Environmental Sustainability

ADI and its employees are committed to protecting the environment and the health & safety of fellow employees, customers, and the public.

At ADI, we are committed to operating in a way that minimizes impacts to the environment. We establish environmental performance objectives using a five-year planning horizon, and make annual updates to our objectives, targets, and programs. Progress is reviewed quarterly at the corporate level and monthly at the site level, and senior management allocates resources appropriately to help keep programs on plan.

Management Systems and Organizational Structure

ADI’s Environmental Management System (EMS) and Occupational Health and Safety (OH&S) management systems at manufacturing sites are certified to ISO 14001 and OHSAS 18001 standards. These internationally recognized standards provide a framework for EMS and OH&S policies and objectives to evaluate and account for legal requirements and other risks. External auditors conduct annual surveillance audits and triennial recertification audits of these management systems.

Overall responsibility for ADI’s compliance with applicable EHS legal requirements lies with the EHS Director. The EHS Director reports to the Senior Vice President (SVP) of Global Operations and Technology, an executive officer, and reports on relevant EHS programs to the Board of Directors. EHS Management meets regularly with the Company’s in-house counsel and as needed with external counsel, advisors, and financial personnel to discuss potential environmental risks (including those related to climate change) and possible impact to the Company.

Environmental Goals

We are committed to operating in a way that minimizes impacts to the environment and conserves resources used in our operations. We monitor the use of resources (energy, water, and materials) in our production operations and work to reduce the loss of these resources via discharges and emissions.

We establish environmental performance objectives using a five-year planning horizon, and make annual updates to our objectives, targets, and programs. Progress is reviewed quarterly at the corporate level and monthly at the site level, and senior management allocates resources appropriately to help keep programs on plan. We started in 2006 with a 10% reduction by 2010 followed by a half-life reduction of 5% by 2015. For our next  goal, we have set another half-life reduction of 2.5% by 2020 from our 2015 baseline.


2020 Environmental Goals

Energy

Usage and Intensity

Main energy usage sources included purchased electricity and fuel (diesel-natural gas-liquified petroleum gas). Energy usage showed a 2% decrease in 2017 from our 2015 baseline year. Energy intensity showed a 7% decrease in 2017 from our 2015 baseline year.


energy-use-chart


In 2017, we have implemented several electricity use reduction programs across our manufacturing sites such as lighting upgrades, Variable Frequency Drives (VFD) installation, and water pump replacement projects. These resulted to more than 7 million kWhr savings. These initiatives led to an overall positive performance on normalized electricity use, both at our wafer fabrication sites and assembly and test sites.

2017 Actual Performance Against 2015 Normalized Goals


Renewable Energy

We have started using renewable energy in our manufacturing sites. This started in the latter part of 2016 in our Ireland facility. Our Philippine site followed suit and shifted to a renewable energy supplier beginning in 2017. The graph below shows that our dependency on non-renewable energy sources has declined due to our use of more environment-friendly, renewable energy sources.


energy-usage-mix-chart


Greenhouse Gas

We use the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standards in estimating our greenhouse gas (GHG) emissions and employ Global Warming Potentials from the IPCC Fifth Assessment Report. The emission factors that we used for estimating emissions were extracted from the US-EPA Climate Leadership Emission Factors for Greenhouse Gas Inventories. Additionally, market-based emission factors were applied if available; otherwise, location-based emission factors were used. GHG emissions that are generated directly and indirectly are categorized into “scopes” based on the source of the emissions. The Greenhouse Gas Protocol defines Scope 1 emissions as those that come directly from sources owned or controlled by the entity, including emissions from fossil fuels used on site. Scope 2 emissions are indirect emissions that result from electricity, heating, and cooling generated offsite but purchased by the entity. Scope 3 emission sources include purchased goods and services; fuel and energy related activities not included in Scope 1 or 2; waste generated in operations; business travel; employee commuting; downstream transportation and distribution; and end of life treatment of sold products. Since 2013, our Scope 1, 2, and 3 emissions have been verified by a third party. We also report our emissions to the CDP.

ADI monitors Scope 1 and Scope 2 emissions and consolidates GHG emissions from which it has operational control - its wafer fabrication facilities, and assembly and test facilities. The Company’s Scope 1 emissions come from the stationary combustion and process emissions, particularly perflourocarbons (PFCs), SF6, and NF3 from wafer fabrication processes. Scope 2 emissions are associated with purchased electricity. We also keep track of our Scope 3 emissions from business travel.

We emit PFCs from wafer fabrication processes and carbon dioxide (CO2) from fuel combustion associated with power and heat generation. Over the years, we have seen a decrease in our Scope 1 emissions due to improvements in our abatement systems. In 2017, our absolute Scope 1 emissions went down significantly, by 30% relative to 2015, while normalized emissions were reduced by 32% over that same time period.


scope-1-emissions-chart


Our 2017 Scope 2 emissions (market-based) have decreased significantly from our 2015 baseline year due to our decision to start using renewable energy. In the last quarter of 2016, one of our manufacturing sites started using renewable energy. In 2017, another site followed suit. These actions resulted in a more than 60% reduction in Scope 2 emissions relative to 2015.


scope-2-emissions-chart

*Our Scope 2 emissions are solely from purchased electricity that are used at our manufacturing facilities.

Initiatives including improvements in our abatement systems and the shift to renewable energy source have driven the downward trend in our normalized emissions. Our wafer fabrication sites achieved a 32% decrease in normalized Scope 1 emissions, while our assembly and test facility realized a 73% decrease in normalized Scope 1 + 2 emissions. 

2017 Actual Performance Against 2015 Normalized Goals
* Scope 1 emissions
** Scope 1+2 emissions


We’ve seen an upward trend in our Scope 3 emissions, due to unique travel needs made necessary by integration activities associated with recent corporate acquisitions. We, however, promote practices that aim to increase employees’ consciousness about the GHG emissions associated with travel and commuting. For example, our Philippines site provides commuting shuttle buses and encourages employees to use them. This program not only benefits the employees by giving them a safe, comfortable, and free ride but also helps the community by reducing traffic with fewer cars on the road, reducing air pollution, and reducing the release of CO2 to the atmosphere. In addition, our Wilmington facility encourages employees to carpool by providing those who carpool with access to prime parking spots. Lastly, we continue to take advantage of technological advancements to reduce GHG emissions from business travel, including teleconference and videoconference technology.


scope-3-emissions-chart


Initiatives including improvements in our abatement systems and the shift to renewable energy source have driven the downward trend in our normalized emissions. Our wafer fabrication sites achieved a 32% decrease in normalized Scope 1 emissions, while our assembly and test facility realized a 73% decrease in normalized Scope 1 + 2 emissions.

Water

Water is an essential part of the Company’s operations, and the Company uses water from public sources. A significant portion of our water is treated to produce the high purity deionized (DI) water necessary for our manufacturing operations. Our water usage is carefully monitored at each of our operating facilities and we have set a water use reduction goal of 2.5% by 2020, relative to the 2015 baseline year. Our 2017 total water withdrawal has increased by 7% from 2015 due to production growth. We also monitor our water use intensity by normalizing our fabrication site’s water withdrawal to our production output. In 2016, our water use intensity increased by 13% from 2015, driven by activities that were related to site expansion construction. Our 2017 water use intensity was virtually unchanged compared to 2015, but compared to 2016, it went down by 12%.

2017 Actual Performance Against 2015 Normalized Goals


We have water use reduction programs implemented at our manufacturing facilities to support our 2020 goals. Water recycling and reuse is a big part of these programs. On an average, 30% of our annual water withdrawal from 2015 to 2017 was reused or recycled. Collectively, we have recycled over 110 million gallons of water in 2017.


water-withdrawal-chart


Wastewater

Wastewater discharge by quality and destination is not a parameter that we currently report on. This is monitored at the site-level but is not rolled up at the corporate-level. Wastewater discharged from our manufacturing facilities is generally sent to the municipal treatment plant, and all water discharges are in accordance with local legal requirements. For the past two years, we’ve seen an increasing trend in the amount of water used in our operations. The increase, due primarily to an increase in production volume requirements, has consequently led to the increase in the amount of wastewater discharged.


total-water-discharge-chart


Waste

As part of our resource conservation program, we have set waste reduction goals at our manufacturing sites of 2.5% by 2020.

ADI has programs to recycle materials and educate our employees on reducing solid waste generation both at home and in the workplace. We’ve also introduced comingled recycling collection, conducted an audit of all waste streams to identify additional materials that could be recycled, and increased recycling awareness programs for paper and beverage containers. Our waste generation has increased from our baseline year due to expansion and growth of the Company. Our waste (total waste generated less recycled nonhazardous waste) normalized to production, however, has shown a reduction of 1.3% from the 2015 baseline year, making us 50% closer to our reduction goal of 2.5% by 2020. Additionally, our recycling rate for non-hazardous waste has shown improvement from 60% in 2015 to 69% in 2017. We are continuously looking for ways to better our performance and are collaborating with suppliers who could help us achieve our goals. Responsibility with our waste production, use, and disposal continues to be a priority. In the past two years, we did not experience any significant spills in any of our manufacturing sites.


2017 Actual Performance Against 2015 Normalized Goals


total-waste-generated-chart


Environmental Compliance at ADI and Beyond

ADI is committed to the exemplary environmental performance of our products and operations. To that end, ADI maintains a regulatory register at each of its operating facilities and has a program to monitor and evaluate our EHS compliance status. Our regulatory compliance management system is both internally audited and externally certified by an independent third party. Government agencies also inspect our facilities for compliance with regulatory requirements. Employees receive EHS training and participate in prevention and risk control activities associated with their work and formalized within the EHS management system. ADI expects suppliers to adhere to the same environmental compliance standards ADI has set for itself.

Conservation

We maintain operations that comply with applicable laws and regulations, including those related to protected areas. Our facilities in Ireland and the Philippines are located inside industrial parks. Our Wilmington facility is near protected wetlands and operations there comply with all applicable requirements related to protected areas and wetlands.

Employees in the Philippines partnered with the Municipal Environment and Natural Resources Office (MENRO) in Naic to protect and conserve sea turtles, locally known as pawikan. The program was spearheaded by the local government of Naic with the goal of saving the endangered sea turtles from extinction. In 2017, ADI volunteers together with the local community released a total of 51 pawikan hatchlings back to the sea. The Company also donated protective nets to protect the hatchlings from predators.