What should Semiconductor companies do about ESG? ADI shares three commitments and practices
Jessie
February 02, 2024
ESG stands for Environment, Social & Governance. Over the years, many companies have come to view ESG as an indicator of non-financial performance and an element of risk assessment.
In a report by Deloitte, it is pointed out that government regulators and investors can evaluate the performance of investment objects in promoting environmental protection, promoting sustainable economic development and fulfilling social responsibility through the observation of corporate ESG performance, and then take corresponding actions in policy guidance and investment decisions. The ESG evaluation system has gradually developed into a new standard to measure the development potential and prospects of enterprises and investment criteria followed by investors.
According to the "2023 China ESG Development White Paper" released by Caixin, as of the end of July 2023, the A-share 2022 ESG information disclosure rate has increased to 34.85%, covering about three-quarters of the total A-share market value.
Yan Zheng, senior Director of Marketing Communications and Public Affairs at ADI Asia Pacific, said that as a leading global technology company, ADI has always been very concerned about its own responsibility and responsibility, which is the main purpose of ADI's ESG implementation. However, she also stressed that ADI's ESG implementation is not purely charitable.
According to Yan, ADI has an internal slogan, "do well by doing good," which means "benefit becomes benefit" in Chinese. "We want to strike a balance between philanthropy and business operations, addressing human and social challenges while seizing the business opportunities that arise," she explains. According to CICC's "2024 China ESG Consumption Report", 56.03% of consumers will increase their goodwill by 10%-30% because of brand promotion of ESG, which proves that the implementation of ESG will bring additional benefits to enterprises.
ADI has developed a unified approach to ESG implementation, and it has a nice name "Horizon Project." The horizon is a directional anchor point on the vast and beautiful rotating planet Earth, and it also represents the direction of the future. It expresses ADI's strong commitment to integrity, diversity, transparency, and mitigating or reversing the effects of climate change.
In conjunction with ADI's recently released ADI 2022 ESG Report, Yan shared the company's commitment and practice across the three dimensions of operations, solutions and community.
More green operation
ADI's manufacturing operations are global and support a broad customer base through a flexible hybrid manufacturing model that combines both owned and contract manufacturing. As the demand for semiconductor products has surged in recent years, ADI has also been expanding the capacity of its internal and external manufacturing facilities, with plans to double wafer production in the United States and Europe by the end of 2025 through internal investments. Including in Beaverton, Oregon, ADI added 25,000 square feet of clean room space to double its capacity. The production area in Limerick, Ireland, has been expanded by 15,000 square feet, tripling capacity.
As the plant expanded year by year, ADI also set detailed and aggressive ESG targets. Such as carbon neutrality by 2030, net zero emissions in the value chain by 2050 or earlier, 50% water recycling (production) by 2025, and so on. Despite its long-term plans, ADI has also achieved measurable results in the short term. For example, Category 1 and Category 2 greenhouse gas emissions will be reduced by 7.2% compared with 2019. In terms of combined revenues, Category 1 and Category 2 GHG emissions intensity decreased by 37% compared to 2019.
Also in the report, ADI disclosed for the first time audited greenhouse gas emission intensity data for Category III. The third category of greenhouse gas emissions refers to related emissions such as upstream transport, distribution and travel. "The third category of greenhouse gas emissions is the most difficult for any business to manage, because first of all it involves every employee of the business, it involves all service providers." Yan Zheng stressed. More green operation
ADI's manufacturing operations are global and support a broad customer base through a flexible hybrid manufacturing model that combines both owned and contract manufacturing. As the demand for semiconductor products has surged in recent years, ADI has also been expanding the capacity of its internal and external manufacturing facilities, with plans to double wafer production in the United States and Europe by the end of 2025 through internal investments. Including in Beaverton, Oregon, ADI added 25,000 square feet of clean room space to double its capacity. The production area in Limerick, Ireland, has been expanded by 15,000 square feet, tripling capacity.
As the plant expanded year by year, ADI also set detailed and aggressive ESG targets. Such as carbon neutrality by 2030, net zero emissions in the value chain by 2050 or earlier, 50% water recycling (production) by 2025, and so on. Despite its long-term plans, ADI has also achieved measurable results in the short term. For example, Category 1 and Category 2 greenhouse gas emissions will be reduced by 7.2% compared with 2019. In terms of combined revenues, Category 1 and Category 2 GHG emissions intensity decreased by 37% compared to 2019.
Also in the report, ADI disclosed for the first time audited greenhouse gas emission intensity data for Category III. The third category of greenhouse gas emissions refers to related emissions such as upstream transport, distribution and travel. "The third category of greenhouse gas emissions is the most difficult for any business to manage, because first of all it involves every employee of the business, it involves all service providers." Yan Zheng stressed.
Realize ESG with technological innovation
"At ADI, it's all about technology innovation, and we want to work with our customers to create solutions that ultimately contribute to a healthier planet and a healthier human society." "Said Yan. This is also the best manifestation of the self-consistent logic of "profit becomes profit".
As Vincent Roche, CEO and Chairman of the Board of Directors of Analog Devices, said, "Semiconductors are the cornerstone of the modern economy." Through its analog products and solutions, ADI has been bridging the physical and digital worlds for the benefit of the planet and people for decades. With the full arrival of intelligence today, ADI is once again acting as an innovator at the intelligent edge, controlling and leveraging data to enable everyday technology intelligence, and helping customers achieve digital transformation with solutions that combine analog, software and digital capabilities.
Collectively, ADI's products and technologies serve the modern world in automation, electrification, connectivity and human health, working with customers to enable breakthrough innovations at the intelligent edge to make the world safer, more efficient and more sustainable.
Taking automation as an example, according to the International Energy Agency data show that the industrial sector accounts for 40% of global energy consumption, of which the motor power consumption can account for 70% of the total industrial power consumption, and it is estimated that the energy cost of the motor in its total cost of ownership accounted for 95%. Therefore, improving the efficiency of the motor can minimize power consumption. BrightSource selected ADI's Trinamic motion control technology and developed internal drives for its solar panel motors. BrightSource chose Trinamic because Trinamic uses CoolStep and StallGuard technologies to improve the functionality and efficiency of the application without adding additional components. CoolStep reduces motor energy consumption by up to 75% and reduces the amount of heat generated by the motor. StallGuard provides cost-effective feedback and diagnostics, ideal for self-calibration, distance measurement, or to verify that all machinery is operating within a safety margin.
In addition, in the field of automation, more and more collaborative robots (Cobots), autonomous mobile robots (AMRs) and more advanced material handling systems will be used to improve work efficiency and keep workers safe. ADI's technology enables robots to more accurately perceive their surroundings and interact more safely with human operators. As one of ADI's customer representatives, the card saving robot has realized the large-scale landing of hundreds of scenes such as robot lock payment, grinding and welding in the fields of industry, consumption and education.
Electrification, as a technology that has lasted for a hundred years, is still in continuous innovation, and more and more scenarios are using electricity as the main source of energy and replacing fossil fuels, including renewable energy generation, energy storage technology, electric vehicles and many other industries. ADI technology runs through all the links of "power generation, transmission, transformation, distribution and use" in the power industry.
At the power generation end, Vision Energy, a subsidiary of Vision Technology Group, introduced ADI MEMS sensor technology in its new generation of intelligent fans, and deployed ADI precision inertial navigation measurement Unit (IMU) and low noise and low drift accelerometer in different locations to achieve real-time monitoring of the key state of the tower. The collected tower information is used to take appropriate measures to avoid accidents, achieve safer fan operation and design, and thus raise the fan safety level to a new level.
In the field of energy storage, at Sunpower's 2023 Global Partner Conference, ADI won the "ESG Pioneer Practice Award" for innovative technologies that promote net zero emissions in the industry and open local collaborative spirit, the first time ADI has won an ESG category award from a customer. It is a high recognition of ADI's long-term practice of sustainable development concepts and its own ESG management. In November last year, at the sixth CIIE, ADI announced close cooperation with Shanghai Paineng Energy Technology Co., Ltd. and Sunshine Power Co., Ltd. two leading energy storage enterprises to create more innovative and easy-to-use products and system solutions for industry customers.
In the electric vehicle market, ADI's battery management System (BMS), which is part of its electrification portfolio ADI Recharge, accurately monitors each cell in an electric vehicle and is critical to maximizing battery pack capacity and ensuring safe and reliable operation. ADI's BMS are currently used by 16 of the world's top 20 Oems. ADI and Yutong Group Limited are collaborating to develop wireless battery management system (wBMS) technology and apply it to a variety of Yutong's current and future electric heavy-duty vehicle platforms, including tractors and buses. ADI's wBMS is the industry's first wireless battery management system for mass production electric vehicles. The wBMS eliminates the need for traditional wiring harnesses and makes battery pack design more flexible. Removing harnesses, associated cables, and connectors also helps reduce potential points of system failure. In addition, it also helps to disassemble the battery pack faster and more economically, which leads to smooth battery cascade utilization and recycling applications.
In the connected market, ADI's extensive range of power products reduces data center energy consumption and helps meet the emerging needs of next-generation data center equipment. The largest cost of data centers comes from electricity, so energy consumption is the most important point in the sustainable operation of data centers. In recent years, with the rapid development of the digital economy, the scale of China's data center market has become increasingly strong, and has maintained an average annual growth rate of 30%. ADI's end-to-end data center solutions include advanced power management, optical control and sensor solutions to support data centers from the edge to hyperscale. Taking ADI's cooperation with domestic 5G optical device leading enterprise Guang Xun Technology as an example, the cooperation between the two sides has been more than 15 years, and there is in-depth cooperation in active and passive optical modules and photonic system products. ADI's research and development and design requirements for customers' new optical module products such as data centers and wireless access helped it complete the first 5G forward optical module design with amplitude modulation function to meet China Mobile standards, and the two parties will continue to cooperate in the next generation of data center optical module products and 5G access and transmission optical module products.
In the health sector, ADI's technology can be applied to medical imaging, medical life sciences and instrumentation, and vital signs monitoring to create greater coverage and equitable access to care. For example, ADI has teamed up with customers in China to develop a continuous patch blood glucose monitor that is more convenient and accurate than traditional blood glucose monitoring methods. In addition, in medical imaging examinations such as CT or X-ray, ADI's high-precision solutions allow for clearer patterns and more accurate diagnoses, while also reducing scan times and radiation exposure to patients.
One cutting-edge research result is for severe acute kidney injury (AKI), where patients may be treated with continuous kidney replacement therapy (CRRT), a form of treatment in which blood is purified through cardiopulmonary bypass and must be drawn several times a day for filtration. ADI's biosensors continuously monitor critical ions, reducing the number of blood draws to once per day, improving efficiency and reducing patient pain. "ADI has a lot of these behind-the-scenes technologies, both in the hospital and out of the hospital, that can help provide a lot of real benefits to patients, reduce patient pain, but also enable more timely and early detection of some conditions." Mr. Yan concluded.
In the past, simply restoring signals was a smart way to add value to data collection. Now intelligence is using increasingly powerful edge AI to assist computing and secure connectivity, turning data into insight, understanding and action. Customers are asking ADI to bring analog, digital and software solutions closer to where detection and driving are happening. This is what ADI understands as the "smart edge."
Same community
ADI is committed to creating a fair and inclusive environment in which people can envision and build their future.
Yan cited ADI's partnership with Woods Hole Oceanographic Institution (WHOI) to raise awareness of the critical role of the ocean in a sustainable future through the formation of the Ocean and Climate Innovation Accelerator (OCIA) alliance. ADI is working with WHOI members to deploy sensors on fishing gear at depths of up to 300 meters to accurately monitor the pH of seawater, and the data obtained can be used to develop mitigation strategies to help combat ocean acidification.
Yan particularly highlighted ADI's employees, who are an important dimension of the company's ESG and sustainability as a multinational company with nearly 25,000 employees worldwide. In 2020, ADI established the ADI Foundation, a separate, legal entity registered in the United States, whose main purpose is to use ADI's strengths to promote a culture of employee engagement to address a variety of social issues, and to encourage activities that have a positive environmental impact on ADI and the communities in which it operates by providing partial financial support. In fiscal year 2022, ADI employees donated $2 million to charitable organizations around the world and matched donations made by the ADI Foundation, benefiting more than 900 community organizations. "Two million divided by nine doesn't seem like a very large number. But it underscores ADI's philosophy that our target audience is charities that lack money and volunteers, and by doing targeted matching, our main goal is to reach more charities at the community level." "Said Yan.
In China, for example, ADI has partnered with the Butterfly House Child Palliative Care Center, the first specialized child care facility in the country to provide palliative care, hospice, and hospice care for severely isolated and disabled children. Yan was impressed that when ADI announced the success of the donation, colleagues in Shanghai and Beijing said they were also supporting the organization for a long time, "This is the first time through the event to bring like-minded partners within the company together." "Said Yan.
In addition, at least 25 civil society organizations have been spontaneously established within ADI, including three important organizations in China. The first is Green team network, which focuses on discussions and practices on sustainable development and environmental issues, such as tree planting, introduction of green living concepts, etc. It has nearly 100 employees in China and nearly 500 employees around the world. The second is the Women's leadership network, which aims to build a communication platform for female leaders. The third is Young Professionals Network, a dedicated platform for ADI employees to communicate and learn from each other within 5 years of joining ADI. Yan emphasized, "None of these organizations were officially initiated by ADI, but employees suggested them and ADI created opportunities to communicate with each other. It is also a testament to ADI's cultural diversity, which encourages communication across time zones, cultures and ethnicities."
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