RESEARCH TRIANGLE PARK – As a core aspect of aligning business operations to company sustainability goals, IBM is putting pressure on its 11,000 global suppliers to commit to, then track and report publicly, in three areas, said Louis Ferretti, project executive, supply chain risk, environmental & compliance programs at IBM, as a panelist in a conversation on sustainability during the RTRP 2021 State of the Region virtual event in early June.
Ferretti, who is based in company’s Research Triangle Park office, noted that whatever the company asks of its suppliers, the company is also implementing, or has already implemented, including an updated pledge on reducing carbon emissions.
IBM announced in February that it would be net zero with regard to carbon emissions by 2030.
The company asks its suppliers–both first tier and second tier suppliers–to demonstrate a commitment to reducing carbon emissions, recycle, and decrease overall energy consumption, said Ferretti, then asks the companies to publicly disclose those efforts in a display of transparency.
“We want to use our considerable influence, to influence not just our first tier but our second tier suppliers to move in that direction,” said Ferretti.
According to Ferretti, IBM spends about $25 billion annually on its supply chain, and $20 billion is indirect, meaning it is spent not on hardware, but rather on services for IBM or its clients.
“When we’re dealing with our large supplier base, we’re consistent with our direction,” added Ferretti. “The climate crisis is one of the most pressing issues of our time,” he added.
“We see that from the very top of our business, all across our business, we’re all in,” he noted. And that’s globally, not just in the Research Triangle Park facility or in the United States, but in all 175 countries the company operates in, said Ferretti. “Companies will not be here in the future if they don’t have a focus on sustainability,” he concluded.
Duke Energy will invest in cleaner energy, reduce emissions by 50% by 2030
“ESG is not a new concept for Duke Energy,” said Stephen De May, North Carolina president for Duke Energy. “We pride ourselves to being named to the Dow Jones sustainability index for 15 years.”
“We are only one of seven companies, and there are dozens and dozens of companies like ours in the United States, but we are one of only seven on that index,” he added.
The company serves 3.5 million accounts, or about 7 million people, in North Carolina, said De May, and employs 16,000 people across the state.
“Our footprint is really big from a corporate perspective, but what really makes ESG central to our company is the fact that we provide an essential service to our customers: electric power,” said De May.
“The generation of electric power produces an environmental footprint, and the management of that environmental footprint while providing affordable, reliable power to our customers, is now one of, and it has been, the most important things that we do as a company.”
The company committed to reducing its carbon emissions by 50% by 2030, which De May noted may not seem significant, compared to other companies–like IBM, for example. “It may feel less ambitious, but for the energy sector, it is ambitious,” he argued.
The company plans to be net zero with regard to its carbon emissions by 2050, said De May, and is also looking at establishing goals around the production of methane.
“Our customers increasingly want cleaner energy,” said De May. “The cleanest energy is the energy you don’t need to produce,” he said, discussing the ways that Duke Energy is reducing its own impact, including the consolidation of its headquarters locations in Charlotte to the Duke Energy Tower.
“We are trying to reduce overall consumption of electricity,” he said, “and the peak usage of electricity, through various programs, through incentives, through the use of technology.”
Driving down peak energy usage will lower the cost of producing energy overall, because there will be less demand for additional facilities, De May said.
North Carolina is already primed to lead, argued De May, noting that the state is currently ranked third in the United States in the amount of potential solar power infrastructure. North Carolina ranked first in the total number of rural clean energy jobs, according to an April report from E2, and 9th overall.
North Carolina’s energy future–and its infrastructure–will look different from it does today, said De May, summarizing that while gas will still play role, it will be greatly diminished, and instead, the state will see “more solar energy, battery storage will increasingly be a part of the energy value chain.”
“Sustainability is here to stay,” said De May. “There is growing consensus on what we need to do, I think the part that is going to be the future of this is the impact of communities, the cost of impact.”
And that’s a critical factor that Duke Energy is considering, even as the company recently increased the cost of electricity for its customers, after approval from the North Carolina Utilities Commission.
“Many of our customers struggle to pay for their basic services today, when you add increasing costs to those customers for cleaner energy, it’s not easier for them to pay for it, though they want cleaner energy,” said De May. “Our focus for the Research Triangle region is to make sure that this transition is done in a just way, environmentally, economically, and sustainably, and to always be thoughtful about the impact to customers and those that have to pay.”
“This region has been a leader in those kinds of things in the past, and this region has been a leader on environmental policy, and I believe it can also be a leader in environmental justice and economic justice issues that are going to come with a sustainability campaign,” concluded De May.