ON SEMICONDUCTOR CORPORATION

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ON Semiconductor : ESG Report

06/16/2022 | 06:03am EDT

2021 Sustainability Report

Creating a better tomorrow. Today.

Table of Contents

Introduction

Our Business

Protecting our Planet and Environment

Ensuring Social Responsibility

Committing to a Responsible Business

Appendix

Introduction

Our Business

Protecting our Planet

Ensuring Social

Committing to a

Responsibility

Responsible Business

and Environment

03

About this Report

08

About onsemi

14

Emissions and Energy Consumption

23

Our Employees

41

Stakeholder Engagement

04

Message from our

11

Our Values

16

Water and Waste Management

28

Diversity, Equity and Inclusion

and Material Topics

President and CEO

11

Tomorrow, today

18

Environmental Compliance

31

Learning and Development

44

Corporate Governance

05 Q&A with Paul Mascarenas

12

Net Zero Commitment

19

Product Stewardship

33

Employee Compensation

47

Enterprise Risk Management

06

2021 Highlights

and Benefits

and Business Continuity

35

Employee Engagement

49

Ethics and Compliance

36

Employee Health and Safety

52

Fair Treatment

38

Impacting our Community

54

Supply Chain

through Giving

56

Information Protection

57

Public Policy

59

Quality and Customer Satisfaction

Appendix

  1. United Nations Sustainable Development Goals
  2. Triple Bottom Line Performance Summary

68 Sustainability Accounting

Standards Board (SASB)

Framework

70 Task Force on Climate-Related

Financial Disclosures (TCFD)

Framework

75 Global Reporting Initiative

(GRI) Index

85 Third Party Assurance Statement

2021 Sustainability Report

Protecting Our PlanetTablend EnvironmentofContents | 2

Table of Contents

Introduction

Our Business

Protecting our Planet and Environment

Ensuring Social Responsibility

Committing to a Responsible Business

Appendix

About this Report

Report Overview

Previously known as the Corporate Social Responsibility (CSR) Report, the 2021 Sustainability Report is the ninth iteration of our voluntary non-financial public disclosure of topics concerning environmental, social and governance (ESG) initiatives at onsemi. This report was created to transparently communicate our efforts in ESG with our investors, customers, stakeholders and employees. These reports have become an important tool for managing sustainability efforts, disclosing sustainability strategies

and measures, and sharing achievements.

Report Scope

Data presented in this report covers the 2021 fiscal year, January 1, 2021 - December 31, 2021. To demonstrate quantitative performance, this report includes year-over-year data to allow for trend identification. This report contains information about onsemi worldwide subsidiaries and joint ventures for which we have management control. Environmental data covers leased and owned internal manufacturing sites, which account for most of our environmental footprint worldwide.

Reporting Principles

Our 2021 Sustainability Report was prepared in accordance with the Global Reporting Initiative (GRI), Task Force on Climate-related Financial Disclosures (TCFD) and Sustainability Accounting Standards Board (SASB) standards.

Date of Issuance

onsemi publishes this Report annually. An electronic version is available on the onsemi website.

Current issue: 2021, published in June 2022

Date of previous publication: June 2021

Date of publication for the next issue: June 2023

Feedback

We welcome feedback on our activities and performance outlined in this report. Please contact us if you have any suggestions or questions regarding this report.

onsemi

Investor Relations and Corporate Development 5005 E McDowell Rd

Phoenix, Arizona 85008 investor@onsemi.com

www.onsemi.com

Reporting Assurance

Information contained in this report has been assured by S&P TruCost Limited in accordance with AA 1000 assurance standard. Our full assurance statement can be found in the appendix of this report.

2021 Sustainability Report

Introduction | 3

Table of Contents

Introduction

Our Business

Protecting our Planet and Environment

Ensuring Social Responsibility

Committing to a Responsible Business

Appendix

A Letter from our President and CEO - Hassane El-Khoury

The challenges of the last two years have certainly been daunting; yet despite the ongoing battle against the pandemic, volatile geopolitical events and the unpredictable supply chain constraints, I am encouraged by so many companies, including onsemi, that are diligently solving the biggest challenges and transforming industries while continuing to emphasize the commitment to create a better world for tomorrow.

onsemi is committed to developing strategies and programs to address global climate change - including introducing methods to reduce our greenhouse gas emissions and our impact on air, water and waste. In addition, onsemi is developing technology and semiconductor products that enable our customers to achieve their own sustainability goals. Our strategy delivers intelligent power and sensing solutions for the sustainable ecosystem including electric vehicles, energy infrastructure, factory automation and advanced safety applications.

To address our carbon footprint, we have pledged to achieve net-zero emissions by 2040. Net-zero emissions require

an ambitious 1.5°C target aligned with climate science for emission reductions across a company's full value chain, and further, ensures direct emissions will not contribute to a global temperature rise exceeding 1.5°C above pre-industrial times.

We have set one of the most ambitious goals in our industry and with this commitment we will surpass the Paris Agreement's goal by a full decade. While it's aggressive, we know that it's the right thing to do for us, for our customers and for generations to come.

Since celebrating my first-year anniversary with onsemi, I have taken time to reflect upon our accomplishments - and while there is a lot to be proud of, I keep coming back to the same conclusion: onsemi is made up of the smartest and brightest minds from all around the world. Our employees, and the ongoing contributions from each one, are our greatest asset - and together, we will continue to create innovative technologies and positively change the world as we know it.

I am proud to share that onsemi was awarded eight accolades for 2021 including being listed on Dow Jones Sustainability Index North America for the fourth consecutive year. In 2022 - for the seventh consecutive year, we were namedone of the World's Most Ethical Companies by Ethisphere; for the fifth consecutive year, we were named part of Barron's 100 Most Sustainable Companies; and for the third consecutive year, one of Newsweek's America's Most Responsible Companies - to name a few. While I am incredibly humbled by these accomplishments; we are not done.

Through 2022 and beyond, we will continue to focus on sustainable manufacturing - concentrating on emissions reduction, energy and water conservation, material optimization and recycling. We will also continue to focus on sustainable products as we innovate and introduce technologies that enable reduced global energy use while supporting our customers to meet and exceed global energy efficiency standards. And we will continue to drive sustainable practices to challenge and enable employees to embody our values and act sustainably in both work and personal aspects as we believe that every action counts in contributing to the greater good.

At onsemi, we are one team working together with our customers and partners for a better tomorrow. Together, we are solving the world's greatest challenges through technical innovation and delivering leadership products for sustainable outcomes. We understand that even the smallest actions can make a positive and meaningful difference. I believe deeply in this company's future and our employees who are passionately committed to doing what's right - today, tomorrow and for decades to come.

Hassane El-Khoury

President and CEO, onsemi

2021 Sustainability Report

Introduction | 4

Table of Contents

Introduction

Our Business

Protecting our Planet and Environment

Ensuring Social Responsibility

Committing to a Responsible Business

Appendix

Q&A with Paul Mascarenas -

Board Member and Chair of the Governance and Sustainability Committee

To explain the importance of our ESG strategy here at onsemi, we sat down with Paul Mascarenas, member of onsemi's Board of Directors and chair of the Governance and Sustainability Committee. Paul shares his insights regarding recent efforts and initiatives driving the company's ESG strategy forward to achieve its climate goal. Paul has a passion for sustainability and has pushed onsemi to be more innovative in its approach to ESG. He played a critical role in re-aligning the former Governance and Nominating Committee of our board to be more focused on sustainability and was integral in its transition to becoming the Governance and Sustainability Committee.

2021 was an exciting year for onsemi. The company went through a massive transformation and started to focus on a winning strategy relative to its business operations. In addition, onsemi committed to be net- zero by 2040. Why did onsemi choose this goal?

For years, onsemi has had a dedicated CSR team guiding our practices around the triple bottom line - people, planet and profit. The company has won many accolades over the years for our continued commitment to ESG initiatives. However, we know that addressing global climate change is the challenge of our time. As average temperatures rise, climate science finds that acute hazards such as heatwaves and floods are growing in frequency and severity, and chronic hazards, such as drought and rising sea levels continue to increase at alarming rates. These acute and chronic hazards have a significant impact on human development and economic productivity, including supply chain disruptions, damage to owned operations and endangerment, death or injury to people in impacted communities. At onsemi, we're creating a future we want to live in. We understand that the contributions we make today can have an impact on the world tomorrow. We knew we needed to address climate change more directly and strategically, thus our net zero goal was born.

How does this goal support the fight against climate change? How is this goal different than some of the other commitments in the semiconductor industry?

onsemi's net zero by 2040 goal demonstrates leadership in addressing climate change by focusing on how we can make a difference. Our goal aligns with the Paris Agreement and ensures direct emissions will not contribute to a global temperature rise exceeding 1.5°C above pre-industrial times. Climate scientists have determined that

warming above 1.5°C can have profound impacts on our planet, including loss of biodiversity, ocean acidification and impacts on agriculture yields. Our net-zero goal differs from some of the other commitments in the semiconductor industry by prioritizing deep decarbonization in our operations and investment in renewable energy before purchasing carbon offsets. Most companies have a commitment to be carbon neutral which allows them to continue to emit as much as they would like, as long as they purchase carbon offsets equal to the amount they emit. At onsemi, we feel it's important to address the root cause. We don't want to use a Band-Aid on a bullet hole and instead define a concrete plan that ensures our actions are solving the problem at hand.

We understand the big picture goal - net-zero by 2040 - but can you tell us how onsemi plans to get there? What are some of your short-term goals?

We realize this is a big commitment and we are taking the time to build a solid roadmap to ensure we achieve this goal. We acknowledge we still have a lot of work to do - Rome was not built in a day! In 2021, we focused on vetting the correct goal and strategy for our business. We worked with BSR, a global nonprofit that works with companies to develop sustainable business strategies and solutions, to develop this goal and build our strategy. Additionally, we took time to educate our internal teams and ensure they understand how this goal will impact them - whether they are in global supply chain, finance or product development. We also needed to ensure we had the correct team in place to lead this strategy. Now that we have built this strong foundation, we are mapping out our roadmap to 2040

and determining what annual targets are needed to meet our goal. Additionally, we are preparing to commit to the Science Based Target initiative (SBTi) and plan to do so by the end of 2022. Our SBTi commitment ensures our goals are based on the latest climate science and will prevent the worst effects

of climate change.

We also acknowledge that this goal is hyper-focused on emissions and the environmental side of ESG. We are working with our internal teams to develop more granular goals around topics like diversity, equity and inclusion, supplier selection, employee learning and development, data security, anti-corruption, water and waste management and global giving to ensure we are incorporating the social and governance sides of ESG within our strategy.

onsemi has many products that support a more sustainable future. Can you tell us about a technology you're excited about?

At onsemi, we provide intelligent sensing and power solutions to help our customers solve the most challenging problems and create cutting-edge products for a better future. Our intelligent power technologies accelerate automation and enable efficient power production, distribution and consumption in the automotive and industrial sectors. Silicon carbide (SiC) is a key component of next- generation semiconductors that provides sustainable technical benefits and improves system efficiency in many applications, including electric vehicles (EVs), EV charging and energy infrastructure. SiC supports the electrification of the automotive industry and allows for lighter and longer-range electric vehicles.

In 2021, we completed our acquisition of GT Advanced Technologies Inc. (GTAT), a producer of SiC. onsemi customers will benefit from GTAT's extensive experience in crystalline growth as well as its impressive technical capabilities and expertise in the development of wafering ready SiC. We intend to scale and accelerate GTAT's development of SiC

to assure customers' supply of critical components and further commercialize intelligent power technologies.

What's next?

We have a long journey ahead, but we have a great group of leaders and employees that are passionate and able to help us meet our goals. Whether it's investing in infrastructure to help us reduce our emissions at the facility level, designing cutting edge technologies to help our customers improve sustainable efficiencies in their products or ensuring our internal workforce consists of diverse talent, we strive to keep ESG top of mind in everything we do at onsemi. Our annual sustainability report will give an in-depth look at our achievements thus

far and highlights the key performance indicators we are tracking to ensure we are achieving our goals. We are looking forward to what's to come and invite you to follow along on this journey - we know it will be one exciting ride! To learn more, please visit onsemi.com/tomorrowtoday.

2021 Sustainability Report

Introduction | 5

Disclaimer

ON Semiconductor Corporation published this content on 14 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 June 2022 10:02:04 UTC.


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Sales 2022 8 248 M - -
Net income 2022 2 042 M - -
Net Debt 2022 614 M - -
P/E ratio 2022 15,3x
Yield 2022 -
Capitalization 30 634 M 30 634 M -
EV / Sales 2022 3,79x
EV / Sales 2023 3,56x
Nbr of Employees 31 650
Free-Float 71,2%
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Hassane El-Khoury President, Chief Executive Officer & Director
Sam Thad Trent Chief Financial Officer, Treasurer & Executive VP
Alan Campbell Director
Johannes M. C. Stork Chief Technology Officer & Senior Vice President
Wei-Chung Wang Executive VP-Global Manufacturing & Operations
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