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 2014, 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 include 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 HSE policies are available to all employees on our intranet site, as are the minutes of the HSE Committee and details of current HSE initiatives. Examples of such initiatives are explained below.
During 2014, 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 continue to act as champions at their office locations to support various training programs and initiatives to raise awareness about health and safety. In February 2014 and July 2014, the Audit Committee received reports on progress against the targets for such matters as part of its routine business at its meetings.
We have developed a health and safety training program for our offices. Through this program, we now have representatives in each region who have obtained or are in the process of obtaining the UK National Examination Board in Occupational Safety and Health. In 2015, training will be extended to cover further skills and competencies such as waste management, fire safety and the control of substances hazardous to health. Within the Facilities, Health, Safety and Environmental function, we have identified specific training to assist team members in the performance of their roles and responsibilities which will be implemented in the coming year. The objective of this approach is to support our employees by providing knowledge, appreciation of the objectives of the Group and a shared sense of responsibility.
In support of these objectives, we completed the deployment of an online HSE compliance tool globally which is designed to give Facilities and HSE staff direct access to information and guidance on meeting the local legislation relevant to their operations. In addition to the data resource which has been created, we will be exploiting the features of an online system to allow our HSE managers to track and monitor, in real time, tasks which they are required to fulfil in order to comply with local laws and regulations. This will be rolled out in phases with the UK targeted for Q1 2015. This online resource is a key tool in our ongoing compliance with ISO 14001 and OHSAS 18001.
In January 2014, we commenced a health, safety and environmental awareness and training program for all our staff worldwide. On a quarterly basis this covered such topics as serious and imminent danger, first aid and responding to the spillage of hazardous materials in the working environment. This program will continue to be run throughout 2015. The aim is to help support, encourage and empower staff at a local level with awareness of HSE compliance requirements and help develop good practices.
The executive director with responsibility for the Group’s Environmental Management System (‘EMS’) throughout 2014 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 to reflect 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 HSE, Facilities, Business Management Systems and Quality Assurance.
The team establishes a program of action for each year and tracks progress against targets. Progress is monitored by the Company’s internal Quality Assurance department, which reports regularly to the Internal Auditor and to the Audit Committee.
At the date of this report, the Company has received two surveillance visits, in June 2014 and January 2015, for both ISO 14001 and OHSAS 18001 which were completed by Lloyds Register Quality Assurance Limited, an internationally recognized 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. Recertification against these two standards will take place in May 2015.
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 have developed a global five-year environmental improvement program, which addresses three major areas: energy efficiencies and reduction in consumption, recycling and waste management, water consumption reduction and efficiencies. Some of the specific objectives for 2015 include reducing the amount of waste going to landfill in the USA and India to less than 10% of the total waste produced and reducing by 5% our energy consumption in our offices in China.
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. The UK government has set a threshold for consumption of electricity per annum above which business are required to register and pay a levy in respect of the 2014 year, which ran for the period 1 July – 30 June 2014. CSR expected to exceed the threshold set by the UK government and we therefore registered for Carbon Reduction Commitment (‘CRC’) Phase 2. CSR submitted its return in July 2014, in connection with which we were subsequently required to purchase an allowance for the equivalent of 4,475 tonnes of carbon, at a cost of £53,688. With the leasing of an additional property in the UK in 2014, we expect our submission in 2015 to be in the region of £60,000.
For the 52 week financial period ended 26 December 2014, 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 UK government has a stated intention through the CRC Energy Efficiency Scheme, 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 UK government Environmental Reporting Guidelines.
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 organizational 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). CSR has recorded information about emissions for the 12 months from 1 October 2013 to 30 September 2014. 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.
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 organization 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.
(tonnes of CO2e)
(tonnes of CO2e)
Emissions intensity (tonnes of CO2e per m2)1
1Total office floor area is 62,162.63 square metres reflecting our gross internal area across all properties occupied during the stated period by the Group worldwide
The Energy Savings Opportunity Scheme (‘ESOS’) also comes into force in 2015. It is a mandatory energy assessment scheme for organizations in the UK that meet the qualification criteria. Corporate groups qualify if at least one UK group member meets the ESOS definition of a large undertaking, i.e. it employs at least 250 people, which is the case with CSR. Because CSR is not fully covered by ISO 50001, we will be carrying out an ESOS assessment. The resulting production of Display Energy Certificates is considered compliant with the requirements of ESOS. These must be carried out and be in place by 5 December 2015 in order for us to meet the requirements of the scheme.
We remain committed to continuous improvement in the recycling of spent materials in the UK and employees 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 2014, through the use of alternative waste disposal methods of mechanical biological treatment and incineration, and based on returns from our contractor, we have reduced the amount of waste going to landfill by approximately 90%. The total amount of all waste types recycled within our UK operations for the 12 month period ended December 2014 was approximately 173,000 kg.
CSR has long been committed to optimizing 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 minimizing 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 ongoing 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 recognized 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, Authorization 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 recognize 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 recognized standards such as ISO 14001, OHSAS 18001and 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 recognized 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 recognized certification exists to the standards mentioned above.
During 2014, reviews of product environmental compliance were conducted by our Supplier Audit Team at suppliers in Taiwan. 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 utilization 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 recognize 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 Organization for Economic Co-operation and Development. Day-to-day activity is undertaken by our product compliance team.
All manufacturing of CSR’s 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 responded to the more rigorous requirements in line with the updated Conflict-Free Sourcing Initiative. By the end of 2014 we had received updated responses from all of our main suppliers and our actions in achieving this position is explained below.
During 2014, we conducted a good faith Reasonable Country of Origin Inquiry (‘RCOI’) that was intended to identify whether any of the necessary conflict minerals in our products either originated in the DRC (or an adjoining country), or were from recycled or scrap sources. Based on our RCOI, we identified that some of the necessary conflict minerals used in our products originated in the DRC or an adjoining country (and may not have been from recycled or scrap sources). Following the conduct of our due diligence, we have determined that, of those suppliers who sourced materials from the DRC or adjoining countries, all the processing facilities had been validated as being in compliance with the Conflict Free Smelter Program.
CSR’s principal suppliers are TSMC and ASE. TSMC and ASE fulfil a significant proportion of our requirement for the manufacture, assembly, test and packaging of our integrated circuits which we supply to our customers. Both ASE and TSMC have completed their supply chain review. As a result, both TSMC and ASE are able to confirm that their supply chain to CSR are DRC conflict free where ‘DRC conflict free’ means that they ‘do not contain minerals that directly or indirectly finance or benefit armed groups in the Covered Countries’. A small portion of our requirement for the manufacture, assembly, test and packaging of our integrated circuits which we supply to our customers are supported by alternative suppliers who are working towards DRC conflict free status. In 2015 we will continue to work towards DRC conflict free status with these remaining suppliers. As a result of this work, in May 2015 we will report that we are ‘DRC conflict undeterminable’, during the continuing transition period of 2015.
We will continue to make reasonable enquiries with our suppliers on their progress in meeting the requirements of the Dodd-Frank Act.