Intel Leads Its Peers In Readiness To Compete In A Low Carbon Economy

| About: Intel Corporation (INTC)
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Summary

Intel is a sector leader for disclosing key environmental, social and governance (ESG) metrics to the marketplace.

By nearly every measure, Intel’s key environmental metrics show the company is positioned to compete well in a low carbon economy.

Intel's metrics demonstrate that they are managing for operational and managerial efficiency, and this approach reduces risk, operating costs, and supports higher profits.

Seeking Alpha Contributor Modern Graham identifies Intel (NASDAQ: INTC) as an undervalued company in the overvalued IT sector, worth a closer look by long-term investors. When I am interested in investing in a sector, I look for an undervalued company within that sector. Then, I analyze and compare that company to its top peers on standardized, non-financial metrics on material environmental, social and governance (NASDAQ:ESG) issues that may impact the business value or reputation of the company or its sector.

Companies voluntarily release key environmental, social and governance (ESG) data through annual reports such as the 10K and the sustainability reports. Since 2009, corporate ESG data has been available through the Bloomberg Professional Service (Bloomberg) and other financial service platforms. SPI's primary source for the ESG data in this blog is the Bloomberg platform. If a company sees an error in their ESG data, it should contact Bloomberg and get it corrected, as it would with public financial data.

Intel's market cap of 150 billion makes it the largest enterprise by far of its top U.S. peers, identified by Bloomberg. One question I have is whether INTC's size works to its advantage. One way to answer that question is to analyze INTC's key environmental metrics to determine whether the company shows continuing improvement in operational and natural resource efficiency.

Table 1 shows that Intel, between 2010 and 2014, continually improved its operating efficiencies, resulting in reduced green (NYSE:GHG) emissions, and energy and water usage, as a percentage of sales.

TABLE 1

Intel Corp - ESG Ratios

2010

2011

2012

2013

2014

GHG Intensity per Sales

72

59

59

59

60

GHG Scope 1 Intensity per Sales

21

19

15

16

19

GHG Scope 2 Intensity per Sales

50

41

44

44

42

Energy Intensity per Sales

119

98

105

106

104

Water Intensity per Sales

954

813

823

1472

830

Water Intensity per Energy

8013

8278

7842

13904

7971

Waste Generated per Sales

2

2

3

3

3

By nearly every measure in Table 1, INTC shows continuing improvement and a downward trend over five years in greenhouse gas emission (GHG) intensity, energy intensity, and water intensity. Only waste intensity has slightly increased over five years. INTC, by reducing environmental intensities while increasing manufacturing operations, shows its managerial competence and commitment to natural resource conservation and efficiency.

Some readers may be interested to know that GHG Scope 1 emissions measure what an enterprise emits directly through its own operations. GHG Scope 2 emissions measure the company's portion of electrical utility emissions. INTC has reduced its Scope 2 emissions significantly since 2010, due to the company "commitment to efficiency, renewable energy, and other ongoing efforts." INTEL explains this in its 2014 Sustainability Report, and describe its new reduction goals for its GHG Scope 1 emissions.

Table 2 provides further evidence that INTC manages for efficiency when it comes to natural resource conservation and environmental emissions.

TABLE 2

Name

ESG Disclosure Score

Energy Intensity/Sales

Water Intensity/Sales

Waste Intensity/Sales

GHG Intensity/Sales

Average (11 securities)

42

134

1446

2

58

NVIDIA

73

26

52

0

12

INTEL

62

104

830

3

60

BROADCOM

55

17

N/A

0

8

STMICROELECTRONICS

53

315

2370

5

N/A

INFINEON TECHNOLOGIES

53

226

3394

4

119

QUALCOMM

50

23

26

0

7

TEXAS INSTRUMENTS

41

229

2002

2

184

Table 2 shows that:

  1. Intel is a sector leader for ESG disclosure, evidenced by its ESG disclosure score assigned by Bloomberg of 62. Bloomberg assigns public companies an ESG Disclosure Score, based upon how well the company discloses standardized metrics. The ESG Disclosure Score is based upon a scale of 0 (no disclosure) to 100 (full disclosure). The average ESG Disclosure for the 11 securities is 42, and Intel's ESG disclosure score is well above the average at 62.
  2. Intel's uses significantly less energy per dollar of sales compared to the Average of 11 of its US peers ("Average"), and has the second lowest energy intensity metric of all seven companies shown here.
  3. Intel uses significantly less water per dollar of sales compared to the Average, and has the second lowest water intensity metrics of all seven companies shown here.
  4. Intel generates slightly more waste per dollar of sales compared to the Average
  5. Intel generates slightly more GHG emissions per dollar of sales compared to the Average. As stated above, INTC is committed to bringing GHG emissions down further.

Intel's metrics demonstrate through objective data that they are managing for operational and managerial efficiency, and this approach reduces risk, operating costs, and supports higher profits.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.