by Michael Jacobson, director of Intel’s Corporate Responsibility Office
Like many Americans, I have spent the past few weeks engaged in the spring ritual known as “March Madness,” where we crown the national collegiate basketball champions—although they may want to rethink the descriptor, because the final four teams didn’t play until April. Duke and Connecticut fans are thrilled because their teams won the men’s and women’s championships, and as a Baylor fan, I’m proud of my university’s performance this season, but a bit disappointed at the same time.
You may be wondering how college basketball and corporate responsibility are connected. First, March is an important month in the preparation of Intel’s Corporate Responsibility Report. I certainly would not characterize it as “madness,” but I think “frenzied” would be fair. Second, there are several similarities between the tournament and judgment of performance that are analogous to performance in the corporate world.
In the world of college basketball, there is no doubt who the best performers on the court are. If they are deemed good enough to participate, their records and their tournament performance are freely available for all to see. But is that the only measure that we use to judge their success? For many fans, points scored, turnovers, and free throws probably trump all else, but for those who are more discerning, academic excellence, compliance to NCAA regulations and governance, and how they choose to engage the community might all be considerations for judging performance. But how transparent are those key performance indicators to the general public?
It is much the same when evaluating the success of a public business or corporation. Earnings, income, gross margin, and stock price are all readily accessible. When we use products and services, we regularly make judgments on quality and overall experience. But are there other factors that should be considered?
At Intel, we believe the answer is yes. As our CEO Brian Krzanich says, “I am personally committed to ensuring that Intel does the right things, the right way.” His leadership has been highly visible around corporate social responsibility (CSR) issues such as conflict minerals[1] and workforce diversity[2]. He has been the driving force behind Intel’s commitment to produce the world’s first conflict free microprocessor, achieved in 2014, and our new commitment to achieve representative employment for women and underrepresented minorities in the U.S. by 2020.
Brian has also been a huge advocate for transparency. He pushes us to stay on the leading edge of companies reporting their corporate responsibility performance. We publicly released our first Environmental Health and Safety report in 1994, and will be publishing our fifteenth annual Corporate Responsibility Report based on Global Reporting Initiative (GRI) guidelines this May.
In the past twenty years, our reporting has evolved – and we expect it to continue. We are engaged with many of the groups that are helping companies determine the best way to report, so that consumers, communities, civil society, and investors (especially investors) can confidently judge companies on their performance. Initiatives and discussions around integrated reporting, consolidation, global frameworks, natural capital, and shared value are all positive steps. And although we’re very interested in what the future of reporting will look like, our focus at the moment is to deliver our 2014 Corporate Responsibility Report at our annual stockholder meeting in May.
This year, for the second time, we’ll be reporting to the GRI G4 Sustainability Reporting Guidelines. At close to 130 pages, the report covers everything from our business strategy and financial performance, to workforce management (including diversity), environmental sustainability, community engagement and social impact programs, supply chain responsibility, and human rights. Each section contains data for our key performance indicators, and our progress towards goals. More importantly, we share our management approach for each issue – from governance and board engagement, to how we encourage our employees to think about corporate responsibility.
One area where we’ve made significant progress is conflict minerals. Intel has worked for six years to validate that conflict minerals in our products are from “conflict free” sources. We achieved our goal of manufacturing microprocessors that are conflict free for tin, tantalum, tungsten, and gold, and set a new goal for all products to be conflict free in 2016. We’ve also partnered on events with other industries and their associations—including the World Gold Council and the Responsible Jewellery Council—to share learnings and best practices. We have reported on and spoken extensively about this issue at high profile events like the Consumer Electronics Show, and we believe our work is having an impact: non-governmental organizations in the Democratic Republic of the Congo (DRC) report that lives are already changing: miners’ wages are increasing, their working conditions are improving, and armed groups are being replaced by hospitals and schools in mining communities across the DRC.
We’re also committed to managing our water use responsibly. Over the past fifteen years, we’ve invested more than $200 million in water conservation programs at our sites around the world. Despite our investments and progress (our absolute water use has decreased in the past two years), our lead in innovative manufacturing processes means our long-term water use may increase. Our strategy in this space is a combination of conservation and reuse. Reaching our aggressive goals will require focus, research, and most of all, action.
An area we’ve been successful in is alternative energy. Since 2008, we have been the largest voluntary corporate purchaser of green power in the U.S., according to the U.S. Environmental Protection Agency, and we have earned numerous recognitions for our actions to address climate change. We’ve facilitated the construction of 20 solar electric installations on 12 Intel campuses in Arizona, California, Colorado, New Mexico, Oregon, India, Israel, and Vietnam. They collectively generate more than 12 million kilowatt hours of clean solar energy each year. We partnered with third parties to complete the installations, which include a 1-megawatt solar field that spans nearly 6 acres of land on Intel’s Folsom, California campus, rooftop installations, and solar support structures in Intel parking lots. Our installation in Vietnam is the largest solar project in that country. We have also piloted on-site wind micro-turbines and ground-source heat pumps at our site in Guadalajara, Mexico, and installed 2 megawatts of fuel cells in California.
But it’s not all solar panels and sunshine – we also report any notices of violation we receive, and suppliers who aren’t meeting our performance requirements. And of course, transparency shouldn’t be limited to an annual report; systems and tools need to be in place to ensure transparency throughout the year. To that end, we’ve invested in our Explore Intel web site (www.exploreintel.com ), where you can track quarterly (or even real time) environmental performance at our factories – just like the performance of collegiate basketball March Madness players.
As it was for Duke and Connecticut, 2014 was a championship year at Intel – a record year of records. We had record revenue, earnings per share, and gross margins, among others. I am certainly proud of that performance, but what makes me even more proud is the corporate responsibility progress we made, which is reflected in our 2014 Corporate Responsibility Report, to be released at our annual stockholder meeting on May 21. It’s my hope that each of you will read our report – as Paul Harvey recognized, the magic, or the emotion, is in what he called, “the rest of the story.”
For more information on Corporate Responsibility at Intel go to- www.intel.com/responsibility
Article notes:
[1] www.intel.com/conflictfree (This link is no longer active.)
Article by Michael Jacobson, director of Intel’s Corporate Responsibility Office. In this role, he is responsible for leading Intel’s corporate responsibility strategy with stakeholders across the company. He has an experienced team of experts in corporate social responsibility, strategic alliances, marketing and communications, stakeholder management and reporting who are committed to building upon Intel’s performance as a leading corporate citizen.
Prior to this position Mr. Jacobson managed Intel’s Corporate team in California and Texas where he was responsible for leading corporate responsibility programs, philanthropic investments and public policy. Mr. Jacobson also worked in Intel’s Corporate Real Estate and Site Development Group as a site selection manager. In this capacity, he was responsible for evaluating locations across the globe for potential Intel investment.
Mr. Jacobson came to Intel from the Fort Worth Chamber of Commerce where he was a director of business development. During his four-year tenure with the Chamber, Fort Worth ranked in the top ten in the United States for business recruitment. Intel was one of the companies that he helped recruit to Fort Worth.
Mr. Jacobson joined the Chamber after serving eight years in Washington D.C. He held positions as assistant to the deputy secretary for management planning and operations for the U.S. Department of Housing and Urban Development, special assistant to the Commissioner for the Social Security Administration and special assistant to the Administrator of the Urban Mass Transportation Administration. Mr. Jacobson received his bachelor’s degree in Political Science from Baylor University in 1984.
