Enabling a Connected World Sustainably 2016 Report Sustainability Report

Transcription

1 Enabling a Connected World Sustainably 2016 Report Sustainability Report

2 Letter from the CEO In 2016, global demand for connectivity across mobile and the Internet of Things ecosystems accelerated, creating further opportunity for Skyworks. Driven by our ability to innovate and deliver high-performance analog and RF solutions to our customers, unit sales and revenue reached all-time highs. In reaching these new heights, Skyworks never wavered in our commitment to sustainability, ensuring our focus on meeting the needs of today without compromising the future. Our team achieved new records in environmental resource conservation and waste minimization, while adding three new factories, each taking on the same sustainability systems and practices that have proven successful in our existing world-class facilities. We further expanded our scope across our vendor base by enhancing supplier sustainability requirements and worker protections, simultaneously strengthening our oversight and visibility. We continued our diligent focus on creating safe and healthy work environments free from harassment and discrimination. In addition, our employees engaged in numerous outreach efforts to help care for the worldwide communities we call home. Throughout this report, I am delighted to share with you our many accomplishments and some of the challenges that remain in our journey toward continuous improvement. We are Connecting Everyone and Everything, All the Time sustainably! Liam K. Griffin President and Chief Executive Officer, Inc. 2 Sustainability Report 2016

3 Enabling a Connected World Through Sustainable Business Practices Skyworks engages in a systematic process to establish and implement standards of performance in the areas of Labor, Environment, Health and Safety, Ethics, and Management Systems. A cross-functional management team, known as the Sustainability Council, establishes performance objectives that drive improvements throughout the organization. Performance is evaluated and reported regularly and actions are taken wherever objectives are not being met. Throughout this report you will find details of these improvements. Below are a few of the highlights. Million kwh Energy saved Percent Conformance to the <60 hour workweek standard* Percent Identified supply chain partners that are Conflict-Free Smelter Program compliant Million Gallons of water saved Percent Employees trained on our business conduct and ethics requirements Thousand Tons CO 2 equivalent emissions averted Thousand Pounds Hazardous waste averted * Electronic Industry Citizenship Coalition (EICC) Code of Conduct Thousand Pounds Municipal waste to landfill averted Sustainability Report

4 Our Company We are a global company with engineering, manufacturing, sales and service facilities throughout Asia, Europe and North America. In August 2016, Skyworks was pleased to add three new manufacturing locations to our global operations. While these factories, one in Singapore and two in Japan, have adopted our Sustainability management systems, data from these sites is not yet included in the factory information represented herein since they have not been Skyworks facilities for a full year. Subsequent reports will include data from these factories. Our Sustainability Policy Skyworks is committed to operating under Sustainable Business Practices that meet today s needs without compromising the ability of future generations to meet their own. We employ a management system approach to: Comply with applicable laws, regulations and requirements Prevent pollution, conserve resources and minimize waste Cultivate safe, healthy and productive work environments Operate with integrity, honesty and accountability Foster continuous improvement Promote Sustainability throughout our supply chain Kadoma, Japan Facility Osaka, Japan Facility Our Products Skyworks' solutions are utilized in billions of consumer products each year. We ensure our devices adhere to strict international regulatory and industry standards regarding hazardous materials content including Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), Restriction of Hazardous Substances (RoHS) and IEC , among others. Skyworks' devices also improve the efficiency of the consumer products in which they operate. For example, Skyworks' high band power amplifiers maintain an overall efficiency of 46% (a 3% improvement from our 2015 solution), enabling a longer battery life and requiring less frequent charging. Our customers can confidently utilize Skyworks' products knowing we are an environmentally friendly wireless solutions provider. Singapore Facility High Band Power Amplifier (PA) System Efficiency (Includes PA and DC/DC Converter) 43% 46% 29% 1. International Electrotechnical Commission (IEC) Material Declaration Standard Sustainability Report 2016

5 Environment Water Use Environmental programs are the foundation from which our Sustainability programs are based. Fifteen years ago, when the company was formed via a merger, an Environmental Management System was developed and implemented. From these fundamental principles, other elements of Sustainability programs were added. Our experience in and focus on environmental improvement is evident year after year. Core to our factory objectives is efficiency improvement, which drives savings and reduces environmental impact. The graphs below highlight our year-over-year and five-year improvement results. We achieved all-time lows in each and every major category we measure. These reductions are the result of aggressive target setting, frequent management reviews and measurable actions when issues arise, helping to ensure any impacts are minimized and our path to improvement is maintained Factory 1 Water Efficiency Gallons per 1k Production Units % Reduction Year-over-Year 42% Five-Year Improvement Energy Use Carbon Dioxide (CO 2 ) Emissions Factory 1 Energy Efficiency kwh per 1k Production Units % Reduction Year-over-Year 39% Five-Year Improvement Direct Factory 1 CO 2 Equivalent Emissions Rate Tons CO 2 per 1k Production Units % Reduction Year-over-Year 64% Five-Year Improvement Hazardous Waste Factory 1 Hazardous Waste Generation Rate Pounds per 1k Production Units 1. Newbury Park, CA; Woburn, MA; Mexicali, B.C. 2. Data tracking initiated in % Reduction Year-over-Year 62% Five-Year Improvement Municipal Waste Factory 1 Municipal Waste to Landfill Pounds per Employee per Month % Reduction Year-over-Year 25% Four-Year Improvement 2 Sustainability Report

6 Supply Chain Supplier Responsibility Skyworks' global supply chain affords us the opportunity to positively influence business practices on a large scale, outside of our own facilities. Supplier requirements are outlined within our Supplier Sustainability Specification, which aligns with the Electronic Industry Citizenship Coalition (EICC) Code of Conduct. Our suppliers are required to incorporate these provisions as their own, while further establishing the Code as a minimum requirement across their own supply chain. This includes the call for supply chain labor programs prohibiting child labor and worker recruitment fees, establishing a maximum 60-hour workweek, and much more. Our Supplier Sustainability Specification is available on our website at: Currently, 139 suppliers contribute direct materials to the development of our products. Our commitment to promote sustainability extends throughout this supply chain and incorporates a process of risk assessment and risk reduction: Sustainability requirements are communicated to our suppliers via the Supplier 1 Sustainability Specification. Here, suppliers are informed of the obligations that all qualified supply chain partners to Skyworks must meet. 2 Suppliers 3 4 All 5 6 Suppliers are closely evaluated and qualified based on a strict set of criteria associated with product quality, performance, price, sustainability programs and more. Major suppliers are identified. These suppliers represent 80% of our expenditures, and include all subcontractor assembly facilities and labor agencies (i.e., recruiting companies). major suppliers complete an industry standardized Self-Assessment Questionnaire (SAQ) developed and implemented by the EICC. Risk rankings are identified based on the SAQ scores. Supplier facilities that are ranked as high risk, in addition to any others specifically requested by Skyworks, must complete an on-site industry standard EICC Validated Audit Process (VAP). VAP is a third-party risk-based audit process where suppliers are objectively evaluated and their sustainability performance is scored. initiate corrective action plans (CAPs) for any issues identified in the VAP. Skyworks collaborates with its suppliers in tracking the CAPs to closure and further provides assistance for capability building at our supplier locations as needed. 4 5 VAP at High Risk Facilities EICC SAQ (Risk Assessment) Corrective Actions and Capability Building 3 6 Major Suppliers Identified Sustainability Requirements Communicated 2 1 Supplier Qualification 6 Sustainability Report 2016

7 Understanding Our Supply Chain As a global organization, Skyworks designs, develops and manufactures products around the world supported by an expansive supply chain network. Our supply chain partnerships provide us with a unique opportunity to extend the reach of our Sustainability programs and affect hundreds of facilities and thousands of employees. Identified by region on the map below are the 18 subcontracted product assembly facilities and 121 finished goods materials suppliers that make up a major portion of our global supply chain. Sustainability Report

8 Supply Chain Our Sourcing Policy Skyworks is committed to the responsible sourcing of minerals. We have established programs aligned with the internationally recognized Organization for Economic Co-operation and Development (OECD) due diligence framework to regularly evaluate our supply chain and require our suppliers to do the same. Suppliers are prohibited from providing Skyworks with materials known to be derived from the Democratic Republic of the Congo (DRC) or adjoining countries that have not been confirmed as DRC Conflict-Free via a recognized and credible third party process, such as the Conflict-Free Smelter Program (CFSP) developed by the Conflict-Free Sourcing Initiative (CFSI). Central Africa Republic Congo Republic Angola Sudan Uganda Democratic Republic Rwanda of the Burundi Congo (DRC) Tanzania Zambia Conflict Minerals In 2010, the United States federal government enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act which, among other things, contained a section addressing the humanitarian goal of ending the violent conflict and human rights abuses in the DRC and surrounding areas which are being funded by the exploitation and trade of conflict minerals mined in that region. As required by Section 1502 of the Dodd-Frank Act, a final rule has been adopted by the United States Securities and Exchange Commission (SEC) which requires all publicly reporting companies for which conflict minerals are necessary to the functionality or production of products they manufacture, or contract to manufacture, to make disclosures about their use of conflict minerals in their products and manufacturing processes. Conflict minerals, as defined in the final rule, include cassiterite, columbite-tantalite and wolframite (and their derivatives, tin, tantalum and tungsten), gold and any other mineral or its derivatives determined by the Secretary of State to be funding conflict in the Covered Countries. Skyworks is a member of the CFSI. Founded in 2008 by members of the Electronic Industry Citizenship Coalition and the Global e-sustainability Initiative, the CFSI has grown into one of the most utilized and respected resources for companies from a range of industries addressing conflict minerals issues in their supply chains. Skyworks utilizes their flagship Conflict-Free Smelter Program providing independent, third-party audits that determine which smelters and refiners can be validated as conflict-free, in line with current global standards. The CFSI also developed the standardized Conflict Minerals Reporting Template (CMRT), which helps companies disclose and communicate about smelters in their supply chains. Skyworks utilizes the CMRT in its programs to retrieve smelter information from our supply chain partners. Additionally, through the same reporting template, a full disclosure of all smelters in our supply chain is made available to all our customers. In 2016, Skyworks positively identified 177 smelters/refiners in our supply chain. All (100%) of the identified suppliers are compliant to the CSFP, which means that they have been audited and confirmed to be DRC Conflict-Free. For more conflict minerals information including our annual SEC disclosures and conflict minerals reports for each reporting year, please visit: Conflict Minerals Covered Countries 8 Sustainability Report 2016

9 Making Great Products, Responsibly Sustainability Report

10 Health and Safety Skyworks is Committed to Cultivating a Safe, Healthy and Productive Work Environment The safety of our employees is of utmost importance. Skyworks operates all facilities in a responsible manner, providing safe and healthy working conditions. In keeping with this commitment, we maintain an Occupational Health and Safety (OH&S) management system to ensure we consistently: Remain in compliance with all applicable safety and health regulatory requirements Integrate safety considerations into strategic business decisions, engineering design, procurement, facilities management and production Cultivate safety responsibility by employees at all organization levels Promote continuous improvement of the OH&S management system and objectives These efforts are supported by a knowledgeable and experienced team of health and safety professionals and employees across the company who are responsible for meeting a stringent set of goals and performance objectives. In 2016, Skyworks saw a modest increase in the Total Reportable Incident Rate (TRIR) in combination with a decrease in the Lost Time Incident Rate (LTIR). While the TRIR is an indication of a slightly greater frequency of occurrences, the lower LTIR is an indication that those incidents were of lower severity. Skyworks initiates a root cause analysis and corrective action process for each and every reportable incident. We strive to create a safer work environment through multiple channels including employee awareness and encouraging management and employee responsibility. Safety training is a regular and recurring activity at all levels of the organization and at Skyworks, safety is everyone s responsibility. Total Recordable Incident Rate (TRIR) Total Cases per 200,000 Hours Worked 3 Lost Time Incident Rate (LTIR) Lost Time Days per 200,000 Hours Worked 3 3. Major operations Woburn, MA, Newbury Park, CA, Mexicali, MX and U.S. design centers. 10 Sustainability Report 2016

11 Management Systems At Skyworks, we strive for perfect quality while abiding by our principles of Sustainable business practices. Our management systems manuals and policies are available to the public via our website and are certified to internationally recognized standards for quality and environment including ISO 9001, ISO/TS and ISO Furthermore, our systems are designed and operated in accordance with the Electronic Industry Citizenship Coalition (EICC) Code of Conduct. To learn more, please visit: Quality Manual: Sustainability Systems Manual: Certifications: EICC Code of Conduct: In 2016, Skyworks continued its active membership in the EICC. The EICC is a nonprofit coalition of electronics companies committed to supporting the rights and well-being of workers and communities worldwide affected by the global electronics supply chain. EICC members commit and are held accountable to a common Code of Conduct and utilize a range of EICC training and assessment tools to support continuous improvement in the social, environmental, and ethical responsibility of their supply chains. Skyworks has been an active member of the EICC since A full list of members can be referenced here: Our factories located in Woburn, MA, Newbury Park, CA, and Mexicali, B.C., Mexico have all successfully completed the EICC Validated Audit Process (VAP). VAP is a standardized third-party audit evaluating conformance to the EICC Code of Conduct. The standardization of the audit allows Skyworks to share audit results with many of our customers who are part of the EICC and/or recognize the VAP as a verification of existing and effective sustainability systems. Ethics Skyworks is dedicated to conducting business that complies with both the letter and the spirit of applicable laws, rules and regulations and consistent with the highest standards of business ethics. Our sound business principles and practices foster our strong commitment to ethical behavior, accountability and transparency. We aim to lead by example guided by our corporate governance and principles as defined in our Code of Business Conduct and Ethics. The Code outlines broad principles of ethical business conduct embraced by Skyworks. In order to establish an effective ethics and compliance program and to develop trust, employees must be able to raise concerns without fear of retaliation. Our employees have a duty to report any known or suspected violation of the code, or of any rules or regulations applicable to the Company. Employees are trained annually on the contents of the Code. In 2016, Skyworks achieved a 99% completion rate. The Code, along with other corporate governance information, is available on our website at: Sustainability Report

12 Employees Our greatest and most valuable resource is our people. Skyworks promotes diversity in the workplace and is proud that our employee population represents 61 nationalities worldwide. We make every effort to create a culture where everyone feels welcomed, valued and respected fostering an environment that is free of bias, prejudice and harassment. We scrupulously adhere to all laws and regulations that are applicable in the countries where we operate, as well as local, state, federal and international child labor and safety laws. We do not employ anyone under the age of 18. In addition, Skyworks employees are provided highquality benefits, compensation, training, staffing and general human resources support. Our programs and policies address the EICC Code elements of: Freely Chosen Employment Humane Treatment Child Labor Prevention Non-Discrimination Working Hours Freedom of Association Wages and Benefits Working Hours Excessive working hours are associated with risks to employees health, safety and work performance. For these reasons, Skyworks has programs ensuring our factories monitor and limit working hours to <60 hours/week in accordance with the EICC code. Days of rest are also monitored, ensuring employees get no less than one day off in each seven-day period. Factory compliance rates are regularly reviewed with management. In 2016, Skyworks achieved a 99% compliance rate to the <60 hour workweek and days of rest standard. 7,230 99% 16% 61 99% total Skyworks employees of the total workforce is full-time voluntary attrition rate nationalities conformance rate to the 60 hour workweek standard 12 Sustainability Report 2016

13 Recognition / Awards 100 Fastest Growing Companies Skyworks was recognized as one of Fortune s fastest growing companies. Skyworks ranked 15th on the list, which was based on the top three-year performers in revenue, profits and stock returns. Fastest Growing Public Tech Companies Skyworks was named one of Forbes Fastest Growing Public Tech Companies (#9) in The list was based on firms with superior growth (both past and projected), along with a solid earningsquality score from Value Line. Orange County Register Top Work Places For the ninth consecutive year, Skyworks was named one of the top places to work by the Orange County Register. Skyworks ranked #24 amongst Midsize Companies based on employee feedback on workplace environment and company leadership. Outstanding Public Tech Company In 2016, the Orange County Technology Alliance named Skyworks as Outstanding Public Technology Company. The organization honors businesses and entrepreneurs fostering innovation and growth in the technology-rich landscape of Orange County, CA. Great Places to Work For the third time, Skyworks Mexicali facility was awarded the Great Place to Work certification by the Great Place to Work Institute, an international organization that benchmarks and recognizes companies who build and sustain high-trust organizational cultures. The designation is based on feedback from employee surveys and evaluation of employers understanding of key factors on what makes a great workplace including credibility, respect, fairness, pride and teamwork. Skyworks is an Equal Opportunity Employer Supporting Diversity in the Workplace

14 Stewardship With employees around the globe, Skyworks calls many countries its home. Our employees support projects relevant to local efforts and are committed to investing their time, expertise and resources to help develop and maintain vibrant, sustainable local communities. Skyworks and its employees are proud to be members of the global community, lending a helping hand where possible. Woburn Employees Support Local Food Pantry and Local Toy Drive Employees from Woburn, Massachusetts, participated in a juice drive to support the local community food pantry. Employees donated over 50 liters of juice to help fill Thanksgiving baskets, which were provided to local families in need over the holiday season. Employees also participated in a toy drive for Jamie s Joy, a local charity which helps local families in need. With a generous spirit, employees donated toys, clothing and books fulfilling approximately 100 children s holiday wishes. Kadoma Employees Participate in Fire Safety and Prevention Challenge and Cleanup Campaign Employees from Skyworks filter solutions team in Japan participated in a firefighting skills competition hosted by the Fire Prevention Association of Kadoma. Skyworks volunteer firefighters earned first place out of 25 local companies and municipalities by demonstrating their abilities in the areas of fire prevention, firefighter safety and fire protection. Employees also joined in a cleanup effort around the neighborhood surrounding the Kadoma facility. Volunteers collected trash ranging from beverage cans to cigarette butts, leaves, weeds, and plastic bags in order to help beautify the area. Adamstown Supports Blood Donation Drive Skyworks Adamstown, Maryland office held a blood donation drive in partnership with Inova Blood Donation Services, a company that supplies lifesaving blood and related products to hospitals in the area. Skyworks employees donated 19 units of blood, which has the potential to save the lives of 57 trauma, newborn or cancer patients. This important effort helped provide a safe and adequate blood supply for patients in the community. Newbury Park Employees Participate in Aut2Run Charity Race More than a dozen Skyworks employees from Newbury Park, California participated in the fourth annual Aut2Run charity event, a race to help promote autism awareness and assist two local children with whom employees share personal connections. The event raised more than $115,000, with the proceeds going to the Autism Society supporting Ventura County. Skyworks Supports STEAM Education Efforts Skyworks sponsored a fundraising event for the Irvine Public Schools Foundation in California to benefit STEAM education efforts. Over 3,000 attendees participated in the carnival themed event, which provided students with hands-on activities to encourage their interests in Science, Technology, Engineering, Arts and Mathematics (STEAM). More than $60,000 was raised to support 32,000 students across 38 schools. 14 Sustainability Report 2016

15 Ottawa Employees and Families Participate in Hospital Fundraiser to Help Kids with Cancer Employees from Skyworks Ottawa office and their family members participated in a cycling fundraiser for the Children s Hospital of Eastern Ontario (CHEO). Now an annual tradition, a dozen Skyworks riders participated in the 15, 35, and 70 kilometer events. Despite rainy conditions, the event raised more than $950,000 for the hospital to support programs dedicated to the treatment and research of childhood cancers. Together with a contribution from Skyworks, the team raised over $4,000. Mexicali Holds Its First Run and Bike Ride Event Skyworks Mexicali facility hosted its first run and bike event to promote health and wellness among employees and their families. Vive Bien (or Live Healthy ) was the theme of the day, which in addition to the races, consisted of exhibits with information about fitness and nutrition, staying healthy and bicycle safety. Representatives from the State of Baja California s Council for Accident Prevention and the Municipal Director for Sport and Physical Culture were on hand to support the event. Nearly 500 individuals participated in the 2K and 5K run, as well as 2K bike ride. Cedar Rapids Participates in Job Shadow Program Skyworks Cedar Rapids design center hosted high school students as part of the Workplace Learning Connection s Job Shadow program. The platform helps youths to explore their career options through handson interaction in a mentor s work environment. They spent a half-day observing one of Skyworks design engineers, to get a first-hand look at a career as an engineer. Industry Sponsorships Skyworks is proud to sponsor industry events that promote innovation through forward thinking. CS ManTech 2016 Skyworks sponsored the CS ManTech Conference in Miami, Florida, a forum dedicated to showcasing and discussing the manufacturing challenges and opportunities in the compound semiconductor industry. Skyworks participation included a presentation by Chief Technology Officer, Peter Gammel, on RF Technology Initiatives for 5G co-authored by Stephen Kovacic of Ottawa, while Shiban Tiku of Newbury Park conducted a two-hour workshop on III-V process technology. Skyworks was also acknowledged for its 15 years of support and sponsorship. IEEE RFIC 2016 Skyworks sponsored the IEEE Radio Frequency Integrated Circuits Symposium, the leading global RF/ microwave technical gathering, as part of Microwave Week in San Francisco, California. Over 400 exhibitors attended the event, representing the latest advances in RF, microwave, and millimeter-wave integrated circuit technology and innovation. Several Skyworks engineers presented technical papers on relevant industry topics and participated in interactive forums, panel sessions and workshops. Sustainability Report

16 Helsinki Beijing Shanghai Seoul Taipei Shenzhen Tokyo Osaka San Jose Newbury Park Cedar Rapids Irvine Mexicali Ottawa Andover Woburn (Headquarters) Basking Ridge Adamstown Greensboro Cork Paris Bishops Stortford Singapore Sales Offices Design Centers Manufacturing USA EUROPE ASIA PACIFIC Headquarters: Massachusetts 20 Sylvan Road Woburn, MA Telephone: (781) Fax: (781) California 5221 California Avenue Irvine, CA Telephone: (949) Fax: (949) Zanker Road San Jose, CA Telephone: (408) Fax: (408) Maryland 5520 Adamstown Road Adamstown, MD Telephone: (301) Fax: (301) France 60 rue Saint André des Arts Bâtiment D Paris France Telephone: Fax: irene.pfeiffer@skyworksinc.com United Kingdom Ground Floor, Riverside House Riverside Bishop s Stortford Herts CM23 3AJ United Kingdom Telephone: will.kerley@skyworksinc.com Finland Keilaranta 16 (5th Floor) FIN Espoo Finland Telephone: Fax: tommi.hiillos@skyworksinc.com China Room , Chong Hing Finance Center No. 288 Nanjing Road (W) Shanghai China PRC Telephone: ext Fax: elaine.zhao@skyworksinc.com Room 2701, 27/F Tower 3 Kerry Plaza No. 1 Zhongxinsi Road Futian District Shenzhen China PRC Telephone: Fax: jesse.li@skyworksinc.com Unit 703, 7th Floor Radiance Building, Qiyang Road Wangjing, Chaoyang District Beijing City, China Telephone: ext Fax: abby.huang@skyworksinc.com Japan Tokyo Opera City Tower 36F Nishi-Shinjuku Shinjuku-ku Tokyo, Japan Telephone: Fax: ahihiro.karikomi@skyworksinc.com Korea POSCO Center (West Wing 12F) 440 Taeheran-ro, Gangnam-ku Seoul, 06194, Korea Telephone: Fax: juhee.lee@skyworksinc.com Singapore 10 Ang Mo Kio Street 65 #05-15/16 Techpoint Singapore Telephone: Fax: yuenfong.choong@skyworksinc.com Taiwan 4 F, #198, Section 2 Tun Hwa S. Road Taipei 106, Taiwan ROC Telephone: Fax: joanna.wu@skyworksinc.com, Inc. NASDAQ: SWKS sales@skyworksinc.com USA: Asia: Europe: 33 (0) BRO398-16A