ST strives to combat climate change in three major ways:

1. a constant dedication to reducing our own environmental impact by reducing our consumption of resources;
2. working with our suppliers and other stakeholders to share our vast experience and encourage best practices;
3. developing advanced semiconductor components that minimize the power consumed in electronic equipment.
   

Like every successful company, STMicroelectronics functions as an open eco-system. It needs external inputs, like energy and raw materials, to operate its manufacturing processes. In addition to producing important components, which enable a wide variety of electronic applications that improve our lives, the manufacturing processes also generate some less desirable outputs, such as waste, CO2 and other emissions to water and air. These inputs and outputs have environmental impacts, including a potential contribution to climate change, which we consider a major global challenge requiring the focused, consistent efforts of all social actors to reduce its impact on our planet.

Although the semiconductor industry makes a relatively small contribution to climate change compared to many other industries, ST integrated a formal, structured approach to reducing its environmental footprint in the early 1990s. Working with the World Business Council for Sustainable Development (WBCSD) at that time helped us to define the areas for action and improvement relating to CO2 emissions and other greenhouse gases (GHG); we called the resulting 10-part plan our Environmental Decalogue. To encourage action and provide metrics for success, ST’s Decalogue defines goals and provides references and benchmarks. Constant efforts have been made to minimize our impact through a focused and multi-faceted strategy that takes all aspects of the value chain into consideration and seeks to achieve results through collaboration with our stakeholders.

For example, since 1999 we have strongly encouraged our suppliers to become ISO 14001 certified and EMAS validated, and we have supported them with training courses on environmental awareness. In 2008, 84% of our suppliers and 97% of our subcontractors were ISO 14001 certified. More recently we have adopted the Electronic Industry Citizenship Coalition (EICC) Code of Conduct – which includes a focus on air emissions – as our official supplier code of conduct and we are progressively deploying it to our suppliers and subcontractors. Our participation in the EICC and our routine engagement with our customers allows us to monitor and understand the environmental needs of our business partners, who are increasingly concerned about climate change issues.

ST’s Environmental Decalogue includes an objective to progressively increase our purchase of green or CO2-free energy and to increase our use of renewable and alternative energy. In 2008, 32% of our purchased energy was CO2-free - 29% nuclear and 3% green (wind/solar) energy). Our wind farm in the South of France and photovoltaic and solar thermal panels at several of our sites contribute to achieve this objective.

ST’s ‘Carbon Roadmap’ supports us in working towards our ambitious target of becoming CO2 neutral with respect to our direct emissions by the beginning of next decade. This roadmap consists of reducing CO2 emissions from Perfluorinated Compounds (PFCs) and continuing our carbon offset program through reforestation. Complete neutrality, including indirect emissions from purchased electricity and transportation, remains a longer-term target, addressed by the corporate initiatives to reduce electricity consumption, to increase the use of alternative and renewable energy, and to offset carbon emissions by more reforestation.
Our direct net emissions due to the use of PFCs have decreased by 39% since 2004 as a result of investment in point-of-use abatement systems and using alternative substances where possible. Efforts to reduce emissions due to transportation include close control of goods logistics and schemes to support employees in using public transport or more energy-efficient alternatives to their own car.

The sequestration of CO2 through reforestation projects also showed a net increase last year. Over the past 12 years, STMicroelectronics has planted 10 million trees in different reforestation programs in Morocco, Australia, the USA, France and Italy (approximately 9,000ha in total). The forests planted sequester carbon emissions, resulting in an overall reduction of 179,000 tons of CO2, the approximate equivalent of the yearly emissions for 60,000 gasoline-powered cars driving 15,000 kms per year.

Thanks to clear targets, strong efforts and the spreading of best practices among our sites around the world, ST has decreased its global energy consumption per unit of production by 50% since 1994, an average of over 5% per year.

Another important aspect of our contribution to reducing climate change is designing for low energy consumption, both in terms of the energy used by the ST component and the energy-saving characteristics that the ST component brings to the final electronic appliance. For example, many of our products are dedicated to power management – from components in domestic electronic appliances like refrigerators, televisions and washing machines to industrial power management, lighting and automotive applications. ST is recognized as a world leader in this domain. While our components are sold to be used in products that consume energy, very often ST technology makes a substantial difference by ensuring considerable reductions in overall energy consumption.

November 2009