Business, Hardware

Is Dell the greenest IT company?

Dell made corporate accountability information available online. Dell is seeking to provide greater transparency to alert shareholders what the company feels is its vastly improved corporate responsibility; evidenced by almost tripling the count of web pages at concerning corporate responsibility. Dell has launched an improved corporate responsibility site. The new site is easier to navigate and highlights more content on Dell’s commitment to sustainable operations, diversity and greener products.

Michael Dell, Dell’s chairman and CEO was cited "We have recognized for a long time that corporate responsibility is both the right thing to do and good business. Our global team is making a real difference in all kinds of ways. We are running our operations with leading efficiency, developing products that are increasingly more environmentally friendly, and doing a number of things large and small to improve customer productivity and enhance their quality of life. We?re pretty determined to achieve even more improvements in these areas."

So what is Dell actually doing in the area of corporate responsibility? According to their corporate report for FY 2009 [PDF Download: Dell’s FY2009 corporate responsibility report], quite a bit. But how does one know anything out of a corporation’s mouth is accurate? In Dell’s case, Dell appoints a section of stakeholders to help ensure the report delivers on what is promised: transparency. These stakeholders are particularly focused on philanthropy and diversity. Dell is taking the fact checking a step further; Dell partnered with Ceres, a national network of investors, environmental organizations and other public interest groups working with companies and investors to address sustainability challenges such as global climate change.

Dell recycles more PCs than all of Top 10 other PC manufacturers combined, including Apple
The report focuses on updates in three areas: Environmental responsibility, corporate accountability and social responsibility. On the environmental responsibility front, Dell exceeded its commitment to recover 125 million kilograms [125 kilo tonnes, 275 million pounds] of broken and used computer equipment under Dell’s free recycling program in 2008. Dell also partnered with Staples to create a consumer recycling initiative at more than 1,500 stores in the United States.

Dell also grew the Reconnect Program with Goodwill to over 1,400 recycling drop-off locations around the U.S, as we previously reported. Besides free recycling, the company also shrunk material use of product packaging by greater than 4.3 million kilograms [4.3 kilo tonnes, 9.5 million pounds] and introduced curbside recyclable product packaging. During 2008 Dell increased its offering of energy efficient products with 148 Star-certified configurations of desktop PCs, laptops, workstations, monitors, printers and other products. Eighty-eight projects were completed designed to save 17 million kWh of yearly electricity use. That comes out to 4,300 tons of yearly greenhouse gas emissions according to the report. In addition, Dell met its goal  to become operationally carbon neutral, an industry first.

To ensure corporate accountability, Dell completed forty-six internal and EICC [Electronics Industry Citizenship Coalition] supplier audits. The supplier audits helped make certain that Dell’s global suppliers are have met or have plans to implement labor standards in line with Dell and EICC requirements. Dell exhausted more than $1 billion with varied suppliers, accomplishing "billion dollar roundtable" status, a Dell first. Another first is Dell’s release of its list of top-tier suppliers.

Dell YouthConnect was founded in India, Brazil and Mexico. This charitable effort has plans to include five more countries by year’s end. It provides cash and technology for groups that support technology education children and adolescents in those countries. "It’s critical we arm youth around the globe with skills to participate in the Connected Era by supporting access to technology resources, teaching youth how and when to use technology and unleashing each child?s unique potential through technology," said Gil Casellas, vice president of corporate responsibility for Dell. A total of $2,731,000 has been granted in Dell’s YouthConnect inaugural year. In 2008, Dell employees gave 145,000 hours of voluntary community service. The Global Diversity Council, which is chaired by Michael Dell, was reinstated in 2008.

Green tech pays up on Wall Street – or so Dell claims
Coming to the interesting bit, Dell’s green push is cited to be one of key drivers of Dell’s stock on Wall Street. In Q4 2008, Dell’s market share fell to 14% [PDF download, down from 16% in H1 2008]. On February 23, 2009, Dell’s share price hit a five year low of $7.84 per share
. However, share price has gone up since February 2009, nearly doubly in value to $14.63 as of 10:49 AM, August 26, 2009. Dell’s target share price is $15 with the decidedly positive half year share price trend, so Dell shareholders have something to smile about.

Clearly, eliminating such expenses as
17 million kWh annual electricity costs and removing 9.5 million pounds of wasted packing materials has a positive effect on the bottom line. Cutting 17 million kWh at 6.76 cents a kWH translates into a $114,920,00
0 savings. Please note, the lowest energy cost figures for Texas were used and the actual savings may be much greater taking into account that this simple cost analysis is for illustrative purposes only. The actual cost analysis would be much more complex as Dell has operations in numerous U.S. states and other countries. It is not clear how much Dell might be saving on packaging costs, but it may be reasonably estimated that considerable cash is saved. Until Dell can recoup its lost market share, eliminating unnecessary costs is the way going forward.

What about the unseen benefits? A March 2009 Gallup poll show that fifty-eight percent of Americans believe the theory of global warming is correct. Reducing utility costs, not only improve the bottom but may result in increased mindshare and Q rating. Dell is obviously hoping this will result in healthier profits. Increasing philanthropic activities in emerging markets is nothing less than wise.

True, the initial outlay of $2,731,000 for YouthConnect may seem unnecessary, especially during an economic recession but Dell is doing the smart thing. India has an estimated population 1,166 billion people while 111,21 million lives in Mexico. In short, India and Mexico combine for over one-sixth of the entire world population representing and almost completely undeveloped market.  Now consider the tentative five-country expansion. If Dell can exploit this global economic expansion successfully, Dell’s worries may be a thing of the past. I wonder what "Dude, you’re getting A Dell," sounds like in Hindi?

Dell invested heavily in becoming a green company. While this was seen as a publicity stunt, Dell really stepped up to the plate and ended up with massive savings in production and marketing tools to tell people that the company is saving money for them as well. Recently, we saw positive reaction from viewers on an otherwise act of vandalism when Greenpeace broke at HP’s corporate headquarters reminding them at the environmental promise they broke, continuing with HP releasing a non-ENERGY STAR compliant computer monitor.
Overall, it looks to us that Dell is the greenest company in tech industry, with Apple following as a distant second [but Apple took action only after Greenpeace reprimanded them]. Sometimes, it pays up to be green.