Climate Change Data

Environmental Metrics

ESG Focus Areas

• Energy Management
• Waste Management
• Product Safety
• Product Lifecycle Management
• Materials Sourcing
• Business Ethics
• Employee Diversity and Inclusion
• Information Security Risk Management

Environmental Achievements

• Achieved a 15% reduction in direct energy usage year-over-year while growing sales 9%
• Adopted global Environmental Policy
• Recycled approximately 796,290 Kg of paper, plastic, wood and other non-hazardous waste

Social Achievements

• Adopted global Human and Labor Rights Policy
• Published 2019 and 2020 Employee Health and Safety Reports

Governance Achievements

• Cohu’s ethics and compliance management system includes periodic employee reminders and certification to our Code of Business Conduct and Ethics, internal mechanisms for reporting and following up on suspected violations, formal procedures for upward reporting to Cohu’s Audit Committee, periodic training and employee awareness programs (including FCPA training), cybersecurity training, quarterly compliance certifications by senior management and written anti-corruption policies.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions if a semiconductor supplier failed to maintain an effective business continuity plan and Cohu was unable to maintain a second source.
• Use of critical materials such as Cobalt, Palladium and Rhodium in a de minimis portion of Cohu’s manufacturing processes.

Mitigation Strategies

• Monitored usage of critical materials, maintained buffer stock, and utilized multiple suppliers where possible.
• Maintained second sources where possible for semiconductors.

Supply Chain Management

Responsible Procurement

• Monitored usage of critical materials, maintained buffer stock, and utilized multiple suppliers where possible.
• Maintained second sources where possible for semiconductors.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SASB

Sustainable Products & Innovation

• Semiconductor equipment used to automate, handle and test semiconductor devices used across many industries, including those used in renewable energy solutions.

Environmental Metrics

ESG Focus Areas

• Energy Management
• Waste Management
• Product Safety
• Product Lifecycle Management
• Materials Sourcing
• Business Ethics
• Employee Diversity and Inclusion
• Information Security Risk Management

Environmental Achievements

• Reduced principal operating sites from 14 to 10.
• 18% reduction in energy to revenue ratio while growing revenue by 39% year-over-year.
• Two operating sites have on-site solar power and our new Kolbermoor, Germany building is certified as a “KfW Efficiency House 70” energy-efficient building.
• Published Scope 1 and 2 Greenhouse Gas Emissions data.

Social Achievements

• Hired a greater percentage of female employees than our current 28% representation, and 39% of U.S. employees identify as from underrepresented communities.
• Returned 4.5% of profits globally to eligible non-executive employees, which amounted to $7.8 million.
• Continued excellent employee safety record, with a 2021 global recordable incident rate of 0.2, which is 78% below the industry benchmark.

Governance Achievements

• Established and published enterprise Sustainability goals.
• Multifaceted ethics and compliance management system including periodic employee reminders and certification to our Code of Business Conduct and Ethics, internal mechanisms for reporting and following up on suspected violations, formal procedures for upward reporting to Cohu’s Audit Committee, periodic training and employee awareness programs (including FCPA training), cybersecurity training, quarterly compliance certifications by senior management and written anti-corruption policies.

Climate Goals & Targets

Environmental Challenges

• Potential supply chain disruptions due to semiconductor supplier failures to maintain business continuity plans.
• Risks associated with the use of critical materials in products, including physical limits on availability and access, changes in price, and regulatory and reputational risks.
• Risks of shortages in certain semiconductors.

Mitigation Strategies

• Maintaining second sources where possible for semiconductors.
• Extending the sourcing horizon to 12–18 months for certain semiconductors.
• Monitoring usage and maintaining buffer stock of critical materials, utilizing multiple suppliers where possible.
• Reviewing critical materials supply chain for potential risks (e.g., Russia-Ukraine conflict).

Supply Chain Management

Responsible Procurement

• Maintaining second sources where possible; extending sourcing horizon to 12–18 months for certain semiconductors; monitoring usage and maintaining buffer stock of critical materials; utilizing multiple suppliers where possible.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SASB

Environmental Metrics

ESG Focus Areas

• Energy Management
• Greenhouse Gas Emissions
• Water Management
• Waste Management
• Product Safety
• Product Lifecycle Management
• Material Sourcing
• Business Ethics
• Employee Diversity and Inclusion
• Information Security Risk Management
• Climate Change

Environmental Achievements

• 26% of electrical energy usage was from renewable sources
• Avoided 486K km in employee travel through remote assisted reality customer support system
• Invested in LED lighting conversion projects across two sites
• Converted Osaka, Japan manufacturing site to an energy provider that utilizes 100% renewable energy (beginning of 2023)

Social Achievements

• Returned a record $7.9M (approx. 4.5% of profits) globally to employees
• Invested approx. $866K to provide >46,700 cumulative training hours to employees globally
• Excellent employee safety record, with a 0.24 incidents in 2022 (60% below industry benchmark)
• Hired more female employees than current 29% representation; 40% of U.S. employees are from underrepresented communities

Governance Achievements

• Multifaceted ethics and compliance management system including periodic employee reminders and certification to Code of Business Conduct and Ethics
• Internal mechanisms for reporting and following up on suspected violations
• Formal procedures for upward reporting to Cohu’s Audit Committee
• Periodic training and employee awareness programs (including FCPA training)
• Ongoing cybersecurity training
• Quarterly compliance certifications by senior management and written anti-corruption policies

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to semiconductor supplier failure to maintain business continuity plans
• Potential climate-related risks to facilities worldwide
• Market related and localized weather/natural disaster-related risks

Mitigation Strategies

• Maintaining second sources for semiconductors where possible
• Extending the sourcing horizon to 12-18 months for certain semiconductors
• Monitoring end market demand trends for products, including potential climate-related trends
• Evaluating climate-related risks (including weather/natural disaster events) within business continuity plans
• Annual corporate Enterprise Risk Assessment (including climate change and other Sustainability risks)
• Increasing the resilience of the global supply chain through various Sustainability initiatives with suppliers
• Maintaining manufacturing expertise across many sites
• Considering geopolitical risks in sourcing strategies

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct signed by suppliers covering approximately 85% of Cohu Melaka’s total spend
• Near-shoring efforts to increase localized material content shipped to Melaka, Malaysia facility

Climate-Related Risks & Opportunities

Physical Risks

• Localized weather/natural disaster events

Transition Risks

• Market shifts related to climate change

Opportunities

• Enabling technologies for renewable energy (power management devices, controllers, inverters, sensors, etc.)

Reporting Standards

Frameworks Used: SASB, TCFD

Sustainable Products & Innovation

• Air-cooled tester designs (75% less electricity than liquid-cooled systems)

Environmental Metrics

ESG Focus Areas

• Energy Management
• Waste Management
• Product Safety
• Product Lifecycle Management
• Material Sourcing
• Business Ethics
• Employee Diversity and Inclusion
• Employee Health and Safety
• Information Security Risk Management
• Climate Change

Environmental Achievements

• Avoided 174K km in employee travel through remote technical support and training.
• Invested $1.2M for 2024 solar power generation projects at two largest manufacturing facilities.
• Replaced air compressor equipment in Poway, California, resulting in an expected 13% annual electricity savings.
• Implemented rainwater collection and recycling system in Laguna, Philippines (estimated 5% water savings).
• Installed a deionized water recycling system in Poway, California (potential savings being evaluated).

Social Achievements

• Returned approximately 4.5% of 2023 profits ($4.7M) globally to eligible non-executive employees.
• Provided more than 51,700 cumulative training hours to employees globally (11% year-over-year increase).
• Maintained excellent employee safety record with a 2023 global recordable incident rate of 0.39 (67% below industry benchmark).
• Conducted a worldwide employee engagement survey.
• Hired a greater percentage of U.S. employees from underrepresented communities than the current representation of 40%.

Governance Achievements

• Established a multifaceted ethics and compliance management system including annual employee certifications, internal reporting mechanisms, and a third-party ethics hotline.
• One report filed in 2023 via the ethics hotline was investigated, resolved, and closed.
• Over 500 suppliers signed Cohu’s Supplier Code of Conduct (approximately 80% of total annual supplier spend).

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to semiconductor shortages.
• Potential risks from climate change, including acute weather events and regulatory changes.
• Managing risks associated with the use of critical materials.

Mitigation Strategies

• Extending the sourcing horizon to 12-18 months for certain semiconductors.
• Maintaining business continuity plans at each operating site and investing approximately $3.7M to enhance business resilience.
• Monitoring critical materials usage, maintaining buffer stock, and utilizing multiple suppliers where possible.
• Engaging with outside risk management experts to assess resilience of primary manufacturing facilities.

Supply Chain Management

Supplier Audits: Periodic on-site audits for new fabrication part and contract manufacturers

Responsible Procurement

• Supplier Code of Conduct signed by over 500 suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Acute weather events (floods, tornadoes, wildfires)
• Rising temperatures
• Extreme variability in weather patterns

Transition Risks

• Stringent environmental policies/regulations
• Increased emissions reporting requirements
• Market shifts
• Reputational risks

Opportunities

• Reducing energy use and emissions
• Supporting customers in renewable energy solutions
• Implementing energy-efficient technologies

Reporting Standards

Frameworks Used: SASB, TCFD

Certifications: ISO 9001, ISO 14001

Sustainable Products & Innovation

• DI-Core AI Inspection software (reduces scrap material)

Awards & Recognition

• America’s Most Responsible Companies 2024 (Newsweek)