OPERATIONS

Energy & Climate Change Strategy

EMC’s primary GHG emissions arise from the generation of the electricity needed to run our business—including our supply chain—and power our products. Therefore, our energy and climate change strategy focuses on the following key areas:

  1. Reducing emissions from our own operations by:
    • Decreasing the demand for energy
    • Maintaining a highly efficient infrastructure
    • Optimizing logistics routes and modes to decrease carbon intensity and footprint
    • Designing and operating our data centers and facilities for energy efficiency
    • Identifying opportunities to adopt renewable energy sources that are economically and environmentally sound
  2. Reducing emissions in our supply chain by:
    • Engaging suppliers in measuring and reporting
    • Collaborating with suppliers in taking measures to reduce emissions
    • Working with the IT industry to develop standards for reporting supply chain emissions
  3. Reducing energy demand in our customers’ IT infrastructures by:
    • Supplying energy-efficient products
    • Developing innovative approaches to manage the exponential growth of data in their operations
    • Delivering services to help customers implement the most energy-efficient solutions for their businesses
  4. Reducing global energy demand by:
    • Supplying information solutions to optimize business functions, accelerate research, leverage data assets, and enhance public infrastructure

American Business Act on Climate Pledge

In 2015, EMC joined the American Business Act on Climate Pledge to encourage global leaders to reach an international climate change agreement at COP 21 in December 2015. In addition to EMC’s commitment (see below), Chief Sustainability Officer Kathrin Winkler participated in a White House panel on climate change as part of the announcement.

In support of our goal to achieve 80% absolute reduction in greenhouse gas emissions by 2050 in accordance with the 2007 Bali Climate Declaration, EMC Corporation pledges to:

  • Realize a 40 percent absolute reduction of global Scope 1 and 2 GHG emissions below 2010 levels by 2020
  • Obtain at least 20 percent of global grid electricity needs from renewable sources by 2020
  • Have all hardware and software products achieve increased efficiency in each subsequent version by 2020
  • Reduce energy intensity of storage products 60 percent at a given raw capacity and 80 percent for computational tasks from 2013 to 2020

In 2015, EMC continued our engagement with the Renewable Energy Buyers’ Alliance (formerly the Corporate Renewable Buyers’ Partnership) sponsored by the World Wildlife Fund, World Resources Institute, Rocky Mountain Institute, and Business for Social Responsibility. In addition, EMC joined the Business Renewables Center, an initiative of the Rocky Mountain Institute, to learn from and share best practices with other corporate purchasers of renewable energy.

ADDITIONAL INFORMATION
Climate Change Policy Statement

Our Goals and Performance

We began measuring our GHG emissions in 2005. Since then, our energy intensity by revenue – the amount of global GHG we emit per $1 million we earn – has declined by more than 46 percent, from 32.99 to 17.55 metric tons. In 2015, EMC purchased 40,000 MWh of Green-e® Energy certified Renewable Energy Certificates (RECs) which helped us achieve our 2015 target.

Our goals:

  • 40 percent reduction of global Scopes 1 and 2 GHG emissions per revenue intensity below 2005 levels by 2015. Achieved in 2012, 2013, 2014, and 2015
  • 20 percent of global electricity needs served by renewable sources by 2020 (excluding VMware)
  • 40 percent absolute reduction of global Scopes 1 and 2 GHG emissions below 2010 levels by 2020 (excluding VMware)
  • 50 percent of global electricity needs to be obtained from renewable sources by 2040 (excluding VMware)
  • 80 percent absolute reduction of global Scopes 1 and 2 GHG emissions below 2000 levels by 2050 (excluding VMware)

Determining Our Goals

To set our long-term goals, we began with the imperative to achieve an absolute reduction of at least 80 percent by 2050 in accordance with the Intergovernmental Panel on Climate Change’s (IPCC’s) Fourth Assessment Report recommendations. We then modeled various reduction trajectories; our goal was to identify a solution that would be elastic enough to adjust to changes in our business, while achieving a peak in absolute emissions by 2015, in accordance with recommendations from the 2007 Bali Climate Declaration.

Our model was based on the Corporate Finance Approach to Climate-stabilizing Targets (C-FACT) proposal presented by Autodesk in 2009. The model calculates the annual percentage reduction in intensity required to achieve an absolute goal. We selected this approach because intensity targets better accommodate growth through acquisitions (in which net emissions have not changed but accountability for them has shifted), and aligns business performance with emissions reductions performance rather than forcing tradeoffs between them. Setting an intensity trajectory also drives investment beyond one-time reductions to those that can be sustained into the future.

The C-FACT system, however, is “front-loaded” as it requires a declining absolute reduction in intensity each year. EMC developed a variant of the model that requires reductions to be more aggressive than the previous year. This makes better economic sense for the company as it takes advantage of the learning curve for alternative fuels as they become more efficient and cost effective. Please see the “Trajectory Diagram” in this section for more information.

While EMC put much thought into setting our long-term goals, some stakeholders felt that they were too distant for most people to conceptualize. In response to this feedback, in 2014, we established our new 2020 targets to mark progress.

The basis of our mid-term targets is an understanding of the contribution that businesses must make to GHG mitigation to avoid dangerous climate change, as described in the CDP and World Wildlife Fund report “3% Solution.” We believe these mid-term goals are aggressive and aspirational, particularly given the anticipated growth in our business. However, we also realize the potential for a combination of escalating effects of climate change and a lack of collective action could require that all businesses, including EMC, accelerate their mitigation plans. We will continue to monitor conditions and adjust our targets accordingly.

Energy Management and Renewable Energy

EMC’s reduction targets will best be achieved through a holistic approach to all aspects of energy management – including supply, demand and procurement. We continue to explore strategies for meeting our renewable energy goals by investigating renewable energy options that are economically and environmentally sound. In 2015, our efforts included:

  • Establishing cross-functional representation for a Global Energy Team to drive long-term energy strategy for EMC. This body is tasked with long-term planning of our energy supply, demand and procurement in all of our four global theaters – Asia Pacific and Japan (APJ), Europe, Middle East and Africa (EMEA), Latin America, and North America.
  • Retaining a new Global Energy Advisory firm to assist our Global Energy Team with mapping out a strategy for global energy management. This service includes identifying global renewable energy programs that we can investigate as part of our renewable energy and emission reduction goals.
  • Implementing a new tool for managing our global carbon accounting and reporting. The tool can also be expanded to assist us in global water accounting and reporting.
  • Breaking ground on a solar field project in Bellingham, Massachusetts. EMC, working in conjunction with Borrego Solar, is installing three 650 kilowatt ground-mounted solar photovoltaic (PV) arrays totaling 1.95 megawatts on EMC-owned property. The system is comprised of more than 6,000 solar PV panels, and is expected to generate 2,520,000 kilowatt hours of energy. The solar farm project is expected to be completed by mid-2016.
  • Conducting more detailed research on other opportunities for solar photovoltaic (PV) energy generation in the U.S., including potential hosting of more solar PV generation facilities, becoming a consumer of solar PV generated off-site through purchased power agreements (PPAs), and other possible solar PV models. These efforts are continuing into 2016.
  • Continuing to investigate other potential alternative energy purchasing in the U.S., India, Ireland and other locations where we have large global facilities and a greater proportion of Scope 2 GHG emissions.

During 2015, EMC purchased 40,000 MWh of Renewable Energy Certificates (RECs) in support of renewable energy generated in the U.S. The RECs purchased supported renewable electricity delivered to the national power grid by alternative energy sources. The RECs are third-party verified by Green-e Energy to meet strict environmental and consumer protection standards. The 40,000 MWh represents 7 percent of the grid electricity consumed at all EMC facilities in the U.S. during 2015. Although we purchased fewer RECs in 2015, this aligns with our long-term strategy to invest in on-site renewable projects.

Also in 2015, in alignment with our position on national climate policy, EMC approved the use of an internal price on carbon. This price has been initially set at $30 per metric ton CO2e, and will be reviewed periodically to adjust for market and regulatory conditions. The intention of this shadow price is to educate and inform business decision makers about the expected future costs associated with GHG emissions. As an initial step, training has been deployed to employees in our finance organizations who support major electricity-consuming or -producing capital expenditures such as new buildings, lease renewals, data center relocation, and lab consolidation.

Reporting & Accountability

We are committed to reporting our progress transparently and disclosing our GHG emissions annually to CDP. To learn more, see our 2016 CDP Climate Change questionnaire response.

Our Ireland Center of Excellence (COE) has continued to participate in the European Emissions Trading Scheme (ETS), which is a cap and trade Scope 1 emissions program that has now entered the third trading phase from 2013 to 2020. This COE has consistently remained within its operating allowance for the previous phases since 2005, but phase three of trading has, as expected, proved to be challenging, and the Ireland COE produced 2,594 metric tons of CO2e against an allowance of 2,550. Previous years of strong performance against our allowance ensured that we have more than adequate additional spare allowances available to cover this excess.

Further energy reduction projects commissioned during 2015 within the Ireland COE have brought our total thermal rated input to below 20 MW. As a result, we now fall outside of the criteria to be a member of the EU ETS. We will, however, continue to monitor and drive reductions in our CO2e emissions.

ADDITIONAL INFORMATION

EMC RECOGNIZED FOR CLIMATE DISCOSURE AND GHG MANAGEMENT

CDP 2015 S&P 500 Climate Disclosure Leadership Index (CDLI)

For the seventh time, EMC was included on the CDLI, earning a score of 100 for the depth and quality of the climate change data disclosed to investors and the global marketplace. To learn more, read the Press Release.

In addition, EMC was recognized as a world leader in supplier action on climate change by CDP in 2015, securing a position on the CDP Supplier Climate A List.

Scope 3 Emissions

At EMC, we continually strive to increase the breadth and depth of our GHG reporting. In our 2015 CDP Climate Change questionnaire response, we reported estimated global corporate emissions for eight of the 15 categories of Scope 3 emissions based on the WRI Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. The following five reported categories represent the greatest opportunity to drive improvement and minimize emissions through our own actions and influence.

Business Travel

In 2015, the GHG emissions associated with business travel was 145,726 metric tons CO2e, including VMware. We track global corporate business travel miles from commercial flight and rail via our corporate travel booking tool. In addition, we estimate the GHG emissions associated with global business travel car rentals and global hotel stays based on data provided by our Travel department. The methodology for calculating the emissions associated with business travel is aligned with the GHG Protocol Corporate Accounting and Reporting Standard.

We continually seek to reduce GHG emissions associated with employee business travel by implementing advances in technology, business processes and resource management. We apply technology to allow us to perform changes remotely to customer technical environments, resulting in reduced emissions from travel. To learn more, visit Employee Travel & Commuting.

Employee Commuting

As of the publication of this report, our 2015 global GHG emissions from employee commuting have not yet been estimated. Please refer to EMC’s 2015 CDP Climate Change response for updated information. EMC maintains a comprehensive employee commuter services program focused on minimizing single-occupancy vehicles and unnecessary local employee travel. To learn more about our employee commuting programs, visit Employee Travel & Commuting.

Direct Tier 1 Suppliers

In 2015, the GHG emissions associated with EMC’s direct material suppliers was 211,809 metric tons CO2e. This reflects Scope 1 and Scope 2 GHG emissions data reported by direct Tier 1 suppliers comprising 96 percent of our annual spend. Using economic allocation, we use their data to calculate our share of their GHG emissions. Because this allocation approach requires access to supplier revenues, a small number of private companies are excluded from the analysis. The total reported metric tons of CO2e is extrapolated to provide an estimated figure for 100 percent of our direct materials supplier emissions. To learn more, visit Supply Chain Responsibility.

Logistics

EMC’s Global Logistics Operations generated approximately 76,989 metric tons CO2e in 2015, a 26 percent reduction in absolute carbon footprint from 2014. We attribute this reduction to various factors including our continuous efforts to shift to lower-emitting modes of transport. This number covers inbound, outbound, interplant, and customer service transportation and logistics, but excludes in-country goods freighting for Brazil, Japan, and Russia. In 2015, we collected data related to carrier operations representing 92 percent of our logistics spend and extrapolated total emissions proportionately based on the reports we received. To learn more, visit Logistics.

Use of Sold Products

Environmental Lifecycle Analyses conducted prior to 2012 confirmed our expectations that more than 90 percent of lifecycle impacts are due to electricity consumed during the product use phase. EMC estimates that the lifetime GHG emissions from use of EMC products shipped to customers during 2015 will be approximately 3,392,352 metric tons CO2e, including VMware. This value represents our customers’ Scope 2 GHG emissions from the generation of electricity that is powering our equipment. To learn more about how we provide ongoing information to end-use customers about how to use our products more efficiently, visit Our Products.

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