SustainabilityEnsuring solid financial results for ADI includes creating a rewarding workplace, and being a trusted partner, environmental steward, and contributor to our communities.
A Letter from Our CEO
In his seminal book, The Living Company, Arie de Geus explores the traits and characteristics that tend to be found among companies that survive for many decades and generations. He wondered what it was that enabled these companies to remain dynamic and thrive long after most companies withered and perished. He found that like organisms in ecological systems, a company’s longevity is largely dependent on its awareness of changes in, and adaptation to, its environment.
In the increasingly connected and interdependent world in which companies operate today, the need for sensitivity to our environment and ability to respond appropriately to shifts in that environment is more important than ever. Analog Devices’ drive to be a “living company” occurs against a backdrop of operations that span the globe and a diverse array of technologies, customers, and end markets that create a complex interplay of environments and ecosystems.
For ADI, sustainability means being aware of the larger role we play in those environments and ecosystems, pursuing a business model and practices that enable innovation-driven growth and benefits for all of our stakeholders – employees, customers, investors, partners, and communities – and being good stewards of our resources. ADI strives for sustainability in four primary areas:
- Economic – a business model that is smart, proven, and solid, yet adaptive to meet the evolving needs of our end markets and customers
- Governance – consistency between our values and actions
- Environmental – reducing waste and limiting any negative impact on the environment
- Social – giving back to the many communities in which we operate and live and from which our future employees, customers, and investors will come
ADI has grown and thrived for more than 50 years by setting ambitious goals in these areas and driving aggressively to meet and exceed them.
Businesses today grapple with two opposing trends. An environment of abundant digital computing and ubiquitous connectivity has made it easier than ever to explore a market or start a business but the increasing “winner takes all” power law dynamic of our economy means that more and more of those businesses fail every year. ADI benefits from both of these trends as we build upon our already strong market share and leverage that strength to explore smart new opportunities.
Our global customer base looks to us for thought leadership and cutting-edge innovations that enable them to continuously improve their product offerings and deliver positive impact in the environments in which they are deployed. We challenge ourselves to continuously improve every aspect of our value proposition from generation to generation with performance and efficiency in mind.
ADI’s strong financial results year after year speak to the soundness of a business model founded on product, application, customer, and end market diversity, continuous technological and business innovation, and operational excellence.
Trust is the true currency of business. From its beginning, ADI has had a strong foundation of ethics and a belief that doing what is right for our employees, customers, investors and communities is the only way to be fully successful in business. We regularly review our policies and continuously conduct training for our employees to educate them about the importance of not just compliance with regulations, but compliance with our values.
We are living through a period of growing ecological pressure as a result of climate change, environmental degradation, and loss of biodiversity due to accelerating species extinction. It is difficult to fully comprehend the long-term effects of these dynamics in our complex ecosystem but what is clear is that humanity faces a serious threat and that it is one we must urgently address.
ADI’s response to the environmental challenge is two-fold – we aim to limit and remediate our own environmental impact and we also work with our customers to ensure Information and Communications Technology (ICT) is part of solving the challenge facing us all.
A key operational goal for ADI is to achieve a 50% greenhouse gas emission reduction target by 2025 over our 2015 baseline. We are making a significant investment in the use of renewable energy at ADI manufacturing sites and establishing targets for our overall carbon footprint in terms of how we deliver ADI products to the marketplace.
In 2015, ADI initiated a major efficiency effort across our organization aimed at eliminating wasteful activities and updating older equipment to improve efficiency. On one of our campuses, this effort has yielded more than $1 million of annual savings in electricity costs and a 19 percent spending reduction on chemicals supporting manufacturing operations by the end of 2017.
In the latter part of 2016, we began to use renewable energy at our manufacturing facility in Ireland and in 2017, our site in the Philippines followed suit and shifted to a renewable energy supplier. As illustrated in the chart below, we have significantly reduced our dependency on non-renewable energy sources by choosing more environment-friendly, renewable energy sources.
Beyond these ongoing improvements at ADI, we fundamentally believe that ICT can be part of the solution to our environmental challenges. Consider the impact the invention and mass adoption of wireless connectivity and the smart phone has had on reducing our production, consumption, and subsequent disposal of products that it has consolidated – e.g., still and video cameras, music players, GPS, calculators, physical media, and increasingly, computers. Consider the impact ICT is having on clean energy production (e.g., solar, wind, etc.) and on reducing energy consumption through more efficient energy storage and usage. Consider the impact that vehicle electrification and battery management systems are having on greenhouse gas emissions. We are proud to be working with the world’s leading companies as they develop the technology solutions that make our environments cleaner, our bodies and ecosystems healthier, and our technologies more efficient.
ADI takes the role of good corporate citizen seriously in the communities in which we operate around the world. “Giving back” to those communities is a shared value across ADI and is a reason why our social sustainability focus extends beyond the positive secondary economic impact of our operations and the jobs we create. In addition to corporate financial contributions, our employees also coordinate and donate their time, for example, building homes for Habitat for Humanity, inspiring the next generation of engineers through mentoring students in FIRST Robotics, and supporting many more charitable organizations around the globe.
Sustainability is not any one thing at ADI. It is everything at ADI; a permeating mindset in which sustainability is infused into all aspects of how we do business. We are proud that our sustainability commitment is routinely recognized by awards such as being named one of the World’s Most Sustainable Corporations by the Corporate Knights in 2017 and named to the Newsweek Green Ranking in 2016. But as our employees are used to hearing me say, we should be pleased with our progress and success but never satisfied, and we pledge ourselves individually and as a company to continue building upon what we have achieved to date to create something even greater tomorrow.
President and Chief Executive Officer
Our Purpose – Tenets – Beliefs
We exist to solve problems that matter. We create—in unique ways—solutions that sense, measure, interpret, and connect the world: we help make machines smarter, improve health care and quality of life, keep people safe, reduce emissions, and make the planet more sustainable.
We are guided by three key tenets: Partner with Customers; Innovate with Impact; and Go Beyond Silicon, and ADI’s values, belief structure, and culture have remained constant and continue to guide our actions and decisions.
ADI has prepared its sustainability reporting in accordance with the GRI Standards: Core Option. ADI’s consideration of relevant topics, whether those topics are material from a sustainability reporting perspective, and their relative materiality is depicted on the GRI index, which is virtually available to all. ADI also publicly reports greenhouse gas emissions through the CDP (formerly Carbon Disclosure Project).
Scope & Boundary – Materiality – Assurance & Feedback
Our Sustainability Report is designed to reflect the significant economic, environmental, and social impacts of ADI operations to facilitate decisions of stakeholders. The data reported by ADI sustainability cover the two-year period ending on December 31, 2017, unless stated otherwise. When available, expanded information is included. This report is limited to our directly managed operations and wholly owned subsidiaries. ADI did not participate in any joint ventures during the reporting period. This report and the data it includes do not reflect operations at legacy Linear Technology Corporation (LTC) facilities since integration of those facilities post-acquisition was ongoing during the reporting period. ADI’s next sustainability report will include those operations.
We have used a materiality determination to identify the most relevant topics to address in this report. To assess materiality, ADI has considered its overall mission and competitive strategy, the interests expressed directly by stakeholders. Each of the following was also used to determine the content for this report: GRI Standards reporting guidelines, resource utilization (energy, water, and materials), waste generation, major sustainability-related impacts and opportunities, information covered in other semiconductor manufacturing companies’ reports, feedback from stakeholders, including employees and investors, and comments from sustainability experts.
As a result of this materiality process, ADI has prioritized its reporting on the following key areas: Environmental Sustainability, Economic Sustainability, Social Sustainability, and Governance and Ethical Sustainability.
Specific material topics to ADI include:
Indirect Economic Impacts Anti-Corruption
Effluents and Waste
Occupational Health and Safety
Training and Education
Diversity and Equal Opportunity
Labor Topics (Freedom of Association and Collective Bargaining, Child Labor, Forced and Compulsory Labor)
Human Rights Assessment
Supplier Social Assessment
Customer Health and Safety
Marketing and Labeling
The boundary of reported content includes operational data and management performance for activities that have a significant impact, and in which ADI has direct control or significant influence. Financial statements were audited by Ernst & Young LLP. Our sustainability report was reviewed by outside consultants and advisors with relevant expertise. Additionally, our greenhouse gas emissions calculations have been independently verified and certified.
We welcome stakeholder comments and feedback, which provide important input for the continual improvement of our sustainability programs and performance. Please direct any general comments or questions regarding environmental, health, and safety (EHS) to firstname.lastname@example.org. For any non-EHS related questions, please contact Sustainability@analog.com.
ADI designs, manufactures, and markets a broad line of high performance integrated circuits (ICs) that incorporate analog, mixed-signal, and digital signal processing technologies.
Organizational structure and management systems related to environmental, health and safety can be found on our Environmental page. Governance structure details can be found on our Governance and Ethics page.
Stakeholder engagement is a collaborative process that is critical to the success of our company. Stakeholder groups most affected by ADI’s business include employees, customers, investors, communities, governments, suppliers, media, and financial analysts. Engagement is demonstrated throughout our report and we utilize the results of these engagements to develop and enhance policies and programs, including those related to sustainability.
We understand that insight into product life cycle status is an important customer decision making criteria. ADI designs products that make efficient use of raw materials, and that incorporate design-for-environment concepts. Quantities of incoming packaging materials are minimized to reduce waste. We have a Product Life Cycle program that aims to extend the useful life of our products.
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