Since 1968 we have helped the industry to create smaller, cheaper, and more powerful microchips. Our focus is on continuing to help our customers achieve their technology roadmap, by expanding our broad portfolio of innovative technologies and products.
Our innovations have led to a range of scientific breakthroughs, which have positively benefited many aspects of society. We have pioneered technologies that are widely used today, including photolithography, epitaxy, ion implantation, and atomic layer deposition (ALD). These innovations support our customers' roadmaps to bring the end consumer the technologies of today and tomorrow.
Our investment in research and development (R&D) is key to our mission. We have R&D partnerships with customers, universities, industry groups, and with our suppliers. We believe these partnerships help us positively influence many segments of society around the world. This is a responsibility we incorporate into our CR strategy.
The key elements of ASMI's strategy, being Innovative Strength, Leadership in Deposition, and Operational Excellence, are reflected in our corporate responsibility (CR) strategy:
The United Nations’ Sustainable Development Goals (SDGs) reflect the priorities of global society, and our CR strategy makes significant contributions to a number of these important goals.
The ways we contribute to these SDGs are described below in the detailed descriptions of our three strategic CR pillars.
For decades, we have contributed technological innovations that help drive modern society. To continue to innovate and benefit society, we need to focus strongly on our R&D efforts, and improve the way we bring our product to market through our product life cycle process. Of course, these societal benefits can only be realized when innovations are brought to market. An efficient and effective product life cycle process is therefore important to bring continually improved technological capabilities to all aspects of life.
Our investments in R&D and our breakthroughs in bringing technological advances to the marketplace enable us to make substantial contributions to several aspects of SDG 9: Industry, Innovation and Infrastructure.
We believe that responsibly managing our business creates value for our company, as well as our stakeholders and society. Our key corporate responsibility philosophy is ZERO HARM! We strive to prevent harm to people, reduce our impact on the environment, and make positive contributions to society. To achieve these goals, we strive to be innovative and challenge conventional approaches, using our guiding principle ‘Drive Innovation, Deliver Excellence’.
Our CR policy lays out our commitment and expectations to health and safety, the environment, labor, ethics, and supply chain management. Each of these areas is further supported by policies, systems, programs, and metrics to ensure that we meet our long-term objectives. The full text of our CR policy is available on our website.
Through stakeholder alignment, we have based our CR Strategy on the Responsible Business Alliance Code of Conduct (RBA, formerly the Electronics Industry Citizenship Coalition, EICC) framework.
The RBA Code of Conduct (the Code) has been widely adopted throughout the electronics industry, with the semiconductor industry and its value chain an essential aspect of this. Many of our customers are RBA members, and as a critical supplier to them we are expected to adopt the Code. The Code, evolves constantly to cover the most recent developments in responsible business practices, and is updated regularly to stay abreast of societal norms and expectations, and the evolution of international standards and expectations. We are committed to upgrading our management practices as the Code and other standards and expectations evolve. Currently, the Code references and follows multiple international expectations and standards, including:
Differences between the Code and the OECD Guidelines are mainly related to business-to-consumer aspects which are not relevant to our business. We use the Code, its supporting documentation, and engagement with RBA member customers to drive a continuous improvement process within the company. The framework of the Code allows us to critically assess our compliance with it and customer expectations. We routinely assess our standing with the Code via multiple methods, including self-assessments, internal audits, and customer audits.
However, responsibility is more than codes and standards, it is also about understanding stakeholder priorities, our material aspects, and integrating responsible business practices into our strategies, objectives, and processes. In this way, we are routinely reassessing ourselves, engaging with key stakeholders, and finding ways to reduce harm, and bring value to society. Employees are encouraged to contribute to this at ASMI, helping strengthen our ZERO HARM! vision.
Through our efforts to manage all aspects of our business responsibly, we contribute to global progress towards the SDGs for gender equality, decent work and economic growth, responsible production, and climate action (SDGs 5, 8, 12 and 13).
Our supply chain is the full system of building and delivering our products to customers. We know we lead a larger system to deliver our final product, and we drive responsibility within that system.
Our approach is driven by our Supplier Code of Conduct (CoC). We have taken into account our stakeholder requirements for a supply chain compliant with the RBA Code of Conduct, and have adopted the Code directly as our Supplier CoC. This ensures our critical suppliers are aligned with the policies and expectations of ASMI. We require our direct suppliers to acknowledge the CoC. If non-compliance is identified, we may choose to terminate the supplier relationship.
We operate an assurance process for our critical suppliers, who are identified annually based on key elements such as, but not limited to, the amount we spend with them, how many similar or alternative suppliers exist, and the amount of time we would need to switch suppliers if we had to. We set objectives for Code acknowledgment, self-assessment, and auditing/corrective action processes that are consistent with RBA requirements.
Our customers also view the ASMI supply chain as their own. Their value chain includes our value chain, and their feedback in 2017 places emphasis on preventing forced and bonded labor (FLBL) and increased attention on diversity.
By focusing on responsible business practices in our supply chain, we expand our impact and our contribution to the achievement of relevant SDGs.
Our CR management system relies on the Corporate Governance Framework set out in the Governance section of this report. This begins with the Supervisory Board and Management Board and the corporate governance standards and values they hold the company accountable to.
Our Management Board is actively engaged in corporate responsibility through the Corporate Vice President of Human Resources, who is also Chairperson of the ASMI Ethics Committee, and the Corporate Vice President of Operational Excellence, who is directly responsible for the Environmental, Health, Safety, and Corporate Responsibility of the company.
Working together, these two organizations define the strategy and approach to corporate responsibility in terms of environmental performance, employee health and safety, labor and ethics, which is subject to approval of the Management Board. The implementation and control of economic and financial aspects is overseen by the Management Board. The Management Board is supported by various functions that each regularly provide forward looking information for the company and the business it operates in.
Our Ethics Committee governs our system of ethics, and reports to the Management Board. The committee is chaired by the Corporate VP of Human Resources, and is composed of representation from the departments legal, corporate responsibility, internal audit, and regional human resources. This committee monitors global ethics issues facing our industry and society, receives feedback from stakeholders, and closely monitors issues we face to set and improve our ethics management system. The committee also monitors performance to the system, meeting regularly and reporting progress to the Management Board. The Ethics Committee also has the important role of supervising the investigation of all ethics-related complaints, including those anonymously reported via SpeakUp!. The SpeakUp! process enables employees, suppliers, customers and any other stakeholder to report ethics issues, concerns or complaints, anonymously and in their own language.
The RBA Committee is chaired by the Director Global Corporate Responsibility and is comprised of subject matter experts and executives. The RBA Committee governs the RBA framework and performance, and reviews applicable stakeholder feedback to the committee’s oversight of material issues, meeting regularly throughout the year. The committee sets performance objectives and reports to the Management Board.
Integration and alignment with the world around us makes us stronger. We learn, grow, and evolve to be a better company with feedback and input from stakeholders. Their feedback can help us shape strategy, policy making, and objectives in relevant areas of social responsibility. Stakeholder feedback also helps to ensure that our decisions and innovations lead to meaningful benefits for all key stakeholders.
A key step in engagement is first identifying key stakeholders, including:
These key outcomes are just a few examples of how we consider stakeholder input and feedback, which we use to further improve our strategies, targets and ultimately our performance.
Additionally, in 2017 we continued to participate in the Transparency Benchmark, an annual assessment on the content and quality of corporate social responsibility reports of Dutch companies. The benchmark helps us gain insight on not only improved reporting, but also on strengthening our programs. Our 2017 performance in the benchmark improved 23% over the 2016 scoring. This benchmark is viewed as an important tool to various stakeholders, including the Dutch Ministry of Economic Affairs as the administrators of the benchmark, and others who have expressed interest as the VDBO and SRI focused investors.
In 2015, we introduced our materiality assessment process. The process provides us with the opportunity to continually assess if our strategic objectives, actions, and initiatives are aligned with our stakeholders and overall importance to our business. The process has remained constant since then, following the sustainability materiality steps and matrix based on the Global Reporting Initiative’s (GRI) G4 Sustainability Reporting Framework, and represents the internal and external stakeholders we have identified. We have also identified environmental, social, and economic aspects that have the greatest impact on our business and have generated the greatest level of interest with our stakeholders across our value chain. The assessment encompasses aspects that are internal and external to the organization.
The materiality assessment continues to capture more aspects of our business, and in the three cycles it has been conducted there has been a slight shift, in importance levels. The risk ranking of the relevant aspects provides a list of our primary strategic focus areas.
For example, while ‘company financial health’, ‘innovation and R&D investment’, and ‘product safety and compliance’ are still the highest-ranking aspects, there has been a gradual increase in importance of ‘information security’. In response, we continue to assess our information security positions, and improve on protection strategies.
All aspects shown in the materiality matrix results are material. Decisions on how to prioritize resources are made regularly, with priority given to those in the high Impact and Importance category. These are considered the primary aspects.
Each one of the current primary aspects is considered strategic to the business, and is integrated with strategic initiatives where applicable. One example is the investments made in R&D, which result in patents and intellectual property that are part of the assets protected by our information security systems. Protecting these investments helps drive company financial health through product development and customer confidence.
Those near the bottom of the assessment are not considered immaterial. In many cases, we do evaluate those against future risks and global trends. One example is the environmental performance aspects. We recognize that climate change, resource conservation, and water management are critical to the survival of the planet. Our impact may be small compared to other companies, but the collective contribution of everyone can have an impact on future generations. We know we can do our part, and strive for improvements in the way we manage our environmental impact. One example of this is the implementation of a water reuse system at our Phoenix facility.
Our validation process is managed through the internal committees and business function owners. Those organizations use applicable market research, benchmarking, and performance assessments to identify gaps and opportunities, as well as risks and challenges to set future strategies, steering methods, and controls.
The table above provides an overview of the primary aspects and their related strategies. For full discussion on each aspect, please refer to the following:
Taxes are determined and paid in accordance with all relevant rules and regulations in the countries in which we operate. We do not use artificial tax structures solely aimed at tax avoidance. We aim to follow both the letter as well as the spirit of the law.
We apply the arm’s length principle to determine transfer prices in accordance with domestic and international rules and standards, such as the OECD Guidelines for Multinational Enterprises. Our disclosures are made in accordance with the relevant local and/or international regulations.
Our goal is to seek an open and constructive dialog with the tax authorities in the countries where we operate, and we aim to disclose all relevant facts and circumstances. We believe that this will enhance certainty on our respective tax position in view of the applicable tax rules and regulations.