Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental aspects
• Personnel aspects
• Supply chain
• Social responsibility
• Compliance

Environmental Achievements

• Increased efficient use of raw materials by 3 percent compared to 2016.
• Reduced CO2 emissions (scope 1 and 2) per produced wafer area by 2.1 percent annually (compared with 2015).
• Reduced total amount of CO2 emissions by 3.4 percent annually.
• Reduced transport volume by 17,039 m³ and avoided 1,608 tons of waste from single packaging in 2019.
• Increased reusable wafer boxes (FOSB) usage to 26 percent, exceeding the 20 percent target.

Social Achievements

• Maintained a low employee turnover rate in Germany.
• Implemented several initiatives to improve safety standards and reduce accidents.
• Offered a wide range of training opportunities for employees (approx. 2,000 seminars and nearly 14,500 e-learning courses).

Governance Achievements

• Implemented a compliance system to avoid, identify, and sanction company-related statutory violations.
• Appointed compliance officers in all active entities and an external ombudsman for anonymous reporting of violations.
• Updated the Siltronic Code of Conduct to include commitments to the UN Global Compact, RBA requirements, and UN Guiding Principles on Business and Human Rights.

Climate Goals & Targets

Environmental Challenges

• Increased requirements on technical specifications negatively affected the efficiency of silicon use.
• Did not meet the target for reducing specific energy consumption due to reduced production volumes.
• Did not achieve the target for increasing the waste recycling ratio due to increased disposal waste from a production enhancement project in Singapore.
• Did not achieve the target for reducing specific water withdrawal due to high water requirements irrespective of wafer production amounts.
• Increased number of accidents with loss days compared to previous years.

Mitigation Strategies

• Initiated and implemented projects to lower specific electricity consumption (lighting, cooling water adjustment, process optimizations).
• Introduced a campaign (“BYO Let plastics go”) to raise awareness about waste reduction in Singapore.
• Implemented measures to conserve and reuse water at various sites.
• Introduced initiatives to address behavior-based accidents (awareness campaigns, reporting programs, enhanced training for new employees).
• Developed a global system to report near misses to reduce future accidents.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Requiring suppliers to comply with UN Global Compact and Responsible Care® principles.
• Addressing violations through discussions and demands for improvements.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI, UN Sustainable Development Goals, Responsible Business Alliance (RBA) Code of Conduct, UN Global Compact

Certifications: ISO 14001, OHSAS 18001, ISO 50001, ISO 9001, ISO TS 16949

Third-party Assurance: KPMG AG Wirtschaftsprüfungsgesellschaft (limited assurance)

UN Sustainable Development Goals

• 6, 7, 8, 12, 13, 3, 4, 5, 10, 16, 17

The report aligns with several UN SDGs, including those related to climate action, responsible consumption and production, decent work and economic growth, and reduced inequalities.

Sustainable Products & Innovation

• Wafers with higher sophisticated physical and chemical specifications enabling smaller and more energy-efficient components.

Awards & Recognition

• Leading Employer 2020 in Germany (ranked 6th in semiconductor industry)
• 4 of 5 stars in German rating for family friendliness
• Gold Award for No Pretreatment Violations (Portland site)
• Silver level for Sustainability at Work (Portland site)

Environmental Metrics

ESG Focus Areas

• Energy consumption
• Waste recycling
• Water usage
• Occupational safety
• Sustainable product development
• Supplier sustainability
• Human rights
• Diversity & Inclusion
• Compliance
• Stakeholder engagement
• Climate change
• Responsible minerals

Environmental Achievements

• Reduced specific energy consumption by 1.5%
• Increased waste recycling rate by 1.5%
• Reduced specific water withdrawal by 1.5%
• Reduced CO2 emissions (Scope 1 and 2) per produced wafer area by 2.9% annually (compared with base year 2015).

Social Achievements

• Increased number of employees by almost three percent to 3,772
• No layoffs or short-time work due to Corona
• Donated protective masks, suits, and disinfectants to local communities
• Concluded a new company agreement allowing employees at German sites to work from home up to two days a week.
• Received awards for achievements as an employer (Company with Top Career Opportunities 2020, Best Employer for Women 2020, Best Trainer in Germany 2020).

Governance Achievements

• Four sustainability targets included in the variable compensation agreement for the Executive Board
• Senior executives measured by sustainability targets
• Implemented a compliance management system with compliance officers in all active entities and an external ombudsman.

Climate Goals & Targets

Environmental Challenges

• Corona pandemic impact on sales of cars and smartphones
• Exchange rate volatility (Euro vs. US dollar)
• Shift in end markets due to the Corona pandemic
• Increased demand for more sophisticated wafers leading to less efficient silicon use.
• Maintaining production during the pandemic while protecting employees.

Mitigation Strategies

• Comprehensive hygiene concepts, increased home office activities, continuous information and communication, and cancellation of business trips
• Cost reduction programs and increased productivity
• Measures to hedge currencies
• Investments in capabilities, capacity expansions, and additional epi-reactors
• Flexible personnel planning strategy (temporary staff).

Supply Chain Management

Responsible Procurement

• Code of Conduct for suppliers
• Compliance with UN Global Compact and Responsible Care® principles
• Compliance with RBA standards
• Analysis and evaluation of supply chain risks

Climate-Related Risks & Opportunities

Opportunities

• Electric mobility
• Renewable energy integration
• Energy-efficient components

Reporting Standards

Frameworks Used: GRI, UN Global Compact

Certifications: ISO 14001:2015, OHSAS 18001:2007 & ISO 45001:2018, ISO 50001:2018 (Germany), ISO 9001:2015 & IATF 16949

Third-party Assurance: KPMG AG Wirtschaftsprüfungsgesellschaft

UN Sustainable Development Goals

• SDG 6
• SDG 7
• SDG 8
• SDG 12
• SDG 13
• SDG 3
• SDG 4
• SDG 5
• SDG 10
• SDG 16
• SDG 17

Initiatives contribute to these goals through various ESG programs and policies.

Awards & Recognition

• Preferred Quality Supplier Award from Intel
• Company with Top Career Opportunities 2020
• Best Employer for Women 2020
• Best Trainer in Germany 2020
• Gold level for Sustainability at work and Gold award for No pretreatment violations (Portland site)

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced direct greenhouse gas emissions (Scope 1+2) by 9% in 2021.
• Achieved a 72.4% waste recycling rate.
• Reduced specific water consumption by 9.7% in 2021.
• Reduced specific energy consumption by 4.8 GWh, equivalent to 1,737 tons of CO2eq.

Social Achievements

• Appointed a human rights officer.
• Implemented measures to support work-life balance for employees.
• Maintained a low employee turnover rate (11%).
• Offered a wide range of advanced training opportunities (274 employees in Germany, 1144 in Singapore, 483+50+347 in Portland).

Governance Achievements

• Implemented a compliance system to avoid, identify, and sanction company-related statutory violations.
• Appointed compliance officers in all active entities.
• Established an external ombudsman for anonymous reporting of violations.
• No cases of corruption or bribery were reported in 2021.

Climate Goals & Targets

Environmental Challenges

• Did not achieve target value for the key performance indicator “efficiency of silicon use” due to a change in the product mix and very high production capacity utilization.
• Did not achieve target for loss time injury frequency rate (4.4 vs. target of 2.0) and injuries involving chemicals (2 vs. target of 0).
• Increased number of accidents with lost workdays compared to the previous year.

Mitigation Strategies

• Initiated and implemented projects to lower specific electricity consumption.
• Launched a communication and idea management campaign for more safety at work at the Freiberg site.
• Continued initiatives to address behavior-related causes of accidents, including the Safety Plus program and reporting of safety-critical situations during new employee induction.
• Implemented a global system for reporting near-miss incidents.

Supply Chain Management

Supplier Audits: Regular audits conducted on more than 100 suppliers representing the global purchasing volume.

Responsible Procurement

• Code of Conduct outlining expectations of suppliers regarding employee treatment and environmental protection.
• Compliance with UN Global Compact and Responsible Care® initiatives and RBA principles.

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, UN SDGs, RBA Code of Conduct

Certifications: ISO 14001:2015, ISO 45001:2018, ISO 50001:2018 (German sites)

Third-party Assurance: KPMG AG Wirtschaftsprüfungsgesellschaft (limited assurance)

UN Sustainable Development Goals

• SDG 6
• SDG 7
• SDG 8
• SDG 12
• SDG 13
• SDG 3
• SDG 4
• SDG 5
• SDG 10
• SDG 16
• SDG 17

Initiatives contribute to these goals through various environmental, social, and governance programs.

Awards & Recognition

• 19 employer awards in Germany (training, development, career opportunities, equality, reputation, trustworthiness)

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced greenhouse gas emissions (Scope 1 and 2) by more than 10 percent despite a slight increase in production volumes.
• Approved installation of a photovoltaic system at the Portland production site (to be operational in 2023).

Social Achievements

• Increased the proportion of female managers in the first management level from 14 percent to 20 percent (almost reaching the target of over 20 percent by June 30, 2023).
• Installed a digital whistleblowing system to report human rights or environmental violations.

Governance Achievements

• The non-financial report was reviewed by the Supervisory Board and audited by KPMG AG Wirtschaftsprüfungsgesellschaft.

Climate Goals & Targets

Environmental Challenges

• Energy crisis due to the war in Ukraine.
• Change in product mix and high production capacity utilization impacting silicon use efficiency.
• Did not achieve targets for occupational accidents (injury frequency rate and injuries involving chemicals).

Mitigation Strategies

• Intensive efforts to combat the energy crisis and decarbonization.
• Continuous efforts to further reduce silicon usage despite challenges.
• Initiated urgent measures to reduce accidents involving chemicals.

Supply Chain Management

Supplier Audits: 5 dedicated ESG audits and ESG assessments during 25 other supplier audits in 2022.

Responsible Procurement

• Code of Conduct requiring compliance with UN Global Compact and RBA principles.
• Conflict Minerals Procedure.
• Know Your Business Partner process (KYBP).

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, UN SDGs, RBA Code of Conduct

Certifications: ISO 14001:2015, ISO 45001:2018, ISO 50001:2018 (German sites), IATF 16949:2016

Third-party Assurance: KPMG AG Wirtschaftsprüfungsgesellschaft (limited assurance)

UN Sustainable Development Goals

• SDG 6
• SDG 7
• SDG 8
• SDG 10
• SDG 12
• SDG 13
• SDG 16
• SDG 17

Siltronic's initiatives contribute to these goals through responsible resource use, climate action, decent work, sustainable production, responsible consumption, and partnerships.

Sustainable Products & Innovation

• Special wafer materials with low oxygen content for energy-efficient power semiconductors.
• Development of gallium nitride wafer material for faster and more energy-efficient charging.

Awards & Recognition

• Gold level for Sustainability at work and Gold award for No pretreatment violations from Portland authorities.
• 20 employer awards in Germany in 2022.

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Occupational Safety
• Supply Chain Sustainability
• Governance

Environmental Achievements

• Reduced CO2 emissions Scope 1 and 2 (market based) by 8% compared to 2022 (243,390 tCO2e)
• Increased renewable energy share to 24% (Greenhouse Gas Protocol) and 5.3% (RE100 criteria) of total energy consumption.

Social Achievements

• Launched various employee wellbeing initiatives (health check-ups, Fit at Work program, health week, flu vaccinations)
• Received several supplier awards from Micron Technology, STMicroelectronics and Nexperia for performance in technology, availability, quality and sustainability.

Governance Achievements

• Updated climate targets, aiming for net-zero Scope 1 and 2 emissions by 2045 and a 42% reduction by 2030 (compared to 2021).
• Joined the RE100 initiative.

Climate Goals & Targets

Environmental Challenges

• Subdued consumer sentiment and weak economic recovery, particularly in China.
• High inventory levels at chip manufacturers and customers leading to reduced wafer demand and delivery postponements.
• Rising energy costs.
• Limited number of suppliers for raw materials, energy, and other resources.
• Geopolitical tensions and trade restrictions.

Mitigation Strategies

• Record investments (EUR 1.3 billion) in expanding production capacity (Singapore fab and Freiberg expansion).
• Currency hedging measures.
• Cost reduction programs and operational excellence initiatives.
• Diversified customer portfolio and globally distributed production sites.
• Long-term supply agreements with customers and multiple sourcing strategies for materials.

Supply Chain Management

Supplier Audits: 5 dedicated ESG audits and ESG assessments in 31 supplier audits in 2023

Responsible Procurement

• Code of Conduct for suppliers
• Conflict Minerals Procedure
• ESG risk assessments
• Responsible Business Alliance (RBA) membership

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (indirect impact on supply chain)

Transition Risks

• Regulatory changes, energy price volatility, availability of renewable energy

Opportunities

• Increased demand for energy-efficient chips and wafers

Reporting Standards

Frameworks Used: GRI, UN Global Compact, Responsible Business Alliance (RBA) Code of Conduct

Certifications: ISO 14001, ISO 45001, ISO 50001 (German sites), IATF 16949

Third-party Assurance: KPMG AG Wirtschaftsprüfungsgesellschaft

UN Sustainable Development Goals

• Goal 3 (Good Health and Well-being)
• Goal 4 (Quality Education)
• Goal 6 (Clean Water and Sanitation)
• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 17 (Partnerships for the Goals)

Siltronic's initiatives contribute to these goals through various ESG programs and targets.

Sustainable Products & Innovation

• Wafers for energy-efficient chips (smaller transistors, shorter conductor tracks, power semiconductors)
• Development of gallium nitride wafer material

Awards & Recognition

• Supplier awards from Micron, STMicroelectronics, Nexperia
• South West Caring Partner Award (Singapore)
• People's Association Community Spirit Award (Singapore)
• PACS Merit Award (Singapore)