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November 11, 2004
Integrating Sustainability at Xerox: A Talk with VP for Environment, Health, and Safety Jack Azar
    by William Baue

In part two of this two-part interview, Mr. Azar discusses how Xerox integrates sustainability into its policies and practices.

This morning, Xerox (ticker: XRX) CEO and Chair Anne Mulcahy will deliver a keynote address to the Business for Social Responsibility (BSR) Conference in New York City. To provide background on Xerox's sustainability, spoke with Jack Azar, Xerox's vice president of Environment, Health, and Safety (EHS). To what degree is Xerox's integration of sustainability driven by external forces such as nongovernmental organizations or CSR/SRI advocates, and to what degree is Xerox adopting sustainability based on a business case?

Jack Azar: External forces that influence our integration of sustainability include nongovernmental organizations, investors, customers, and developing regulations. We have also found there to be a good business case in many situations, especially when these considerations are taken into account in product design.

SF: What is the business case for Xerox to integrate sustainability, beyond regulatory compliance?

JA: Our Waste-free programs have demonstrated the direct economic benefits of pursuing these goals. Xerox saves several hundred million dollars each year as a result of its remanufacturing and recycling programs. Increasingly, we are bringing to our customers' attention the ways in which Xerox products and services can help our customers achieve their own sustainability goals. Xerox invests in technologies and solutions that give our customers a new way to do their work, creating value, improving productivity, and ultimately making our customers business more sustainable.
Just a few examples are on-demand publishing, electronic document management solutions, and smart documents that enable the transition between paper and digital documents. These solutions build value and reduce costs for Xerox customers . . . and they significantly lessen the environmental impacts of our customers’ operations.

SF: Does Xerox apply a triple bottom line approach to its social, environmental, and financial accounting?

JA: Not in a formal sense, but Xerox's firmly embedded core values and effectively deployed ethical policies ensure that all of these aspects are addressed.

SF: How does the digital world affect Xerox's environmental stewardship?

JA: Advances in digital technology provide new opportunities for environmental stewardship. For example, Xerox is a leader in developing micro-electro-mechanical-systems (MEMS) which integrate electronics and mechanical systems to enable more intelligent systems based on sensing, control and adaptive processes. Research in MEMS will result in smaller machines that make more efficient use of materials and energy.

Xerox is also focused on expanding the boundaries of today's documents. Research efforts look at how to create alternative document viewing media, such as electronic paper, that preserve desirable attributes of paper such as portability, thinness and low cost, while imparting the benefits of digital systems such as reuse and storage. Xerox established its first commercial venture in 2003, marketing SmartPaper technology via wholly owned subsidiary Gyricon, LLC.

SF: What are the biggest EHS and sustainability challenges Xerox faces, and what strategies is Xerox developing to address them?

JA: Today, the elimination of hazardous materials from our products by 2006 is the biggest challenge we face. While this is required only in certain markets, we design products for a worldwide market and therefore this requirement will be applied to all our products. Our strategy is critically dependent on our component suppliers' readiness to provide parts without the targeted materials. The industry transition to lead-free electronics poses additional challenges for Xerox because our product lines are designed for remanufacturing and operate in a closed loop process. This means that parts are designed for durability and extended life and can be reused in new products. We are working with the EU government on requirements that will avoid premature disposal of returned parts that contain the targeted materials.


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