AMD on Climate Goal Successes, Risks
AMD discusses how they surpassed recent climate protection goals to decrease greenhouse gas emissions by 40 percent as well as their new, loftier goals.
Advanced Micro Devices (AMD), an industry leader in implementing and promoting energy efficiency strategies and ranked No. 2 on CRO’s 100 Best Corporate Citizens 2007 list, recently announced that it has surpassed its “2004 Climate Protection Plan” goals of reducing greenhouse gas emissions by 40 percent and has released a new set of goals for 2010. In its 2007 “Global Climate Protection Plan” report released July 24, AMD faces the challenge of meeting these new goals as it undergoes a manufacturing model transformation and a recent merger with ATI.
In this CRO Q & A, AMD’s Director of Global Environmental Health and Safety Steve Gloseclose and Senior Strategist Larry Vertal discuss both general and industry-specific sustainability trends, the benefits and pitfalls of increased media focus on green initiatives and how they motivate action from every employee.
Any new updates or changes in the 2007 Global Climate Protection Report/Plan?
Steve Gloseclose: The most fundamental change is that we recognized last year that we had already achieved our long-term goals, so we needed to go through the sophomore assessment process and figure out where are we now, what makes sense for our future goals. The previous greenhouse gases goal was a 40 percent reduction of normalized emissions by the end 2007. Actually by the end of 2006, we achieved reduction greater than 50 percent. Then we had an energy consumption goal that was to reduce normalized emissions by 30 percent by year end ‘07, and we achieved a bit more than 40 percent by year end ’06.
We recognized that as we put out last year’s report, and we spent the last half year trying to figure out what’s our next step. We have a new goal set that we unveil in this report, and that is—from a 2006 baseline—we’re going to reduce another 30 percent by 2010 in greenhouse gas emissions and energy use and we’re going to reduce another 40 percent by 2010. Those are great goals that we’re proud of and those are the fundamental metrics that drive a lot of this, behind that you get woven into the report.
Achieving the new goals instead of the old goals is very complex for us right now, especially as the company goes through, particularly over the last five years, so many structural changes and globalizes. We spun off our domestic manufacturing, we purchased ATI, we’re going through that integration process now. We have a whole new suite of products and different manufacturing model and it’s quite a challenge so I’m very pleased we’re able to stay the course and set new ambitious long-term goals with all that change going on.
2010, that’s the window, and it’s a relatively short period of time from 2006 to 2010. We are right in the midst of assessing our overall manufacturing strategy, and this company is going to be a much different company as it continues to change, so what we will be in 2010, you can never say with certainty. Looking at that, we think there is risk in setting a goal for this time period, but we are very pleased our executives recognize this responsibility and believe we can drive to that and continue to reduce our own manufacturing and operational emissions.
I think it is important to segue from the focus on those numerical goals to our overall strategy, because I think that’s important and a differentiator in the way we go about this. It is not just about setting our greenhouse gas emission goals, and being a part of the EPA Climate Leaders program and setting those examples—that is important—but it’s the integration of our operational impacts with our product performance, and all those small things and large things that people do everyday. So it’s a sum of all parts that we think is our obligation to do our best, do what we can and lead by example, and collaborate with our customers, our other business partners, governmental agencies and NGOs [nongovernmental organizations] to continue to try to reassess what makes sense for us to do.
You don’t see a numerical goal on the product side, but you do see a lot of description about what our products do and I think that’s one of the challenges for the future: to continue the path of trying to better quantify the product impact or the life cycle of the product and continue to drive that. Right now though, our biggest contribution is providing that enabling technology: energy efficient processors that are part of complex systems that use energy. So that is a collaboration that is extremely important there.
The technology will continue to evolve, become more energy efficient. On the product side what we can be extremely proud of, is that we’ve driven competition from performance to performance per watt, we really have baked into the competition energy efficiency, which is to the betterment of climate and climate protection.
What new trends are you seeing in corporate environmental and sustainability initiatives in general?
Gloseclose: Trends we’re seeing are towards integration in several dimensions. We are all recognizing that we need to integrate up and down the supply chain. AMD is a member of EIPC (European Institute of Printed Circuits) electronic industry code of conduct. Many of our partners, customers and competitors are part of that. We are recognizing that our own efforts really have limits and we may be approaching the limits of what we can do within the boundaries of our factories and our organization models. We need to engage further and deeper up and down the supply chain. And we’ve seen tremendous momentum toward that over the last several years—and even more so at an accelerating pace over the last year especially as all of our customers are making more demands on us, we’re making more demands on our suppliers. There’s a lot of power in that right now to make a change.
What advice or lessons learned can you pass on to other companies looking to implement 'green' or sustainability initiatives?
Gloseclose: I touched on it before: it is the lesson that it is the sum of all parts. Each company has to assess what makes sense for its own culture and operations and not focus on trying to identify a kind of marquee sexy issue or project. When you look at each individual company, particularly in the electronics industry, our own operations really are not significant greenhouse gas emitters compared to other industry sectors, but we do have tremendous opportunity and obligation to lead by example and to continue working on our products and technology and how they all fit together to where you can really leverage each improvement.
Larry Vertal: In the context of the current media and public focus on the issues, the issue of transparency, clarity and lack of exaggeration is extremely important. I think we all need to be concerned that, in general, these types of issues can be over-hyped. Therefore AMD takes the position of trying to be very transparent and lack exaggeration in its statements, which is aligned with AMD’s culture at its core—very much a cultural thing with AMD as a corporation.
What are some of the challenges the technology industry faces in going green? And conversely, what are some of the advantages it has (compared with other industries) in going green?
Gloseclose: An advantage, from an environmental stewardship perspective, is that we have a tremendous advantage at the moment in that our products provide hope for enabling future successes. Our products are energy consuming products. Therefore, if we don’t address problems and improve those products, we exacerbate the problem. When we do improve them, we can be part of much good that can come from that, and the simple fact that it links with our business strategy is tremendously powerful for cultural change within the company and outside the company and being able to drive many green initiatives.
Vertal: Fortunately, AMD was in a leadership position in bringing performance per watt to the forefront of people’s minds with our products, based on our direct connect architecture that we really started developing in 1999/2000 and saw the light of day beginning with Opteron Processors in 2003. This came from the fact that the company is so customer-focused, that we—back at the turn of millennium basically—started getting feedback that there were starting to be real concerns, especially in the server arena, around power energy efficiency and therefore about our architecture. And to Steve’s point, because we provide such a critical component—namely the microprocessor—of computing systems in general, we were able drive, as a component manufacturer, this issue to the forefront—working with our customers, the people that actually provide computing platforms, to the final customer. So we have this leverage point that allows us to help attack the problem. Now at the same time we [have problems], because we produce real physical things, namely processors and graphic devices and things like that. We actually have manufacturing plants. We’re not a software company. So from a disadvantage side, in principle, we produce physical products. We have to address those issues and that’s one of the things with Steve’s leadership and his organization, we’re focused on as well.
Gloseclose: I think that point reflects back to driving corporate responsibility up and down the supply chain. Even companies that are manufacturing their own products, somebody is doing that, so that product on the street is still consuming energy to be produced. As companies globalize, organizational models change, it comes back to the integration points. We need to continue integrating manufacturing impacts of these products, and that’s very complicated to do. We’re all making progress on that, some faster than others. That’ll continue in the future because a lot of things have to align to be able to pull that data in and to analyze it and to make sure that we are comparing apples to apples across companies or products or industries. It’s a little bit of a risky period right now. It’s very positive that these topics are getting much more attention in the press, but it is very complicated and subtle, so some of these issues are prone to oversimplification. We’re trying to find the right balance to make sure we can keep track of progress.
Your report says you will “continue to lead the industry in awareness about energy conservation both from a product and corporate perspective.” How do you plan to do that?
Vertal: Our leadership as one of the founding members of the Green Grid [a consortium of information technology companies and professionals seeking to globally improve energy efficiency in data centers] was very telling, as it rallied the industry to a level playing field. It’s an organization that’s focused on an area of concentration of energy usage today around data centers, and I think AMD, along with some of the other founding members, showed some very clear leadership there. We’ve extended involvement in other organizations as well. For example, AMD is the founding sponsor of the Climate Savers Initiative, and both of those initiatives include our biggest competitor. This comes from our belief that we can help lead the world to energy efficient computing and therefore have an impact on energy usage and impact with respect to environmental issues on the planet through how our products are used and how they are implemented, as well as leading the industry.
Additionally, we have had a long history of deep involvement in organizations such as Silicon Valley Leadership Group focused on this area. We are, for a second year, a major sponsor of California Clean Tech Open, where we sponsor a power efficiency prize, a competition that is energizing the startup mentality in Silicon Valley to fund and nurture energy efficiency and reduce environmental impact in general.
Gloseclose: Collaboration on all different levels is extremely important, whether it’s with local groups at some of our sites, working on improving bike lanes in Austin for the cycling community, or at the higher levels working with the European Commission, or the U.S. EPA [Environmental Protection Agency], particularly the EPA. We’ve worked with them and the Energy Star program since the early 90s, and we’re one of the charter members of the Climate Leaders program. All these different points of collaboration, we don’t list them all for their own sake, but when you put them all together as we laid out in the report, we’re hoping to show that the constellation of all those collaborative efforts really adds up.
We should also mention, it is fortunate that we happen to do business in areas where public policies and the governmental agencies are really driving innovation. In Austin, Texas, the city of Austin has what we think is one of the most ambitious climate protection plans in the country and in the world, driving things like plug-in partners and very proactive promotion of renewable energy. (Listen to the podcast with Austin Mayor Will Wynn.) In California, there are similar relationships. In New York, where we have an option to build a future fab location, the research and development authority is one of the most progressive in country, so wherever we are doing business, we look for those like-minded entities that we can partner with and keep driving us forward.
It’s really a collection of those that really make a difference, rather than one standout, and you put on top of that something as ambitious as Green Grid, that Larry is dedicating a tremendous amount of time and attention to, to try to pull together all the tentacles of the industry around a common problem, I think you can really begin to make a difference.
This year, AMD was ranked #2 on the 100 Best Corporate Citizens List 2007 (published by CRO), with especially high rankings in Environment, Employee Relations, Community Initiatives and Governance. How does AMD integrate corporate responsibility throughout all areas of the company? Is it the message from the top down/imparted to new employees from day one?
Gloseclose: This gets to be one of the top challenges. We’re very fortunate to have executive management that implicitly believes in corporate responsibility and environmental stewardship. It’s not necessarily a top-down effort. We have that tremendous support that is there, and appreciation that you see as part of AMD’s corporate culture. Whether it’s our 50 by 15 initiatives or the Green Grid, they work in recognizing that you can align a business model with doing good at the same time.
And then at an operational level, we have a tremendous professional environmental health and safety staff all over the world that take great efforts day in, day out to help take care of their fellow employees, engage their fellow employees. I think on that latter point is where we continue to do a better job—harvesting all the brilliant ideas that every employee has and trying to put those into action. When we’ve done all that—there hasn’t been a corporate responsibility campaign—it’s just implicitly part of the background of our company and our integrity.
It’s very telling of the company that we have made great progress without saturating the internal airwaves with the topic, it’s just simply is something that we do. And again that gives me great hope that as we begin to find better ways to communicate and engage more people we can do even better. Part of our strategy is also to learn from others, so we could learn from a number of other leading companies on better ways to engage and drive the kind of integration we’re trying to achieve.
Vertal: On the homepage people log into daily, when they basically log on at work, one of the things that is predominately there is something called an idea box, which allows employees to give direct feedback and ideas to the company on this and other points. One of the areas Steve is getting a lot of feedback on from the employees right now is ideas related to the environment. So there’s a sense of empowerment that senior management will listen to them because these things do not go into a black hole. I can assure you, we all at a senior level get pinged on these when they come in.
To see the AMD 2007 “Global Climate Protection Plan” Report, visit http://www.amd.com/us-en/assets/content_type/DownloadableAssets/2007_GCPP.pdf
To hear the podcast with Austin Mayor Will Wynn, visit www.amd.com/greenpodcast
Note: This transcript was edited for style and clarity.