Expert recommendations for sustainability reporting in the semiconductor industry

As the semiconductor industry focuses on controlling its environmental footprint, it is becoming clear that this footprint spreads wider than facilities, campuses, or company-wide direct emissions. Calculating the environmental impact of chip manufacturing requires an effort which reverberates down the entirety of the semiconductor supply chain. Indirect greenhouse gas emissions from the value chain, characterized as 'Scope 3' by the Greenhouse Gas Protocol, are a vital but barely understood step in the process.

In our latest UltraFacility webinar, panelists Natasha Hodas (WSP), Sara Turner (Lam Research), Mike Halblander (Teradyne) and Jeff Rudnik (ASM) joined moderator Bob Leet (Leet Environmental Consultants) for an enlightening discussion on the industry's steps towards understanding scope 3 emissions.

Here are some of the key takeaways from the webinar, summarizing the key themes of the discussion.

1. Industry collaboration is essential

Sara Turner and Mike Halblander offered their perspective as co-chairs of the Semiconductor Climate Consortium (SCC) Scope 3 working group, expressing the importance of moving forward collectively and working within the context of existing norms and standards to avoid conflicting advice. This working group works to contextualize Scope 3 greenhouse gas emissions reporting within the unique circumstances of the semiconductor value chain.

Working groups like the SCC and the IRDS (International Roadmap of Devices and Systems), represented on the panel by Jeff Rudnik, illustrate the necessity of collaboration from all areas of the semiconductor value chain in order to drive progress on shared challenges in the industry.

2. Sustainability’s return on investment

Investing in sustainability can be seen as an unattractive prospect – without the pressure of regulations, manufacturers prefer to prioritize other business levers which have a more obvious and lucrative return on investment. However, Mike Halblander took pains to stress that in some capacities, initiatives which improve sustainability have extremely valuable outcomes. For example, reducing electricity consumption can save money as well as energy, leaving more money and operational capacity to utilize in other areas of the business.

3. Advancing data collection and monitoring

Companies in the semiconductor industry are increasingly looking to develop their data collection for Scope 3 emissions, to advance from ballpark estimates based on spending to granular primary data collection from suppliers.

As part of this, the panelists took pains to stress the importance of frequent and accurate metering and monitoring for key sustainability metrics – including water usage, air emissions, and energy. Proactive installation of monitoring technologies can reap many benefits, not only in getting the jump on regulatory compliance, but also in terms of building smarter facilities that make it easier to optimize efficiency.

Data sharing is the way forward, and the way to get to this is by employing a similar framework to financial accounting, which can be applied uniformly and therefore is easier to audit. Jeff Rudnik pointed to the EU's Corporate Sustainability Reporting Directive as a regulation which could, in time, make a useful blueprint for sustainability accounting.

5. Paving the way, brick by brick

Companies adopting Scope 3 emissions reporting practices are kick-starting a chain reaction that reverberates down the value chain – when chip manufacturers ask their suppliers to provide accurate accounting of their emissions, suppliers in turn encourage their suppliers to provide data.

Establishing common expectations for comprehensive environmental accounting is the first step towards a fuller understanding of the semiconductor industry's environmental footprint. When requirements are pushed throughout the value chain from hyperscalers, to fab players, to tool manufacturers, to equipment manufacturers and their supply chains, the semiconductor industry can begin to set standards to advance sustainability industry-wide.

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