Sustainability: STMicroelectronics’ Jean-Louis CHAMPSEIX Talks about long-term value for stakeholders

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Do you know that ST is also a producer of ultrapure water & the company produces around 30 billion litres of water every year

STMicroelectronics is in the list of first five companies to join the Electronic Industry Citizenship Coalition. The same is now known as Responsible Business Alliance. The company had signed the United Nations Global Compact in 2000. It is worth mentioning here that the company has more than 8,000 people working in R&D and product design. It also has about 18,000 patents and is filling more than 500 new patents every year.

“For us, basically sustainability means three things: we create technology for a sustainable world, we do it in a sustainable way, prioritizing people and protecting the planet, and of course we create long-term value for all stakeholders including our employees, customers, investors and partners,” says Jean-Louis CHAMPSEIX, Group VP, Head of Corporate Sustainability, STMicroelectronics.

“When I was based in Singapore from 2004-2008, the company also helped Singapore to promote the United Nations Global Compact. We are the only private company invited to speak at this event. We have published an external long-term commitment since 1994 and we just recently updated this commitment through the Sustainability Charter which is public information, and you can find much about it on the website. And we have 24 years of Sustainability Report,” adds Jean-Louis CHAMPSEIX.

Not much is known but ST is also a producer of ultrapure water. The company produces around 30 billion litres of water every year. The importance of water for the semiconductor industry is a globally known fact. The company has also set an aim of being carbon neutral by 2027. ST has also managed to decrease its water consumption by 72 per cent.

“Many think ST is a semiconductor business company. In reality, we produce 30 billion liter of ultrapure water in order to operate. So we are also in the business of purifying water. We not only address the circular economy, but with some of our leading customers. I cannot mention their names because it is confidential. But we have huge initiatives worldwide for zero waste,” says Jean-Louis CHAMPSEIX.

Here are some interesting excerpts from the interaction

Que 1. How does ST deepen its encouragement of its employees about the concept of sustainability?

Ans 1 – It is the specificity of ST. Since the creation of the company, you may remember that our first CEO Pasquale Pistorio was leading the way in terms of carbon neutrality in the 1990s, and also leading the United Nation digital divide taskforce. Since the creation of the company, we have engaged employees in this transformation journey. So it is totally embedded in our culture.

If I go a bit more in detail, it includes of course a lot of communications from the leaders, starting from the quarterly conference from the CEO on business sustainability, and general manager of the fabs, and our sustainability champions. It also goes on initiatives to engage our employees, actually involving them to innovate in sustainability.

Que 2 – Any specific challenges on sustainability front during the pandemic?

Ans 2- When it comes to COVID, it has given us the opportunity to accelerate the sustainability program. So if you look at the Sustainability Report, we have a sustainability strategy made of 3 pillars. The first one is about people. The second one is about sustainable technology where we do business. And the third one is about the environment.

If you take the first one as an example, the COVID has created a lot of expectations suddenly from all stakeholders on health and safety and preparedness because when you work on health and safety, you have almost zero accident. The only thing we have done for many years is to work on prevention, to work on near misses, to work on potential important accidents, to learn from it and to change the behavior.

So these high expectations from all stakeholders including our employees and customers have created a condition for us to go further, therefore to significantly improve all our safety KPIs such as recordable cases.

Que 3 – What benefits does driving sustainability give to ST?

Ans – Sustainability benefits for ST are multiple, and for all stakeholders. Basically, there are two major benefits. I will focus on the second one and start with the 1st one. First, it reduces many kinds of risks. It reduces risks for our employees, typically health, safety and even unemployment. It reduces risks for customers in terms of resilience, reputation, and supply for example. It reduces risks for investors, the capability to execute our long-term plan and to accelerate the long-term plan to have sustainable growth. It also reduces risks for the society at large in terms of pollution and resource scarcity in communities in which we operate.

The second added value we see, which is even more important, is that we strongly believe and know that it creates a lot of added value for both short term and long term. Let me take a few examples. Let’s talk about the short term added value. For financial gains in terms of energy saving, we do not disclose energy bill, but if you look at the energy consumption which we share transparently, and you know very well the price of electricity in the world, then you will know that we have a triple-digit number million US dollars bill of electricity every year. So, each time we save 6%~10% of our electricity bill, we save a double-digit number of million dollars every year. The number of million we save since the creation of the company in energy efficiency is definitely a triple-digit number of million dollars saved. So this is a very good example. Insurance premium is extremely low in ST. We even get reimbursement for insurance because we are so low in terms of risk. Employee retention is another example of saving.

Que 4- Any examples?

Ans – I have in mind 3 examples. For customers, it brings a lot of agility, resilience, and the capability to operate during the crisis. The second added value for customers I could quote is the ability to innovate and bring added value, responsible products for them and also for their final customers. So we were billing 10% of responsible products in 2016 and we plan to bill 33 per cent by 2027 for example. The third added value for our customers is to use us to partner on the most advanced sustainability initiatives.

I mentioned the Apple example on clean energy initiatives. So we produce all the products of Apple with 100% renewable energy for example. And we have been one of the leading companies to do so. We have alliances with customers, among which the most famous one is the Schneider Electric we recently announced. And we shared a lot of best practices and we signed a strategic partnership to help us to become carbon neutral and we help them to tackle more responsible solutions with our technology.

I could mention many more. For investors in terms of attraction, not only we are recognized in various indices on CEPA, on carbon, but are also automatically part of the new sustainability index that are created in the world without even filling in the surveys, because we share so many transparent data so they know us very well, so this year we have been automatically part of the CAC 40 ESG Index for example. It creates a lot of added value in terms of employee engagement, increasing engagement and productivity. It creates a lot of added value in terms of talent attraction, hiring and retention, attracting the best candidates. As I have said, we are recognized as the best employer choice in France, Italy and India for many years. It also increases the possibility of partnering with the most advanced suppliers, and the most innovative ones who want to work with us and to develop new innovative solutions.

The last example I would like to mention is the value it creates on society itself. I would like to take a few COVID examples. ST has given 500,000 FFP2 masks to hospitals close to where we operate, not now but at the beginning of the crisis. Our friends and presence in China offers us the possibility to order these masks where European hospitals cannot have a lot of them.

More recently, we acquired a lot of oxygen respirators in India both for hospitals and for our employees. We are doing the same in Malaysia. So we are taking initiatives to help the community and develop loyalty.

Que 5 – How do you measure the progress these sustainability programs have made?

Ans 5 – We monitored and published yearly report of all our progresses publicly since 1994 through holistic measures like eco-footprint, which is a concept we use for all of our sites, or through specific KPIs addressing different aspects of sustainability like health and safety, recordable case, severity rate, the level of people engagement, the training hours (more than 44 training hours per employee, close to 3 million training hours a year), the diversity indicators by workforce and by place, remuneration standards including the fair wages, all the site certifications, the direct and indirect emissions including transportation emission, the water usage and recycling, the recycling of waste, the percentage and revenue of responsible products, the number of patents, the supplier risk management, and the community involvement. They are all holistic KPIs reported because we believe that transparency is virtuous. I would like to add that we follow almost all the most advanced reported initiatives such as United Nations Principle, United Nations Sustainable Development Goals, Global compact Initiative, SASB standard, TCFD (Task Force for climate financial disclosure).

Que 6 – How do you define responsible products?

Ans – Basically, it is the sum of products that provide added value from various environmental standpoints, mostly from climate (>90%), so reducing the energy consumption of the product itself, or the usage and application. The societal added value is just a low part of it, but it is mostly on safety and medical. You have to split it in our Sustainability Report. I do not give you this split because it is confusing. Some products may do both and so there is a split in the Sustainability Report. So this is our definition. It is very clear and audited. Every year, we are improving in this aspect.

Que 7 – What is ST’s vision and commitment for Diversity & Inclusion and how do you plan to promote it?

Ans 7 – It is an important topic for us. Our vision is very simple — at ST, you can be the true version of yourself, that’s very clear. As I have said, it is embedded everywhere in our management system since the creation of the company. We believe that the diversity & inclusive culture enhances innovation, engagement and agility, and provides huge added value to our business.

Our strategy on diversity & inclusion is very simple. Number 1, we attract diversity, as I have mentioned, we are committed to recruiting around 30% women exempt every year. Number 2 is about equity. We ensure equity all across our processes and career development, with a gender equal pay ratio of 99.6% as I have mentioned. We are working to make it 100% everywhere. A further aspect of the D&I strategy is to continuously develop an inclusive culture.

Let me give a few concrete examples for us. In Asia, we have 29 internal trainers to deliver unbiased workshops. This year, we have several women in the leadership development path which is the long-term training path with coaching, workshop and networking. This week, I am very happy that an executive program, what we call Women in Leadership Advanced Path in Asia (just for Asian women) is another example. We have a very active back-end site network of women. We have plenty of initiatives everywhere to promote women.

In Singapore, we have the Girls2Pioneer program which is a 3-year partnership with United Women of Singapore. We have another program called S.H.E (Share.Help.Empower) in India. We have Asian leadership award in India that recognizes not only the leadership of ST but also the leadership in terms of diversity.

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