As part of the Kenanga Webinar Series titled “Accelerating Decarbonisation,” the research team had the privilege of hosting Isabell Diel from Infineon’s investor relations team.
One of Infineon’s key focus areas is gender diversity in its management positions, with a goal of having at least 20% female representation in its management positions. Based on its latest financial year 2022 sustainability report, the company has 16.5% female representation in management roles, representing an uptick from 16% in financial year 2021.
“This improvement came in tandem with a 9.3% increase in management headcount, which indicates that 21.8% of the new hires were female. Climate change remains a global challenge largely due to carbon emissions from various sources,” said Kenanga Research (Kenanga) in the recent Thematic ESG Report.
In Infineon’s case, the use of greenhouse gases (GHG) such as perfluorinated compounds (PFC), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3) in wafer-etching processes contributes significantly to its emissions.
These gasses are difficult to replace in semiconductor chip manufacturing, and with increasing chip complexity, they account for 80.7% of Infineon’s scope 1 emissions. However, the company has taken measures to reduce emissions by improving production efficiencies and investing in smart abatement systems, resulting in a 68% reduction in scope 1 emissions.
Infineon aims to achieve carbon neutrality (scope 1 and 2) by 2030 and expects to achieve 70% of its target by 2025. The company’s strategies for achieving this goal include avoiding direct emissions, purchasing green energy, and compensating emissions using certificates that combine development support and CO2 abatement.
“Infineon’s main energy consumption comes from electricity usage in wafer fabrication processes. The energy-intensive nature of these processes, such as lithography, leads to significant energy consumption. Infineon has dedicated energy teams in each production site to optimize energy usage and efficiency,” said Kenanga.
The company has implemented a recycling system that captures exhaust heat for repurposing, reducing the demand for energy. Infineon also employs innovative techniques like cooling cleanrooms with river water, practicing a circular economy by purifying used solvents for reuse and collaborating with suppliers to refurbish rejected wafers.
Water plays a crucial role in semiconductor manufacturing, and Infineon consumes a significant amount of water for rinsing wafers and cooling production equipment. The company has implemented water recycling processes at sites identified with high water stress risks, reducing fresh water withdrawal. Infineon consumes approximately 30% less water per cm2 of manufactured wafer compared to the global average.
When comparing Infineon’s environmental, social and governance practices with local companies such as MPI, INARI, and UNISEM, it is evident that all three companies have made strides in gender diversity, with high proportions of female employees and significant female representation on boards of directors.
“In terms of environmental indicators, MPI has achieved the most significant reduction in energy intensity, followed by UNISEM, while INARI saw a slight increase. All three companies have shown a reduction in water intensity, with UNISEM and MPI leading the way,” said Kenanga.
Based on these insights, the environmental, social and governance ratings for the three companies are fine-tuned as follows: INARI maintains its 3-star rating for energy efficiency, MPI’s ratings are upgraded to 3.5-stars for energy efficiency and effluent/water management, and UNISEM’s ratings are upgraded to 3-stars for corporate governance and 3.5-stars for workers’ safety & wellbeing and effluent/water management.
Infineon’s environmental, social and governance initiatives go beyond scope 1 and 2 emissions, as the company is already addressing scope 3 emissions through the use of the Integrity Next platform to manage environmental, social and governance among its vendors globally. Infineon believes in the long-term benefits of environmental, social and governance initiatives and encourages other companies to increase investor awareness and follow suit, despite the additional costs involved.
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