Dell operates under the fundamental belief that information technology can make our world a better

place. From energy management, to health care, to children’s education, to the connectedness of
communities, we believe in creating loyal customers by providing a superior experience at a great
value. The highlights mentioned in Michael Dell’s introduction relate directly to our fiscal year 2008
strategic initiatives and goals. These include design for the environment, Electronic Industry Code of
Conduct (EICC) implementation, and climate strategy. Due to our efforts this past year, we hold
industry leadership positions in many of these areas. We believe in winning at Dell. And not just in
terms of customer service and technology, but also in terms of social and environmental stewardship.

Design for the Environment

Our pledge to eliminate brominated flame retardants and polyvinyl chloride from new product designs
by 2009 will force widespread changes in our supply chain. As a standards-based organization, we
cannot rely on niche solutions. Instead, we need to include cost-effective and technically sound
solutions in our procurement specifications. These solutions must be applicable worldwide. Like the
transition to lead-free solders, the campaign to use compliant materials will reach deep into our
organization and require attentive coordination by the Dell team and our partners.

EICC Implementation

Our Global Citizenship program continues to evolve. In 2006, we introduced the use of our Business
Process Improvement (BPI) methodology to address supply chain issues. For nearly a decade, we’ve
used the methodology to identify and address such conventional manufacturing issues as quality,
throughput, delivery, and cost. Last year was the first time we used BPI in a corporate responsibility
context — with notable results in improvements in work hours, time off, and workplace noise and
temperature. Looking ahead, the drive to fully integrate the EICC into the supply chain remains a
demanding and daunting challenge for our company and the industry. The work of the EICC over the
past three years has set the stage for us to more fully employ the EICC tools in 2007. This includes
awareness building, shared audits, and the use of approved auditors. We will also ask our Tier 1
suppliers to sign the Code — a move that will compel our Tier 1 suppliers to disseminate the Code to
their Tier 1 suppliers, our Tier 2 suppliers.

Climate Strategy

This past year we significantly upgraded our strategy to address our climate impacts. We will
continue to improve the design of our products to deliver greater performance using the least power.
Other efforts in this area include furthering our energy efficiency work at our factories and in product
transportation, and extending our customer engagement programs such as Plant a Tree for Me. We
believe our direct model gives our company a unique chance to educate our customers on
environmental issues and social issues. It’s an opportunity and responsibility we gladly accept.

Additional Efforts

Our focus on the areas of design for the environment, EICC implementation, and climate strategy is
by no means the sum total of our strategic initiatives for this year and in the near future. We will
continue our work in reducing packaging, improving transportation efficiency, preserving endangered
forests, promoting diversity, and maintaining high ethical standards. Our business unit and site
managers will observe and measure employee wellness, health and safety. And we anticipate a
broadening of our HIV/AIDS efforts in China, Brazil, and India, where our employee growth is
greatest. Figure 2 lists many of the explicit goals we have set for fiscal year 2008 and beyond. We
encourage you to review the remainder of the report for more detailed information. Reflecting on
where we’ve come and where we are going, it is obvious that the demands of delivering economic,
social and environmental value increase each year. But we’re optimistic about the future and we’re
passionate about this work.

FIGURE 2: FUTURE GOALS FOR FY2008 AND BEYOND 

Corporate Accountability Goals

Ethical behavior Continue to develop EICC tools, hold ethics and

compliance training and continue to sponsor the annual
Ethics Day to raise ethics awareness, particularly in
locations outside the U.S.

Stakeholder engagement Hold stakeholder forums four times a year in various

regional locations.

Improve the collection and graphical representations of

sustainability metrics.

Supplier diversity Launch the Direct Talk program to attract and advise
minority-owned businesses on the Dell procurement
process.

Employee health and wellness Continue to expand HIV/AIDS prevention and awareness
programs while recognizing the cultural differences within
individual regions.

Continue to work with world business coalitions and

nongovernmental organizations (NGOs) to identify
HIV/AIDS prevention and treatment options in all regions
of the world.

Supply chain global citizenship Ask all Tier 1 suppliers to sign the Electronic Industry
Code of Conduct (EICC) and encourage these suppliers to
obtain EICC compliance with their Tier 1 suppliers (our
Tier 2 suppliers).

Continue to use independent auditors to audit Tier 1 and 2

suppliers.

Create Best Practices and Lessons Learned documents

from our Business Process Improvement methodology
pilot project and share with all Tier 1 suppliers.

Host Global Citizenship workshops in China.

Expand the BPI project methodology to 15 suppliers.

Regulatory compliance Operate in full compliance with environment, health and

safety laws and regulations and incur zero fines
associated with compliance.

Environmental Responsibility Goals

Climate protection Reduce greenhouse gas emissions from Dell supplier

operations by requesting applicable data and working with
suppliers on emissions reduction strategies once data is
collected.
 Reduce greenhouse gas emissions from Dell operations
and products by 25 million tons through improved product
performance and preconfigured systems with Energy
Smart operational settings. Expand Energy Smart settings
into each product category.

Reduce emissions from shipping products by optimizing

shipping routes, instituting customer delivery notification
process, and opening more facilities to assemble products
closer to the customer.

Reduce overall transportation requirements by 25 percent

by using rail trailers to increase capacity of flat railroad
cars, more multi-pack configurations, and shipping
efficiencies.

Reduce GHG emissions of Dell's freight operations by

increasing the percentage of freight shipped through
SmartWay Transport Partnership carriers.

Product design Implement server-managed power management for

customers worldwide to avoid 40,000 tons of carbon
dioxide emissions between fiscal years 2008 and 2012.

Materials Avoid 100,000 tons of lead and 60,000 tons of brominated

flame retardants (BFRs) between fiscal year 2004 and
fiscal year 2012.

Eliminate all remaining uses of BFRs and polyvinyl

chloride (PVC) by end of 2009, including
tetrabromobisphenol-A (TBBP-A) in circuit boards, as
acceptable alternatives are identified that will not
compromise product performance and will lower product
health and environmental impacts.

Facilities and manufacturing Recycle or reuse 99 percent of waste from manufacturing

operations by 2012.

Further reduce carbon intensity by 15 percent by 2012

(based on 2006 levels).

Improve our average score from the LEED®  (Leadership in

Energy and Environmental Design) Green Building Rating
SystemTM  by 2012.

Workplace health and safety Reach 100 percent of Dell employees each year with
safety communications and training.

Attain and maintain a recordable workplace injury case

rate of 0.4 cases per 100 employees.

Forest stewardship Reduce product packaging and shipping materials by

5,000 tons in fiscal year 2008.

Use Green CellTM  biodegradable foam for packing

material.
 Migrate direct mail and inserts to higher recycled content
paper and increase amount of Forest Stewardship Council
(FSC) certified fiber used.

Seek partnerships with suppliers of fiber waste streams for

an economical source of raw materials.

Product stewardship Recover 125 million kilograms of discarded product by

fiscal year 2010 through asset recovery programs.

Community Engagement Goals

Employee Volunteerism Achieve participation from 50 percent of Dell employees

worldwide.