Sustainable Operations

Greenhouse Gas (GHG) Emissions

Dell estimates its greenhouse gas (GHG) emissions using the international GHG Protocol and the Environmental Protection Agency (EPA) Climate Leaders Greenhouse Gas (GHG) Inventory Guidance. We categorize our emissions as follows:

• Scope 1 emissions — Direct emissions that we generate in our own operations as a result of fuel combustion and minor leakage from air-conditioning and refrigerant systems.
• Scope 2 emissions — Indirect emissions associated with the production of electricity that we purchase for use in our facilities.

In addition, we also calculate and report on the emissions associated with business air travel as a Scope 3 emissions source.

In 2006, we set a goal to reduce our Scope 1 and 2 emissions intensity, as measured by carbon intensity, by 15 percent by 2012. In 2008, we announced an additional goal to reduce our total emissions by 40 percent by 2015. We have also pledged to achieve carbon-neutral operations by 2012.

As compared with the revised baseline year data for Fiscal Year 2008, Dell achieved the following in Fiscal Year 2009, as stated below:

• Reduced Scope 1 emissions by 12.4 percent, or 4,348 metric tons of carbon dioxide emissions (CO2e)
• Reduced Scope 2 emissions by 6.1 percent, or 24,563 metric tons of CO2e
• Reduced net Scope 2 emissions by 18.8 percent, or 72,667 metric tons of CO2e (net Scope 2 emissions calculated as Scope 2 emissions, less emissions reduced through green electricity purchases)
• Reduced Scope 3 business air travel emissions by 30.3 percent, or 28,306 metric tons of CO2e
• Reduced total electricity consumption by 2.9 percent, or 18,276 megawatt-hours (measured in MWh purchased)
• Increased green electricity purchases by 436 percent, or 99,853 MWh (measured in MWh purchased)
• Reduced total emissions intensity by 6.6 percent, from 7.12 to 6.65 (intensity calculated as total Scope 1 and 2 emissions divided by annual revenue)
• Reduced net emissions intensity by 18.2 percent from 6.90 to 5.64 (net intensity calculated as total Scope 1 and 2 emissions, less emissions reduced through green electricity purchases, divided by annual revenue)

While Fiscal Year 2009 emissions were being calculated, we identified opportunities to further refine and/or correct some of our Fiscal Year 2008 data. The emissions calculation methodology was not changed. Dell’s baseline year emissions for Fiscal Year 2008 (2007) were recalculated as follows:

• Scope 2 emissions — 400,035 tons of CO2e (revised down from 403,210 metric tons, or 0.8 percent). This revision is due to minor internal data refinements.
• Scope 3 emissions from business air travel — 93,382 tons of CO2e (revised up from 51,747 metric tons or 80.5 percent). This revision is due to updated data provided by a travel agency.

Because electricity use is the primary contributor to our GHG emissions, the most important action we can take is to reduce the amount of energy we use. During Fiscal Year 2009, Dell completed 88 projects in manufacturing and other facilities, resulting in a projected reduction of about 17 million kilowatt hours of electricity annually. This reduction is also projected to reduce associated Scope 2 emissions by approximately 4,300 tons of CO2e.

Dell established a capital fund in Fiscal Year 2008 specifically to fund operational sustainability and energy-efficiency projects. We have a Global Energy Management Program office, which created the process to compete for these funds, and which evaluates the proposals and selects those to be funded. Additionally, this team monitors the projects for progress in implementation, as well as planned savings, as opposed to actual savings in both kilowatt hours and carbon dioxide emissions. Projects range from lighting upgrades to building controls improvements, with individual projects expenditures ranging from $15,000 to more than $1.5 million.

In addition to improving our energy efficiency, using green power where readily available will help reduce our own carbon footprint. Since the end of Fiscal Year 2009, approximately 35 percent of our U.S. electricity and over 20 percent of our global electricity comes from non-fossil, renewable power sources, as defined by the U.S. EPA. We intend to increase our purchases of non-fossil, renewable power from our utility providers in the coming years, where it makes sense to do so.

Non-Fossil, Renewable Power Purchases

Energy efficiency can help reduce our GHG emissions, but it doesn’t eliminate them. In meeting our reduced electricity needs, we’re committed to integrating non-fossil, renewable power into our operations wherever possible. We believe it’s critical that our industry take a leadership role in the transition to a carbon-constrained economy through aggressive energy efficiency and the use of clean power.

During the last two years, Dell has increased the amount of non-fossil, renewable electricity purchased directly from local providers. At the end of Fiscal Year 2009, 20 percent of our global operational electricity came from non-fossil, renewable power sources.

In April 2008, Dell began powering its global headquarters in Round Rock, Texas with 100 percent clean power, and our Austin, Texas campuses have increased the amount of non-fossil, renewable power purchases to nearly 32 million kilowatt hours of green electricity. Nine of our global facilities are now fulfilling their power needs with 100 percent non-fossil, renewable power.

To meet our carbon neutral commitment, Dell responsibly offsets its remaining Scope 1 and 2 emissions and business air travel emissions.

For the electricity purchases that are not from clean sources, we purchase certified renewable energy credits (RECs) and verified emission reductions (VERs).

We partner with Conservation International (CI) on a habitat and forest preservation initiative in the Republic of Madagascar — an island nation off the southeast coast of Africa — to offset our Scope 1 and Scope 3 business air travel GHG emissions. CI, in partnership with government communities and other local institutions, protects up to 500,000 acres of tropical forestland in the Fandriana-Vondrozo Forest Corridor, which stretches along Madagascar’s southeastern side. During the next five years, the accumulated benefits of preserving the forest are estimated to prevent the release of 500,000 metric tons of carbon dioxide.

While Dell’s primary objective in the Madagascar program is to offset some of our GHG emissions, we’re pleased by the other environmental and social benefits from this project. Our investment allows CI to introduce sustainable conservation methods to the local population, reducing the destruction of the existing forests and protecting a vital source of fresh water for the region. By improving our own efficiency and protecting forests, Dell is addressing the major drivers of climate change — energy use and deforestation — while also delivering significant biodiversity and community benefits.

Wastewater and Storm Water

Most Dell facilities are located in urban or suburban areas that provide municipal sewer collection and treatment. In some locations, Dell operates on-site sanitary sewage treatment or pretreatment systems. Wastewater is generated from water used in cafeterias and canteens, restrooms, building heating and cooling systems, janitorial cleaning and facility maintenance. Dell’s manufacturing processes themselves do not use water; therefore, they do not generate industrial wastewater. In some cases, treated wastewater effluent is used for landscape irrigation.

Storm water runoff at many Dell facilities is directed to on-site or municipal storm drain systems, ponds or other devices, as determined by local codes. Hazardous materials are stored in a manner that minimizes the risk of contaminating storm water.

Facility Air Emissions

Because our manufacturing processes do not use significant amounts of hazardous materials, they do not generate significant amounts of hazardous air pollutants (HAPs).

Minor sources of volatile organic compound (VOC) and other air emissions from other operations include testing and use of emergency standby electrical generators, leaks in air conditioning systems, combustion by-products from small gas-fired water and space heating systems, and emissions from company-owned or company-leased maintenance and security vehicles (at larger campuses).

We estimate that our total VOC emission was about 3.7 metric tons in Fiscal Year 2009. These emissions come from combustion of fuel used in building heating/cooling systems and in our backup electrical generators.

See above for information on GHG emissions.

Solid Waste

Nonhazardous waste — Most of the solid waste generated at Dell facilities is nonhazardous. Waste streams include packaging materials (cardboard, wood, paper, plastics, foam and metal) from incoming parts and supplies, wastepaper, equipment toners and ink cartridges, as well as waste from food service, housekeeping, and facility and equipment maintenance.

The graphs below show the amounts of nonhazardous waste generated during the past three years for Dell’s manufacturing and fulfillment facilities, along with the percent recycled, reused and disposed by landfill or incineration. During Fiscal Year 2009, we increased the amount of waste reused or recycled to 95.4 percent, further closing in on our goal of reaching 99 percent recycling and reuse by 2012.

In Fiscal Year 2009, the total waste generated from manufacturing and fulfillment facilities increased by 10 percent compared to FY 2008, as two new factories ramped up during the year. However, the amount disposed increased by only 3.3 percent. Total nonhazardous waste from manufacturing operations in Fiscal Year 2009 was 100,159 metric tons. Of this, 95,527 metric tons were recycled or reused.

We are now also tracking waste disposed and recycled in our labs, offices and call centers (administrative facilities). Based on data received from about 35 percent of our administrative operations in Fiscal Year 2009, we estimate that total global nonhazardous waste reached about 3,820 metric tons, and of that about 41 percent was recycled in Fiscal Year 2009. We anticipate that the total amount of waste generated from administrative operation will fluctuate as sites improve their data collection and reporting capabilities.

Hazardous and regulated waste — Dell’s manufacturing processes normally use only small quantities of hazardous materials and generate negligible quantities of hazardous and regulated wastes. Cleaning, repair and maintenance on equipment and buildings generate minor amounts of wastes, such as used oil, spent mercury-containing light bulbs, aerosol cleaners and paints, solder waste and spent batteries. Gathering this data globally has proven challenging, but we are making changes in our internal data collection system that should enable us to better estimate these wastes in the near future.

Hazardous Material Releases

During Fiscal Year 2009, there were no significant spills or other releases of hazardous materials to the environment at Dell facilities. Some Dell facilities with backup electrical generators or fire system booster pumps may store diesel fuel in outdoor storage tanks. We place the tanks inside secondary containment to minimize the potential for accidental release. Other possible spill or leak sources include vehicles, hydraulic equipment (such as trash compactors) and air-conditioning equipment.

Regulatory Compliance

Dell facilities are periodically subject to routine regulatory inspections, such as those for environmental compliance. Inspections may result in minor findings or improvement notices; these issues are typically corrected immediately, and do not require further investigation or inspection. In Fiscal Year 2009, Dell facilities were not assessed any fines related to environmental noncompliance. However, during Fiscal Year 2009, Dell paid a fine to a government agency in Brazil related to a safety inspection conducted in late 2006 (as reported in our Fiscal Year 2007 Sustainability Report). The total amount paid was approximately $5,400; one outstanding item from that inspection is still awaiting final agency determination.

Sustainable Buildings and Operations

Our long-term goal is to double the environmental awareness of our buildings and operations, using the scoring system created by the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) program. A few of the related activities undertaken in Fiscal Year 2008 include the following:

• We worked with an architectural firm to assess some of our buildings and are creating a self-assessment tool for building managers to use. We are also testing continuous commissioning programs in some of our operations.
• Although we have not undertaken any new building construction projects recently, building managers have access to a capital fund set aside for energy efficiency and other environmental improvements to existing facilities. During Fiscal Year 2009, more than 88 building improvement projects were created and/or completed, with a projected annualized savings of 17 million kilowatt hours. Several projects also resulted in projected water savings.