HP Sets the Bar for Sustainability: Another Company Making the World a Better Place

HP’s annual sustainability report is out, and they are making impressive progress. I’m fascinated by the fact that as the US Government pulls back on sustainability, US businesses are stepping up and HP appears to be leading the pack. What drove this is that investors, customers, and employees are becoming far more aware of issues like pollution and climate change and want the companies they work for, invest in, and buy from to step up to helping assure the future of the planet. One of the impressive stats is they have helped 21 million students (including adults) through quality education programs against a goal of 100 million by 2025.

Here are some of the other more interesting highlights from their progress (most of this is year over year and the report is through 2018, so they have likely made even more progress in 2019).

Profit in Progress

A lot of CEOs initially seemed to believe that sustainability would have an adverse impact on profit but given eliminating waste is at the heart of most efforts and there are collateral costs to pollution, that hasn’t proven to be the case at HP. They have tied $972 million of income directly to their sustainability efforts an increase of 35 percent year over year (2017-2018) and this is far greater than market growth.

That’s nearly a billion dollars in revenue tied to their sustainability efforts.

Diversity

Diversity is one of those things that most companies give lip service to but don’t really drive because it breaks the status quo and puts the dominant demographic, the one in power (mostly old white guys) at risk. But HP has now been able to showcase that diversity increases innovation and their advancements in PCs like the HP Spectre Folio, and printers (both conventional and 3D) have showcased significant innovative advancements that their less diverse competitors have yet to match. This is proving a strong lever to overcome the entropy plaguing most other diversity efforts I’ve monitored.

Sustainability

Printers as a class, due to their use of paper, plastic, and ink are potentially one of the dirtiest products in the technology market and HP has done impressive work to make their printers one of the cleanest lines in segment. They led with a massive focus on recycling print cartridges and shifting to zero deforestation sources for both paper and packaging. While HP Printing appears to lead both the printing industry and HP in this regard the rest of the company uses 7 percent recycled plastic now (saving 21,000 tons of plastic a year that would otherwise go into the oceans or landfills) with a target of 30 percent by the end of this year. For packaging they were at 65 percent renewable by the end of last year with a goal of 100 percent by year end across all of HP’s products.

They are 100 percent renewable energy in the US with a plan to go 100 percent worldwide by 2035 (I expect they’ll meet this goal years earlier due to the efforts overseas and both the lack of energy reliability and very high cost of energy overseas).

The are increasingly shifting to suppliers that have strong sustainability efforts, cleaning up their supply chain and resulting in additional progress.

Minority and Small Businesses

HP set an aggressive goal to use minority owned and small business and they are up to $423 million in spending for small businesses and $219 million for minority owned and women owned businesses (given women are in the majority now you can’t loop them in with minorities but they are still under represented in the technology segment). It is very labor intensive for large company like HP to use smaller firms, yet this is part of HP’s commitment and they are stepping up to it.

Philanthropy

Most firms seem to do this mostly for image and aren’t that focused on progress. HP is on target to provide $100 million to philanthropic efforts. While this includes the more typical matching for contributions from employees it also includes paid time off for employees who want to volunteer for philanthropic efforts. This engages the employees in the efforts more deeply and focuses resources on getting things done rather than the more typical media event.

Wrapping Up

I believe if every major company focused on making the world a better place the world would become one. Companies are really stepping up to address global problems and HP is one of the leaders making a difference and setting an example.

Based on HP’s study people are aggressively choosing firms that have strong sustainability stories and that is driving the industry to address problems that the governments aren’t yet really stepping up to. If our race is still around in 100 years it may be due to efforts like HP’s and while you and I may be long gone, it would be nice to know the world may outlast our generation thanks to these efforts.

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Rob Enderle

President and Principal Analyst at Enderle Group

As President and Principal Analyst of the Enderle Group, Rob provides regional and global companies with guidance in how to create credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero dollar marketing. For over 20 years Rob has worked for and with companies like Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens.