Friday, September 25, 2009

apple and business week

nnovation & Technology September 24, 2009, 6:00PM EST text size: TT
Apple Launches Major Green Effort
It's being more forthcoming with environmental data—and working to change the terms of the debate

By Peter Burrows

In recent years, Apple (AAPL) has been hammered by several environmental groups. Greenpeace singled it out for its use of toxic chemicals in 2007, and it has done poorly in rankings of the greenest corporations. The criticism is jarring for a company with a cool, progressive image and Mr. Inconvenient Truth, Al Gore, on its board.

Now, Apple is set to launch its most aggressive effort yet to counter green critics. On Sept. 24, the company will release more of the details environmental groups have been clamoring for, on its Web site and elsewhere. Apple, for example, will reveal its annual corporate carbon emissions for the first time. Lack of disclosure of that figure has hurt the company in several rankings, especially because rivals such as Hewlett-Packard (HPQ) and Dell (DELL) have given it out.

Apple's real goal is to change the terms of the debate. Company executives say that most existing green rankings are flawed in several respects. They count the promises companies make about green plans rather than actual achievements. And most focus on the environmental impact of a company's operations, but exclude that of its products.

Apple argues that broader, more comprehensive figures for carbon emissions should be used—for everything from materials mined for its products to the electricity used to power them—and it's offering up its own data to make the case. Executives say that consumers' use of Apple products accounts for 53% of the company's total 10.2 million tons of carbon emissions annually. That's more than the 38% that occurs as the products are manufactured in Asia or the 3% that comes from Apple's own operations. "A lot of companies publish how green their building is, but it doesn't matter if you're shipping millions of power-hungry products with toxic chemicals in them," says CEO Steve Jobs in an interview. "It's like asking a cigarette company how green their office is."

Apple's total carbon figure is an eye-opener. HP and Dell put their carbon emissions at 8.4 million tons and 471,000 tons respectively, though both are larger than Apple in terms of revenue. Their numbers exclude product use and at least some manufacturing, though. The companies have said that including those factors would boost their carbon totals severalfold.

Jobs and Apple have been working on their effort for several years. They brought in the consultant Fraunhofer Institute to help crunch data and hired chemists to eliminate toxins. The company is disclosing its data days after it was beaten out in another green ranking by Dell, Hewlett-Packard, and IBM (IBM), but Jobs says that was not the reason for the timing of its disclosures. "This is when we just got the work done," he says.

Some environmental experts applaud Apple's move. They say green rankings have been limited by the data companies provide, and Apple is setting a high bar for calculating and disclosing carbon emissions. "This could completely change how companies are evaluated," says Alexandra McPherson, project director with Clean Production Action, an environmental group.

Other experts aren't so sure. Some say companies shouldn't get credit or blame for the carbon emissions from their products, because such data can be manipulated. Apple may be trying to count the impact of products simply because such calculations make the company look good against its peers. "All of these companies report in ways that favor their business model," says Conrad MacKerron, director of corporate social responsibility programs at the As You Sow Foundation, a corporate accountability group.
Ramping Up Recycling

Apple counters that it's time for companies, in tech and elsewhere, to examine their environmental impact as broadly as possible. For tech companies, that should include the energy-gobbling products they sell. "We're not being intellectually honest with ourselves if we don't deal with the products that we make," says Timothy D. Cook, Apple's chief operating officer.

The company is disclosing new product information, as well as overall carbon emissions. Apple will document on the new Web site data that it ended the use of controversial polyvinyl chlorides (PVCs) and bromide flame retardants (BFRs) in its devices last year. HP and Dell had promised to do the same by 2009, but recently pushed that back. Apple is also going further and pushing suppliers to get rid of bromine and chlorine, the harmful ingredients in PVCs and BFRs.

Jobs admits criticism from Greenpeace and others motivated Apple to improve its environmental efforts, but he fumed over the tactics at the time. Greenpeace attacked Apple because it wouldn't publicly set long-term goals for carbon reduction and toxic removals. Jobs says it's more important to deliver results than make promises, noting that Apple was the first computer maker to ditch CRT monitors in all its products because they contain lead. "I thought Greenpeace was being very unfair with us at the beginning, and that they were using us to get visibility," he says. "To have people saying we didn't care and that we were callous in this area was very painful—and untrue."

Jobs insists he won't start setting long-term environmental targets to satisfy critics. But Apple is becoming more transparent on its Web site and other fronts. Last year, the Carbon Disclosure Project put Apple near the bottom of its rankings for corporate disclosure, with seven points on a 100-point scale. On Sept. 21, when the group released its 2009 rankings, Apple scored a 73. Paul Dickinson, president of the project, says Apple's effort to make measurement of carbon impact more comprehensive is a step in the right direction. "Its approach is legitimate, and to be encouraged," he says.

Business Exchange: Read, save, and add content on BW's new Web 2.0 topic network
Eco Laggard

Apple has done poorly in several environmental rankings, including Newsweek's report on The Greenest Big Companies In America in its Sept. 21 issue. Rivals Hewlett-Packard and Dell ranked first and second on the list, while Apple was miles behind at 133. The company suffered in part because it hasn't set long-term environmental goals publicly.

For Newsweek's coverage, go to

With Arik Hesseldahl

Burrows is a senior writer for BusinessWeek, based in Silicon Valley.

No comments: