Carbon Emissions

Reducing Our Company-wide Carbon Footprint: “Energy Challenge 2012”
In 2003, Xerox made a public commitment to reduce greenhouse gas (GHG) emissions – our carbon footprint – by joining the U.S. EPA Climate Leaders program and launching an internal program known as Energy Challenge 2012. We adopted a goal of reducing by 10% our absolute GHG emissions across all company operations, by 2012, from a 2002 baseline. By focusing efforts on energy efficiency, new technologies and business productivity, Xerox met this target six years ahead of schedule – in 2006. Recognizing our obligation to do even more, in 2007, Xerox set a new and challenging goal to reduce our GHG emissions by 25% by 2012, from a 2002 baseline. Through 2009, we have cut emissions by 31%, or 158,000 tons of carbon dioxide equivalents (CO₂e). This was achieved by reducing energy consumption in our facilities, manufacturing operations and across our service and sales vehicle fleet. In 2009, energy consumption was down 21% compared with 2002. While technically we have met our target, we recognize that a portion of the GHG emission reduction is also due to decreased production as a result of the downturns in the world’s economy. In 2010 and years that follow, we expect market conditions to improve and our production levels to increase. We will continue to work diligently to reduce energy consumption and GHG emissions within our operations and assess our overall GHG reduction each year until 2012, when we will announce performance against that goal.

Energy Consumption

Greenhouse Gas Emissions

Greenhouse Gas Inventory
In keeping with the international guidelines of the Greenhouse Gas Protocol developed by the World Resources Institute and the World Business Council for Sustainable Development, Xerox tracks the six major GHGs: carbon dioxide (CO₂); methane (CH₄); nitrous oxide (N₂O); hydrofluorocarbons (HFCs); perfluorcarbons (PFCs); and sulfur hexafluoride (SF₆). We express our carbon footprint in terms of carbon dioxide equivalents (CO₂e). In fact, energy sources account for more than 99% of our GHG emissions. Xerox’s GHG inventory includes direct emissions from the combustion of fossil fuels, primarily natural gas, and indirect emissions from purchased electricity and steam at our manufacturing sites, offices and warehouses. The inventory also includes the combustion of gasoline and diesel fuels in our service and sales vehicle fleet. Xerox is in the process of expanding GHG tracking to include Scope 3 emissions. In 2009, emissions from employee business travel were determined; efforts to characterize optional sources, such as contract manufacturing and outsourced product distribution, are under way.

In February 2010, Xerox acquired Affiliated Computer Services (ACS). GHG emissions data associated with ACS facilities are being collected and will be included in the 2010 reporting of our corporate GHG inventory and fleet.

Through our ACS Transportation Solutions group, we offer PrePass, a system that electronically verifies truck weight and credentials. It eliminates the need for vehicles to stop at weigh stations. ACS has administered this program since it began. It now spans 29 states and a network of more than 420,000 trucks. PrePass has saved four million idling hours and associated carbon emissions.

Sources of Greenhouse Gas Emissions

In 2009, Xerox GHG emissions totaled 357,000 metric tons of CO₂e. About 54% were indirect emissions from purchased electricity and steam. The remaining 46% were direct emissions from the combustion of natural gas, gasoline and diesel fuel. Xerox-owned or leased facilities, such as manufacturing sites, offices and warehouses, are associated with 72% of our GHG emissions. The remaining 28% are emissions from our service and sales vehicle fleet and other mobile sources.

Remote Services Solve Problems Quickly and Reduce Greenhouse Gas Emissions

Xerox’s service fleet accounts for a significant proportion of its greenhouse gas (GHG) emissions. A variety of initiatives have been undertaken to reduce this impact, including more fuel-efficient vehicles and reducing miles driven through improved device reliability and use of remote technologies. Xerox Maintenance Assistant, launched in October 2009, enables diagnostic data to be transmitted directly from the customer’s location to Xerox without an on-site service call. More than 50,000 devices currently utilize this service, resulting in an avoidance of approximately 200 service calls per month. This solution alone has resulted in a reduction of CO₂ emissions of more than nearly 25 metric tons per year while also enabling more machine uptime for the customer.

Strategies for Meeting Our Reduction Target
Our ultimate goal is to be climate-neutral. While our strategy for achieving that goal is evolving, our first priority is to reduce our total GHG emissions by lowering the energy intensity of our operations. To that end, we have cut our energy intensity 23% from 2002 to 2009 (energy consumption per million dollars in revenue). Xerox is finding success with the following approaches:

Shifts toward More Energy-Efficient Technologies
One example is Xerox's commitment to emulsion aggregation (EA) technology, or chemical toner, which is estimated to generate 28% fewer GHG emissions in the manufacturing process than conventional toner.

Process Improvements That Reduce Energy Demand
Xerox is its best case study for the efficiency of using digital multifunction systems in workplaces instead of stand-alone printers, copiers, fax machines and scanners. In Xerox locations worldwide, employees depend on networked Xerox systems for all document management needs. One multifunction system can cut energy consumption by up to half compared to several single-function devices.

Increased Reliability of Xerox Equipment and Parts
Digital technology has improved the reliability of components inside our products. This reduces service calls, which results in fewer miles driven by Xerox technicians and less gasoline consumed. Longer-lasting parts also mean that less manufacturing energy is invested over the life of a Xerox product. One example is an engineering replaceable unit (ERU) for our monochrome products that needed replacement after 370,000 prints in 2007, but has been redesigned to now last 600,000 prints.

Equipment Upgrades and Energy Management Programs
Every year, Xerox facilities identify opportunities to reduce energy consumption through equipment upgrades and better energy management. Some Xerox facilities save energy through “free” cooling. In winter months, the facilities cool process water by running it through outdoor pipes instead of using chillers, which are the equivalent of industrial air conditioners.

Use of Renewable Energy Sources
By purchasing “green power,” several Xerox sites, including those in the United Kingdom and the U.S., are taking advantage of opportunities to further reduce GHG emissions. An example is the purchase of renewable energy credits that largely offsets electricity consumption at our Corporate Headquarters in Norwalk, Conn. In Xerox facilities in the U.K., a significant portion of the portfolio is powered by Green Energy.

Climate Change Risks and Opportunities
Xerox has examined the regulatory, physical and commercial risks and opportunities associated with climate change. We are well positioned for current and potential future regulation by our investment in a robust GHG emission inventory. Consistent with our sustainability strategy, the company will continue to invest in energy-efficient product designs and solutions to meet future customer demands and product-centric regulatory requirements. We are currently gathering Scope 3 emissions data and other key metrics to assess climate change risk in the supply chain.

Xerox is not subject to unique risks due to changing weather patterns, rising temperature and sea level rise. In the case that our operations or customers’ operations are impacted by unpredictable events such as extreme weather, the company’s well-defined crisis management plan will be executed. It covers communication with employees and customers, management of employee health and safety issues, business continuity and resumption processes, as well as interaction with government organizations.