As You Sow has engaged several computer and information technology (IT) companies on climate change to encourage progress on corporate reporting about greenhouse gas (GHG) and carbon footprint assessment, and commitments to future GHG emission reduction in both operations and supply chain. We researched the progress of several companies and were encouraged to find that several leading hardware companies have made public commitments to GHG reduction:

These commitments are all welcome. However, the companies use different baselines and assumptions. Further, none yet fully address their global supply chains, where an estimated 70% to 90% of total GHG emissions may occur.

Challenging Apple to Improve GHG Reporting

One company that has not made GHG reduction commitments and lags on public reporting is Apple Inc. When we first looked at the company in the fall of 2008, it had not made significant public statements about its corporate carbon footprint. Apple had received low scores in at least two studies evaluating the quality of its public GHG disclosure. The Carbon Disclosure Project (CDP) survey is a widely recognized instrument for companies to discuss how they are measuring and reducing carbon footprint. Apple barely participated in the 2008 survey, answering only a couple out of nearly 100 questions. CDP gave Apple a score of 7 on its disclosure vs. a score of 91 for Dell and 88 for HP.

A 2008 report by RiskMetrics Group and CERES focusing on corporate governance and climate change policies scored IBM at 79, Dell 77, and Apple 27. One of the key issues the survey tracked was board oversight of climate change. It asked for evidence of explicit oversight responsibility for environmental affairs or climate change. Apple got a score of zero in that area. We are disappointed that a company with former Vice President Al Gore on its board, scored so poorly. Mr. Gore is one of the world’s most prominent champions for action on climate change. Apple should have world-class commitments and transparency on green house gas reporting and reduction.

2009: Two Steps Forward

We filed a shareholder proposal for 2009 asking Apple to make GHG reduction commitments and to publish a corporate responsibility report addressing other environmental and social impacts such as toxics and recycling. Shortly after we filed the proposal, Apple released estimates of greenhouse gas (GHG) emissions associated with the lifecycle of its major products in a product-specific format. However, the usefulness of this data was limited because it was in a different format than that provided by competitors and most major U.S. companies. The company released only product-based carbon footprint estimates while other companies use aggregate carbon emission estimates.

For example, Apple estimated lifecycle emissions for a MacBook Air laptop at about 748 pounds of CO2 equivalent, but this figure lacks sufficient context. There is no easy way for customers or shareholders to tell if 748 pounds is a lot of CO2 compared with competitors.

The proposal received the support of about 8% of shares voted at the company’s 2009 annual meeting. Following the shareholder vote, the company took two positive steps. First, it did a better job discussing its carbon footprint in the Carbon Disclosure Project survey, reporting aggregate GHG emissions as we had requested. Second, it released a summary of a lifecycle assessment (LCA) of GHG emissions associated with all of its products. The company said the LCA takes into account each phase of production including mining of metals, component manufacturing and associated emissions, product use and disposal.

We applaud the company for taking this action. LCAs make producers more aware of the environmental implications of materials use throughout product lifecycle. However, there is still a concern because it is difficult to evaluate the validity of the LCA based on the small amount of information released. LCAs involve complicated emissions modeling and choices about how to characterize environmental impact and sort and weight indicators. A laptop can have components from scores of different suppliers. Did Apple use actual emissions data from its suppliers or computer modeling to estimate emissions? What were key assumptions used in the LCA methodology? Were the concerns of independent reviewers resolved?

2010: Pressing for Public GHG Reduction Commitments

As You Sow has filed a shareholder proposal again for 2010 at Apple. We appreciate the substantive steps taken by the company as discussed above. However, Apple continues to lag peers in an important area – it continues to refuse to make specific GHG emission reduction commitments. The proposal is co-filed by the New York City pension funds and Calvert Asset Management Co.

We would also like the company to release basic data about its LCA as discussed above, and to improve overall corporate responsibility reporting. Until Apple releases actual LCA data and the assumptions they are based on, assessing its environmental leadership remains difficult. LCAs are emerging as a future standard for measuring environmental performance.

Wal-Mart Stores, developer of the Sustainability Consortium, a group of companies, NGOs, academic researchers developing standards to rate sustainability attributes of products, has pledged that LCAs generated by its process will be open and transparent. It is essential for investors and research-oriented NGOs to be able to validate corporate environmental performance.

Finally, LCA disclosure is an IT industry responsibility, not just for Apple. As You Sow would like to see Dell, HP, IBM and other large IT companies work together to develop uniform measurement standards for LCAs and provide disclosure in a way that their performance can be compared by stakeholders.

Special 2010 Apple Investor Proxy Information

Click here for our information sheet for the upcoming shareholder meeting, Feb. 25

Go to a chart comparing public reporting by Apple, Dell, and HP.

Click here for the text of 2010 Apple shareholder proposal.

Read a September 2009 blog posting on Apple’s LCA summary.