Earth Protect Blog

February 27, 2009

Apple Inc. had its shareholder meeting Wednesday and the media focused on the absence of its charismatic leader Steve Jobs. But there's an even more famous guy associated with Apple. Al Gore is one of my heroes. As a journalist, I covered him as a Senator 20 years ago in Washington. He was light years ahead of his colleagues on so many environmental issues

-- and still is. But I'm scratching my head to understand what is going on with Gore and Apple, where he serves on the board.

Gore could be using his influence to transform Apple into both an environmental leader and an aggressively public proponent of the carbon reduction he so passionately advocates. But it's not happening. Apple has done some good things. It has a good record on product power management. More recently it has improved on electronics recycling after being prodded by groups like As You Sow, but as far as we know it is not a leader on climate issues. It has not been proactive in releasing information and has been cagey about what it has released, which seems unacceptable, especially with Gore on the board.

The level of basic disclosure by Apple is poor. Of the big four IT companies -- Apple, Dell, HP, IBM -- Apple has disclosed the least information and is the only one that has not made a major commitment to carbon footprint reduction. The Carbon Disclosure Project (CDP) survey is the most widely recognized instrument for companies to discuss how they are measuring and reducing their carbon footprint. Apple barely participated in the latest survey answering only a couple out of nearly 100 questions. CDP gave Apple a score of 7 on its disclosure vs. 91 for Dell and 88 for HP.

CDP represents nearly 400 institutional investors with $57 trillion under management who want to know how companies are planning for a carbon constrained future. Investors like Generation Investment Management, whose mission is to mainstream sustainability in the capital markets. Generation is a CDP signatory and yes, Gore is also chairman of that firm.

A recent report by RiskMetrics and CERES focusing on corporate governance and climate change policies scored IBM at 79. Dell 77, and Apple 27. One of the key issues the survey tracked was board oversight of climate change. It asked for evidence of explicit oversight responsibility for environmental affairs or climate change. Apple got a score of zero in that area. Think about that -- a zero with Al Gore on the board. The company is either doing little or hurting itself by not responding adequately about what it is doing.

At As You Sow, we know it's doing something. Shortly after we filed a shareholder proposal with the company last fall asking for more disclosure on climate-related issues, Apple released estimates of greenhouse gas (GHG) emissions associated with the lifecycle of its major products in a product-specific format.

However, the usefulness of this data is severely limited because it's in a different format than that provided by competitors and most major U.S. companies. The company released only product-based carbon footprint estimates while other companies use aggregate carbon emission estimates. For example, Apple estimates lifecycle emissions for a MacBook Air laptop at about 748 pounds of CO2, but this figure lacks sufficient context to make it meaningful. There is no easy way for customers or shareholders to tell if 748 pounds is a lot of CO2 compared with competitors. Apple chose a format it must have known would make comparison of performance with peers difficult. A cynic might suggest that when you sell 50 million iPods a year, a lot of carbon was emitted to mine and process all that metal, and it sounds better describing it bite-size.

Apple says its lifecycle analysis of products takes into account each phase of production including mining of metals, component manufacturing and associated emissions, product use and disposal. The company says 95 percent of the carbon footprint is associated with production, use and disposition of its products and only 5 percent with its offices and management operations. OK, that's a good step but the company won't disclose key assumptions used in the analysis or reveal a total emissions figure. Why not? That data should be publicly reported as part of the CDP survey mentioned above. Further, how are they acting on the results of this research; are they pressing suppliers to reduce carbon footprint and improve material efficiency?

Another concern is that the company has not released a public commitment to company greenhouse gas reductions as have peers such as Dell, HP, IBM, Intel and Sun Micro:
• Dell has pledged to reduce carbon intensity 15 percent by 2012 and to become carbon neutral.
• HP has pledged to reduce absolute GHG emissions 16 percent by 2010 at owned and leased facilities worldwide from a 2005 baseline.
• IBM has set a goal to reduce GHG emissions 12 percent by 2012.
• Sun Micro has already met a goal to cut emissions from operations 20 percent over 2007 levels by 2015.

Gore addressed a national energy summit earlier this week with Bill Clinton and said "the science is continuing to warn us that we really do have a planetary emergency."

So if it's a planetary emergency we need all hands on deck! Businesses need to change their attitude and practices -- big time. There's no better place to start than Apple where he has significant influence.

Apple is one of the most popular, closely watched companies. When Apple does something, lots of people pay attention. Apple's iTunes store is the top music retailer in the U.S. -- bigger than Wal-Mart. Imagine the opportunity to use a tiny piece of that valuable real estate to educate consumers by offering free videos to download on what they should be doing to reduce their carbon footprint.

Apple is a very wealthy company -- it sold 55 million iPods, 13 million iPhones and nearly 10 million Macs last year. Total sales were $32 billion and the company remains hugely profitable. The former VP could take a page from the playbook of fellow Apple board member Eric Schmidt of Google. Google is spending about $40 million at its Google.org subsidiary on important initiatives to reduce CO2 by developing electric vehicles and researching ways to wean us off of coal and oil by 2030. Unlike most companies, Apple does not disclose charitable contributions. How about donating or earmarking 5 percent of its profits to mitigate the environmental impact of its products?

For socially conscious investors, there is a great disconnect between having one of the world's pre-eminent environmental activists on climate change on Apple's board and still having to push and tug at the company to match its peers. Apple with Gore should be second to none.

Conrad MacKerron is director of the corporate social responsibility program at As You Sow Foundation, which uses dialogue and shareholder advocacy to promote better social and environmental policies at publicly traded companies. He is author of "Business in the Rainforests: Corporations, Deforestation and Sustainability" and a former Washington Bureau chief for Chemical Week.