 John Furrier looking angle. How are you? Welcome to the cube. Thank you. It's not a cube though. It's a it's a circle It's a conceptual cube and that's that our brand name But you know we love to be on the ground and talking to the smart people so thanks for joining us historic place It's wonderful Lot of history here. Okay, so it's my partner Dave Vellante. This is the cube or flagship telecast So tell us what's going on with you and and what's new? Okay, good. I can tell you a little bit about HP sustainability efforts. Okay, since you're here in front of Bill and Dave's office Maybe I'll start there. Absolutely. So our efforts into environmental sustainability aren't new So we didn't just get it into this field or this initiative because it's fashionable or trendy actually, we had the foresight of to a very forward-thinking founders Bill and Dave who believed a long time ago that it was not just about making a profit but also about making a contribution and giving back and in 1958 when Bill and Dave established the first corporate objectives for the organization. They listed corporate citizenship as One of the eight corporate objectives right alongside market leadership and profitability despite what Milton Friedman said here here Did he say something different? Yeah, he trashed You know giving back to the communities personally feel that that's is I'm with Bill and Dave So yeah, I think you can do both. Yeah. Why not? It's good for business They said that profit was a means to an end right? It wasn't the ultimate and it was a means to an end So that you can contribute you can do both and they were astute business people obviously because it's grown to what? 126 billion over 72 years but I think it's important to know that it's really been part of our legacy and part of our DNA so Obviously that doesn't mean we're wrestling our laurels We'll keep raising the bar on sustainability and we try to drive it not only into our product portfolio because we'd like to Say that we have the most energy efficient portfolio in the industry, which is very important I think you saw some of those examples today But also we drive it into our operations both our footprint our facilities and our real estate as well as into our supply chain Which is huge which is 60 billion dollars 68 billion dollars Keeps going up. Oh, maybe I maybe a 60 ish. It's huge. Well. He was 50 Teleon is bragging about 50 billion the next time we have anything is a day that's up to 60 So I wouldn't be surprised if it's pushing 70. It's huge we have 700 production suppliers in that supply chain and numbers over 300,000 people and In that supply chain, that's not just that that's outside of you know, of course, that's an extension of ourselves Right, so making sure that they adhere to a high level of social and environmental Standards in the supply chain is very important and so back in 19 now 2002 I think we set up the we we established a social and environmental supply chain standard that in 2003 became the standard in the EICC are you familiar with the electronic industry citizenship coalition? And that's the standard everybody in the supply chain adheres to today So we're very instrumental in helping to shape this right so you quantify that you report on that Yeah, for the past three years we've a lot of transparency and visibility so three years ago We asked we published first-ever list of all our suppliers top-tier suppliers And that got quite a lot of stir and controversy because people said that's you know confidential information can proprietary information Why would you want to publish it? And we said no it's important because it's an extension of ourselves so we publish the list of all our suppliers We've done that every year since it's right in our global citizenship report and then three years ago We actually asked them to our first-tier suppliers which represent like 80% of our supply chain We asked them to Publish and report on their carbon emissions so their global footprint or the carbon footprint Which they did and as you can imagine the first year was a little bit that didn't quite understand what we were asking Etc. Second year got better. So this is the third year. We've reported on our supply chain carbon emissions a lot of people a lot of people You know in the trends out there you see Occupy Wall Street and all these you know This you know the younger generation kind of don't know what's going on I don't know that legacy of HP about how much HP actually cares about this and I worked at HP for nine years I remember maybe one of the move from the white boxes to you know He's being sustainable and then all kinds of you know with the toner cartridges, etc. And other consumables How important that is okay now you have this announcement that we're talking about today around you know data centers And you're seeing Facebook for example just announced they're putting a data center in the Arctic So people are trying to do all these new things to try to help What have you seen in terms of trends around sustainability around you know really making a difference versus just punching it in There's a check a box on some report What can people look at in the public and say you know that company really does a good job? Some of the trends is there a way for the average person out there in the tech industry to say oh wow I can recognize that that company does a good job with sustainability Yeah, so I think making it relevant and communicating it to the average consumer I think is still a challenge I think it started off a little bit on a backward foot when the whole conversation was about the science Global warming even climate change and people can't quantify that they can't visualize it funny story was We bought a new washer and dryer this weekend. This isn't a side But I thought it was very clever because they had the washer and dryer They had the washing machine and on top of the washing machine was energy star rated of course It was the most ultra efficient, but they had stacked four high and six deep water bottles You know not that they're very sustainable obviously, but you know the plastic water bottles And it's it with every load that you do in this washing machine You will save the equivalent of this many water bottles now that really hits you in the eye Wow, and you know cost savings of course helps, but I think we have an essay sustainability community done a good job of Quantifying and making it real so that's why we're really focused a lot of energy efficiency because it's not just carbon footprint Which is interesting, but you know what is a carbon footprint and CO2 E? But we really are saying where it affects the pocket in the US We're kind of spoiled we water our lawn you do these things We don't understand the magnitude of that but out you guys are a global company What's going on outside the u.s. Clearly there's an awareness in India for example in other countries where Europe they understand this What's the global balance like I mean can you share some insight into kind of the sustainability picture globally and the relations and how that affects business? Sure, so we are a global company as you know, and I think about 65 percent of our revenue is outside the u.s Based on this past quarter, so we definitely have a big global footprint. I do you do see trends differently So we do have manufacturing hubs distribution hubs in various countries So I think what you see is products made in China for China that are really constructed for the local The local culture Consumption, you know, maybe they traveling more yeah disposable Issues or there's smaller statue perhaps the products are lighter. We have the same in India So you you do have different emphasis in Europe obviously Their regulatory process is so much farther ahead of ours. So a lot of what they do is for Regulatory market access compliance But when we like the Ross to initiatives that were introduced last year when we have to meet a standard in one country because we are global in 170 countries that following year we make it a global standard. So just saying we're going to do this in France or this in Germany Or this in California. It's just too much complexity to manage. Yeah, so we say more efficient internally just go standard, right? Absolutely, so we do we take any of those standards and roll it out globally. It's just more efficient So how has the initiative affected the bottom line of Daniel Estee in his book green to gold, right? Basically the premise was it's good for business and has your sustainability effort been been good for the bottom line It has we like to say we like to take the conversation away from Environmental responsibilities to talk about business Environmental sustainability to really talk about business sustainability. This is really about how can you sustain HB as a business or as an industry for? another 72 years to come right and that means having enough access to the bra materials at the price Point that you need in the quantity. They're not disconnected. Are they? No, they're not so we do talk about top-line growth And so you see some of the products that are most energy efficient We have a number of them not only our product portfolio, but our product offerings that give insight and intelligence to consumers So they can manage their own footprint or the water consumption, etc So it's good for the top line It's good for the bottom line cost savings and efficiencies anytime you can reduce consumption You're reducing cost which obviously helps the bottom line and it's a good market differentiator market leadership angle So we look at all three and not just nice to do because we don't want to make it Separate we really want to drive it mainstream into the business I have kind of a left field question or a question out of left feels that stand for giving a talk to some young students and Diceden I have kids my oldest is 16. I have a young one is nine and and This kind of post 9-11 culture you're seeing a different mindset I mean I'm 46 next month. So I grew up in the 80s I guess and so there's different kind of mindset, but you know post 9-11 you're seeing a different cultural mindset for the young Being educated right now in college trying to look at disciplines And there's a sustainability thread that we see coming through this kind of next generation Can you share with your vision on the insight or advice for folks in college or our younger generation about? Disciplines to pursue because the sustainability or clean tech Areas are really hot right now from a you know, we need to solve some big problems And I talked to Prith Banerjee and you know, he always talks about you know We want to solve these big problems in the labs and you guys are doing a lot of research here at HB labs What would you share with those folks out there who might see this video about? things to study curriculum career paths All have kind of you know in the future inventors the future entrepreneurs out there Yeah, so I think today's I have three in college and one just out of college. So still paying those bills for a couple years, right? So so I think you hit it right in the head I think that today's consumers are today's college graduates are looking for more than just a paycheck They're a little bit more self-absorbed perhaps or maybe that comes with age and maturity I don't know but I think they are looking to make a difference and to contribute and I think it's not just The paycheck, but it's what you can do with the paycheck work life balance quality of life So I think a lot of the students. I'm even if they're general MBA students or other disciplines They've taken some course in sustainability or environmental studies, which I think is very very valuable So I would encourage, you know, anyone in college to be mindful of Sustainability as it impacts their discipline. So whether it's sustainable finance or sustainable human relations or sustainable Product design, you know, I how do you build sustainability in because that's really how we're going to get a mainstream movement gone, right? It's not that it's a fringe just for the environmental studies PhDs the green people It's really how do you take those mindset and build it into your your core curriculum in these technical areas? You would see that might not be obvious Mostly mechanical engineering electrical engineering computer science. Is there any kind of disciplines? It's important in all of them. There's none that I would call out. I think you'll hear from Chandrakant He's very he'll talk a lot about the mechanical he talks a lot. We know Chandrakant. He's awesome mechanical engineering because he said there's really a Lack of mechanical engineers coming out So I think it's really important in all disciplines, whether it's quantifiable or whether it's the software sciences So okay, my final question is what's your challenge for the next five years of sustainability for HP? And how you're dealing with the current Flux and changing marketplaces cloud and mobile and products introductions are faster cycle times So I think that there's two big challenges One is to stay ahead because we appear on number one two or three and most of these ratings and rankings and whether you put any Credence in them or not, you know, they're nice to do and we're not working to be in a rating a ranking at a certain level But it's also a nice affirmation that people recognize that we're doing well whether it's from a disclosure of visibility or performance standard, so I think our Challenge there is to stay on the top when you're number one two or three everybody wants to knock you off right king of the hill So that's one challenge is is keeping up at a pace that If you're if you're you know if you're not if you're not moving forward you you're losing ground So that's one because our competitors aren't standing still and even though we've had a 50-year head start in the space As I mentioned earlier our competitors even though they're catching up. They started slower They really are a full court press So I think that's one of the big challenges and the second big challenge I think is really to take it from niche to mainstream I still attend a lot of conferences a lot of seminars and I feel like everybody in the audience is not in their head And they all get it headlights or more like no, yeah, we get it. Yeah, we get this But you look in the room. There's 200 people in the room. You say there's got to be 2 million people So I don't think we've taken it mainstream, you know And there's still a lot of talk about EV companies and solar companies and wind companies and those are the companies that are that are heralded is really making a difference in clean Tech, but when you can get an HP at our size and scale three and a half products a second We ship if we can get that into mainstream then you really can take it from niche to mainstream So I think that's a big mainstream is education. Is it more Programs, what do you think consumer education is a big one making it in very tangible terms But also, you know the move to integrated reporting So I'm a big advocate for for sustainability financial statements You got to talk the language of business and I think companies need to do a better job of quantifying So that's why it's not carbon. It's cost consumption and carbon. I mean, that's important But it's cost consumption how you affect in the top line how you affect in the bottom line How do you integrate into financial systems and technology presumably can help you do them We spent a lot of time talking about the product, but the product is probably a small portion of the impact that we can potentially have Right. I mean applying technology to do reporting and maybe censoring and the bigger opportunities to take the technology Which is you know our products and even if they're the most energy efficient in the world And I think that you know, we keep that pressure on that's still on me two to three percent of the whole carbon footprint How do you take technology innovation some of the stuff you've seen here in labs and really? Transform or disrupt that other 97 98 percent industries whether it's tech transportation logistics agriculture forestry Commercial buildings. How do you take? Technology to take a carbon-heavy process or industry and make it low-carbon like we've done for printing So you take 52 trillion pages are printed every year 52 trillion pages only 10% of those are digital 90% of them are analog pages and analog pages is a lot of printing distribution, you know Repulping because a lot of the stuff magazines books, you know goes back and never gets sold It's a very wasteful process right a lot of transportation if you can digitize those pages, and then you don't you you're Distributing and then printing them locally in the quantities you want where you want if you want them at all It's a much more efficient process Today was all about this harmony around having that kind of performance Yeah, I mean I think my my feeling is is that you know you mentioned the core values of HP citizenship being one of them Profitability was key, you know the same argument always comes down about Sarbanes-Oxley You know the cost overhead involved in managing, you know going public for the financial and now with sustainability Some companies may not made us try to Skim and not do the right thing so the balancing that citizenship, you know responsibility needs to be mindful And I think I'm not sure if the government may provide some incentives I mean do you see the government being involved? Is it a policy issue too? Or I mean most people will say that's too much reporting the cost for me to implement these systems I got to hire all these people and is that a factor or is that just well We're doing all this despite the fact of having any big government mandate or warrior HP HP's HP's So we're doing this. I think growing businesses. Yeah, HP has to I mean we have to continue Leading the way and hopefully help shape some of those regulations when they do inevitably come best practices kind of you know Case studies. Yeah, exactly and great. It's important. Well, thanks for coming on the cube. Appreciate it. Thank you Thanks for coming Subbing in me this great conversation