Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability Management
• Energy Efficiency
• Environmental Impact Reduction
• Employee Relations
• Community Involvement
• Conflict Minerals

Environmental Achievements

• Reduced purchased electricity by 2,185,682 kWh (roughly the energy required to power 124 U.S. single-family homes for one year) and reduced indirect greenhouse gas emissions by 1,082 kilograms CO2.
• Reduced natural gas consumption by 18,143,689 cubic feet (roughly the consumption of 148 average U.S. single-family homes for one year) at Gresham, Oregon facility, reducing direct emissions of greenhouse gases by 991 metric tons CO2e.
• Reduced incoming city water consumption by more than 7.1 million gallons.
• Reduced as-shipped product packaging weight by 8%, or approximately 34,375 kg (projected).
• Avoided shipping 6,761 kg of cardboard, saving about 126 trees and reducing freight-related greenhouse gas emissions.

Social Achievements

• Did not lay off any employees during the global economic crisis.
• Earned “Best Employer” awards in Arizona, United States, and in Thailand in 2009.
• Established 17 active employee clubs in Thailand, including a Charity Club involved in various community initiatives.
• Implemented employee gardening plots at Fab 4 campus.

Governance Achievements

• Created a Sustainability Management Team with direct communication to a Vice President.
• Formalized reporting of sustainability management activities through Microchip’s Quality Management Review process.
• Completed its first Carbon Disclosure Project response, achieving a score of 70.

Climate Goals & Targets

Environmental Challenges

• Supply chain complexities in identifying the country of origin of minerals used in products and related smelters/processors.
• Meeting new SEC requirements regarding Conflict Minerals.

Mitigation Strategies

• Working with the supply chain to identify the country of origin of minerals and related suppliers.
• Implementing internal procedures to ensure compliance with SEC requirements on Conflict Minerals.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Working with supply chain to identify origin of minerals.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Carbon Disclosure Project (CDP)

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• PIC microcontrollers with XLP technology
• Solutions for wireless communications for Smart Grid
• MCP1640 boost regulator family

Awards & Recognition

• Best Employer awards in Arizona and Thailand (2009)

Environmental Metrics

ESG Focus Areas

• Employee Recruitment and Retention
• Ethics and Integrity
• Energy and Climate Impacts
• Forced Labor
• Integration of Microsemi into Microchip
• Occupational Health and Safety
• Product Impacts
• Supply Chain Management
• Water and Waste Impacts

Environmental Achievements

• Reduced carbon emissions (Scope 1 and 2) from 529,370 metric tons CO2e in 2018 to 425,973 metric tons CO2e in 2019.
• Reduced energy consumption from 1,024,225 MWh in 2018 to 968,169 MWh in 2019, resulting in almost $500,000 USD in savings.
• Diverted almost four million pounds of waste from landfills.

Social Achievements

• Implemented trip reduction programs in Chandler, Tempe, and Gresham, resulting in decreased single-occupancy vehicle rates.
• Maintained a low injury rate.
• Supported various community initiatives, including STEM outreach, Project C.U.R.E., and United Way.

Governance Achievements

• Maintained compliance with laws and regulations related to sustainability.
• Became a member of the Responsible Business Alliance (RBA) in 2020 (announced in the report).

Climate Goals & Targets

Environmental Challenges

• Increased Scope 1 and Scope 2 carbon emissions and energy consumption due to company growth and acquisitions.
• Increased water usage at various facilities due to increased production.

Mitigation Strategies

• Investing in energy improvement projects to reduce energy use and carbon footprint.
• Implementing innovative measures to reduce water use and effluent wastewater.
• Migrating product production to the most efficient manufacturing centers.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Conflict Minerals Reporting Template (CMRT)
• RMI membership
• Due diligence on smelters

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, SASB

Certifications: ISO 45001 (Thailand), ISO 14001 (Thailand, Philippines)

Third-party Assurance: Strategic Sustainability Consulting (SSC)

Sustainable Products & Innovation

• Energy-efficient microcontrollers, analog, wireless, security, timing, discrete, and human-interface products; ultra-low power devices; single-chip monitoring solutions; SiC power devices for electric vehicles.

Awards & Recognition

• Platinum Award from the City of Gresham (Gresham Site Services Team)
• Environmental Quality Conservation Award (Thailand)
• CSR-DIW Continuous Award (Thailand)
• 3Rs Award (Thailand)
• Zero Waste to Landfill Award (Thailand)
• Prime Minister's Industry Award (Thailand)
• Various awards in the US (Best Companies to Work for, Top Workplace, etc.)

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Reduced Scope 1 and 2 emissions by 1,928 metric tons CO2e through various energy efficiency initiatives.
• Achieved a 15% reduction in GHG intensity from 2018 to 2021.

Social Achievements

• Not disclosed

Governance Achievements

• Board-level oversight of climate-related issues through the Nominating, Governance, and Sustainability Committee (NGSC).

Climate Goals & Targets

Environmental Challenges

• Increased indirect (operating) costs due to emerging climate change regulations and sustained adverse climate change.
• Potential for sustained adverse climate change to directly impact operations through water and power shortages and higher utility costs.
• Vulnerability of facilities in arid or tropical regions to extreme weather events.

Mitigation Strategies

• Long-term strategy influenced by climate change, including capital improvements and manufacturing changes to reduce GHG emissions and address weather volatility risks.
• Maintaining a corporate structure and culture that facilitates communication of a unified business plan to address unexpected opportunities and risks.
• Keeping abreast of customer and potential customer needs and evolving regulatory changes.
• Investigating possible improvements in innovation and participating as appropriate for Microchip.

Supply Chain Management

Supplier Audits: 100% of suppliers by number

Responsible Procurement

• Climate-related requirements included in supplier contracts.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (storms, floods, droughts)
• Water and power shortages

Transition Risks

• Climate change regulations (emissions limits, manufacturing process changes, material substitutions, increased investment in control technology, offset projects, new permits).

Opportunities

• Increased demand for low-power products and services due to global focus on GHG emission reduction.

Reporting Standards

Frameworks Used: Greenhouse Gas Protocol, TCFD

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Low-power microcontrollers and microprocessors.

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Sustainability

Environmental Achievements

• Reduced normalized Scope 1 emissions by 15% using 2018 as a baseline year.
• Reduced absolute and normalized Scope 2 emissions by 14% and 18%, respectively, from the baseline year.
• Recycled 63% of waste, surpassing short- and mid-term waste targets.

Social Achievements

• Launched an annual photo contest engaging employees in sustainability initiatives.
• Expanded trip reduction program to improve air quality and reduce traffic congestion.

Governance Achievements

• Established an ESG Steering Committee composed of senior executives to oversee climate-related activities.
• Tied 5% of the Management Incentive Compensation Plan (MICP) bonus to the achievement of annual ESG goals.

Climate Goals & Targets

Environmental Challenges

• Increased indirect costs due to enhanced emissions-reporting obligations and emerging regulations.
• Increased indirect costs due to water scarcity in arid or tropical regions.
• Potential for climate-related litigation.

Mitigation Strategies

• Keeping up with climate change-related laws and implementing abatement tools and alternative energy sources.
• Implementing a water treatment program at the Gresham site to reduce water dependency and improve water quality.
• Adopting sustainability measures, engaging with stakeholders, and adhering to product material compliance laws and regulations.

Supply Chain Management

Supplier Audits: 100% of suppliers

Responsible Procurement

• Climate-related requirements included in supplier contracts
• RBA membership and annual SAQs

Climate-Related Risks & Opportunities

Physical Risks

• Water scarcity
• Extreme weather events

Transition Risks

• Emerging regulations
• Enhanced emissions-reporting obligations

Opportunities

• Development of new low-power products and services

Reporting Standards

Frameworks Used: TCFD, SBTi (Net Zero Guidance)

Certifications: ISO 14064-3 (underway)

Sustainable Products & Innovation

• Low-power microcontrollers and microprocessors

Environmental Metrics

ESG Focus Areas

• Climate Change
• Supply Chain Responsibility
• Diversity and Inclusion
• Employee Well-being
• Governance

Environmental Achievements

• 19% reduction in Scope 1 and 2 emissions compared to 2018 baseline
• 100%+ increase in percentage of renewable energy use over 2022
• 75% of total waste diverted from landfills in 2023
• Completion of Net Zero Roadmap and Climate Scenario Analysis

Social Achievements

• 8,334 cumulative volunteering hours by 2,377 employees across 121 events
• Supplier Responsibility Survey launched with environmental and forced labor topics
• 100% leaders trained on diversity and inclusion

Governance Achievements

• Strong Board Leadership with enhanced expertise and gender diversity

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Accurate assessment of Scope 3 emissions due to methodology changes and supplier data collection
• Managing climate-related risks and opportunities across short, medium, and long-term timeframes

Mitigation Strategies

• Developed a comprehensive roadmap outlining our strategy and annual milestones for Net Zero by 2040
• Conducted Climate Scenario Analysis to identify and assess climate-related risks and opportunities
• Surveyed 100% of direct manufacturing suppliers to engage with them on climate change, renewable energy procurement, and GHG emissions reduction targets.
• Implemented a comprehensive risk management strategy to identify, assess, and mitigate climate-related risks

Supply Chain Management

Supplier Audits: 100% of major suppliers surveyed in 2023 (75% response rate)

Responsible Procurement

• Supplier Code of Conduct
• RBA membership
• Responsible Minerals Initiative (RMI) membership

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Flooding
• Water stress
• Heatwaves

Transition Risks

• Emerging regulations
• Enhanced reporting requirements
• Renewable energy procurement
• Demand for low-carbon products and services

Opportunities

• Market diversification driven by the transition to EVs and clean energy
• Efficient supply chain through increased due diligence
• Improved operational efficiency
• Greater resilience against extreme weather events

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Certifications: ISO 14001, ISO 45001, ISO 50001, IATF16949, AS9100D, ISO 9001

Third-party Assurance: EcoAct (limited assurance for Scope 1 and 2 emissions)

Sustainable Products & Innovation

• Low-power devices
• Silicon Carbide (SiC) products

Awards & Recognition

• America’s Most Responsible Companies (Newsweek)
• World’s Best Employers (Forbes/Statista)
• America’s Greatest Workplaces for Women (Newsweek)
• Most Inclusive Workplaces in America (Best Companies Group)