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Dell Goes Green

The PC maker announces a plan to become carbon neutral.

SAN FRANCISCO -- As it remakes its business model amid slumping sales,


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is also readying changes to help the environment.

The world's No.2 PC maker pledged Wednesday to significantly reduce its emissions of greenhouse gases through a mixture of increased renewable energy use, more efficient business practices and a yet-to-be determined system of investments designed to offset its energy use.

The net result should be that Dell's contribution to emissions of carbon dioxide -- the gas that has been linked to global warming -- will be neutral. Dell said the move will make it the first computer company to be carbon neutral.

"Never before in the history of business have we seen such a critical need to build a worldwide community dedicated to improving the environment," CEO Michael Dell said in a statement.

A Dell spokesman said the company was not releasing the estimated cost of the project -- in part because it has yet to finalize the carbon offset system -- but noted that the company has already planned to incur an expense for the project next year.

In its most recently ended quarter, Dell had sales of $14.8 billion and earned $733 million in net income. Since founder Michael Dell returned to the CEO post earlier this year, the company has been making

big changes to its business model in order to revive slumping sales in the face of tough competition.

Shares of Dell are up about 20% since April on hopes that the company can mount a successful comeback.

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Dell's announcement comes as global warming is garnering increasing attention from businesses and world leaders. On Monday, United Nations Secretary General Ban Ki-Moon told delegates at the general assembly that the technology to reduce greenhouse gases now exists and that failure to act would have devastating consequences.

Meanwhile, New York's attorney general has reportedly launched an investigation to determine whether certain energy companies have failed to give investors adequate disclosures about the financial liabilities posed by their power plants' carbon emissions.

Dell's carbon neutral program, which will begin in 2008, is only a goal -- failure to meet the carbon neutral target carries no penalties to the company, other than to its reputation, a Dell spokesperson acknowledged.

The program is limited to Dell's operational activities -- essentially the electricity consumption and the heating and cooling at its worldwide facilities -- and does not include the environmental impact of the PCs and servers that it produces. Large corporate data centers -- crammed with machines made by Dell,


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and other computer companies -- are sucking up an increasing amount of electricity.

Under Dell's carbon neutral plan, the company will seek to cut back the amount of electricity used by its facilities through measures such as switching to more efficient lighting and insulation.

The company, which employs some 80,000 workers in more than 50 countries, also plans to get more of its energy from renewable sources when it is economically feasible. According to Dell, 10% of its energy consumption in Texas currently comes from renewable sources, primarily wind power.

To make up for the energy that it cannot get from renewable sources and the environmental impact of air travel by its executives, Dell said it will establish a system of carbon offsets. The offsets will involve investments in projects that can be evaluated for their long-term viability and assurance that the carbon savings are real, Dell said.

Shares of Dell closed down 18 cents at $27.98 Wednesday.