Having just wrapped up the hottest May on record in my home base of Austin, TX., it’s an appropriate time to talk about sustainability and climate action in the tech industry. In my coverage as a tech analyst, I’ve looked at many different sustainability programs from many different companies—all welcome, but some certainly more impactful than others. One company that seems always to be driving much of the conversation is HP Inc. In April, I wrote an article on the company’s latest climate goals, announced to the public in celebration of Earth Day 2022. Now, the tech stalwart is back in the environmental news with the release of its annual Sustainable Impact Report. This report, which HP has published for over 21 years, showcases the measurable progress towards its specific sustainability goals. In a way, I would call it the secret ingredient to the success of HP’s sustainability program, helping to ensure transparency and accountability. In the words of the company, “what gets measured gets done.” Today I’d like to touch on some of the highlights from the 2021 edition of the report and share some further insight I received from HP Inc.’s Chief Impact Officer. Ellen Jackowski. Let’s dive in.
Business impact overview
The report begins with a letter from HP Inc. President and CEO Enrique Lores outlining the high-level aims of HP’s sustainability program. According to Jackowski, the company’s sustainability efforts have always been led from the top, beginning with founders Bill Hewlett and Dave Packard. Back in 1957, Hewlett and Packard enshrined the company’s commitment to giving back to the community and environment in the company’s first set of corporate objectives (read more HP sustainability history here if interested). Lores is carrying on the tradition—according to Jackowski, he is intent on incorporating sustainable practices throughout the organization, with an emphasis on realizing the positive business impacts of these efforts.
On that note, one of the significant findings in the 2021 report is how important these sustainability programs have become to HP’s overall business objectives. Last year, the company says it brought in $3.5 billion in new sales that it says is tied to its sustainability goals, over three times the amount attributed to these efforts the year before. HP also shared that it had allocated nearly $1 billion worth of net proceeds from its inaugural sustainability bond to various eligible projects as of this past October. The company also shared that over $7 billion worth of new sales last year came from deals in which its products met customer requirements for registered product eco-labels (designations such as ENERGY STAR, EPEAT, Blue Angel, etc.).
These gains make sense, given the growing alarm around climate change and consumers’ increasing desire to support businesses that share their values. It’s also very beneficial to publish this number because it could encourage other companies that might be more reticent to commit to such initiatives. Sustainability and equity don’t have to hurt the business—in fact, investing in these issues can have the opposite effect.
HP’s sustainability efforts essentially fall into three categories: climate action, human rights and digital equity. HP focuses on these areas because they are “most material” to the company, according to Jackowski. In other words, these are the areas where HP feels it can make the most tangible impact on the customers and communities it serves.
Climate and conservation updates
HP’s overarching goal is to reach net-zero greenhouse gas (GHG) emissions by 2040, with the stair-step goals of becoming carbon neutral in its operations by 2025 and achieving a 50% reduction in overall carbon emissions across the HP value chain by 2030. HP says it reduced its carbon footprint by 9% from 2019 to 2021, even while its net revenue climbed by 8%. According to HP, these reductions came from the increased energy efficiency of its product line and a consumer shift during the pandemic towards lighter, more efficient devices for remote work. Much of HP’s environmental footprint comes from product use emissions on the consumer side. On that front, HP says it has reduced the intensity of said emissions by 39% since 2015, putting it ahead of schedule on its goal to reduce product-use emissions by 30% by 2025.
HP Inc. also focuses heavily on reducing its footprint through circularity—utilizing recycled and renewable materials, designing products for longevity, and other strategies for keeping resources “in the circle” for as long as possible. For more information, I encourage you to check out Moor Insights & Strategy’s 2020 research paper on the topic here. HP has pledged to reach 75% circularity (by weight) in its products and packaging by 2030. This year’s report informed us that HP has already achieved 39% circularity by weight. Additionally, the company shared that it has eliminated 44% of its single-use plastic packaging since 2018, progressing towards its 75% goal for 2025. Further progress over the past year includes HP Inc.’s February acquisition of Choose Packaging, a packaging development company seeking to disrupt the industry with its zero-plastic paper bottle.
During our briefing, I asked Jackowski if the company was doing enough in terms of product design to encourage circularity (versus in packaging)—i.e., building modules with ten-year lifespans that can be repurposed in developing countries instead of ending up directly in the landfill. She acknowledged, bluntly, that nobody is doing enough—not even HP. She emphasized the importance of hitting HP’s current benchmark goals as fast as possible, noting that this sense of urgency and commitment to raising the bar on itself is a big part of HP’s culture and strategy. Giving credence to this notion are the cases in which HP is ahead of schedule on its reduction timelines. She also noted that of the three categories of materials utilized in circular systems—reused, recycled and renewable—HP is most aggressively pursuing reuse. These efforts include getting the products back through systematic processes, providing them with upgrades and shipping them out for “a second life.” One big part of this strategy is HP’s pivot toward as-a-Service consumption models in recent years.
I also pressed Jackowski on the issue of cost—I must say that in all my 20+ years as a product person, I’ve never met a customer that was willing to pay a higher price for a greener product. As a tech analyst, I’ve seen a lot of hypocrisy from companies on this topic. Jackowski acknowledged the need to keep prices competitive and explained how HP’s innovation model seeks to cut costs by eliminating certain materials (i.e., paper instructions) to reinvest those savings into more expensive non-plastic forms of packaging. Ultimately the goal is to offset the often higher cost of green materials by reductions elsewhere.
The company also highlighted its efforts to combat deforestation. HP has sourced all of its HP-brand paper and paper-based packaging from recycled or certified sources since 2020. Still, it is now going one step further with its pledge to counteract all possible deforestation from non-HP paper used in HP products and print services by 2030. In 2021, HP says it addressed 23% of its total fiber footprint for paper in its products and print services, counteracting 19% of the deforestation footprint for non-HP paper.
Human rights and digital equity
Beyond climate action and conservation efforts, the sustainability report displayed HP’s progress towards its various human rights goals. In terms of diversity, we learned that HP is on track to reach 50/50 gender equality in company leadership globally by 2030, with women now making up 32.5% of all leadership (director level and above). Notably, HP is the first Fortune 100 tech company to commit to the 50/50 goal. Additionally, HP says 39.5% of its new hires in 2021 were women, up from 35.8%. As of 2021, women also made up 22.7% of all technical and engineering roles at the company. HP projects this percentage will exceed 30% by 2030.
The company says it has also increased the number of Black and African American executives on its leadership team by 33% over the year before. Additionally, HP says nearly 45% of all new U.S. hires in 2021 belong to a minority group, an 8% increase over 2020. The company also shared its goal to meet or exceed the labor market representation for all ethnic/racial minorities in the U.S. by 2030.
HP also shared that in its first year of tracking, it had accelerated digital equity for 4.3 million people out of a stated goal of 150 million by 2030. To accomplish this, HP and partner Aspen Digital are developing a program called the “Digital Equity Accelerator,” which helps non-profits scale their efforts to expand digital access to underserved communities worldwide.
Jackowski noted that while HP is making good progress on all its sustainability initiatives, there is still much work to do. I appreciated her honesty about how difficult and sticky these systemic issues are to address. China, with its laxer labor laws, is simply tough to compete with. Building up the manufacturing capabilities in other countries, such as Indonesia, takes time and investment. Ukraine was seen by many as a potential answer, but, for obvious reasons, that is no longer viable. She acknowledged that, in many cases, the technological solutions we need to enable a more sustainable future haven’t even been developed yet. Yet, HP presses on.
I believe this clear-eyed analysis is one of the reasons HP’s sustainability programs continue to show results. HP’s understanding that no one company can solve the world’s daunting environmental and societal problems inspires it to act with the urgency that others have trouble mustering. There will always be another more ambitious target to meet, and HP isn’t one to rest on its laurels.
Note: Moor Insights & Strategy writers and editors may have contributed to this article.