorporating both direct and supply chain operations.

This management approach is undertaken at least annually

under the requirements of IBM's global environmental

management system, and as part of our single global ISO 14001

EMS accreditation. These processes look at business risk

comprehensively including, but not limited to, risks and impacts

related to water source, water use and wastewater discharges,

and the applicable external environmental issues that may

negatively or positively impact on the achievement of the

intended outcomes of IBM's global EMS. This includes likely


22

consequences of climate change such as, more extreme

weather or natural disasters, changing rainfall patterns and water

availability.

Water quality at a

basin/catchment

level

Relevant,

always

included

Water quality is relevant for provision of WASH services in all

IBM workplaces and in supply of water, for example, for cooling

and humidity control for buildings, and for water used in

manufacturing, hardware development and research center

processes. Water aspects are integrated into a comprehensive

and global risk assessment process incorporating both direct and

supply chain operations.












availability and worsening quality.

Stakeholder conflicts

concerning water

resources at a

basin/catchment

level

Relevant,

always

included

Stakeholder conflicts over water resource will be considered for

new sightings or relocation of IBM’s locations and for business

activities, products and services that may be impacted,

negatively or positively. The evaluation is integrated into a



Implications of water

on your key

commodities/raw

materials

Relevant,

always

included

The implication of water resource is evaluated for provision of

WASH services in IBM workplaces and in supply of water, for

example, for cooling and humidity control for buildings, and for

water used for manufacturing, hardware development and

research center processes. The evaluation is integrated into a













23



availability and worsening quality.

Water-related

regulatory

frameworks

Relevant,

always

included

The implication of water related regulatory frameworks is

evaluated for provision of WASH services in IBM workplaces and

in supply of water, for example, for cooling and humidity control

in buildings, and for water used for manufacturing, hardware

development and research centers processes. Periodic review of

country environmental laws relevant to IBM’s activities, products

and services where it does business is integrated into a


incorporating both direct and supply chain operations. This

planning cycle is undertaken at least annually under the

requirements of IBM's global environmental management

system, and as part of our single global ISO 14001 EMS

accreditation.

Status of

ecosystems and

habitats

Relevant,

always

included

IBM uses the World Resources Institute’s Aqueduct Water Risk

Atlas, which highlights regions around the world where water

resources are stressed to meet human and ecological demand,

to identify IBM locations in areas of “high” or “extremely high”

baseline water-stress. IBM locations and business organizations

are responsible for development of conservation action plans

and execution and reporting of results. Based on analysis from

this tool and on information from IBM locations in water stressed

areas we have not identified any location that may adversely

impact a sensitive aquatic ecosystem or habitat. This process is

built into IBM's global Environmental Management System

implemented at IBM locations and assessed during the annual

contextual planning review cycling.

Access to fully-

functioning, safely

managed WASH

services for all

employees

Relevant,

always

included

All IBM locations worldwide are provided with water, sanitation

and hygiene (WASH) services. IBM’s own corporate instructions

on workplace and health matters require the company to provide

potable/fresh water and sanitary facilities in the workplace. It is

also a legal or regulatory requirement in some places where we

operate.

Other contextual

issues, please

specify

Relevant,

always

included

IBM leverages relevant management systems and business

processes when performing risk assessments and management,

including IBM's global environmental management system

(EMS) which is integrated into our business operations.

Our periodic EMS reviews and audits consider environmental

conditions such as climate change and global warming

implications on our business operations, including for water


24

resource and wastewater discharges. Refer to:

https://www.ibm.com/ibm/environment/ems/.

W3.3c

(W3.3c) Which of the following stakeholders are considered in your organization’s

water-related risk assessments?

Relevance

&

inclusion

Please explain

Customers Relevant,

always

included

Many of our clients, especially in the beverage industry, agricultural

industry, and extractive industry can all be uniquely and more

directly impacted by water-related risk than IBM. IBM provides IT

services and solutions that help clients be more efficient in their

water consumption or managing business activities that intersect

water management.

IBM is uniquely positioned to contribute to the 17 UN Sustainable

Development Goals (SDGs), including Goal 6, across five key areas:

products, services, and solutions; workplace diversity and inclusion;

environmental programs; supply chain; and corporate citizenship

initiatives. IBM values innovation that matters, not just for our

company, but also for our clients and the world and this commitment

includes the application of our expertise and technologies to solve

environmental challenges. Our products, services and solutions

enable our clients to conserve natural resources, reduce the

environmental impacts associated with their operations, and make

informed decisions that drive improved sustainability. For example,

we are enabling water agencies to monitor and manage

environmental stressors. Additional examples are outlined in the

2019 IBM and the Environment report from page 52 in the Solutions

section. Stakeholders engagement and voluntary collaborations are

outlined from page 16 of the 2019 IBM and the Environment report.

Refer to the IBM website at:

https://www.ibm.com/ibm/environment/annual/reporting.shtml

Employees Relevant,

always

included

Applicable IBM business organizations assess water risks per their

environmental management system requirements. For example,

providing suitable training and awareness of employees with

operational responsibilities that may intersect with or impact on the

environment. WASH services are provided at all IBM workplaces for

employees and visitors.

Investors Relevant,

always

included

IBM publicly discloses its approach to environmental management

and results of its programs. IBM publishes an annual IBM and the

Environment report at:



25

Local

communities

Relevant,

sometimes

included

IBM completes a contextual planning review of its global

environmental management system at least annually. IBM business

organizations or IBM locations risk assessments are relevant as part

of their environmental management system requirements and

annual EMS contextual planning review. See additional comments

for other stakeholders below.

NGOs Not

relevant,

explanation

provided

IBM's water related-risks are not impacted by NGOs. IBM completes

a contextual planning review of its global environmental

management system at least annually. IBM business organizations

and IBM locations are expected to do the same. This systematic

process ensures that all relevant contextual issues are identified and

addressed as required.

Other water

users at a

basin/catchment

level

Not

relevant,

explanation

provided

IBM's water related-risks are not impacted by other water users at a

basin / catchment level. IBM completes a contextual planning review

of its global environmental management system at least annually.

IBM business organizations and IBM locations are expected to do

the same. This systematic process ensures that all relevant

contextual issues are identified and addressed as required.

Regulators Relevant,

sometimes

included

IBM's water related-risks may be impacted by applicable laws,

standards and codes of practice. IBM completes a contextual

planning review of its global environmental management system at

least annually. IBM business organizations and IBM locations risk

assessments are relevant as part of their environmental

management system requirements and annual EMS contextual

planning review that may include issues such as water sources,

uses and direct water discharges to receiving waters.

River basin

management

authorities

Relevant,

sometimes

included


standards and codes of practice. IBM completes a contextual

planning review of its global environmental management system at

least annually. IBM business organizations and IBM locations risk

assessments are relevant as part of their environmental

management system requirements and annual contextual planning

review that may include water-related risk assessment of water

sources, uses and direct water discharges.

Statutory special

interest groups

at a local level

Relevant,

sometimes

included


standards and codes of practice and voluntary agreements. IBM

completes a contextual planning review of its global environmental


and IBM locations risk assessments are relevant as part of their

environmental management system requirements and annual

contextual planning review.


26

Suppliers Relevant,

always

included

IBM works with suppliers to maintain resiliency and our collective

ability to serve clients. We collaborate with industry groups to

improve our sector.

In 2010, IBM set requirements for all of our first-tier suppliers to

create their own systems for managing social and environmental

responsibilities, with the goal of developing and sustaining their own

capabilities to manage their responsibilities, including complying with

the Responsible Business Alliance (RBA) Code of Conduct. We

expect all first-tier suppliers to establish and measure their

performance, establishing voluntary, quantifiable environmental

goals for, at a minimum; waste, energy and greenhouse gas

emissions. In addition, we require all first-tier suppliers to publicly

disclose these goals, results and other environmental aspects of

their management systems, conduct self-assessments, audits and

management reviews, and cascade these actions to their direct

suppliers.

Our objective is to help suppliers build/enhance their capability to

manage their responsibilities effectively, systematically, and

sustainability over the long-term.

Supporting information on supplier environmental responsibility is

available at: https://www.ibm.com/ibm/environment/supply/

Water utilities at

a local level

Relevant,

always

included


standards and codes of practice and voluntary agreements. IBM

completes a contextual planning review of its global environmental



environmental management system requirements and annual

contextual planning review, including for supply, workplace use or

water discharge.

Other

stakeholder,

please specify

Not

relevant,

explanation

provided

All relevant stakeholders have already been identified above. IBM

completes a contextual planning review for its global environmental



environmental management system requirements and annual EMS

contextual planning review. Refer to the Stakeholder engagement

and voluntary collaborations section from page 16 of the latest

annual 2019 IBM and the Environment report at:


W3.3d

(W3.3d) Describe your organization’s process for identifying, assessing, and

responding to water-related risks within your direct operations and other stages of

your value chain.


27

IBM’s enterprise risk management process considers relevant risks to our business including

those related to the environment and helps ensure business continuity and asset protection. In

addition, our global EMS includes a process for identifying and assessing significant

environmental aspects of our business. Potential environmental risks include extreme weather

events, interruptions in the availability of energy, water and other critical materials, which could

affect IBM’s operations or supply chain; inability to comply with environmental laws and

regulations, which could impact manufacturing operations or product deliveries; liabilities

associated with inadequate or improper disposal of wastes and other materials generated from

operations, including end-of-life products; and impacts to our reputation associated with

perceived failure to responsibly manage the environmental impacts of our operations. IBM

manages its operations to meet business objectives while minimizing these potential risks.

IBM’s Chief Sustainability Officer provide annual updates on matters related to the environment

to the Directors and Corporate Governance Committee of the Board. Our EMS establishes


responsibilities that are also specified in our environmental requirements for suppliers, as well

as the IBM Business Conduct Guidelines certification that all IBM'ers must complete annually.

In 2010, IBM set new requirements for our first-tier suppliers to create their own systems for

managing social and environmental responsibilities, with the goal of developing and sustaining

their own capabilities to manage their responsibilities including complying with:

• the Responsible Business Alliance (RBA) Code of Conduct (formerly the Electronics Industry Code of Conduct),

• measuring performance and establishing voluntary, quantifiable environmental goals for, at a minimum waste, energy and greenhouse gas emissions,

• publicly disclosing these goals, results and other environmental aspects of their management systems,

• conducting self-assessments, audits and management reviews, and

• cascading these actions of their next-tier suppliers.

IBM requires all new suppliers without a systematic approach to manage social and

environmental responsibilities applicable to their business to create one during their first year of

doing business with IBM. Our objective is to help suppliers build/enhance their capability to

manage their responsibilities effectively, systematically, and sustainability over the long-term.


https://www.ibm.com/procurement/sems#requeriments

W4. Risks and opportunities

W4.1

(W4.1) Have you identified any inherent water-related risks with the potential to have a

substantive financial or strategic impact on your business?

No


28

W4.1a

(W4.1a) How does your organization define substantive financial or strategic impact

on your business?

IBM’s enterprise risk management process considers relevant risks to our business including

those related to the environment and helps ensure business continuity and asset protection. In

addition, our global EMS includes a process for identifying and assessing significant

environmental aspects of our business. Potential environmental risks include extreme weather

events, interruptions in the availability of energy, water and other critical materials, which could

affect IBM’s operations or supply chain; inability to comply with environmental laws and

regulations, which could impact manufacturing operations or product deliveries; liabilities

associated with inadequate or improper disposal of wastes and other materials generated from

operations, including end-of-life products; and impacts to our reputation associated with

perceived failure to responsibly manage the environmental impacts of our operations.

IBM manages its operations to meet business objectives while minimizing these potential risks.

IBM’s Chief Sustainability Officer provide annual updates on matters related to the environment

to the Directors and Corporate Governance Committee of the Board. Our EMS establishes


responsibilities that are also specified in our environmental requirements for suppliers, as well

as the IBM Business Conduct Guidelines certification that all IBMers must complete annually.

IBM does not perceive any unusual or substantive water-related impacts on our operations or

the value chain outside of those risks we plan for as part of our ongoing business and risk

management processes. These processes look at business risk comprehensively including, but

not limited to, risks and impacts related to water use and wastewater discharges. We anticipate

that the management systems of both IBM's and our production and service suppliers'

operations will enable those operations to anticipate and adapt to potential risks and mitigate

the impacts without significant disruptions to our business. Refer to:


W4.2b

(W4.2b) Why does your organization not consider itself exposed to water risks in its

direct operations with the potential to have a substantive financial or strategic

impact?

Primary

reason

Please explain

Row

1

Risks exist, but

no substantive

impact

anticipated

Based on our assessment, IBM does not perceive any unusual or substantive

water-related impacts on our operations outside of those risks we plan for as

part of our ongoing business and risk management processes. These

processes look at business risk comprehensively including, but not limited to,

risks and impacts related to water use and wastewater discharges.

We anticipate that the management systems of both IBM's and our production

and service suppliers' operations will enable those operations to anticipate

and adapt to potential risks and mitigate the impacts without significant


29

disruptions to our business. Refer to:


W4.2c

(W4.2c) Why does your organization not consider itself exposed to water risks in its

value chain (beyond direct operations) with the potential to have a substantive

financial or strategic impact?

Primary

reason

Please explain

Row

1

Risks exist, but

no substantive

impact

anticipated

We conducted risk assessments in connection with the nature and scope of

IBM's business operations and our supply chain. IBM does not perceive any

unusual or substantive water-related impacts on our operations or the supply

chain outside of those risks we plan for as part of our ongoing business and

risk management processes. These processes look at business risk

comprehensively including, but not limited to, risks and impacts related to

water use and wastewater discharges.

We anticipate that the management systems of both IBM's and our production

and service suppliers' operations will enable those operations to anticipate

and adapt to potential risks and mitigate the impacts without significant

disruptions to our business. Refer to:


W4.3

(W4.3) Have you identified any water-related opportunities with the potential to have a

substantive financial or strategic impact on your business?

Yes, we have identified opportunities, and some/all are being realized

W4.3a

(W4.3a) Provide details of opportunities currently being realized that could have a

substantive financial or strategic impact on your business.

Type of opportunity

Efficiency

Primary water-related opportunity

Improved water efficiency in operations

Company-specific description & strategy to realize opportunity

IBM has identified opportunities to enhance the efficiency of water use of our operations

worldwide recognizing the importance of focusing on water-stressed regions. Our first

water conservation goal was established in 2000 and addressed water use in our


30

microelectronics manufacturing operations. With the divestiture of IBM’s semiconductor

manufacturing operations in 2015, our water use decreased significantly and became

primarily associated with cooling and humidity control of buildings, domestic

consumption at the workplace, and building fire protection systems.

Given the above IBM redirected its water conservation focus and resources to

operations in water-stressed regions of the world with a goal to continue to produce the

greatest desired outcome from our efforts. In 2016, IBM established its latest water

conservation goal to achieve year-to-year reductions in water withdrawals at larger IBM

locations and data centers in water-stressed regions. We used the World Resources

Institute’s Aqueduct Water Risk Atlas, which highlights regions around the world where

water resources are stressed to meet human and ecological demand, and our site

specific information and expert judgment to identify IBM locations in areas of “high” or

“extremely high” baseline water-stress.

In 2019, on-site reuse of process water and recycling of treated wastewater at these

locations was equivalent to 5% of their total water use. Through our global EMS we

continue to improve water-use efficiency and to minimize our operational impact on

water resources. Further information is outlined in the Water Conservation section from

page 36 of the latest 2019 IBM and the Environment report at:


Estimated timeframe for realization

Current - up to 1 year

Magnitude of potential financial impact

Low-medium

Are you able to provide a potential financial impact figure?

Yes, a single figure estimate

Potential financial impact figure (currency)

25.4

Potential financial impact figure – minimum (currency)

Potential financial impact figure – maximum (currency)

Explanation of financial impact

IBM estimates savings it has realized from its environmental leadership practices. These

include savings from energy, material and water conservation; recycling; and reductions

in waste. Ongoing savings from previous years’ initiatives are not carried over in this

calculation, yielding very conservative estimates. In addition, IBM estimates the

avoidance of costs that likely would have occurred if its EMS were not in place. This

cost avoidance is difficult to quantify, so a reasonable attempt has been made to

estimate. In 2019, IBM’s combined, estimated environmental savings and cost

avoidance totaled $94 million, resulting in an estimated net savings of $25.4 million for

the company. This includes for water use, wastewater treatment, and chemicals use for


31

on-site wastewater treatment and treated wastewater discharges, avoidance of fines

and penalties, pollution prevention and related environmental externalities.

Refer to the Environmental Investment and Return section from page 13 of the latest

annual 2019 IBM and the Environment Report at:


Type of opportunity

Products and services


Sales of new products/services


IT solutions and services for Environment Stewardship:

Here are just a few current examples of how IBM technology is being used to improve

the quality and sustainability of water and agriculture.

A. Digital farming platform: Yara, a global crop nutrition company based in Norway, is on

a mission to responsibly feed and protect the planet by advancing more productive and

sustainable agriculture to create a world without hunger. The company is combining its

115 years of agronomic expertise, crop knowledge and modeling capabilities with IBM

technology - insights from IBM Watson Studio, IBM PAIRS technology, The Weather

Company and other services – to bring more knowledge to farmers by building the

world’s leading digital farming platform. The platform will provide hyper-local weather

forecasts in addition to offering real-time recommendations to farmers tailored to the

specific needs of individual fields and crops, helping to increase crop production, save

water and decrease the need for fertilizers and pesticides. Learn more at IBM Services.

B. SmartRural is a precision agriculture company that helps farmers make more efficient

use of their resources and protect their crops via analytics and machine learning. By

migrating its analytics platform to the IBM Cloud, SmartRural achieved better crop

yields, a 25% reduction in water use, and a 50% reduction in fertilizer use.

C. In June 2019, IBM and The Weather Company, an IBM Business, launched Forecast:

Change, a new initiative to help combat freshwater scarcity in communities around the

globe. IBM contributed funding, services and technology to The Nature Conservancy

and charity: water to help raise awareness around and expand their efforts of providing

access to clean drinking water for people in climate-distressed areas. A major milestone

was recently achieved with charity: water when 100 million liters of clean and safe water

was made available for the first time to more than 16,000 residents of Cambodia and

Niger, West Africa.

Several examples are included in the Solution section from page 52 of the latest 2019

IBM and The Environment report at:



1 to 3 years



32

Unknown






IBM considers this business confidential information, not appropriate to be disclosed.

Type of opportunity





IBM Research works with organizations around the world to develop creative solutions

that address what is arguably one of today's greatest challenges: protecting the

environment and our natural resources, including for water.

For example Transboundary water management:

Transboundary water sources – aquifers and watersheds spanning two or more

countries’ borders – often present management challenges. Upstream overuse can

cause shortages downstream, for example, or pollution in one country can impact

another’s water quality. IBM Research– Africa is working with partners to develop a pilot

system for managing transboundary water supplies, starting with the Ramotswa Aquifer

between South Africa and Botswana. The goal is better data, improved forecasting and

deeper analysis that can help guide decisions on water management locally and

regionally. Learn more at IBM Research.

Details can be found on the IBM Research website at:

https://www.ibm.com/blogs/research/2019/11/ai-pilot-to-address-transboundary-water-

challenges/


1 to 3 years


Unknown



33






Type of opportunity





For example: IBM Global High-Resolution Atmospheric Forecasting System.

Access to accurate and timely weather information can help farmers know when to

plant, fertilize, apply pesticides and irrigate. It can also help airlines efficiently route

around turbulence and reduce fuel consumption. IBM GRAF, the Global High-

Resolution Atmospheric Forecasting System, from The Weather Company, now offers

the whole world weather forecasts that update every hour at a 3-kilometer resolution,

providing access to information that helps improve decisions for farming and other

industries as well as our everyday lives. Learn more at The Weather Company at its

dedicated website: https://www.ibm.com/weather/industries/cross-industry/graf


1 to 3 years


Unknown







34


Type of opportunity





Example: Technology for aquaculture:

Farmed fish production, or aquaculture, supplies more than half the world’s consumption

but has lagged agriculture in its use of technology. A team at IBM Research-Europe is

developing an aquaculture management platform that integrates a variety of data

sources, processed by AI technology, to offer a real-time view of farm dynamics and

provide early warnings on risks. “Our goal is to transition the aquaculture industry from

ad hoc decision-making based on heuristics and intuition, to real-time informed

decisions backed by AI insights and IoT connectivity,” says IBM’s Fearghal O’Donncha.

“This transition has the potential to greatly reduce operational costs while enhancing fish

health and ensuring sustainability.”

Learn more at IBM Research: https://www.ibm.com/blogs/research/2019/03/data-driven-

aquaculture-management/


1 to 3 years


Unknown








35

W6. Governance

W6.1

(W6.1) Does your organization have a water policy?

Yes, we have a documented water policy that is publicly available

W6.1a

(W6.1a) Select the options that best describe the scope and content of your water

policy.

Scope Content Please explain

Row

1

Company-

wide

Company water

targets and

goals

Commitments

beyond

regulatory

compliance

Commitment to

water-related

innovation

Commitment to

stakeholder

awareness and

education

Commitment to

water

stewardship

and/or collective

action

IBM’s corporate policy includes an objective to “conserve natural

resources by reusing and recycling materials, purchasing

recycled materials, and using recyclable packaging and other

materials.”

IBM’s environmental corporate directives set corporate-wide

objectives and requirements for water conservation, and

management of water discharges. IBM maintained a water

conservation goal between 2000 – 2015 focusing on our water

intensive microelectronics manufacturing operation. IBM

divested its semiconductor manufacturing operation on July 1,

2015.

The company has since refreshed the water goal, which aligns

with its current business, calling for the company to achieve

ongoing year-to-year reductions in water withdrawals at specified

IBM locations in water stressed areas.

IBM's Environmental Policy is publicly available, for example at:

https://www.ibm.com/ibm/environment/policy/

W6.2

(W6.2) Is there board level oversight of water-related issues within your organization?

Yes

W6.2a

(W6.2a) Identify the position(s) (do not include any names) of the individual(s) on the

board with responsibility for water-related issues.

Position of

individual

Please explain


36

Other C-

Suite

Officer

Governance: IBM’s Chief Sustainability Officer (CSO) is the company’s top

environmental executive of IBM. This person is authorized to set IBM’s strategy for

environmental affairs, including those matters related to climate change, and to

establish the company’s environmental requirements, goals, and management system

to drive consistent execution across IBM’s global operations and achieve results

consistent with environmental leadership. The CSO updates the Directors and

Corporate Governance Committee of the IBM Board of Directors annually covering

IBM’s environmental programs, performance, challenges and emerging issues are

discussed. IBM Business Unit executives are responsible for implementing within their

operations, and monitoring and reporting to IBM corporate staff. The requirements and

responsible leaders are outlined in IBM's global Environmental Management System.

See further information at: https://www.ibm.com/ibm/environment/ems/

W6.2b

(W6.2b) Provide further details on the board’s oversight of water-related issues.

Frequency

that water-

related

issues are a

scheduled

agenda item

Governance

mechanisms into

which water-

related issues

are integrated

Please explain

Row

1

Scheduled -

some

meetings

Monitoring

implementation

and performance

Reviewing and

guiding strategy

Reviewing and

guiding corporate

responsibility

strategy

Reviewing

innovation/R&D

priorities

IBM's environmental performance highlights are provided

to IBM’s specified environmental executives, our VP for

Environmental, Energy and Chemical Management

Programs, Corporate Environmental Affairs, and Chief

Sustainability Officer (CSO), on a monthly basis.

IBM conducts an annual review of our global environmental

management system with both the Vice President and

CSO. The CSO updates the Directors and Governance

Committee of IBM’s Board of Directors annually on our

environmental programs and performance, challenges and

emerging issues. Top executives of business unit are

responsible for implementation within their operations. The

frequency of annual review is appropriate considering

IBM’s business, maturity and comprehensiveness of its

environmental management system, and record of

performance and accomplishments.

As the top environmental executive of the company, IBM's

CSO is authorized with the responsibility to set IBM’s

environmental strategy and direct IBM’s environmental

programs across our business globally, to delivery desired

results, including those pertaining to water resource. See

further information at:



37

W6.3

(W6.3) Provide the highest management-level position(s) or committee(s) with

responsibility for water-related issues (do not include the names of individuals).

Name of the position(s) and/or committee(s)


Vice President of Corporate Environmental Affairs and Product Safety. The position

is equivalent to "Chief Environmental Officer".

Responsibility

Both assessing and managing water-related risks and opportunities

Frequency of reporting to the board on water-related issues

Annually

Please explain

IBM's env'al performance highlights are provided to IBM’s specified executives, our VP

of Environmental, Energy and Chemical Management Programs (EECMP), Corporate

Environmental Affairs, and the Chief Sustainability Officer (CSO), on a monthly basis.

IBM conducts an annual review of our global EMS with both the VP EECMP and the

CSO. IBM's CSO updates the Directors and Governance Committee of IBM’s Board of

Directors annually on our env'al programs and performance, challenges and emerging

issues. As IBM's top env'al executive, the CSO is authorized with the responsible for

defining IBM's env'al strategy and setting requirements and goals. These two executives

lead the staff in developing and maintaining IBM's env'al corporate directives, internal

standards and other guidance documents to support implementation of our env'al policy,

and achievement of the intended outcomes of IBM’s global EMS. Business organization

executives are responsible for implementation within their operations.

W6.4

(W6.4) Do you provide incentives to C-suite employees or board members for the

management of water-related issues?

Provide incentives for

management of water-

related issues

Comment

Row

1

Yes Incentive based performance is directly tied to delivery of

environmental goals and targets set at least annually, including

for the water conservation goal and program execution across

the business.


38

W6.4a

(W6.4a) What incentives are provided to C-suite employees or board members for the

management of water-related issues (do not include the names of individuals)?

Role(s) entitled to incentive Performance

indicator

Please explain

Monetary

reward

No one is entitled to these

incentives

Non-

monetary

reward

Chief Sustainability Officer

(CSO)

Other C-suite Officer

VP for Environment, Energy and Chemical Management Programs, Corporate Environmental Affairs

Reduction of water

withdrawals

Improvements in

efficiency - direct

operations

These are examples of the key

environmental performance

metrics measured against related

to water-efficiency and

conservation.

W6.5

(W6.5) Do you engage in activities that could either directly or indirectly influence

public policy on water through any of the following?

Yes, other

W6.5a

(W6.5a) What processes do you have in place to ensure that all of your direct and

indirect activities seeking to influence policy are consistent with your water

policy/water commitments?

Roles, responsibilities and authorities are defined by IBM global environmental management

system which is aligned to the international standard ISO 14001: 2015 for Environmental

Management Systems. Refer to our website at: https://www.ibm.com/ibm/environment/ems/

IBM indirectly influence environmental policy and focus through industry associations by way of

offering solutions to demonstrate the importance of achieving and promoting/enabling water

efficiency and environmental resiliency.

IBM Corporate Environmental Affairs executives are the only staff that have the responsibility

for authorization of all external stakeholder communications of an environmental affairs nature,

as well as new memberships and commitments of business and government organizations,

NGOs and industry associations. IBM's agreement to any legal or voluntary commitments that

may become an IBM compliance requirement must firstly demonstrate how they are aligned

with IBM environmental policy and show how they are consistent with the intended outcomes of

IBM's global EMS and environmental programs.

W6.6

(W6.6) Did your organization include information about its response to water-related

risks in its most recent mainstream financial report?


39

No, and we have no plans to do so

W7. Business strategy

W7.1

(W7.1) Are water-related issues integrated into any aspects of your long-term

strategic business plan, and if so how?

Are water-

related

issues

integrated?

Long-

term

time

horizon

(years)

Please explain

Long-term

business

objectives

Yes, water-

related

issues are

integrated

5-10 IBM’s enterprise risk management process considers

relevant risks to our business including those related to the

environment and helps ensure business continuity and asset

protection. In addition, our global EMS includes a process for

identifying and assessing significant env'al aspects of our

business. Potential env'al risks include: extreme weather

events causing interruptions in the availability of energy,

water and other critical materials, which could affect IBM’s

operations or supply chain; inability to comply with env'al

laws and regulations, which could impact manufacturing

operations or product deliveries; and impacts to our

reputation associated with perceived failure to responsibly

manage the env'al impacts of our operations. IBM manages

its operations to meet business objectives while minimizing

these potential risks. IBM conducts an annual review of our

global EMS with the VP of Environment, Energy and

Chemical Management Programs (EECMP) and the Chief

Sustainability Officer (CSO). IBM's CSO updates the

Directors and Governance Committee of IBM’s Board of

Directors annually on IBM’s env'al programs and

performance. IBM’s CSO is responsible for defining IBM's

env'al strategy and setting requirements and goals. These

two executives lead the staff in developing and maintaining

IBM's env'al corporate directives, internal standards and

other guidance documents to support implementation of our

env'al policy, and achievement of the intended outcomes of

IBM’s global EMS.

Strategy for

achieving

long-term

objectives

Yes, water-

related

issues are

integrated

5-10 Water is integrated into a comprehensive and global risk

assessment process incorporating both direct and supply

chain operations. The approach covers both our historic,

current, and potential practices to determine relevance of


40

environmental aspects and impact and their associated

significance across relevant business organizations.

Further, and as already outlined in this questionnaire, water

use and conservation and water discharges are

environmental aspects identified in IBM's global

Environmental Management System with implemented

management programs designed for prevention, preparation

and response to impacts on the environment from our

operations and within our supply chain.

We anticipate that the approach of these management

systems for both IBM's and our production and service

suppliers' operations will enable those operations to

anticipate and adapt to potential risks and mitigate the

impacts without significant disruptions to our business.

Financial

planning

Yes, water-

related

issues are

integrated

5-10 Assessment of risk is based on the nature and scope of

IBM's business operations and our interaction with suppliers.

IBM does not perceive any unusual water-related risk in our

operations or the supply chain outside of those we plan for as

part of our ongoing business and risk management

processes. These processes look at business risk

comprehensively including, but not limited to, risks and

impacts related to water use and wastewater discharges from

our operations globally.

We anticipate that the approach of these management

systems for both IBM's and our production and service

suppliers' operations will enable those operations to

anticipate and adapt to potential risks and mitigate the

impacts without significant disruptions to our business. Refer

to: https://www.ibm.com/ibm/environment/ems/

W7.2

(W7.2) What is the trend in your organization’s water-related capital expenditure

(CAPEX) and operating expenditure (OPEX) for the reporting year, and the anticipated

trend for the next reporting year?

Row 1

Water-related CAPEX (+/- % change)

Anticipated forward trend for CAPEX (+/- % change)

Water-related OPEX (+/- % change)


41

Anticipated forward trend for OPEX (+/- % change)

Please explain

IBM does not directly disclose this specific type of information beyond overall annual

capital costs, operational expenditure, and cost avoidance and savings derived from the

maintenance and continual improvement of our global environmental management

system, programs and infrastructure. In 2019, IBM invested $7.1 million of capital and

spent $61.5 million in operating expense to build, maintain and operate its worldwide

environmental protection infrastructure and programs. Over this same period IBM’s

combined, estimated environmental savings and cost avoidance totaled $94 million,

resulting in an estimated net savings of $25.4 million for the company.

Refer to section on Environmental investment and returns from page 13 of the latest

2019 IBM and the Environment report at:


W7.3

(W7.3) Does your organization use climate-related scenario analysis to inform its

business strategy?

Use of

climate-

related

scenario

analysis

Comment

Row

1

Yes IBM’s enterprise risk management process considers relevant risks to our

business including those related to the environment and helps ensure

business continuity and asset protection. In addition, our global EMS includes

a process for identifying and assessing significant environmental aspects of

our business. Potential environmental risks include extreme weather events,

interruptions in the availability of energy, water and other critical materials,

which could impact IBM’s operations or supply chain; an inability to comply

with environmental laws and regulations, which could impact manufacturing

or product deliveries; liabilities associated with unsound disposal of wastes

and other materials generated from operations, including end-of-life products;

and impacts to our reputation associated with perceived failure to responsibly

manage the environmental impacts of our operations. IBM manages its

operations to meet business objectives while minimizing these potential risks.

W7.3a

(W7.3a) Has your organization identified any water-related outcomes from your

climate-related scenario analysis?

Yes


42

W7.3b

(W7.3b) What water-related outcomes were identified from the use of climate-related

scenario analysis, and what was your organization’s response?

Climate-related

scenarios and

models applied

Description of possible

water-related outcomes

Company response to possible water-

related outcomes

Row

1

Other, please

specify

World Resources Institute’s Aqueduct Water Risk Atlas tool

Increased frequency of

natural disasters and

changing rainfall patterns

impacting water supply and

quality, particularly in

water-stressed regions as

defined by WRI Aqueduct

tool.

As part of IBM's global environmental

management system (EMS) an annual

planning and assessment of the material

environmental issues that may negatively or

positively impact on the achievement of the

intended outcomes of the EMS is undertaken.

This includes likely consequences of climate

change such as, more extreme weather or

natural disasters, changing rainfall patterns

and water availability and quality.

It is important to recognize that addressing

energy-efficiency, increasing renewables

purchased and reducing operational and

supply chain greenhouse gas emissions for

climate protection will also contribute to water

resource protection activities of a business.

W7.4

(W7.4) Does your company use an internal price on water?

Row 1

Does your company use an internal price on water?

No, and we do not anticipate doing so within the next two years

Please explain

IBM does not consider internal pricing on water to be a relevant or effective driver for

our business. We rely on our corporate policy to drive resource conservation and

efficient use and where applicable, supplemented with voluntary corporate goals to

minimize our operational demand. IBM's current water goal is to achieve year on year

reductions in water withdrawals at specified IBM locations in water-stressed regions.


43

W8. Targets

W8.1

(W8.1) Describe your approach to setting and monitoring water-related targets and/or

goals.

Levels for

targets

and/or

goals

Monitoring

at

corporate

level

Approach to setting and monitoring targets and/or goals

Row

1

Company-

wide

targets

and goals

Targets are

monitored

at the

corporate

level

Goals are

monitored

at the

corporate

level

IBM's first water conservation goal was established in 2000, focusing

on the significant use of water in our microelectronics manufacturing

operations. With the divestiture of IBM’s semiconductor

manufacturing operations in 2015, our water use decreased

significantly and became primarily associated with cooling and

humidity control of buildings, domestic consumption at the

workplace, and building fire protection systems.

Given the above IBM prioritized its water conservation focus and re-

directed resources to operations in water-stressed regions of the

world with a goal to continue to produce the greatest desired

outcome from our efforts.

In 2016, IBM established its latest water conservation goal to

achieve year-to-year reductions in water withdrawals at larger IBM

locations and data centers in water-stressed regions. We used the

World Resources Institute’s Aqueduct Water Risk Atlas, which

highlights regions around the world where water resources are

stressed to meet human and ecological demand, and our site

specific information and expert judgment to identify IBM locations in

areas of “high” or “extremely high” baseline water-stress.

Our current water conservation goal covers 13% of IBM's total

utilized real estate space encompassing 43 IBM locations including

data centers and other large offices in water-stressed regions

worldwide.

In 2019, water withdrawals at these IBM locations decreased by 2%

versus 2018. Reductions resulted from better management of water

used in building heating, ventilation and air conditioning systems,

adjustments to humidification equipment for regulating

environmental conditions in data centers, efficiency enhancements

to deionized water purification systems, improved maintenance of

water pipelines, installation of water saving devices in restrooms,

and water awareness initiatives at our locations.

In addition, these locations avoided water withdrawals through

actions such as reuse of rejected deionized water from purification

equipment, and recycling of site wastewater for use in evaporative


44

cooling systems.

In 2019, on-site reuse of process water and recycling of treated

wastewater at these locations was equivalent to 5% of their total

water use.

IBM also monitors, measures and manages water use and

wastewater discharges at IBM locations not in water-stressed

regions for maintaining operational conditions and compliance with

discharge permits. This is a requirement of IBM’s global

environmental management system.

Further information is outlined in the Water Conservation section

from page 36 of the latest 2019 IBM and the Environment report at:


W8.1a

(W8.1a) Provide details of your water targets that are monitored at the corporate level,

and the progress made.

Target reference number

Target 1

Category of target

Water withdrawals

Level


IBM Locations in water-stressed regions worldwide as defined by WRI Aqueduct

tool, IBM site specific information and expert judgement.

Primary motivation

Reduced environmental impact

Description of target

IBM's water conservation goal is to achieve year-to-year reductions in water withdrawals

at larger IBM locations and data centers in water-stressed regions.

Quantitative metric

% reduction in total water withdrawals

Baseline year

2015

Start year

2016

Target year

2019


45

% of target achieved

100

Please explain

Year on year percent reduction in withdrawals from IBM locations in water stressed

regions. In 2019, water withdrawals at these IBM locations decreased by 2% versus

2018.

W8.1b

(W8.1b) Provide details of your water goal(s) that are monitored at the corporate level

and the progress made.

Goal


Year on year reductions in water withdrawals in water-stressed regions.

Level

Company-wide

Motivation

Reduced environmental impact

Description of goal

IBM's water goal is to achieve a year to year reduction in water withdrawals at specified

IBM locations in water stressed regions.

In 2016, IBM established its latest water conservation goal to achieve year-to-year

reductions in water withdrawals at IBM locations, including data centers and other large

offices in water-stressed regions worldwide. We used the World Resources Institute’s

Aqueduct Water Risk Atlas, which highlights regions around the world where water

resources are stressed to meet human and ecological demand, and our site specific

information and expert judgment to identify IBM locations in areas of “high” or “extremely

high” baseline water-stress. IBM locations subject to the goal are assessed at least on

an annual basis to ensure applicability to the needs of the business.

Baseline year

2015

Start year

2016

End year

2019

Progress

In 2019, water withdrawals at these IBM locations decreased by 2% versus 2018.

The annual percentage reductions in water withdrawals from the previous year in water-


46

stressed regions were: 6.6% in 2016; 2.9% in 2017; 0.4% in 2018 and 2% in 2019.

Our current water conservation goal covers 13% of IBM's total utilized real estate space

encompassing 43 IBM locations including data centers and other large offices in water-

stressed regions worldwide. IBM also continues to implement water conservation

projects at IBM managed locations that are not in water-stressed regions.

Further information is provided in the Water Conservation section from page 36 of the

latest annual 2019 IBM and the Environment report at:


W9. Verification

W9.1

(W9.1) Do you verify any other water information reported in your CDP disclosure (not

already covered by W5.1a)?

No, we do not currently verify any other water information reported in our CDP disclosure

W10. Sign off

W-FI

(W-FI) Use this field to provide any additional information or context that you feel is

relevant to your organization's response. Please note that this field is optional and is

not scored.

W10.1

(W10.1) Provide details for the person that has signed off (approved) your CDP water

response.

Job title Corresponding job

category

Row

1

Vice President, Environment, Energy and Chemical Management

Programs, Corporate Environmental Affairs

Other C-Suite Officer

W10.2

(W10.2) Please indicate whether your organization agrees for CDP to transfer your

publicly disclosed data on your impact and risk response strategies to the CEO Water

Mandate’s Water Action Hub [applies only to W2.1a (response to impacts), W4.2 and

W4.2a (response to risks)].

Yes


47

SW. Supply chain module

SW0.1

(SW0.1) What is your organization’s annual revenue for the reporting period?

Annual revenue

Row 1 77,100,000,000

SW0.2

(SW0.2) Do you have an ISIN for your organization that you are willing to share with

CDP?

No

SW1.1

(SW1.1) Could any of your facilities reported in W5.1 have an impact on a requesting

CDP supply chain member?

No facilities were reported in W5.1

SW1.2

(SW1.2) Are you able to provide geolocation data for your facilities?

Are you able to provide geolocation data for your facilities? Comment

Row 1 No, this is confidential data

SW2.1

(SW2.1) Please propose any mutually beneficial water-related projects you could

collaborate on with specific CDP supply chain members.

SW2.2

(SW2.2) Have any water projects been implemented due to CDP supply chain member

engagement?

No

SW3.1

(SW3.1) Provide any available water intensity values for your organization’s products

or services.


48

Submit your response

In which language are you submitting your response?

English

Please confirm how your response should be handled by CDP

I am

submitting to

Public or Non-Public

Submission

Are you ready to submit the

additional Supply Chain Questions?

I am submitting my

response

Investors

Customers

Public Yes, submit Supply Chain Questions

now

Please confirm below

I have read and accept the applicable Terms

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Welcome to your CDP Water Security Questionnaire 2020 W0 ......International Business Machines (IBM)...

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