DELL TAKES A STEP step toward curbing emissions, even before the upcoming Copenhagen protocol that’s likely to force everyone to reduce emissions. Foresight is a good thing if you want to stay in the game and with these improvements in efficiency, it looks like Dell (NASDAQ: DELL) is trying to stay ahead of the curve, and competitors.
Dell voluntarily reducing green house gas (GHG) emissions by 18 percent in FY09 is good step forward, quite the encouraging news from a large company. As we all watch the run up to the Copenhagen talks for hard numbers in greenhouse gas emissions, this is a welcome data point. Some companies have gotten a reputation for denying the future, and some companies attempt to implement changes in a proactive manner. While Dell’s track record isn’t spotless, it’s making some major steps forward in GHG reduction, and a 18.2 percent year on year reduction is not a trivial thing to implement.
Dell has taken a pragmatic approach to GHG reduction by splitting out the areas of reduction. The first area is heating, cooling and company vehicle use with a reduction of 12.4 percent. Next is the emissions from their electrical use and Dell offsets them with RECs (audited Renewable Energy Credits) to achieve an 18.8 percent reduction. Unfortunately this doesn’t indicate the level of energy savings by converting their manufacturing to more efficient processes versus offsets. We don’t see that directly in their numbers, only total energy purchased offset with RECs.
To help us understand the rest of the energy picture we are told that Dell reduced overall energy use by 2.9 percent while it has also increased its green power purchases. That now accounts for more than 25 percent of its global energy use. This translates to an increase of annual green power (not RECs) purchases from 12 million kWh in 2004 to 116 million kWh in 2009. This is one of the best metrics for a company “going green” as it represents direct investment to a utility to provide power from renewable or low GHG sources.
The third area of reduction is a whopping 30.3 percent less GHGs by reducing employee air travel. This not only saves the environment, but also employee travel time, and a good bit of money as well.
One interesting note for those who watch the sustainable investment funds is a metric Dell mentions on carbon intensity (CO2/revenue). This is interesting in comparison to others in the same industry, but not across sectors. It brags, and rightfully so, that it is currently at less than half of the carbon intensity of its competitors. In other words pretty efficient for the money it’s making.