1 SESHA Conference May Corporate Social Responsibility ON Semiconductor May 18, 2011

Transcription

1 1 SESHA Conference May Corporate Social Responsibility ON Semiconductor May 18, 2011

2 Implementation of a Corporate Social Responsibility Strategy Abstract The term Corporate Social Responsibility (CSR) encompasses corporate governance, environmental due diligence and sustainability, worker rights, and health and safety considerations. In response to the social needs and desires driven by company stakeholders (shareholders, customers, employees and the local communities where companies do business), there has been a surge of CSR activity in all aspects of business (manufacturing, services, etc.). This activity requires companies to formally demonstrate they are good global corporate citizens wherever they do business. In order to align with the global electronics community and to formalize and organize our various CSR efforts, On Semiconductor became an applicant member of the Electronic Industry Citizenship Coalition (EICC) in mid-2009 and we became a full member of the EICC in December of We had previously endorsed the EICC code of conduct and we had a number of programs already in place to ensure compliance to the various tenets of the code, including a long established code of business conduct and formal certification to the ISO14001 environmental management system standard. This presentation/discussion will explore our current state of CSR globally and focus on our implementation and management strategy internally within our own facilities and externally with our supply chain. The presentation/discussion will incorporate an overview on the impact of recent legislation regarding conflict metals and human rights. 2 SESHA Conference May

3 Implementation of a Corporate Social Responsibility Strategy ON s path Reviewing Corporate Social Responsibility Steps to Implementation Strategy Development/Management Engagement/Commitment Organization Structure Establish performance metrics Communication within the organization Lessons Learned/Continual Improvement 3 SESHA Conference May

4 ON s Path Pre 2007 Customers requested compliance to basic tenets of corporate social responsibility Already had the elements of CSR in practice: Business Code of Conduct Intellectual property Environmental Management Systems OSHA practices 2007 through 2009 Uptick in CSR activity from customers in the form of increasing customer audits of facilities (especially Asia) increased in number of contracts including statements of commitment Held strategy discussions with Corporate Staff (QMR) Statement of commitment with all Corporate Staff Joined EICC as an applicant member 4 SESHA Conference May

5 ON s Path Became Full Member of EICC Created Management System documentation and external website Rolled out our commitment to our suppliers Benefits Seeing company in a global perspective Aligned with our corporate transformation (financial and cultural maturity growth) Reputation, growth, employee retention, create better working conditions for employees Overcome cultural and regional norms Lessons Learned Provided growth opportunities for different regions of the company Some company norms/belief systems challenged Develop company communication earlier 5 SESHA Conference May

6 Reviewing Corporate Social Responsibility tenets* Corporate governance Environmental due diligence Sustainability Labor policy (worker rights) Health and safety considerations Legislative environment * Reference EICC guidelines (1These standards are not intended to create new and additional third party rights, including for employees.) 6 SESHA Conference May

7 Reviewing Corporate Social Responsibility Business Integrity Corporate Governance No Improper Advantage Disclosure of Information Intellectual Property Fair Business, Advertising and Competition Protection of Identity Community Engagement 7 SESHA Conference May

8 Reviewing Corporate Social Responsibility Environmental due diligence Environmental Permits and Reporting Pollution Prevention and Resource Reduction Hazardous Substances Wastewater and Solid Waste Air Emissions Product Content Restrictions Carbon Reporting Sustainability 8 SESHA Conference May

9 Understanding Corporate Social Responsibility Labor policy (worker rights) Freely Chosen Employment Child Labor Avoidance Working Hours Wages and Benefits Humane Treatment Non-Discrimination Freedom of Association 9 SESHA Conference May

10 Understanding Corporate Social Responsibility Health and safety considerations Occupational Safety Emergency Preparedness Occupational Injury and Illness Industrial Hygiene Physically Demanding Work Machine Safeguarding Sanitation, Food and Housing 10 SESHA Conference May

11 Legislative Environment Conflict Metals (Dodd-Frank Act) Reporting the source of metals to ensure they aren t sourced from the Democratic Republic of Congo (DRC) California Legislation regarding Human Trafficking California Transparency Supply Chains Act of 2010 will go into effect January 1, 2012 Anti-corruption Laws Anti-corruption legislation is being enacted by many countries New UK Bribery Act will go into effect in April SESHA Conference May

12 Steps to Implementation Strategy Development/Management Engagement/Commitment Organization Structure Steering team Communication Program Establish performance metrics 12 SESHA Conference May

13 Strategy Development Management Engagement/Commitment Develop organization strategy ask? What type of company do we want? What kind of customers do we want to attract Align with organization goals Get upper management/ceo s staff commitment Provide visible statement of commitment with all Corporate staff team Incorporate different functions in the organization with a role in the process HR, EHS, Legal, Supply Management, Quality, etc. 13 SESHA Conference May

14 Approach The EICC Code of Conduct encourages broad adoption of CSR best practices by all ICT companies and suppliers. The Code of Conduct provides guidelines for performance and compliance with critical CSR policies. EICC provides tools to audit compliance with the code, and helps companies report progress. Adoption Any company may voluntarily adopt the EICC Code of Conduct. Adoption steps: Identify interest Obtain management commitment Train staff Establish and promote the Code of Conduct Integrate the Code of Conduct into procurement processes Emphasize continuous improvement Work with EICC to standardize industry tools Focus Areas The Code of Conduct provides guidance in five critical areas of CSR performance: Labor, Health and Safety, Environment, Management System, Ethics 14 SESHA Conference May

15 ON Semiconductor Corporate Statement of Commitment As a global supplier to customers worldwide, ON Semiconductor operates across a diverse range of cultures and international markets. We are committed to providing our customers with inventive, high quality products that are environmentally sound, conducting our operations in an environmentally, socially and ethically responsible manner and complying with all applicable laws and regulations of those countries worldwide where we do business. This commitment is deeply ingrained in our Core Values, certain policies and our Code of Business Conduct ("Code"). As further evidence of our commitment to corporate social responsibility, we have embraced specific standards that are modeled after the Electronic Industry Code of Conduct ("EICC). Many if not all of these standards are reflected already in one way or another in our Code and other policies which, like the EICC standards, address, among other things, conduct across several areas of social responsibility including labor practices, health and safety, environmental, ethics and which promote management systems designed to ensure conformance with these standards. ON Semiconductor is committed to incorporating these standards into our facilities' auditing program and to work toward continuous improvement in these areas. 15 SESHA Conference May

16 Steering Team Organization Structure Executive Sponsor EICC contact & Coordinator - Coordinates completion of EICC Surveys internally Environmental, Health and Safety Legal Human Resources Supplier Commitment to CSR Actively participate in groups engaged in CSR activities Create a venue for updates to the organization internal site accessible by the organization 16 SESHA Conference May

17 Communication Internal to The Organization Develop communication Program Overall CSR program based on audience Corporate Staff/Senior Managers Middle Level Managers Manufacturing Associates Articles in internal newspapers, media board, etc. 17 SESHA Conference May

18 18 SESHA Conference May Establish performance metrics

19 Establish performance metrics Labor Audience Corporate Staff Venue - Corporate Key Performance Indicator Meeting Reporting Frequency Quarterly Metric Number of Employees by Region reported now Global Turnover rates by Region reported now Regulatory or Statutory Review of Labor Law New laws Changes in the law Impact or No impact Issues/Concerns/Update Housing for Employees Working Hours Compliant or Not? Working Wages Compliant or Not? 19 SESHA Conference May

20 Establish performance metrics Corporate Governance (Ethics and Compliance) Audience - Audit Committee of the Board of Directors Venue Audit Committee members Reporting Frequency Semi-annual Metric Corporate Compliance and Ethics Program: Trend analysis Number of ethics incidents Personnel/Human resource matters Fraud/Theft Conflict of interest Sox 404 (Accounting/Internal Accounting or auditing and Non-Sox (regulatory matters) Advice Employee Code of Conduct training All employees every two years New employees part of new employee orientation training Intellectual Property Update Every quarter 20 SESHA Conference May

21 Establish performance metrics EHS & Health and Safety Audience Site Management, Corporate Operations Management Venue Site Operation reviews, Annual EHS Management Review Reporting Frequency Environmental goals progress Quarterly EHS Management Review - Annual Metric Air Emissions Waste generated Injury/Illness Statistics Reclaim/Recycle Facility and regulatory changes Audit results Progress toward EHS objectives and targets EHS metrics (e.g., air emissions, waste generated, injury/illness statistics) 21 SESHA Conference May

22 Establish performance metrics Management System Audience Corporate Staff Venue: Corporate Quality Management Review Reporting Frequency Quarterly Metric Overall Summary of EICC Performance Metrics Benchmarking or Continuous Improvement Internal Audit and 3 rd party audit updates Issues/Discussion 22 SESHA Conference May