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2011 Corporate Social Responsibility Report

RISKS, OPPORTUNITIES AND IMPACTS

IMPACTS

LCCP LEEDS building

Lexmark’s social and environmental impacts are broken down into three focus areas and are addressed by corresponding initiatives – Product Initiatives, Operational Initiatives and Community Initiatives:

  • Product Initiatives include all products and processes we develop to help our customers reduce their environmental footprint and meet the accessibility needs of their workforce.
  • Operational initiatives include all the things we do to reduce our own environmental footprint at Lexmark facilities and make Lexmark a better employer and business partner through commitments to human rights and fair labor practices.
  • Community initiatives include all the things we do to environmentally and socially improve the communities in which we live and work.

Legal compliance in these areas is priority one at Lexmark. We make sure that we are within legal standards wherever we have operations, after which, we balance and prioritize our approach by addressing what needs to be done to best meet the needs of all stakeholders as completely as possible.

RISKS AND OPPORTUNITIES

Corporate social responsibility trends have led imaging organizations, including Lexmark to evaluate the potential of physical risks and regulatory possibilities for our business as well as to consider potential opportunities to enhance and capitalize on our product offerings thereby helping our customers achieve their environmental sustainability and social responsibility goals.

Environmental and Regulatory Matters and Waste Obligation

Lexmark's operations are subject to numerous laws and regulations, particularly relating to environmental matters that impose limitations on the discharge of pollutants and establish standards for the treatment, storage and disposal of solid and hazardous wastes. For further information on the impacts of these regulatory matters, please refer to Lexmark's Form 10-K.

Waste Obligation

Waste Electrical and Electronic Equipment ("WEEE") Directives issued by the European Union require producers of electrical and electronic goods to be financially responsible for specified collection, recycling, treatment and disposal of past and future covered products. The Company's estimated liability for these costs involves a number of uncertainties and takes into account certain assumptions and judgments including average collection costs, return rates and product lives. Should actual costs and activities differ from the Company's estimates, revisions to the estimated liability may be required.

Climate Change

The potential impacts of climate change have led lawmakers across the globe to take a precautionary approach, proposing and implementing new regulations to guide governments, businesses and citizens in their efforts to reduce global warming. These regulations have the potential to impact all businesses. Regulations requiring reductions in energy usage will motivate consumers and businesses to replace wasteful equipment with energy-efficient products. Lexmark recognizes that cutting energy use is one of the most effective ways to reduce greenhouse gas emissions, a major contributor to climate change.  Lexmark’s environmental policies and programs support the reduction of greenhouse gas emissions within Lexmark’s own operations and those of our customers. 

Operational Risks

Climate change and associated weather disruptions have the potential to affect the operations of all organizations. Our operations and those of our manufacturing partners, suppliers and freight transporters are subject to natural and man-made disasters such as earthquakes, tsunamis, floods, hurricanes, typhoons, fires, extreme weather conditions, environmental hazards, power shortages, water shortages and telecommunications failures. The occurrence of any of these business disruptions could adversely affect our revenue and financial condition and increase our costs and expenses. As Lexmark continues to consolidate certain functions into shared service centers and moves other functions to countries with lower-cost labor, the probability and impact of business disruptions may increase over time. Lexmark has a business continuity plan in place at each site that faces risks due to climate change.

Product Opportunities

Lexmark offers a wide range of environmentally beneficial and highly accessible imaging devices and software solutions that help customers print less and meet the accessibility needs of their workforces. Demand for such products and solutions can have a positive financial impact for Lexmark.