On Semiconductor Issues A Differentiated Annual CSR Report

By Patrick Moorhead - August 7, 2020
On Semiconductor CRS Report

One of my favorite parts about writing about disruptive tech companies is being able to share how these large companies impact our environment, economy, community, and the world around them. One of the most exciting parts about it, is that you can tell a lot about a company, its employees, its leadership, and its overall direction based on its Corporate Social Responsibility (CSR) report.

Jean Chong, VP of ethics and CSR at ON Semiconductor, said, “in 2019, the organization hit many milestones in the area of CSR and ethics, all while remaining a leader of energy-efficient semiconductors that help make the world greener, safer and connected.” I think ON Semiconductor’s latest CSR report testifies to the success of the company while maintaining social responsibility and even having a positive over a neutral impact around them.

I have written earlier in the year about the incredible impact ON Semiconductor has had during the COVID-19 crisis. ON Semiconductor’s focus during the COVID-19 crisis was on ethics and how respect, integrity, and initiative still matter in a crisis. Similarly, ON Semiconductor’s CSR report shows its drive for respect, integrity, and initiative for its employees, communities, partners, and environment.

ON Semiconductor’s Ethics and CSR programs moved to the CEO reporting level this year putting it at the top of the chain of command. This is a meaningful move.

ON Semiconductor’s focus on responsible sourcing

ON Semiconductor’s supply chain consists of a multifaceted structure of direct material suppliers, foundry and subcontractor providers, indirect material suppliers, and professional service providers. Out of the 10,000 suppliers and service providers across the globe, 7,200 are product related. As part of ON Semiconductor’s core values of integrity, respect, and initiative, they insist on high standards of social responsibility from its suppliers. This social responsibility includes providing safe working conditions, treating workers with dignity and respect, prohibit human trafficking and slavery, promoting ethical behavior, and using environmentally responsible processes.

On Semiconductor Mineral Report

ON Semiconductor vets suppliers who deal with conflict minerals that are responsible for violence and human rights violations. Conflict minerals include metals like tin, tantalum, tungsten, gold, and now cobalt that are used in its manufacturing process.. In regions where these minerals are sourced, like the Democratic Republic of the Congo (DRC), ON Semiconductor collaborates with suppliers and the Responsible Business Alliance (RBA) through the Responsible Minerals Initiative.

According to ON Semiconductor, its initiative to have good sourcing practices is one of the reasons MSCI moved ON Semiconductor’s ESG (environmental, social, governance factor) Rating from BBB to A. MSCI’s ESG Ratings measure a company’s ESG risks and ON Semiconductor’s rating of A puts it at top five in its industry.

ON Semiconductor Foundation takes initiative

In 2019, ON Semiconductor formed the ON Semiconductor Foundation (The Foundation)is a 501c3 organization with an employee-based board of directors.. The Foundation joins the company’s  global corporate giving program (GCG) and employee volunteer program (EVP). The Foundation combines the resources, talents, and efforts of the former programs to make a greater impact around the world.

ON Semiconductor Foundation logo

GCG has donated more than $5 million since its beginning in 2016. The funds were donated to organizations that support STEAM (science, technology, engineering, arts and mathematics) The EVP is a volunteer program, started in 2017, allowing employees to volunteer during company time at the organization of their choice that meets the organization’s eligibility criteria. .

Employees can volunteer for up to one day a year, generally 8-12 hours per year, while receiving pay for time spent. 

The Foundation’s webpage shows how the organization  is impacting communities, schools, and other foundations around the world. For example, employee volunteers toured Boai School and Rehabilitation clinic in addition to donating a financial contribution through the GCG. The company established a long-term partnership with the organization to volunteer on a regular basis.

ON Semiconductor’s environmental impact

I have written earlier in the year about how ON Semiconductor’s efforts to cut energy consumption is not only great for business, but also for the environment. In 2019, ON Semiconductor had many impressive sustainability achievements that totaled $10.8 million in sustainability projects. ON Semiconductor says these projects focus on energy conservation, water conservation, chemical waste reduction, material optimization, and recycling at its global manufacturing sites.

ON Semiconductor reported reducing 9,341 metric tons of CO2 emissions through 35 projects in four countries in 2019. On top of this, ON Semiconductor encouraged its employees to use alternative methods of transportation, like biking, and managed to reduce eight tons of pollution in Phoenix, Arizona, alone. If you have ever been to Phoenix, Arizona, you know how hot it can get. I cannot imagine the dedication it takes to ride my bike around the city in the scorching heat.

The company also recycled 14,958,208 Kg of hazardous and non-hazardous waste from its manufacturing facilities across the globe. Comparably, 5,875,919 kg of waste went to landfills, with 6,474,809 kg of total hazardous waste being transported. These impressive numbers are all thanks to the projects at ON Semiconductor’s manufacturing sites that contribute to reducing product waste.

While ON Semiconductor reused most of its hazardous and non-hazardous waste, it also recycled 910,000 kg of scrap materials and 1,376 Kg of precious metals from their global manufacturing facilities. These materials were sent to their main reclaim center, located at their headquarters, where they sorted and sold for a total of $22 million in recovered materials.

Industry-leading diversity and inclusion

ON Semiconductor is an industry leader and one of the few companies in its industry that has a focus on diversity and inclusion. ON Semiconductor’s D&I program focuses on creating a tight-knit culture and environment so that diversity and inclusion are embedded into everything it does.

ON Semiconductor ranked #1 on Fortune 500 high tech/semiconductor company for gender diversity. Its D&I framework is unique in that it starts in the workplace and expands into its communities, focusing on workplace inclusion, workplace diversity, and community partnerships and is integrated into a plan with five pillars.

The five pillars include Policies and practices, Development and training, Fill the talent and succession pipeline, Communication and awareness, and Measure success.

The five pillars include Policies and practices, Development and training, Fill the talent and succession pipeline, Communication and awareness, and Measure success. Source ON Semiconductor

ON Semiconductor’s D&I program has led to ON Semiconductor launching a U.S. paternal leave policy, global human rights policy, and expanding its pay equity to a global assessment. All of these accomplishments in diversity and inclusion resulted in ON Semiconductor being in the Bloomberg Gender-Equality Index.

Wrapping up

Almost every time I write about ON Semiconductor, I never fail to talk about how its drive for semiconductor innovation is rooted in its drive for its respect, integrity, and initiative. ON Semiconductor’s CSR report stands by that drive and shows its industry leadership in environmental impact, community engagement and diversity and inclusion.

ON Semiconductor takes social responsibility a step further by keeping its suppliers socially responsible, and by putting into place governance where there are conflicting resources. The ON Semiconductor Foundation encourages its employees to give and volunteer all around the world. Its company culture differentiates itself from others by embedding itself with deep, diverse, and inclusive values.

ON Semiconductor was named one of the World’s Most Ethical Companies® by Ethisphere Institute in its industry for the fifth year in a row and listed on Barron’s 100 Most Sustainable Companies in America for the third year in a row in 2019. This year, they were recognized as Newsweek’s America’s Most Responsible Companies. ON Semiconductor’s CSR report shows just how good of a company it is, and just how well it treats its employees, community, and the world.

Note: Moor Insights & Strategy co-op Jacob Freyman contributed to this article.

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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.