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:
- 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 data centers for energy efficiency
- Identifying opportunities to adopt renewable energy sources that are economically and environmentally sound
- 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
- 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
- Supplying information solutions to optimize business functions, accelerate research, leverage data assets, and enhance public infrastructure
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 42 percent, from 32.6 to 18.66 metric tons.Our goals:
- 40% reduction of global Scopes 1 and 2 GHG emissions per revenue intensity below 2005 levels by 2015. Achieved in 2012, 2013, and 2014; We are not retiring the goal yet, as we need to remain on-target to meet reduction levels through 2015.
- 20% of global electricity needs served by renewable sources by 2020 (excluding VMware)
- 40% absolute reduction of global Scopes 1 and 2 GHG emissions below 2010 levels by 2020 (excluding VMware)
- 50% of global electricity needs to be obtained from renewable sources by 2040 (excluding VMware)
- 80% 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 greenhouse gas 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 2014, our efforts included:
- Activities of the Global Energy & Water Management Steering Committee, which is tasked with: reviewing and refining energy and water goals and projects; developing recommendations for management; establishing plan, task, and cost models; and implementing programs.
- Establishing cross-functional representation for a global 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.
- Evaluating new tools for managing our global carbon accounting and reporting.
- Conducting more detailed research on solar photovoltaic (PV) energy generation in the U.S., including investigating potential hosting of 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 2015.
- Continuing to investigate other potential alternative energy purchasing in the U.S., India, Ireland, and other locations where we have large global facilities.
During 2014, EMC purchased 157,000 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 157,000 MWh represents 27 percent of the grid electricity consumed at all EMC facilities in the U.S., including all divisions during 2014.
Also in 2014, a cross-functional team from Global Real Estate & Facilities, Finance, Global Product Operations, and the Office of Sustainability researched a variety of models for using an internal cost of carbon to reflect anticipated long-term financial impacts from changes in greenhouse gas emissions. We expect to implement the resulting proposal in 2015.
Reporting & Accountability
We are committed to reporting our progress transparently and disclosing our GHG emissions annually to CDP. To learn more, see the link in the sidebar for our 2014 CDP Climate Change questionnaire response.
Our Ireland Center of Excellence (COE) continues 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 within the Ireland COE due for commissioning in early 2015 will have the effect of bringing our total thermal rated input below 20 MW and consequently, we will 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.
Scope 3 Emissions
At EMC, we continually strive to increase the breadth and depth of our GHG reporting. In our 2014 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.
In 2014, the GHG emissions associated with business travel was 153,752 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.
As of the publication of this report, our 2014 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 the Employee Travel & Commuting.
Direct Tier 1 Suppliers
In 2014, the GHG emissions associated with EMC’s direct material suppliers was 215,000 metric tons CO2e. This reflects Scope 1 and Scope 2 GHG emissions data reported by direct Tier 1 suppliers comprising 98 percent of our annual spend. Using economic allocation, we use their data to calculate our share of their GHG emissions. The increase in estimated emissions compared to 2013 is primarily due to merger and acquisition activity among our suppliers, which affects the estimated values derived by the economic allocation methodology. To learn more, visit Supply Chain Responsibility.
EMC’s Global Logistics Operations generated approximately 92,081 metric tons CO2e in 2014. This number covers inbound, outbound, interplant, and customer service transportation and logistics, but excludes in-country goods freighting for Australia, Brazil, Japan, Russia and South Africa. In 2014, we collected data related to carrier operations representing 93 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 2014 will be approximately 4,066,255 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.
- Climate Change Policy Statement
- EMC 2015 CDP Climate Change Information Request Response
- EMC 2014 CDP Climate Change Response
- EMC 2013 Investor CDP Response
- EMC 2012 Investor CDP Response
In 2014, EMC signed the Corporate Renewable Energy Buyers’ Principles, sponsored by the World Wildlife Fund and World Resources Institute.
"The Buyers" Principles provide EMC with a useful framework for evaluating opportunities for renewables in our own operations. They also provide a powerful foundation for collaborating with energy providers and our peers to increase the quantity, availability and economic attractiveness of renewables to a wider range of businesses.” —Kathrin Winkler, Chief Sustainability Officer, EMC
Also in 2014, EMC aligned with the World Bank’s Put a Price on Carbon Statement to voice our support for carbon pricing and developed a process for pricing carbon internally that we expect to implement in 2015.
EMC is a signatory to The Climate Declaration, a project of Ceres that brings together companies and individuals to demonstrate support for national action on climate change.
EMC RECOGNIZED FOR CLIMATE DISCOSURE AND GHG MANAGEMENT CDP 2014 S&P 500 Climate Disclosure Leadership Index (CDLI)
For the sixth 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.
2015 Climate Leadership Award
In 2015, EMC was recognized by the U.S. Environment Protection Agency (EPA) with a 2015 Climate Leadership Award for Excellence in Greenhouse Gas Management – Goal Setting. To learn more, read the Press Release.