HP to Reduce Greenhouse Gas Emissions Throughout Supply Chain

As more and more companies search for greener options to improve overall sustainability, HP takes the lead in becoming the first information technology (IT) company to begin an ongoing effort to reduce greenhouse gas (GHG) emissions for its first-tier manufacturing and product-transportation supply chain partners. The Senior Vice President of Operations, Printing and Personal Systems, Tony Prophet, recognizes the direct impact it has on environmental sustainability.  

“HP has one of the largest supply chains in the industry. It’s imperative to manage it not just efficiently, but also ethically and in an environmentally sustainable way. We (HP) understand the importance of reducing our carbon footprint, promoting sustainability throughout the IT supply chain and driving innovation that creates a better world and brighter future.”

Other companies have set goals similar to HP, in order to strategically align their operations with environmental sustainability. Companies such as Tesco have pledged to halve GHG emissions by 2020, while other companies like Coca-Cola have launched water-stewardship and sustainable packaging programs. 

HP calculated a baseline GHG emissions intensity for their first-tier manufacturing and product-transportation supply chain partners in 2010. The baseline calculation for emissions intensity was established using suppliers’ GHG emissions divided by HP’s annual revenue. This method was used in order to “normalize performance based on business productivity”. By 2020 HP’s goal is to reduce GHG emissions intensity off of the baseline calculations by 20%. 

In close collaboration with the World Wildlife Fund’s (WWF) Climate Savers Program HP developed a move forward strategy. But first in order to establish these goals with their supply chain partners HP looked to strengthen their existing supplier relationships by engraining their supplier base into the company culture and forming strong strategic alliances. Once strategic relationships where formed with their supply base HP was able to establish business incentives for their suppliers once GHG emissions-reduction goals are reached. If HP achieves the plans goal two million metric tons of GHG emissions will be prevented from entering the environment. Some of the specific programs HP has released include:

• Expanding its Energy Efficiency Program (EEP) for manufacturing suppliers
• Instituting specific emissions reduction initiatives with supplies with GHG intensive operations (for example, an LCD panel manufacturer)
• Creating production transportation-related initiatives
• HP plans to release its GHG emission measurements and progress towards its goal through their Global Citizenship Report

This new program extends from HP’s supplier social and environmental responsibility (SER) requirements, which apply to any supplier doing business with HP. HP’s new program will impact over 1,000 production supplies and tens of thousands of non-production suppliers spanning over six continents.

Many corporations like HP are beginning to recognize that GHG reduction is critical and extends much further than internally. More than three quarters of GHG emissions among most industry sectors stem from their supply chains. Decreasing supply chain GHG emissions has become an increasing concern for many leading companies. However, in order to work with suppliers in the reduction of GHG emissions, goals and incentives must be set on top of forming strong alliances with the current supply base.