STMicroelectronics on corporate responsibility – part 1
Semicon giant, STMicroelectronics, recently ranked 6th in the Q2-09 leading semiconductor sales leaders by IC Insights, came out with Corporate Social Responsibility (CSR) report some time ago!
I chatted up with Vivek Sharma, director, India Design Center and vice president EMR, STMicroelectronics, to find out more about this particular report, ST’s concept of sustainable excellence, and of course, the need for such a report. This is the first part of my conversation with ST. The second part will appear later this week.
ST’s concept of sustainable excellence
This is indeed a noteworthy topic in itself. CSR has been the core belief for ST since inception. In fact, STMicroelectronics is one of the first global industrial companies to recognize the importance of environmental responsibility and has won many awards for its pioneering work in this field.
Sharma that the company played a leading role in demonstrating ‘Green is Black’ i.e., environmental responsibility delivers real financial benefits and these goals are not in contradiction to each other.
“For building a culture on this core belief, all levels in an organization have not only to be involved, but also to ensure their commitment as well. This was given a communicatble and practical shape when corporation adopted TQM principles in early nineties and its concepts, processes and practices were cascaded to all levels of whole enterprise. Soon after, company published its first
“‘Environmental Decalogue’ in 1994, followed by another wave of TQEM. In this journey, the company has continually widened the scope of its definition of corporate responsibility and increasingly formalized both the deployment of its principles within the company and the reporting of the results to stakeholders to ensure that it remains at the forefront of corporate responsibility.”
According to him, ST’s Sustainable Excellence program was launched in 2007 to revamp the same core belief and to embed corporate responsibility into every level of the company’s activities. The term reflects ST’s firm belief in its ability to balance stakeholders’ expectations to make the company ‘sustainable’ –- successful now and in the future -– in the short and long terms, and enable it to contribute to sustainable development at a global level. This progam is based on three key principals — integrity, people and excellence, which captures the essence of it.
Need for the CSR report
Great stuff, that! However, I was curious to know the real purpose of such a report at this point of time.
Sharma added that this is an annual report through which STMicroelectronics intends to give an overview of its corporate responsibility strategy, achievements at company and local levels, and a description of the challenges it faces in all areas of corporate responsibility — such as environment, employee well-being, community involvement, and product responsibility, while also demonstrating strong performance in aspects that are becoming increasingly important to stakeholders. This is a testimony to the company’s commitment to CSR and it reports the progress track record on various fronts, hence demonstrating our accountability.
Recording continued progress in all areas
Elaborating on how ST was able to record continued progress in all areas of corporate responsibility, he said: “As can be noticed in the report, we are able to make the continued progress in all the areas. The key reason lies in the fact these CSR goals have been successfully deployed throughout the organization and we are able to generate high commitment to this cause.
“As an example, the energy used per production unit has been more than halved since our pulishing of decaloque where in there was a target of 5 percent reduction every year. For us, corporate responsibility is a process of continuous improvement while adapting to a changing business environment. On a regular basis, our company is evaluated by rating agencies and extra-financial analysts working with ethical indices or asset management companies, thereby ensuring that our practices are benchmarked with other leaders and this external evaluation has also direct impact on potential investors in the company.
“As outlined above, on an annual basis, we intend to give an overview of our corporate responsibility strategy, our achievements at company and local levels and a description of the challenges we face in all areas of corporate responsibility such as environment, employee well-being, community involvement, and product responsibility while also demonstrating strong performance in aspects that are becoming increasingly important to stakeholders.”
These include: the health and safety of the company’s employees, diffusion of corporate responsibility in the supply chain, implementation of human rights, responsible restructuring, etc. apart from economic results.
Short- and long-term benefits
This concept from STMicroelectronics out to have short- and long-term benefits. On this area, Sharma said that although the CSR’s focus is well understood to yield the sustained results over long-term, it very well offers numerous short term advantages. Simply, short term results achieved without compromising CSR principals would yield sustained long term results.
“Let us take a relatively obvious example, keeping employees healthy and safe, providing them good work life balance etc. can deliver high quality results in short term whereby ensuring their long term sustainability. Although, all examples may not be so obvious and rather sometimes can even be very challenging to arrive at the balance, nevertheless these principals provide guiding direction This helps building aligned expectations from stakeholders.
“Let us take another example in the area of environment and product responsibility. The short-and long-term benefits from this concept would be seen in various areas such as power applications in our homes, from lighting, heating,air-conditioning, white goods appliances and entertainment electronics.”
Replacing traditional incandescent bulb lamps with compact fluorescent lamps (CFL) cut energy use by a factor of five, using advanced motor control technologies for energy efficiency, silent operation, etc., can bring down energy consumption by as high as 40 percent and noise levels as well. In short term, electricity bills come down and in long-term this helps in conserving the environment as energy needs go down.
Role of ST India
Now, it is time to find out the involvement level of the Indian arm in all of this. As per Vivek Sharma: “ST’s India operations are seamlessly integrated into the ST corporate culture, and hence, embody the CSR initiatives with equal vigor through structure, systems, processes and practices, while also taking into consideration local realities.
“As a matter of structure, locally we have Sustainable Excellence Committees, Ethics Committee and employees’ voluntary committee known as Community & Environment Support (CES). As an example of processes, Sustainable Excellence Operations Review is carried out every quarter with SE committee.
“Being a major IP design center, quality and timeliness of the products developed has an impact on the economic results of the company. To strengthen these, various training programs, both corporate and local are deployed along-with strong practices e.g., project management. The sites are ISO/TS certified to ensure these. Further, a design center is a key place to ensure high energy efficiency of semiconductor products.”
As an example. ST’s local teams are developing low-power design platforms in latest technologies, e.g., 45nm, 32nm, etc., on which semiconductors chips are designed and which can help in bringing down the power consumption as high as 30 percent. Chips and embedded software are also designed to consume less power, e.g., set-top box SoC solutions, cited Sharma. The sites are certified to the latest information security standard of ISO 27001.
On the social front, the company’s health program is fully deployed locally as well. “In the last one and a half year, more than 85 percent of our employees have undergone health check. There is continuous series of health talks on the local sites from medical specialists. Even though, Greater Noida is a design center, hence, there are less changes of employee safety issues as compared to manufacturing plants. It is OHSAS 18001 certified to keep the high standards. Also, regular employee engagement surveys are done to ensure high level of employee motivation,” he explained.
Another corporate program, under the aegis of ST Foundation, namely, Digital Unify, is intended to bridge the Digital Divide is being pursued strongly locally. Already, nine labs have been opened in Indian schools where students don’t have access to computers and Internet. The basic infrastructure comprising of computers and associated hardware along-with training is provided here. So far, over 2,000 students have been trained with the goal of doubling this number this year.
Sharma said: “In order to extend good practices in the supply chain, we invite our suppliers to agree on the Business Ethics principals. As a local initiative, we systematically inform our suppliers not to offer any gifts to any of our employees/decision makers in order to ensure no conflict of interest and high business integrity.”
Under the environment focus, the first and foremost need is to spread the awareness about the environment challenges that the world is facing. ST organizes events from time to time, e.g. Environment Week in June 2009, wherein, environment related movies are screened, stalls were put up — like CCFL/LED bulbs, painting competition and quizzes on environment are organized. NGOs are invited to interact with employees, and plant saplings are distributed as well.
Being non manufacturing units in India, although, there is no direct pollution, reduction of waste in various forms remain under focus e.g. energy/water/paper consumption, food wastage etc. In order to optimize transport related pollution, ST has deployed 38 buses running on CNG, which carry more than 80 percent of employees at Greater Noida.
Part II: What’s in store?
So there you go! This is the end of part 1. Part 2 will focus on the following aspects: reducing greenhouse gases/reducing carbon footprint/C02 emissions, handling of e-waste and chemicals and its impact, and development of ‘greener and cleaner’ supply chains by ST. Stay tuned!
