| www.hp.com/hpinfo |
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| Share Price (3/15/07): | $39.70 |
| OVERVIEW: | |
| Market Value (3/15/07): | $106.3 BIL |
| Revenue 2006: | $91.7 BIL |
| Employees: | 156,000 |
| Return on Equity 2006: | 16.5% |
| HIP PRACTICES: | |
| Vision: | "The HP Way" incorporates the company's involvement on a world stage. Hence, global markets and sustainable products are part of the culture. However, no estimate of "green" revenue, because 'all of it should be.'" |
| Metrics: | By 2010, will reduce carbon dioxide emissions from owned and leased facilities worldwide to 15 percent below their 2006 levels. Partnering with World Wildlife Fund to identify the best technology and practices to reduce energy use. 2006 purchasing goals: $1.4 Bil to women and minority owned small businesses out of $52 Bil (2.7% of total). |
| Financials: | In both 2005 and 2006 roughly $6bn in customer proposals asked about environmental programs, primarily product design. Positive financial gain from robust equipment take-back program, initiated 20 years ago. |
| Accountability: | Group of 15 environmental organizations embedded in various operating units, including product development teams in regions world-wide. Conscious decision to use decentralized approach to embed environmental leaders as valued members of teams, rather than folks sit in corporate headquarters. Management of this structure is more challenging but it embeds the environment into profit and loss decisions around the world. Working with EPA to drive creation of standards that would enable easier tracking of actual ROI payback from environmental design. New US executive order makes EPA's "environmentally preferable" tool part of government procurement for desktop PC, monitors and notebooks. |
| Decision-Making: | In 1992, began Design for Environment (DFE) program, factoring the environmental lifecycle impact into product design. Three core components since inception: materials innovation, product efficiency, and design for recycling. Design for Environment is "a necessary part" of financial services arm. Expect customers to give products back at end of useful life and to handle in environmentally responsible manner. |
| HIP OUTCOMES: | |
| Health: |
Zero work fatalities, Lost workday case rate = 0.11%. Telework program for 11,400 employees (about 7%). |
| Wealth: |
Boosted employee 401-k matching to 6% (from 4%); however, froze pension and health benefits for some employees. |
| Earth: |
Although had not reduced overall GHG emissions by year end 2005 transparent that 87% of GHG emissions are from energy consumption. Goal to reduce GHG by 18% in 2006. Suppliers required to achieve environmental criteria; as of Nov 2006, audited 550 direct material suppliers at 830 sites worldwide, covering 98% of global purchasing spend. Gaps require an environmental management system. In 2005, collected and recycled more than 140 million pounds (approximately 64,000 tons) of used products. This brings the cumulative total since 1987 to more than 750 million pounds (340,000 tons). Combined recycling and reuse rate for fiscal year 2005 was 10.3% of sales. |
| Equality: |
40% (4 of 10) women on executive team; 32% of worldwide staff are women. Diverse resellers totaled $2.15 billion in sales of HP products and services in 2005; Purchases from minority- and women-owned U.S. businesses exceeded 21% of its total qualified procurement spending in the United States. |
| WHATS NEXT: | |
| Practices: | Embedded enviro groups in business units should help spread the sustainability approaches swiftly and innovate for market needs. |
| Outcomes: | Catch-up progress on carbon-neutrality should drop to bottom line, women-balanced executive teams tend to outperform peer groups. |
| OTHER RATINGS: | |
| KLD: Companies are rated from negative (0) to positive (6) in seven areas. | Community: 6.0 Governance: 2.9 Diversity: 6.0 Employees: 5.2 Environment: 5.3 Human Rights: 2.2 Product: 3.1 Included in KLD Indices for: Domini 400, Broad Market Social Index, Large Cap Social Index |
| Calvert Rating: Companies are rated on a scale of 1 (substantially below Calvert standards) to 5 (superior). | Environment: 5 Workplace: 5 Business Practices: 3 Human Rights: 5 Community Relations: 5 Included in Calvert funds: Yes |
| RESOURCES: | |
| Sustainability or CSR Report: | HP FY06 Global Citizenship Report |
| Annual Report: | Annual Reports, Proxy Statements & Forms 10-K |
--Sara Olsen and Ruthie Ackerman
