STMicroelectronics a global semiconductor leader serving customers across the spectrum of electronics applications creates innovative technologies that bring an important contribution to overcoming the environmental and social challenges of the planet today.
Sustainability is a mandate that STMicroelectronics had been adhering to since the company’s inception in 1987. STMicroelectronics is a global semiconductor leader delivering intelligent and energy-efficient products and solutions that power electronics at the heart of everyday life.
Chips and systems from STMicroelectronics, incorporating the most advanced innovations, are found in billions of products, ranging from cars and factory machines, through washing machines and air-conditioning systems, to smartphones and telecommunications equipment.
The belief in creating technology for a sustainable world, in a sustainable way; prioritizing people and preserving the planet has always been embedded in the foundations of STMicroelectronics.
Recently, ELE Times Sub Editor, Mayank Vashisht, had the privilege to interact with Jean-Louis CHAMPSEIX, Group VP, Head of Corporate Sustainability, STMicroelectronics and had a tremendously profound discussion on STMicroelectroncs’ commitment to growth with sustainability. Excerpts:
ELE Times: Due to the COVID-19 pandemic, the progress of the 2030 Agenda for Sustainable Development has been seriously affected. Can you share how will ST contribute to this goal?
The COVID-19 pandemic has demonstrated our great resilience and preparedness for ST. It has demonstrated our ability to follow as usual two overarching priorities. First, placing people’s health and safety first; second, ensuring business continuity. Counter-intuitively, this pandemic crisis has created the conditions for us to accelerate our sustainability journey. In fact, if you go back a little bit in time, ST has a longstanding commitment to sustainability. Just to take a few examples, in 1993, we published our first public long-term commitment to the environment. In 1996 we published our first yearly sustainability report, and this year, in May, a few days ago, we published the 25th yearly report in a row. In 2000, we joined the UN global compact in creation year. In 2005 we were one of the first to join the RBA (Responsible Business Alliance). AT that time, it was called EICC for Electronics Industry Citizenship Coalition. It was so successful that it changed its name to go above the electronics industry. In 2011 we created a unique program called “Sustainability Technology” to manage and report the full life cycle of our products. So we are capable of reporting CO2 from materials, including eco-design, manufacture, and usage of chips.
In 2020 we announced our carbon neutrality by 2027. So, just to give you a little bit, in 2021, Covid-19 has demonstrated our strengths in protecting our people. These include psychosocial risk prevention, assistance and employee wellbeing. If I think of an example of gender equality, contributing to United Nations Sustainable Development Goal #5, we reached for the first time a 100% gender pay ratio both on base salary and total compensation. If I go into SDG 8 with decent work and growth, we reached the best score ever in safety with 0.12% of safety recordable cases. Actually, ST has a 2025 goal of 0.15 including contractors, and in 2021 we reached this 2025 goal. So again, Covid-19 counterintuitively helps us to accelerate our efforts and our sustainability performance.
Another example is our zero tolerance for forced labour also in our supply chain. ST sites are leading the way, but ST is also developing its local supply chain, which benefits all our ecosystems. It is also a strong competitive advantage for ST. If I mention an example of cleaning energy, contributing to UN SDG 7, we reached for the first time 50% of renewable electricity at the company level, but also reached for the first time 20% of our revenues generated from responsible products. I mentioned these examples because we at ST not only take care of our footprint but also of our handprint contributing to a more sustainable society. We develop technologies and solutions that contribute to a better world. And maybe the last important example of climate protection related to SDG 13, we exceeded our yearly goals on carbon neutrality. We are much in advance in order to achieve the 2027 commitment to be carbon neutral.
I encourage you to read the 25th sustainable report we just published in May, where you will see all our contributions, many more sustainable development goals and ambitions, but also all of our progress versus our commitments towards a more sustainable world. We report in many formats in order to engage all of our stakeholders. We follow all major standards such as Global Reporting Initiative (UN GRI), but also TCFD (Task Force on Climate Financial Disclosures) and SASB (Sustainability Accounting Standards Boards). All of these standards are very important for us because we are committed to extreme transparency for all of our stakeholders. We believe transparency is healthy and virtuous for trust. Whatever our eventual missed intermediate goals, it’s important to show our progress.
ELE Times: ST has made the sustainability index an important criterion for employee bonuses and also the distribution of shares to executives. So, please elaborate on the roles it plays in ST’s development?
ST’s approach to sustainability is to create technologies for a sustainable world, in a sustainable way, meaning prioritising people and the planet in order to create value for all stakeholders. We create short and long-term value that we aim to redistribute to our employees, customers, investors and also communities wherever we operate. In line with our approach, we have extended 2021 the existing sustainability index previously created for executives. We extended it to all ST’s employees eligible for the short-term incentives, meaning around 19,000 people at ST. In 2021 we also used a sustainability index for long-term incentives as a key criterion for the allocation of shares. Actually, this sustainability index for share allocation represented 33% of share allocation to ST leaders.
These sustainability indices include sustainability key performance indicators that are materials for the company: Carbon Neutrality, Health and Safety, Diversity and Inclusion, and last but not the least, People and Investors’ Engagement. The scheme is the same for the CEO compensation, executives, managers, and all of our employees who are eligible through the job grades of the company. Just to mention, the scheme also includes a stretch mechanism to recognize and reward overperformance.
ELE Times: Please highlight initiatives ST has launched for sustainable development.
On the people side, we are working on further diversity and inclusion initiatives, and this year our CEO announcing a new program to go even further. And we are working on talent attraction and retention programs.
On the environmental dimension, we are working on more advanced energy savings. It’s important because if you want to become carbon neutral, the best way is not to emit carbon in the first place. Energy saving is a win-win. It helps carbon neutrality, but also helps a lot in terms of energy efficiency cost. We are committed to the use of 100% renewable electricity by 2027. Today we already provide Apple, our biggest customer with products made with 100% renewable electricity. I mentioned the name of the customer here because it is public information. Actually, Apple is communicating directly.
We also commit to deploying a number of initiatives, such as our program called “STEM your way”. This program aimed to promote Science Technology, Engineering and Mathematics in all of the schools in the local eco-systems where we operate.
ELE Times: Can you explain about ST Foundation and its programs to address the digital divide issues?
The ST Foundation is very active in breaking the digital divide in the world, as well as in support also for that STEM program. So, we are also acquiring some kits and tools to help teachers and students everywhere. They do, on top of that, develop traditional IT training usually delivered to the non-privileged or senior populations with difficulty using IT tools in the connected world of today.
ELE Times: ST has more than 100 nationalities, how exactly does employee diversity help it to innovate? Do you have any relevant data and cases?
It is an important question for ST. ST was created in 1987 with a diverse culture, and we have made it the company’s competitive advantage. Indeed, we are convinced that diversity enables innovation, and increases multiple customer engagement and experience. We have more than 200,000 different customers. It also enhances the employer value proposition to attract and retain the best talents, and improve employee engagement and productivity while minimizing risk for all of our investors.
In ST we believe that diversity is a fact, equity is our choice and inclusion is a must behaviour. Our strategy has always been to strengthen diversity, equity and inclusion in all our operations everywhere. Today ST already counts 115 nationalities. If we talk about equity, the women’s base salary ratio is 100.1%, meaning the women’s base salary globally at ST is equal to or even slightly higher than men’s base salary. If you look at the total compensation, base salary plus variable bonuses, the ratio for all employees is 100.0%, meaning that women are paid exactly as men. It is at the global level. Of course, we continue to work on this equity to ensure this case in every job, function and place. With regard to inclusion, we monitor the perception of people every year. 80% of our employees declare they can be at ST the true version of themselves. ST really has a very inclusive culture.
To know about ST’s Approach to Sustainability, visit www.st.com/content/st_com
Mayank Vashisht |Sub editor | ELE Times
