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Apple Quitting Green Registry Leads to Purchasing Fallout

San Francisco plans to suspend purchases of Apple Inc. (AAPL) computers after the company stopped participating in an environmental certification program used by governments and universities to make purchasing decisions.

San Francisco’s 50 departments and 28,000 employees will no longer be able to use city funds to buy Apple desktops, laptops or monitors because the Cupertino, California-based company dropped out of a rating system called EPEAT to track the environmental impact of computers, Jon Walton, the city’s chief information officer, said yesterday in an interview. The city’s policy doesn’t apply to iPhones and iPads, he said.

Apple’s plan to drop participation in the program may have broad consequences because many governments and universities are required to use EPEAT’s registry when making purchasing decisions. The University of California, the largest U.S. public higher-education system, is considering whether to suspend Apple computer purchases because its bylaws require computers to meet the standards, said Bill Allison, head of campus technology services at the Berkeley campus.

“When something like this happens, it’s a significant change in the landscape,” Allison said. The school needs two weeks to work with Apple and administrators in the university system to consider how to move forward, he said. “We’re reviewing the impact of this.”

Photographer: David Paul Morris/Bloomberg

The new Apple Inc. MacBook Pro laptop during the Apple Worldwide Developers Conference in San Francisco. Close

The new Apple Inc. MacBook Pro laptop during the Apple Worldwide Developers Conference in San Francisco.

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Photographer: David Paul Morris/Bloomberg

The new Apple Inc. MacBook Pro laptop during the Apple Worldwide Developers Conference in San Francisco.

San Francisco’s decision was first reported by the Wall Street Journal’s CIO Journal.

‘Comprehensive Approach’

Apple defended its decision to drop out of EPEAT, which it helped create several years ago. The company said it meets strict environmental standards, including the government’s Energy Star program, that exceed EPEAT.

“Apple takes a comprehensive approach to measuring our environmental impact, and all of our products meet the strictest energy-efficiency standards backed by the U.S. government,” said Kristin Huguet, a spokeswoman for Apple. “We also lead the industry by reporting each product’s greenhouse gas emissions on our website, and Apple products are superior in other important environmental areas not measured by EPEAT, such as removal of toxic materials.”

Allison, of the University of California, said Apple’s move may lead to an updating of the environmental standard, which is several years old. Apple told him that EPEAT is outdated and has become less effective as manufacturing standards and product design have changed, he said.

Photographer: David Clapp

City Hall in San Francisco, California. Their 50 departments and 28,000 employees will no longer be able to use city funds to buy Apple computers. Close

City Hall in San Francisco, California. Their 50 departments and 28,000 employees will... Read More

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Photographer: David Clapp

City Hall in San Francisco, California. Their 50 departments and 28,000 employees will no longer be able to use city funds to buy Apple computers.

Purchasing Decisions

Design changes for Apple’s new MacBook Pro may have led the company to pull out of EPEAT, said Kyle Wiens, the co-founder of IFixit, which performs tear-down analysis for consumer- electronics products and advocates for better recycling practices. The latest MacBook’s battery is now glued to the aluminum body of the laptop, making it more difficult to disassemble and recycle, he said.

EPEAT standards make purchasing decisions easier because the school doesn’t have the budget or time to review each product on a case-by-case basis, Allison said.

“It may be that we need to help push vendors who like to act unilaterally when they can to work together to evolve the current standard,” he said.

While Apple has occasionally run afoul of environmental groups -- including being targeted by Greenpeace protesters for not using enough clean energy at its data centers -- the company has taken steps to be more green. Apple said in May that its 500,000-square-foot data center in North Carolina will be powered by renewable energy by 2013. It was also the first technology company to eliminate PVC toxins used to insulate power cords and in flame retardants for its products.

Environmental Impact

EPEAT was started in 2006 by technology companies, U.S. government agencies and outside groups as a rating system for buyers of electronics to determine the environmental impact of products. Dell Inc. (DELL), Hewlett-Packard Co. (HPQ) and Samsung Electronics Co. are among the manufacturers that participate, according to the group’s website.

“We regret that Apple will no longer be registering its products in EPEAT,” the group said on its website. “We hope that they will decide to do so again at some point in future.”

According to EPEAT’s website, the registry is used to make purchasing decisions at the states of California and Massachusetts, Ford Motor Co. (F) and Yale University.

The U.S. General Services Administration, the agency in charge of much of the federal government’s purchases, “recommends EPEAT, but at this time GSA doesn’t require EPEAT for all contracts,” said Dan Cruz, a spokesman for the agency, in an e-mailed statement.

Cornell University, in Ithaca, New York, will be reviewing decisions around computer purchasing “carefully,” according to Thomas Romantic, director of Cornell Business Services. Middlebury College in Vermont also is evaluating how to proceed, said Jack Byrne, director of sustainability integration at the school.

In San Francisco, Apple’s products make up about $45,000 of the city’s total $200 million information technology budget, Walton, the city’s CIO, said.

“I’m just hopeful that we can have a dialog with Apple so we can continue to work with them,” he said.

Apple’s shares fell less than 1 percent to $604.43 at the close in New York. The stock has increased 49 percent this year.

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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