One of the first global businesses to implement an environmental management system, Hewlett-Packard has earned kudos for sustainability efforts at every stage of the production process, from greener product design to energy efficiency in manufacturing to managing electronic waste. SLM asked Pat Tiernan, Hewlett-Packard's vice president of corporate social and environmental responsibility, about the the true meaning of "producer responsibility" and what lies ahead for a cleaner, greener electronics industry.

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SLM: HP spends $50 billion annually to procure materials, components, manufacturing, and distribution services for its products. That's a lot of power to shape the market. What are some of the things the company is doing to ensure environmental responsibility upstream? How has HP benefited in both financial and non-financial terms from greening its supply chain?

Pat Tiernan: Essential to HP's approach is our Supply Chain Social and Environmental Responsibility (SER) Policy and the companys Supplier Code of Conduct, released in 2002, which commits HP to work with its suppliers to ensure they operate in a socially and environmentally responsible manner. Recognizing the advantages of consistently addressing these issues industry-wide, in 2004 HP led the development of the Electronic Industry Code of Conduct (EICC) to foster responsible labor, human rights, environmental, health and safety (EHS), and ethics practices across the electronics industry's global supply chain.

In the past few years, there has been a significant increase in the expectations from a wide range of stakeholdersconsumers, employees, investors, communities, and governments in regard to companies commitment to social and environmental business practices. A companys global reputation can be undermined by allegations of social and environmental violations. Non-governmental organizations (NGOs), social responsibility investment (SRI) fund interests and the media continually demand responses from us about our supply chain SER conformance and reporting practices.

SLM: The concept of producer responsibility has gained a lot of traction in recent years, particularly in the electronics sector. What was the turning point for HP in terms of initiating new programs to deal with e-waste, efficiency in materials use, and the reduction of toxics in its products? How have these issues changed HP's approach to design and R&D?

PT: HP began recycling products more than 20 years ago. Since then, HP has recycled nearly 1 billion pounds of products worldwide. HP offers its customers a variety of return and recycling options. HPs hardware return and recycling program operates in more than 40 countries, regions and territories globally. Additionally, HP offers free return and recycling for HP LaserJet and inkjet print cartridges in more than 43 countries, regions and territories.

HP works closely with stakeholders around the world to establish the most environmentally sustainable electronics reuse and recycling solutions. We support the shared responsibility approach, whereby all stakeholders, including producers, play a role in managing the proper end-of-life management of products. We encourage other manufacturers to accept responsibility for the recycling of their own products, as we have done for more than two decades. We believe the shared responsibility approach will drive environmental improvements of products while keeping consumer costs to a minimum and minimizing the role of and burden on government.

Our legacy of leadership in product recycling has provided HP with significant opportunities to design products with limited environmental impact. Many HP products are designed without paint, plating and flame retardants, without adhering dissimilar materials, and use a snap-fit design with a limited number of similar screws, for easy disassembly and recycling at end-of-life. HPs Design for Environment policy restricts the use of designated materials in HP products. HP's environmental procurement policy requires the companys suppliers to restrict the use of designated materials in HP products, as specified in HPs General Specification for the Environment (GSE). The GSE prohibits or restricts certain substances from use in HP products or in the manufacturing of HP products. The specification, which in many cases exceeds legal requirements, is integrated into the companys product development process and used by our designers and suppliers.

SLM: HP has committed to cutting its greenhouse gas emissions 20% by the year 2010. What does HP stand to gain from such a commitment? Or, put another way, what does HP stand to lose if it fails to address the growing problem of climate change?

PT: HPs goal for 2010 is to reduce our companywide global energy use by 20% below 2005 levels. Our global environmental strategy addresses the convergence of technology and conservation to reduce environmental impact. We look at the environment in three ways: through our products, operations and supply chain. We make our technology products energy efficient to the highest standards and we make them easier to recycle. As we work to become a more efficient business, were also getting more efficient in our own energy use. We make sure our suppliers are as environmentally and socially responsible as we are through stringent monitoring processes. Our holistic approach to environmental stewardship is integrated across our business and is visible at each stage in the lifecycle of our products.

SLM: What are some of the other environmental goals HP is currently aiming for? How do you measure success in these areas?

PT: As one of the worlds largest IT companies, HPs largest impact on the environment is through its products. HP is committed to providing products and services that are environmentally sound throughout their life cycles. HPs priorities are based on the ways our products impact the environment, specifically the energy that they consume in use and their impact at the end of their useful life. Since 1992, HP has had a Design for Environment program in place that focuses on three priorities, product energy efficiency, materials innovation and design for recyclability. HPs end-of-life priorities are to expand the global reach of convenient end-of-life disposal options and to increase customer participation in environmentally responsible recycling. HPs goal is to recycle 1 billion pounds of hardware and print cartridges by the end of 2007.

SLM: Finally, how have HP's sustainability efforts helped make the company more competitive in the marketplace?

PT: Smart corporate leaders and savvy investors agree that paying attention to ecological trends and how they affect the bottom line may be a successful investment strategy. Increasingly, global mutual funds are investing in companies that recognize the enormous opportunity that exists to save money by saving natural resources and by providing products, services and technologies that are needed to create a sustainable society.

For example, Portfolio 21 recently listed HP in its top ten financial performers among companies implementing environmental business strategies. The top performers in the fund posted returns ranging from 41% to 131% in 2006. Portfolio 21 included HP in its top ten list because the company understands environmental constraints and risks, such as climate change, and is changing the way it designs products and develops business models to reduce exposure to these constraints and risks, thereby ensuring greater long-term competitiveness.