Email | Print    Type Size  -  +

Dell's plan to help save Earth

The computer maker says it has completely neutralized its carbon emissions. Here's how.

By Marc Gunther, senior writer
August 6, 2008: 9:00 AM EDT

dell_hq3.03.jpg
Dell installed energy-efficient lighting, cut back on air conditioning and tapped renewable energy at its Texas headquarters.

(Fortune) -- Dell is announcing Wednesday that it has become carbon neutral by turning out the lights in its offices, buying wind power and protecting endangered forests in Madagascar.

It's all part of CEO Michael Dell's commitment to make the company that he started back in 1984 "the greenest technology company on the planet."

But what, exactly, does becoming carbon neutral mean?

It turns out that there's no agreed-upon definition of carbon neutral, even as rock groups like the Rolling Stones, events like the Super Bowl and the Oscars, and a growing number of companies have set carbon neutrality as a goal.

Among them, and this is by no means a complete list, are such well-known firms as Google (GOOG, Fortune 500), HSBC (HBC), Swiss Re, Timberland (TBL) and Yahoo (YHOO, Fortune 500) (You can read about Google's plans here, HSBC's here, Swiss RE's here, Timberland's here and Yahoo's here.) Some are already carbon neutral, others still on the way.

Becoming carbon neutral - which, you may recall, was the New Oxford American Dictionary's word of the year back in 2006 - means this, according to the dictionary:

"Calculating your total climate-damaging carbon emissions, reducing them where possible, and then balancing your remaining emissions, often by purchasing a carbon offset: paying to plant new trees or investing in 'green' technologies such as solar and wind power."

The goal, of course, is to cut back on greenhouse gases entering the atmosphere and thereby slow global warming. But there are at least two gray areas here - calculating "total" emissions and the role of carbon offsets. Let's see how Dell addressed each one.

Dell says it emits about 475,000 tons of carbon a year. That includes the operations of its offices and facilities around the world, the pollution belched by company-owned cars and the air travel of Dell employees.

It doesn't, however, include the manufacturing of most of the components that go into Dell products - those are made by outside suppliers, not controlled by Dell (DELL, Fortune 500). The company says it is asking its suppliers to report their carbon emissions and encouraging them to reduce them.

Nor, of course, does it include the electricity used by Dell computers once they reach the customer's office or home. To deal with that, Dell invites customers to offset their emissions by donating to a program called Plant a Tree for Me.

Once Dell calculated its emissions, it chose to reduce them in three ways. The first is through energy-efficiency measures. It installed lighting systems that turned off automatically when employees aren't at work, replaced light bulbs with more energy-efficient ones, upgraded its air-conditioning equipment and cooled its offices just a little less, to the dismay of some workers.

"They're sweating for a good cause," jokes Dane Parker, global director of environment, health and safety for Dell. "All of our investments in internal efficiencies have very positive returns, with paybacks of less than three years."

Once Dell curbed its own energy usage, it set out to buy as much "green" power as possible. For its Round Rock, Tex., headquarters, for example, the company uses all of the power generated from a landfill gas-to-energy plant operated by Waste Management, which meets 40 percent of the campus' power needs. The remaining 60 percent comes from wind farms and is provided by TXU Energy. Dell is making additional investments in wind power in the U.S., China and India.

According to the U.S. Environmental Protection Agency's Green Power Partnership, which ranks Fortune 500 companies by the amount of renewable energy they buy, Dell is No. 12 - behind tech companies Intel (INTC, Fortune 500) (No. 1) and Cisco (CSCO, Fortune 500) (No. 7) but ahead of rivals Hewlett-Packard (HPQ, Fortune 500) (No. 21), IBM (IBM, Fortune 500) (No. 34) and Apple (AAPL, Fortune 500) (No. 36.)

Finally, Dell is offsetting about 20% of its power use through a partnership with Conservation International to preserve a forest in southeastern Madagascar. The idea here is provide alternative livelihoods to people who now making a living by clearing the forest, growing rice in poor soil, then cutting more trees to grow more rice as the soil is drained of its nutrients.

"Slash and burn agricultural pressures are clearing the forest there at an intense rate," says Toby Janson-Smith, senior director of Forest Carbon Markets at Conservation International. Dell's funds will help families learn more sustainable forms of agriculture, such as planting under the forest canopy or growing wood for housing or fuel in a sustainable manner.

Conservation International estimates that Dell will help protect 591,000 acres of tropical forest land now threatened with destruction, and prevent 500,000 tons of CO2 from entering the atmosphere during the next five years. The project will be certified by independent third parties, the company says.

So what does Dell's commitment add up to? Clearly it's well thought-out, serious and part of broad sustainability push. (Dell also offers free recycling of its products and an array of super-efficient PCs and servers.) This doesn't mean that you can label your Dell computer "green" - remember, you don't know how or where it was made - or that the company's business model of producing and assembling computers all around the world, then shipping them to customers, is truly sustainable. But Dell's headed in the right direction. To top of page

Company Price Change % Change
Bank of America Corp... 16.15 0.00 0.00%
Facebook Inc 58.94 0.00 0.00%
General Electric Co 26.56 0.00 0.00%
Cisco Systems Inc 23.19 -0.02 -0.09%
Micron Technology In... 23.91 0.00 0.00%
Data as of Apr 17
Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 10:28am ET
Sponsors
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.