A MEMBER OF
THE UNIVERSITY OF HONG KONG GROUP
香 港 大 學 機 構 成 員
FIONA LOCK
YIHONG YAO
APPLE’S ENVIRONMENTAL SUSTAINABILITY
STRATEGY: CONSIDERING INNOVATION FOR
EVERYTHING
We take our passion for innovation beyond our products and into our
practices. We believe true innovation must consider everything.1
-- Apple‘s Environmental Responsibility
On April 16 2015, Apple, the consumer electronics giant, announced in California that it had
invested in solar power in China and forest preservation in the USA, redefining and
expanding its means of innovation. 2 During the past four decades, since 1976, Apple
designed and released innovative products, such as iMac, iPod, iPhone, iPad and the Apple
watch, becoming a technical giant in the consumer electronics industry and successfully
inspiring users’ loyalty worldwide. Not satisfied with these achievements, Apple expanded its
innovative scope from products and services to environmental sustainability issues,
innovation aimed at caring for the planet.
As early as 2000, Apple managed and controlled the environmental impact of its operations
by certifying all its manufacturing sites worldwide through ISO 14001, an international
standard that formulated a structured environmental management system.3 Since then, Apple
continued to exploit renewable sources and find environmental-friendly solutions for its
products and services. In June 2013, Apple appointed Lisa Jackson as its new Vice President,
Environmental Initiatives, reporting directly to the CEO and Board of Directors.
1
Apple (2015) "Environmental Responsibility", https://www.apple.com/hk/en/environment (accessed 16 June 2015).
The Associate Press (2015) “Apple Digs In on Green With China Solar, US Forest Projects”, New York Times,
http://www.nytimes.com/aponline/2015/04/16/technology/ap-us-tec-apples-forests.html?_r=0 (accessed 16 June 2015).
3
Apple (2015) "Environmental Responsibility", https://www.apple.com/hk/en/environment (accessed 16 June 2015).
2
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Hong Kong; website: http://cases.centennialcollege.hku.hk .
This case was fully supported by a grant from the Research Grants Council of the Hong Kong Special Administrative Region,
China (UGC/IDS12/14).
© 2015 by Centennial College, a member of The University of Hong Kong group. No part of this copyrighted publication may be
reproduced or transmitted, in whole or part, in any form or by any means, whether electronic, mechanical, photocopying,
recording, web-based or otherwise, without the prior permission of Centennial College.
This case was prepared for class discussion purposes and is not intended to demonstrate how business decisions or other
processes are to be handled.
Ref. 15/004C
Published: 17 August 2015
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Apple’s Environmental Sustainability Strategy: Considering Innovation for Everything
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She oversaw Apple’s efforts to use renewable energy and greener materials efficiently and
effectively and develop innovative ways to preserve resources, accelerating the pace of the
technology giant’s commitment to environmental sustainability.4 By 2015, Apple partnered
with The Conservation Fund to protect and sustainably mange forest that provided fiber for
packaging paper, develop renewable micro-hydro power projects and initiate solar power
farms, putting into practice its mission to make the planet better and achieving its goal of
innovation for everything.5
What are the factors that drove Apple to initiate its environmental sustainability strategy?
How did Apple fulfil ISO 14001 requirements? What are the limitations, short-term effects
and long-term effects of Apple’s environmental sustainability strategies and practices?
The Impact of the Consumer Electronics Industry on the
Environment
Booming at the beginning of the 21st century, the consumer electronics industry improved
technical performance and manufactured cutting-edge products, advancing business
efficiency, keeping people connected, and making lives more enjoyable. However, for a long
period, the industry did not consider environmental issues a priority. Scholars pointed out
negative impact on the environment during manufacturing, usage and disposal of consumer
electronic devices related to the consumption of large amount of energy, the use of toxic and
hazardous materials and the scrapping of outdated consumer electronics.
A 2014 Bloomberg report indicated that, according to the International Energy Agency,
electronic devices wasted US$80 billion of power per year on standby mode, due to
inefficient technology and the maintenance of network connections. The report also indicated
that this problem would continue, and that, by 2020, electronic devices would waste around
US$120 billion worth of power solely due to standby mode. 6 The consumer electronics
industry was highly competitive, with a short technology revolution cycle. Last year’s
flagship model could quickly become next year’s trash, and many outdated consumer
electronic devices such as computers, printers, mobile phones and tablets contained toxic
minerals and chemicals, making the proper disposal and recycling of such outdated devices
critical.7
We all share the responsibility of protecting our planet. Leveraging the
power of innovation, the consumer electronics industry is voluntarily leading
the way to improve sustainability and increase the energy efficiency of the
devices we all rely on.8
-- Gary Shapiro, President and CEO of the Consumer Electronics Association
In recent years, consumer electronics manufacturers have been urged to keep environmental
sustainability and energy efficiency in mind when they design, produce and sell their products:
to think green and innovate, beyond products and services, on energy efficiency and on earth-
4
Apple Press Info (2013) "Apple Press Info: Lisa Jackson", https://www.apple.com/pr/bios/lisa-jackson.html
(accessed 16 June 2015).
Apple (2015) "Environmental Responsibility", https://www.apple.com/hk/en/environment (accessed 16 June 2015).
6
Mathew Carr (2014), "Electronic Devices Waste $80 Billion of Power a Year", Bloomberg Business,
http://www.bloomberg.com/news/articles/2014-07-02/electronic-devices-waste-80-billion-of-power-a-year-iea-says (accessed
20 July 2015).
7
Julia Moreno "Normal is recycling out-of-date electronics", Vidette Online,
http://www.videtteonline.com/index.php/2014/09/08/normal-is-recycling-your-out-of-date-electronics (accessed 20 July 2015)
8
Gary Shapiro (2014) "How the Consumer Electronics Industry Is Thinking Green", The Huffington Post,
http://www.huffingtonpost.com/gary-shapiro/how-the-consumer-electron_b_5167386.html (accessed 20 July 2015).
5
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friendly concerns. 9 For example, consumer electronic manufactures began to: consider the
impact of raw materials on the environment; find new, non-toxic alternatives; prioritize
recycling plans; explore new, renewable energy resources; and to enhance energy efficiency.
All these efforts at sustainability aimed to reduce negative environmental impact and create a
greener planet.10
Apple’s Environmental Sustainability Strategy11
Aiming to implement environmental responsibility, to better the planet and to create the best
products, Apple redefined and expanded its innovative practices from products and services to
environmental concerns. Led by Lisa Jackson, Apple’s Office of Environmental Initiatives
worked closely with other teams within the company. In the past few years, Apple has
considered environmental issues the company’s highest priority. It has initiated strategies that
it strongly believed could make the most significant impact, including climate change
reduction, adoption of renewable energy, conservation of finite resources, and use of greener
and safer materials in products and manufacturing processes.
Reducing climate change
Design, manufacture and transportation of products from manufacturing sites to consumers
globally consume a large amount of energy, creating a huge carbon footprint and causing
climate change. 12 Apple was not an exception. Apple created a rigorous measurement
standard that not only disclosed the carbon footprint of products and facilities such as offices
and retail stores, but included the carbon footprint of other parts of its supply chain, such as
manufacturing, transportation, and product use and recycling.
Manufacturing processes contributed 72% of Apple’s total carbon footprint, and was the
largest factor in Apple’s impact on climate change. Although Apple did not own supply and
manufacturing facilities, it counted the carbon footprint of its supply and manufacturing
processes and worked closely with its global suppliers to reduce impact on climate change.
From 2013 to 2014, Apple’s overall carbon footprint increased due to the increase of its
product sales, particularly of the iPhone and MacBook. To ease the negative impact, Apple
improved its efficiency by reducing the carbon intensity linked to manufacturing and product
use. In 2014, product usage accounted for seven million carbon-dioxide units, equivalent to
21% of Apple’s total carbon footprint. Apple, which designed both software and hardware
for its products, adopted methods of technological collaboration to generate higher energy
efficiency. It developed three methods to build the efficiency and reduce the energy
consumption of its products, including efficient power supply, efficient hardware and smart
power management software.
Using renewable resources
Forests, sunlight and wind were naturally renewable resources and could provide both energy
and materials over long periods. Apple was striving to use 100% clean and renewable energy,
9
Ibid.
10
Ibid.
Unless otherwise referenced, this session was adapted from Apple Inc. (2015), “Environmental Responsibility Report: 2015
Progress Report”, https://www.apple.com/environment/pdf/Apple_Environmental_Responsibility_Report_2015.pdf (accessed
20 July 2015).
12
Carbon footprint measured the total amount of greenhouse gas (usually in equivalent to the total amount of CO2) produced
directly and indirectly by a person, an organization or an event. [Carbon Trust (2015), “Carbon footprinting guide”,
http://www.carbontrust.com/resources/guides/carbon-footprinting-and-reporting/carbon-footprinting (accessed 20 July 2015).]
11
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such as energy generated from sunlight, wind and water, in all of its facilities. To achieve the
goal of “packaging [that] had a net-zero impact on the global supply of sustainable virgin
fiber,” Apple consumed paper more efficiently by designing smaller packaging and, through
sustainable-fiber specifications, enhancing the proportion of recycled paper and responsibly
sourced virgin paper used. By collaborating with The Conservation Fund, Apple protected
36,000 acres of working forest in the eastern U.S. Apple also made clean and renewable
energy its energy standard. As early as 2012, all Apple’s data centers were powered entirely
by renewable energy; in 2015, all Apple’s retail stores in the U.S utilized 100% renewable
energy. Apple planned to do likewise in all of its facilities world-wide.
Using recyclable resources
Realizing that resources were finite and might not exist forever, Apple actively designed
products that consumed fewer materials and promoted reuse and recycling. It minimized the
impact of raw materials on the environment by adopting resources in the manufacturing
process that were recyclable and reused as much as water.
By designing products that required less material and by innovating in manufacturing,
Apple’s products became smaller, thinner and lighter, but more durable. For example, the
batteries for notebooks were built-in and could last up to five years, while consumers could
continue to use their old Apple products while installing the latest OS software and
applications.
Apple’s “Reuse and Recycling Program” allowed customers to exchange their old Apple
products for credit and buy new models with the application of this credit at Apple retail
stores in several countries. In constructing its new headquarters, the new Apple campus, the
company recycled more than 95% of the material from its existing buildings. Realizing that
water was the most valuable resource in the world, Apple not only improved water usage
efficiency and recycling methodology in its offices, data centers and retail stores, but also
initiated “The Clean Water Program” aimed at enhancing water reuse rates in its supplier and
manufacturing sites.
Leaving toxins out of products
As an industrial leader that made efforts to reduce or remove harmful toxins, Apple
eliminated a lot of the harmful toxic substances from its products and required its suppliers to
adhere to its “Regulated Substances Specification,” which went far beyond minimum legal
requirements. Apple not only designed products consisting of greener, safer materials, but
established an environmental testing lab and collaborated closely with its suppliers to make
sure that its products did not contain the harmful substances Apple specified. To improve the
environment, Apple upgraded manufacturing and recycling processes and minimized toxic
substances in its supply chain, preventing air, land and water pollution. To ensure product
safety, Apple eliminated many harmful toxins, such as PVC in power cords, arsenic in touch
screens, and BFRs (brominated flame retardants) in cases. Apple also provided safe working
conditions and required its suppliers to do the same in their manufacturing plants. All these
efforts aimed at minimizing or even eliminate toxins from its supply chain that linked
suppliers, manufacturers, factory workers, logistics and customers.
CENTENNIAL COLLEGE
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Looking Forward
On April 25 2014, demonstrators from two activist groups, Green America and China Labor
Watch, gathered at the entrance of Apple’s New York flagship store and held signs to
condemning Apple’s toleration of its Chinese suppliers’ use of two toxic chemicals that
could cause cancer and damage the nervous system, benzene and n-hexane, in both early
production phases and final assembly. Five months later, Apple improved its manufacturing
processes, banning the use of these two harmful chemicals in final assembly and lowering
their use in early production phases, thus demonstrating its efforts to protect factory workers
and end users.13
“Better” means we are never done. We push ourselves every day to develop
innovations that reduce our carbon footprint, use cleaner and safer materials,
and show that what’s good for the planet can also be good for business. 14
-- Lisa Jackson, Vice President of Environmental Initiatives, Apple
As stated in Lisa Jackson’s letter, Apple had a very long way to go, but it never stopped and
was proud of its progress, because at Apple innovation was intended to make things better,
and making the best products in the world was Apple’s ultimate goal.
Suggested Questions:
1. Summarize Apple’s environmental sustainability strategy.
2. What were the factors that drove Apple to initiate its environmental sustainability strategy?
3. As an ISO 14001-certified company as early as in 2000, what did Apple do to fulfil ISO
14001 requirements?
4. What were the limitations, short-term effects and long-term effects of Apple’s
environmental sustainability strategy and practices?
Supplementary Teaching Material:
2-minute Video: Apple (2015) “We believe true innovation must consider everything”.
13
Dara Kerr (2014), "Apple halts use of two harmful chemicals in iPhone assembly", CNET,
http://www.cnet.com/news/apple- halts-use-of-two-harmful-chemicals-in-iphone-assembly (accessed 20 July 2015).
14
Lisa Jackson (2015) "A letter from Lisa Jackson", Apple Inc.,
https://www.apple.com/hk/en/environment/our-progress/posts/201404-lisa-jackson-letter.html (accessed 20 July 2015).
CENTENNIAL COLLEGE
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