Flex : 2022 CDP Water Security Disclosure

CDP Water Security Questionnaire 2022

CDP Water Security 2022

Table of Contents
W0.	Introduction	2
W1.	Current state	3
W2. Business impacts	8
W3. Procedures	8
W4.	Risks and opportunities	10
W5.	Facility-levelwater accounting	17
W6. Governance	27
W7.	Business strategy	30
W8. Targets	32
W9.	Verification	34
W10. Sign off	34

W0. Introduction

W0.1

(W0.1) Give a general description of and introduction to your organization.

We are the manufacturing partner of choice that helps a diverse customer base design and build products that improve the world. Through the collective strength of a global workforce across 30 countries and responsible, sustainable operations, we deliver technology innovation, supply chain and manufacturing solutions to diverse industries and end markets, including automotive, communications, energy, healthcare, and industrial, among others.

Sustainability including environmental, social and governance (ESG) have always been a core part of how we operate as a responsible manufacturer. Our long-term strategy, purpose statement, vision, mission and values reinforce our duty to positively contribute to the world, from designing and building our customers' products to continuously improving our day-to-day operations. Our advancement of sustainability includes aligning efforts with global initiatives to ensure progress across our footprint and beyond our four walls. We proudly offer low carbon products that allow other organizations to avoid Scope 2 emissions through solar energy, representing 5.12% of our total revenue. We are a participant in the world's largest sustainability initiative, the UN Global Compact, and in 2021, we reached the Global Compact's advanced level for second year in a row.

Our sustainability efforts have gained recognition from several organizations, including the Manufacturing Leadership Awards, Responsible Business Alliance, Frost and Sullivan and EcoVadis, a provider of CSR Ratings and Scorecards that awarded us the "Platinum Recognition Level." Sustainalytics ranked Flex #1 in the electronics manufacturing sub-industry category, and we were ranked in the top 50 globally out of approximately 13,000 companies overall. We achieved the highest disclosure and transparency score on ESG factors, recognized by the Institutional Shareholder Services Inc. (ISS), and received the Prime status in 2020. For the fifth consecutive year, we are a constituent of the FTSE4Good Index. Most recently and for the second year in a row, we qualified for inclusion in the S&P's Sustainability Yearbook. We were named to CDP's prestigious A list for water security for a second year, and received an A- for climate change in 2021. Flex was also recognized as a 2021 CDP Supplier Engagement Leader for its actions to measure and limit greenhouse gas emissions across its supply chain. This recognition, a company first, places Flex in the top 8% of companies who disclosed to the global environmental non-profit's full climate questionnaire.

The value we bring and the progress we make toward a more sustainable future are enabled by our ~160,000 employees, who are committed to doing the right thing always for our customers, colleagues, shareholders and communities. We believe that a sustainable approach is not only essential to our business, but also the environment and our broader communities where we live and work. Our sustainability and ESG strategy and efforts identify our commitment to sustainable development across our framework that focuses on the world, our people and our approach to doing business. Our framework encompasses several pillars, including the environment, community, health and safety, inclusion and diversity, labor practices, suppliers, customers, ethics and governance. Our framework supports our 2030 goals and forms the foundation of global and local initiatives that continually inspire us to improve our corporate citizenship and workplace performance.

As our sustainability and ESG journey continues toward our 2030 goals, we remain focused on operating a responsible business, meeting the needs of all our stakeholders and delivering meaningful impact in our many communities as a trusted manufacturing partner, employer and investment of choice.

Note: In 2021, Nextracker is a fully owned Flex company. This reporting cycle is the first time Nextracker is responding to CDP. Nextracker has been incorporated into Flex Ltd.'s CDP responses in years prior and the data disclosed here is also reported under Flex's water data for 2021.

W0.2

(W0.2) State the start and end date of the year for which you are reporting data.

Reporting year

Start date	End date
January 1 2021	December 31 2021

W0.3

(W0.3) Select the countries/areas in which you operate.

China

Malaysia

Mexico

United States of America

W0.4

(W0.4) Select the currency used for all financial information disclosed throughout your response.

USD

W0.5

(W0.5) Select the option that best describes the reporting boundary for companies, entities, or groups for which water impacts on your business are being reported.

Companies, entities or groups over which operational control is exercised

W0.6

(W0.6) Within this boundary, are there any geographies, facilities, water aspects, or other exclusions from your disclosure?

No

W0.7

(W0.7) Does your organization have an ISIN code or another unique identifier (e.g., Ticker, CUSIP, etc.)?

Indicate whether you are able to provide a unique identifier for your organization.	Provide your unique identifier
Yes, a Ticker symbol	FLEX

W1. Current state

W1.1

(W1.1) Rate the importance (current and future) of water quality and water quantity to the success of your business.

	Direct use	Indirect	Please explain
	importance	use
	rating	importance
		rating
Sufficient	Important	Important	Direct use: The primary use for good quality freshwater in our direct operations is for sanitation and drinking water. In our manufacturing operations, freshwater is also used for
amounts			rinsing parts in our painting lines, cleaning, HVAC and cooling water. This is important to our business, because access to an affordable, reliable and adequate freshwater
of good			supply is required across our operations to meet customer needs. While our business is not water intensive, some of our operations are in water-stressed areas, and we are
quality			increasingly utilizing water management practices to reduce our freshwater withdrawals. For example, in recent years, we reduced our monthly water withdrawal costs by over
freshwater			40% by replacing broken fixtures, installing self-shutting faucets, and through an awareness campaign at our Cebu Design Center. We also made upgrades to a wastewater
available			treatment facility at our Austin site to increase its annual recycling capacity to 75 million cubic meters of water. In 2020, we saw significant reductions in water consumption by
for use			installing self-close water taps in the restrooms and canteen in our Skudai site. By piloting wastewater treatment systems and reducing freshwater water withdrawals in our
			direct operations, we anticipate our future dependency on freshwater to decrease.
			Indirect use: The primary use of freshwater in our indirect operations is for supplier manufacturing, sanitation, and drinking water. Supplier access to an affordable, reliable
			and adequate freshwater supply is important to the success of our business because it is required to meet customer needs. In 2020, we included questions specific to water
			management in our Supplier Assessment Questionnaire to better understand how our suppliers address water management issues. We do not anticipate future freshwater
			dependency among our suppliers to change because we do not anticipate their potable water needs will change.
Sufficient	Important	Important	Direct use: The primary use for non-freshwater in our direct operations is for irrigation and cooling. This is important for our business because we have a select number of
amounts			facilities that depend on recycled water as the primary water source. For example, in 2021, we focused our efforts towards assessing opportunities for water recycling,
of			evaluating new technologies that can withdraw water from the air for use in our operations. We are excited to continue exploring new ways to decrease our water withdrawal.
recycled,			We invested in CAPEX 100,000 usd on water efficiency projects in 2021. For example, in 2021, we updated our Tijuana facility by a filtering system that allows water from the
brackish			laundry area to be filtered and reused in the sanitary facilities of the plant. Also, to further reduce water, our site in Juareth installed an additional line for treated water in
and/or			campus restrooms, allowing water recovered from the production processes to be treated and reused.
produced			We anticipate our future non-freshwater dependency to increase as we continue to invest in reclaimed water systems and purchase recycled water from third-party suppliers.
water
available			Indirect use: The primary use of non-freshwater in our indirect operations is for supplier product manufacturing, global logistics, as well as cleaning, irrigation, and cooling. This
for use			is important for our supplier activities, as it reduces our suppliers' dependency on good quality freshwater, which is becoming an increasingly valuable and scarce resource.
			We anticipate future dependency on non-freshwater among our suppliers to increase as customer requests help drive water conservation activities and suppliers continue to
			invest in reclaimed water systems.

W1.2

(W1.2) Across all your operations, what proportion of the following water aspects are regularly measured and monitored?

	% of	Please explain
	sites/facilities/operations
Water withdrawals	100%	Water withdrawals are quantified for 100% of sites within our operational control. For the vast majority of our sites, the method of measurement for water
- total volumes		withdrawals is based on actual water bills/invoices and/or water meter records. Sites report data on a monthly basis, and a regional group validates, reviews, and
		approves the data. When actual water invoices are not available, we estimate water withdrawals based on the size and type of site. In 2021, 94% of our total water
		withdrawals was based on actual water invoices.
Water withdrawals	100%	Water withdrawals by source are quantified for 100% of sites within our operational control. For the vast majority of our sites, the method of measurement for water
- volumes by		withdrawals is based on actual water invoices received monthly or quarterly. Water invoices and total water withdrawals are reviewed annually. When actual water
source		invoices are not available, we estimate water withdrawals based on the size and type of site. In 2021, 94% of our total water withdrawals was based on actual water
		invoices. We monitor all of our water withdrawals by source when actual invoice data is available. We assume that all estimated water is withdrawn from third party
		sources.
Entrained water
associated with
your metals &
mining sector
activities - total
volumes [only
metals and mining
sector]
Produced water
associated with
your oil & gas
sector activities -
total volumes [only
oil and gas sector]
Water withdrawals	100%	The quality of water withdrawals is monitored for 100% of our sites, primarily through our water utilities. We rely upon our utilities to provide suitable quality water.
quality		For the vast majority of our sites, 94% in 2021, the method of measurement for water withdrawals is based on actual water bills/invoices and/or water meter
		records. Sites report this data on a monthly basis, and a regional group validates, reviews, and approves the data. When actual water invoices are not available,
		we estimate water withdrawals based on the size and type of site.
Water discharges -	100%	Water discharges are monitored for 100% of our sites within our operational control. Sites report this data annually based on site-specific estimation as the method
total volumes		of measurement. When site-specific estimation for discharges is not available, discharges are assumed to be equal to withdrawals.
Water discharges -	100%	Water discharges by destination are monitored for 100% of our sites within our operational control. Sites report this data annually based on site-specific estimation
volumes by		as the method of measurement. When site-specific estimation for discharges is not available, discharges are assumed to be equal to withdrawals. The vast
destination		majority of our water discharge is to municipal/local off-site/common treatment facilities.
Water discharges -	1-25	We comply with our internal and external stakeholders' requests at the local and global level. Some of our sites have wastewater discharge permits requiring pre-
volumes by		treatment of industrial waste. Those sites perform monitoring as required by their permits (wither specific or general) and submit self-monitoring reports. In some
treatment method		cases, the local authorities also take samples for compliance purposes. The vast majority of our water discharge is to municipal/local off-site/common treatment
		facilities.
Water discharge	1-25	We comply with our internal and external stakeholders' requests at the local and global level. Some of our sites have wastewater discharge permits requiring pre-
quality - by		treatment of industrial waste. At these sites we perform monitoring as required by our permits (whether specific or general) and submit self-monitoring reports; in
standard effluent		some cases, the local authorities also take samples for compliance purposes. The vast majority of our water discharge is to municipal/local off-site/common
parameters		treatment facilities.
Water discharge	Not relevant	We do not run thermal processes; therefore, none of our sites are monitoring water discharge temperature. We do not expect this to be relevant in the future since
quality -		we do not anticipate changing our business practices.
temperature
Water consumption	100%	Water consumption is monitored for 100% of our sites within our operational control. Water consumption is calculated by subtracting water discharge from water
- total volume		withdrawals as the method of measurement. Sites report on water withdrawal monthly and water discharge annually.
Water	100%	Water recycled/reused is monitored for 100% of our sites. Sites report this data on a monthly basis based on the rainwater catchment and water treatment
recycled/reused		system's readings as the method of measurement, and a regional group validates, reviews, and approves the data.
The provision of	100%	We provide fully functioning water, sanitation, and hygiene (WASH) services to all employees at 100% of our sites. As part of our daily custodial services, WASH
fully-functioning,		services are monitored daily (frequency of measurement). WASH services are also cleaned daily (method of measurement). We comply with our internal and
safely managed		external stakeholders' requests locally and globally. We have dormitory, kitchen and cafeteria water standards. We require that each dormitory floor provides clean
WASH services to		and safe drinking water and access to a hot water supply. All food preparation must be done with potable water. To recognize the importance of access to WASH,
all workers		Flex signed the World Business Council for Sustainable Development (WBCSD) Pledge for Access to Safe Water, Sanitation and Hygiene at the Workplace in
		2019. This pledge was made to commit to implementing access to safe water, sanitation, and hygiene at the workplace at an appropriate level of standard for all
		employees in all premises under our direct control.

W1.2b

(W1.2b) What are the total volumes of water withdrawn, discharged, and consumed across all your operations, and how do these volumes compare to the previous reporting year?

	Volume	Comparison	Please explain
	(megaliters/year)	with
		previous
		reporting
		year
Total	6143	Higher	In 2021, total water withdrawals were 6,143 megaliters. Water withdrawals increased 10% from 2020 to 2021 because of increased revenues and changes in
withdrawals			production in 2021, leading to more water withdrawn. We consider any increase in water withdrawals, consumption, or discharges of 10-25% to be "higher" than the
			prior year. We anticipate future volumes to remain about the same since we do not anticipate major changes in our business. Total withdrawals equals the sum of
			total discharges and total consumption (W = D + C), because discharges are estimated to be total withdrawals minus total consumption.
Total	4628	Higher	In 2021, total water discharges were 4,628 megaliters. Water discharges increased 14% from 2020 to 2021 because of increased revenues and changes in
discharges			production in 2021, leading to more water discharged. We consider any increase in water withdrawals, consumption, or discharges of 10-25% to be "higher" than the
			prior year. We anticipate future volumes to continue to remain about the same as in 2021 because we do not anticipate major changes in our business. Total
			discharges equals total withdrawals minus total consumption (D = W - C), because discharges are estimated to be total withdrawals minus total consumption.
Total	1515	About the	In 2021, total water consumption was 1,515 megaliters. Water consumption decreased 2% from 2020 to 2021, which is about the same, because both total
consumption		same	withdrawals and total discharges increased due to increased revenue and production. Total consumption equals the sum of total withdrawals minus the sum of total
			discharges (C = W - D) because consumption is estimated to be total withdrawals minus total discharges. Therefore, because both withdrawals and discharges
			increased in approximate proportion amounts, consumption stayed about the same. We consider any change in water withdrawals, consumption, or discharges of
			less than 10% to be "about the same" as the prior year. We anticipate future volumes to remain about the same since we do not anticipate major changes in our
			business.