International Business Machines : A Letter from the Chairman

Of all the work we have done to transform IBM, I am most proud of the way in which we are defining responsible stewardship in the digital age.

At IBM, we have always taken the long view. That means grounding strategy and business decisions in core values that endure through decades of political, technological and societal change. They are:

• Dedication to every client's success.
• Innovation that matters, for our company and for the world.
• Trust and personal responsibility in all relationships.

Leading with values is not wide-eyed altruism. It is clear-eyed business strategy. Values attract the best employees. They sustain our client relationships. And they have guided our efforts to lead the industry in modeling what 'good tech' looks like.

For example, our Principles for Trust and Transparency have become the global ethical standard of digital responsibility, inspiring similar doctrine in businesses and governments around the world:

• The purpose of new technology is to augment mankind, not replace it.
• Data and the insights it yields belong only to the owner of that data.
• AI should be open, transparent and explainable.

At IBM, we consider the full impact of our technology on society. And we readily accept our leadership role in making the digital era an inclusive era.

As such, we have pioneered programs that ensure the many - not just a few - benefit from the digital economy. To that end, we substantially expanded our 21st-century apprenticeship program and P-TECH six-year high school education model in 2019. Enrollment in the apprentice program grew twice as fast as expected. And P-TECH doubled the number of participating schools to 220, in 24 countries, with a pipeline of 150,000 students.

Our Call for Code and Code and Response programs continue to scale, tapping the talents of developers to address some of society's most intractable challenges. In 2019, 180,000 developers from 165 countries created more than 5,000 applications focused on disaster relief.

In 2019, IBM published its 29th annual IBM and the Environment Report, and advanced our environmental leadership as a founding member of the Climate Leadership Council, where we have supported a carbon tax that will reduce carbon emissions globally through market-based incentives. At the same time, we remain on track to achieve a 40 percent reduction of carbon dioxide emissions associated with our own energy consumption by 2025. In addition, IBM developed a breakthrough method of recycling polyethylene terephthalate (PET), a widely used plastic with a high carbon footprint that is difficult to recycle. IBM's new method will make it possible for more types of PET plastic to become 100 percent recyclable, helping to reduce the 8 million tons of plastics that enter our oceans each year.