2020 ESG INSIGHT
Transcript of 2020 ESG INSIGHT
MediaTek is a fabless semiconductor company that is focused on the design and development of leading technologies and IC products. All manufacturing, assembly, and testing processes are outsourced to external companies. As such, MediaTek focuses on environment-friendly product designs, procurement and management of suppliers, reduction of resource and wasted energy, and protection of employee health and safety.
MediaTek began conducting self-inventory in 2016 and have outsourced for external verification in 2019.
Scope 1 direct emissions from sources owned or controlled by the organization.
Scope 2 indirect emissions result from the generation of purchased or acquired electricity, heating, cooling, and steam consumed, for which makes up 95.9% of MediaTek’s overall emissions.
Scope 3 reduction efforts: commuting shuttle buses for employee transportation launched in June 2015, with four designated travel routes and inter-office electric-car routes, has reduced carbon emission by 16,434 metric tons in 2019.
Environmental
Key Environmental goals Environmental Certification
GHG Emissions
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Urge suppliers to jointly pledge for
2% annual reduction
2019 Target Reduction: 10.0% 2019 Achievement Rate: 10.7%
2020 Target Reduction: 11.6%
2020 Target Reduction: 5.4%
Long-term: Conduct global carbon emissions verificationsand risk assessments
20172016 2018 2019
50,000
60,000Unit: metric ton
40,000
30,000
20,000
10,000
0
35,511
717 748 808 2,095
37,070 37,941
48,985
GHG Emissions
Scope 1 Scope 2
01
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ISO 14001External verification since 2006.
ISO 14064Internal adoption since 2016, External verification completed in 2020.
NTD 60.53 Million
For 2019
Invested on environmental causes ZERO& Violations of environmentalprotection regulations (penalties)
GHG Emissions Energy Saving
Water Conservation
Completed greenhouse gas emission
verifications of all sitesin Taiwan
Expand greenhousegas emissions
verifications to buildingslocated in China
Conduct globalcarbon emissions
verifications and riskassessments
CurrentStatus
Short andmid term
Longterm
15%Increased usageeffeciencyObtained Gold greenbuilding certification (LEED)
In 2019, MediaTek attained an average rate of power saving of 10.7%, a number we aim to raise to 11.6% in 2020, on top of:
For 2018, power consumption increased due to increases in manpower, expansion of usage areas in the new building offices, and increases in usage of the IT data center; for 2019, the addition of 3 office buildings to MStar acquisition and inauguration of the Wireless Communication Building contributed to the increase in consumption.
With the largest data center in Asia, we have successfully completed conversion to a new generation of high-density power-efficent Data Centers that have become a core functional support behind our technology development.
GovernanceSocial
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Power Management and ConservationPower Saving
Highlight 1: Enhance efficiency: High-density power efficient Data Centers
2017 2018 2019
2017 2018 2019
100
120
Unit: Million kWh
80
60
40
20
0
70.06.7
71.912.0 91.9
27.4
Power Consumption & Conservation Breakdown
Power Conservation Breakdown
High Density Energy Conserving Datacenters
Green Energy (solar power system)
Office AC systems
Lighting Management
Equipment Improvement and Systematic Management
N/A
N/A
3.64
0.75
0.36
Substantial waste occurs due to the nature of conference room use, including abandoned bookings or switched-on lighting and air conditioning. To optimize conference-room resources, we used MediaTek IoT chipset, LinkIt 7697, to detect real-time conference room usage and automatically switch off lighting and AC when not in use. In addition, this product also keeps us informed of conference room usage conditions, thus ensuring optimization of conference room resources.
Highlight 2: Innovative application: Smart, energy efficient IoT platforms applied to meeting rooms
EnvironmentalESG
Insight Report
Power ConservationPower Consumption
Cutting power consumption atdata centers by 4% within 3 years
Boosting annual output ofsolar power to 0.2M kWh3% 0.2M
1 2
1.45
N/A
3.09
0.98
1.13
20.3
0.14
4.1
1.5
1.4
100+ ConferenceRooms
3kWh
SavedDaily
20.3million
kWh
Data centerConservation
564 kWh(2 Gj)
AnnualSavings
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Since MediaTek’s chipsets power a variety of end devices, we include environmental considerations at all stages in the design. Environmentally conscious designs are implemented in products through energy-efficient production processes and use of non-toxic materials. MediaTek products all comply with ROHS and WEEE regulations and do not use prohibited substances.
Highlight 3: MediaTek’s new solar power system
Green Desgin
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Chip Size1.20
0.60
1.00 1.010.91
0.82
Power Consumption1.20
0.60
1.00 0.970.86
0.79
Power Consumption and Chip Size(normalized to 2016 value)
2016 2017 2018 20192016 2017 2018 2019
-3%-11%
-8%
+1%-10%
-10%
250
Unit: Million kWh
200
150
100
50
0
300
239
192217
Annual Power Savings (calculated based on production volume)
2017 2018 2019
Minimizing Power Consumption Minimizing Physical Size
Est. AnnualOutput
CO2
Reduction0.2%equivalent
of Our Total AnnualPower Consumption
107metric tons
Estimated200,000
kWh (720 Gj)
We took advantage of our roof-top space at the headquarter to install solar energy generation facilities, in an effort to offset our grid-provided power, move towards a carbon-neutral operation and to lower energy expenditure. This marks the first privately installed solar energy conversion system in Hsinchu Science Park that connects to Taipower's power grid. Rooftop solar panels are estimated to cut temperature of top-floor office by 3-5°C, reducing airconditioning power consumption significantly.
We aim to reduce environmental impact by:
MediaTek offices draw water from water plants in various districts, and for 2019 a total of 317,480 metric tons (approx. 317 million liters) of water were used. The water consumption increased by 27% compared to the previous year, mainly due to the acquisition of MStar’s 3 new office buildings, and the addition of the new Wireless Communications Building.
Water Resource Management
MediaTek has a strict process for selecting collaborating companies for waste removal and reuse, and we conduct non-periodic audits on the legal compliance of waste disposal as part of our monitoring responsibilities. Despite increasing in scale, the total waste disposal was down year over year by approximately 21 metric tons in 2019. The total waste disposal during 2017, 2018, 2019 is 94.03, 102.79, and 81.66 metric tons respectively.
Waste Management
As fabless IC design house, MediaTek's top priority is to work with our suppliers to decrease potential impacts on the environment and society. We ensure responsible supply chain management by reducing our environmental impact where possible, encouraging suppliers to work together on issues relating to climate change. We select our suppliers based on the 3 ESG aspects, confirming management policies and organizational structures of our suppliers, conducting on-site and written audits each year/month, organizing relevant training and improvement meetings, and hosting supplier forums to provide awards and generate encouragement for our top suppliers.
Supply Chain Management
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Average Water Saving Ratio
5.4%3.7%
2019 Rate 2020 Target
Water Consumption and Savings
Data scope: offices in Hsinchu Science Park/Zhubei/Taipei (coverage scope 100%)
233 250 317 350
11.5
19.94.7%
4.4%
3.7%
5.4%
2017 2018 2019 2020(F)
12.2
11.4
Water savingsWater consumptionProportion of savings (%)
Unit : million liters
Waste Disposal
42.30
33.7232.53
60.4947.94
61.50
2017 2018 2019
120
60
0
Unit: metric ton
Waste electronic componentsGeneral waste
Overview of MediaTek’s supply chain management tools
Create online training videos and training materials relating to Supplier Code of Conduct
RBA online courses
Regularly host forums among suppliers to share best practices
Supplier Forums
Recognize and encourage excellent supplier performance
Supplier Conferences
Uphold principles of local procurement, retaining job opportunities for locals and decreasing transportation distance of materials
Local procurementSupplier risk evaluation standards and sustainable audit standards
Established management standards
Ensure that minerals used by suppliers are not sourced from conflict areas
Integrated guidelines and declarations of Responsible Business Alliance Code of Conduct, International Labor Office Tripartite Declaration of Principles, and UN Universal Declaration of Human Rights
MediaTek Supplier Code of Conduct
Through RBA online management system, SAQ, and written and on-site audits
Regular audits
Conflict minerals
Mechanisms of supply chain management MediaTek’s influence
GovernanceSocial
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1/
1/
2/
2/
2/
3/
4/
5/
5/
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Supplier Code of Conduct
Management systems
Business ethics
Labor and human rights
Environmental protection
Health and safety
MediaTek Supplier Code of Conduct
Established management standards and regular audits
Comprehensive Implementation of Supplier Assessment Policies to Promote Sustainable Supply Chains
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Insight Report
For the full details of the Code of Conduct, please refer to p.49 of the 2019 CSR Report.
68%
12%
Transaction scaled downor even terminated
Resumetransactions
RISK ASSESSMENT
High Risk Priority ProcurementTargets
2019 CoC (Code of Conduct) Sign Rate
Expected 2021 Sign Rate
68%80%
60 POINTS≥
PASS
FAIL
On-Site or PaperAUDITING
Since 2011, MediaTek has been conducting conflict mineral inspections and require suppliers to provide "Declaration of non-conflict mineral usage" in accordance with the Conflict-Free Smelter Program (CFSP), RBA, and Global e-Sustainability Initiative (GeSI) regulations. In 2018 also began using CRT to conduct cobalt inspections.
3/
4/
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Conflict Minerals
5/ MediaTek’s Influence: supplier forums, RBA online courses, supplier conferences
MediaTek upholds the principle of local procurement, in order to provide job opportunities for local residents and decrease carbon emissions due to reduced material transportation distances. Procurement value in Taiwan exceeds 100 billion NTD a year, accounting for vast majority of our procurement of both raw materials and common goods.
MediaTek held a forum on responsible supply chain in 2019 and has decided to make it an annual event, in order to realize green manufacturing for sustainable development. Forum included themes of SDG12 and SDG13 for sustainable energy and climate actions, where opinion leaders and experts/scholars gave talks about international trend and propose suggestions, while suppliers with excellent performance shared with attendees their experience.
local raw material and procurement and testing. Local general procurement
Local Procurement
73% 81%
RMI Certified Smelters100%by 2021:
Disclose detailed smelter information
EnvironmentalESG
Insight Report
IATF 16949 ISO 14001 ISO 45001 RBA/SA 8000Sony
Green- Partner/QC 080000
HSPM
ISO 9001
Quality Management
System
Automobile Industry Quality
Management
Environmental Management
System
Occupational Health and Safety
Management
Social Responsibility Management
100% 100% 100% 100% 100% 100%
100% 100% 100% 100% 100% 100%
100% 100% 100% 89% 67% 89%
100% 100% 100% 100% 70% 70%
100% 100% 100% 97% 81% 87%
Risk level: Low risk (X > 60%) | Medium risk (60 > X > 30%) | High risk (X < 30%)
Environmental assessment Social assessmentEconomic assessmentAspect
Supply chain certification assessment results
Category
Fabcompanies
Assemblycompanies
Testingcompanies
Memorymanufacturers
Overallproportion
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MediaTek provides an environment of diversity and inclusiveness to attract global talent, with opportunities for them to unleash their potential and grow with the company. We aspire to be involved through our core capabilities to promote technology education and innovative technological applications, empowering innovation and local implementation.
As research and development is a core requirement, MediaTek is driven by a need to seek out leading technical talent globally. Full-time employees account for 97% of the workforce, including disabled people (63 in 2019), offering them fair job opportunities. We have established 27 sites around the world, and hope to through exchanges and collaboration, hope to leverage our demographically and geographically diverse employees.
MediaTek hires a higher than average share of female R&D and technical support personnel than the high-tech industry.
Social
Employee Structure and DiversityGlobal, Diverse, and Inclusive Workforce
Distribution of Gender by Levels
[Note] This information includes employee numbers from MediaTek and its subsidiaries (including MStar and Nephos that joined in 2019), but does not include employees at independently operating subsidiaries (Airoha, Ilitek, Richtek, Econet, Sigmastar).
[Note] The above information was retrieved on December 31, 2019.
Senior management42(96%)
2 (4%)
348 (90%)
38 (10%)
1,099 (88%)
143 (12%)
10,132 (80%)
2,504 (20%)
Mid-level management
Entry-level management
General employees
2,687(18.8%)
11,621(81.2%)
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Proportion of women
2017 2018 201918
19
19.1%
19.5%
18.8%
18.5
19.5
In 2019, MediaTek had a global turnover rate of 7.2% (5.4% in Taiwan), which was significantly lower than the 19.8% (15.7% in Taiwan) in the high-tech industry (see Radford 2020 Market Research Report). To continue the optimization of MediaTek's talent structure, we not only focus on indicators for new hires and employee turnover, but also pay close attention to the number of applications per job, offer-to-acceptance rates, and development and retention of new hires. We hope we can continue to attract the best individuals to work at MediaTek from a highly competitive talent market, by adopting methods such as our Care System for new hires and exit interviews.
New Hires and Turnover Rate
Type of employment Male Female Subtotal
Full-time
Part-time
Total
11,557 2,653 14,210
64 34 98
11,621 2,687 14,308
Type of Employment
EuropeNorth
AmericaAsia
(Ex. Taiwan) Taiwan Total
385 292 4,716 8,915 14,308
Geographic Distribution
16.4%Females inR&D / technical departmentsCompared to 13-15% of femalegraduates from relevant degrees.
7.2%5.4%
&2019 MediaTek Global & Taiwan Turnover RateCompared to high-tech industry turnover rates of 19.8% & 15.7% for global and Taiwan respectively.
GovernanceSocialEnvironmental
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2015 20172016 2018 2019
1,200
600
800 794955 921
993 9987.3%
9.1%8.4%
9.2%
7.2%
Proportion of exiting employees 2015-2019
[Note] Proportion of new hires: Number of new hires/ Total number of employees at the end of the year; Proportion of exiting employees: Number of exiting employees/Total number of employees at the end of the year.
number of exiting employees proportion of exiting employees
8.0%
4.0%
6.0%
10.0%
Employee RenumerationThe salary ratio of permanent male and female engineering employees is 1:1 in 2018 and 2019. Among companies listed on the Taiwan Stock Exchange (TWSE) in 2018, MediaTek offered the highest average salaries for full-time non-managerial employees based in Taiwan, and we have remained ahead of the curve throughout 2019.
/ Largest such facility in Hsinchu Science Park (approximately 21,354 ft2 / 1,984 m2).
/ Offers extended childcare, free of charge, until 8:00 p.m., for employees when they are at work.
/ Innovative teaching methods, integrating game and learning, to aid children’s science and art exploration.
/ Apart from using standard alcohol for surface disinfection, stringent nightly ultraviolet germicidal lamps are also used.
/ Offer competitive compensation and fringe benefits Institute flexible fringe-benefit program meeting employee's needs.
MediaTek In-House Preschool
Item 2017 2018 2019
Average salaries for full-time non-managerial staff
Median of full-time non-managerial staff salaries
2,705
2,422
2,647
2,339
2,693
N/A
[note] Full-time, non-managerial staff are all full-time employees excluding Board members and managers.
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Retention rate (End 2019)
95%
Over 10 communications sessions and face-to-face communications were held before the integration, explaining to the 2 companies' employees MediaTek's corporate culture, management concept, and corporate vision, in addition to answering their ques-tions. Through face-to-face communications, employees get to know more about the company.
In the wake of the acquisitions, the company strengthened those employee's identification with MediaTek via global celebratory activities, care system, and smooth communications channels, helping them adapt to the new environment and blend into the corporate culture.
Retention of quality employees from theacquisition of MStar and Nephos
Consistentlyachieving
yearperiodturnover rates for past<10% 5
Thousand NTDAmong highest average salaries for full-time non-managerial employees
MediaTek values employee experiences and strives to help each employee enjoy their work. Employees derive positive experiences from different things, so we are active in communicating with our employees as we seek to understand their motivations through a variety of channels. We provide benefits that exceed legal compliance requirements and aim to take care of the physical and mental health, and the work-life balance.
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Employee Development and Talent Cultivation
MediaTek learning structure
Mandatory coursesBasic technical training
Core values Training of new hires
Technical forumTechnical training plan
Advanced management forumManager training
AOPTraining for senior management
Strategic management forum
Individual development plan
Operational leadership
Organizational leadership
Strategic leadership
Corporation-wideIndividual departments
Departmental training
Senior managersLeadership training with a focus on strategic action.
Mid-level managersLeadership training with a focus on organizational action.
Entry level managersLeadership training with a focus on operational action.
Individual development plan.Engineers / administrative staff
All employees.
Workplace Health and Safety
ISO 45001 External verification since 2018
Managerial level trainingConsidering development goals from different angles, we offer complete talent-cultivation program, to assure the strength of high-quality talent pool and consolidate the leadership and management capability of management at various levels.
MediaTek cultivation program
Manager sensitivitytraining
Cultivationof leadershipcapabilities
Coaching forhigh-potential
talent
Training for the Board and senior
managers
A company's sustainable operation and growth hinges on exercise of employees' professional and management talent to the fullest. We aim to become a global semiconductor leading firm in technology and operation, via a training and development mechanism for employees at various levels.
Managers
Non-managerial staff
All Employees
11,842
87,263
99,105
1,672
12,636
14,308
7.08
6.91 2,546
6.93
Employee Type Total Hours Total Persons Average Hours Average Cost/Person (NTD)
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MediaTek has adopted sound corporate governance practices to reflect our strong commitment to protecting stakeholder interests.
Governance
Organizational Structure
The Board meets at least once each quarter; it convened 6 times in 2019 with 98% attendance.
Shareholders
The Board
MediaTek Inc.
Internal Audit Division
Audit Committee
Remuneration Committee
Business Unit TechnologyDevelopment
StrategicDevelopment
Wireless SOC System Architecture
Corporate Strategy
Intelligenct Devices Central Design
Corporate Sales &Marketing
Corporate Sales
Corporate Marketing
Smart Home Wireless Technology
Computing and AI
Multimedia
CorporateOperations
Process Tech. &MFG Operation
InformationTechnology
Legal & Intellectual Property
Finance
Human Resources
Central Engineering
Corporate Technology
Board of DirectorsThe Board of Directors is currently composed of 9 directors (including 3 independent directors). For a list of Board members and their educational background and work experiences, please refer to p.11 of MediaTek’s 2019 Annual Report. MediaTek‘s directors’ renumeration are disclosed on an individual basis and can be found on p.18 of MediaTek’s 2019 Annual Report.
Ming-Kai TsaiChairman M
Ching-Jiang HsiehVice Chairman M
Lih-Shyng TsaiDirector and CEO M
Title Name M
Chung-Yu Wu Convener
Member
Member N/A
Member
Convener
Independent Director M
Peng-Heng ChangIndependent Director M
Ming-Je TangIndependent Director M
Title Name MAudit
CommitteeRemuneration
Committee
Cheng-Yaw SunDirector M
Kenneth KinDirector M
Gon-Wei LiangDirector M
Title Name M
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Functional Committees
The Audit Committee meets at least once each quarter, and otherwise as necessary. The Audit Committee convened a total of 6 times with 100% attendance in 2019.
The audit committee supervises the adequate presentation of our financial statements, the selection and discharge of the CPA, the independence and performance, the effective implementation of our internal control, compliance with relevant laws and regulations, and the control mechanism for existing or potential risk.
Chung-Yu WuConvener 100%
Peng-Heng ChangMember 100%
Ming-Tze TangMember 100%
Title Name Attendance
Audit Committee - 3 independent directors
The Remuneration Committee meets at least once per year; and the Committee convened 2 times in 2019 with 100% attendance.
The Remuneration Committee aims at establishing and regularly reviewing the performance evaluation procedure for directors and managers as well as establishing compensation policy, system, standard and structure and regularly reviewing the compensation of directors and managers.
Peng-Heng ChangConvener 100%
Chung-Yu WuMember 100%
Ji-Ren LeeMember 100%
Title Name Attendance
Remuneration Committee - 2 independent directors and 1 independent external expert
The CEO serves as the Chair of the Committee and is responsible for convening the senior executives from various units, including marketing, R&D, sales, HR, process technology & manufacturing operations, legal, finance, and auditing units, as well as the MediaTek Foundation to assume the Committee members.
CSR Committee – CEO, Senior Executives from various units
The CSR Committee meets twice a year; with status updates to the Board yearly.
In 2019, the information security risk management framework was strengthened. The Cyber Security Committee and the head of the supervisors of IT formed the Cyber Security Committee, with the top director of the IT Department as the convener. The Information Security Committee is responsible for information security management, planning, supervision and implementation. Related matters include: formulating and regularly reviewing the security policy, including the security incident notification and response mechanism.
Cyber Security Committee
With the help of the Corporate Legal Division, the Board directors have completed various trainings, including trade secret protection, detection and prevention of fraud, the latest issues and analysis of the Company Act, insider trading and directors’ duties particularly in M&A context, the Income Tax Act and the Statute for Industrial Innovation. By virtue of these education program, the directors learn about the latest industry trends and how to function the Board effectively.
Corporate Governance Unit
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MediaTek published a Whistleblowing Policy in 2019 to enhance corporate governance. During the investigation, the identity of the whistleblower would be kept confidential, and each cases would be independently handled.
MediaTek adopts a zero-tolerance policy for corruption and bribery, unfair competition, intellectual property infringements, and insider trading. Any violator of the Code of Business Conduct or relevant internal rules discovered by the Whistleblowing System and other law enforcement mechanisms will be severely punished to the full extent of our policies and the law, and the internal auditing will also investigate, record, and feedback upon the violation to protect our reputation and ethical values.
Whistleblowing System
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MediaTek periodically provides internal training courses covering topics of Proprietary Information Management (PIM), and prevention of trade secret violations among others, thereby strengthening employee’s awareness of ethical management and enhancing our corporate governance. In legal compliance, MediaTek follows domestic and international policies and laws that may potentially impact our business and financial operations, updating internal rules accordingly. In turn, the Audit Division reviews and examines the enforcement status of legal compliance. We have established a Whistleblowing System, with dedicated reporting channels and procedures for investigation, to enforce the principles of ethical management as regulated in the Ethical Corporate Management Best Practice Principles and Code of Business Conduct.
8 top guidelines of the Code of Business Conduct
Integrity and Legal Compliance
Zero tolerance for bribery, corruption, extortion, andembezzlement
Refrain from unfair competition and behaviors that cause adverse impact on the environment, labor safety, and the society
Strict prohibition against giving or receiving inappropriate giftsand interests
No contact with those who fail to comply with our Code of Business Conduct
Respect intellectual propertyrights and honor confidentialityobligations
Protect privacy and personal information
Insider trading prohibition
Avoid the conflict of interest
Phone886-3-603-0011(Audit Division Manager)
[email protected] (Automatically transfer to the Audit Division Manager)
AddressMediaTek Audit Division Manager, No. 1, Dusing 1st Rd., Hsinchu Science Park, Hsinchu City 30078, Taiwan
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Chairman: VP of Operations ManagementDuties: Appoint risk management tasks and responsibilities for all units. Formulate response measures for operational disruptions. List potential risks. Evaluate impacts of every risk. Identify the most impactful internal and external issues. Classify and report to management based on impact levels.
Business Continuity Management Committee
Risk Management
Governance Risk Management
1. Formulated emergency procedures, incident (injury) investigation, disaster recovery procedures against business risks.2. Formulated response procedures for emergency at production sites against supply-chain risks.3. Managed currency fluctuations with forward exchange contracts.4. Coped with interest rate changes with effective forecast via sensitivity analysis of interest-rate risk.
Social Risk Management
Assessed risks to employees’ human rights Ensured conformance of labor policy to domestic and foreign human-rights conventions and to legal requirement of host governments. Held labor-management meetings regularly.
Environmental Risk Management Formulated environmental management policies and occupational health and safety management policies. Conducted annual review on climate change issues. Revised environmental protection measures according to international trends, operational needs, and government policies.