HPE launches world's first supply chain program based on climate science

May 25, 2017 • Blog Post

How HPE is leading the way to a sustainable ICT supply chain with emissions reductions targets that could equate to taking 21 million cars off the road for an entire year

The IT industry has recently felt increased pressure to manage the emissions of both their operations and their value chain, as the demand for connectivity and computing power has increased exponentially. By 2020, 100 billion connected devices will generate far more demand for computing and data storage than todays infrastructure can accommodate. The trend is unsustainable, but solutions lie in the innovations and standards that companies like Hewlett Packard Enterprise (HPE) drive.

Today, HPE announced the world's first comprehensive supply chain management program based on climate science. The landmark initiative will provide our suppliers with the tools they need to develop a customized plan to reduce their own emissions and drives a global standard for supplier greenhouse gas (GHG) engagement and abatement. HPE's objective is for this innovative program to act as a model for the industry and the world.

The program will require 80% of HPE manufacturing suppliers[1] to set science-based emissions reduction targets in their own operations by 2025, seeking to avoid 100 million tons of emissions. These reductions equate to taking 21 million cars off the road for an entire year.

As part of the goal, HPE will reduce manufacturing-related GHG emissions on an absolute basis within our supply chain by 15% by 2025, becoming the first IT company to establish a supply chain goal that is in line with climate science.

HPE will also be the first company in any industry to undertake the complexity of creating a customized science-based target for suppliers by providing them with a broad range of tools and resources that will help them build their capability to set and achieve operational targets that drive down emissions.

"Enabling our suppliers to set science-based targets will help to improve their environmental footprints and, indirectly, those of our products", said Cliff Henson, senior vice president of global supply chain for HPE. "This creates a ripple effect throughout our value chain. When our customers implement these sustainable IT solutions, they in turn lower their own footprint, allowing them to do more with less environmental impact."

By driving the energy efficiency of HPE's manufacturing processes and products, emissions reduction goals equate to cost savings not only for the company but also for suppliers and customers. According to data from CDP, an international NGO that holds the largest database of corporate climate change information, the average internal rate of return (IRR) for investments on emissions-reduction activities in the IT sector is nearly 40%.

"Businesses today face growing pressure to meet tougher procurement standards as customers look to reduce all costsfinancial and environmentalfrom the products they purchase", said Antonio Neri, executive vice president and general manager of HPE's Enterprise Group.

"This program will ensure we remain a trusted sourcing partner to our customers by providing them with high-quality products that are manufactured responsibly", said Henson.

This bold step speaks to HPE's firm commitment to move aggressively to ensure the world is successful in driving down global emissions. "By taking this leadership position HPE will serve to inspire the ambition of their industry peers and their supply chains to improve their operations, standards and practices to lower emissions, which will drive innovation and have a huge environmental impact," said Nigel Topping, CEO of We Mean Business.

Working with the CDP supply chain program, HPE's aim is to drive best practice throughout our industry while managing the associated climate risks and financial opportunities. Paul Simpson, CEO of CDP, and a founding partner of the Science Based Targets initiatives said, "This is a fantastic initiative by HPE to ensure that the IT sector can benefit from their business strategy to incorporate science-based target setting throughout their value chain. They are both driving the transition to a low-carbon economy, while securing competitive advantage."

This new goal will complete HPE's existing suite of climate change targets across its value chain, including a commitment to reaching 100% renewable energy through RE100, a science-based target (SBT) to reduce operational GHG emissions by 25%, and a goal to increase the efficiency of HPE's product portfolio 30 times by 2025.

The new program will assist suppliers to set and achieve SBTs by providing support and tools developed in partnership with leading experts at BSR and POINT380. This will enable HPE suppliers to create customized targets, plan and implement emissions reduction projects, and enhance accountability by publicly tracking progress on setting and achieving these targets. The program will also incentivize suppliers to set and achieve these goals by assessing them favorably through HPEs social and environmental responsibility (SER) scorecard, which directly ties their SER performance into HPE's procurement decisions.

HPE has also partnered with BSR and POINT380 to develop a white paper that outlines a supply chain standard for GHG emissions engagement and abatement, a first in the industry. It will act as a resource for all suppliers to set a pathway toward an SBT strategy.

By taking a holistic approach to ensure accountability within HPEs own supply chain, build the capability of suppliers to set SBT targets in their own operations, and provide a standard for supplier GHG engagement and abatement, HPE is taking a leadership stance with a goal to catalyze the IT industry and beyond.

[1] By spend, including final assembly and strategic commodity suppliers