Lenovo is cutting emissions while creating cost savings
BSR
INTRODUCTION
Lenovo is a leader in providing innovative consumer, commercial, and enterprise technology. Its portfolio of products and services includes PCs, workstations, servers, storage, networking, smart TVs, and mobile products such as smartphones, tablets, and apps. Lenovo is headquartered in Hong Kong and has key operation centers in Beijing, China, and North Carolina, USA.
THE TARGETS
Lenovo is committed to driving reductions in greenhouse gas (GHG) emissions from the company’s worldwide business activities—including those of its suppliers and customers—and reporting on its efforts annually. Lenovo is on track to achieve its emission reduction target of 40 percent combined Scope 1 and 2 emissions by 2020, relative to its base year of 2009/10. In 2018, Lenovo expanded on its pledge to take climate action by committing to set a science-based target.
Along with its suppliers, Lenovo seeks a 3 percent or better annual absolute reduction in emissions, water, and waste. And in 2017/18, Lenovo set a requirement for at least 75 percent of its direct suppliers by spend to have climate change reduction targets.
In response to its commitment to transparent disclosure, Lenovo has reported its carbon emissions data and strategies since 2009 through the voluntary public reporting system with CDP.
WHAT IS LENOVO’S APPROACH TO REDUCING EMISSIONS?
Lenovo developed a corporate climate and energy policy to reduce emissions company wide and implemented a long-term climate change strategy that focuses on five areas of influence to move to a low-carbon economy:
- Internal operations and direct emission from facilities (Scope 1)
- Energy suppliers and operational emissions that are attributable to Lenovo’s activities (Scope 2)
- Supply chain and its associated emissions as it relates to the production and delivery of goods and services to Lenovo (Upstream Scope 3)
- Customers and the emissions associated with their procurement, use, and disposal of Lenovo products (Downstream Scope 3)
- Government, non-government organization, and public actions
From there, Lenovo set corporate-wide targets to align with the policy and strategy, and reports on progress to achieve its targets annually. Lenovo prioritizes its efforts in the following order: energy efficiency, use of renewable energy, and the purchase of renewable energy credits or carbon offsets.
To identify its risks associated with climate change, Lenovo conducts an annual evaluation to assess its climate risks. Lenovo’s Global Environmental Affairs team is responsible for assessing climate risks, which are evaluated on the actual and potential influence on the environment and the business. This feeds the information into the global risk register, led by the company’s Enterprise Risk Management team. As a result, Lenovo found that energy consumption, GHG emissions, and climate change are significant environmental aspects and impacts for the company.
Lenovo’s global Energy Management System (EMS) oversees the programs and efforts to reduce emissions companywide. To achieve its targets, Lenovo focuses on improving operational and logistical energy efficiency, reducing energy consumption, switching to renewable energy sources, supporting an increase in renewable energy from the grid, and purchasing renewable energy credits and carbon offsets.
WHAT PROGRESS AND ACHIEVEMENTS HAVE BEEN MADE THUS FAR?
Lenovo reduced its global Scope 1 and 2 emissions by 32 percent since 2009/10, tracking with its target of 40 percent by 2020. During this period, Lenovo has implemented over 150 energy efficiency and renewable energy projects worldwide. Lenovo is now looking to set second generation targets—beyond 2020—and has committed to setting a science-based target.
In 2016/17, Lenovo had several operational efficiency achievements, contributing approximately $570,000 in savings and reducing energy consumption by 5,200 MWh annually. In February 2017, Lenovo announced a new PC manufacturing process, that involves low-temperature solder, which cuts carbon emissions 35 percent compared to standard manufacturing processes, while increasing reliability. Lenovo estimates that to date, the new process has saved over 150 metric tons of CO2e emissions. In addition, the company leverages renewable energy from both active and passive solar systems at its facilities in China, and additional active solar systems are in process or planned for both the US and China.
Lenovo also made progress with energy-efficient products, for instance equipping PCs and servers with power management features and intelligent cooling systems. With suppliers, Lenovo implements the Responsible Business Alliance’s (formerly the Electronic Industry Citizenship Coalition) environmental reporting tool or the CDP reporting tool for Tier 1 suppliers. It is also a founding member of Green Freight Asia, to improve fuel efficient freight transport in Asia.
DID YOU ENCOUNTER ANY CHALLENGES OR NEGATIVE IMPACTS?
Lenovo’s greatest challenge to reduce absolute supplier emissions and environmental impact is the growth of business and procurement spend, which increased 180 percent since 2010. In some cases, new suppliers previously did not have, or did not prioritize, emissions reduction programs. Working with suppliers and establishing a monitoring and measurement system—to clearly determine a baseline—is essential in resolving challenges and accelerating energy efficiency. For example, Lenovo engages its suppliers through monthly newsletters, business reviews, conferences, education and training packages, and offers subject-matter experts to improve environmental and energy performance. Lenovo also evaluates suppliers’ performance across several indicators including energy efficiency targets and provides regular feedback.
By working closely with internal teams and external partners, Lenovo identified areas to reduce energy consumption and emissions and prioritized them using its preferred hierarchy of focusing on energy efficiency first, then renewable energy, and lastly purchasing credits or offsets. While progress is being made to achieve 30MW of owned or leased renewable energy generation capacity globally by 2020, challenges remain. To address this, Lenovo continues to explore solar energy opportunities with both active and passive systems at its facilities in China, the US, and at other sites around the world.
WHAT HAS BEEN THE REACTION TO THE TARGETS FROM INTERNAL AND EXTERNAL STAKEHOLDERS?
Lenovo regularly engages stakeholders to inform and provide feedback on its climate strategy and performance. In addition to CDP rating Lenovo at the Leadership Level, scoring an A-, it also honored the company with the 2017 CDP Award for Entrepreneurship on Responding to Climate Change. CDP also scored Lenovo an A- on the 2017 CDP Supply Chain survey and recognized the business as being a 2017 Leading Supplier for Corporate Action on Climate Change in China.
WHAT WIDER IMPACT DO COMPANIES HAVE BY MAKING SUCH COMMITMENTS?
Lenovo believes that businesses have a key role to play, and should own their responsibility, to avoid the impacts from climate change. In alignment with the Intergovernmental Panel on Climate Change and the Paris Agreement, Lenovo encourages other companies to take immediate action to hold global warming well below 2°C to protect society and the environment.