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In one of his first post-leave interviews, Apple CEO Jobs says the impact of products, not the emissions of factories, is what counts, and that it's time to focus on a company's results, not its lofty goals
Except for one keynote speech he gave on Sept. 9, Apple CEO Steven P. Jobs has shunned the press since he went on medical leave in January. But Jobs spoke with BusinessWeek on Sept. 22 about a subject that has nothing to do with the Mac, iPods, or iPhones.
The topic was Apple's (AAPL) reputation with regard to the environment and its effort to reposition itself as a leader instead of a laggard. While environmentalists tend to focus on carbon emissions from corporate operations and companies' publicly stated goals to do better, Jobs says Apple wants to set the pace in addressing what he says is a bigger challenge: reducing the amount of power required to run the company's products. "Unfortunately, we're way ahead of our competitors," Jobs contends.
Until recently, Apple did little to back up this argument other than to say "trust us." That didn't sit well with organizations that urge companies to engage in public debate over global warming or appoint executives or board members to push a green agenda. Apple almost never takes a position on public-policy questions, and few Apple staffers speak or even attend industry conferences. So it's not surprising that Apple scores poorly in rankings. "We tend to report rather than predict," says Jobs. "You won't see us out there saying what the PC is going to look like in 2016. We quietly go try to invent the PC for 2016."
A New Way to Gauge Carbon Footprints
But now, Jobs thinks the time is right to report on what Apple has accomplished. The company has finished a multiyear data-mining project to fully understand its environmental impact on the planet and has published data that may stir up controversy. Apple takes issue with studies that hand accolades to rivals such as Dell (DELL) and Hewlett-Packard (HPQ) for cutting emissions at their facilities. Apple's research suggests that those emissions make up only a small slice of a company's larger environmental impact—a mere 3% in Apple's case. Far more of the carbon footprint, he says—53%—is generated by Apple's products. "Everyone focuses on whether you have motion detectors in the conference room" so the lights will go off when it's unattended, says Apple Chief Operating Officer Tim Cook. "But making products cleaner involves real engineering. It's about innovating, and it's hard work."
Dane Parker, Dell's director of environment, health, and safety, concurs that the collective use of products has a bigger impact than a company's facilities. At the same time, he speculates that Apple's analysis is at best a guess. "I don't think they're fudging anything," he says. "But I don't think there are sufficiently vetted methodologies" that all companies can follow. Until they exist, Parker thinks it's more useful for companies to lead in terms of things they can control. Better to focus on the energy efficiency—which saves money as well as greenhouse gases—than an abstract notion such as a product's carbon footprint.
Jobs says Apple's environmental consciousness isn't new—just expanded. The company has focused on energy efficiency for years, he says. When Greenpeace launched a campaign criticizing Apple in 2007, Jobs fumed that the group was unfairly using Apple's fame to draw attention to its cause. He says he agreed with many of the group's goals, and he even agreed that Apple had to do more than just make energy-efficient products, such as improving its recycling program. But, frustrated by the bad press, he asked Apple board member and alpha-environmentalist Al Gore for advice. "Al's advice was to just do your work," Jobs says. "Don't get in a mud-slinging war with those guys."
Quickly, Apple began to change its tactics. Starting in 2007, Jobs began issuing an "environmental scorecard" on new products during his keynotes. And he pulled together a team to do the far-reaching "cradle-to-grave" studies to understand where Apple was having the most detrimental effect. The goal was to understand each step of the product-development cycle in detail.
Still, environmentalists clamored for an overall emissions number, so Apple could be held to account against other companies that had long provided that information. Only recently did Jobs' task force finally roll up all the data to come up with a corporationwide annual total of 10.2 million cubic tons of carbon, which includes emissions from products. Dell puts its total emissions at 471,000 tons, but the tally doesn't include the impact of its computers and other products or that of its suppliers.
Eliminating PVC and Other Toxic Materials
Apple is also winning kudos for an intensified effort to eliminate toxic materials. While many tech companies have promised to stop using particular commercial compounds that include bromine and chlorine, Apple two years ago began requiring suppliers to prove that their products included none of these chemicals at all. That required a major investment, says COO Cook, including hiring chemists to help suppliers come up with alternatives. Take PVC, the additive that gives computer cables their flexibility. To avoid using the material inside its products, Apple came up with a "special blend" of polyester.
Meantime, while both Dell and HP had promised to stop using PVC by the end of 2009, both recently said the goal was impossible because of a lack of commercial substitutes. Yet Apple met its target of 2008 for the innards of its devices, and sources say future products will ship with PVC-free power, mouse, and monitor cords. "We report what we've done, while others set goals they can't meet—and then they're let off the hook," gripes Apple Chief Financial Officer Peter Oppenheimer, noting that Dell and HP rank highly in a recent green list in Newsweek.
HP says it, too, is working with suppliers and that its products will be PVC-free in late 2010. HP also has promised to improve the energy efficiency of its printers by 40% by 2011 relative to 2005. And by 2010 it aims to improve the efficiency of its servers by 50% and desktop and laptop PCs by 25%. HP says its total emissions are 8.4 million tons and acknowledges that the total would be an "order of magnitude" greater if it were to include product emissions in its disclosures. It doesn't currently plan to do so.
Staying Out of the Fray
While Apple is disclosing more information about its environmental record, it's not likely to rocket to the top of green rankings. Sources say the company will probably continue to steer clear of public-policy debates and make no changes in its governance to highlight the company's environmental commitment.
Of course, Apple is not immune to the temptation to "greenwash"—the tendency to overstate environmental accomplishments to win PR kudos. Take Apple's recycling program. The company notes that it recycled 33 million tons of gear in 2008. As a percentage of sales, that's more than twice as much as HP and Dell. Yet most of that is non-Apple products, which tend to be larger and heavier than Apple's given the popularity of its laptops, iPods, and iPhones. "What we really need to know is how much of their own products they are taking back," says Barbara Kyle, who runs the Electronics TakeBack Coalition.
Still, for the first time in years, Apple seems to be gaining credibility with many environmentalists—particularly those who agree that it's time corporations be measured on accomplishments rather than plans. "It's been so much about setting lofty targets and putting out fancy reports," says Michel W. Gillenwater, a climate-change researcher at Princeton University. Or, as Jobs puts it: "All of this stuff is only important for the world if you actually do it. Promises can be very hollow."