Responsible mineral sourcing

A diverse range of minerals and metals are needed to manufacture semiconductors. Sourcing these components is complex and requires robust processes to manage the risks. The multitier nature of the supply chain adds further difficulties, as does its global scale, which may include areas affected by conflict.

At ST we have developed a holistic approach to identify, manage, and monitor responsible mineral sourcing. We are closely engaged with our suppliers and conduct due diligence in our sub-tier supply chain. Our priority is to ensure we do not procure raw materials that have a negative impact on people, and we actively seek solutions to limit our impact on the environment.

Our policy statement is fully aligned with OECD due diligence guidelines. It is available at www.st.com. I 3-3 I

A long journey

Acting on 3TGs

Tantalum, tin, tungsten and gold, collectively known as the 3TGs, are used in electronic components such as semiconductors. They are also potential ‘conflict minerals’. This refers to minerals (and the associated refined metals) that are mined, traded, controlled, supported, or financed by illegal armed groups, causing serious human rights violations and environmental damage in conflict-affected and high-risk areas (CAHRAs).

As part of our strategy to address this risk, we joined the Responsible Minerals Initiative (RMI) in 2011 and started to implement a conflict minerals process focused on the Democratic Republic of Congo (DRC) and neighboring countries. In 2012, we released our first Conflict Minerals Reporting Template (CMRT). By implementing new processes and reporting templates within our supply chain, we achieved 100% compliance with the Responsible Minerals Assurance Process (RMAP). From 2017 to 2020 and again in 2022, all our products were conflict free.

Extending to cobalt

In 2016, we extended our efforts to monitor cobalt, another potential conflict mineral found in our products and technologies. Two years later, cobalt became part of our standard process, and we published our first Cobalt Reporting Template (CRT), issued by the RMI. At the end of 2021, we started using the Extended Minerals Reporting Template (EMRT) which is a combination of the CRT and Mica Reporting Template (MRT).

Our 2022 EMRT demonstrates significant progress, 60% of the smelters in our supply chain are now RMAP compliant, compared to 24% in 2021.

As an RMI member, we contribute to the working group and plan to address further unregulated minerals in the future.

Risk assessment and mitigation

An essential requirement for our suppliers is to use minerals originating from smelters that conform with the RMAP standard. Each new supplier is screened, and every new raw material used is systematically pre-assessed to determine whether it falls within the scope of our responsible minerals sourcing program.

We are committed to removing all non-compliant smelters from our supply chain. Every year, suppliers complete a questionnaire on our requirements, enabling us to evaluate their maturity and their willingness to commit to due diligence. Additionally, suppliers are required to provide us with their updated CMRT. In case of changes in the supply chain, suppliers are expected to notify us within two weeks and provide a compliant reporting template within 90 days.

We ensure we remain vigilant by sharing any risks we identify with ST management every quarter.

We encourage any stakeholders concerned about non-compliance or risk of non-compliance to raise a grievance either on ST’s independent multilingual Ethics Hotline, accessible on our website (see www.st.com) or through the RMI grievance portal.

2022 overview

As part of our ongoing due diligence efforts, in 2022 we declared 229 smelters from 154 suppliers and subcontractors in our 3TGs supply chain. At the end of the year, 100% of these smelters were validated as RMAP compliant, compared to 99% in 2021. During this period, we removed 22 smelters from our supply chain and introduced 53 new smelters.

New challenges

In 2022, we faced additional challenges due to the global geopolitical context, the Russia/Ukraine conflict, and new legislation on forced labor. This meant it took us five months to complete our annual supplier questionnaire, the longest period since 2013. Challenges included:

• suppliers’ responsiveness
• customers’ individual and more stringent approaches to anticipate upcoming risks and legislation
• companies conducting CMRT exercise only once a year

Alice Ferreira

Responsible Minerals Specialist, Product Quality and Reliability group

Facing a complex geopolitical environment, we have worked with the responsible minerals’ community globally to overcome these new challenges. We have adopted a risk-based approach, leveraging collaboration and enhanced transparency to identify and tackle adverse impacts. I am proud to represent ST in the working groups responsible for driving due diligence for new minerals in the years ahead.”

The CMRT is an essential tool for us to share our supply chain evolution with our customers. In 2022, we released four CMRT updates. The number of customer requests for CMRTs increased by 50%, to more than 600. In view of this heightened demand, we implemented a new communication process to make relevant information and updates more accessible. Updates to the CMRT are now automatically communicated to customers who have already raised a request. A total of 165 customers benefited from this new process in 2022.

EU regulation

In 2021, the EU due diligence regulation came into force, and we decided to voluntarily engage in the RMI Downstream Assessment Program (DAP) to assess the maturity of our responsible minerals sourcing program. This gave us the opportunity to update internal procedures and practices. This included:

• ensuring alignment with OECD due diligence guidance for responsible supply chains of minerals from CAHRAs
• defining risks and formalized response strategies
• communicating ST and RMI grievance processes internally, on our portal and in supplier communications
• reinforcing internal and external stakeholder training using RMI materials
• implementing formal reporting to ST management

Our DAP audit encompassed our entire organization and minerals throughout our supply chain. In 2022, ST was confirmed as fully compliant and the first semiconductor company to have passed this audit.

We revised our US Security and Exchange Commission (SEC) report to integrate changes and build a unique SEC and EU reporting framework.

Contributing to the Sustainable Development Goals

Our commitments and programs as described above contribute to:

SDG target 8.7 – Take immediate and effective measures to eradicate forced labor, end modern slavery and human trafficking, and secure the prohibition and elimination of the worst forms of child labor.

SDG target 8.8 – Protect labor rights and promote safe and secure working environments for all workers.

SDG target 17.16 – Enhance the global partnership for sustainable development, complemented by multistakeholder partnerships that mobilize and share knowledge, expertise, technology and financial resources, to support the achievement of the sustainable development goals in all countries, in particular developing countries.