2007 Corporate Responsibility Report IBM Australia · (GPTW), an initiative that created an...

2007 Corporate Responsibility Report IBM Australia

For nearly a century, IBMers have invented technology and applied it to business and society on a global scale, to make the world work better.

Today, we create and integrate hardware, software and

services to enable enterprises, institutions and forward-

thinkers around the world to succeed.

Business Priorities and Strategy

Every two years, IBM conducts a survey of CEOs and

other leaders around the world, in order to assess what

is most important to them. In the most recent survey,

in which more than 1100 CEOs worldwide assessed

the impact of the rise of the integrated global economy,

eight out of ten said they foresee significant changes to

their industries and business models in the near term —

and plan to respond to them with bold measures.

Several factors are driving these changes:

The integration of global economies, the rapid •

growth in new markets and the widespread need of

new skills.

A new computing model for business based on •

open, flexible systems.

The need for organisations to use technology to be •

more innovative in their processes, business models

and management systems.

At IBM, we’re working with our clients to develop

new business designs and technical architectures to

compete in this new environment — addressing their

needs through three strategic priorities:

1. Focusing on open technologies and high-value

solutions such as virtualisation, high performance

chips, modular and open IT and Service Orientated

Architecture (SOA).

2. Delivering integration and innovation to clients by

transforming their business operations and improving

profitability.

3. Becoming the premier globally integrated enterprise

by investing in emerging markets and replacing

vertical hierarchies with horizontally integrated teams.

Markets of Operation

A globally integrated enterprise, IBM operates in more

than 170 countries and enjoys an increasingly broad-

based distribution of revenue, grouping markets by

common growth characteristics, not location.

Technology Leadership

In 2007, for the 15th consecutive year, IBM was issued

more U.S. patents (3125) than any other company.

In the last five years IBM has aggressively comple-

mented an investment of $29 billion U.S. in research

and development with more than 60 acquisitions of

hardware, services and software companies.

Our Values

Since its inception, IBM has been a company that

defines itself by fundamental values — not by products,

technologies or leaders. Today, shared values are

more essential than ever before — for enterprises, for

individuals and for the globally integrating society of the

21st century.

In 2003, IBMers worldwide came together to renew

and define our core values which now serve as the

foundation of IBM's culture and brand and the guide for

each IBMer’s work, decisions and relationships.

IBMers value:

Dedication to every client’s success•

Innovation that matters — for our company and for •

the world

Trust and personal responsibility in all relationships.•

© Copyright IBM Australia Limited 2008 ABN 79 000 024 733 © Copyright IBM Corporation 2008 All Rights Reserved.

Business StrategyIBM is an innovation company…

Innovation drives our business model, the way we interact with our clients and partners and the way we treat our employees.

Bringing our brand to life

A brand is made real by the experience clients have

when they deal with our company. Our brand attributes

are: innovation, business savvy, client focus, trustworthy

and leadership. For our brand to be real, this is how our

clients should genuinely feel about IBM Australia.

We use the results of our research to continually hone

and strengthen our position, to ensure that our clients

have the best experience possible

that continually exceeds their

expectations.

To ensure we maintain peak

performance, in 2005 we

embarked on the ‘Brand to Life’

program, where every part of

our organisation, from the

executive leadership team

down, examined how we

could demonstrate these

brand promises to the

market. As a result,

our brand attribute ratings have improved further in the

areas of client focus, business savvy and trustworthy.

2008 Objectives

Further improve our brand recognition in terms of:

• Businessandtechnologyinnovation

• Businesssavvy

• Clientfocus

“Innovation that matters” is a central pillar of

everything we do at IBM. True innovation is about more

than business results: it’s about a healthier society,

a more progressive workplace, a safer

world. Our business strategy ensures

the work IBMers do creates a chain

reaction that goes beyond us and will

outlast us. This isn’t simply about being

clever or creative ourselves, it’s about

helping our clients become innovators.

That’s what we mean when we say that IBM

is an innovation company.

The innovation business model

Our business model is designed to help our

clients transform their organisations to competitive

advantage, in the process providing long-term value to

our shareholders. To support this, we strategically invest

in services and technologies that have the best long-

term growth and profitability prospects based on the

value they deliver to our clients.

For example, in recent years we have decreased our

involvement in the areas of our industry that are prone

to commodity pricing – divesting our hard disk drive and

personal computing businesses – and increased our

investment in high value areas such as software

and services.

As a result, in 2005 IBM Australia was able to offer

its clients a broad portfolio of capabilities ranging

from business performance transformation services

to software, hardware, research and financing. These

capabilities help our clients transform their operations.

They allow us to show our clients how to tap the

potential of increasingly powerful and accessible

technologies, tools and services; to guide them to make

smart choices about how to exploit these capabilities

systemically and distinctively.


Our Values

IBMers value:

• Dedication to every client’s success

• Innovation that matters – for our company and

for the world

• Trust and personal responsibility in all

relationships

Since 2003, IBM Australia has implemented a number

of initiatives to raise employee awareness of these

Values, and encourage and enable employees to live the

Values on a daily basis. IBM Australia is making good

progress, with results of the 2007 Employee Values

Survey showing that 98 percent of employees are aware

of the Values.

Some of the key Values based initiatives for 2007 are

outlined below.

Living our Brand speaker series

In 2007, we launched the Living our Brand speaker

series which aims to encourage discussion about the

IBM Values, and to get a different perspective from

external speakers about how we might actually live our

Values. The series consists of interviews with prominent

business people outside of IBM around

the topic of a particular Value. The

interviews, which are conducted by

IBM Executives, are professionally

filmed and distributed to all employees

via the IBM intranet.

Some of the people interviewed in

2007 included Reverend Tim Costello -

CEO World Vision Australia, who talked

about “dedication to every client’s

success”, and Rachael Robertson

- Antarctic station team leader,

who discussed “trust and personal

responsibility in all relationships”.

‘Managing by Values’ event

Over two days in June 2007, more than 850 managers

across IBM Australia and New Zealand took part in an

interactive conference in Brisbane. The key objectives of

the event were to reinforce the importance of Our Values

in becoming the world’s leading globally integrated

enterprise, and to provide people managers with clarity

around the IBM strategy and encourage them to take a

“one-IBM” approach to their work.

The feedback received from managers was over-

whelmingly positive. A similar event is planned for 2008.

A/NZ Organisational Awards

In addition to the Outstanding People Manager Awards

program, two new awards were launched in 2007 which

focused on our Values. These were:

1. The A/NZ Teaming Award.

2. The Client Innovation Award.

The Teaming Award is a quarterly based award aimed at

recognising teams that best demonstrate IBM’s Values

and On Brand behaviour at work. The selection criteria

is based on displaying elements of business savvy, client

focus, innovation and trustworthiness.

The Client Innovation Award is open to employees on

a sales plan or in a client support role. This award is

also quarterly and recognises the individual or team that

has helped IBM beat the competition through applying

innovative solutions.

ThinkPlace

2007 saw the continued promotion and use of

ThinkPlace, our online employee collaboration tool for

posting and discussing new ideas. A number of new

members joined the program, and over 40% of IBM

Australia employees are now registered as unique users

of ThinkPlace. Initiatives to promote and increase the use

of ThinkPlace included:

• An Update of all new employee orientation materials;

• ThinkPlace success story articles on our intranet site;

• Profiling ThinkPlace members on our intranet site;

• Developing local Executive challenges; and

• Developing local BizTech projects.

Making IBM a Great Place to Work

Embedding values in a meaningful way in a large

organisation is always a complex task, particularly in a

company like IBM where our people are spread over 140

different locations, 40 percent work on client sites, and

60 percent do not work in the same location as

their manager.

In 2004, we launched

Great Place to Work

(GPTW), an initiative that

created an organisational

structure over the top

of our matrix reporting

lines, putting people in

clusters by location. The

aim of the program is to

provide opportunities for

our people to increase

connectedness to IBM and build a local community

within the organisation.

In 2007, we held over 230 GPTW social events and

activities across all the IBM locations. According

to a review held at the end of the year, the majority

of employees felt these activities had made a real

difference to their workplace, and employee participation

rate was at an all time high.

“GPTW is giving everyone in my region a chance to

participate and contribute to achieving a better working

environment for all.” IBM employee

EXEC Connect

The EXEC Connect program continued throughout 2007

as a way of providing all employees with an opportunity

to meet with members of the IBM Australia Extended

Leadership Team in an informal setting. Through these

sessions, IBM Australia has gained a longitudinal

perspective on employees’ issues and concerns.

2007 Achievements

√ Built upon the GPTW program to encourage

greater participation, and ensure new employees felt

connected to the IBM community

√ Re-ignited interest and encouraged dialogue about

the IBM Values using key IBM events and activities

√ Provided managers and employees with additional

tools and support to live the Values

√ Further promoted IBM’s innovation agenda, and

continued to utilise the ThinkPlace processes and

infrastructure that were already in place

2008 Objectives

• Continue to encourage employees to live out the IBM

Values through ongoing communications, and the

implementation of Values based awards and events

• Build on our culture of innovation by providing

employees with greater opportunities and the

necessary tools to collaborate

• Ensure the GPTW program incorporates all new

employees and work locations in its structure


GPTW is giving everyone in my region a chance to participate and contribute to achieving a better working environment for all.

Learning and Opportunity

Continual learning isn’t just essential for productivity – it’s also a huge factor in employee satisfaction and retention…

A new relationship has developed between IBMers

and IBM. In return for the company’s investment in

training and development opportunities, employees

are taking on greater personal responsibility for their

career development, learning, wellness and community

involvement.

We believe we will attract the best expertise and talent

by offering the best access to it. Of course, there’s

always the risk that people will take this expertise

and these assets somewhere else. But to our way of

thinking, this is a risk worth taking — if it allows us to

attract outstanding people to our organisation.

At IBM, the objective of learning and opportunity

is to boost the vitality of our workforce – giving our

people energy, drive and direction, thus improving our

sustainability.

Over the past several years, Australia’s Challenge

and Opportunity Index, which is part of our internal

Global Pulse Survey and is the key measure of our

organisational learning – had increased. The priority for

2007 was to continue to build on these improvements

by identifying opportunities for and removing barriers to

development.

Employee Development

Career Vitality Program

In 2007, we continued to build on the established

Career Vitality Program to support employee career

development and promote internal movement by:

• promotingcareersandcareerdevelopment

opportunities;

• promotingarobustinternalmarketplaceculturethat

balancessupplyanddemandrequirementsand

meetsemployeeexpectations;

• developingtoolsorcreatinglinkagestoexisting

initiativesthatsupportvisibilityofcareerpaths,

developmentopportunities,shortterm/longtermskill

developmentopportunities,andinter-businessunit

movements;and

• enhancingandtailoringcareerworkshopstosuit

differentdepartmentneedsandresultinginactive

careerplanning.

Promoting development planning

During the year, we promoted employee development

through awareness campaigns. In the first quarter of

2007 we ran the ‘You can Boost Your Career’ campaign

which encouraged employees to take time to think

about and plan their development. The campaign

offered workshops to support managers and employees

in this activity. Later in the year we featured a number

of articles on the IBM Intranet which focused on further

raising the awareness of the importance of career. In

addition, we circulated posters about the campaign

and held a number of mentoring workshops which were

conducted for all employees and special interest groups,

such as new graduates.

This helped to improve the Challenge and Opportunity

Index, and sustain our Individual Development Plan (IDP)

completion rate at over 90%.

New Employees

Supporting the integration of new employees into IBM

is a priority, and in 2007 we reviewed and improved

our processes and offerings that support the transition

process for new employees. All new employees now

participate in the Connections program and associated

new employee learning curriculum. Connections

Advisors are appointed to assist employees with

practical support, and over the first twelve months of

employment, new hires participate in online, face to face

and teleconference based learning.

In 2007 we developed a new three day offering for

graduate hires, a day 1 introductory program for

experienced hires, a new hire portal and refined our

internal processes to improve the day 1 experience.

In 2008 we plan to review the pre-day 1 experience for

new hires, and improve our processes, which include

developing a pre hire website to provide a high quality

introduction and inspirational foundational experience for

all new hires.

Improving management effectiveness

IBM regularly holds online ‘Jam’ sessions – global

web-based events which allow company-wide online

brainstorming over two or three days on specific topics

and ideas.

In our 2004 ‘World Jam’, the top rated idea was a

program aimed at assessing a manager’s people

management skills, given their key influence on

employee retention, morale, well-being and pride in

IBM. This led to the introduction of an annual Manager

Feedback Survey, which allows employees to provide

feedback on their manager’s strengths and weaknesses,

with a focus on development. The most recent survey

was conducted in late 2007 and Australia largely

maintained its position on all the survey questions.

Being a first-line manager is one of the most challenging

jobs at IBM. Our managers report the highest workloads

among all employees, and our people consistently say

they want more time with their managers.

Despite these challenges, in 2007 a solid majority of IBM

Australia’s employees rated their managers favourably.

Ratings were particularly strong in the areas of support,

trust, alignment to IBM values and communication.

Areas identified for improvement included helping

employees with career and development activities,

providing performance feedback and assisting

employees to collaborate. To address these issues, we

created the following new activities and programs.

2007 Manager Feedback Report: Australian Averages

Favourable Unfavourable Neutral

0 20 40 60 80 100

Q1 Helps me understand how my work contributes to IBM ‘07‘06

Q2 Provides clear performance feedback ‘07‘06

Q3 Helps me address issues and concerns ‘07‘06

Q4 Shows appreciation for contribution ‘07‘06

Q5 Behaves in a way to earn my trust ‘07‘06

Q6 Helps me to collaborate across geos and orgs ‘07‘06

Q7 Encourages me to be innovative ‘07‘06

Q8 Works with me to develop my expertise and progress my career ‘07‘06

Q9 Has effective two way communication ‘07‘06

Q10 My manager’s decisions and values model our values ‘07‘06

Q11 Encourages me to integrate my work as needed ‘07

Q12 Overall, how good a job is being done by your manager ‘07‘06

‘Going for Growth’ Manager Event

The ‘Going for Growth’ Manager Event aimed to engage

managers and provide them with information to support

the business transformation, as well as tools to help

them in their role as leaders. The event provided senior

leaders with an opportunity to thank managers for their

role in leading their teams, and their contribution to the

business’ success.

The event was opened by Glen Boreham - Managing

Director, IBM Australia and New Zealand, and the first

day centred on the business strategy and the manager’s

role in helping achieve business goals in line with the

organisation’s Values.

The second day had a strong development focus with

the morning session focussed on the managers own

personal development. This was followed by a session

focussed on helping managers in their role as leader and

a manager of people. The event featured presentations,

given by IBM senior executives and external speakers,

debates, panel discussions, an interactive Values

workshop, information booths and more than fourteen

different breakout sessions which were run by Human

Resources and covered topics such as mentoring, the

importance of collaboration, networking techniques,

coaching, dealing with stress and career journeys.

Manager Vitality Program

The Manager Vitality Program was established in 2005,

following feedback from the Managing for Innovation

workshop delivered to 900 managers. Its objectives

were to improve manager effectiveness by building a

manager community to support learning, share best

practice, and recognise the role of people managers

within IBM.

In 2007, the program included regular networking

and development events such as a quarterly manager

update hosted by IBM Australia’s CEO and Managing

Director, and monthly teleclasses called the Manager

Series, which covered topics of specific interest to

people managers including the importance of

career planning.

2007 Achievements

√ DeployedaProfessionalDevelopmentTool

whichenabledallemployeestocompleteskills

assessments

√ DeployedLearning@IBMExplorerwhichprovided

personalisedlearningrecommendationsand

careerguidancebasedonjobcategory,andskill

developmentrecommendationsbasedonjobrole

√ DeployedanewGlobalOpportunityMarketplace

recruitmenttooltoadvertiseandfillvacancies

√ Enhancedtheinformationavailableviathe

IBMIntranet

√ ImplementedPhase2oftheCareerVitalityProgram

√ Providedadditionalsupportforpeoplemanagers

through:

• implementingnewtoolssuchas‘Manager

Dashboard’whichprovidesaconsolidatedview

ofteamemployeedata

• enhancingaccesstoinformationthroughthe

‘ManagerPortal’

• learningofferingstargetedtomeetspecific

individualneeds

• providingmorerecognitionandrewardfor

peoplemanagers

• conductingatwo-dayallmanagereventto

recogniseanddeveloppeoplemanagers

• consultingwithmanagersonissuesand

needsresultinginestablishmentofManager

ConsultationBoardfor2008

2008 Objectives

Throughout 2007, we continued our journey towards

next generation learning. Our people are not only highly

mobile and time poor, but their expanding and changing

roles mean they continually need to be retrained and

cross-trained. In this type of environment, learning

needs to be ubiquitous – not just an event. We have

made progress towards embedding learning into our

workplace, and continue to use technology to make

learning ‘on demand’ and to change our culture from

bringing the worker to the learning to bringing the

learning to the worker.

In 2008 we will continue to focus on building capability

and will be looking to the future skill needs to enable

IBM to respond quickly to market changes. It will be

important for employees to focus on these change

requirements, as they will result in new skills/careers and

professional opportunities.

In order to respond to this environment, IBM has built

an integrated architecture of tools which supports

the business requirement of increased agility and

responsiveness for changes in skills, careers and

employee deployment.


Specific projects in 2008

In 2008, learning will build capabilities and engage

employees through the following projects;

• TopTalent

• FoundationalCompetencies

• Newofferingsforsellers

• ManagerConsultationBoard

• Prehireexperiencefornewhires

IBM’s Diversity Networking Groups – IBM has formed five diversity networking groups – all of which are key stakeholders of our Workforce Diversity program. These groups consist of IBM employees who voluntarily come together with the ultimate goal of providing feedback to the business, and enhancing the success of IBM’s business objectives by helping their members become more effective in the workplace.

IBM’s current diversity networking groups are as follows:

1. People with Disability - a networking group for people with a disability. This is a very active group, with strong connections to the wider community.

2. Flexibility – a networking group which is very active and is open to anyone interested in part time work, job sharing and other flexible working options.

3. Women in Technology – a networking group which aims to support the growth, development, advancement, and recognition of IBM’s current population of technical women.

4. Cultural Diversity – a networking group with a focus on multiculturalism.

5. Gay, Lesbian, Bisexual & Transgender (GLBT) – a networking group which supports the GLBT internal community and also participates in external community partnerships.

IBM’s Diversity Networking Events – IBM recognises that all employees must be consulted, and as such we hold regular diversity networking events. All employees are invited to these events and have the opportunity to provide feedback and learn about IBM’s Workforce Diversity program.

IBM’s Diversity Contact Officer (DCO) network – The DCO is another feedback mechanism. DCO’s are employees who are trained to handle grievances relating to Diversity. They represent the wider IBM community including, men, women, people from a variety of ethnic backgrounds, people with a disability and people who are gay or lesbian. Approximately 60 employees are DCO’s and have been trained in Equal Employment Opportunity and Anti-Discrimination legislation.

At IBM, our goal is to enhance awareness, open-

mindedness, knowledge, tolerance, and respect for

other cultures in order to build a stronger IBM team and

continue to foster innovation.

“Diversity at IBM means that difference is expected,

respected and encouraged so that every employee can

be productive, innovative and achieve to their fullest

potential. Our mission is to help create and maintain

an IBM culture, climate, and environment in which all

people feel welcomed and valued; and to maximise the

utilisation of our diverse talent, and position IBM as the

company of choice within our community and to our

clients and our workforce.”

Glen Boreham General Manager IBM Australia and New Zealand Chairperson of the IBM Diversity Council

Our diversity strategy gives us a competitive edge that

is delivered through our employees. Their differences

lead to diversity of thought which sparks the innovation

required for our success. What’s more, because we

reflect the makeup of the Australian community, our

people can relate to the needs and values of our clients

and business partners. Our leadership position in

diversity helps us attract the best people and acts as an

inspiration to our employees.

IBM in Australia and New Zealand implements local

strategies and diversity initiatives aimed to ensure we

meet the high standards set out by IBM’s global diversity

strategy.

We recognise the importance of the successful

integration of Workforce Diversity Principles so that

all employees understand and act accordingly. Some

of the ways in which IBM communicates with

employees include Diversity Networking Groups,

Diversity Networking Events and the Diversity Contact

Officer Network.

Workforce Diversity

To remain competitive, we need employee populations that mirror and understand the markets we serve — uniting different cultures, languages, geographic origins, professions and perspectives into one globally integrated enterprise.

The Journey Ahead

Workforce Diversity = Diversity of thought = Innovation

Areas of Focus in 2007

1. Women in the Workforce

2. People with Disability

3. Work Life Integration

4. Gay, Lesbian, Bisexual and Transgender (GLBT)

5. Cultural Diversity

6. Generational Diversity

Women in the Workforce

Globally, IBM has seen substantial growth in the

number of senior women executives — from 185 in

1997 to more than 1,000 today. Sixty-five percent of

our women executives are working mothers; and we

have 16 female country managers in locations such as

Singapore, Taiwan, Thailand, and Spain. Each of these

women demonstrates outstanding leadership qualities

and is achieving superior business results. All IBM had

to do was level the playing field so that excellence and

achievement were the only criteria for success.

Our Performance in Australia

Metric 2004 2005 2006 2007

Hiring 24% 27% 27% 30%

Women in Technical Roles 24% 24% 24% 37%

Women in Management 25% 28% 28% 27%

Women Executives 16% 17% 18% 18%

In 2007, women made up 31% of IBM Australia’s

workforce, and we are still very much committed to

recruiting, retaining and promoting the best female talent

available.

Also in 2007, we saw an increase in the overall number

of women hired by IBM, and the number of women in

technical roles. From 2004 through to September 2007,

the percentage of women on IBM’s Technical Resources

High Potential Program also increased from 15.0% to

19.0%. Women currently make up 92% of the overall

part time workforce at IBM, with 39% of women who

are working part time in senior roles.

Advancing Women

By year end 2007, 18% of IBM’s executives were

female, demonstrating a steady year on year increase

since 2004 (when the figure was at 9.4%). Women

Women in the Workforce Programs and Achievements

School Speakers Program – The School Speakers Program was developed in 2000 in partnership with Swinburne University in Melbourne, Victoria. In 2002 the program was extended into NSW with the University of Technology, Sydney. The program consists of teams of volunteer female IBM employees and university students visiting schools to demystify study and career opportunities in IT and engineering. Over 1500 school children in 17 schools had the benefit of a visit from 13 registered IBM volunteers.

Serious Women’s Business Conference – In 2007, IBM who is a foundation partner, participated in a Serious Women’s Business Conference that focused on ‘Defining Success’. IBM’s Executive Sponsor for Women was the Chairperson at the conference, and IBM had over 100 employees attend, with feedback about the conference being very positive. Attendees found value in not only the content but also the opportunity to network with over women. It was an ideal opportunity for IBM women to reflect on their own definition of success and to gain insight to what other women are doing that is inspirational.

EX.I.T.E. Camps – IBM’s EX.I.T.E. (EXploring Interests in Technology and Engineering) camps are inspiring middle-school girls to make a difference through science and technology. IBM runs the program in collaboration with Local High Schools and the Public Education Office. We held three EX.I.T.E. camps in 2007 in Ballarat, Sydney and Brisbane, with over 60 girls participating.

represented 31% of all promotions into first line

management, 22% into second line management, and

17% into third line management.

In 2007, IBM was named an Employer of Choice for

Women by the Equal Opportunity for Women in the

Workplace Agency. This is the seventh year in a row

that IBM Australia has been awarded the citation for

creating a work culture that supports the advancement

of women. Also in 2007, IBM was named a finalist at the

annual Equal Opportunity for Women in the Workplace

Agency’s (EOWA) Business Achievement Awards.

Attracting Women

In 2007, 30% of IBM’s graduate hires were women,

more than double the current rate of females entering

tertiary IT courses. We have a comprehensive long-term

strategy designed not only to attract female graduates

to the company, but to encourage women in Australia

and New Zealand to enter IT studies and careers.

suppliers such as Australian interpreting and captioning

service providers to develop live ‘on-demand’ services.

IBM’s strategy continues to focus on developing

innovative pathways for people with disability to enter

ICT education and careers. These initiatives aim

to increase the number of people with disability in

employment and add to the potential IBM talent pool.

Increasing the pipeline

In Australia, IBM knows the strategic importance of

collaboration and is committed to partnerships with

Government, Education and the Community, to build the

number of people with disability to enter into education

and employment in the ICT Industry. Some recent and

ongoing Programs include:

Willing and Able Mentoring (WAM) Program – IBM has been involved in the Willing and Able Mentoring Program initiated by Deakin University since its inception in 2001, and supported the program to go national in 2003. In 2007, when the program did not gain federal funding, IBM stepped in with both the Australian Employers Network on Disability and some other key leading organisations, to support a re-launch of a national program so that all students with a disability across Australia could have the opportunity to participate and help launch their professional careers. Over 60 IBM employees have volunteered to participate in the program as a mentor.

School Speakers Program – The School Speakers Program is aimed at de-mystifying IT for high school students and is a collaboration between Industry and Education to try to promote the significant benefits of a career in IT. In 2004, IBM expanded this program which was originally aimed at getting more women into IT, to also aim at students with a disability. The program is designed to encourage high school students to follow IT education pathways by showing the students about the wide and infinite possibilities that a career in IT can bring. The program did this through introducing them to young IBM graduates and University IT students who spoke to them about their own pathways and experiences.

EX.I.T.E. – IBM’s EX.I.T.E. (EXploring Interests in Technology and Engineering) camps are another initiative aimed at tackling the IT skills shortage, and build a healthy pipeline of young people entering the Industry. The camp was originally designed to develop the skills and motivation of young women into IT, but was adapted back in 2005 into a camp for young students with a disability. The camps range in duration from 3 to 5 days and are developed in partnership with State Departments of Education across Australia, to build the confidence and skills of students with disability by developing their skills in IT in a fun and hands on project based manner.

AWISE (Australian Women in IT and Science Entity) Partnership – In 2007, IBM continued their partnership with AWISE to reach out to young girls about IT as a career. Through this partnership IBM has been involved in the:

•GirlsinICT,Science,MathematicsandTechnology Conference• National–GoForITGirlITBlueprint• BoardReadinessPrograminSouthAustralia•MentoringPrograminNSW• VariousNetworkingeventsacrossAustralia• TechGirlsareChicnotjustGeekbooklaunch• Tech2Morrow

Ongoing initiatives

• CareerDevelopmentweblecturesforwomen

• WaiteGroupTopStepsprogramforwomen

• TakingtheStageinfluencingworkshopforwomen

• Springboardearlycareerdevelopmentprogram

for women

• Mindsetworkshopsformanagersonthevalue

that women bring to IBM

• Annualsalaryequityreviewsbygendertoremove

possible bias

• ChiefExecutiveWomenTalentDevelopment

program

People with Disability

Our Performance

Our long term commitment and approach to ensuring

that people with disability are represented in our

business has resulted in workforce representation

across all business areas in the organisation and at

all levels.

This fact was externally recognised in 2007 when IBM

was named a finalist in the Prime Minister’s Employer of

the Year award for the inclusion of people with disability.

IBM was recognised for its ongoing commitment

to disability employment through its proactive and

holistic approach, resulting in disability representation

throughout all business units and at all levels from

graduate to senior roles within the organisation.

In addition, IBM also won the Australian Sign

Language Interpreters Association (ASLIA) NSW

‘Organisation of the Year’ award for its commitment

to the deaf community in its workforce. IBM provides

accessible equipment and ongoing services, such as

interpreting services to employees through a central

accommodation fund. IBM has also partnered with

Accessibility

IBM believes that the combination of technology and

innovation can empower human potential by making its

information technology widely available and accessible

without regard of user ability. IBM’s competitiveness

in the marketplace depends on satisfying its clients’

demands for products that meet the needs of all

potential clients, including people with disability.

IBM has a global corporate instruction that all our

products must include important accessibility features

and functions, so that products, tools, applications and

services, are either directly accessible or compatible

with assistive technology. This instruction also applies

internally where, in 2007, IBM continued to provide

accessible physical and virtual environments to all of

its employees. This is a holistic approach that includes

a real estate accessibility strategy, a centralised

reasonable accommodations strategy, to enable our

people to succeed, and a procurement strategy where

accessibility is a standard criteria built into all supplier

engagements.

Education and Awareness

In 2007, IBM continued to build greater awareness and

capability throughout the organisation via education.

IBM conducted specific disability employment education

sessions for employees, as well as recruitment specific

sessions for its workforce management teams. Auslan

(Australian Sign Language) in-house courses were also

conducted and available to all employees wishing to

learn basic sign language.

The IBM People with Disability Networking Group also

conducted awareness raising events across the country

in 2007, which focused on disability that is acquired

through life.

Work Life Integration

IBM aims to retain talented people by recognising the

importance of and supporting their life outside of work.

Our Performance

In 2007, over 75% of employees felt that working at

home and flexibility had a positive impact on work

productivity, morale and commitment. In addition,

IBM saw a 7% increase of employees who felt their

managers were supporting them in managing work

and life.

IBM continues to appreciate the challenges of managing

work and life effectively and continues to provide Flexible

Working Options for employees. IBM’s flexible working

options include, Part Time/Job Share, Individualised

Work Schedules, Compressed Work Weeks, Working

from Home and Telecommuting.

Work Life Programs and Achievements

WorkLife Essentials – In 2007, IBM continued to run its WorkLife Essentials online portal, to assist employees with finding resources to help them manage their work and life. There were over 1200 hits to this portal in 2007.

Men@Work – In 2004, IBM extended its School Speakers Program to include a disability component, where IBM employees with a disability visit schools to promote IT to students with a disability. The program is now integrated into the overall School Speakers Program package.

Managing Separation and Single Parenting Seminar – This seminar was held in Melbourne for IBM employees who were interested in learning more about:• thechallengesofchildupbringing;• howtomeetapartner;• encouraginganddevelopingthechild/parent

relationship with the non-custodial parent;• adviceonWork/Life/Balanceforthesingleparent;• howtomanageyourfinances;and• managingseparation.

Generational Diversity

Our Generational Diversity strategy is focused on

enabling mature workers to continue to contribute to

our business success. As our workforce ages, IBM

faces greater competition to attract new employees and

retain existing ones. To address this challenge, we have

processes, tools and strategies to retain and maximise

the careers of our mature aged workforce and recruit

from this talent pool.

In 2007, all IBM managers from Australia and New

Zealand attended a manager conference in Brisbane. At

this conference managers were provided the opportunity

to attend workshops on ‘Leading a Multi-Generational

Workforce’.

At these workshops, managers were introduced to

the concept of building an environment and culture

where the individual needs of employees are respected

in regards to stages in their life and careers. Robert

Critchley, a well known consultant and author of

Generational Workforces, conducted two workshops

in June 2007, followed up by a teleconference call for

managers in September of the same year.

In 2007, we continued to deploy the Generational

Workforce Strategy, including Global Webcasts to raise

awareness and capability of Mature Age Workers with

the opportunity for employees to provide feedback on

some of the challenges and opportunities on the topic of

Mature Aged workers.

IBM also partnered with the Diversity Council of Australia

in 2007 to deploy ground breaking research in the

area of Mature Age Employment in Australia and New

Zealand. This research assessed the underlying issues

of recruitment and retention of Mature Age workers in

a restricted labour market. It also provided IBM with

data on how Mature Age workers felt about current and

future engagement of the labour market.

Our Performance

Metric 2004 2005 2006 2007

Representation of workforce over 45

29% 31% 34% 44%

Representation of workforce over 65

0.18% 0.27% 0.2% 0.24%

% of part-time workers over 45

21% 22% 22% 22%

% of part-time workers over 65

0.4% 0.8% 1.0% 1.0%

Our Generational Diversity Program aims to provide a

flexible workplace culture which allows IBM employees

to enjoy:

• continued participation in the workforce without

age-related barriers;

• flexibleworkhoursandresponsibilities;

• avarietyofworkstyleoptions;

• greaterlifestylechoices;

• continuedlearningandjobsatisfaction;and

• anongoingconnectiontotheIBMcommunity.

Cultural Diversity

IBM is dedicated to driving cultural change through

innovative principles and policies, and is committed to

providing a workplace where employees feel welcomed

and valued for who they are. IBM operates across

nine time zones in 170 countries, where more than

70 languages are spoken. This diversity is one of our

greatest strengths – especially when we leverage it

effectively, bringing the best talent and ideas together to

solve our clients’ problems.

Cultural diversity in IBM Australia

IBM Australia is a melting pot of cultures that

contribute greatly to both our innovation and

understanding of our clients. In 2007, IBM focused on

continuing to build awareness of cultural diversity in

our workforce, and also on growing our workforces’

capability to work effectively in a globally integrated

environment.

Asian Employee Constituency Networking Group

IBM employees established a globally

recognised Asian Constituency Networking

Group in Australia, which aims to highlight

the value of our Asian talent in the

organisation and build greater awareness

and understanding of the Asian culture.

Networking Events

In 2007, IBM held various diversity networking events

celebrating different cultures including large celebrations

for the Lunar New Year in early 2007 and for Diwali,

the Indian Cultural Festival of Lights held in November

each year. IBM also supported and sponsored two IBM

teams in the NSW Dragon Boat Racing Carnival, which

was made up of employees from many different cultural

backgrounds, and the teams were well supported by

fellow IBM employees and their families who were able to

enjoy the company provided BBQ’s.

EX.I.T.E. Camp for Indigenous Australian students

In 2007, IBM developed the first EX.I.T.E. (EXploring

Interests in Technology and Engineering) camp for

Indigenous students. It was held in Ballarat, Victoria at

the IBM facility which is located close to the University

of Ballarat’s Mount Helen Campus. IBM, the University

of Ballarat and the Victorian Department of Education,

worked with the local Indigenous community to present

a four day camp for Indigenous students across the

region, to develop their skills and motivation for IT, in a

fun and project based camp environment.

The Cape York Program

IBM is working with Westpac to provide employee

secondments to support Indigenous communities in

Cape York. In conjunction with Indigenous Enterprise

Partnerships, this program works with other Indigenous

organisations to develop solutions and support

programs that foster self-sufficiency in the community.

Since 2006, through the support and sponsorship of

individual business units and the wider IBM, thirteen

employees have

now taken

part in this

secondment

program. They

have used

their skills and

experience to help

build opportunity,

education and

employment in these

remote Indigenous

communities. The

various projects and

opportunities cover a

wide scope and include

areas such as income

management, business development, personal

development, IT and Marketing.

Shades of Blue

In 2007, IBM introduced a new version of its Cultural

Intelligence education, Shades of Blue. This blended

learning solutions and provided managers and

employees with awareness, knowledge and skill

readiness to work effectively across cultural differences

and within a multicultural environment. Participants

understand cultural competence and its importance to

our environment today through exploring key cultural

differences on national, functional, and interpersonal

levels. Participants were also able to explore real-life

challenges and opportunities to improve performance

and bridge cultural gaps enabling employees to work

successfully across cultures and across borders.

Floating Cultural Holiday

To acknowledge individuals’ needs to balance cultural

and work commitments, our Floating Cultural Holiday

policy gives people the option of ‘trading’ official public

holidays for another day of personal cultural significance.

For example, an employee may wish to ‘trade’ the

Queen’s Birthday for Yom Kippur, Diwali or Eid.


Gay Lesbian Bisexual & Transgender Diversity

IBM strives to create an atmosphere where Gay Lesbian

Bisexual & Transgender (GLBT) employees are valued,

empowered to think freely, express themselves and

innovate, and able to fully contribute to the workplace

and our clients. Below are some of the recent initiatives

and ongoing activities delivered in 2007.

GLBT Employee Networking Group

The ‘EAGLE’ (Employee Alliance for Gay & Lesbian

Empowerment) Networking Group consists of proactive

employees whose

objective is to work

with the organisation

to promote a safe

and open working

environment for all

employees, regardless

of sexual orientation,

gender identity, or

gender expression.

The group offers

GLBT employees

opportunities to network

both professionally

and socially, career

development and

mentoring development,

participation in

community outreach and

input into developing

IBM’s overall GLBT

strategy. As with all of

the Diversity Networking

Groups, EAGLE has

a representative on the IBM Diversity Council and the

Global GLBT Taskforce as well as the regional Asia

Pacific internal GLBT work team.

IBM GLBT Employee Empowerment Conference

Workplace inclusion and engaged participation is

important from IBM’s and its employees’ perspective. In

March 2007, IBM held a GLBT Employee Empowerment

Conference. The objective of the conference was:

to reinforce IBM’s commitment to supporting an

environment that is actively inclusive of GLBT

individuals; to challenge existing perspectives of GLBT

held within the workplace; to discuss and understand

issues; and to develop a focused set of actions that

further improve the reach and influence in addressing

GLBT issues within IBM, with external organisations and

business partners, and in support of the community.

Employee Float in the Sydney Mardi Gras

IBM proudly supports its GLBT employees in celebration

of diversity and has been sponsoring a float in the

Sydney Mardi Gras since 2004. In 2007, over 80 IBM

employees, partners and friends joined the float which

aptly showcased IBM’s overall marketing theme of

‘What Makes You Special?’

The Midsumma Festival

In January 2007, IBM sponsored and participated in

the Volunteers Program of the Midsumma Festival. The

festival celebrated 20 years of diversity and inclusion

in the community and had over 100,000 people enjoy

the month long calendar of arts and cultural events,

showcasing the talents within GLBT community to the

wider community.

2008 Diversity Objectives

√ Ensure our workforce is representative of IBM’s client

and community base.

√ Raise employee morale by being seen as an

employer of choice by our people.

√ Contribute to our brand image by being recognised

as a leader in diversity and as an employer of choice

in the external marketplace.

“The employees of IBM represent a talented

and diverse workforce. Achieving the full potential

of this diversity is a business priority that is fundamental

to our competitive success. Business activities such

as hiring, promotion, and compensation of

employees, are conducted without regard to

gender, gender identity or expression, sexual

orientation.”

Mark Latchford, Vice President, IBM Sales and Distribution

Executive sponsor for GLBT employees at IBM Australia

• implement,measure,andcontinuallystriveto

improvewell-beingprocessesforpreventingwork-

relatedaccidents,injuriesandillnesses;

• fosteremployeeinvolvementandprovideappropriate

well-beingeducationtoemployeestoenhancetheir

abilitytoworksafelyandproductively;

• performauditsandself-assessmentsofour

conformancewithemployeewell-beingandproduct

safetyrequirementswithresultsreportedtosenior

management;

• investigateandaddresswork-relatedandproduct

safetyincidents;and

• provideappropriateresourcestofulfilthese

objectives.

Our support for well-being through prevention is

vital to our innovation, productivity, and morale. We

have realised enormous dividends through client and

employee confidence in the safety of our products and

our workplaces. The IBM Corporation expects nothing

less in our efforts than the excellence we have attained

in these areas.

Well-being Policy

Corporate Policy 127H: Responsibility for employee

well-being and product safety.

IBM’s fast-paced business growth and expansion

into new markets challenge the traditional means of

managing employee well-being. The profile of the

average IBMer is changing, and this demographic shift

presents a broad range of challenges relative to safety,

health and wellness.

In response to these challenges, IBM’s global Well-

being Management System (WBMS) deploys a “total

health management strategy” that creates locally

relevant healthcare initiatives that are proactive — and

that effectively manages the highly complex, diverse

and changing health and safety needs of countries and

employee populations around the world.

Corporate strategies, instructions and procedures must

support our commitment to employee well-being and

product safety. Each of us, manager and employee

alike, shares a personal responsibility for the following

objectives:

• provideasafeandhealthfulworkplaceforour

employees;

• provideproductsthataresafeforusebyourclients

andemployees;

• meetapplicablelegalrequirements

andvoluntarypracticestowhichwe

subscribewhereweoperateandsell

products;

• incorporateemployeewell-being

andproductsafetyrequirementsin

businessstrategies,plans,reviews,

andproductofferings;

Employee Wellbeing

IBM promotes employee well-being as a strategic value and fundamental component in the company’s success. Well-being is more than traditional occupational health and safety. It includes consideration of physical and psychological fitness that promotes individual creativity, productivity and commitment.

Original signed by:J. Randall MacDonaldSenior Vice President, Human ResourcesIBM Corporation

Endorsed by:G. BorehamCountry General ManagerIBM Australia & New Zealand

Well-being Management System

We implement the commitments in the well-being policy

using the IBM Well-being Management System. This

forms the framework for maintaining employee health,

safety and well-being controls and promoting continual

improvement. It is implemented and managed by the

Global Well-being Services team.

Well-being Programs

Occupational Health & Safety (OHS) programs

In 2007, and for the first time, IBM achieved AS/NZ

4801 and OHSAS 18001 certification of its Well-being

Management System. This was a significant increase in

scope from previous years as only one of our business

units had achieved this certification historically. This

accredited certification required 12 days of external

auditing and ensures excellence in how we manage our

OHS programs.

In addition to the external audit program,

we conducted the concurrent internal

OHS audit program which reviewed the

sites where over 80% of our employees

work. The review confirmed that there were

no major compliance issues at any of our

sites.

In 2007, IBM launched an online OHS training

module for employees. The online tool not only

included training, but also had a competency

test and feedback form which allowed us to

consult with thousands of employees on OHS

issues. Over 3000 employees and managers

completed this training.

Throughout 2007, 112 formal ergonomic assessments

were performed, prompted by either employee requests

or workplace injury investigations.

Safety Review Groups continued to meet in 2007 to

help manage OHS risks. The separate groups were

determined by location or by business unit, depending

upon the hazards applicable to those populations.

The rate of safety incidents in 2007 (per 100 employees)

rose slightly from 1.08 to 1.10. The main causes of

the incidents were slips and trips (42%), repetitive

movements (13%) and muscular stress (12%).

However, the number and rate of workers compensation

claims decreased in 2007, as did the number and rate

of lost time claims.

Overall Health & Productivity Programs

In 2007 IBM launched a comprehensive online health

promotion portal called Fitness2live. The portal gave

employees the opportunity to do an online health

risk assessment, and participate in online programs

designed to enable them to make healthy lifestyle

changes. It also allowed employees to record their

health data, design healthy meal plans and also gave

them access to a library of health information. Over 13%

of employees took advantage of this portal.

In 2007 we also had the first company wide influenza

vaccination program with a participation rate of

approximately 25%.

We also continued to run our annual health assessment

program with over 1200 employees taking part, an

increase of approximately 10% from the previous year.

This was achieved by offering assessments at many

sites that had not previously been part of the program.

We ran a stress resilience

seminar at an all-manager

meeting and followed

this up with additional

resilience seminars

with selected teams.

In addition, we

provided occupational

rehabilitation for

employees with

both work related

health issues

and non-work

related health

issues.

In 2007

we assisted 465 employees with their health and their

return to work, and provided individual counselling to

290 employees and their families through our Employee

Assistance Program (EAP). The EAP is an on-request

service dealing with both personal and work related

problems, which can be attended during working hours.

IBM Australia provides 52 weeks of paid sick every 24

months. Average days of sick leave taken per employee

in Australia reduced from 3.93 days in 2006 to 3.58

days in 2007.


Our Performance

Metric 2006 2007 % change

2008 Target

Safety incident rate*(per 100 employees)

1.08 1.10 +2% Reduce by 5%

Workers compensation claim rate*(per 100 employees)

1.15 0.87 -24% Reduce by 5%

Lost time claim rate*(per 100 employees)

0.56 0.37 -34% Reduce by 5%

Average days sick leave per employee (Australia)

3.93 3.58 -9% Reduce by 5%

*The overall goal is to reduce safety incidents and

workers compensation claims to zero. The target above

is a year-to-year target.

2007 Achievements

• Providedbetteraccesstothewellnessassessments

• Supplementedthewellnessassessmentswithonline

tools

• IntroducedannualOHStrainingforallemployeesand

managers

• ProvidedfurtheravenuesforOHSconsultation

2008 Objectives

• MaintainAS/NZ4801andOHSAS18001

complianceandcertification

• IncreasecoverageofourinternalOHSauditprogram

• IncreaseOHSonlinetrainingparticipationrate

• IntroduceanOHSrisktoolformanagerstocomplete

onanannualbasis

• Obtainbetterdataonhealthandproductivitythrough

combiningtheonlinehealthpromotiontoolandour

healthassessmentprogram

• Providebothfacetofaceandonlineresilience

workshops

Community Report Individuals, small businesses and local communities can be the chief beneficiaries of the global economy — but only if they understand their options and are empowered to seize them.

Today, many enlightened companies, communities and thinkers are trying to decide how to differentiate themselves, in order to get the world to invest in them, buy from them or hire them. At IBM, we are looking at ways to use technology to facilitate cooperation, collaboration and competition — to help break down the barriers that impede progress.

IBM’s approach to community support is to help

people use information technology to improve the

quality of life for themselves and

others. Our program

of stakeholder

consultation has led

us to focus on areas

where technology

can make the biggest

difference. In Australia,

these areas include

K-12 education,

particularly in disadvantaged communities, supporting

people with disabilities and addressing the digital

divide. In 2007, our dedicated Corporate Citizenship

and Corporate Affairs Department continued to work

in partnership with not-for-profit organisations and

government departments in these areas, coordinating

the donation of funds, technology and employee time to

support specific programs over the long-term.

Over the years, where this consultative process has

highlighted gaps in community resources, we have

developed new technology programs and tools. In

2007, we continued to support, expand and develop

these programs.

Further information on all our programs can be found at:

http://www.ibm.com/au/ibm/community

Encouraging volunteerism

IBM’s On Demand Community (ODC) volunteer program

has been running since late 2003, and encourages our

current workforce and retiree population to support

their local communities. The ODC program provides

employees with technology solutions and strategies,

including tutorials that can be accessed online and

shared with the community organisations in which

employees volunteer.

For those employees new to volunteering, the ODC

program provides a quick and easy means of working

out how they can best support IBM’s community

engagement projects. Depending on how much time

our volunteers have to give, the program offers solutions

geared for those who wish to volunteer once a week or

once a year.

For seasoned volunteers, the ODC program also

supports employees’ individual voluntary

work by rewarding their volunteer

time with corporate donations.

When individuals or teams of IBM

employees or retirees volunteer for a

consecutive period of time, they can

earn a community grant of cash or

technology for their chosen charity

through the ODC program.

In 2007, IBM Australia had 765 new employees and

retirees take part in the ODC program. More than 2,200

people were registered in 2007, making up 58,626

hours of volunteer service to their communities against

a target of 38,000 hours. IBM also gave 56 grants of

cash or IBM equipment to community organisations and

schools where IBMers had contributed more than 40

hours of volunteer service over five months. The market

value of these grants was over AUD$148,000. The 2007

target was to award 30 community grants, and this was

nearly doubled.

In addition to supporting IBM employees in their

own volunteer efforts, IBM also manages a range of

partnerships with selected not-for-profit organisations

to create opportunities for employees to volunteer in

our communities, by using IBM’s specifically designed

resources to deliver programs which are consistent with

our community engagement strategy.

Promoting Science Education

As part of IBM’s ongoing commitment to the

promotion of science education, IBM employee

volunteers have been introducing students from the

Western English Language School (WELS) to basic

science concepts. The participating students are

new arrivals to Australia and with the help of the

volunteers engage in innovative science activities and

experiments from IBM’s TryScience website

(www.tryscience.org). The program has helped

to spark students’ natural curiosity and interest in

science, and also teaches the students science

concepts as well as literacy and collaboration skills.

The programs run for four weeks with IBM volunteers

working with the children on a range of science topics.

The volunteers plan engaging activities and hands-on

experiments which are well supported by the teachers

in the classroom environment.

In 2007, IBM ran two WELS TryScience programs.

Through the IBM employees volunteer commitment,

WELS was able to take advantage of IBM’s

Community Grants program and was awarded

six laptops in 2008. The combination of science

education and corporate volunteerism has proven to

be very successful and will continue into 2008.

Promoting Learning

Reinventing Education

Through our global Reinventing Education program, IBM

develops partnerships with Ministries and Departments

of Education to encourage and support school

improvement and reform throughout the world.

In Australia, the Reinventing Education program was

launched in partnership with the Victorian Department

of Education in July 2001. It involved 25 schools

from metropolitan and rural Victoria. As part of this

program, IBM contributed expertise and technology to

help teachers investigate and share ways to integrate

information and communication technologies into

teaching to improve student learning outcomes.

In 2006, in partnership with the Victorian Department

of Education, IBM released a CD-ROM called ‘Guiding

School Change’, which was based on the outcomes

from the Reinventing Education program. Through

the program, Australian students and educators have

worked collaboratively with peers from participating

schools across the world including China, USA, UK,

Japan, Singapore, Vietnam and India.

In May 2007, IBM held the inaugural IBM Asia Pacific

Reinventing Education Summit in Shanghai, China.

This invitation-only event brought together leaders

from education, government and business from

across Asia Pacific to discuss the factors shaping the

learning intensive society of the 21st century and their

implications for schooling.

IBM KidSmart Early Learning Program

Since 2001, the IBM KidSmart Early Learning Program

has provided technology and training to enhance

learning in Australian disadvantaged pre-schools

and child care centres. Over 750 centres have

received KidSmart units consisting of colourful Little

Tikes furniture, a PC and educational software. An

independent evaluation of the KidSmart Program in

Australia has shown that children participating in the

program have improved their sharing, listening and

cognitive skills.

Consistent with the goals of early childhood education,

KidSmart builds on the understanding that pre-school

children learn best through creative play and social

interaction. The system uses this premise to improve a

child’s learning skills and encourage them to become

confident technology users - an increasingly important

life skill.

In 2007, IBM donated 135 KidSmart units to pre-

schools, child care centres and schools across five

Australian states and territories. At the request of our

KidSmart program partners, an additional 14 KidSmart

units were to be delivered in April 2008 to the NT, WA,

VIC and NSW.

Each KidSmart centre also benefits from teacher training

workshops, which introduce teachers to the technology

and explore ways of effectively integrating KidSmart into

their teaching programs. IBM works in partnership with

the Government and not-for-profit partners to deliver

this training. So far, over 1500 teachers have been

trained against a target of 1476.

KidSmart in Aboriginal communities

In 2007, IBM partnered with the Western Australia

Department of Education to deliver

20 KidSmart units to remote

Aboriginal communities

in support of the

government’s Aboriginal

Literacy Strategy.

Teacher training for the

KidSmart program is

delivered using a ‘Two

Way’ method which

involves both an English

Language and Literacy

Consultant and an Aboriginal community

member working in tandem in the remote communities.

The program has been very effective, and is expected to

expand in 2008.

National KidSmart Summit

In November 2007, IBM Australia held a two day

national KidSmart summit in South Australia. The

summit which was coordinated by IBM Australia,

was hosted by the South Australian Department

of Education and was an excellent opportunity for

KidSmart partners and practitioners to share their

program experiences, and provide valuable stakeholder

input to the future direction of the KidSmart program.

Twenty-four delegates from around Australia including

key government agencies, not-for-profit organisations

and early childhood centres attended the summit and

agreed that IBM should continue to lead and coordinate

a national network of KidSmart partners.

KidSmart journeys

To assist with the continual development of KidSmart,

in late 2007, 11 case studies of KidSmart journeys of

schools and kindergartens have been produced and are

available in print and electronic copy.

IBM EX.I.T.E Program for Young Women

Since 2001, IBM Australia has held annual EX.I.T.E

(EXploring Interests in Technology and Engineering)

camps with the support of state Departments of

Education. The camps encourage young women to

pursue studies in engineering, information technology

and science. During 2006 and 2007, EX.I.T.E camps

were held in QLD, NSW and VIC, with the first

Indigenous EX.I.T.E camp held in Ballarat, Victoria in

2007. Camps have a significant impact on student

choices, with 24 out of 31 girls from one camp

in QLD choosing IT subjects the

following year.

EX.I.T.E - Ballarat Indigenous Camp

2007

E.X.I.T.E Ballarat was the first camp

outside of the Americas to focus on

indigenous youth. IBM partnered with

the University of Ballarat Aboriginal

Education Centre (AEC), the

Department of Education and Early

Childhood Development and the

Catholic Education Office Diocese of

Ballarat to deliver the camp.

SWIRL - Story Writing In Remote Locations

In 1997, as an extension of our relationship with Victoria

University, IBM Australia became involved in a project

called SWIRL (Story Writing In Remote Locations) in a

remote, outback Aboriginal community in Australia’s

Northern Territory.

Through SWIRL, Aboriginal students are improving

their literacy skills by composing stories about their

activities. These stories are then made into books and

used as school library resources. The program delivers

both immediate benefits to the students composing the

stories and long term benefits to their communities, by

providing relevant literature to engage the interest of

other children in the area. In every location, the students

involved have improved their literacy, been eager to

learn and have developed a renewed enthusiasm for

attending school.

In 2007, Victoria University (VU) took 50 students to

the Northern Territory for one month and worked in five

remote communities during this time. The communities

included Yuendumu, Atitjere, Areyonga, Ntaria and

Papunya, with approximately 12 VU students located

in each community to implement the SWIRL program.

The VU student team came from a range of faculties

including Education, Arts, Youth Studies, Community

Development and Physical Education with an important

feature of SWIRL being to provide unique professional

learning experiences for the VU undergraduate students.

IBM donated 15 PCs and five printers to the SWIRL

program, with three PCs and one printer going to each

site to assist with the implementation of the program.

During the program, over 300 school aged students

from the communities participated, and over 600 books

were produced.

IBM MentorPlace

IBM volunteers regularly mentor hundreds of primary

and secondary school students around Australia.

Following a workplace visit, students and their IBM

mentors communicate through IBM MentorPlace, a

secure internet site that allows them to collaborate on

a range of projects and activities. At the end of the

program, typically lasting for two or more school terms,

the IBM mentor visits the student’s school.

IBM MentorPlace gives students a valuable insight into

the business community and increases their confidence

and enthusiasm for career options in technology. In

2007, the MentorPlace program expanded into WA and

VIC, supporting 190 students (target was 150) with 182

IBM mentors from VIC, NSW, QLD, WA & ACT.

International Science School

Since 1989, IBM Australia has worked with the

University of Sydney’s Science Foundation for Physics

to raise the profile of science education. In 2005, an IBM

senior executive, Mrs Louise Davis, was the first female

to be appointed President of the Science Foundation

for Physics at Sydney University, a role that continued

throughout 2007.

In 2007, IBM supported the foundation’s biennial

International Science School (ISS) for gifted science

students in Year 11 and 12 from around the world. The

2007 ISS had the theme of ‘EcoScience’ and included

133 students from nine countries, including for the first

time, a cohort from India. Speakers for the 2007 ISS,

included Professor Lord Robert Winston, who gave

an extremely well received public speech on Genetics,

and Professor Michael Oppenheimer, Professor of

Geosciences at Princeton University.

Physics on the Road

Since 2002, the School of Physics at the University of

Sydney has run an outreach program called ‘KickStart

Physics’, which gives HSC physics students the

opportunity to use experimental equipment typically

unavailable in high school classrooms. In 2007, IBM

continued to fund ‘KickStart on the Road’ – taking

the program outside of Sydney to students in Wagga

Wagga, Dubbo and Armidale.

MyScience - myscience.com.au

In 2006, a Primary Science initiative called MyScience

was piloted by a team including IBM, the NSW

Department of Education and Training (Western Sydney

Region), and the Science Foundation for Physics. The

program aimed at providing primary school teachers

with more confidence in teaching science through

professional development sessions and classroom

support, fostering children’s natural curiosity and

developing their investigative skills through authentic

investigations, promoting community involvement from

scientists in the community.

IBM continued to support this growing initiative in 2007,

along with the other collaborators, through funding and

in-kind support with the provision of resources such

as TryScience and MentorPlace. MyScience will again

continue in 2008.

Using technology to support the community

World Community Grid

www.worldcommunitygrid.org

The World Community Grid is the largest public

humanitarian grid in existence, with a base of more

than one million computers and 400,000 members,

supporting 10 research projects to date.

Using grid technology that connects individual

computers to create a larger and more powerful

system, the World Community Grid provides increased

computing power and makes larger bodies of

information available to help public and not-for-profit

organisations advance research for humanitarian

purposes.

The World Community Grid uses the idle time of

hundreds of thousands of computers around the world

to give researchers tremendous amounts of power,

exceeding that of several supercomputers, to run

complex computations. The grid accelerates the pace

of research by performing computations that would take

years on a PC in days or even hours.

To become part of the World Community Grid,

volunteers simply select the projects that they wish to

contribute their PC time to and download and install a

small software program to process the work.

In 2006, volunteers contributed 9,500 computers* to

the World Community Grid enabling three new research

projects to run, which included:

• HelpCureMuscularDystrophy-leadingtobetter

treatmentsformusculardystrophy

• FiocruzGenomeComparison-developingbetter

drugsandvaccinesandimproveddiagnostic

procedures

• HelpDefeatCancer-improvingthetreatment

ofcancer

The World Community Grid powered by 16,995**

computers is currently supporting the following

research projects:

• FightAIDS@Home-investigatingdrugtherapies

• HumanProteomeFolding-Phase2(HPF2)currently

focusingonMalaria

• DiscoveringDengueDrugsTogether-Phase1

• AfricanClimate@Home-ClimateModelling

• HelpConquerCancer-X-rayCrystallography

* This figure is based on computers that are readily

identifiable from Australia, where owners of those

devices entered ‘Australia’ as their country in their

profile (this is an optional process).

** This figure is from April 2008

accessibilityWorks – helping to use the web

With more than ten percent of the global population

affected by some sort of disability, IBM has an important

role to play in ensuring that this population has full

access to technology.

To accommodate the needs of disabled users, we invest

in resources and partnerships that provide direction

and guidance for the development, production and

use of accessible computer and Internet technologies,

educational materials and business communications.

This includes:

1. Leadership in key worldwide standards organisations.

2. The advancement of accessibility in important open

standards such as OpenDocument Format.

3. Open source collaboration projects like IBM

Research’s collaboration with universities on the

maturing workforce and the IBM Accessibility Tools

Framework.

Our accessibilityWorks tool makes Web content

available to people with disabilities and benefits those

who may have difficulty reading from a computer screen

or using a mouse and keyboard. accessibilityWorks

contains features that allow web content and

interactions to be changed to meet individual user

needs. For example, text can be enlarged and visually

modified and a “text to speech” function can read

pages aloud.

More than 200 non-profit organisations and schools in

28 countries now use accessibilityWorks, and versions

of the tool are currently available in multiple languages,

including Brazilian, Portuguese, Chinese, Italian,

Spanish, Russian and Korean. In the future, there will be

a concerted focus on expanding access worldwide, with

particular emphasis on educating children with autism

and other students with special needs. The technology

is continually revised, based on input and suggestions

from existing partners and collaborators.

Organisations in Australia using accessibilityWorks in 2007:

Australia Australian Seniors Computer Club Association

Macquarie University

Technical Aid to the Disabled

The Spastic Centre

Novita Children’s Services

Murdoch University Guild for Students

New in 2007 Hornsby Hospital (Rehabilitation Unit)

New in 2007 Association for the Blind, WA

Refurbished Technology Program

IBM donates refurbished and recycled equipment to

not-for-profit organisations which are aligned with IBM’s

community engagement strategy. In 2007, IBM donated

refurbished laptops and desktops to our partner

community organisations, as well as other not-for-

profit groups that support education, job training and

technology accessibility.

In 2007, IBM donated 170 refurbished PCs and

ThinkPads to 49 different organisations against a target

of 100 devices and 25 organisations.


2007 Achievements

√Engaged765newemployeesandretireesintheODCprogram,againstatargetof410.Morethan2,200people

wereregisteredin2007,makingup58,626hoursofvolunteerservicetotheircommunitiesagainstatargetof

38,000hours.

√Delivered61internalcommunicationstoIBMemployeesfeaturingODCandcommunityengagementinformation.

√Provided56grantsofcashorIBMequipmenttocommunityorganisationsandschools.

√Donated135KidSmartunitstopre-schools,childcarecentresandschoolsacrossfiveAustralianstates

andterritories.

√ExpandedtheMentorPlaceprogramintoWAandVIC,supporting190studentswith182IBMmentorsfromVIC,

NSW,QLD,WA&ACT.

√Donatedoneculturalkiosk(EternalEgypt)toMonashUniversityinMelbourne.

√PlacedoneTrySciencekioskinDevonportMaritimeMuseuminTasmania.

√ExpandedtheimpactandnumberofusersoftheWorldCommunityGridin2007.TheWCGispoweredby

16,995(April2008)computersandcurrentlysupportsFightAIDS@Home,HumanProteomeFolding,Discovering

DengueDrugs-Together,AfricanClimate@HomeandHelpConquerCancer.

√ProvidedtwoaccessibilityWorksgrantstotheHornsbyHospital,RehabilitationUnitinNSW,andtheAssociation

fortheBlindinWA.Afurthertwoinstallationsweredeferredpendingimprovementstothe

accessibilityWorkssoftware.

√Donated170refurbishedPCsandThinkPadsto49communityorganisations.

2008 Objectives

√Obtain400newregistrationstoIBM’sOnDemandCommunityprogram,andcontribute20,000newhoursof

volunteertimetolocalcommunities.

√RewardlongtermvolunteerengagementsbyIBMretireesandemployeesbymaking35cashortechnology

equipmentgrantstocommunitygroupswhereIBMvolunteershavecontributedsignificantly.

√Donate140KidSmartUnitstochildcarecentres,kindergartensandschools.

√Provide150IBMonlinementorstoschoolstudentsaspartofIBM’sMentorPlaceprogram.

√ExpandtheimpactandcomputerruntimeoftheWorldCommunityGrid.

√Donateaminimumof100refurbishedcomputerstocommunityorganisationswhofitourcommunity

givingstrategy.

√PromoteandimplementScienceeducationprogramsintheK-12educationsector.

Our Environment We are committed to environmental leadership in all of our business activities, from our operations to the way we design our products and use technology...

Our efforts in this regard reduce our costs, help create a healthy workplace for our employees and clients, and help to protect the environment that nurtures us all.

“IBM’s corporate environmental affairs policy, first

introduced in 1971, provides the strategic framework

for the company’s environmental management

system and environmental affairs objectives. These

objectives address areas such as workplace safety, the

conservation of energy and other natural resources,

environmental protection, and to develop, manufacture

and market products that are safe for their intended

use, efficient in their use of energy, protective of the

environment, and that can be reused, recycled or

disposed of safely.

IBM operations could potentially impact the environment

in a number of ways. Chemicals needed to service our

products and operate our facilities in Australia and New

Zealand must be properly managed, from purchase

through storage, use and disposal. Our data processing

centres are energy and/or relatively water-intensive. In

addition, IBM products should be designed so that they

can be reused, recycled or disposed of properly at the

end of their useful lives.

To identify and effectively manage the potential

environmental impact of our operations, IBM established

and has maintained a worldwide environmental

management system (EMS) for over 30 years. The EMS

is a cornerstone of the company’s efforts to protect the

environment, drive energy efficiency and forms a crucial

foundation of our broader commitment to corporate

citizenship.

The environmental policy is supported by corporate

instructions, practices and standards that govern IBM’s

worldwide operations and are basic to its environmental

management system. These standards and practices

cover areas such as: chemical and waste management;

energy efficiency and management; climate protection,

environmental evaluation of suppliers; product

stewardship; incident prevention and reporting; and

environmental assessment for real estate transactions.

IBM has introduced and integrated 27 voluntary

environmental goals and targets supported by the

business into facility operations and product development

processes to further drive continual environmental

improvement.

Significant environmental aspects and associated programs established in Australia

Significant Environmental Aspects in 2007

Australia Environmental & Chemical Management Programs

Energy consumption • Energy Efficiency and Management• Climate Stewardship

Training & Communication

Supplier Evaluation

Compliance

Environmental Due Diligence

Metrics and Performance

Greenhouse gas emissions

Chemicals use & storage • Chemicals Management• Ground Water and Soil Protection

Hazardous waste disposal • Pollution Minimisation and Management• Procuring for the EnvironmentNonhazardous waste disposal

Materials consumption

IT equipment and packaging disposal and reuse

• Product Refurbishment and Reuse• Computer Scrap Recycling• IBM Printer Supplies Return Program

Unplanned releases • Environmental Incident Prevention, Preparedness, Response and Reporting

Water use and discharges • Water Conservation

Biodiversity loss • Bush Regeneration and Biodiversity Protection

Governance and controls posture are key elements.

IBM has established a professional self-assessment

program to check compliance with legal and

internal environmental requirements. Environmental

performance is monitored and tracked through a

corporate environmental performance database (EPD).

Performance is reported up to the Corporate and local

management teams.”

ISO 14001 EMS Certification

In 1997, IBM became the world’s first major

multinational company to have earned a single

worldwide registration to the ISO 14001 Environmental

Management System standard. The registration covers

IBM’s manufacturing, product design and hardware

development. IBM was able to earn its single worldwide

registration to ISO 14001 because of its longstanding

global EMS.

IBM has since expanded its global ISO 14001

registration to include chemical-using research

locations, and several IBM country organisations

who have voluntarily obtained ISO 14001 registration

covering non manufacturing locations. The IBM West

Pennant Hills site in NSW, Australia, has maintained this

accreditation (certificate number 43820.36) since 2002.

Benchmarking Environmental Management Practice

In 2007, IBM received a Gold rating in the Corporate

Responsibility Index conducted by the St James Ethics

Centre in Australia. The environmental management

component received an overall rating of 90%. The Index

assesses the extent to which corporate strategy is

integrated into responsible business practice throughout

an organisation. It provides a benchmark for companies

to evaluate their management practice in four key

areas of corporate responsibility including community,

environment, marketplace and workplace.

Product Stewardship

IBM first established a Product Stewardship program

in 1991. Our product stewardship objectives are to

develop, manufacture and market products that are

increasingly energy efficient; can be upgraded and

reused to extend product life; incorporate recycled

content and environmentally preferable materials and

finishes; and can be recycled and disposed of safely.

The program is part of IBM’s global EMS, and provides

development organisations with direction, goals,

infrastructure, tools and expertise to apply environmental

life cycle considerations from product concept through

to product end-of-life management.

Product environmental attributes such as energy

efficiency, materials content, chemical emissions

testing, design for recycling, end-of-life management

plans, and packaging data must be documented and

reviewed in IBM’s Product Environmental Profile tool at

various check points during the development process.

Compliance management tools like the Product

Content Declaration for IBM’s suppliers, support

the assessments required for a complete Product

Environmental Profile prior to product release.

Further information on our Product Stewardship

program is available at: http://www.ibm.com/ibm/

environment/products/index.shtml.

Extending Life of Computers and End-of-Life Management

IBM has a well established parts re-utilisation and

computer equipment repair and refurbishment business

in Australia and New Zealand. This business sells fully

refurbished computer equipment as IBM Certified Used

Equipment (ICUE). Other used IT equipment is cleaned

up and/or repaired and reused internally, donated

to charitable and community organisations, or sold

as functioning parts. IBM has established an asset

evaluation, resale and recycling program for equipment

off lease, unwanted and defective equipment and parts,

and end-of-life equipment from internal operations. All

suppliers that handle end-of-life IT equipment on behalf

of IBM must be approved for that use, undergoing a

comprehensive environmental evaluation process.

In 2007, IBM Australia reused and recycled over 780

tonnes of IT equipment, including desktops, notebooks,

servers, monitors, printers and other peripherals.

Less than 1% of this material was disposed to landfill,

meeting the corporate target. The large wooden Arbo

crates that protect server racks and IT equipment and Computer Refurbishment Centre in Sydney

other packaging from the scrapping operation are

reused and mostly recycled at a national warehouse in

Sydney, Australia.

Of the 177 tonnes of IT equipment evaluated for

scrapping in 2007, approximately 1 tonne of LCD

screens were stored for future processing and 98% of

the processed scrap was recycled.

The IBM Printer Supplies Return program diverted from

landfill and primarily recycled over 11.7 tonnes of print

consumables in Australia. IBM concluded the global

sale of its Printer Systems Division in late 2007 to Ricoh

which formed a joint business venture with InfoPrint

Solutions Company. Going forward IBM Australia will

review the need to maintain the returns program, whilst

ensuring print consumables from our sites continue to

be recovered for recycling.

Community Product Take Back

IBM is helping to develop safe and environmentally

responsible solutions for the community to dispose

of waste IT equipment. IBM participates in various

community e-waste recovery schemes globally, and

in Australia, is involved in the Victorian Government

Byteback pilot.

IBM continues to investigate solutions in conjunction

with governments to minimise the environmental impact

from households and small offices located at home

disposing of computers reaching end of life.

IBM Australia continues to work with the Australian

Information Industry Association (AIIA) to negotiate

with the Australian Government on a fair and practical

national computer take back scheme for the community.

The Government has been working with the AIIA to

determine how they can ensure that manufacturers,

importers and local assemblers of computers can share

the responsibility and financial burden for disposal

of their branded product at end of life. Finding a

mechanism that can ensure an equitable playing field is

made difficult by unbranded product where no owner,

manufacturer or local assembler can be identified. This

is a unique situation within the electrical and electronic

equipment industry. For further information, please

visit the AIIA web site: http://www.aiia.com.au/i-cms.

isp?page=139

IBM was one of 10 companies to voluntarily participate

in the Victorian Government Byteback pilot scheme

for the collection and recycling of old and unwanted

computers from the community. The pilot program

started on 1 July 2007 and will run until 31 December

2008. Sustainability Victoria is running Byteback in

partnership with the AIIA and various corporate IT

partners. The findings of the pilot are to be used to

support the development of a supportive legislative

framework for a national scheme.

In 2007, over 12 tonnes of old IBM branded computers

and associated peripherals were collected and

processed from the two collections sites located in

the greater Melbourne region. This represented about

5% of the total amount processed by Byteback. IBM

employees located in Melbourne have been encouraged

to use Byteback. For more information, please visit the

Byteback website: www.bytebackaustralia.com.au/

index.html.

Summary of computer scrap processed through IBM operations in Australia 2000 - 2007

Company Year Total Pocessed Recycled ^ Landfilled Stored # Units % Recycled

IBM Australia

2000 327.7 296.2 237.8 58.4 31.5 (t) 72.6

2001 230.8 139.0 99.5 39.5 91.8 (t) 43.1

2002 393.9 390.9 316.2 74.7 3.0 (t) 80.3

2003 215.6 207.9 172.9 35.0 7.7 (t) 80.2

2004 155.3 155.3 160.2 25.1 0.0 (t) 83.8

2005 189.3 189.3 168.2 21.1 0.0 (t) 88.9

2006 154.5 154.5 152.9 1.6 0.0 (t) 98.0

2007 176.7 175.7 172.3 3.4 1.0 (t) 98.0

Key: ^ = The 2001 Australian recycled rate is missing Q1 product scrap records which could not be verified and the annual data included cardboard packaging. Stored units are not classified as processed or recycled.

Energy Efficiency

IBM’s commitment to energy efficiency spans the

breadth of its global business, from its operations to its

technology, products and services. The company’s first

formal environmental and energy conservation policies

date back to 1971 and 1974 respectively, and programs

supporting them have been incorporated in IBM’s

worldwide EMS since that time.

The corporate policy on environmental affairs calls for

responsible energy use including conserving energy;

improving energy efficiency; and giving preference

to renewable over non-renewable energy sources.

Energy use is a significant environmental aspect and

impact identified under the IBM worldwide EMS for

our operations and products. Energy conservation

makes both good environmental and business sense.

It reduces direct expense, saves resources and lowers

emissions of greenhouse gases.

In May 2007, IBM announced it is redirecting $1 billion

US per year across its global businesses, mobilising the

company’s resources to dramatically increase the level

of energy efficiency in IT.

From 1990-2007, IBM saved 4.6 billion kWhr of

electricity consumption, and saved over $300 million US

through its annual energy conservation actions.

In 2007, our goal for energy conservation was to

achieve annual energy conservation savings equal to

3.5% of IBM’s actual annual electrical and fuel use. This

goal applies to spaces owned, operated or leased by

IBM globally in support of IBM’s operations. The energy

conservation savings formula used to measure the goal

incorporates actual total annual electricity and fuel used

and associated costs against annual savings achieved.

Energy Use

In 2007, IBM Australia made a 0.2% annual energy

conservation saving. The measured energy conservation

savings projects that contributed were for lighting and

air conditioning system efficiency improvements and

IT technology refresh completed at the IBM Centre in

Southbank, Melbourne and at the Baulkham Hills data

centre in Sydney. The projects conserved 123MWh of

electricity and avoided AU$9.8K in costs in 2007. The

total annual consumption of electricity was 105,030

Mega Watt hours.

Energy used for Australian operations included

electricity, natural gas and diesel fuel. In 2007, IBM

Australia began purchasing GreenPower, government

accredited renewable energy, equal to 3,696 MWh of

our annual contestable electricity usage purchased

through Origin Energy. GreenPower is renewable energy

sourced from the sun, the wind, water and waste that

is purchased by our energy company on our behalf and

feed into the National Electricity Grid.

Climate Change

At IBM, we recognise climate change as a serious issue

with far-reaching impact and we understand the need for

businesses, governments and civil societies throughout

the world to work together to stabilise the atmospheric

concentration of greenhouse gases (GHGS).

Our climate strategy includes a comprehensive effort

to create products and develop solutions that enable

clients to become more energy efficient. To reduce our

company’s environmental impact, we have introduced a

three-part carbon management hierarchy:

1. Designing our operations for energy use reductions

and efficiencies.

2. Purchasing renewable, low CO2 -emitting energy

generating sources.

3. Using abatement technology to reduce GHG

emissions from our operations.

From 1990-2007, IBM avoided 3.1 million metric tons

of carbon dioxide emissions, equal to 45% of the

company’s 1990 global CO2 emissions, primarily from

implementation of key energy conservation savings

measures.

To further extend this significant achievement, IBM set a

new goal in 2006 to reduce CO2 emissions associated

with its energy use 12% between 2005 and 2012

Old computer components

through energy conservation, the use of renewable

energy and/or funding an equivalent CO2 emissions

reduction by the procurement of Renewable Energy

Certificates (RECs) or comparable instruments.

In 2007 in Australia, the consumption of electricity from

the National Electricity Grid, continued to be our single

largest contributor to our Greenhouse gas emissions

(a Scope 2 emission). Our business critical operations

associated with data processing centres needed the

majority of this energy and therefore demands our

highest ongoing focus and attention.

In 2007, IBM directed additional resources to identifying

and delivering on energy conservation savings measures

in the region. Due to the complexity of the measures

proposed for Australian sites, the associated energy

saving benefits are not expected to show until 2008.

During the year, IBM continued to voluntarily participate

in the Australian Greenhouse Challenge Plus program

to help reduce greenhouse gas emissions and focus

on energy conservation, purchase of renewable energy

and to minimise biodegradable waste to landfill. This

ongoing voluntary participation places the company in

good stead for reporting under the National Greenhouse

and Energy Reporting Act 2007, and understanding

the part we will need to play under a proposed national

Carbon Pollution Reduction Scheme.

Greenhouse Gas Emissions

Between 2000 and 2007, Australian operations reduced

electricity use through conservation savings and

avoidance by 8,349 Mega Watt hours, and was able to

decrease or avoid over 8,300 tonnes of carbon dioxide

emissions.

Stationery related Emissions

The Scope 1 and 2 emissions represented 84% of

the total emissions generated in 2007. The majority

was Scope 2 emissions linked to electricity used from

the National Electricity Grid. Diesel fuel and natural

gas related Scope 1 emissions make up less than 1

percentage point.

In 2007, net stationary related emissions from the 48

sites increased 1.6% on 2006 to 113,946 CO2-e tonnes,

an increase of 1,854 tonnes. Actual total stationary

emissions were 118,097. IBM purchased over 3,600

MWh of Green Power that offset our stationary GHG

emissions by 4,149 tonnes, CO2 -e emissions or 3.5%.

Transport related Emissions

In 2007, GHG emissions were 22,280 tonnes, a saving

of over 23% or 7,000 CO2-e tonnes of emissions on

2006. This was generated from fuel consumption

associated with ground and air transport by employees.

These emissions represented 16% of the total net

annual emissions inventory in Australia. The majority of

these emissions continued to come from domestic and

international flights.

Summary of stationary GHG Emissions at IBM sites from 1998-2007

Company Year Scope 1 & 2 emissions from

sites (t CO2-e)

Change in annual emissions

(t CO2-e)

Cumulative avoided emissions

(t CO2-e)

(No. of sites) and square meters of net leased area

(m2 nla)

IBM Australia

1998 162,015 — — (35) 134,729

1999 140,141 21,874 21,874 (35) 134,729

2000 129,778 10,363 32,237 (35) 134,729

2001 116,385 13,393 45,630 (29) 133,475

2002 129,237 (12,852) 32,777 (35) 148,187

2003 125,862 3,375 36,152 (36) 141,935

2004 125,889 (27) 36,125 (36) 141,795

2005 138,268 (12,379) 23,747 (36) 157,044

2006 112,092 26,176 49,923 (45) 178,871

2007 113,094 (1,854) 48,069 (48) 172,554

GHG emissions from ground transport and air travel

decreased, with a 28% or over 7,600 tonnes CO2 -e

emissions reduction for the latter. The reduction is

considered the result of a strategy that applied tight

management control, a flexible working environment,

continued deployment of improved energy efficient

and mobile computing technology for employees, and

promotion of audio visual, net and teleconferencing

facilities.

Ozone Depleting Substances and Synthetic Greenhouse

Gases

IBM eliminated its manufacturing use of CFCs and all

other Class 1 ozone-depleting substances in 1993.

Our only remaining use of CFCs and HCFCs is as

refrigerants in the air conditioning systems in our

facilities.

IBM’s inventory of these refrigerants declined in 2007

due to a reduction in the number of facilities we have.

Pollution Prevention

Whenever possible, IBM redesigns processes to

eliminate or reduce chemical use and substitute more

environmentally preferable chemicals. We understand

how important it is for chemicals that are used for

research, development and manufacturing to be

managed properly — from selection and purchase

through storage, use and disposal — and have a

developed a comprehensive and proactive waste

management program.

IBM’s Environmental Policy calls for the efficient use of

natural resources such as office consumables, water

and energy, environmental due diligence, prevention

and minimisation of pollution through reduction in

the use and secondary containment of hazardous

chemicals at our facilities, waste minimisation and

proper management and preparedness and prompt

response to unplanned releases. IBM implements these

same stringent environmental requirements across all its

operations globally.

Chemicals Management

In 2007, IBM continued to manage chemical substances

to minimise the need for, and reduce, the amount of

hazardous substances and dangerous goods used and

stored at leased sites in Australia and New Zealand.

For example, all chemicals used on IBM sites must first

be approved for that use by IBM. We employ a risk

assessment process that seeks to replace hazardous

substances with suitable non hazardous alternatives.

Imported service chemicals and product supplies

In 2007, IBM Australia continued to hold a Company

Chemicals Registration (No. 2354) with the National

Industrial Chemicals Notification and Assessment

Scheme (NICNAS) for importing industrial chemicals into

Australia. These chemical products consisted of service

chemicals to repair and maintain hardware and product

supplies such as toner, developer and fuser oil.

Imported refrigerant gases

In 2007, IBM held a two year Pre-charges Equipment

Licence (Number PCE6701887) with the Australian

Commonwealth Department of Environment and

Heritage and paid a Levy fee for importing synthetic

greenhouse gas refrigerants to Australia in accordance

with the Commonwealth Ozone Protection and

Synthetic Greenhouse Gas Management Act 1998.

In 2007, IBM imported less than 100 kilograms of

refrigerant gas into Australia which was contained

within the cooling units for high end mainframes. In

accordance with the licence, IBM continued to maintain

a financial membership with Refrigerant Reclaim

Australia to ensure responsible recovery and destruction

of refrigerant gases at end-of-life in Australia. Also, a

business process is in place to ensure proper recovery

and destruction of the refrigerant gas contained in

recovered cooling units from the scrapping of IT

equipment at end of lease and from internal operations.

Waste Minimisation and Management

Reducing waste, either by improving the efficient use of

materials, avoiding generation of waste, or introducing

systems for the recovery and reuse of unwanted

material, is a key element of our Environmental

Management System. Reducing use of paper in the

office is one example.

The company has global waste minimisation programs

in place at our facilities. In Australia and New Zealand

these include Employee Awareness programs to reduce

office paper consumption, maintenance of resource

efficient network printing facilities, deployment of facility

and office waste recycling programs, participation in

applicable voluntary government programs and an

environmental evaluation process for use of waste

suppliers that handle and treat hazardous waste from

our sites.

Efficient use of packaging materials and the National

Packaging Covenant

IBM Australia voluntary joined the National Packaging

Covenant in 2000 to help communicate IBM corporate

packaging environmental initiatives to reduce the use of

hazardous substances, drive efficient use of materials

and to enhance local reuse and recycling initiatives.

IBM has since prepared two action plans, the latest, the

IBM Packaging Stewardship Action Plan, covers 2006

to 2010 and is available on the Internet at: http://www-

07.ibm.com/ibm/au/environment/packing.html.

In 2007, IBM Australia remained a signatory to the

second National Packaging Covenant Agreement and

was a member of the National Packaging Covenant

Industry Association. In 2007, we again contributed

to the transitional industry funding arrangements in

accordance with Covenant Mark II. IBM has submitted

and had approved its 2007 IDAS KPI report and annual

progress report by the National Packaging Covenant

Council.

In October 2007, IBM received a Packaging Evolution

Award for “Most Outstanding Demonstration of

Packaging Waste Management in Australia”. This

was the second year of the awards and IBM’s first

involvement. IBM’s winning entry highlighted its:

long history of worldwide packaging stewardship •

initiatives;

many examples of environmental packaging design •

initiatives in Asia Pacific which avoid packaging waste

and improve the efficient use of raw material;

office recycling initiatives which delivered an average •

61% nonhazardous waste recycling rate in 2006; and

secondary use of unwanted plastic packaging and •

plastic parts from old PCs to make fence posts and

pallets in Australia.

Reducing Paper Use in the Office

In 2007, IBM Australia continued to reduce the

consumption of office paper in Australia with a 7.7%

(almost 4 million sheets) saving on 2006, the equivalent

to 530 trees. Between 2001 and 2007 a 20 million sheet

reduction in office paper was achieved.

IBM has been implementing a resource efficiency

strategy that includes encouraging employees to avoid

printing and maximising the use of the mobile computer,

and when necessary printing efficiently, including using

the network printer system when in the office, and

printing on both sides of the paper.

IBM Australia trends in cut paper consumption 2001-2007

Company Year Number of sheets of cut paper used

Tonnes equivalent Trees equivalent Reams used per full-time equivalent employee

IBM Australia

2001 68,602,000 343.8 9,094 —

2002 64,404,390 321.9 8,515 —

2003 62,970,200 315.8 8,356 10.8

2004 58,254,150 293.0 7,751 9.8

2005 53,575,380 269.0 7,118 9.2

2006 51,859,325 262.0 6,934 8.3

2007 48,877,200 242.1 6,404 7.0

Materials Disposed from Facilities

In 2007, the IBM global annual non hazardous waste

recycling target was 75%. IBM in Australia is seeking

to achieve this goal by 2010. To help achieve this,

facility recycling programs are being enhanced and

national office recycling programs were being planned

in late 2007 for introduction early 2008. IBM has taken

account of the fact that office paper reduction efforts will

significantly reduce the volume of materials recycled and

therefore impact on our ability to achieve the corporate

goal much earlier than 2010.

At the seven key sites in Australia, IBM generated a

total of 584 tonnes of waste, 4% or 26 tonnes less

waste than in 2006. The majority was non hazardous

waste. We also generated another 477 tonnes of non

hazardous waste from 55 additional sites were accurate

general rubbish records were not always available to

IBM from the Landlord.

We recycled 57% of our non hazardous waste

generated from our facilities as we work towards a

recycling target of 75% by 2010. This was a reduction

of 4% by weight on 2006. The fall is considered to be

linked to the reduction in office paper usage during the

year. While the actual recycling achieved was below our

corporate target of 75%, the company is planning to

pilot and then introduce nationally an improved office

waste recycling program in 2008 that will further drive

recycling efforts.

Hazardous Waste

In 2007, IBM Australia generated and disposed of

7.4 tonnes of hazardous waste. A majority of this was

recycled. All these materials were disposed of through

IBM approved Hazardous Waste Service Suppliers.

As for previous years, the waste stream consisted

primarily of lead acid and gel cell batteries from UPS

battery rooms and mercury containing fluorescent tubes

and globes.

Non-hazardous Waste

In 2007, IBM Australia generated 577 tonnes of non

hazardous waste from its seven key facilities, almost 5%

or 28 tonnes less non hazardous waste than in 2006.

This decrease was partly the result of a reduction in

number of facilities and increased performance of our

waste avoidance program.

The amount of solid non hazardous waste being

disposed to landfill from our seven key facilities rose

marginally by 4% to 242 tonnes, up from 233 tonnes

in 2006.

Trend for Total Waste Disposed at IBM Sites from 2000 to 2007

Company Year (No. of sites) and Total Waste Disposed from Key leased and operated Sites

(No. of sites) and Total Waste Disposed from IBM Leased

and Client Sites *

Overall total (t)

Hazardous waste (t)

Non-hazardous waste (t)

Non-hazardous waste (t)

IBM Australia 2000 (8) 1,457.5 197.7 1,259.8 —

2001 (8) 1,333.8 28.8 1,305.0 (49) 522.8

2002 (8) 1,654.9 32.1 1,622.8 (51) 508.5

2003 (8) 1,108.9 66.5 1,042.3 (64) 642.9

2004 (8) 1,233.5 90.3 1,181.0 (59) 746.3

2005 (8) 1,190.8 28.3 1,162.5 (49) 892.5

2006 (7) 609.7 4.6 605.1 (55) 2,329

2007 (7) 584.3 7.4 576.9 (55) 477

Key: * The data from leased sites is separate because we only have partial waste generation records from sites where the landlord controls the main building waste disposal service. The figures do not therefore indicate the complete environmental footprint at such sites.

At our National warehouse in Sydney, Australia (one

of our seven key sites), 76% of 117 tonnes of non

hazardous waste was recycled. Packaging materials

were also reused for distribution of parts and products

when feasible, primarily as protective packaging and

fill materials. Arbo crates used to move racks and

mainframe equipment were reused internally and by

some suppliers.

The three key materials that compose the non

hazardous waste stream at our seven key sites were

general trash (41% by weight), cardboard (24% by

weight) and paper (16% by weight). General rubbish

appeared to increase in volume primarily as a result of

the waste disposal service supplier reporting the rubbish

and cafeteria waste streams together in 2007.

Of the 477 tonnes of non hazardous waste that IBM

generated, 80% by weight was recycled. A majority of

this was office paper.

In 2007, almost 89% of 223 tonnes of non hazardous

waste generated at our National Headquarters in

Sydney was diverted from landfill and primarily recycled.

Trend for solid non-hazardous waste landfilled 2000-2007

900 –

800 –

700 –

600 –

500 –

400 –

300 –

200 –

100 –

0 –

2000 2001 2002 2003 2004 2005 2006 2007

694 642 876 487 634 583 233 242

Compostition of solid non-hazardous waste in 2007

Key:

General Trash 41% Recyclables 4%

Paper 16% Wood Pallets 9%

Media Destruction 2% Building Materials 4%

Cardboard 24%

The IBM Printer Suppliers Return program diverted

11.7 tonnes of print consumables such as toner

cartridges and bottles generated at designated sites

from landfill.

Water Conservation

Water is one of the most precious natural resources in

our region. The efficient use and strategic management

of water is high on the agenda of governments and of

key concern to the community, particularly in Australia.

Since 2003, IBM has maintained a water conservation

program in Australia focusing on our data processing

centres and designated national and state offices. In

2007 we tracked, analysed and sought to manage

water consumption at 10 designated sites across

Australia.

IBM primarily uses water in cooling towers and chiller

systems for control of the thermal load in our offices

and data processing centres and for amenities, building

maintenance, cafeteria facilities, rest rooms and

kitchenettes, and for make up in landscape ponds. Our

data processing centres rely heavily on the continuous

delivery and high quality of the domestic water supply

for maintaining the computer raised floor environment.

During 2007, IBM in conjunction with the relevant water

utilities at two data centres in Victoria, investigated

potential water savings and had water savings action

plans prepared. The plans identified actions for

improving water efficiency by adjustments to toilet

cisterns and urinal flushing, installation of flow restriction

devices in taps and low flow shower heads and

installation of tanks to harness rain water for topping up

evaporative lose from cooling towers.

In 2007, IBM’s annual water consumption was 129,180

kL at 10 key sites, a rise of 4,475 kL or 3.6% on 2006

for these same sites due to increase water use in data

centres. Four of the ten key sites are major data centres,

and they consumed 95,204 kL or 74% of the total water

used at these sites. Water use at three of the four data

centres increased by 6,130 kL or 6.9% over 2006.

The office locations among the 10 sites recorded a

combined water savings of 4.6% or 1,654 kL on 2006,

but the increased water use in the three data centres

exceeded this saving.

Data Centre Operations

The table below shows that water consumption per

square metre of net leased area of data centre space

increased from 1.58kL to 1.69 kL in 2007. In 2006, the

average daily water use was 244 kL, increasing to 261

kL in 2007. The increase in water use at three of the

data centres represented an additional consumption of

10,000 kL for the year. There were two primary factors

for this increase. The first was a significant water leak in

a cooling tower system that was identified and repaired

in 1H2007. The second was business growth.

Offices

Water efficiency at the office sites declined slightly with

the water usage per square metre of net leased area

increasing by 40 litres to 770 L /m2 nla in 2007.

In 2007, the national headquarters in Sydney continued

to achieve significant water savings. The total water

used at the building fell a further 36% or 5,160 kL to just

over 9,000 kL. This was achieved as a result of getting

a 12 month advantage from water efficiency renovations

to the amenities that were completed by the Landlord,

Stocklands. Also, the IBM Centre at Southbank in Melb-

ourne recorded a 4% or 541 KL annual saving on 2006.

Summary of water use for Australian sites from 2006 to 2007

Year 2006 baseline 2007

Site category Four data centres Six office sites Four data centres Six office sites

Annual Water use (kL) 89,074 35,631 95,204 33,977

Square metres of net leased

area (m2 nla)

56,207 48,739 56,207 44,309

FTE employees 3,670 5,795 2,613.38 5,054.41

Kilolitres used daily (kL/d) 244 98 261 93

KPI - kL/m2 nla 1.58 0.73 1.69 0.77

KPI – kL/FTE 33.36 6.15 36.43 6.72

Trend in water use at IBM Australian Sites 2003-2007

70,000 –

60,000 –

50,000 –

40,000 –

30,000 –

20,000 –

10,000 –

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2003 2004 2005 2006 2007

In 2007, the West Pennant Hills site in NSW recorded an

increase in water consumption from 2006 of 4,600 kL or

10% to 51,300 kL. Between 2000 and 2007 a total of

75,587 kL of water equivalent to 50 Olympic swimming

pools was saved at the West Pennant Hills site.

Remediation and Conservation

In 2007, IBM continued to maintain environmental and

chemical management programs to prevent pollution

and protect the environment in Australia and New

Zealand.

Protecting Groundwater, Soil & Human Health

In 2007, we continued to evaluate current and

prospective suppliers that handle hazardous waste,

end-of-life product and other commodities that pose

a relatively high level of environmental risk for the

business. Such evaluations are part of an effort to have

suppliers that provide good service and meet IBM and

government environmental requirements.

We also continued a comprehensive environmental due

diligence program across our sites in Australia and New

Zealand. This included conducting due diligence for all

real estate transactions, acquisitions and divestitures.

For example, an environmental site assessment in

Melbourne, Australia, for a new data centre led to

soil and groundwater investigations, monitoring and

rectification works by the Landlord prior to IBM, the sole

tenant, commencing full operations on the site.

During 2007, a soil and groundwater monitoring

program continued to be maintained at several

leased data processing centres located in Australia.

The low level of contaminants measured required

ongoing monitoring and periodic management review

to determine ongoing management and compliance

requirements.

Biodiversity Protection

IBM has maintained a Native Bush Regeneration program

in Australia since 2000. The program is designed to

protect remnant bushland and the wealth of biodiversity

identified at the 26ha leased and operated site.

Two bush regeneration plans have been prepared by

IBM to guide the continued protection of the ‘Sydney

Blue Gum High Forest’ and ‘Sydney Turpentine

Ironbark Margin Forest’ located on site. These critically

endangered communities have been listed for protection

at both the State and National level. The IBM site at

West Pennant Hills in NSW, in combination with the

neighbouring Cumberland State Forest, maintains

some unique and rare plant communities and fauna

considered by NSW Department of Environment and

Climate Change (DECC) to be in good condition.

The bush regenerator continued to remove noxious

weeds and other garden plant invaders of the area

during the year across six key regeneration areas,

while being mindful to retain existing habitat for birds

and other fauna species present. Regeneration is

progressing well allowing for additional expansion of

existing sites and addressing of new sites identified in

the management plan.

Bobook Owls

Orchard dam that now provides aquatic habitat and water quality

polishing at the West Pennant Hills siteCumberland Forest orchid

One species of colourful fungi at West Pennant Hills

Audits & Compliance

IBM continued to maintain and improve its

environmental programs to ensure compliance with

environmental and chemical management protection

laws and to prevent and minimise the impact of

environmental incidents from our operations in Australia.

During 2007, we received no environmental fines,

penalties or improvement notices and had no other

environmental enforcement proceedings against the

company.

Environmental Incident Prevention and Reporting

IBM identifies, prevents and mitigates environmental

risks by implementing environmental and chemical

management programs across Australia and

New Zealand. Secondary containment of liquids,

environmental due diligence and groundwater and soil

monitoring are key programs. A comprehensive incident

preparedness, response and reporting program has

been established to minimise the risk of an unplanned

release at our data processing centres in the region.

The program is designed to ensure a safe and promote

response, clean-up and reporting of incidents, with

the identified cause being addressed effectively by

management.

In 2007, IBM Australia had one environmental incident

recorded during April resulting in 900 kilograms of

R22 refrigerant gas leaked to atmosphere at our West

Pennant Hills site in NSW. This occurred because of

a shaft seal failure for a chiller leading to the entire

volume being lost. The chiller plant was taken off-line

awaiting repair or decommissioning in light of facility

improvements and environmental works planned for the

site in 2008.

Environmental Partnerships

Globally, IBM is a member of the following voluntary

performance initiatives and partnerships with

governmental and nongovernmental organisations:

U.S. Environmental Protection Agency’s (EPA) energy •

star and Climate Leaders programs

World Resources Institute’s (WRI) Green Power •

Market Development Group

Charter member of the World Wildlife Fund’s Climate •

Savers program

Pew Centre on Global Climate Change•

The Conservation Fund•

The Environmental Law Institute•

The World Environment Centre•

The World Resources Institute•

The World Business Council for Sustainable •

Development

The Climate Group (TCG)•


Environmental Impacts in Our Supply Chain

As part of our Environmental Management System, we

evaluate our suppliers’ facilities and methods, as well

as their subcontractors, prior to approving them for use

and at regular intervals thereafter.

In addition, we have:

ENCOURAGED our suppliers to pursue ISO 14001.•

UNDERTAKEN supplier training on environmental •

issues such as the relevant requirements of the

eu RoHS Directive and providing the required

information for Product Content Declarations.

ESTABLISHED a proactive approach to managing •

our suppliers’ use of certain materials and

substances.

We are currently involved in two initiatives, the

Electronics Industry Citizen Coalition (EICC) and

the Carbon Disclosure Project (CDP) Supply Chain

Leadership Collaboration (SCLC), to analyse ways to

reduce the GHG emissions associated with our supply

chain.

2008 Objectives

Maintain and drive continual improvement of the IBM •

worldwide Environmental Management System.

Continue to voluntarily maintain and expand the •

regional coverage of the global IBM ISO 14001 EMS

accreditation.

Participate in suitable external indices to help •

benchmark and attain best practice in environmental

management.

Achieve annual energy conservation savings equal to •

3.5% of IBM’s actual annual electrical and fuel use.

Reach IBM’s stretch target of a 75% non hazardous •

waste recycling target by 2010.

Reach a 2% target for annual water saving at the •

designated leased sites in 2008.

Continue to support and maintain key bush •

regeneration programs designed to protect

biodiversity and support the local goals of our

Environmental Management System in 2008.

Reuse or recycle end-of-life products and ensure that •

the amount of product scrap sent to landfill does not

exceed a combined 3% by weight of the total amount

processed.

Number of Strategic/Core Suppliers

328

283

2004 2005

259196

2006 2007

Our supply chain is becoming increasingly concentrated.

In 2007, more than half of our spend was with just 20

companies.

The Integrated Supply Chain is guided by IBM’s core

values, principles and practices. It evaluates supplier

performance regularly to ensure that only the best

products and services are provided.

Our core values portray the deep understanding,

integrity, team work, initiative and urgency that the

company and all its divisions embrace.

It is IBM’s policy to conduct itself ethically and fairly in

relation to its suppliers and all others with whom we do

business. Our goal is to regularly measure performance

and provide feedback to core and strategic suppliers.

This feedback is provided through formal performance

reviews, participation in supplier performance programs

and through normal business communication channels.

Supplier Relations – IBM Ombudsman

The IBM Global Procurement Ombudsman Office was

established in 1994. The aim of the Ombudsman Office

is to provide an avenue for suppliers, employees, and

others, to address procurement related concerns and

issues that cannot be resolved satisfactorily through

normal business channels, and provide advice early on,

regarding supplier related issues.

The Ombudsman Office runs independent of line

managers, and all situations are evaluated in a fair and

objective manner.

Purchasing power extends an organisation’s sphere of influence beyond its corporate footprint…

Integrated Supply Chain

For an enterprise like IBM to consistently provide

innovative products and services on a global basis, it

must maintain a strong supply chain — especially today,

with markets so diverse and dispersed.

IBM currently has about 30,000 supplier locations

spread out over more than 60 countries. Throughout

Australia and New Zealand, we have numerous

suppliers, and in 2007 spent over USD$950 million with

Australian and Global suppliers.

We don’t just expect these organisations to comply

with laws and regulations; we also hold them to high

standards of responsible behaviour. To help define the

parameters of the relationship, we have developed

a comprehensive Supply Chain Social Responsibility

initiative that underscores our belief that values define

business relationships just as much as economic

necessities do.

Supply Chain Spend (USD million)

$453 m

$599 m

$689 m

2004 2005

$966 m

2006 2007

Supply Chain Social Responsibility Program

In 2004, IBM implemented a global Supply Chain

Social Responsibility program across IBM’s network

of suppliers. In Australia this involved requiring new

suppliers to sign our Supplier Conduct Principles and

encourage all our suppliers to adopt sound practices

with regard to protecting the environment, employee

health and safety and ethical conduct.

Supplier Conduct Principles

IBM requires its suppliers to abide by our Supplier

Conduct Principles. These principles are the minimum

standards we expect from our suppliers as a condition

of doing business with IBM. In no particular order,

they cover:

• ForcedLabour

• HealthandSafety

• ChildLabour

• ProtectionoftheEnvironment

• WagesandBenefits

• LawsandRegulations

• WorkingHours

• EthicalDealings

• Non-discrimination

• Communications

• RespectandDignity

• RecordKeeping

• FreedomofAssociation

IBM considers the Supplier Conduct

Principles and adherence to them in our

supplier selection process, and has the right to take

action with suppliers who fail to comply with these

principles.

We also monitor suppliers’ performance as part of our

Annual Supplier Evaluation program. In addition, and

where relevant, we include a requirement for annual

Environmental and Occupational Health and Safety

(OHS) audits in our contracts with local suppliers.

Our long term goal is to work with our suppliers to foster

full compliance as they, in turn, apply these to their

extended sources of supply engaged in the production

of goods and services for IBM.

We communicate these principles to our suppliers

via a detailed document that includes examples of

compliance and non-compliance, to help our suppliers

assess their own operations. This information, which is

available in ten languages, is posted at www.ibm.com/

procurement.

Electronic Industry Citizenship Coalition (EICC)

IBM and a number of other large electronics firms

released the EICC Code of Conduct in 2004. This paved

the way for a standards-based approach to monitoring

suppliers’ compliance across several areas of social

responsibility, including labour, health, safety, and

environmental impact.

This initiative fosters a common understanding of

socially responsible business practices with suppliers,

and aligns the interests of all constituencies around

industry standards to encourage sound practices of

social responsibility in the global marketplace.

As part of the industry group that developed this code,

IBM accepts it as an alternative to our existing Supplier

Conduct Principles. At the same time, we continue to

implement our Supplier Conduct Principles to drive

social responsibility across our vast supply network.

Environmental Declaration for Suppliers

IBM manages the environmental impact of its products

via a Product Stewardship Program. To ensure our

suppliers meet these environmental requirements, we

require them to make a Product Content Declaration on

the environmental impacts of the products, parts and

assemblies supplied to IBM.

Supplier Diversity

IBM recognises that a diverse supplier base is integral

to company profitability and strategic objectives, and

solidifying the connection between client satisfaction

and winning in the marketplace. IBM’s Supplier

Diversity program expands purchasing opportunities for

businesses owned and operated by minorities, women,

the gay and lesbian community, veterans and service

disabled veterans, and people with disability. Purchasing

opportunities are also expanded

for not-for-profit organisations

that hire people with disability

and for HUBZone companies.

Building and maintaining a

community of diverse suppliers

increases IBM’s opportunity to

hear new ideas, apply different

approaches and gain access

to additional solutions that

respond to client needs. Such collaboration helps IBM

deliver quality products and world-class service to a

growing global marketplace. In addition, some of our

diverse suppliers are also important IBM clients. IBM

is proud of its support of supplier diversity and works

to further support the economic development of the

communities in which it works and operates.


IBM strives to be recognised by our

Suppliers, Partners and Clients as being a leader in Supplier

Diversity.

Continuous Improvement

We share social audit results with our suppliers so that

they are aware of any noncompliance with either IBM’s

Code of Conduct or with local country law. When audit

findings reveal non compliances, we require that our

suppliers submit detailed corrective action plans for our

approval. We believe that this encourages them to take

ownership over their own progress and devise realistic

solutions that work for them.

This interchange of audit information and improvement

plans helps emphasise to our suppliers that continuous

improvement is a requirement for their global supply

chain as well as ours. The exchange also helps foster

our suppliers’ efforts to establish social responsibility as

part of their own branding and daily operations.

RELATIONSHIP DEVELOPMENT

During the year, we work proactively to deepen

relationships with our clients. We identify actions

to address any issues they may have with IBM, by

using data and feedback from surveys, executive

interviews and workshops, all conducted or facilitated

by professional, independent third party organisations.

Some of these include:

IBM Client Experience Survey

In 2007, the IBM Client Experience Survey (ICES)

revealed that over 62% of clients surveyed regarding

our engagement process were either satisfied or very

satisfied, with 21.9% dissatisfied (see fig 1).

2003 2004 2005 2006 2007

65.5%

15.3%

73.6%78.6% 76.5%

62.3%

9.97% 11.5%21.9%

Satisfied Dissatisfied

0.0%

Fig 1: ICES results

The ICES is conducted throughout the year by an

independent third party, research organisation. It

measures factors such as IBM’s:

• abilitytomeetourclient’sbusinessneedsandobjectives;

• solutiondelivery;• value;• servicequality;• knowledgeofourclients’businessandindustry;and• skills.

The ongoing nature of the survey allows IBM to

continuously follow-up on opportunities for improvement

identified through the feedback. In 2007 the results

have decreased from previous years. This is attributed

to a change in the response method to previous

years,whichimpactedthevolumeofresponsesquite

significantly. This will have had some implications on

results, however the information we take from these

survey responses continues to enable us to drive

projects to address any pervasive issues that exist.

Our ClientsCorporate responsibility is at the heart of client satisfaction.

As a trusted advisor to many companies, it is vital IBM acts responsibly and with integrity in all aspects of our business – and particularly in our day-to-day dealings with our clients.

Our clients are our driving force. To ensure we remain

focused on their needs, we constantly monitor client

satisfaction levels and have developed processes to

helpusrespondquicklyandeffectivelytomeetclient

concerns. Our initiatives to improve performance and

achievements are summarised below.

Client Action Councils

IBM business units regularly review client satisfaction

indicators and feedback including formal reviews on a

monthlyandquarterlybasis.Thereviewscover:

• clientsurveyresultsanddataaboutcausesofcomplaints;

• complaintmanagementofcurrentsituationsincluding,progress,supportrequirementsandclosure;

• analysisofanypervasiveissuesthatmayhaveappeared via the feedback mechanisms, and the identification of initiatives to fix these issues;

• businesspartnersatisfactionindicatorsfromtheannual satisfaction survey as well as other direct feedback mechanisms;

• theprogressofanewbidandproposalprogramtoensureourclientsreceivethehighestqualityproposals;

• andinitiativestogiveoursalesforcemoretimetobeface-to-face with their clients.

To sustain our client focus, we link the remuneration

of everyone in the company to our client satisfaction

performance.

Client Executive Relationship Survey

IBM uses a third party research organisation to carry

out a Client Executive Relationship Survey (CERS) with

our largest Services clients. This covers everything from

the health of the relationship to satisfaction with service

delivery.

In 2007, the results of this survey average 7.03 out of

10 for satisfaction. This is a decline of 0.4 points from

last year. The overall result is satisfactory and the details

within the feedback enable us to focus on the specific

gaps in our delivery and relationship management to

drive client satisfaction improvements.

Technical Support Satisfaction

For clients who manage their own environments, we

randomlysurveythequalityofourremoteandon-site

technical support. This provides

a daily feedback loop that

allows us to resolve specific

local issues causing client

dissatisfaction. In 2007, 91.3%

of the hardware clients and

92.9% of the software clients

surveyed were satisfied with the

way their calls were resolved.

Alternatively, when we manage

the IT environment for our

clients we check satisfaction

with individually agreed programs, including Service

Level Agreement (SLA) reports and end-user surveys.

Complaint Management

IBM has an experienced client care team, dedicated

to managing and resolving any client complaints. The

Resolution Owners in this team become the central

point of contact for the client and the business to

expedite the resolution of any client complaint. A

client can register a complaint via a number of options

Our Ballarat Client Service Centre won

the Victorian and National Help Desk

of the Year Award from the Australian

Teleservices Association in

2003 and 2004.

including phone, letter, e-mail and via the ‘contact us’

section on the IBM web site. All these communications

arequicklyreferredtoaResolutionOwnerforsupport.

In addition to reactively responding to client complaints,

IBM has a process to combat issues before they

become complaints. These are called ‘Proactives’,

and are where the client care team helps the IBM client

teams to proactively address a client challenge before it

becomes a complaint. In 2007, 25.3% of all situations

were lodged as ‘Proactives’.

During 2007, we also focused on closing out client

situationsmorequickly.Wetrackedthetimeittook

to identify a fix for the problem as well as the time it

took to close the case. Although reducing this time is

important, we will not close a case until we are satisfied

we have monitored the fix for a sufficient period of time

to ensure it is successful.

As part of striving for best practice in this area, IBM in

Australia and New Zealand is certified by the external

auditor BVQI to the Australian Standard for complaint

management systems, AS/NZS 4269 – 1995.

Post Complaint Diagnostic Survey

IBM surveys a large sample of clients who have made

a complaint, to assess satisfaction regarding how their

complaint was handled. We use feedback from this

survey to continually improve our complaints handling

process. In 2007 68.9% of respondents indicated

they were satisf ied or very satisfied with the complaint

handing process, with 23% less than satisfied for

various reasons.

Our Performance

Metric 2004 2005 2006 2007 2008 Objective

IBM Client Experience Survey Satisfied clients Dissatisfied clients

73.6%11.2%

78.6%9.9%

76.5%11.5%

62.3%21.9%

Improvement year to year

Client Executive Relationship Survey 7.1 7.1 7.4 7.03 8 (out of 10)

Technical Support Satisfaction Survey Software Hardware Indexed

Data n/aIndexed

Data n/a86.3%84.6%

84.3%83.1%

84%87.5%

Complaints acknowledged in 24 hours* 99% 96% 98.2% 98.7% 95%

*These figures exclude Lenovo situations from the 2004 figures to enable meaningful year-on-year comparisons.

Client Charter

IBM’s clients are our driving force. As a commitment

to our clients, IBM Australia and New Zealand has

published a Client Charter setting out our key priorities

and commitments for engaging with our clients. There

are three pillars to IBM’s Client Charter. These are listed

below along with the promises we strive to deliver for

our clients against each pillar.

Dedication to every client’s success1. Our people partner with you to make your success

their priority2. We complement your organisation’s resources

with highly trained industry, business and technical specialists and our business partner network.

3. You can access us online at ibm.com/au or speak to an IBM employee, rather than a voice activated system, any time of the day or night.

4. We constantly monitor client satisfaction levels and havestrongprocessestohelpusrespondquicklytoaddress your concerns.

Innovation that matters – for our company and the world5. We manufacture products that are efficient in their

use of energy, protective of the environment, and able to be reused, recycled or disposed of safely.

Trust and personal responsibility in all relationships6. Our employees subscribe to a strict code of ethical

conduct. 7. We respect your personal details and abide by

Privacy laws to protect your information. 8. Our employees who manage your data are trained in

security principles and manage your IT infrastructure according to strict governance and security requirements.

9. We honour the warranty commitments we make for our products and services.

10. We assign a resolution owner to your complaint and aim to contact you within one business day of registering your complaint.

11. We use our expertise and technology to support community programs.


With an IBM Corporation Board committee devoted

exclusively to matters of corporate governance, IBM

often acts ahead of the market to adapt to new areas of

corporate responsibility.

For example, a full year before Section 404 of the

Sarbanes-Oxley Act (SOX) went into effect in December

2004, IBM evaluated its system of controls to assess

whether it was ready to meet the demands of the new

requirements.

As a result, we implemented a centralised global

management system for our internal controls that

includes standardised process flow documentation

and tests key control points quarterly for financial and

operational processes.

In 2007, this IBM Corporation-level control framework

provided the basis for IBM’s assurance of effective

financial and operational controls and our attestation

of this in response to our regulatory

obligations.

Codes of Conduct

Our Business Conduct Guidelines

define the standards of business

conduct, ethics and integrity for all of

our directors, executive officers and

employees worldwide.

These guidelines address more than just compliance

with the law and general standards of ethics. They also

ensure that our relationships with clients, investors,

colleagues and communities are built on trust. As

such, they are a tangible example of our values and

an expression of the responsibility of every employee

to uphold them. For this reason, every year all IBM

employees are asked to certify to the Business Conduct

Guidelines and complete an online Business Conduct

Guidelines course.

In 2005, we added a Technical Ethics supplement

to our Business Conduct Guidelines to clarify IBM’s

research and development professional standards and

expectations of our technical employees. The guideline

focuses on the ethics of publishing and presenting

research materials, covering such topics as: plagiarism,

research falsification, and scientific conflict of interest.

Privacy and Security

Advances in technology, such as those that enable

individuals to publish and disseminate information

independently, are driving heightened interest in

privacy. The wider distribution of business processes —

frequently at the international level and across different

jurisdictions — has accentuated this trend.

As a global company that helps organisations make

the most of technology, we have a leadership role

to play in engaging with the private, public and civil

sectors to develop new thinking and practices that

help meet society’s expectations of privacy — and to

set exemplary policies and practices within our own

enterprise.

Ethics and Integrity Web Course

To supplement and strengthen IBM’s Business Conduct

Guidelines and fraud risk assessment programs, an

Ethics and Integrity web course was piloted in 2004 and

deployed in Australia in 2005. The course emphasises

key issues pertaining to financial integrity, including fraud

awareness and identification, inappropriate behaviour,

and is based on real-life situations.

In 2007, the Ethics and Integrity web course was

consolidated into the Business Conduct Guidelines, and

all eligible IBM employees were provided with access to

this course in Australia.

Corporate GovernanceThe way organisations approach corporate governance tells you a lot about what they value…

IBM utilises an on-demand

environment for its controls

structure.



Confidentially Speaking Program

IBM’s Confidentially Speaking program allows every

IBM employee to express concerns on any company-

related subject, whether related to their own job, such

as benefits, careers, safety, or processes, or involving

alleged violations of our Business Conduct Guidelines.

Employees can choose to express concerns

anonymously.

The Confidentially Speaking program is consistent with

IBM’s value of trust and personal responsibility in all

relationships.

We monitor all alleged Business Conduct violations as

part of the Internal Audit (IA) centralised investigations

process. This ensures that any allegation with a

potential financial reporting impact, is turned over to

internal investigators and is appropriately reported to the

Audit Committee.

2007 Achievements

√ Continued to improve corporate

governance practices

√ Continued to focus on certification of Business

Conduct Guidelines program and Ethics and

Integrity training for all eligible employees.

2008 Objectives

• Continuetoensuremandatorycertificationof

Business Conduct Guidelines and Ethics and

Integrity training for all eligible employees.

• Continuespecificcodeofconducttrainingand

certification as an integral element of Business

Conduct Guidelines Certification.

Public Policy

In 2007, IBM’s priorities as a business

community leader were to help keep

Australia competitive and to develop

our export market. To this end, in

2007 we worked with State and

Federal governments to:

• ensureAustralia’sinvolvement

inmultilateraltrade

negotiationsandFree

TradeAgreements,

supportedAustralia’s

softwareandservicesindustry;

• advancetheuseofopensourceandopen

standardswithintheAustralianICTcommunityin

ordertogiveAustraliangovernmentagenciesand

Australianbusinessesunprecedentedflexibilityand

interoperability;

• encouragetheadoptionofpolicieswhichsupported

innovationintheAustralianeconomy.Thisincluded

policieswhichcreatedacultureofinnovation,R&D

taxreform,andamorecollaborativerelationship

betweenthepublicandprivatesector;

• promotegreaterrecognitionoftheimportanceof

theservicessectortotheAustralianeconomy,and

theneedtoencouragegreaterinvestmentinthis

sectorinordertomakeAustraliamoreinternationally

competitiveandtocreateeconomicgrowth;

• encouragetheadoptionofinnovationmetricsasa

tooltomeasureinnovationintheeconomy,andin

theservicessectorinparticular.Thisenabledthe

governmenttobetterassesstheeffectivenessof

strategiesintroducedtostimulateeconomicgrowth

intargetareas;

•developAustralia’sskillsbasebyadvisinguniversities

andtheresponsiblegovernmentdepartmentson

waysthattheycandevelopnewqualificationsand

courseswith21stcenturyskills;

•increasethecapacityofAustralia’sworkforceby

makingtheworkplaceaccessibletoabroader

numberofworkersinAustralia,includingmature

workersandpeoplewithdisability;and

•increaseexportsbyinvestinginopportunitiesfor

workersinAustraliatosupplyhighvalueservicesto

clientsoverseas.

Working in partnership with Trade

and Industry Bodies

Managing Director, IBM Australia

and New Zealand, Glen Boreham,

and other senior employees

participated in a number of industry

body boards and taskforces –

providing input into the key policy

debates affecting the ICT industry, as

well as coordinating industry advice

and information to Government on

developments and initiatives.

In 2007, these industry bodies included:

• AustralianInformationIndustriesAssociation(Glen

BorehamiscurrentlyDeputyChairman)

• BusinessCouncilofAustralia

• AmericanChamberofCommerceinAustralia

• AustraliaIndustryGroup

• AustralianServicesRoundtable

• PrimeMinister’sScienceEngineeringandInnovation

CouncilWorkingGrouponScienceand

TechnologyInnovation

We also engaged in policy debates with a number

of Australian and international bodies to ensure that

they were aware of the needs of Australia’s business

community. These included:

• APEC

• AustralianBusinessAdvisoryCouncil

• OECD

• StandardsAustralia

IBM believes that large organisations have a responsibility to contribute to the broader community and business policy environment in which they operate.

In this regard, IBM Australia works with Australia’s Federal and State Governments to try and improve Australia’s competitive advantage on the world stage by providing insights and perspectives on policies that will improve the business and broader community.


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