A Contemporary Case Study: AppleMATTHEW BOEHRET

2Discussion

In the life cycle of a product created by Apple, what environmental impact created

by that product should Apple be responsible for?

3Agenda1. Key Ethical Question Identified2. Background (Context)3. Stakeholders4. Research/Industry Data5. Comparator Case6. Consequences7. Theory/Standard Analysis8. Objectivity9. Recommendations10. Questions

4Ethical Question

Is Apple doing enough to deter the effects on the environment caused by its

operations and products?

5

050100150200250Background

Timeline

1976Apple founded by S. Jobs and S. Wozniak

1984Apple’s 4th Computer:

The Macintosh

1985Steve Jobs left Apple

1997Steve Jobs returned as

CEO

2013Lisa Jackson appointed

as VP of Environment…

2007Steve promises

greater transparency

2001Apple introduces the iPod and first retail

store

2007Apple introduces first

iPhone

2010Apple introduces the

first iPad

2015Joined American Business

Act on Climate Pledge

1970 1980 1990 2000 2002 2004 2006 2008 2010 2012 2014 2016

2011Tim Cook appointed as

CEO

6Background (cont’d)Context

Apple ValuesEnvironment

EducationSupplier ResponsibilityPrivacy and Security

Inclusion and Diversity

Accessibility

7StakeholdersIdentification & Introduction of the Relevant Parties

Board of Directors

Customers

Shareholders

Organizational Members

Government

Public

8Research & Industry DataRelevant Publicly Available Information

Resources

Suppliers

Organization

Products

9Test your knowledge!

How many different types of metal go into a phone?

62!

10Test your knowledge!Round 2!

How many pounds of raw mined materials does it take to make the average cell

phone?

165 pounds!

11Research & Industry DataResources

Reduce• Water used – reused for cooling 35 times!• 60% of paper products used recycled wood fiber and only 39% used

sustainably sourced virgin fiber

Remove• Beryllium, mercury, lead, arsenic, PVC and Phthalates, BFRs

Recycle• 61m + lbs. of materials recovered for reuse through 2015

12Video Example - Liam 1.2 million phones per year.

13Research & Industry DataSuppliersFocused on educating suppliers and assisting when possible

• A waste diversion program that helps 22 factories reduce, reuse, and recycle• EHS Academy established in 2013 focuses on educating workforces on environment, health, and safety (EHS)

skills.Apple’s Green Chemistry Advisory Board was formed in 2014

• Explores ways to replace restricted substances with greener alternatives.

100% of final assembly facilities are free of Apple-prohibited substances. Next, non-final assembly.

• … and then the world!*

By 2020… Avoiding 30 million metric tons of pollution by installing clean energy.• Equivalent to taking over 6 million cars off the road for one year!

By 2018… Foxconn will create 400 megawatts of solar energy!• Covers final production of iPhone

*not really the world.

14Research & Industry DataOrganization

93% of their energy uses worldwide are renewable sources.100% renewable in 23 countries!100% renewable at every data center!

15Research & Industry DataApple Campus 2 95% of materials from past site is being recycled 100% powered by renewable energy

4 megawatts of baseload biogas fuel cells 16 megawatts of rooftop solar

75% of the year the building will be naturally ventilated 8,000 trees

7,000 of which are newly planted shade and fruit trees Drought tolerant Watered using recycled water from nearby recycling facility.

20% increased commute alternatives program that will support more than 1/3 of the workforce.

Organization

16Research & Industry DataProducts

iPhone 7 Apple Watch iPad Pro Macbook Pro0%10%20%30%40%50%60%70%80%90%

100%

0

100

200

300

400

500

600

700

800

78%69%

85%

84%

56 50

240

710

Production Customer UseTransport RecyclingGreenhouse Gas Emissions

Perc

enta

ge o

f Gr

eenh

ouse

Em

issio

ns

Kilo

gram

s of G

reen

hous

e Ga

s Em

issio

nsEquivalent to 134 miles driven by an average passenger

vehicle!

Equivalent to 1,702 miles driven by an average passenger

vehicle!

17

18Comparator Cases

Current Sustainability Ranking(Newsweek)

18 241

Profitability in 2015 $234 billion $172 billion

Current Stock Price $108.55 $1,374.58

Pounds of Recycled Products in 2015 90 Million 120.1 Million

19Comparator Cases (cont’d)

Energ

y Prod

uctivit

y

Weight

- 15%

Greenh

ouse

Gas Pro

ducti

vity

Wight -

15%

Water P

roduct

ivity

Weight

- 15%

Waste P

roduct

ivity

Weight

- 15%

Green R

even

ue

Weight

- 20%

Susta

inabil

ity Pa

y Link

Weight

- 10%

0.00%4.00%8.00%

12.00%16.00%

Newsweek Rating

Apple Samsung

20ConsequencesIn Maintaining Sustainable Business Practices

Positive

Negative

Doing What’s RightPositive Image

Minimizing Footprint

Innovation

Decreased Shareholder Value

Decreased Profitability

21Theory and Standard Analysis

Corporate Eco Forum

ISO 14001 on Environmental Management System

ISO 5000 on Energy Management

Conflict-Free Sourcing Initiative

UL Environment’s UL 100 Standard for Mobile Devices

EICC Environmental Sustainability

Understanding Relevant Standards

22Objectivity

What about suppliers other than finishing

factories?

Why not use recycled parts in new products?

What about renewable ways to power products?

How can consumers be encouraged to keep products

longer?

How are retail stores being monitored to

ensure they are being sustainably

responsible?

23RecommendationsRecommended Course of Actions

Decrease use of dirty energy sources from suppliers.• In October 2015, announced solar power expansion plans.• By 2020, decrease greenhouse gas emissions by ~20m metric tons!

Increase amount of reusable materials in products.• Liam is only the first step.

Decrease amount of energy used by Apple products.

Decrease the turnover of Apple product.• Highly unlikely

Incentivize recycling of Apple products.

72% of carbon footprint!

24Recommendations (cont’d)Recommendation

s Pros Cons

↓ dirty energy sources used by suppliers.

• ↓ greenhouse gas emissions • Barrier to entry for suppliers• ↑ individual products cost

↑ amount of reusable materials

• ↓ need for newly mined sources• Potentially ↓ cost of individual

product• Leads innovation

• Could lengthen production time• Potentially ↑ cost of individual

product• Potentially ↑ energy costs to

produce↓ amount of energy used by products

• Higher sustainability• Improved brand image• Leads innovation

• ↑ individual products cost

↓ turnover of products

• ↓ production• Higher sustainability• Leads innovation

• ↑ competitor pressure• ↓ profitability• ↑ individual products cost

Incentivize recycling

• Higher sustainability• Improved brand image • ↓ profitability

Pros and ConsLegend

↑ - Increase↓ - Decrease

Questions.

26REFERENCES

Burger, A. (2014, July 18). Smartphones are everywhere… but where are the standards. Triple Pundit. Retrieved from http://www.triplepundit.com/ Desjardins, J. (2016, March 8). The extraordinary raw materials in an iPhone 6s. Visual Capitalist. Retrieved from http://www.visualcapitalist.com/ Edwards, B. (2011, May 19). A tale of two Apple stores (the first two). Macworld. Retrieved from http://www.macworld.com/ Freedman, A. (2016, March 21). Apple brags about its environmental progress, but the truth is it still has work to do. Retrieved from http://mashable.com/Price, D. (2O09, April 14). Green Apple: Why Apple was bad for the environment (and why that’s changing. Macworld. Retrieved from http://www.macworld.co.uk/Rawlinson, N. (2016, April 1). History of Apple, 1976-2016: The story of Steve Jobs and the company he founded. Macworld. Retrieve from http://www.macworld.co.uk/ SCRE Team 7 (2012, June 18). Key sustainability issues in the electronic industry: Sustainability industry report. NC State University: Poole College of Management. Retrieved from https://scm.ncsu.edu/ Suarez, E. (2016). Top green companies in the World 2015. Newsweek. Retrieved from http://www.newsweek.com/ Woody, T. (2012, February 22). How Apple went from environmental laggard to leader. Forbes. Retrieved from http://www.forbes.com/ Apple Inc. Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934. (2016). Retrieved from https://www.sec.gov/Archives/edgar/data/320193/000119312516422528/d79474ddef14a.htm Apple press info. (2016). Retrieved from https://www.apple.com/pr/products/ Apple’s revenue worldwide from 2004 to 2016* (in billion U.S. dollars). (2016). Retrieved from https://www.statista.com/statistics/265125/total-net-sales-of-apple-since-2004/ Conflict free resourcing. Retrieved from http://www.conflictfreesourcing.org/ Environmental responsibility report: 2016 progress report, covering fiscal year 2015. (2016). Retrieved from http://www.apple.com/environment/reports/It takes roughly 165 pounds of raw mined materials to make the average cell phone. (2016, October 13). [Electronic Forum]. Retrieved from https://omegaforums.net/ Samsung. (2016). Retrieved from http://www.samsung.com/us/aboutsamsung/citizenship/usactivities/environmentalinitiatives/recyclingdirect/ Supplier responsibility. (2016). Apple. Retrieved from http://www.apple.com/ U.S. Environmental Protection Agency. (2016). Greenhouse Gas Equivalency Calculator. [Calculator]. Retrieved from https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator Yahoo! Finance. (2016). Apple, Inc. Stock Price: 2004 – 2016 [Data set]. Retrieved from https://finance.yahoo.com/quote/AAPL/history?period1=1104469200&period2=1483160400&interval=1mo&filter=history&frequency=1moHardwick, T. (2016, April 15). Apple’s recycling initiatives recovered 40 million in gold. MacRumors. Retrieved from http://www.macrumors.com

Images: Apple Logo: http://animagehub.com/new-collection-of-apple-logo-vector/apple-logo-vector-10/ Apple Logo: https://commons.wikimedia.org/wiki/File:Apple_logo_black.svg Samsung Logo: http://www.logospike.com/samsung-logo-png-3025/ Singapore Solar Panels:

https://www.google.com/search?q=apple+graphic&rlz=1C1CHBF_enUS716US716&espv=2&biw=1463&bih=786&source=lnms&tbm=isch&sa=X&ved=0ahUKEwiFs9TN9ZzQAhVDwYMKHS-ADeYQ_AUIBigB#tbm=isch&q=apple+environmental+png&imgrc=HNNIMzT75niHYM%3A

Shareholder: http://www.ehouse411.com/ueditor/net/upload/image/20160909/6360898407602902862372448.jpg Resources:

https://static1.squarespace.com/static/519b50a5e4b0f9a510a45197/t/550216dde4b0f1aba3c4fb42/1426200320169/GoldPour.png https://www.imore.com/sites/imore.com/files/styles/larger/public/field/image/2014/10/Cook_Foxconn.JPG?itok=7iMD0roV http://assets.creativity-online.com/images/work/full/a/p/p/Apple_Better14.jpg http://assets.inhabitat.com/wp-content/blogs.dir/1/files/2016/03/apple-liam-iphone-recycling-robot-3-889x520.jpg

Theory and Standard Analysis http://grass-tex.com/wp-content/uploads/2013/12/ISO-14001.png http://gesi.org/files/Partners%20and%20Members/ElectronicIndustryCitizenshipCoalition/EICC_large.png http://www.conflictfreesourcing.org/media/xcfsi-logo.png.pagespeed.ic.o0IbvQFbnG.png http://ulenvironment.com/images/cert-jansan.png

Thank you!

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