How Intel measures its environmental performance

| August 6, 2008

Intel’s director of corporate social responsibilityAs the world’s biggest manufacturing of computer microprocessors, you can say that Intel is at the heart of the information revolution. Throughout the years, the company has managed to reduce the energy consumption of its chips in the market place, but can its own efforts to reduce emissions compete with the global demand of its products? In this interview with Dave Stangis, Intel director of corporate social responsibility, Green Telecom editor, Tony Chan, finds out what the company is doing to reduce not only the environmental impact of its products, but inside its operations, its supply chain, and its energy procurement policy. More importantly, we find out how Intel measures and quantifies its environmental performance.

What are some of the core initiatives that Intel has implemented to reduce energy consumption across its operations?

In terms of our core initiatives, we take a look at it in kind of a life cycle approach. So we look at the life of a chip from the time it is conceived, working on designing the process, working with the manufacturer to optimise energy use. Our approach is to design for the environment, designing in more energy efficiency in terms of our process, so that we are comprehending it upfront in the design process, so that when it comes to market, it uses less energy, and offer that promise and performance to our customers.

It goes beyond that. The biggest foreign issue is within our factories – they are very large and require a lot of energy and resources. Alone just on energy, we have a dedicated capital funding program just focused on energy conservation. For example, from 2001, we’ve spent about US$20 million in energy conservation projects, which saved US$1.2 million dollars and 500,000 kWh of energy. That’s just in our own manufacturing facilities.

When you looked outside the company, to when the chips are in the market place, there’s been a big change in Intel’s energy efficiency portfolio, technologies like dual core, which offers 40% reduction in energy consumption while doing 40% more work. The data, as of last May, that there were enough dual core processor out in the market place, that the work they did and the energy they saved, compared to previous generations, was equal to taking 2 million cars off the road. Now we are up to taking 4 million cars off the road in terms of climate impact.

The fourth pillar for Intel is leadership, leadership out in the industry, among our peers, competitors. Here is where you find things like the Climate Savers Computing initiative that we launched last year, our focus on energy efficient design centres, our climate change policy worldwide.

Those are kind of the big four pillars that represent our core initiatives – product design and manufacturing, the actual product in the market place, reducing emissions and leadership.

What methodology does Intel deploy for measuring its carbon emissions? What is being done contain and reduce emissions?

There are standard methodologies out there. As you are probably aware, the Carbon Disclosure Project has methodologies for energy measuring, climate change emissions, climate impact, and so on. Part of that methodology is basically measuring the energy that we buy and the carbon emission we produce, and mentions strategies that we take at containing those emissions across the board with an absolute goal of reducing them by 40% by 2012. So we target to reduce our energy use by a measurable amount every year.

Also, we are one of the largest users of renewable power in the US, in particular, wind power, hydro, biomass, solar. In fact, we don’t really talk about offsetting any particular product or plant, but renewable energy use represents 46% of our US energy consumption.

The strategy going forward is: We want to continue to do the right thing in the renewable power space, so we are looking to install real projects in our facilities worldwide. We are focusing on a decision criteria that comprehend costs and comprehend return on investment. So we are considering the installation of some solar, solar water projects at some of our sites. And we are looking at every site that we operate worldwide, and we are looking at the kind of technology that we can implement worldwide, and using that to base our investment decisions. We will probably install or initiate the installation of three projects this year alone.

In Intel’s CSR report, there’s a point that Intel is on track to meet a goal to reduce emissions per unit of production, does Intel measure its environmental performance in any other way, such as emissions per revenue, per employee?

We are on track to reduce our emission per unit of product. This normalization concept of per chip, per manufactured unit, per revenue, per employee, is certainly something that’s around for a while. For Intel, we’ve been reporting our environmental performance since 1994, so we’ve been doing it for a long time.

We have experimented with different kinds of normalization methods. We started out with normalizing on revenue, basically a trend line that tells energy, emissions, water, waste and so on, divided by revenue. But in the transparency space, in the reporting movement, there’s a move towards a more tangible normalization act.

So we actually report on normalised per production chip, but we also report on all employees, employees by site, employees by region, in revenue, income. All these things, and we exposed our data sheet with all of our environmental data, so if you were interested in energy use per country, you can dig through all of that based on that data. It is very transparent.

In terms of environmental reporting, it is still very early and explored by many organizations. There are some companies that issue their environmental report along with their annual report, but always as a separate report, does Intel actually integrated its environmental reporting inside the annual report?

Yes, it is an annual process for us. We publish our report according to global reporting guidelines, and we put it on the Web in PDF. We create an executive summary and distribute it to people around the world. We have a full web page where you can scroll through all the data and we publish some working reports as well. We launch the reporting initiative in conjunction with our annual stockholders’ meeting, the general meeting of the company, and we reference data and the report in our financial statements, so there is correlation.

Does Intel have a green procurement policy?

Inside the company, we have developed goals for Intel’s suppliers which will basically reward our suppliers for offering additional green procurement options. So there are green procurement policies in terms of materials, recycleability, packaging, and so on. What we have done this year for the first time, is to set up a criteria for all our suppliers that they will have the next three years to become incrementally more environmentally friendly.

At the end of 2008, we expect the suppliers to have an environmental rating of excellent. At the end of 2009, we expect to them to have goals in terms of environmental performance. By 2010, we expect our suppliers to have published performance metrics on the environmental initiatives. We set out a roadmap for our suppliers to become more environmentally responsible.

Does Intel set internal goals – performance indicators – for individual departments/locations?

There are internal goals. What happens in Intel is that we translate our external goals from our operational goals. Inside the company, there are multiple processes that tie goals to different initiatives for flash memory, microprocessors, servers, and so on. So each of those initiatives has their own set of internal goals, but as a company, those are much too complicated to try to translate for the external world, they wouldn’t understand it. We have a lot of work in translating those corporate goals to talk about the whole company. So yes, we have our internal goals, and we work to translate those to the market.

As a technology leader, is Intel working on anything beyond making its chips more energy efficient, such as sensors for managing energy consumptions, applications for reducing travel emissions, work at home programs, etc?

There’s a lot of work in the server and design space, some work with the US Environmental Protection Agency on standards for low energy use, external efforts on reducing the energy use of desktops, initiatives with universities and so on. We are also beginning to look at using our technology to manage energy use across different markets, optimizing travel routes for lower emission. We’ve had for years, a telecommuting program, teleconferencing programs to minimise travel emissions. We still have some work on quantifying all of that impact on a positive stand point.

Intel recently spun off some technology with the establishment of SpectraWatt, what can Intel’s silicon-level expertise brings to the solar power market?

This is a little bit different. You are getting into area that involves Intel capital, basically the venture capital arm of Intel. As you can imagine, there’s a lot of technology overlap in the production of silicon wafers for chips and silicon wafers for solar power. There’s a big gap in terms of what they end up like, but as far as the way they are manufactured, there’s some technology that Intel capital is making investments in, in the green tech space.

It is not a direct play to migrate Intel’s manufacturing technology to solar manufacturing. It’s a different process, but there’s obviously some overlap. But those investments are much more about Intel Capital looking at as good investments – these are good things for the environment, these are going to be good businesses going forward. They are looking at it much more from that perspective.

Intel is a major user of renewable energy, how has that impacted operations in terms of investment in on site systems, and managing different power suppliers?

What is happening with renewable projects is we are pursuing, and buying renewable energy credits equivalent to 1.3 million kWh, which lowers our footprint, but also boosts investment in future investments in renewable power. These credits are retired, so no one else can have them. If another company wants to use renewable power, the [renewable energy] industry will have to invest in additional capacity in order supply that company.

As a global company, is it difficult to implement a concerted effort across its global operations in terms of renewable energy policy (due to different availability levels in different geographical locations?)

There’re always challenges in term of trying to implement some of these policies, when you try to take a global approach, one environment, one energy policy and globalised it. When we are taking a look at renewable energy policy and the promotion of renewable energy projects, you are bringing in opportunities from every geographical area, relationships in China, India, all our sites in the US, Israel, Ireland.

We are asking those sites to bring the best application they can and we bring them to a management review process, where we sit down and review all these projects, in terms of upfront costs, net costs, benefits to the local community, benefits to the employees, actual positive environmental impact and based our decisions on those.

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