Health, Safety and Environment
CSR expects the highest of ethical standards of all its employees and its policies and procedures support its stated aim of acting with integrity in all aspects of its operations.
The Board director responsible for health and safety matters is Will Gardiner, Chief Financial Officer. During 2013, Mr. Gardiner met with those who manage the Company’s health and safety issues including the Senior Manager for Health, Safety, and Environmental (HSE). Reports are presented to the Board twice each year covering health and safety matters, which includes statistics on accidents and incidents and progress in fulfilling targets linked to continuous improvement and promoting wider awareness of HSE matters.
In the UK, we have an HSE Committee which meets regularly and is chaired by the Senior Manager, HSE. Our Health, Safety, and Environmental policies are available to all employees on our intranet site as are the minutes of the HSE Committee and current HSE initiatives. Examples of such initiatives are explained below.
During 2013, work continued in promulgating HSE best practices across the CSR group, deploying measures developed in Cambridge as a baseline for globally applicable and acceptable policies, procedures and guidance. Country leaders and their deputies act as champions at their office locations to support various training programmes and initiatives to raise awareness about health and safety. In February 2013 and July 2013, the Audit Committee received reports on progress against the targets for such matters as part of its routine business at its meetings.
As an important part of implementing global HSE policies, we have developed a health and safety training programme for our offices. Through this programme, we expect to have a representative in each region who is qualified to National Examination Board in Occupational Safety and Health standards in the United Kingdom. We expect to implement the programme during the first half of 2014.
We are also in the process of deploying an online health, safety and environmental compliance tool globally which is designed to give our employees direct access to information and guidance on meeting the local legislation that is relevant to their operations. This online resource is a key part of the ISO 14001 and OHSAS 18001 requirements. In January 2014, we commenced running a health, safety and environmental awareness and training programme for all our staff worldwide covering topics such as display screen equipment (DSE), Control of Substances Hazardous to Health (COSHH), serious and imminent danger and manual handling. The aim is to help support, encourage and empower staff locally with health, safety and environmental compliance and help develop best practices; it will also provide an effective overview of the effectiveness of the HSE management system.
The executive director with responsibility for the Group’s Environmental Management System (EMS) throughout 2013 was Mr. Chris Ladas, Operations Director. Since CSR is a fabless semiconductor company and therefore does not have its own manufacturing facilities, our EMS, which has the support of the Board, has been developed reflecting that all our employees work in office based environments which results in a low eco-footprint. We do however seek to establish and maintain high environmental management standards across all aspects of our operations, consistent with the environmental standard ISO 14001. Certification requires that we have an EMS which defines the environmental policy of the Group and sets objectives intended to drive continuous improvements in environmental awareness and practices.
The ongoing management of EMS is overseen by a team incorporating managers responsible for Facilities, Business Management Systems and Quality Assurance.
The team establishes a programme of action for each year and monitors progress against targets. Progress in carrying out the action plans is monitored by the Company’s internal Quality Assurance department, which reports regularly to the Internal Auditor and to the Audit Committee.
In 2013, the Company underwent a certificate renewal assessment for both ISO 14001 and OHSAS 18001 which was completed by Lloyds Register Quality Assurance Limited, an internationally recognised independent assessor. The visits confirmed that the Company’s Management System continued to satisfy the requirements of ISO 14001:2004 and BS OHSAS 18001:2007, and continued certification to these standards was awarded.
Our environmental policy includes commitments to:
- employee consultation and training;
- assessment of our activities and product-related environmental impacts to identify targets for continuous improvement; and
- legal compliance and due consideration of other stakeholder environmental requirements.
We believe that we are taking appropriate steps to contribute to sound environmental practices, covering not only the manufacture and supply of our products but also positive measures to establish and build on good working practices within our various office locations. We are developing a global five-year environmental improvement programme, the initial phase of which will commence during the second quarter of 2014. The programme will encourage employees, who will act as local area champions, to promote our environmental responsibilities within their own offices and which will target issues such as efficiencies and reductions in energy and water consumption, and waste management.
We are registered with the Environment Agency pursuant to the requirements of the Climate Change Act 2008, which forms a key component of the commitment by the UK government and businesses in response to the Kyoto Protocol on climate change.
CSR has implemented procedures in order to be able to record and report on energy consumption for our UK premises. The UK government introduced the first phase of payments in respect of carbon usage in 2012. CSR submitted its return in July 2013, in connection with which, we were subsequently required to purchase an allowance for the equivalent of 4,032 tonnes of carbon, at a cost of £48,396. The reporting qualification for the second round of the Carbon Reduction Commitment Energy Efficiency Scheme (or ‘CRC EES’) registration applies to entities which are expected to use more than 6,000 MW hours of electricity settled in the Half Hourly Market in the UK, at sites where the entities meet these energy costs directly (rather than having them provided as part of landlord supply). As CSR expects to exceed this threshold of use, we have registered for CRC Phase 2. This will be reported during the second quarter of 2014. We currently anticipate that the payment under CRC Phase 2 will be approximately £60,000, which we will be expected to pay in the third quarter of 2014.
For the 52-week financial period ended 27 December 2013, CSR is required to disclose details of Global Greenhouse Gas (‘GHG’) emissions in our annual report and financial statements pursuant to the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 (the ‘Regulations’). The government has a stated intention through the CRC EES, and the Regulations, that by tracking and reporting quantities of GHG’s that they produce, companies will also become more aware of their carbon footprint. The Regulations are also intended to encourage companies to identify areas where reductions in emissions can be made and explore opportunities to implement money-saving energy efficiency measures, which in turn will be better for the environment.
The classes of emissions on which CSR is required to report are identified in the ‘Greenhouse Protocol, A Corporate Accounting and Reporting Standard (Revised Edition, 2004)’ (reflecting Defra Environmental Reporting Guidelines, (Revised October, 2013)). These comprise:
Scope 1: Direct GHG emissions
Direct GHG emissions occur from sources that are owned or where CSR has operational control, for example, emissions from combustion in owned or operationally controlled boilers, furnaces and vehicles; or emissions from chemical production in owned or operationally controlled process equipment.
Scope 2: Electricity indirect GHG emissions
Scope 2 accounts for GHG emissions from the generation of purchased electricity consumed by the company. Purchased electricity is defined as electricity that is purchased or otherwise brought into the organisational boundary of the user. Scope 2 emissions physically occur at the facility where electricity is generated.
CSR’s GHG reporting regime covers Scope 1 emissions (fuel combustion and the operation of CSR’s facilities) and Scope 2 emissions (from purchased electricity, heat, steam or cooling). For the first disclosure under the Regulations, CSR has recorded information about emissions for the 12 months from 1 October 2012 to 30 September 2013. We have followed the Greenhouse Gas Protocol (revised edition 2004) and the operational control consolidation approach to determine what is included and excluded. Therefore all entities and facilities either owned or under the operational control of the Company worldwide have been included. Lease-based properties under operational control were also included. The data has been sourced from utility bills and company car log books. As permitted under the Regulations, air travel and other emission sources not under our control have been excluded for the first reporting period.
By following the operational control consolidation approach, disclosures include leased assets that are not included in the consolidated financial statements. The intensity ratios for indicating performance for emissions are to express carbon output in terms of an appropriate metric for the organisation concerned. For an essentially office-based business such as CSR, we have determined that floor space (based on a measure assessed as the gross internal area) correlates more closely with the greenhouse gas emissions of the Company, as for CRC reporting.
Total office floor area is 63,363.2 square metres reflecting our gross internal area across all properties occupied by the Group worldwide
This information provides a baseline against which it will be possible to assess the extent of any reductions in emissions, whether through the installation of equipment, consumption management systems or operational changes to reduce energy usage.
We remain committed to continuous improvement in the recycling of spent materials in the UK. The total amount of all waste types recycled within our UK operations for the 12-month period ended December 2013 was 124,596 kg, which is equivalent to 69.5% of all the waste produced in the year (waste types recycled during the 11-month period January to November 2012 was 115,092 kgs which is equivalent to 70.5% of all waste produced in that period). Staff are actively encouraged to support such initiatives. Waste bins are segregated into categories of recyclable materials and suitable waste bins have been located in communal areas. In addition, part of the selection criteria for waste removal contractors considers their environmental credentials. In 2014, it is our objective to eliminate waste going to landfill, through the use of alternative waste disposal methods of Mechanical Biological Treatment and incineration (power to plant/national grid). We are working with third party providers in support of this objective.
CSR has long been committed to optimising the use of ‘greener’ materials in our end-products. We continue to work with customers and suppliers as well as our own in-house teams in developing and supplying products which meet the highest standards as regards minimising the use of hazardous substances.
CSR’s products are manufactured and packaged in a variety of forms. All new products released by CSR in recent years are manufactured according to CSR’s own ‘green’ standards. The green standards have been developed by CSR as part of continual engagement with leading global companies who are customers of CSR and also with the support of our suppliers. CSR’s green standards therefore reflect not only internationally recognised guidelines but also the feedback of our customers, whose requirements frequently exceed the minimum conditions set by governments and regulators.
We have dedicated staff who assist in the development of all new products and the review of existing product lines targeting the use of greener materials. Part of their role is to monitor established and pending legislation and standards published by national and supranational governments and agencies and to ensure that we are proactive in going beyond the minimum requirements in our compliance with the types and quantities of materials used.
In this respect we work closely with both customers and suppliers in developing products to reduce the use of hazardous materials, and through testing and certification, ensuring ongoing compliance. Our standard integrated circuits are fully compliant with all existing European legislation, including Restrictions of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Regulations (RoHS) and Registration, Evaluation, Authorisation and Registration of Chemicals regulations (REACH), as well as in other territories where equivalent legislation has been introduced.
In addition to procedures that establish and monitor compliance, we have processes in place to make sure that customers are supported with up-to-date materials, information and laboratory analysis to validate the environmental compliance of our products.
CSR is a fabless semiconductor company. We design and sell semiconductor products and we subcontract to third parties the processes for the manufacture, packaging and testing of our products. We recognise the importance of ensuring that our key suppliers have appropriate policies and practices on social, environmental and ethical matters. Key manufacturing partners are selected and assessed based on certification to appropriate globally recognised standards such as ISO 14001, OHSAS 18001 and SA 8000. We are proud to continue to work alongside TSMC, which is reputed to be the ‘greenest’ semiconductor fabricator company in the world. By reducing emissions, recycling water and consuming less water, TSMC is already recognised as a champion of good environmental policies and standards.
We periodically undertake audits of the operations of our key supply partners to provide assurance that appropriate standards are being maintained in these areas and to determine whether internationally recognised certification exists to the standards mentioned above.
During 2013, reviews of product environmental compliance were conducted by our Supplier Audit Team at suppliers in Taiwan and Korea. Through these reviews, we obtained assurances on certain practices and supporting certifications.
Based on the extent of our ongoing engagement described above, the Board believes that steps are being taken to mitigate against the risks relating to health, safety and environmental responsibilities and there is no present expectation that prevailing practices would materially affect our strategic objectives.
Pursuant to Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, (the ‘Dodd-Frank Act’), in August 2012, the SEC adopted disclosure requirements for SEC reporting companies on the utilisation of certain so-called ‘conflict minerals’ (tantalum, tin, tungsten and gold ) mined from the Democratic Republic of Congo (DRC) and adjoining countries in their products. CSR is registered with the SEC and our products contain one or a combination of tantalum, tin, tungsten and gold which is intentionally added and necessary to product functionality. The majority of these supplies do not come from scrap or recycled sources. Whilst we are not a direct buyer of the conflict minerals from source, we recognise that we need to report on our supply chain and the extent to which such conflict minerals may be used in our products. For this purpose, we have implemented measures for gathering information from our suppliers.
We have generated and approved an internal management system to determine an approach in addressing the requirements of the Dodd-Frank Act. The management system reflects the guidelines defined by the Organisation for Economic Co-operation and Development. Day-to-day activity is undertaken by our product compliance team.
All manufacturing of CSRs semiconductor products is performed by our supplier partners. As such, we are a downstream company. We have no direct business relationship with smelters or refiners. We also believe that our suppliers have no direct business relationship with smelters or refiners.
We have generated new supplier requirements to address the requirements of the Dodd-Frank Act in respect of conflict minerals disclosure.
We have performed a Reasonable Country of Origin Inquiry which was sent to our main semiconductor suppliers. We have received completed forms back from all of these suppliers but in some cases, the responses show that our suppliers cannot yet fully identify that the conflict minerals used are ‘DRC Conflict-Free’.
We recognise that the Conflict-Free Smelter programme is still in development. Companies, who are required to report, but are unable to determine whether the products are conflict free are allowed to describe products containing conflict minerals as ‘DRC Conflict- Undeterminable’ during a transitional period, provided they exercise due diligence on the source and chain of custody. We do not expect complete data to be available from all suppliers immediately.
We will continue to make reasonable enquiries with our suppliers in order to understand the extent of their use of conflict minerals in our semiconductor products.