Greenthink - Insights On STMicroelectronics'
Unique Culture That Works To Make Sustainable Development Practical and
Profitable
ST's Recent Management Awards For Its Malta back-End Operation
Company's Highlight Its Commitment To Environmental And Financial Goals
by Lee H. Goldberg
Sustainable business practices and technologies are gaining credibility as several large, publicly-traded companies are demonstrating that minding the environment can actually bolster the bottom line. While changing the operating principles of a company can be a difficult long-term project, it's beginning to pay off for companies like STMicroelectronics, which just received the Management Award for Sustainable Development from the European Awards for the Environment 2002 committee. (For more information about the award, click here.)
The award, given this past October to ST for the performance of their back-end semiconductor processing plant in Malta, is the latest result of a 10-year effort to incorporate environmental principles into the business equation.
Measurable Targets Produce Results
The award's judges said that one of the most significant factors ST's nomination was its development of and adherence to the Company's "Environmental Decalogue", a set of ten quantified, timed and measurable targets created to guide the company towards achieving environmental neutrality. First published in 1995, the Decalogue outlines the company's goals for water and energy conservation, reduction in greenhouse gas emissions, chemical usage, pollution and waste. Far from being a passive statement of principles, Georges Auguste, ST's Corporate Vice President and Director of Total Quality and Environmental Management, explained in an earlier interview that the document is part of the company's basic operating principles and helps breed a culture where employees at all levels are encouraged and rewarded for being environmentally-aware. Auguste said that the corporate culture of continuously improving both financial and environmental performance extends beyond the employees, as customers and suppliers are invited to apply the same principles to their operations.
The latest version of the Decalogue, updated in 1999, sets even more aggressive targets, in particular the highly ambitious goal to go beyond the targets of the Kyoto Protocol and become CO2-neutral by the year 2010. The Malta site used the updated Decalogue to address a range of environmental issues and has made significant advances in reducing water consumption, in improving energy efficiency, and in recycling wastes. For example, the installation of water recycling plants saved 120,000 m3 of water in the year 2000. The impact of this normally water-hungry operation plant recycling 75% of its working water is especially important because it is the largest private industry operating in Malta's parched ecosystem. Giuliano Boccaletti, ST's Corporate Environment Director, says the plant's water recycling rate is expected to climb to 90% by 2005.
How It's Done
In an exclusive interview with analogZONE, Boccaletti filled in a few details of how ST uses its environmental principles as tools to simultaneously improve both business and the ecosystem which it depends on.
AZ: Now that you've won this award, what would you consider ST's other big successes and challenges on the environmental front?
Boccaletti: Well, that invites a long answer, but I'll try to
give you just a few highlights. For one thing, we were the first company
anywhere to have all sites both EMAS and ISO
14001 certified. We've been running like this since 1997, starting with
the first site in 1995. We've also shown it is both possible and practical
to develop clear roadmaps for implementing greenhouse gases emission reduction
(for climate change protection.) We've also instituted an aggressive program
to eliminate, or greatly reduce, the number and amounts of chemicals we
use to produce our products.
AZ: ST is one of the pioneers in integrating environmental principles into its core business plan. Has this involved any extra costs or efforts on your part?
Boccaletti: We haven't had to make any real extra efforts, apart the creation of a dedicated corporate environmental group. Mostly it's just taken a different focus on the part of the top management's commitment and the conviction that "ecology is free." Surprisingly, the environmental investments are in fact largely repaid if production processes are pollution-free and the use of natural resources and energy are reduced.
For example, none of our investments in energy conservation has taken longer than 3 years to pay for itself, with an average of 2 years. After that point, our investments in the environment are pure profit. Our 2001corporate environmental report clearly validates this when it cites the environmental costs of total 2000 and 2001 ($59 M), and how they have been more than repaid by savings ($108 M)in the same period.
AZ: Just like its competitors, ST has suffered losses in revenue and stock value over the last two years, but the declines have been markedly less severe than many other companies. Does this have anything to do with the environmentally- and socially-proactive philosophy that dominates the company's business decisions?
Boccaletti: ST is basing its environmental policy on the following milestones:
AZ: Are there any key technologies or business practices that your company has employed which have contributed to your successful harmonization of environmental and economic concerns?
Boccaletti: We are both refining our own operations and working with our suppliers to continuously improve our performance and to ensure we meet the Environmental Decalogue objectives. Some of the areas we are currently working on include: The energy efficiency of our equipment and tools; optimization of chemical processes for minimum consumption and waste creation; chemical recycling; water consumption reduction and recycling; and production process optimization.
AZ: Are there any other ideas or resources you would care to share that would help other companies follow your example?
Boccaletti: We have had great success in getting our suppliers to align with our environmental goals and practices. Besides the obvious economic leverage we have, we were able to get other companies educated and eager to work with us by providing environmental training, sharing examples of our best practices, providing audits and support for their environmental certification.
AZ: It is most likely that "green products" of various types represent one of the most significant growth areas for the coming decade. Do you have any insights about how these "hot" markets will be defined, and what sorts of products or technologies might be expected to drive them?
Boccaletti: We are already surfing this "green wave" in several different markets. For one thing, we are migrating rapidly to producing lead-free products to meet new European requirements. We are also very involved with power conscious design (less power consumption of products both at design and during their service life.) Where possible our designs comply with the US EnergyStar programs, a government-backed energy efficiency initiative for electronic products. This helps our products find their way into many high-efficiency consumer products that are being designed to meet EnergyStar or other eco-labeling requirements.
In addition to energy-saving applications, such as the stand-by feature on battery chargers, the latest generation of lighting lamps, audio amplification through pulse modulation, there are several other applications in the automotive sector that are making a significant contribution to minimizing environmental impacts.
The ST soft computing team is working with Marelli and the Istituto Motori di Napoli on a hybrid car project using a fuel cell and gas. ST has also worked on a system to reduce the energy needed for power-assisted steering that could produce 10% fuel savings under normal conditions. We expect that there will be a growing market for the electronics to support sophisticated, energy-efficient vehicles in both Europe and Asia, and eventually North America.
About the European Awards for the Environment
The prestigious award was presented by Margot Wallström, European Commissioner for the Environment, at a ceremony held on October 3 at the Hungarian National Gallery in Budapest.
The European Awards for the Environment (originally called The European
Better Environment Awards for Industry) were launched in 1987 to stimulate
technological developments that will help create a sustainable society.
The Awards, held every two years, are designed to recognize and promote,
as an example to others, organizations that make an outstanding contribution
to sustainable development. They aim to highlight policies, practices, processes
and products from all sectors of business in the European Union which help
achieve economic and social development without detriment to the environment
and natural resources upon the quality of which continued human activity
and further development depend. The Awards are given in four categories:
Management Award for Sustainable Development; Product Award for Sustainable
Development; Process Award for Sustainable Development; International Co-operation
Award for Sustainable Development.