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April 20, 2010

Green Supply Chain News: IBM Latest to Join Push for Green Suppliers, with new Requirements for Green Strategy and Reporting – but Avoids Blanket Mandate


Big Blue becomes Big Green; Carrot more than Stick, Tech Giant Says

By The Green Supply Chain Editorial Staff

IBM is the latest large company to announce a new Green supply chain initiative, using its purchasing clout to drive suppliers into more environmentally-friendly supply chain strategies. However, the requirements are designed to be flexible, IBM says, to meet the specifics of each supplier’s size and business operations.


The tech giant announced late last week that it was pursuing a strategy that was expansive in scope and will leverage its huge purchasing clout, but one which will nevertheless recognize the uniqueness of each supplier.


That’s a tall order when you have some 28,000 suppliers across as many as 90 countries. The IBM program includes suppliers of both physical goods as well as services.


According to Wayne Balta, IBM’s VP of corporate environmental affairs and product safety, those suppliers will soon be getting a letter from “Big Blue” telling them they better get on board with “Big Green.”

The Green Supply
Chain Says:
The kicker is this: IBM will also “ask” that its suppliers publicly disclose their results in each area.

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Under the new program, Balta says that sometime in 2010, IBM is “asking” each of its suppliers to define an “environmental management system” suitable to their particular business operations. The comments, appearing on an IBM blog site, do not define what that term means. assumes it means that there simply must be some overarching program in place, rather than meaning a technology system – but we could be wrong.


Balta additionally says IBM will ask these suppliers to establish voluntary environmental goals and measure performance for at least three Green Supply Chain issues: 

  • Energy conservation
  • Greenhouse gas emissions
  • Waste management/recycling.

The kicker is this: IBM will also “ask” that its suppliers publicly disclose their results in each area.


There’s more.


IBM will also “ask” that these same requirements be “cascaded down” to any of their suppliers who perform work for them that is material to what is ultimately supplied to IBM.


“So this program will fan out among our suppliers’ suppliers, spreading its impact even further,” Balta says.


No “Blanket Mandate”


While the requirements are steep, IBM stresses that the program is flexible enough to meet different business needs.


“Since our suppliers are diverse, there cannot be a one-size-fits-all solution,” Balta added. “Some are huge publically-traded companies while others may be small businesses with much fewer employees. We want them all to build long-term sustainability in a way that is integral to their routine operations, not as an add-on fix.”


A key part of that approach is that there will be no public grading of suppliers.


“This is a carrot not a stick approach,” Balta says.


He offered some examples:


  • Chemicals used for manufacturing “must be” properly managed from inception through final use and disposition. Products and components can be designed for the environment, considering material selection, energy intensity, and recycling at end-of-life. Even service operations such as call centers can be energy-intensive 
  • For a shipping company, their routes might be redesigned to save fuel.

 Balta added: We’re finding that suppliers are at different stages of development and sophistication in terms of their understanding of sustainability and environment impact. While these requirements may seem like old news in mature economies, attention to these matters in emerging markets has not been great over the years.”



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