TI and the semiconductor industry are working proactively to reduce greenhouse gas (GHG) emissions and are committed to global business sustainability.
While our industry's emissions are relatively small, we make financial investments and employ numerous mitigation strategies to reduce GHG emissions by:
These programs help reduce "direct" or scope 1 emissions (owned or controlled by TI) and "indirect" or scope 2 emissions (due to purchased electricity, heat or steam) that contribute to climate change. We have dedicated teams to manage and measure our progress toward reducing GHG emissions. In addition, we also leverage external expertise, and share our knowledge with government and industry entities to continue to reduce GHG emissions.
Many of our efforts to reduce GHG emissions have been in place for decades, when we began a formal energy conservation program in the mid-1970s.
The company's vice president of worldwide facilities, who reports directly to the chief financial officer, oversees TI's climate-change initiatives. Our greenhouse gas (GHG) strategy team – comprising internal environmental leaders and government relations staff, as well as legal, air quality, chemistry and energy experts – coordinates and manages these initiatives.
The Audit Committee of our board of directors oversees environmental compliance efforts and risk assessment processes. Where climate-change matters may have significance for TI, these matters are included in reviews to help the Audit Committee fulfill their oversight responsibilities. The GHG strategy team periodically briefs executive managers regarding status and progress.
In addition, employees at all job levels globally are held accountable for compliance with environmental, safety and health requirements. We expect employees to achieve continuous improvement toward objectives and targets appropriate to their function, including GHG reduction goals.
TI calculates its greenhouse gas (GHG) emissions using guidelines from the World Resources Institute (WRI). It includes direct (scope 1) and indirect (scope 2) emissions of six types of gases included in the Kyoto Protocol:
In addition to the WRI guidelines, we calculate our inventory using the Intergovernmental Panel on Climate Change's Tier 2B methodology for scope 1 emissions. This includes accepted quantification methods, emission factors and global warming potential. We do not currently obtain external verification of this data; however, we have obtained third-party verification of our data-collection process and methodology.
Our carbon footprint calculation includes all owned and leased sites larger than 50,000 square feet. This accounts for 97 percent of our total square footage and more than 99 percent of our equivalent carbon dioxide (CO2e) emissions. It does not include any subcontractor or supplier manufacturing facilities or facilities smaller than 50,000 square feet, whether owned, leased or controlled by TI.
TI currently does not include scope 3 GHG emissions (such as emissions from our supply chain, waste generated by TI or business travel) in our formal GHG emissions inventory. However, we have begun measuring business air-travel emissions from TI's private jets for flights into, within or out of European Union countries in anticipation of potential requirements under the region's GHG Emissions Trading Scheme. We also track certain employee commute activities through our Commute Solutions program.
Not every climate-change mitigation strategy is appropriate for TI. We must weigh each greenhouse gas (GHG) reduction decision by balancing our progress in sustainability against practical cost considerations. In 2011, we set an ambitious company goal to reduce GHG emissions per chip produced by 30 percent over the next five years.
We currently focus our efforts on reducing emissions from two primary areas – perfluorocompounds (PFCs) and energy use – which make up the majority of our emissions.
PFCs are a group of chemicals vital to semiconductor manufacturing that are considered greenhouse gases. Our industry recognizes that although the volume of such chemicals used may be small, we are still obligated to find technically and economically feasible alternatives that further reduce PFC emissions while preserving product quality.
As part of a 10-year, industry wide voluntary memorandum of understanding with the U.S. Environmental Protection Agency (EPA), TI reported PFC emissions to the agency, supporting a 10 percent emission reduction goal from a 1995 baseline through 2010. The semiconductor industry successfully achieved and far surpassed that goal.
Our company committed to helping the industry achieve a new goal, established in 2011, to reduce normalized perfluorocompound emissions by 30 percent per amount of product produced (based on surface area) by 2020.
We voluntarily report PFC and other GHG emissions to the World Semiconductor Council as part of the U.S. industry report. In addition, we report our performance to the CDP, a group of institutional investors that encourage private- and public-sector organizations to measure, manage and reduce emissions. We also report our U.S. GHG emissions to the U.S. EPA to comply with mandatory GHG reporting requirements.
The production of energy from fossil fuels generates carbon dioxide (CO2), a greenhouse gas. The majority of GHG emissions we report are from upstream emissions at energy generation facilities.
The conservation and efficiency actions we have taken and planned are significantly contributing to a reduction in our GHG emissions.
TI's environmental, safety and health (ESH) management system identifies, evaluates and tracks applicable legal and other ESH-related standards or requirements for its operations, products and services, including those related to climate change.
ESH review teams comprising environmental, safety and industrial hygiene specialists maintain this process. The specialists on these teams are responsible for continually identifying, tracking and communicating changes regarding ESH operational and product requirements.
Our business units and government relations organization also monitor government initiatives and incentives, as well as business opportunities, so that we can apply our innovative technologies to enable energy savings and new energy sources, which can subsequently help reduce greenhouse gas emissions.
Although not currently believed to be material, we are exposed to certain regulatory and physical risks associated with climate change. We closely track global energy and environmental concerns and are committed to being part of the solution. In addition, we work through associations to provide context and perspective on the potential impact of legislative and regulatory proposals.
Regulations addressing greenhouse gas (GHG) emissions are in place or are being developed in many markets where we operate.
For example, we are required to comply with two GHG rules set by the U.S. Environmental Protection Agency (EPA) that went into effect beginning in 2011:
Preconstruction permitting for new or modified facilities that will emit "major source" levels of GHG emissions. Known as the "Tailoring Rule," EPA requires stationary sources, like TI's U.S. manufacturing facilities, to obtain permits for projects calculated to emit GHGs above certain thresholds. New or modified facilities must incorporate the best-available GHG emission-control technology into the project. The Tailoring Rule also requires major sources of GHG emissions to either add GHG permit requirements to existing Title V operating permits or obtain new Title V operating permits.
Mandatory reporting of GHG emissions from combustion sources. The EPA requires the semiconductor industry (among other industries) to measure and report annual fluorinated GHG emissions (such as sulfur hexafluoride, perfluorocompounds and hydrochlorofluorocarbons) as well as GHG emissions from combustion sources.
Although not currently believed to be material, TI could potentially be exposed to certain physical risks that may be associated with climate change, such as typhoons or other extreme weather events. In any natural or man-made disaster, our priorities are to protect our people, assets, revenue and reputation. In addition, our technologies can aid relief and recovery efforts.
Should any of our global sites be impacted by extreme weather events, we are prepared. Each site worldwide has a business continuity plan detailing an effective and timely response to any natural or man-made disaster. The program focuses on risk assessment, preparedness, incident response and business recovery, and helps ensure business reliability for our customers and safety for our workers and communities.
Governments and private entities in many of the major markets where we operate are taking significant action to increase energy efficiency and the availability of renewable energy, which helps reduce greenhouse gas (GHG) emissions. These markets include, but are not limited to, the U.S., China, the European Union, India and Japan.
As a result, we anticipate opportunity for growth by providing technologies that will enable our customers to reduce power use and subsequent GHG emissions. Potential customers include electricity providers, distributors, manufacturers of white goods (appliances) and the transportation industry, among many others.
TI is well-positioned to respond to these needs as an industry leader in power-management and ultra-low-power solutions. For example, our power-management devices and microcontrollers reduce energy consumption in electronics, industrial equipment appliances, PCs and automobiles, and enable smarter homes, buildings and electric grids.
Our technology is also helping harness often untapped renewable energy sources – wind, solar, vibration and even human body heat – to reduce the world's reliance on fossil fuels and promote the use of alternative, smarter sources.
We invest in research and development and collaborate with partners to develop new energy technologies. We have also opened on-site centers such the Solar Energy Systems Lab and LED Lab to develop breakthrough innovations in this space.
We also are designing our own products to be more efficient. For example:
Global energy demand is expected to double by 2050, which calls for a more efficient and reliable power infrastructure. Smart grids, enabled by TI technology, are reducing costs, saving energy, and improving how energy demand is monitored and managed. Utilities can use smart electrical meters to adjust (with permission) thermostats, appliance usage and HVAC settings in homes and businesses to avoid rolling brownouts or having to charge peak rates. This reduces climate impacts as well.
Industrialized and emerging countries are seeking ways to reduce carbon dioxide emissions from automobiles to support global climate-change initiatives. Our analog and embedded processing products allow hybrid and electric vehicles to reduce these impacts.
With the continued legislative and regulatory focus on developing new sources of power, while reducing energy consumption and emissions in coming years, our business opportunities in these areas (both near and long term) may likely escalate.
In the event of extreme weather events or other potential physical changes associated with climate change, TI technology can aid response and relief efforts. This includes helping customers develop emergency response communications or the latest medical equipment.