Climate Change Data

Penguin Solutions

Climate Impact & Sustainability Data (2020, 2021, 2022, 2023)

Reporting Period: 2020

Environmental Metrics

Total Carbon Emissions:9048 tCO2e/year
Scope 1 Emissions:1669 tCO2e/year
Scope 2 Emissions:7379 tCO2e/year
Renewable Energy Share:>60%
Total Energy Consumption:43,359,142 kWh/year
Water Consumption:99 megaliters/year
Waste Generated:38.38 metric tons (hazardous)/year

ESG Focus Areas

  • Climate Action
  • Diversity and Inclusion
  • Governance

Environmental Achievements

  • Atibaia, Brazil facility uses 100% renewable electricity since 2016, resulting in a 98% decrease in total emissions since 2017
  • >60% of electricity from renewable sources globally
  • Reduced GHG emissions despite increasing business volume through energy-saving programs (2010-2019)
  • >50% of hazardous waste recycled
  • 60% water reuse in Atibaia, Brazil facility

Social Achievements

  • Global employee turnover rate of about 3% (compared to industry average of >15%)
  • Established a COVID-19 task force to ensure employee safety and well-being
  • Implemented COVID-19 safety measures across global sites (PPE, social distancing, testing, contact tracing)
  • Donated medical equipment and supplies to communities during COVID-19 pandemic
  • Recognized Juneteenth as a paid holiday

Governance Achievements

  • Established an ESG steering committee to guide corporate impact goals and supplier standards
  • Maintained ISO 9001, ISO 14001, and ISO 45001 certifications across all manufacturing sites
  • No monetary losses from legal proceedings associated with anti-competitive behavior
  • 100% of regular full-time employees completed online ethics training

Climate Goals & Targets

Long-term Goals:
  • Commit to transparently reporting on our ESG program and engage with stakeholders to integrate feedback and seek continuous improvement on our ESG performance (2021)
Medium-term Goals:
  • Implement and fund activities and programs to drive recruitment, career support, and community building for underrepresented groups (2022)
  • Achieve 75% renewable energy use at our global operations by 2025
Short-term Goals:
  • Maintain ISO certifications (9001, 14001, 45001)
  • Maintain low risk in RBA SAQ
  • Maintain active RBA VAP
  • All new key suppliers to agree to SGH Supplier Code of Conduct
  • 100% supplier response to Conflict Minerals information requests
  • Total reportable incident rate below 1.0 globally

Environmental Challenges

  • Increased Scope 1 emissions in 2020 due to new facilities in Tempe, Arizona and India
  • Increased water consumption in 2020 due to added locations in Tempe, Arizona and Kochi, India
  • COVID-19 pandemic requiring rapid adaptation of work practices
Mitigation Strategies
  • Committed to achieving 75% renewable energy by 2025
  • Implemented energy conservation initiatives and renewable energy sourcing
  • Implemented closed-loop processes for water reuse
  • Established a COVID-19 task force and implemented safety protocols

Supply Chain Management

Supplier Audits: 80% of SGH’s annual global supply chain spend is with RBA members whose facilities must be audited by the organization in compliance with VAP procedures

Responsible Procurement
  • RBA Code of Conduct
  • SGH Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SASB (Semiconductors and Hardware industries), GRI

Certifications: ISO 9001, ISO 14001, ISO 45001

Awards & Recognition

  • STOPWASTE award (Newark, CA facility)

Reporting Period: 2021

Environmental Metrics

Total Carbon Emissions:58,937 tCO2e/year
Scope 1 Emissions:0 tCO2e/year (offset by 2,395 tCO2e)
Scope 2 Emissions:58,937 tCO2e/year
Scope 3 Emissions:Not disclosed
Renewable Energy Share:19.2% of total energy use
Total Energy Consumption:145,000 MWh/year
Water Consumption:593 ML/year
Waste Generated:198.19 tons/year (hazardous)
Carbon Intensity:Not disclosed

ESG Focus Areas

  • Climate Action
  • Water Management
  • Waste Management
  • Diversity, Equity, and Inclusion
  • Ethics and Compliance
  • Supply Chain Sustainability
  • Employee Engagement
  • Community Engagement

Environmental Achievements

  • Achieved significant reductions in emissions in Brazil by switching to renewable electricity.
  • Offset 2021 Scope 1 emissions through partnership with Pachama.
  • Partnership with GSPARX to install solar panels at Penang facility, offsetting 1,063 metric tons of CO2 annually.
  • Recycled over 65% of water across all facilities in 2021.
  • Total hazardous waste recycling rate over 50% in 2021.

Social Achievements

  • 3% employee turnover in 2021 (far lower than the 15% industry average).
  • Launched a gender pay parity analysis.
  • Collaborated with Circa DiversityJobs to promote open positions to underrepresented groups.
  • Partnered with Cristo Rey San José Jesuit High School on its Corporate Work Study Program.
  • Established an Employee Resource Groups (ERGs) program.

Governance Achievements

  • Formed an ESG Steering Committee.
  • Formally introduced ESG oversight as a chartered responsibility of the Nominating and Corporate Governance Committee of the Board of Directors.
  • Included ESG in executive bonus program.
  • Conducted a pay parity analysis.
  • Established a Cybersecurity Risk Management Committee.

Climate Goals & Targets

Long-term Goals:
  • Achieve net-zero carbon emissions (Scope 1 and Scope 2) by 2030
Medium-term Goals:
  • Employ at least 75% renewable energy in global operations by 2025
  • Improve ISS, MSCI, and Sustainalytics scores by 20% from 2020 by 2024
Short-term Goals:
  • All major sites to maintain ISO certifications (9001, 14001, 45001)
  • 100% supplier response to conflict minerals requests
  • All sites maintain Low Risk in RBA SAQ
  • Implement programs to drive recruitment of underrepresented groups

Environmental Challenges

  • Significant increase in Scope 2 emissions year over year due to the acquisition of Cree LED.
  • Acquisition of Cree LED and its facilities led to a significant increase in hazardous waste production.
  • Global supply chain challenges due to the pandemic.
Mitigation Strategies
  • Actively working to reduce Scope 2 emissions through reduced energy consumption and expansion of renewable energy sourcing.
  • Continuously seeking innovative solutions to minimize hazardous waste production.
  • Developed strategies to maintain customer delivery requirements and business growth despite supply chain disruptions.

Supply Chain Management

Supplier Audits: 75% of annual global supply chain spend is with RBA members whose facilities must be audited by RBA in compliance with VAP procedures.

Responsible Procurement
  • SGH Supplier Code of Conduct
  • RBA Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks
  • Climate-related natural disasters (e.g., fire, drought, sea level rise)
Transition Risks
  • Not disclosed
Opportunities
  • Reduced energy consumption
  • Expansion of renewable energy sourcing

Reporting Standards

Frameworks Used: GRI: Core Option, SASB, UN Global Compact, TCFD

Certifications: ISO 9001, ISO 14001, ISO 45001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

  • Not disclosed

Not disclosed

Sustainable Products & Innovation

  • Penguin Computing’s liquid immersion cooling technology
  • Cree LED’s low-energy LED lighting technology
  • SMART memory modules with low-voltage technology

Awards & Recognition

  • Gold and Platinum Recognition from RBA
  • Silver Medal from EcoVadis

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:43,000 MTCO2e (Scope 1 and Scope 2 Market, including offsets)
Scope 1 Emissions:3,599.69 tCO2e/year
Scope 2 Emissions:39,370.47 tCO2e/year (Market)
Renewable Energy Share:38%
Total Energy Consumption:141,969 MWh/year
Water Consumption:466 ML/year
Waste Generated:561.77 metric tons of hazardous waste (60% recycled); 96,012.49 metric tons of non-hazardous waste (94% recycled); 4,240 metric tons of e-waste (100% recycled)

ESG Focus Areas

  • Climate Change
  • Diversity, Equity, and Inclusion
  • Governance
  • Supply Chain
  • Employee Well-being
  • Community Engagement

Environmental Achievements

  • Achieved 38% renewable energy usage in global operations (nearly double from the previous year)
  • Invested in carbon offsets to reduce carbon footprint
  • Set an ambitious commitment to achieve net-zero Scope 1 and Scope 2 GHG emissions by 2030
  • Penang, Malaysia site achieved 100% renewable electricity generation

Social Achievements

  • Recognized as a Great Place to Work by the Great Place to Work® Institute
  • Launched three employee resource groups
  • Conducted a pay parity analysis and took action to ensure equitable pay
  • Partnered with HBCUs and HSIs to increase diversity in recruitment
  • Partnered with Cristo Rey San José Jesuit High School's CWSP

Governance Achievements

  • Increased executive accountability to ESG initiatives
  • Formally introduced ESG oversight as a chartered responsibility of the Nominating and Corporate Governance Committee
  • Committed to including measurable ESG performance goals in the executive bonus program (starting 2023)
  • Revised Whistleblower Policy to improve clarity

Climate Goals & Targets

Medium-term Goals:
  • Achieve net zero carbon emissions (Scope 1 and Scope 2) by 2030
Short-term Goals:
  • Maintain ISO 14001 and ISO 45001 certifications at all major sites
  • Maintain low risk in RBA SAQ
  • 100% supplier response to conflict minerals requests
  • Improve public ESG scores

Environmental Challenges

  • Increased emissions baseline due to acquisitions of Cree LED and Stratus
  • Maintaining employee engagement in a hybrid work environment
  • Addressing gender pay gap identified in US workforce
  • Achieving 100% supplier response to conflict minerals requests (85% achieved)
Mitigation Strategies
  • Implementing energy efficiency measures and transitioning to renewable energy sources
  • Investing in carbon offsets and RECs
  • Regular company-wide communications and meetings
  • Implementing changes to address gender pay gap
  • Partnering with RiskRate for better supply chain risk management

Supply Chain Management

Supplier Audits: 72% of annual global supply chain spend is with RBA members whose facilities are audited by RBA in compliance with VAP procedures.

Responsible Procurement
  • Supplier Code of Conduct
  • Requirement for ISO 14001 certification
  • Screening of new suppliers using environmental and social criteria
  • Partnership with RiskRate

Climate-Related Risks & Opportunities

Physical Risks
  • Extreme weather
  • Natural disasters
Transition Risks
  • Current and emerging regulation
  • Technological advancement
Opportunities
  • Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Universal Standards, SASB, UN Global Compact, TCFD

Certifications: ISO 9001, ISO 14001, ISO 45001

Third-party Assurance: DNV (reasonable level of assurance for Scope 1 and 2 emissions)

Sustainable Products & Innovation

  • Cree LED’s high-performance LED lighting technology
  • SMART’s DDR5 memory module with low-voltage technology
  • Penguin Computing’s technologies leveraging liquid immersion cooling

Awards & Recognition

  • EcoVadis Silver Medal
  • MerComm ARC Awards Honors Recognition
  • LACP Spotlight Award
  • RBA Gold and Platinum Recognition

Reporting Period: 2023

Environmental Metrics

Total Carbon Emissions:9974.19 tCO2e/year (Scope 1 and market-based Scope 2, including offsets)
Scope 1 Emissions:315.85 tCO2e/year
Scope 2 Emissions:9,974.19 tCO2e/year (market-based)
Renewable Energy Share:78%
Total Energy Consumption:98,837 MWh/year
Water Consumption:381 ML/year
Waste Generated:61,765 metric tons/year (non-hazardous), 158.14 metric tons/year (hazardous)

ESG Focus Areas

  • Climate Action
  • Diversity, Equity, and Inclusion
  • Governance and Ethics
  • Supply Chain Responsibility
  • Employee Well-being

Environmental Achievements

  • 76% reduction in total Scope 1 and 2 greenhouse gas (GHG) emissions from 2022
  • 78% renewable energy in total energy use
  • Offset 100% of Scope 1 emissions for the second year in a row

Social Achievements

  • Conducted a global, gender-based pay parity study
  • Unveiled a new people strategy to unify the workforce
  • 98% ethics and compliance training completion rate among employees

Governance Achievements

  • Joined Sustainable IT and maintained membership with the Responsible Business Alliance (RBA)
  • Centralized and fortified the global information security program
  • No confirmed instances of corruption in 2023

Climate Goals & Targets

Medium-term Goals:
  • Achieve net-zero carbon emissions (Scope 1 and Scope 2) by 2030
Short-term Goals:
  • Source 75% of energy from renewables globally by 2025

Environmental Challenges

  • Achieving net-zero carbon emissions by 2030
  • Maintaining 100% supplier response to conflict minerals requests (achieved 88% in 2023)
  • Improving public ESG scores
Mitigation Strategies
  • Investing in renewable energy credits to offset direct emissions
  • Implementing a robust waste management program
  • Strengthening IT strategy and cybersecurity training

Supply Chain Management

Supplier Audits: 71% of supply chain spending with RBA members (whose facilities are audited by RBA)

Responsible Procurement
  • Supplier Code of Conduct aligned with RBA Code of Conduct
  • Requirement for ISO 14001 certification for 82% of top suppliers

Climate-Related Risks & Opportunities

Physical Risks
  • Extreme weather events
  • Natural disasters
Transition Risks
  • Regulatory changes
  • Technological advancements

Reporting Standards

Frameworks Used: GRI, SASB, UNGC, TCFD

Certifications: ISO 14001, ISO 45001, ISO 9001

Third-party Assurance: DNV (for Scope 1 and 2 GHG emissions)

Sustainable Products & Innovation

  • Cree LED products consuming up to 90% less energy
  • SMART’s DDR5 memory module using low-voltage technology
  • Penguin Solutions’ liquid immersion cooling

Awards & Recognition

  • Three BrightStar awards for Cree LED products
  • Top 500 and Green 500 lists (six times each for Penguin Computing)
  • Platinum-level recognition for Penang site in RBA VAP
  • Platinum-level score for Penguin Computing in VAP
  • GDUSA Magazine’s American Graphic Design Award for 2022 ESG Report