the hidden component - hewlett packard · 7 how hp helps you save energy 8 how hp helps you reuse...

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R E S P O N S I B I L I T Y

THE HIDDENCOMPONENT

FY06 Global Citizenship Customer Report

3 Letter from Mark Hurd

5 The Hidden Component

7 How HP helps you save energy

8 How HP helps you reuse and recycle equipment

11 How HP gives you confidence in your supply chain

12 How HP builds in accessibility and privacy

14 How HP invests in communities

16 Citizenship in INDIA

18 Performance summary

19 Goals summary

See outside back cover for all report endnotes.

See HP’s comprehensive FY06 Global Citizenship Reportat www.hp.com/go/report.

To learn more about HP’s global citizenship awards andhonours, see www.hp.com/go/report/awards.

See HP’s comprehensive FY06 Global Citizenship Report at www.hp.com/go/report. The Hidden Component 3

HP made solid progress in 2006 toward our goal of becoming the world’s leading IT company through ouraim of simplifying our customers’ experiences withtechnology and helping them do what they want to dofrom wherever they are.

Being a leading company starts with strong financial performance. In fiscal 2006, HP revenue increased 6 percent to $91.7 billion and non-GAAP earningsper share increased 46 percent to $2.38. And weachieved the most balanced profit mix by businessgroup and region that HP has seen in years.

It also means leading in citizenship. HP has a long-standing commitment to operate with the highest standardsof ethics and integrity. Our failure to meet our ownprinciples during an HP investigation into leaks ofsensitive company information has led us to redoubleour commitment to adhere to our core values, highstandards of ethics, privacy and other aspects of globalcitizenship. To that end, we will continue to build on ourlegacy of responsible conduct and sound corporategovernance across the company and wherever we dobusiness.

The way we see it, global citizenship and business successgo hand in hand. In fact, global citizenship is the “hiddencomponent” in HP products — embedded in our design

and engineering, including accessibility, energy efficiencyand recycling. It’s also an important part of how weoperate our business, from responsible supply chainmanagement to the steps we’re taking to reduce ourown environmental footprint. HP’s global citizenship effortsare further reflected in our continued support for the UNGlobal Compact.

We’re building on a long history of investing incommunities around the world and addressing issues ofconcern to our customers and other stakeholders. Ourpriorities are supply chain responsibility, energy efficiencyand product reuse and recycling. We concentrate on thesesubjects in this report, which has been developed to showhow our global citizenship work helps customers achievetheir objectives.

Sincerely,

Mark HurdChairman, Chief Executive Officer and President

Letter From Mark Hurd

I have pleasure in sharing India’s contribution to HPscommitment to global citizenship in our 2007 annualglobal citizenship report.

The pages within provide a brief overview of HP India’sapproach to CSR: increasing access to IT, responsibleenvironment practices and community engagementactivities.

Last year, we worked with the International Institute ofInformation Technology [IIIT-B] in an effort to jointlyleverage our strengths and infrastructure to deliverlivelihood skills to educated, unemployed youth.

In the higher education environment, our Technology forTeaching grant [T4T] helped support the development ofmobile technology in two leading institutions. A region-wide competitive grant, T4T aims at supporting thedevelopment of mobile technology environments in highereducation; transform teaching and learning models; andfoster opportunities for academic leaders to understandthe potential of mobile technology in universityenvironments.

In our pioneering efforts to remain an environmentallyconscious citizen, we have recycled 130MT of e-waste

in 2006 alone. We continue to explore ways to beincreasingly energy efficient and environmentally friendly.Saving energy and contributing to a greener environmentis both our starting point and goal. This is the belief weare instilling throughout our organization.

As the world grows smaller, we will continue to upholdglobal standards that will ensure the welfare of not onlyour employees, but also our suppliers and partners. Weremain committed to the issues of environment, corporategovernance and social responsibility. This and subsequentCSR reports are intended to document our progress inthese areas.

I invite you to read more about HPs people, our businessand our contributions to global citizenship.

Balu DoraisamyManaging DirectorHP India

Letter From Balu Doraisamy, HP India

4 The Hidden Component See HP’s comprehensive FY06 Global Citizenship Report at www.hp.com/go/report.

The Hidden Component 5

The Hidden ComponentGlobal citizenship is the “hidden component” in HP products which creates a competitive advantage for both HP and our customers. It’s an important part of how we operate our business, from managing our supply chain and creating energyefficient products, to ensuring privacy protection and recycling equipment at the end of its useful life.

HP has a strong history of being a good global citizen. Our founders Bill Hewlettand Dave Packard recognised that a company has a responsibility beyond makinga profit for its investors, including a commitment to enrich the businesses, lives andcommunities of its customers, partners and employees. For nearly 70 years, we havehonoured that responsibility by striving to be an economic, intellectual and socialasset to each country and community in which we do business.

Today, we continue to conduct our business in accordance with our founders’ values.This benefits not only the communities we impact, but also our customers. The “hiddencomponent” of global citizenship helps us to meet a wide range of emerging customerneeds and expectations, as well as providing quality, performance and reliabilitythrough our products and services.

For example, our customers want to ensure that the products they purchase areproduced in conditions that reflect high labour and environmental standards. We share that concern and we are investing significant resources to assess,monitor and improve standards in our suppliers’ factories.

Energy usage is another pressing customer issue, due to rising energy prices and the connection between fossil fuel use and climate change. HP helps customers save money and reduce their greenhouse gas emissions by offering energy efficientproducts and services, from PCs and printers to efficient solutions for data centres.

When customers have finished using products, they want to dispose of them responsibly.Through our global product reuse and recycling services, we offer customers convenient,secure, environmentally responsible and cost-effective solutions. We have extensiveexperience and process more used equipment than any other IT company.

We address numerous other global citizenship issues as well. For example, we promote a high degree of accessibility in our products, we work to protectprivacy and we invest in communities where we live and work through ourphilanthropic and employee involvement programmes. HP has a long-standingcommitment to conducting business with uncompromising integrity, which is core to everything we stand for as a company.

The next time you are thinking of buying IT equipment, we’d be happy to talk to youabout our “hidden component.” We believe it is just as important as features suchas price, performance and quality. The rest of this document describes our efforts inthis area, and what we are doing to live up to our founders’ values while providingyou with products and solutions that meet your needs.

“We’ve been using HPproducts in our data centres foryears, and the new ProLiantservers are even more efficientthan previous models.We’ve recently begun a migration to c-ClassServer Blades where we expect increasedcomputing power while utilising the energyefficient HP Thermal Logic technology.

What’s worth mentioning here, is that HP takesthe time to work with us on tackling energyefficiency issues at the systems level and makessure we’re getting the most out of ourequipment. They’re not just selling us productand walking away.

Dense clusters of servers often requireadditional air-conditioning which increasescapital expense and operational costs becauseof increased energy usage. HP recognises thatand provided us with a “thermal assessment” of our data centre giving us valuableinformation about how we could moreeffectively use our cooling resources.

Working with HP, we’ve been able to takegreat steps forward in technology, whileleaving a cleaner footprint in our wake.”

Ed LeonardChief Technology OfficerDreamWorks Animation



HOW HP HELPS YOU

SAVE ENERGYOur customers increasingly focus on energy efficiencydue to rising energy costs and climate change. HP offersenergy efficient products and services, using leadingtechnologies from the chip to the data centre.

Reducing the energy consumed by our products savescustomers money and reduces the carbon dioxide (CO2)emissions from electricity generation that contribute toclimate change. Improving product energy efficiency has been integral to our Design for Environmentprogramme since the programme was launched in 1992, and we extend our reach by working withother organisations. For example, in 2006, we launched a climate change initiative with theconservation organisation World Wildlife Fund (WWF).We also participated in the multi-stakeholder processthat developed the environmental performance standardwhich is the basis for the EPEAT registration tool forcomputers in the United States.

Large energy savings can come from smallimprovements multiplied across a large number ofproducts, as well as from more sizable advances inspecific products and services. We have made energy-saving innovations across the spectrum of our productsand services—from using energy-efficient computer chipsto creating servers with breakthrough technology anddeveloping industry-leading services for data centres.

PCs and printersOur current PCs and workstations are more efficient thanthe HP products they replace. For example, our BladePC incorporates low-voltage processors that are 10times more efficient than those in a typical desktop PC.

In 2007, we have redesigned our HP Deskjet printers toreduce their off mode power consumption to less than 1 watt. This will enable customers to save on theirenergy bill for printing and reduce associated CO2

emissions related to electricity generation.

Servers and storageIn 2006, we launched c-Class Server Blades (compact,high-density servers in a specially designed enclosure)with energy efficiency in mind. These servers requireonly two-thirds the power of conventional rack-mountedservers, saving energy through power management,

monitoring technologies and innovative cooling. c-ClassServer Blades include several energy-saving features:

• Users can monitor and adjust power according tothe demands of the equipment.

• Hundreds of embedded sensors throughout the server enclosure enable monitoring and precise managementof power demand, heat and cooling resources.

• HP Active Cool fans (with 20 patents pending at thestart of 2007) were inspired by model aircraft enginesand developed specifically for c-Class Server Blades.

Data centresEnterprises with data centres can save a significantamount of energy by using HP’s industry-leadingDynamic Smart Cooling (DSC) service. Cooling canrepresent 60% to 70% of the total power needs of adata centre. HP’s DSC service manages these coolingresources, helping customers save energy and moneywhile increasing data centre computing density.

High-density data centres can house hundreds or eventhousands of racks of servers. Dynamic Smart Coolingcan reduce cooling costs by 15% to 40%. For example,a large data centre can save up to 15% of cooling costsand avoid as much as 5,300 tonnes of CO2 emissionsper year related to electricity generation, equivalent tokeeping 1,100 cars off the road for a year (see casestudy in full report). We are applying this technology inour own data centres.

GOAL

By 2010, reduce the combined energy consumption of HP operations and products 20% below 2005 levels.1

For more goals and performance data, see pages 18–19.

Dynamic Smart CoolingThis is a conceptual view of Dynamic Smart Coolingcomponents, sensing temperature at the inlet andcontrolling air conditioning flow and temperature tomaintain data centre efficiency.


When you buy new computers or printers, you can be leftwondering what to do with the equipment they replace.HP provides services that make the most of the used modelswhile reducing your old equipment’s environmentalimpact and providing responsible disposal whennecessary.

More than 200 million new PCs are bought each yearworldwide.2 Many of these (and other IT products suchas printers and servers) replace existing equipment. Unwanted equipment can be a waste of resources, can contain hazardous substances and can add to the pressure on landfill sites.

We began remarketing used equipment in 1981, and have provided recycling services since 1987. We offer customers various reuse and recycling optionsto manage their equipment, including processes forprotection of customers’ personal information. For more information on programme availability and terms of these offerings in your country, see www.hp.com/go/reuse-recycle.

ReuseWe extend the life of IT equipment, reduceenvironmental impacts and make products accessible to more people through our hardware repair andremanufacturing programmes.

Our remarketing programmes enable customers whodon’t need the latest technology, or who have limitedbudgets, to purchase equipment that has been returnedto HP. These programmes include selling pre-ownedequipment configured to a buyer’s specific needs, anddisassembling products to reuse parts, where possible.

We offer remarketed hardware products on mostproduct lines, including PCs, monitors, printers andeven entire data centres. We do not reuse printcartridges, as remanufactured cartridges do not meet our quality and reliability standards.

RecyclingHP offers responsible recycling services in 45 countriesand territories. Our approach begins with design,

which can help to make recycling easier. For example,we make easily removable components and avoid paintwhen feasible.

We use HP-approved recycling vendors who dismantleequipment and process components and materials to extract as much value as possible. We require them tomeet our general Supplier Code of Conduct and ourglobal recycling standards and policies. These requirevendors to store, handle and process materials in waysthat prevent releases to the environment and prohibit exporting materials without our approval. We monitorcompliance through site audits.

In 2006, we collected and recycled 75,000 tonnes ofused products. This brings the cumulative total since 1987to more than 420,000 tonnes, approaching our billionpound goal (450,000 tonnes) by the end of 2007. Our 20 years of experience allows us to offer efficientand environmentally responsible recycling services.

We also collaborate with others to develop effective andefficient recycling solutions. During 2006, we helped tocreate StEP (Solving the E-waste Problem)—an initiativethat brings together various UN organisations,government agencies, companies and academics tohelp address e-waste management, especially indeveloping countries. In Europe, we have beeninstrumental in creating the European Recycling Platformand Nordic Electronics Recycling Association, collectiveprogrammes to comply with European Union producerresponsibility requirements for the recycling of electronicwaste.

GOAL

Recycle 1 billion pounds of electronic products and supplies by the end of 2007.


HOW HP HELPS YOU

REUSE AND RECYCLE EQUIPMENT

2001 2002 2003 2004 2005 2006 2007

305

395495

615

755

920 Target:1,000

Total cumulative recycling[Million pounds]

“I want a supplier that providesan efficient and responsibleasset recovery service.I want a supplier that provides an efficient and responsible asset recovery service. Nortel refreshes computer equipment on averageevery three years and as a result we have well over a thousand items a year to disposeof across the Asia Pacific region.

Previously, our approach was to erase all thedata from the hard drives, pack the equipmentinto crates and ship it across the world. I wasdelighted to find that HP has an asset recoveryservice in every country where we operateacross the region, relieving us from thisburdensome process and helping us to avoidcosts.

HP organizes everything, from collecting andstoring equipment at our sites to wiping diskdrives to the standard we require, thus ensuringthat our data doesn’t fall into the wrong hands.HP also decides whether the equipment is ableto be refurbished and reused in the second-hand market or be recycled.

We chose HP because their recycling practicesare consistent with Nortel’s expectations andcommitment to the environment. We arecommitted to corporate social responsibilityand we look for the same in our partners.”

Lawrence ChungSenior Manager, Information Services, Asia Nortel



“I want assurance that oursuppliers meet the labour,environmental and ethicalstandards set out in ourCode of Ethical Purchasing.Vodafone is a significant purchaser of information and communications technologyequipment and services. We are committed tocorporate responsibility (CR) in all facets ofour operations and assess CR performance aspart of our supplier scorecard.

We are not just looking for a code of conductand a signature on a contract. We want tosee hard evidence that our suppliers have arobust, risk-based programme for engaging,assessing and, where necessary, improvingthe standards of their suppliers.

HP has a well established supplierengagement and audit programme. In addition, they have established initiatives to build the capability of their suppliers tomanage these issues and have been proactiveplayers in efforts to develop a commonindustry approach through involvement in the GeSI and EICC initiatives.”

Annette FergussonSenior CR Manager Vodafone

Our customers are concerned about the labourstandards and environmental impacts at the factoriesthat make their IT products, and we share that concern.You can’t see it, but behind each HP product is a significant investment made to improve standards in our supply chain.

The global scope and value of HP’s procurement provides us the opportunity to impact the human rights,health, safety, environmental and ethical performance of thousands of businesses worldwide that constitute our supply chain. HP spends approximately $50 billionannually procuring product materials, components, manufacturing and distribution services. We believe that treating workers with dignity and respect, while implementing high standards for health, safety, the environment and ethics, leads to higher qualityproducts and reduced costs.

We are committed to having a positive influence on the lives of the workers who manufacture our products. We back this commitment with a comprehensive supplierengagement, assessment, auditing, corrective action andcapability-building programme. We prioritise suppliers for engagement based on our assessment of the risk they represent (see graphic).

Strong, clear and appropriate standards are essential to improving conditions in the supply chain. We believethat raising the standards of the electronics industry supply chain is most effectively addressed on an industry-wide basis, so that suppliers receive a consistent messagefrom their customers.

In 2002, HP was the first electronics company to publisha Social and Environmental Responsibility Supplier Codeof Conduct. In 2004, we helped lead the development of the Electronic Industry Code of Conduct (EICC), the standard we now apply. The EICC fosters responsible

management and operational practices in labour, humanrights, the environment, health and safety, and ethicsacross the electronics industry’s global supply chain. HP isthe Vice Chair of the EICC Implementation Group andbelongs to the EICC steering committee and work groups.

Since 2004, we have conducted 254 audits of oursuppliers, at sites producing HP products that employmore than 300,000 workers. In 2006, we engaged an independent auditing firm to review our supply chainprogramme. The review included verification audits of 24 supplier sites in China, Malaysia, Mexico andThailand.

When our audits reveal labour, ethics, health, safety or environmental problems, we work with suppliers toaddress those issues. HP does not tolerate serious orrepeated violations of our Code and in rare cases wheresuppliers are unwilling to take the necessary steps toimprove performance, HP will terminate the relationship.

In addition to conducting extensive supplier audits todemonstrate our expectations and monitor performance,we provide training in the systems needed to maintainhigh standards. During 2006, we started two projects to help build the capability of our suppliers to managelabour, health, safety, environmental and ethicsperformance: one in China providing managementtraining to 30 suppliers who employ approximately100,000 people, and another in Central Europe aimedat piloting ways to reach sub-tier suppliers selected andmanaged by our suppliers.

GOAL

Audit 95% of high risk product materials, component and manufacturing supplier sites by the end of 2007.


HOW HP GIVES YOU

CONFIDENCE IN YOUR SUPPLY CHAIN

Second-tier suppliersHP will train first-tiersuppliers to audit second-tier suppliers in 2007

Third-tier suppliersHP and our first-tier suppliers will train second-tier suppliers tomanage their suppliers

First-tier suppliers

HP’s risk-based approach to supplier engagement

400 low risk suppliers engaged and assessed (no audits necessary)

45 high risk new suppliers to be audited at 80 sites in 2007

115 high risk suppliers auditedat 254 sites through 2006 (will re-audit 80 sites in 2007)

40 suppliers to be assessed (risk level to be determined)


Issues such as accessibility and privacy are increasingly important in IT purchasing decisions. We build accessibilityfeatures into our products, help business customers meethigh privacy standards and protect our customers’ data.

AccessibilityPeople with disabilities or age-related limitations can find it difficult to use information and communicationstechnology (ICT). This is a major issue, as these peoplerepresent a significant and growing percentage of thepopulation. For example, more than 50% of working-agecomputer users in the United States are affected by mild to severe visual, hearing, dexterity, speech or cognitiveimpairments that limit their abilities.3

Reflecting these trends, the number of accessibilityregulations and standards is rapidly increasing globally. In Canada, the European Union, Japan, parts of LatinAmerica and the United States, government agencies must purchase accessible ICT.

We believe everyone should have the opportunity to useand benefit from ICT. We integrate accessibility into HPproducts and websites to improve the user’s experienceand meet customer requirements.

Accessibility features on HP products include buttonsidentifiable by touch, switches positioned within easyreach and large adjustable displays. Case studiesdetailing our accessibility products and services areavailable on our Accessibility website.

Additionally, our voluntary product accessibility template(VPAT) database documents the accessibility features ofproducts offered to public sector customers. This includesinformation on two-thirds of applicable HP products. We extended the list in 2006 to include servers.

Some customers need specialised “assistive technology”(AT) devices such as screen magnification or largeprintkeyboards. For this reason, we collaborate withapproximately 50 of the largest AT vendors in the world to ensure compatibility with their specialised products.

PrivacyHigh data protection standards are vital in developing andmaintaining trusted relationships with customers andemployees. Privacy supports the appropriate handling of data in e-commerce and the information society.

We protect customer data that we have access to throughour commercial relationships and the IT services weprovide. We also help customers do the same for the datathey manage.

We incorporate privacy features into products to build trustwith consumers and help corporate customers comply withprivacy regulations. We are developing a company-wideprivacy product development standard, which we willbegin implementing across HP products.

Consumers and employees can raise privacy issues byemailing [email protected]. We received 6,651 emails in 2006, an 18% increase from 2005. Most messagesconcerned routine matters, such as updating informationand opting out of HP marketing announcements.

We monitor compliance with our privacy policies through:

• Customer and employee feedback • Compliance reviews and assessments • Privacy audits, which extend to suppliers

We also work with others to establish best practice privacystandards. In 2006, we co-founded the Consumer PrivacyLegislative Forum with Microsoft and eBay to simplify privacy regulations and enhance consumer protection.

Unfortunately, events in 2006 related to the use ofpretexting on behalf of HP may have underminedconfidence in our commitment to privacy. The methodsthat were used to uncover the source of confidentialinformation leaks within our Board were inconsistent withHP’s values and decades of ethical behaviours. This wasan unfortunate departure from normal behaviour. Ourcommitment to privacy remains strong and undiminished.These events have alerted us, however, to a need for theright procedures at all levels within HP to ensure that we meet privacy expectations and have shown usopportunities to strengthen our commitment further.

We have learned from this experience and are expandingand reinforcing our accountability systems to help ensurethat HP, our Board members, employees and thoseworking on HP’s behalf act in a manner that reflects ourvalues, policies and individuals’ expectations of us.

See more information about accessibility and privacy inthe full report online.

HOW HP BUILDS IN

ACCESSIBILITYAND PRIVACY

Global Master Privacy PolicyHP’s Global Master Privacy Policy governsthe collection, storage,transport and use of customer and employeepersonal data as wellas personal data heldon products returned toHP for refurbishing or recycling. Our policy isbased on the principlesof Safe Harbor, theOrganization forEconomic Cooperationand Development(OECD) Guidelines onthe Protection of Privacyand Transborder Flowsof Personal Data, andthe Fair InformationPractice principles.


Our customers expect HP to be a responsible companyand invest in the communities where we live and work.We use our strengths—our technology, our people andour profits—to help benefit communities around the world.

We focus our social investment where there are pressingsocial needs, where we can have the biggest impact andthrough programmes that are relevant to our business.

Our programmes covered two main areas in 2006:

• Education—helping educators use technology to improveteaching and enhance learning and increasing access totechnology in education from primary school to universitylevel.

• Communities—accelerating economic developmentin underserved communities and helping nonprofitorganisations use technology to become moreefficient and effective.

Our social investments help benefit grant recipients and their clients while adding value to HP’s business. We believe that by contributing to society we strengthenour relationships and improve our reputation with communities, customers, governments and other

stakeholders, and enhance employee satisfaction. As an example, our grant recipients are an excellentsource of feedback on our products, and through theseproduct donations we raise the visibility of HP’s brandwith potential future customers.

In the last five years we invested $277 million in socialinvestment programmes worldwide. Our donations in2006 represented approximately 0.63% of our pre-taxprofits.

EducationQuality education is essential for economic growth, productive citizens and prosperous communities. Informationtechnology benefits education by improving access toinformation, supporting innovative and engagingteaching methods and increasing student academicachievement.

HP donates products and cash to schools, colleges and universities around the world, and provides technicaland professional development support to improve teachingand enhance student success.

For example, our Technology for Teaching grants helpeducators use technology in the classroom to improve

HOW HP

INVESTS IN COMMUNITIES

Social investment by region, 2006[Million $U.S.]

United States $34.9

Americas $2.9(Not including the United States)

Europe, Middle East $5.5and Africa

Asia Pacific $2.3and Japan

Total $45.6


teaching and make lessons more exciting and engagingfor learners. We provide professional developmenttraining and support and encourage grant recipients to share good ideas, successes and challenges throughonline communities and conferences. We have made HP Technology for Teaching grants of more than $36million to nearly 650 educational institutions in 32 countries since the programme began in 2004.

CommunitiesHP offices worldwide give money and technology to support their local communities. Often they focus on improving access to technology.

In 2006, projects included:

China—Provided technology grants to four Youth Business China training centres for potential micro-entrepreneurs.

Colombia—Donated 60 computers to three new centresin Bogotá, which provide job-skills training andtechnology access to disabled people and woundedveterans.

Europe—Supported the Micro-Enterprise AccelerationInstitute (MEAI) to prepare trainers to deliver the newlylaunched HP-sponsored curriculum on how entrepreneursand small businesses can use technology to build andgrow a business.

Unites States and Puerto Rico—Awarded Technology for Communities grants to 104 nonprofit organisationsworking in the areas of health and human services,workforce development, the environment, arts andtechnology, and community and economic development.

Measuring impactWe measure the impact of our social investment to helpensure that communities, and therefore HP, receive themaximum benefit from our contributions. We requirestatus updates and final reports from the projects wesupport. Using this information, we identify projects for possible reinvestment and improve our grantprogrammes.

For example, the International Society for Technology inEducation is helping us to review the impacts of our HPTechnology for Teaching grants. Preliminary results fromtheir research in 2006 suggest that these grants have produced direct, positive effects on teaching and studentlearning. The findings also demonstrated that HP had increased the positive effects of its grants by including professional development in its support for K-12 educators.

Next stepsIn 2007, we will align our social investment even moreclosely with our business. We have identified three focusareas—economic development (particularly support formicroenterprise development), education and theenvironment.

Our other priorities for 2007 are to develop programmeswith a broader global reach, increase consistency inprogrammes across regions, improve measurement andevaluation of programme results, and extend our learningcommunities for grant recipients.

See more information about social investment in the full report online.

For more information about HP’s philanthropyprogrammes, see www.hp.com/go/grants.

Community

Education

e-inclusion

Partial list of social investment locations during fiscal year 20064


�

Commitment to CommunityJadavpur University in Kolkata, West Bengal, is using its HP Technology for TeachingGrant to establish a mobile learning (m-learning) center where students taking an M. Tech. course in Distributed & Mobile Computing can access content using hand-heldcomputers. The University already has a digital library, and a content management anddevelopment system using an m-learning authoring tool. Students are able to tap a server-based open source wireless laboratory, built on existing laptop computers and wirelesstechnology. Enterprising students are able to submit project proposals to a ProjectIncubation Center set up under this grant. Selected projects will receive support andmentorship.

“Mobility and wireless technology can bring down the barriers to learning and open upnew possibilities for teaching and learning. We look forward to making the best use ofthis unique opportunity”, said Dr. Pradip K Das, Director, School of Mobile Computing& Communication, and Professor, Department of Computer Science & Engineering.

In India, HP focuses primarily on Education andCommunity development [Increasing Access toInformation Technology]. This focus helps address socialand economic inequality in underserved communities.

In 2006, HP collaborated with the Indian Institute ofInformation Technology, Bangalore (IIIT-B). The Programwas founded on HP and IIIT-B’s commitment to leveragetheir respective strengths, infrastructure and businessprocesses in furtherance of philanthropic initiativesaimed at providing material benefits to the deservingsections of society. IIIT- B is a new generation GraduateSchool focusing on all aspects of Information Technology(IT). Promoted by the Government of Karnataka and theIT industry, IIIT-B represents a model of Public-Privatepartnership that has set a new benchmark in the highereducation system in India. The computing productsdonated by HP were utilized in delivering trainingprograms to deserving students in an effort to enhancetheir skills and increase their employability.

The HP Technology for Teaching InitiativeAnna University and Jadavpur University in India wereawarded the Technology for Teaching Grant [T4T] in2006. T4T has transformed the way subjects are taughton campuses. The universities received HP tablet PCs,external storage and optical drives, wireless networkingcards and printers, as well as a stipend for staff to workon the projects.

Employee Volunteering at HP in IndiaHP India’s CSR activities at a corporate level areplanned, administered and funded in line with HP’sglobal framework for CSR.

On the ground however, there are a plethora ofprograms and initiatives conceived, funded and runentirely by employees.

MAD, or Making a Difference, is an employeevolunteering organization that comprises employees whoshare a common passion: to make a genuine differencein the lives of underserved, disadvantaged people. MADprovides support to various organizations on a regularbasis. Most initiatives are self-sustaining, often managedby small groups of employees with interest in specializedareas.

HEARTS, HP Employees: A Reason To Smile, is anotherVolunteer initiative at the Business Processing DeliveryOrganization (HP BPO).

HEARTS connects with communities to empower themthrough support in education and healthcare. Some oftheir programs include:

• Sponsorship of a classroom for over 30 five year old students at the Parikrama Humanity Foundation, a not-for-profit organization for underserved children from slums around Bangalore. Parikrama imparts quality education to slum children and works with parents to create stable, nurturing homes. Employees also contribute toward sponsoring meals, uniforms, books, stationary and teacher salaries.

• HEARTS along with HelpAge India set out on an ambitious mission to make the areas around its facility, cataract-free. Contributions helped to organize eye check-up camps and over 100 cataract surgeries. HelpAge India is working for the cause and care of older persons, with the ultimate aim of empowering them to take decisions pertaining to their own lives.

CITIZENSHIP IN INDIA


Hewlett-Packard [India] has dedicated CSR programmes that specificallytarget differently-abled and socially disadvantaged sections of society suchas senior citizens and orphaned girl children. HPs CSR programmes are runentirely by its employees who volunteer their managerial and technical skillsfor these activities.– NASSCOM Foundation’s “Catalysing Change” 2007

• Together with Akshara Foundation, HEARTS has adopted a site consisting of 3000 households with 500 children in the age groups of 3-5 year olds (balwadi - pre-schools learning environment) and 6-14 year olds. Employees organize learning through play and fun activities, English coaching and mentor programs. Children are provided with learning materials, including educational toys; fun sessions on arts and crafts, singing, dancing and painting competitions. Akshara’s programs are child centric and designed to increase enrollment and reduce dropouts in schools.

The Community Service Club is a popular employeevolunteering club at the Global Delivery India Centre.The motto of the Club is to help transformunderprivileged sections of society by connecting with them as individuals and in teams.

Some of the Community Service Club’s activities include:

• Mentoring at the APD (Association for Differently Abled People). As mentors, they assess interests and potential based on educational background, offer career counseling, teach English, provide basic orientation to Computer office applications and also coach in preparing resumes and facing interviews.

• ‘Stuart Little’ screening & animation workshopIdentification of initiatives that would help meet today’s needs as well as prepare for tomorrow is a key component of rural education; English speaking coaching is one among them.Volunteers worked with students from the Dodda Thogur School, and started with a screening of ‘Stuart Little’ as an ice-breaker. The children enjoyed

the cartoon but wished to comprehend the verbal exchanges as well. This fueled their willingness to come back and learn. Volunteers went on to organize a successful animation workshop.

• The Budding Artist eventVolunteers conceptualized the Budding Artist event as a platform to identify high potential artistically inclined kids who could be nurtured to build careers in commercial art.

1594 students participated in the event of which 750 artistically inclined children were selected using parameters like composition, color usage, imagination and creativity. The 750 children went on to enter the inter school event of which winners were selected and felicitated at a prize distribution ceremony.

HP India has played a leading role in the electronicsrecycling sector by partnering with E-Parisaraa recyclers,an HP approved & audited recycling company, to recycleelectronic hardware responsibly and ensure no hardwaregoes to landfill. In 2006 alone, HP recycled over 130MTof e-waste, contributing to efficient use of resources as wellas prevention of environmental pollution.


HP profile

Number of employees [Approximate] 151,000 150,000 156,000

Net revenue [Million $U.S.] $79,905 $86,696 $91,658

Research and development spending [Million $U.S.] $3,563 $3,490 $3,591

Energy efficiency5

Electricity use [Million kWh] 2,709 2,801 2,759

Natural gas use [Million kWh] 428.5 430.4 437.7

Greenhouse gas emissions [Tonnes CO2] 1,451,700 1,551,300 1,598,500

Carbon dioxide emissions from employee business air travel [Tonnes CO2] 253,000 279,000 289,000

Carbon dioxide emissions from HP auto fleet [Tonnes CO2] NA 157,200 174,800

Product reuse and recycling6

Total cumulative recycling—computer hardware and supplies combined [Million pounds] 615 755 920

Total annual recycling—computer hardware and supplies combined [Million pounds] 120 140 165

Total reuse and recycling combined, by year [Million pounds, approximate] NA 190 210

Number of countries/regions/territories with HP return and recycling programmes 36 42 45

Supply chain

Supply chain social and environmental responsibility

Suppliers engaged [Total, cumulative] 363 475 557

Total sites audited [Cumulative] 45 130 254

Audit results (See Supply chain–Conformity assessment– Performance section online)

Supplier diversity (purchasing results)7,8

Total small businesses [Million $U.S.] $3,040 $3,011 $3,510

Total minority-owned firms [Million $U.S.] $1,100 $1,100 $1,200

Total women-owned firms [Million $U.S.] $397 $424 $400

Operations

Nonhazardous waste [Tonnes] 112,994 103,959 106,622

Nonhazardous waste landfill diversion rate [% of total produced] 81.3% 87.1% 87.3%

Hazardous waste [Tonnes] 7,320 7,001 8,638

Ozone depletion potential of estimated emissions [Kg of CFC11 equivalent] 4,954 4,358 3,935

Water consumption [Million litres] 8,220 8,390 8,637

Employees

Worldwide workforce demographics [% female of total employees] 29.7% 29.9% 29.9%

U.S. workforce demographics (See Employees–Diversity– Performance section online)

Lost workday case rate [Global rate]9 0.10 0.11 0.13

Value of cash and products donated by employees, including HP matched funds [Million $U.S.] $18.5 $16.9 $14.8

Social investment

Worldwide giving, total [Million $U.S.] $61.6 $45.3 $45.6

% of pre-tax profits 1.5% 1.3% 0.63%

2004 2005 2006

PERFORMANCE SUMMARYThis is a summary of performance data from the comprehensive HP FY06 Global Citizenship Report online, which includes additional metrics and data. All data are for HP’s fiscal year (ending October 31 of the year indicated), unless otherwise noted.


GOALS SUMMARY

Energy efficiency

• Increase purchases of renewable energy in the United States to 50 million kWh/year from the 2006 level of 11 million kWh. • Goal for 2010: Reduce the combined energy consumption of HP operations and products 20% below 2005 levels.10

• Goal for 2010: Improve energy efficiency for high volume server families by 50%, relative to 2005.11

• Goal for 2010: Improve energy efficiency for high volume printer families by 30%, relative to 2005.12

• Goal for 2010: Reduce energy consumption and the resulting carbon dioxide emissions from HP-owned and HP-leased facilities worldwide to 15% below 2006 levels.

Product reuse and recycling » more goals online

• Recycle 1 billion pounds of electronic products and supplies by the end of 2007. • Simplify the Asset Recovery Services customer offering in the Americas and Europe, Middle East and Africa regions to provide a single point of

contact for our customers.

Supply chain » more goals online

Supply chain social and environmental responsibility• Conduct auditor training and supplier forums in Brazil, Central Europe, China, India, Southeast Asia and Vietnam. • Engage and assess 95% of product materials, components, manufacturing and transportation suppliers by number and by spend. • Audit 95% of high risk product materials, component and manufacturing supplier sites.• Conduct new and follow-up verification audits at 100 sites. • Launch standardised risk and supplier assessment tools with EICC and GeSI electronic industry groups and integrate into HP’s processes. • Design strategy for determining environmental footprint of HP’s supply chain.

Supplier diversity• Award $3.1 billion of U.S. purchases to U.S.-based small businesses. • Establish goals for diverse supplier spending in Europe.

Products » more goals online

Materials• Eliminate the use of brominated flame retardants (BFRs) in the external case plastic parts of all new HP brand product models introduced after

December 31, 2006. • Eliminate the remaining uses of BFRs and PVCs in HP brand products as acceptable alternatives are identified that will not compromise

product performance and will lower product health and environmental impacts. Logistics

• Increase capacity utilisation in truck transport in the United States to at least 85% (from approximately 80% in 2006). • Conduct risk assessment and extend supply chain social and environmental responsibility policy and programme to high priority

logistics suppliers. Accessibility

• Develop Voluntary Product Accessibility Templates for 90% of all applicable products.

Operations

• Continue to divert 87% of solid (nonhazardous) waste from landfill globally until the end of 2007.

Privacy » more goals online

• Have 80% of HP workforce complete updated Standards of Excellence Data Privacy training. • Implement improved privacy guidelines for investigations.

Employee giving and volunteering » more goals online

• Establish employee engagement opportunities for all local social investment programmes in Europe, Middle East and Africa. • Increase the number of employees who donate products to schools and charities through employee giving programmes in the United States

by 10% over 2006.

Social investment

• One hundred percent of education grant recipients report that HP products received have a positive impact on teaching and learning as measured against goals they set for their projects.

• Measure social investment impact in our Asia Pacific and Japan region to ensure maximum benefit to communities and HP.

This is a partial list of HP’s global citizenship goals. See additional goals in several categories, as well as progress against goals for 2006, in the comprehensive HP FY06 Global Citizenship Report online. All goals are for 2007, unless otherwise noted.

To learn more, visit www.hp.com/go/report

About this reportThis report covers all HP operations but does not include joint ventures. Unless otherwise noted, all references to 2006 refer to the fiscal year ended October 31, 2006. All references to dollars are to U.S. dollars. “Tonnes” refers to metric tonnes.

Report endnotes1 Goal applies to HP owned and leased facilities globally and to average energy efficiency across identified

high volume product families, using industry standard measurement benchmarks and holding ship rates constant using IDC reported figures for 2005. Identified product families include products in the following categories: notebook and desktop computers, inkjet and LaserJet printers and industry standard servers.

2 “PC Market Surged in 2005, Will Settle in 2006,” by Michael Kanellos, January 28, 2006, CNET News.com.3 Based on a research report commissioned by Microsoft Corporation and conducted by Forrester Research, Inc.,

in 2003. See http://www.microsoft.com/enable/research/workingage.aspx.4 Squares represent programmes (could be multiple locations) in that country. 5 Data in this category is from HP operations.6 Hardware recycling data from Europe/Middle East/Africa and HP LaserJet recycling data are calendar year.

The remaining data is based on the HP fiscal year.7 All figures are for U.S. purchases from U.S.-based businesses.8 Data is for the 12-month period ending September 30 of the year noted.9 Lost workday case rate is the number of work-related injuries that result in time away from work per 100

employees working a full year.10 See endnote 1 above.11 Efficiency is defined in terms of kWh/transactions per minute (using SPEC or another benchmark appropriate to

the server class). Goal applies to industry standard servers, referenced in endnote 1. These families currentlyrepresent 50% of sales volume in this category.

12 Efficiency is defined in terms of kWh (using the Total Electrical Consumption Method)/pages per minute. Goalapplies to printers referenced in endnote 1. These families represent more than 35% of inkjet printers and morethan 45% of LaserJet printers shipped in 2005.

© 2007 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statementsaccompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.

4AA1-1431ENN, March 2007

Printed on 100% post-consumer recycled paper with low-VOC inks.

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