SUSTAINABILITYREPORT

2021

CONTENTS
3

CEO MESSAGE

4
5
7
8
11
13

CREE | WOLFSPEED 2021
Who We Are
Our Values
Why Cree | Wolfspeed
Our Response to COVID-19
Capacity Expansion

17
18
19
21
22
22
24

SUSTAINABILITY 2021
Sustainability Mission and Principles
Sustainability Goals
2020 Sustainability Milestones
Sustainability Reporting
Materiality Assessment
Our Contribution to the UN SDGs

29
30

CORPORATE GOVERNANCE 2021
Absolute Commitment to Integrity
and Respect
Corporate Governance
Board of Directors and Committee
Composition
Code of Conduct
Risk Management
Sustainability Oversight

30
30
31
31
31
32
33
34
36
36
37
37
38

ECONOMIC 2021
Responsible Business Practices,
Innovating for a Better Future
Product Quality
Customer Satisfaction
Global Trade Compliance
Supply Chain
Responsible Minerals Sourcing
California Proposition 65

40
41
41
42
43
53
54
56
59
59
67
68
72
73

SOCIAL RESPONSIBILITY 2021
People First, People Always
Our Employees
Our Interns and Recent Graduates
Diversity, Equity and Inclusion
Employee Engagement
Benefits
Training and Development
Health and Safety
Health and Safety — Our Employees andContractors
Health and Safety — Our Customers andPartners
Community Engagement

73
74
74
74
75
75
76
80
81
87

ENVIRONMENT 2021
Processes that Protect the Environment,
Products that Improve it
Product Sustainability
Product Ecology
Product End of Life
Environmental Management and ISO 14001
Environment, Health and Safety Policy
NC Environmental Stewardship Initiative
Energy and Greenhouse Gas Emissions
Other Air Emissions
Water Management
Waste Management

89
90
117
119
121
138
153

APPENDIX 2021
GRI Content Index
SASB Disclosures
UN SDGs Disclosures
TCFD Disclosures
Sustainability Data
Independent Assurance Statement

CEO MESSAGE
This past year has been an extraordinary period of global transformation and it isclear that the ongoing pandemic has renewed a worldwide focus on the fundamental
importance of taking care of each other and our planet. Collectively, we have faced
new and uncertain circumstances and have adapted, responded and innovated inways that have created great progress. We continue to learn from all we have faced,
and we remain focused on helping our people excel during this unique time. We also
maintain an unwavering dedication to serving our customers as we seek to transition
the world from silicon to a more efficient semiconductor, silicon carbide. While levelsof environmental and health consciousness reach new heights, we are once again
reminded of our lead role in the rethinking of old paradigms and the creation of amore sustainable future.
As we focus on the future, we are excited to officially change the name of ourcompany to Wolfspeed in October. Operating under the Wolfspeed name marksa pivotal step for our company as we are now a pure-play global semiconductor
powerhouse well-positioned to lead the industry conversion from silicon to siliconcarbide. Set apart by our more than 30-year history of driving transformational
market shifts, we are the original champions of a technology that is bringing positivechanges to the way we live. Our Wolfspeed solutions are key to the electrificationof the drivetrain to support the shift to electric vehicles, wireless infrastructure to
unlock the potential of smart cities, and power storage to enable broader adoptionof alternative energy, enabling greater efficiency and performance, smaller systems,
and lower costs.

everything from cars to gaming systems, all of which align with our mission andshould increase demand for our products. For example, in July, the European Union
Council adopted a new climate law to make the bloc’s greenhouse gas emission
targets legally binding. In August, the White House issued an executive order setting
a target for electric vehicles, hydrogen fuel cell and plug-in hybrids to be up to 50% of
US sales by 2030. This action comes at the same time that many US automakers haveincreased their commitments to ramp their electric vehicle production activities.
We believe these actions and policies will accelerate production demand. Our
products allow for the development of leading energy efficient products inapplications such as renewable energy, wireless communication, electric vehicles,
electric vehicle charging, and an ever-expanding list of industrial applications.
We remain steadfast in our purpose, which includes revolutionary principles insustainable production processes that help protect the environment and reduceclimate impacts by powering more with less. We are committed to 50% reductionin our Scope 1 and 2 GHG emissions by 2030 with plans to achieve net zero GHG
emissions by 2050.
Responsible Business Practices, Innovating for a Better Future

We maintain a firm commitment to responsibly conducting business alongside anacute awareness of our role in enabling a better future, and I thank our people for
their dedication and help in achieving formidable milestones over the past year.

We’ve accomplished critical milestones in the past year, including making significant
progress on our Capacity Expansion Plan. Next year we will open the world’s largest
silicon carbide fabrication facility in Upstate New York’s Mohawk Valley region.
The simultaneous expansion on our North Carolina campus will establish a worldclass silicon carbide corridor on the East Coast. We are investing heavily to position
ourselves for what is expected to be a multi-decade growth opportunity across thepower and RF markets.

One of those important milestones is our first set of corporate-wide sustainability
goals, set out within this report. These goals will drive our sustainability strategy andefforts, which align with our organization structure, core competencies and culture
and unite our business units, global locations and functions. Next year, we will reporton our progress toward them.

With a culture that drives quality as a competitive advantage, our operating strategies
set us up to successfully reduce waste, build highly skilled teams, increase customer
satisfaction and advance automotive initiatives to exceed industry expectations.
As we expand, we are committed to manufacturing excellence with processes thatenable consistent, repeatable, predictable and sustainable production.

People First, People Always

Absolute Commitment to Integrity and Transparency

Our employees remain our biggest differentiator and taking care of them willcontinue to serve as our guiding principle. We remain committed to creating andsustaining a culture built on inclusivity, where all employees are safe, engaged andable to contribute to their full potential.

Our Board of Directors provides leadership, counsel and oversight by a trusted groupof executives from the global manufacturing, operations, semiconductor and sciencematerials sectors. With new members joining in the past few years, our board of
directors set a high standard for our employees, and with the development of firesidechats between board members and our employees, the role the board plays is as
impactful and critical as ever.

As we heighten our commitment to fostering a diverse, equitable and inclusive
culture welcoming employee differences and identities, we are investing inprograms that will serve as a force for measurable change within our business andcommunities. We also continue to develop relevant Employee Resource Groups,
establishing direct and unique resources for Black, Hispanic, Latin and AsianAmerican and Pacific Island employees, as well as others dedicated to LGBTQ+ and
Mental Health Ally communities in 2020.
We have established new means for day-to-day connection, dialogue and support
through the pandemic, including CEO video messages, in-home and drop-off
daycare support, increased pay for almost half of our workforce, and operated aninternal mobility practice that combines ongoing workforce development, leadershiptraining, education assistance and career path planning. By proactively providing
learning opportunities and other avenues for advancement, we seek to enhance
the growth, development and financial well-being of all team members. This is
critically important as our team expands to include both seasoned semiconductor
leaders from across the industry along with a steady pipeline of young professionals
through our intern program and partnership with local universities. This past year,
we have welcomed highly experienced leaders to oversee both our global operations
as well as facility-level operations at our Durham and Marcy locations, an importantachievement in our commitment to excellence in responsible and sustainableproduction practices.
Processes that Protect the Environment, Products that Improve It
Across the globe, we continue to see momentum and action from both private andpublic entities regarding more energy-efficient and sustainable solutions, withThis is the first year we’re reporting to the UN Sustainable Development Goals andthe Sustainable Accounting Standards Board (SASB). We’ve also, for the first time,
included a full Task Force on Climate Related Financial Disclosures (TCFD) sectionin our report. We will continue to present our Sustainability information to ourstakeholders in a transparent manner.
It is increasingly clear we are at the beginning of a multi-decade secular shift as
the next generation in power semiconductors will be driven by silicon carbide
technology. With more experience than any competitor in our industry, world-classleadership from across the industry, investment in expansion, our knowledge, ability
to deliver, and commitment to innovation is unrivaled. Leading the way every single
day, we strive to continue to do what others say can’t be done.
Sincerely,

Gregg A. Lowe
President and CEO
3

CREE | WOLFSPEED
2021

4

WHO WE ARE
Cree is an innovator of Wolfspeed® power and radio frequency (RF) semiconductors and lighting class LEDs. Cree’s Wolfspeed
product families include silicon carbide materials, power-switching devices and RF devices targeted for applications such as
electric vehicles, fast charging, inverters, power supplies, telecom and military and aerospace. Cree’s LED product families
included blue and green LED chips, high-brightness LEDs and lighting-class power LEDs targeted for indoor and outdoor lighting,video displays, transportation and specialty lighting applications. In 2020, Cree announced the divestiture of its LED business,
which was finalized in March 2021.

Our Products and Applications

Wolfspeed(48% total Revenue)

LED(52% total Revenue)

PRODUCTSPRODUCTS

Materials, Schottky Diodes, MOSFETs, PowerLED Chips, XLamp LEDs, High Brightness

Modules, MMICs, Bare Die, HEMTs

LEDs, Integrated Lighting Solutions

APPLICATIONSAPPLICATIONSElectric Vehicles (EVs), EV Charging

High Power General Lighting, Specialty

Infrastructure, Solar, Energy Storage, Data

Lighting, Video Screens, Automotive

Centers, Communications Infrastructure,
Radar, Aerospace and Defense5Where We’re LocatedIndustry Awards and Recognition
Barron’s List of 100 Most Sustainable Companies
2020, BARRON’S

Semifinalist in Coolest Thing Made in NC Contest
2020, NORTH CAROLINA CHAMBER

Honorable Mention, Ragan’s Employee Communications
Awards Class of 2020 (Virtual Events/Celebrations)

50 Companies to Watch in 2020
2019, BLOOMBERG

2020, RAGAN
All-SiC Modules for High Voltage Applications
2018, DEVICE DESIGN AND PACKAGING AWARD

Passive Components & Discrete Semiconductors
2016, ECN- IMPACT AWARD

Wide Bandgap Automotive Traction Inverter
R&D 100 AWARD, 2016

Industry Award Winner
INDUSTRY AWARD WINNER, FIVE CONSECUTIVE YEARS:
2012- 2016

6

OUR VALUES
Our values are a simple, yet powerful, reflection of who we are and how we act; they are in all that we say, do and achieve forCree | Wolfspeed. They reflect both our great history of disruptive innovation and set the tone for the exciting future ahead. We
do amazing things in a human way.
Our employees from around the world across every business function shared their thoughts about our values through focus
groups, emails and conversations. As a result, we’ve established principles that represent what we want the experience to be
for our employees as well as the customers, partners and communities we serve.
In 2020 we developed our Values in Action program. Every day, Cree | Wolfspeed employees are making impactful contributions
for our customers and our company. Our new employee recognition and years of service program, called Values in Action,
rewards and honors employees for going above and beyond and delivering exceptional results aligned with our values and our
culture. Through the Values in Action program employees can say “thank you” by nominating a coworker for good work they’vedone with a Values in Action award. All Cree | Wolfspeed employees have the opportunity to formally recognize their peers aswell as be acknowledged for service anniversaries through the Values in Action program.

INTEGRITY
and RESPECTOWNERSHIP and
ACCOUNTABILITY

INGENUITY
and PASSION

We always act with integrity andrespect for our people, workplaceand community. Relationships
matter. We value everyone’s
contribution and an environmentof spirited and open debate.

We are accountable to each otherand committed to the highest
standards of work and behavior.

Our passion for making theworld better through innovationmeans we take risks and question
conventional thinking, developing
new technologies and ways of
doing business—leading the way,
every single day.

We do the right thing, and we say,“Thank You.”We succeed or fail together.

We do what others say
can’t be done.

7

WHY CREE | WOLFSPEED
We’re leading the transformation from silicon to silicon carbide and GaN as we shape the future of semiconductor markets: thetransition to electric vehicles, the move to faster 5G networks, the evolution of renewable energy and energy storage, and theadvancement of industrial applications. After more than thirty years of forging new technology adoption and transformation, ourWolfspeed® power and radio frequency (RF) semiconductors are leading the industry through unrivaled expertise and capacity.
What’s next? We believe anything is possible through hard work, collaboration and a passion for innovation.

SiC EXPERTISECAPACITY EXPANSIONPORTFOLIO

Our founders were the first to
successfully synthesize siliconcarbide, and for the last 30 years
have focused on devising andsupplying the world’s powersystems designers with theindustry’s highest performing
SiC technologies for high-power
applications.

As a pioneer in silicon carbide
semiconductors, we now field theworld’s broadest, most capable
portfolio of next generation, SiCbased MOSFETs, Schottky diodes
and power modules for power andindustry needs.

We are currently constructing theworld’s largest silicon carbide
fabrication facility in Marcy, New
York. This brand new, state-of-theart wafer fabrication facility will be
automotive-qualified and 200mmcapable. It is complemented by ourmega materials factory expansion
currently underway at our Durham,
North Carolina headquarters.

Proven Success

PROVEN LEADERSHIPPROVEN EXPERIENCEPROVEN EFFICIENCYPROVEN RELIABILITY

30+

7+

10 vs 1

206+

Years of Experience

Trillion Power devices
field hours

Switching efficiency of
SiC over Si

Billion hours of endconsumer usage of RF
devices8Cree | Wolfspeed Milestones
How do leaders lead? By being first.
We have spent more than 30 years establishing a global brand known for innovation, financial strength and reliable materials
sourcing, staffed by the most forward-looking thinkers and doers in any scientific enterprise. When we transitioned to theWolfspeed name in 2021, we were poised to build on that foundation with a renewed enthusiasm for the future.

9Cree | Wolfspeed Milestones (continued)

2020
We released the Wolfspeed® 650V silicon carbide MOSFETs, delivering
a wider range of industrial applications and enabling the next generationof Electric Vehicle (EV) onboard charging, data centers, and otherrenewable systems with industry-leading power efficiency. The newdevices, which use Wolfspeed’s industry-leading, third generation C3M™
MOSFET technology, deliver up to 20 percent lower switching losses thancompeting silicon carbide MOSFETs and provide the lowest on-state
resistances for higher efficiency and power dense solutions. End users
benefit from lower total cost of ownership in a variety of applications
through the more efficient use of power, reduced cooling requirements,
and industry-leading reliability. Compared to silicon, our new 650V siliconcarbide MOSFETs deliver 75 percent lower switching losses and a 50
percent decrease in conduction losses which results in a potential 300
percent increase in power density.

10

OUR RESPONSE TO COVID-19
Cree | Wolfspeed has been at the forefront of innovation for more than 30 years. Today, we are known for leading the worldwide
transition from silicon to silicon carbide that is powering a more efficient and sustainable future across electric vehicle, 5G andindustrial applications. So, with disruption and innovation at the core of our company culture, it was natural for us to apply thatsame mentality to how we handled the pandemic. Here’s a look at how we responded and the key takeaways as we head into a
new age of possibility.

Employees FirstAt the outset of the pandemic, we had one primary focus: the health and safety of our employees. Our employees remain ourbiggest differentiator, so taking care of them served as our guiding principle for navigating the many challenges of the pandemic.

Communication
Led by our CEO, we looked for every opportunity to help employees and prioritized communication as the vehicle for connecting
the workforce while enabling space for our people to take care of themselves and their loved ones. We quickly rolled out acomprehensive communication strategy, starting with regular video messages from our CEO, as well as ongoing communications
across all internal channels about our evolving safety protocols and measures meant to keep everyone safe. We also ensured a
360-degree approach to communication, with ways for our employees to let us know about their biggest challenges and concerns,
so we could regularly assess and respond to their needs. One of the most impactful changes we made was increasing the cadenceof listening sessions with our CEO, Gregg Lowe. Over time, employees became more and more comfortable voicing their opinions
in this setting, resulting in an array of great initiatives. We assembled communications teams and task forces specifically for
COVID-19 response and they are still in place to this day. If there is a measure that can be taken to ease concern or improve safety,
we deploy it.

Long-Term Thinking
Rather than putting short-term, reactionary measures in place, responding to the pandemic has pushed us to think about how we
could truly become a better employer for the long-haul while responding to the situation.
As an essential technology manufacturer, Cree l Wolfspeed is home to a population of manufacturing and office employees, and it
remains vital to keep everyone safe while remaining operational. Any employees who were able to work from home were asked to
do so to help ensure the health and well-being of our manufacturing population. But, something interesting happened when we
did this. Our teams quickly adapted to the new operating environment at the onset of the pandemic, embracing the use of digitalplatforms to pursue and win business. The level of engagement has been impressive with meetings on our digital collaboration
hub totaling more than 1,000 a day, conference calls up fourfold and sales pitches per week up seven times in the first five weeksof the pandemic.
In response, we specifically created and deployed a new program called “Work Where it Works,” which is designed to enable
employees to achieve a better work/life balance and to be more productive by developing their ideal working schedule based on
their personal needs or work style. For example, employees will be able to work from home all the time or come into the office for
however many days serves them best following the pandemic.
Looking ahead, we will further enable employees to set up remote workstations and continue to improve information sharing
across geographically dispersed areas of our business. Additionally, we have already begun hiring employees outside of theimmediate geographic vicinity of our offices and taking advantage of our ability to integrate a broader pool of talent into theorganization.

11

Thinking HolisticallyOur manufacturing facilities in the US have remained operational throughout the pandemic as essential businesses. So, whilesome employees are able to work from home, it is vital that we’re taking a holistic approach to making Cree l Wolfspeed agreat place to work for everyone. As we all know now, going to work during a pandemic presents a heavy load of challenges for
employees. “Work Where it Works” needed to be a comprehensive program taking into account the needs of all our employees,
not just the ones working remotely. A recent survey by The Economist found that 90% of executives recognize the impact of
employee well-being in the economic performance of their business yet face challenges in translating this into core businessobjectives or performance indicators. For us, we knew addressing employee well-being needed to be a comprehensive effort andgo far beyond hand sanitizer stations and virtual calls. The same survey found that executives who focused on building a “cultureof health” within their workplace are far more likely to achieve higher employee productivity and engagement, which was true inour case.

Employee Resources
For employees who needed to be onsite to keep our manufacturing processes running smoothly, the primary concern continued
to be safety. We quickly moved to put onsite safety measures in place, but we also took a step back and asked ourselves how we
could help our employees on a broader scale. This led to additional changes, such as childcare benefits to help make employees’
lives easier in and out of work. Specifically, we began offering three different childcare options -- two drop-off and one in-home-- to support our working parents. We also subsidized regular onsite food trucks, improved outdoor seating areas, randomly
provided “thank you” bags and gave reward and recognition credits as a holiday gift to onsite employees. We also extended
sick time to ensure our people felt comfortable staying home to take care of themselves. In addition, we implemented a Global
Employee Assistance Program, a Global Virtual Fitness Program, a Work From Home Allowance for remote employees, andresources for remote employees to find IT peripherals, ergonomic furniture, and office supplies.

Community Outreach
These are challenging times for our community-agency partners as they work overtime to meet a new level of need. To help our
local communities, we made a significant donation of KN95 masks to hospital systems in North Carolina and New York, withoutcompromising the health and safety of our employees. We have also extended our support of local food banks where we operate,
including donations in direct response to the pandemic, as well as furthered our partnership with Habitat for Humanity in
Durham, North Carolina with a COVID-19 relief donation to its emergency fund that was used to give homeowners a three-month
reprieve on their mortgage payments. We remained focused first and foremost on the health and safety of our people, our families
and our communities, but also on our commitments to our customers and the communities where we work, live and serve.

Forward Look
Our operations remain strong because our business continuity and safety measures are working, and we have continued to adapt
as the situation evolves. Our employees’ dedication to keeping our business running and safely serving our customers during thisdifficult time has been nothing short of amazing. We have been steadfast in our commitment to our employees’ health and wellbeing since the very beginning of the pandemic, and, in turn, our employees have pivoted quickly in the new normal to drive us
forward.

12

CAPACITY EXPANSION
Expanding Capacity for Silicon Carbide
At Cree | Wolfspeed, we are driving the industry transition from silicon to silicon carbide.
To meet the increasing demand for our groundbreaking Wolfspeed technology that
supports the growing electric vehicle (EV), 4G/5G mobile and industrial markets, weannounced in 2019 that we will be establishing a silicon carbide corridor on the East Coastof the United States.

>30X INCREASE

in silicon carbide wafer
fabrication>30X INCREASE

In 2019 we announced our plans to invest $720 million over five years to expand of
our silicon carbide (SiC) capacity, which will generate up to a 30-fold increase in SiC
wafer fabrication capacity and 30-fold increase in SiC materials production to meet the
expected market growth by 2024.

in silicon carbide materials
production

We are currently constructing the world’s largest silicon carbide fabrication facility
in Marcy, New York. This brand new, state-of-the-art wafer fabrication facility will be
automotive-qualified and 200mm-capable. It is complemented by our mega materials
factory expansion currently underway at our Durham, North Carolina headquarters.
The new fabrication facility will dramatically increase capacity for our Wolfspeed siliconcarbide and GaN business and will be a bigger, highly-automated factory with greater
output capability.

compared to previously
planned facility>25% MORE OUTPUT

STATE OF THE ART

automotive-qualified
production facility in Marcy, NY

Renderings of the Mohawk Valley Fabrication facility in Marcy, New York

Construction progress of the Mohawk Valley Fabrication facility in Marcy, New York
13

Estimated timeline for the Mohawk Valley Fabrication facility in Marcy, New York

Celebrating progress on the construction of our Mohawk Valley Fabrication facility in Marcy, New York. Representing the last steel
truss to be installed. The signed beam will be installed in the building’s cafeteria ceiling.
14

Investing and Partnering in the Mohawk Valley to Build a High-Tech Workforce
We announced our plans to partner with local community and four-year collegesin North Carolina and New York to develop training and internship programs
to prepare our workforce for the high-tech employment and long-term growth
opportunities in both location that our expansion plan presents.
As part of our ongoing, long-term commitment to the Mohawk Valley, we
are working with academic institutions and other community and economic
development partners to help expand the local economy and create a pipelineof high-tech professionals. We recently announced funding the Cree | Wolfspeed
Scholarship and two endowed faculty chairs, named for two of Cree’s co-founders,John Edmond and John Palmour, to help ensure students who come from
historically underserved or marginalized communities, as well as those with significant financial need, have greater access to theeducational opportunities that will equip them to excel as part of tomorrow’s high-tech workforce.
Our commitment includes a $2 million scholarship program over 10 years and the creation of two endowed faculty chairs through a $1.5
million fund over five years, beginning in August 2020, for the continued expansion of science, technology, engineering, and mathematics(STEM) opportunities for students at SUNY Polytechnic Institute (SUNY Poly).

Partnering to Build a Pipeline of High-Tech Professionals
We are working with education and business partners across the region to establish a robust pipeline for the next generation of highquality, high tech jobs in the Mohawk Valley, including those we will need in advanced manufacturing. Our culture fosters an inclusive
workplace, and our hiring efforts develop employees from the communities where we operate. We fuel long-term growth opportunities
for our team through an internal mobility practice that combines ongoing workforce development, leadership training, education
assistance and career path planning.

OUR PARTNERS• Alfred University• Cornell University• Fort Drum
• Herkimer College• Hudson Valley Community College• Mohawk Valley Community College• Rensselaer Polytechnic Institute• Rochester Institute of Technology• SUNY Polytechnic Institute• Utica College

Giving Back to the Communities Where We Live and Work
Investing in and giving back to the communities where we live and work is part of who we are as a team, and we are excited toextend these investments to the Mohawk Valley. Since announcing the construction of our new fabrication facility, we’ve worked
with partners such as SUNY Poly, Mohawk Valley Community College, and multiple community-based agencies to help build
the local economy, develop local talent, support STEM education at multiple levels and help our new neighbors in need. Moreinformation about our community engagement efforts can be found in the Community Engagement section of this report.
OUR PARTNERS• Boilermaker• FIRST• Mohawk Valley Community College• Rescue Mission of Utica• Save the Day Foundation• SUNY Polytechnic Institute• Utica City Football Club
• Utica Comets

15

Expanding with the Environment in Mind
We continuously explore options for environmental-related improvement projects to help offset our expansion efforts. The
following initiatives are planned to be implemented at our new Mohawk Valley Fab.

BUILDING EFFICIENCYLEEDOur new Mohawk Valley
Fab is planned to be
LEED certified

With our LEED certification, you’llknow the world’s largest siliconcarbide fabrication facility operates
with efficiency. Our buildings will haveenergy, water and waste savings built
into their design.

ENERGY SAVINGS

RENEWABLE ENERGY

5000+ MWh50%

of annual energy savings
are built into the designof our new fabof our electricity will befrom carbon-free or lowcarbon sources

Energy efficient products means energy
efficient operations. Our new Mohawk
Valley Fab will have 100% energy
efficient LED lighting and energy efficientventilation fans, saving us energy year
over year. Also, approximately 50% of ourenergy will come from carbon-free or lowcarbon sources based on the local energy
grid mix and a ReCharge NY award.

WATER SAVINGSWATER RECYCLING

500k+ gal

60k galof annual water savings
are built into the designof our new fab

of water planned to berecycled per day at our
new fabEV CHARGINGNew EV charging stations will be installedat our new fab, in addition to the ones
currently used at our Durham and RTP
facilities. The new EV charging stationsat our Mohawk Valley Fab are estimatedto result in an annual reduction of over
100,000 lbs of CO2 emissions.

14

new electric vehicle (EV)charging stations planned
to be installed

Various initiatives, including collecting
rainwater for irrigation and installing
low-flow faucets will help offset ourannual water needs. We are alsoplanning to install a water recycling
system to offset purchases of new water.

16

SUSTAINABILITY
2021

17

SUSTAINABILITY MISSION AND PRINCIPLES
The best for our employees, our environment and our communities
Our Sustainability Mission
Our purpose extends beyond our products. Our business is built on the power of silicon carbide
and the innovative possibilities unleashed by the technology. Always at the forefront of technology
revolutions, we serve as a catalyst for driving change that transforms our communities, industries,
and our world by powering more and consuming less.
This is Wolfspeed.
Our Sustainability Principles

People First,
People Always

We consider the health and well-being of each individual associatedwith the Cree | Wolfspeed community as our primary responsibility.
We have established stringent rules for material sourcing, supplierselection, and employee health and safety, while also promoting
community engagement and education programs.

Processes that Protect theEnvironment, Productsthat Improve it

We strive to minimize resource use and reduce the environmental
impact of our production process. We are committed to responsibly
managing environmental impacts, including being in compliancewith environmental legislation as a minimum, and ensuring continual
improvement in our environmental performance. Our productsustainability goals are simple: enable our customers to invent power
and wireless systems for a responsible, energy efficient future. We
are committed to responsibly managing our products from cradle
to grave as we lead the innovation and commercialization of siliconcarbide and GaN.

Responsible Business
Practices, Innovating for a
Better Future

At Cree | Wolfspeed, we relentlessly pursue disruptive technologies
that change industries. We operate at the highest ethical standards
and actively manage risks inside and outside of the organization toensure long-term financial performance. We adhere to the policies
outlined in the Code of Conduct and require our suppliers to adhere
to strict social and environmental standards, as described in our
Supplier Code of Conduct.

Absolute Commitment toIntegrity and Transparency

Our Board of Directors sets high standards for our employees,
officers and directors. We are committed to transparency of ourSustainability information and data.

18

SUSTAINABILITY GOALS

WATER
WASTE

Processes that
Protect theEnvironment,
Products that
Improve it

GREENHOUSE GASESCOMMUNITY

People First,
People Always

HEALTH & SAFETY

We maintain a firm commitment to responsibly conducting business alongside an acute awareness of our role in enabling amore sustainable future. To that end, this year we established our first corporate-wide sustainability goals. These goals will drive
our sustainability strategy and efforts, which align with our organization structure, core competencies and culture and unite ourbusiness units, global locations and functions.

» OUR AMBITION» OUR GOAL

Providing a safe and healthfulwork environment is paramountto our success and protects ourmost valuable resource, ouremployees.

Establish a certified Occupational
Health & Safety Management Systemfor 100% of our manufacturing sites​by 2025» OUR AMBITION» OUR GOAL

Close the opportunity gap by
providing more opportunities
for STEM education, at all levels,
to people in need, particularly inunderserved communities.

Establish STEM partnerships at
100% of our major locations by 2025

» OUR AMBITION» OUR GOAL

Actively fight against climatechange and reduce our andothers’ carbon footprint; Stayefficient, stay productive. Be a
company that makes a difference
for future generations.

• Reduce Scope 1 and 2
greenhouse gas (GHG) emissions
by 50% by 2030

» OUR AMBITION» OUR GOAL

Ensure sustainable and efficientuse of water across all sectors.
Become a leader in addressing
water scarcity.

Increase water recycling rate by
25% by 2025

» OUR AMBITION» OUR GOAL

Be a company that directs
to zero waste through waste
reduction and recycling.

Achieve 85% waste diversion
rate from landfill by 2025

• Achieve net zero Scope 1 and 2
GHG emissions by 2050

19

» OUR GOAL

Assess suppliers on socialand environmental risks tostrengthen partnerships withthose with best practices.

Evaluate ESG risks and opportunities
for 100% of suppliers on our Approved
Supplier List by 2025

» OUR AMBITION» OUR GOAL

Improve resiliency throughour diversity efforts andreduce inequalities across our
supply chain.

Achieve >5% supply chain spend
from diverse suppliers by 2025

» OUR AMBITION» OUR GOAL

Use a defined and concise
method to easily gather thedata needed to evaluatesustainability risks.

Complete 3 risk plans/year under
our Enterprise Risk Management(ERM) program by 2025

» OUR AMBITION» OUR GOAL

Actively and continuously work
to improve our disclosures andratings through major reporting
frameworks to drive continuous
improvement efforts.

Achieve a score of B or better on
all CDP surveys by 2025

DIVERSITY

SUPPLY CHAIN» OUR AMBITIONRISK MANAGEMENT

Responsible
Business
Practices,
Innovating for a
Better Future

TRANSPARENCYSUSTAINABILITY GOALS

Absolute
Commitment
to Integrity andTransparency

20

2020 SUSTAINABILITY MILESTONESJANUARY 2020

FEBRUARY 2020

FEBRUARY 2020

APRIL 2020

JUNE 2020

JULY 2020

Launched our Technician Certification
Program

Launched our second employee resourcegroup (ERG), the PRIDE Group

Donated $3.5M for the Cree | Wolfspeed
Scholarship program and the Dr. John
Edmond and Dr. John Palmour Endowed
Faculty Chairs to expand STEM opportunities
at SUNY Polytechnic InstituteMade Barron’s List of 100 Most Sustainable
Companies in America

Donated 20,000 KN95 masks to Duke University
Health System, a local hospital near ourheadquarters
Hosted our Cree | Wolfspeed 2020 Virtual STEM
Day for employees and their children

JULY 2020

AUGUST 2020

SEPTEMBER 2020

OCTOBER 2020

OCTOBER 2020

OCTOBER 2020

NOVEMBER 2020

NOVEMBER 2020

DECEMBER 2020

DECEMBER 2020

We completed construction on thefoundation of our new Mohawk Valley FabDonated $4M to N.C. A&T University, ahistorically black university (HBCU), to establish
the Cree | Wolfspeed Endowed Scholars
Program to support students in STEM

Launched new ERGs, Black Hispanic Latinx(BHL) and Veterans Pact

Hosted our second annual Diversity, Equity &Inclusion Conference for all employees

A total 42 of our employees completed ourTechnician Certification Program in 2020

We disclosed our water-related information to
CDP Water Security for the first time

Partnered with Durham Bulls and BASF to createa STEM pollinator garden at the Durham Bulls
Athletic Park, a local baseball stadium near ourheadquarters

Held a ceremony to commemorate the installationof the final steel beam at our new Mohawk
Valley Fab, which is planned to be LEED certified

Donated 200 turkeys to the Rescue Mission of
Utica to help families in need

We recycled 118 million gallons of water in 2020and performed our first corporate-wide waterrisk assessment for the first time

21

SUSTAINABILITY REPORTING
Cree | Wolfspeed’s sustainability report has been prepared in accordance with the Global
Reporting Initiative (GRI) Standards: Core Option. Our report also aligns with the Sustainability
Accounting Standards Board (SASB) semiconductor standard and the Task Force on Climaterelated Financial Disclosures (TCFD) framework. Our GRI Content Index, SASB Disclosures and
TCFD Disclosures can be found in the Appendix of this report. Cree | Wolfspeed also supports theUnited Nations Sustainable Development Goals (SDGs). How our business activities contributeto the SDGs are highlighted in the Our Contributions to the UN SDGs and UN SDGs Disclosuressection of this report. Our Health and Safety information has been reported using guidance fromthe Center for Safety & Health Sustainability. Refer to the Materiality Assessment section below
to learn more about how the content of this report was developed. We used an independent
third party to perform a limited assurance verification of select sustainability report data. The
Independent Assurance Statement can be found at the end of this report.

» OUR AMBITION
Actively and continuously work
to improve our disclosures andratings through major reporting
frameworks to drive continuous
improvement efforts.

» OUR GOAL
Achieve a score of B or betteron all CDP surveys by 2025

MATERIALITY ASSESSMENT
To better understand which environmental, social, economic, governance, and product topics are material to Cree | Wolfspeed, we
have engaged with our internal and external stakeholders. Our internal stakeholders involved in our materiality assessment included
employees of different departments within Cree | Wolfspeed. For our external stakeholder analysis, we reached out to suppliers,
distributors, contract manufacturers, customers, investors, and trade associations. Other stakeholders who were not involved in
the materiality assessment include insurers, competitors, government agencies, community members, and dependents/familyof employees.
For stakeholder groups that we did not reach out to or if we did not receive responses from a stakeholder group during themateriality assessment, we referred to the Sustainability Accounting Standards Board’s (SASB) standard for the semiconductor
industry to ensure that our material topics chosen during our assessment are consistent with the semiconductor industry.
The results of the materiality assessment help us to better prioritize our areas of focus. We used the results of our initial materiality
assessment to update our materiality assessment in 2020, which is presented in the table on the next page. The material topics
shown in the table on the next page are reported on in greater detail per the GRI Standards. The topics we considered during ourmateriality assessment are as follows:

Environmental
Water Scarcity
Climate Change
Raw Material Resource Scarcity
Water and Wastewater Management
Air Emissions
Waste Management
Energy Efficiency of Operations

SocialEmployee Diversity and Equal Opportunity
Community Engagement (Local & Global)
Sourcing of Conflict Minerals
Code of Conduct
Labor and Employment Practices
Employee Attraction/Development Retention
Occupational Health and Safety

Corporate Governance
Political Activity/Lobbying
Geo-political issues
International Trade Regulations
International Standards Compliance (REACH, RoHS, ISO 14001)
Risk Management
Stakeholder Dialogue/Transparency
Corporate GovernanceRegulatory ComplianceIntellectual Property Security (Cyber & Data Security)
Ethical Business Practices

Economic
Contribution to Regional/Local Development
Indirect Economic Impacts
Growth in Emerging Markets
Mergers and Acquisitions
Supply Chain/Sourcing Issues
Financial Performance

Product
Packaging Contains Recyclable Materials
Recognition/Awards
Customer Health and Safety
Product End-of-Life Disposal
Product Compliance
Energy Efficiency of Products
Product Affordability
Customer Satisfaction
Product Innovation
Product Quality

22

Materiality Assessment Report
Importance toUpstream

Importance toCree | Wolfspeed

Importance toDownstream

Climate Change

High

High

High

Water and Wastewater Management

High

High

MediumWaste Management

Low

High

Low

Energy Efficiency of Operations

Low

High

Medium

Employee Diversity and Equal Opportunity

Low

High

MediumCommunity Engagement (Local and Global)

Low

High

MediumMediumHigh

High

Employee Attraction/Development/Retention

Low

High

Low

Occupational Health and Safety

Low

High

MediumMediumHigh

Low

Supply Chain/Sourcing Issues

High

High

High

Financial Performance

Low

High

Low

Customer Satisfaction

Low

High

High

Product Innovation

Low

High

High

Product Quality

MediumHigh

High

Acceleration of Sustainable Technologies

MediumHigh

High

International Trade Regulations

High

High

High

Risk Management

Low

High

MediumIntellectual Property Security (Cyber & Data
Security)

High

High

High

Material Issue
ENVIRONMENTAL

SOCIAL

Labor and Employment Practices

ECONOMIC
Contribution to Regional/Local Development

PRODUCT

CORPORATE GOVERNANCE

23

OUR CONTRIBUTIONS TO THE UN SDGs
We have reported on how our operations and business activities
contribute to the UN SDGs. Refer to the UN SDGs Disclosuressection of this report for more information about how the UN SDGs
and their specific targets align with our business focus, strategy andmaterial issues.

Our Approach•

At Cree | Wolfspeed, we believe everyone should have a roof over their heads, enough to eat,
and an opportunity to excel. It is impossible for children to achieve at their highest level when
they are worried about where they will sleep at night, or where their next meal will comefrom. Working with our community partners to meet these needs not only helps address
the opportunity gap, but also helps students focus on achieving their full potential throughscience, technology, engineering and math (STEM) education programs. This work builds
important relationships with our community neighbors, including those historically underserved
communities, with the same spirit of innovation and passion that drives our business. Working
closely with our charitable corporate partners, we are able to focus our efforts on addressing
homelessness, diversity and social injustice, as well as increasing awareness of the opportunities
provided through STEM.

Our 2020 Activities•

We provided extra funding to Habitat for Humanity’s mortgage relief fund to help keep families intheir homes during the COVID-19 pandemic when many lost their jobs.

•

During the COVID-19 pandemic, we increased our support of the Food Bank of Eastern &Central North Carolina and Feeding America, Inc. to feed those in need, many of whom foundthemselves suddenly unemployed, in the U.S. locations where we operate.

•

We established the Cree | Wolfspeed Scholarship program and the Dr. John Edmond and Dr.
John Palmour SUNY Polytechnic Institute Endowed Faculty Chairs for the continued expansionof STEM opportunities.

Our Goals and Certifications•

We have a sustainability goal to promote STEM education opportunities in the communities inwhich we operate:			Establish STEM partnerships at 100% of our major locations by 2025			

24

OUR CONTRIBUTIONS TO THE UN SDGs
Our Approach•

At Cree | Wolfspeed, we believe everyone should return home healthy and safe every day​. We
have occupational health and safety programs to ensure the safety of our workplace throughevaluation and prevention measures. Cree | Wolfspeed supports the well-being of our employees
through programs that support a healthy lifestyle. We are committed to offering benefits toemployees and their families to assist in improving health and lifestyle choices. Programs
throughout our operations are tailored to the needs of the employees in the region and include
many health-related benefits. We also have programs for our employees’ mental health including
employee assistance programs and our Mental Health Allies employee resource group (ERG).

Our 2020 Activities•

We initiated our Safety Fundamentals program, which describes all employees’ responsibilities
for ensuring health and safety throughout our organization.

•

We deployed a new program called “Work Where it Works,” which is designed to enable
employees to achieve a better work/life balance.

•

We donated 65,000 KN95 masks to healthcare workers and first responders serving on the front
lines of the COVID-19 pandemic in New York and North Carolina.

Our Goals and Certifications•

We have a sustainability goal to further ensure the health and safety of our employees:

			
			

Establish a certified Occupational Health & Safety Management System for 100% of ourmanufacturing sites​by 2025

Our Approach•

At Cree | Wolfspeed, we continuously strive to implement best management practices thatconserve and recycle water and prevent and reduce water pollution. Because we are constructing
a new state-of-the-art, automotive-qualified 200mm-capable wafer fabrication facility in Marcy,
New York, complemented by our mega materials factory expansion currently underway at our
Durham headquarters, we will remain dependent on good quality water and anticipate our total
water dependency to increase in the future. We continuously explore options for water recycle
improvements to help offset the expected increase in water withdrawals as we expand.

Our 2020 Activities•

We performed our first company-wide water risk assessment to better understand our current
and future water-related risks.

•

We submitted our water-related information to the CDP Water Security survey for the first time.

Our Goals and Certifications•

Our owned manufacturing operations are certified to ISO 14001:2015.

•

We have the following sustainability goals to further reduce our water-related impacts andincrease the transparency of our water related risks and opportunities:			

Increase water recycle rate by 25%​by 2025

			

Achieve a score of B or better on all CDP surveys by 2025
25

OUR CONTRIBUTIONS TO THE UN SDGs
Our Approach•

We’re leading the transformation from silicon to silicon carbide and GaN as we shape thefuture of semiconductor markets: the transition to electric vehicles, the move to faster 5G
networks, the evolution of renewable energy and energy storage, and the advancement ofindustrial applications. After more than thirty years of forging new technology adoption andtransformation, our Wolfspeed® power and radio frequency (RF) semiconductors are leading theindustry through unrivaled expertise and capacity.

Our 2020 Activities•

We released the Wolfspeed® 650V silicon carbide MOSFETs, delivering a wider range ofindustrial applications and enabling the next generation of Electric Vehicle (EV) onboard
charging, data centers, and other renewable systems with industry-leading power efficiency.
The new devices, which use Wolfspeed’s industry-leading, third generation C3M™ MOSFET
technology, deliver up to 20 percent lower switching losses than competing silicon carbide
MOSFETs and provide the lowest on-state resistances for higher efficiency and power dense
solutions. End users benefit from lower total cost of ownership in a variety of applications
through the more efficient use of power, reduced cooling requirements, and industry-leading
reliability. Compared to silicon, our new 650V silicon carbide MOSFETs deliver 75 percent lower
switching losses and a 50 percent decrease in conduction losses which results in a potential 300
percent increase in power density.

•

StarPower Semiconductor and Cree | Wolfspeed announced that Zhengzhou Yutong Group, alarge-scale industrial Chinese manufacturer of commercial vehicles that specializes in electricbuses, is using Wolfspeed 1200V silicon carbide devices in a Starpower power module for its
new, industry-leading, high-efficiency powertrain system for electric buses. The use of siliconcarbide-based power solutions enable faster, smaller, lighter and more powerful electronicsystems for commercial electric vehicles. The parties are working together to accelerate thecommercial adoption of silicon carbide-based inverters in electric bus applications. Upon
rollout, Yutong Group will deliver their first electric bus in China to use silicon carbide in its
powertrain, representing a significant advancement in providing an even more efficient e-bus tothe market.

Our Goals and Certifications•

Our capacity expansion plan includes working toward a 30-fold increase in SiC wafer fabrication
capacity and 30-fold increase in SiC materials production to meet expected market growth forthese technologies.

•

Depending on the facility, our manufacturing operations are certified to ISO 14001:2015, ISO
9001: 2015, IATF 16949: 2016, and/or AS 9100D.

26

OUR CONTRIBUTIONS TO THE UN SDGs
Our Approach•

Cree | Wolfspeed is committed to fostering a culture of diversity, equity and inclusion
encompassing all employee differences and identities. Because we believe diversity, equity
and inclusion drives better business results, we celebrate our employees’ authenticity andunderstand that diverse ideas, perspectives, thinking styles and backgrounds produce higher
quality decisions, enabling us to solve problems other companies think to be impossible. We arealso committed to reducing inequalities in the communities in which we operate. We partnerwith municipalities, civic organizations and advocacy groups to help ensure our community
is one that addresses any inequities in opportunity. We are out to prove that any societal
disadvantage can be overcome with adequate resources and support so that all are free topursue and achieve a productive, fulfilling life.

Our 2020 Activities•

In 2020 we hosted listening sessions with team members from across the organization, which
helped to shape new initiatives such as, increasing transparency around our recruiting policies,
introducing new employee resource groups (ERGs), developing a mentoring program, and much
more.

•

We developed our first Diversity, Equity and Inclusion (DEI) scorecard, which helps us measure
our progress toward DEI-related activities. Our DEI scorecard now is part of our annual bonus.

Our Goals and Certifications•

We have a sustainability goal to promote reduced inequalities in our supply chain:			Achieve greater than 5% supply chain spend from diverse suppliers by 2025

Our Approach•

At Cree | Wolfspeed, we continuously strive to reduce the overall impacts of our manufacturing
processes, including substituting sustainable resources in place of non-renewable resources,
reusing or recycling materials wherever technically possible and economically reasonable, andminimizing waste and disposing of waste safely and responsibly.

Our 2020 Activities•

Our manufacturing operations continued to evaluate and optimize recipes to maximize chemical
usage without negatively impacting product quality thereby reducing the amount of chemicals
required in some processes. We also worked to utilize all chemicals in bulk fill drums to reduce
the amount of residual chemicals left in their containers after use.

•

We have been working to enhance one of our key manufacturing processes, which resulted in a
reduction of approximately 132,000 lbs of raw materials in 2020 compared to 2019 usage.

Our Goals and Certifications•

Our owned manufacturing operations are certified to ISO 14001:2015.

•

We have the following sustainability goals to further reduce our waste and water-related
impacts:			

Increase water recycle rate by 25%​by 2025

			

Achieve 85% waste diversion rate from landfill
27

OUR CONTRIBUTIONS TO THE UN SDGs
Our Approach•

Cree was founded upon the premise that our silicon carbide (SiC) based technology for
power and radio frequency (RF) devices could fundamentally change the efficiency of energy
use around the world. Our mission is to lead the innovation and commercialization of SiC
and gallium nitride (GaN), liberating designers to invent power and wireless systems for a
responsible, energy efficient future. We have always focused our priorities on improving theenergy efficiency of our products, which in turn have a lower impact on the environment andclimate change. In addition to providing energy efficient products, we strive to reduce GHG
emissions and improve energy efficiency at all Cree | Wolfspeed sites.

Our 2020 Activities•

Our LED, power and RF products sold in 2020 will save approximately 327 million MWh and 125
million metric tons CO2e over their estimated lifetimes compared to less efficient alternative
products (e.g., silicon-based power products, silicon- or gallium arsenide-based RF products).

•

We are currently exploring GHG abatement technologies for our facilities and in 2020 and 2021
began installing abatement devices at our Durham and RTP manufacturing facilities.

•

In 2019, we began planning for a project to eliminate the use of one of our greenhouse gaseswith a high global warming potential (GWP) in one of our manufacturing processes. In 2020, thisproject entered the testing phase and is planned to start transitioning over to full production
during 2021.

Our Goals and Certifications•

Our owned manufacturing operations are certified to ISO 14001:2015.

•

We have the following sustainability goals to further reduce our GHG and climate-related
impacts:			

Reduce Scope 1 and 2 GHG emissions by 50% by 2030

			Achieve net zero Scope 1 and 2 GHG emissions by 2050

			Achieve a score of B or better on all CDP surveys by 2025

28

CORPORATE
GOVERNANCE
2021
Absolute Commitment to Integrity and Transparency

29

ABSOLUTE COMMITMENT TO INTEGRITY AND TRANSPARENCY
Our Board of Directors sets high standards for our employees, officers and directors. We are committed to the transparency of
our Sustainability information and data.

CORPORATE GOVERNANCE
Our Board of Directors sets high standards for our employees, officers and directors. Implicit in this philosophy is the importanceof sound corporate governance. It is the duty of the Board of Directors to serve as a prudent fiduciary for shareholders and tooversee the management of our business. To fulfill its responsibilities and to discharge its duty, the Board of Directors follows theprocedures and standards that are set forth in these guidelines. These guidelines are subject to modification from time to time as
the Board of Directors deems appropriate in the best interests of Cree | Wolfspeed or as required by applicable laws and regulations.

Corporate Governance Documents• Corporate Governance Principles• Anti-Corruption Statement• Articles of Incorporation• Corporate Bylaws• Compensation Committee Charter• Governance and Nominations Committee Charter• Audit Committee Charter• Code of Conduct• Code of Ethics for Executive Officers and Other
Senior Financial Personnel• Supplier Code of Conduct

BOARD OF DIRECTORS AND COMMITTEE COMPOSITION
Our Board of Directors plays a critical role in our operations and vision. The Board has the highest authority over the company,
and its members are selected due to their significant executive experience in the industry. Our Board of Directors meets quarterly
to review topics such as corporate strategy, product development, finances and operations. Our Board members are also
members of different Committees. More information about our Board of Directors can be found on our Board of Directors andCommittee Composition pages on wolfspeed.com and in the Diversity, Equity and Inclusion section of this report.
Audit
Committee

Board Member

Governance andNominations
Committee

Compensation
Committee

M

M

Glenda Dorchak

I

John C. Hodge

I

M

M

Clyde R. Hosein

I

C

M

Darren R. Jackson

I

M

M

Duy-Loan T. Le

I

John B. Replogle

I

Marvin A. Riley

I

M

M

Thomas H. Werner

I

M

C

Gregg A. LoweMM

I = Independent Director
C = Chairperson
M = Member

M

C

30

CODE OF CONDUCTOur Code of Conduct applies to every Cree | Wolfspeed employee around the world, and to our Board of Directors; it governs
every business decision we make. Our Values are at the core of our success and the Code of Conduct embodies and reinforces
our commitment to act in a manner consistent with our Values and put them into practice every day. Our Code of Conduct isavailable on wolfspeed.com.

RISK MANAGEMENT
Risk management at Cree | Wolfspeed is a process undertaken by all functions within
the business, including a review of risks related to financial and market performance,
operational performance, emergency preparedness and response, environmental healthand safety compliance, among other areas. In addition, we have established a formal
Enterprise Risk Management program in order to identify, assess, prioritize and manage
key enterprise risks. Sustainability-related risks and opportunities are also discussed andaddressed as part of this program. Our material business risks are listed in our periodic
reports filed with the Securities and Exchange Commission and in our Annual Reports. Our
water-related risks can be found in the Water Management section of this report. Our risks
associated with climate change can be found in the TCFD Disclosures Risk Management
and Our Climate Change Risks subections of this report.

OUR AMBITION
Use a defined and concise
method to easily gather thedata needed to evaluatesustainability risks.

OUR GOAL
Complete 3 risk plans/year under
our Enterprise Risk Management(ERM) program by 2025

The Board, acting itself or through one or more of its committees, has general oversight responsibility for corporate risk
management, including oversight of management’s implementation of risk management practices. While the Board is responsible
for risk oversight, management is ultimately responsible for assessing and managing our risk exposures. The Board directly
oversees management’s assessment, mitigation efforts and monitoring of strategic and operational risks, such as those relating
to competitive dynamics, market trends and developments in our industry, changes in economic conditions, cybersecurity andSustainability. Senior management regularly updates business plans for each of our product lines, including an assessmentof strategic and operational risks and responses to identified risks, and members of the Board and senior management meet
annually to review these plans. In addition, senior management reports to the Board at each quarterly Board meeting on progress
made against these strategic plans, including an update on changes in risk exposure and management’s responses to the changes.

SUSTAINABILITY OVERSIGHT
Our Board of Directors is responsible for all Sustainability matters at Cree | Wolfspeed through our Governance andNominations Committee. This Committee assists our Board of Directors in discharging its oversight and responsibility
related to environmental, social and governance (ESG) matters such as climate change impacts, energy and natural resources
conservation, environmental and supply chain sustainability, human rights, employee health, safety and well-being, diversity
and inclusion, corporate charitable and philanthropic activities and other Sustainability issues that are relevant and material
to Cree | Wolfspeed. The Committee provides guidance to the Board on these issues and performs an oversight role in shaping
Cree | Wolfspeed’s Sustainability strategy and goals and targets development. Sustainability-related information covering a
range of topics is presented to our Board of Directors at least once per year, or more frequently as important matters arise, by
our Senior Vice President of Legal & General Counsel. The group with responsibility for Sustainability at Cree | Wolfspeed, andthat develops Sustainability information to be presented to the Board of Directors, consists of Cree | Wolfspeed employees
from various departments, including Environment, Health and Safety, Corporate Sales and Marketing and Legal. When relevant,
we also engage with employees from Human Resources (which includes Diversity, Equity and Inclusion), Operations (which
includes Supply Chain and Product Quality) and Finance (which includes Investor Relations).
31

ECONOMIC
2021
Responsible Business Practices,
Innovating for a Better Future

32

RESPONSIBLE BUSINESS PRACTICES,INNOVATING FOR A BETTER FUTURE
At Cree | Wolfspeed, we relentlessly pursue disruptive technologies that change industries. We operate at the highest ethicalstandards and actively manage risks inside and outside of the organization to ensure long-term financial performance. We adhere
to the policies outlined in the Code of Conduct and require our suppliers to adhere to strict social and environmental standards,
as described in our Supplier Code of Conduct.
The majority of the data included in this report is on a calendar year basis (January to December). Financial data is reported on afiscal year basis (June to July). Our financial data for FY2020 can be found in our 2020 Annual Report.

$909.3M FY20 Revenue$470.7M Wolfspeed Revenue$433.2M LED Revenue

33

PRODUCT QUALITY
Our quality policy is to meet the needs and expectations of our customers, be dedicated to continual improvement, and ensurea full commitment to our corporate values. The following sites are certified for our quality management systems. Our certificates
can be found on our Product Quality page on wolfspeed.com.
Durham, North Carolina• ISO 9001: 2015
• IATF 16949: 2016

RTP, North Carolina• ISO 9001: 2015
• IATF 16949: 2016

Fayetteville, Arkansas• ISO 9001:2015• AS 9100D

Morgan Hill, California• ISO 9001: 2015

Mesa, Arizona• ISO 9001: 2015
Huizhou, China• ISO 9001: 2015
• IATF 16949: 2016

Our Capacity Expansion Plan will allow us to efficiently respond to customer demands, implement quality strategies to further
our quality culture, as well as invest in the people, processes, and systems necessary to achieve that level of scale. Our strategy is
to integrate our people, systems, and culture to drive quality as a competitive advantage. More information about our expansion
efforts can be found in the Capacity Expansion section of this report.

Build out experienced
quality engineering
teams

Invest in scaling quality
management systemand processes

Advance automotive
culture through key
quality initiatives

We’re advancing our total quality culture through zero-defect strategies such as statistical process control, factory defectreduction program, and robust testing strategies. We’re also doing supplier assessments and development, as well as having aneven greater overall customer satisfaction focus.

34

As part of our quality initiatives, we have also focused on the implementation and enhancement of 5S practices in our
manufacturing areas.

GLOBAL OPERATIONSMANUFACTURING EXCELLENCEGLOBAL OPERATIONSMANUFACTURING EXCELLENCE

WHAT IS IT?

• A tool or approach to attain and maintain a high level of workplace organization• Engages employees to drive standardization and consistency• Provides visual cues when items are out of place

WHAT IS IT?
BENEFITSTO CREE | WOLFSPEED AND OUR CUSTOMERS?
• A tool or approach to attain and maintain a high level of workplace organization• Provides a safe workplace• Engages employees to drive standardization and consistency• Improves our production readiness• Provides visual cues when items are out of place• Demonstrates our commitment to our customers’ quality and process control expectations• Enables a culture for consistent, repeatable, predictable, and sustainable processing

BENEFITS TO CREE | WOLFSPEED AND OUR CUSTOMERS?
• Provides a safe
workplace
WHERE
DO
I GET MORE INFORMATION?
• Improves our production readiness• Your area leads and supervisors will discuss your specific involvement• Demonstrates our commitment to our customers’ quality and process control expectations• Access the Global Operations Manufacturing Excellence link under the “Applications” menu on the intranet• Enables a culture for consistent, repeatable, predictable, and sustainable processing

WHERE DO I GET MORE INFORMATION?

• Your area leads and supervisors will discuss your specific involvement• Access the Global Operations Manufacturing Excellence link under the “Applications” menu on the intranet

35

CUSTOMER SATISFACTION
Our Customer Support Mission Statement guides us to ensure we meet or exceed our customers’ expectations.

MISSION STATEMENT
The mission of Cree | Wolfspeed’s Customer Service function is to always convey a passion for the customer and to consistently
deliver the best service experience.

VISION STATEMENT
Delivering Customer Satisfaction is about providing timely, responsive service with integrity, simplicity and a passion for
excellence while meeting or exceeding the customer’s expectations

STATEMENT OF WORK
Customer Service is any activity provided by a Cree | Wolfspeed employee that enhances the ability of a customer to realize the fullpotential value of a Cree | Wolfspeed product or service before and after the sale is made, thereby leading to Customer Satisfaction
and repurchase.

CUSTOMER SERVICE PRINCIPLES• Recognize the importance of all customers and the role every Cree | Wolfspeed employee plays in influencing thecustomer’s perceptions. While impacting these perceptions, be professional, reliable, credible, responsive and friendly.
• Communicate promptly and honestly and via the customers’ choice of medium. Try to be brief and clear.
• Be a voice for the customer. When rules and policies don’t make sense to our customer, challenge the way Cree | Wolfspeed
does business and seek opportunities for improvement.
• When a problem arises, which is inevitable, view the problem as an opportunity to improve. Solving problems will
enable us to raise the quality of our products and services.
• Listen well, be responsive and demonstrate a sense of urgency. Understand that how something is said has asignificant influence on how it is received. Under promise and over deliver.
• Strive to make it easy for the customer to do business with Cree | Wolfspeed to ensure that Cree | Wolfspeed remains its
preferred supplier.

GLOBAL TRADE COMPLIANCE
We recognize our compliance responsibilities and the importance of exercising reasonable care and due diligence in ourinternational transactions and related recordkeeping practices. Our Global Trade Compliance (GTC) team is tasked with ensuring
our compliance with export control laws and regulations, such as the International Traffic in Arms Regulations (ITAR) and theExport Administration Regulations (EAR). Our mission is to ensure full compliance with all applicable trade laws and regulations,through our partnership with the United States Government, while also supporting Cree | Wolfspeed’s business objectives. As partof our GTC program, we screen all parties we may enter into a new business relationship with, including customers, distributors
and end customers, as well as perform due diligence with regard to the end use of our product as a final product, the expected
ultimate end users, and the customer’s ability to comply with applicable end use and re-export controls. Our GTC team mustalso approve individuals for “export controlled areas”, which include both physical access and IT access to export controlled
technology. Due diligence is performed for any possible red flags, which are abnormal or unusual circumstances in a transactionthat indicate that the export may be destined for an impermissible end-use, end-user, or destination. All Cree | Wolfspeed
employees receive Export Awareness Training as a part of their onboarding.
36

SUPPLY CHAIN
We conduct our activities in a manner that reflects
our Code of Conduct and Values, which include» OUR AMBITION» OUR AMBITION
being a good corporate citizen, dealing fairly in
Improve resiliency throughAssess suppliers on social
business, behaving ethically, supporting basic humanour diversity efforts andand environmental risks to
reduce inequalities acrossstrengthen
partnerships
withrights and a safe and healthy workplace, doing
our supply chain.
those
with
best
practices.
business in an environmentally responsible manner,and complying with applicable laws. We expect our» OUR GOAL
» OUR GOAL
suppliers to adhere to the same high standards and
Evaluate
ESG
risks
and
we are committed to ensuring that our supply chain
Achieve >5% supply chain spend
opportunities for 100% offrom diverse suppliers by 2025
reflects our values and beliefs through our Suppliersuppliers on our Approved
Code of Conduct. Refer to the Supplier Resources
Supplier List by 2025
page on wolfspeed.com to access our Supplier
Code of Conduct and Purchase Order Terms andConditions. Refer to our Small Business Program
page on wolfspeed.com to learn about our commitment to maximizing opportunities for small businesses.

RESPONSIBLE MINERALS SOURCING
Cree, Inc. Responsible Minerals Sourcing Policy
Mining is an intensive process involving potential social and environmental risks that may cause lasting negative impacts if notproperly managed. Certain high-risk minerals (notably tin, tantalum, tungsten, gold and cobalt) sourced from regions of the world
with ongoing conflict carries a risk of funding organizations that are involved in illegal or unethical activities including humanrights abuses such as child labor, harsh working conditions, environmental destruction and corruption. A growing awarenessof the abuses committed in these areas of conflict has prompted an industry wide investigation into any supply chain tainted bythese atrocities. In the U.S., the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) requires publicly
traded companies to report annually on the presence of conflict minerals originating in the DRC or adjoining countries in the
products they manufacture or contract to manufacture. The purpose is to report any abuses, and through disclosure, halt thesourcing of designated minerals via supply chains implicated in conflict zones.

CREE’S COMMITMENT
Cree’s Responsible Mineral Policy aligns with our commitment to uphold and respect fundamental human rights for all people,
including those who work in our supply chain. Cree complies with applicable legislation and strongly supports industry-wide
efforts to promote responsible sourcing, protect human rights, and combat child labor throughout supply chain. Cree does notdirectly procure minerals from mines, or the smelters or refiners that process them, but believe we can influence upstream supply
chain actors through our policies and practices. Recognizing the complexity of this issue, we are actively engaged with industry
peers, suppliers, and other stakeholders to promote the responsible sourcing of minerals through the Responsible Minerals
Initiative (RMI). Our goal is to work collaboratively through the supply chain to source minerals consistent with our values aroundhuman rights, business ethics, labor, health and safety practices, and environmental responsibility. We believe this can be done
while continuing to source responsibly from the DRC and other high-risk regions.

37

RESPONSIBLE MINERALS SOURCING
Cree’s internal due diligence framework is designed to conform, in all material respects, to the OECD Due Diligence Guidance for
Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD Guidance) to determine the country oforigin and chain of custody for high-risk minerals in our supply chain. To promote responsible investigations of high-risk minerals,
Cree uses the Conflict Minerals Reporting Template (CMRT) and the Cobalt Reporting Template (CRT) issued by the Responsible
Minerals Initiative (RMI).

SUPPLIER EXPECTATIONS
To support ethical procurement practices and responsible mineral sourcing, Cree expects suppliers that provide components and/or materials containing “relevant minerals” to adhere to the same high standards to which we hold ourselves. For the purposes ofCree’s Responsible Minerals Sourcing program, relevant minerals currently include:• Columbite-tantalite (tantalum), Cassiterite (tin), gold and wolframite (tungsten) – also known as “conflict minerals” or“3TG”;• Cobalt; and• Any other mineral identified by Cree as contributing possible risk to the supply chain.
We require suppliers to:• Adhere to Cree’s Supplier Code of Conduct and all applicable laws and regulations related to mineral sourcing;• Source only from smelters and refiners validated by a third-party audit program. Accepted programs include: the RMI’s
Responsible Minerals Assurance Process, the LBMA’s Responsible Gold Certification; or the RJC’s Chain-of-Custody
Program;• Make reasonable efforts to remove all non-participating and non-validated smelters or refiners from Cree’s supply
chain;• Design and implement due diligence frameworks and management systems consistent with OECD Guidance to achieve
responsible mineral supply chains;• Verify and inform Cree whether the minerals included in materials or component parts are conflict-affected or high-riskminerals;• Respond to Cree inquiries for reporting templates and due diligence information, and promptly implement corrective actions
identified and requested by Cree; and• Extend these expectations to their own suppliers.
If these requirements are not met, Cree will proactively work with the supplier to further develop their capabilities in responsible
mineral due diligence to ensure alignment to Cree’s supplier requirements. Cree will terminate relationships with suppliers that do
not make substantive and prompt efforts to comply with our policy.

CALIFORNIA PROPOSITION 65
The California Safe Drinking Water and Toxic Enforcement Act of 1986, commonly referred to as “Proposition 65” or “Prop 65”,
is a right-to-know law that is unique to the State of California. The goal of Prop 65 is to ensure that individuals in the Stateof California are informed about possible exposure to chemicals “known to the State of California to cause cancer and/or
reproductive toxicity.” Under the law, the California Office of Environmental Health Hazard Assessment (“OEHHA”) is tasked withmaintaining a list of chemicals and updating the list at least annually. To date, there are over 900 chemicals listed by OEHHA,
which list can be found at https://oehha.ca.gov/proposition-65/proposition-65-list.
38

CALIFORNIA PROPOSITION 65
Historically, only manufacturers of end products had an obligation to notify Californians about significant amounts of chemicals
in the products they purchase for their homes or workplaces. In late 2016, OEHHA adopted new regulations that went into effecton August 30, 2018. Proposition 65 now applies to suppliers of components used in end products to ensure that information
about chemicals used in the components is communicated to Californians who might come into contact with the chemicals
during the development, manufacture, or use of the end products.
To comply with Prop 65, businesses (including manufacturers, distributors, and retail sellers) must provide a “clear andreasonable” warning for listed chemicals unless exposure is low enough to pose “no significant risk” of cancer or is significantly
below levels observed to cause birth defects or other reproductive harm. A Prop 65 warning does not necessarily mean a productis in violation of any product-safety standards or requirements.
When one of these chemicals is present, Cree | Wolfspeed is required to disclose certain information to its customers anddistributors, who in turn are required to disclose appropriate information to their customers. We have created this website tohelp our customers and distributors identify impacted Cree | Wolfspeed products and the applicable downstream disclosures.
Our products in the component product families listed in the table below contain one or more of the chemicals identified in Prop
65. Please refer to the product data sheet for each Cree | Wolfspeed product in the impacted Cree | Wolfspeed product families
for more details on the disclosures applicable to that product.

Listed Chemical

LED Products3

Power Products

RF Products

Diisononyl Phthalate(DINP)1

Packaging Only All LED Chip Products

Packaging Only All Power Chip Products

Packaging Only All RF Chip Products

Lead (Pb)2

LED Modules

All Schottky and
MOSFET Components

PTGA
PTMA

LMB

PCB

LMH

SLX

LMR

LED Drivers
LMD[1] Cree’s semiconductor die products (excluding packaging) do not contain any chemicals that must be
disclosed under California Proposition 65. However, the Cree semiconductor die products are packaged
using a PVC die transfer film that contains DINP. An occupational warning must be provided to any customer that buys the Cree die for use in product development or manufacturing in the State of California.
The customer in turn must prominently display a similar occupational warning at its California locations
where employees and contractors will be handling the PVC die transfer film. Because the Cree die
products themselves do not contain any chemicals that must be disclosed under California Proposition
65, incorporation of the die into another product will not create an obligation to include a Proposition
65 product warning on the higher-level product. However, the customer must ensure that the PVC die
transfer film is properly handled and disposed of as a hazardous material after die removal.
[2] These Cree products contain Lead (Pb). The Lead is fully encapsulated in components used in theCree products. So, unless the Lead is accidentally or intentionally exposed, there is no chance thatan employee, customer, or other individual will come into contact with the Lead in Cree’s products.

Nonetheless, Proposition 65 requires Cree to provide its California customers and distributors withboth an occupational warning and a product warning for individuals who potentially could be exposedto the Lead in the Cree products either accidentally or intentionally. An occupational warning must
be provided to any customer that buys the impacted Cree products for use in product development
or manufacturing in the State of California. The customer in turn must prominently display a similar
occupational warning at its California locations where employees and contractors will be handling theCree products that contain Lead. In addition, because the Cree products contain Lead, incorporation
into another product will create an obligation to include a Proposition 65 product warning on thehigher-level product. Please note, the amount of Lead used in each Cree product remains below the ≤0.1% acceptance level in EU RoHS. In addition, these products continue to comply in accordance withEU RoHS exemptions 7A and 7C-1 for the bill of materials.
[3] Please note this information does not apply to Cree’s consumer or commercial lighting products.

FOR MORE INFORMATION:
Prop 65 Link: https://oehha.ca.gov/proposition-65
Prop 65 Substance list: https://oehha.ca.gov/proposition-65/proposition-65-list
39

SOCIALRESPONSIBILITY
2021
People First, People Always

40

PEOPLE FIRST, PEOPLE ALWAYS
We consider the health and well-being of each individual associated with the Cree | Wolfspeed community as our primary
responsibility. We have established stringent rules for material sourcing, supplier selection, and employee health and safety, while
also promoting community engagement and education programs.

OUR EMPLOYEESOur employees are valued and critical to our success. Cree | Wolfspeed is an Equal Employment Opportunity (EEO) and Affirmative
Action (AA) employer, and employs regular full and part-time employees, as well as temporary and contract employees asnecessary. We also have a rapidly-developing intern program.

Global Employees by Region
2020
2019
2018
2017
2016
0

1,000

North America

2,000
APAC

3,000

Female

5,000

6,000

7,000

Europe2020 Employees by Employment Contract & Type1
Employee
Type

4,000

Male

Total

By Employment Contract
Full Time/Part Time

1,954

3,182

5,136

Temporary

244

299

543

Total

2,198

3,481

5,679

2020 Employees by Region1
Employee
Type

North
America

APAC

Total

Full Time/Part Time

3,256

1,880

5,136

Temporary

543

0

543

Total

3,799

1,880

5,679

By Employment Type
Full Time

2,147

3,456

5,603

Part Time

51

25

76

2,198

3,481

5,679

Total

[1] Data presented here is for our significant locations of operations, which represents approximately 98.5% of our total number of 2020 employees.

41

OUR INTERNS AND RECENT GRADUATES
Cree | Wolfspeed offers a variety of opportunities for internships and entry-level positions for new graduates. Our interns and recent
graduates gain real world experience through hands-on project-based assignments designed to empower and allow them to grow. We
depend on the talent and ideas that recent graduates and interns bring to continue to drive the innovation of the future.
Our internship program inspires contribution, culture and community and was first launched in 2018. From 2018 to 2019, we morethan doubled the intern population, extended the program internationally and increased the diversity rate by 25%. From 2019 to
2021, we have increased our intern diversity numbers to 48% diverse. Some of the perks of our internship program include:

Direct interaction with senior leaders

Community engagement

Networking with field experts

Professional development

Paid internships

On-site café and fitness center

Culture that fosters collaboration and innovation

Mentor program

Social and cultural events

Attention to diversity and inclusion

Clear contributions

Campus Ambassador Program

Represents 2021 intern demographics
42

DIVERSITY, EQUITY AND INCLUSION
Diversity, Equity and Inclusion: Overview
Cree | Wolfspeed is committed to fostering a culture of diversity, equity and inclusion encompassing all employee differences andidentities. We are building an environment where inclusivity is real and active rather than theoretical and static. Because we believe
diversity, equity and inclusion drives better business results, we celebrate our employees’ authenticity and understand that diverse
ideas, perspectives, thinking styles and backgrounds produce higher quality decisions, enabling us to solve problems other companies
think to be impossible. Our diverse workforce contributes to our success and enables us to grow and continuously provide state-of-theart technology and products.
Each of us must respect the diversity, talents, and abilities of others regardless of our differences. At Cree | Wolfspeed, we view diversity
as including all the unique characteristics that make up each of us – and it’s far more than the diversity you can see. We embrace,
encourage and value diversity of thought, experience, insight, skill and background. We’ve seen how diversity, equity and inclusion
drive better business results and celebrate our employees’ differences and authenticity. Diverse ideas, perspectives, thinking styles,
and life experiences produce higher quality decisions and enable us to solve problems other companies think to be impossible.
We gather motivated individuals who are true to their nature and beliefs, provide resources and room for growth, and harness the
cumulative genius which is inherent in our human race.
We are devoted to fostering a culture of diversity and inclusion encompassing our employees’ differences and believe that providing awork environment free from discrimination is paramount. We are proud to be an Equal Opportunity (EEO) and Affirmative Action (AA)employer, making hiring and promotion decisions based only on fair, unbiased evaluation of skills, work history, and performance. Ourcommitment to diversity and inclusion is supported by our stance against discrimination and our belief that all employees, regardlessof their race, color, religion, gender, gender identity or expression, sexual orientation, national origin, genetics, disability status, age,marital status, protected veteran status or any other protected class, contribute to our ongoing success. We strive to attract, develop
and retain a workforce that is as diverse as the markets we serve, resulting in an inclusive environment that embraces the strength ofour differences.

Diversity, Equity and Inclusion is embedded in
the following impactful pillars:

talent acquisition

ensuring we can attract diverse talenttalent management

ensuring we can keep and advancediverse talentcultureensuring our environment is one that eliminatesbarriers to achievement of diverse talentsocial impact

ensuring our community is one that minimizes
barriers to achievement

43

Diversity, Equity and Inclusion: Social Justice
We continue to advance our activities in support of promoting social justice as well as diversity, equity and inclusion inside and outsideof the company. In 2020, and reflective of our values-based culture which places a premium on integrity and respect, we hosted
listening sessions with team members from across the organization who expressed their interest in helping us with these important
initiatives. We believe our employees are our greatest thought leaders. With their guidance and insight, we moved forward collectively
and with intention to better serve our people and the community. The listening sessions we hosted helped to shape the following new
initiatives:• Increasing transparency around our recruiting policies• Providing unconscious bias and implicit bias workshops for everyone in the company, at all levels• Introducing new Employee Resource Groups (ERGs) to help drive inclusivity and advocate for policy change• Developing the MPower mentoring program• Implementing a matching gifts program, which was released in 2021, that allows employees to make contributions to causes
they’re passionate about• Adding Juneteenth as a company-recognized holiday

To commemorate the end of slavery in the United States, Juneteenth is celebrated every year on June 19th. Juneteenth is now a company-recognized holiday.

Our Matching Gifts Program
Our Matching Gifts Program supports programs
focused on food and hunger relief, housing andemergency housing relief, educational and earlyintervention programs through science, technology,
engineering and math (STEM), and programs aimed
at closing the opportunity gap in our communities
through the advancement of diversity, equity andinclusion and social justice initiatives. Through ourMatching Gifts Program, each time an employee
makes a donation to one of our identified agencies,
we will match their donation dollar-for-dollar, andup to $500 per employee in a fiscal year. Virtual
dollars known as “Cause Cards” are provided to
new employees when they join Cree | Wolfspeed to
introduce them to the giving platform.

ERGs support our inclusion and diversity goals and objectives.
Each ERG exists to benefit and advance its own group members
by working strategically, both internally and externally, and while
also helping to contribute to our business success. Since our lastreport was released, we have initiated four new ERGs.

44

Diversity, Equity and Inclusion: DEI Scorecard
Cree | Wolfspeed uses a DEI Scorecard to measure our progress toward DEI-related activities. Progress toward DEI-related
activities outlined in our Scorecard is a part of our annual employee bonus. Our first Scorecard was developed in 2020 for FY2021.
The results of our DEI Scorecard presented below are for FY2021, which spans from July 2020 through June 2021. All other data
presented in the 2020 Diversity, Equity and Inclusion Data section is on a calendar year (January through December) basis.

FY2021 DEI Scorecard
DEI Metric
Number of Women in our
Mentoring Program

DEI Goal
10 Women

FY2021 Status1● 42 Women

Number of Underrepresented in
10 Underrepresented
our Mentoring Program● 20 Underrepresented

Percentage of Women in ourIntern Program◐ 45% Women

50% Women

Description of Activities
We launched our MPower mentoring program. We
hosted 3 Executive MPower Sessions attended by
330+ employees and 6 ERG MPower Events.

Percentage of Underrepresented
50% Underrepresented
in our Intern Program● 51% Underrepresented

We are working to organically build diversity
throughout the organization. Our goal is to attract
and retain a diverse talent pool with a focus onearly in career talent.

Number of New Internal DEI
Initiatives

2 New Initiatives● 4 New Initiatives

We launched 4 new ERGs.

Number of New External DEI
Initiatives

2 New Initiatives● 4 New Initiatives

We launched the following initiatives/partnerships:
NCA&T, SUNY Cree Scholars Programs, Daniels
Center of Math of Science and Black Girls Code.

Number of Women in
Development Programs

20 Women● 45 Women

Number of Underrepresented in
30 Underrepresented
Development Programs● 72 Underrepresented

Development Programs refer to our Leadership
Development Program (LDP), Technician
Certification Program (TCP) and Education
Sponsorship program.

[1] ● DEI scorecard goal met◐ DEI scorecard goal partially met

45

Diversity, Equity and Inclusion: 2020 DEI Data
2020 DEI Data - Employees1
Admin
SupportWorkers

Craft
Workers

Executive/
Senior Level
Officials andManagers

First/Mid Level
Officials andManagers

Operatives

Professionals

Sales
Workers

Service
Workers

Technicians

Female

63.0%

0%

15.9%

23.8%

51.4%

28.3%

25.0%

33.3%

24.9%

Male

37.0%

100%

84.1%

76.3%

48.6%

71.8%

75.0%

66.7%

75.1%

<30

14.8%

20.0%

0%

2.1%

27.5%

25.3%

9.4%

18.5%

23.0%

30-50

61.7%

40.0%

36.4%

66.5%

55.5%

56.6%

56.3%

51.9%

53.3%

>50

23.5%

40.0%

63.6%

31.4%

17.1%

18.1%

34.4%

29.6%

23.7%

American Indian or
Alaska Native (Not
Hispanic or Latino)

0%

0%

0%

0.2%

0.1%

0.3%

0%

0%

0.7%

Asian (Not Hispanic
or Latino)

25.3%

13.3%

4.7%

25.9%

66.0%

36.1%

22.6%

14.8%

39.8%

Black or African
American (Not
Hispanic or Latino)

27.9%

33.3%

2.3%

7.9%

25.9%

5.0%

0%

66.7%

19.0%

Hispanic or Latino(United States ofAmerica)

3.8%

0%

2.3%

4.8%

1.5%

2.5%

3.2%

3.7%

3.1%

Native Hawaiian
or Other PacificIslander (Not
Hispanic or Latino)

0%

0%

0%

0%

0.04%

0.3%

0%

0%

0.2%

Two or More Races(Not Hispanic or
Latino)

1.3%

0%

0%

0.5%

0.5%

1.6%

0%

3.7%

1.4%

White (Not Hispanic
or Latino)

41.8%

53.3%

90.7%

60.7%

6.0%

54.1%

74.2%

11.1%

35.9%

Diversity
Category

GenderAge

Ethnicity[1] Data presented here is for our significant locations of operations, which represents approximately 98.5% of our total number of 2020 employees.

2020 DEI Data - Board of Directors
Diversity Category

Board of Directors

Countries Represented by Employees

GenderFemale

22.2%

Male

77.8%

2020

<30

0%

2019

30-50

0%

>50

100%

2018

American Indian or Alaska Native (Not
Hispanic or Latino)

0%

2017

Asian (Not Hispanic or Latino)

11.1%

Black or African American (Not Hispanic or
Latino)11.1%

Hispanic or Latino (United States of America)0%

Native Hawaiian or Other Pacific Islander(Not Hispanic or Latino)0%

Two or More Races (Not Hispanic or Latino)

0%White (Not Hispanic or Latino)

77.8%

77

Age

Ethnicity

72
69
64
0

20

40

60

80

46

Diversity, Equity and Inclusion: Welcome All
Cree | Wolfspeed is committed to cultivating an environment in which we actively seek to reduce any opportunity gap based on race,
nationality, economic status, gender, or social orientation, and have implemented programs and initiatives keyed to recruiting themost ambitious, capable and talented to join our team.

Job Descriptions and Roles:
A RebootMore Joy,
Less Stress

Rewarding Hard Work is
Sort of Our Thing

Intellectual growth tends
to make titles fleeting anda job description merely
a convenient label. As acompany we believe there is
no shortage of good ideas,
and our search for solutions
gains energy and insight
through an open interchangeof ideas and solutions.

Being a parent is one oflife’s joys and it makes
for a more well-rounded
employee. We’ve aligned withorganizations which include
UrbanSitter, the Boys & Girls
Clubs of Durham and Orange
Counties and the YMCA tohelp reduce team members’
child care expenses.

Graduate hires have gained
skills and abilities throughtheir own initiative whichhelps our company grow. A
Student Loan Repayment
Benefit is available to help
under-resourced, newly
graduated hires focus theirtalents on building a careerwith our company.

Uniting For Knowledge
and Perspective

Finding The Next Waveof Leaders

Test Driving A Vehicle
For GrowthDiversity Alliances with civic
and business organizations
help under-represented
communities grow andsucceed. The NC Chamberof Commerce, RTI and thecities of Raleigh and Durham
support these Alliances withperformance benchmarking
and networking opportunities.

Corporations have a social
responsibility to help ensurethat neither color, culture,ethnicity or economic statuslimit opportunity to a fulfilling
career. We recruit fromand provide endowments,
scholarships and internships totwo of America’s largest HBCUs,
Morgan State and NC A&T.

Internships further our
inclusion, diversity andbusiness goals with thesupport of an intern-specific
ERG (Employee Resource
Group). Currently 47% of ourinternships reflect equitablegender and diversity aims,
and interns supporting tech
units are 65% female.

47

Diversity, Equity and Inclusion: Nurture All
By proactively providing learning opportunities and other avenues to advancement, we seek to enhance the growth, development andfinancial well-being of all team members. We’ve launched a multi-step initiative, MPower, to develop mentors, foster the establishmentof mentor-mentee relationships and evaluate and document progress. Existing and emerging Employee Resource Groups (ERGs) are asignificant resource in guiding our efforts.

A Mentor Is Both Teacher
and Pupil

When They Grow,
We Grow

We seek to develop leaders witha diversity of life experiences
to harness the ambition andaptitude often overlooked inunderrepresented communities.
MPower structures engagement
for all team members,
documents growth, andaccelerates career progress andadvancement.

Both mentor and mentee gain
meaningful insights which go
beyond academic expertise to
create sociological awareness,
cultural understanding anda broader worldview, whichadds to the intellectual depthof the organization and spurs
innovation. And that’s the point.

Counting Stars

Education Sponsorship

MPower. It’s a movement, agoal and a promise to confirm
the certainty that increasingly
capable employees create
an increasingly capableorganization. MPower helps foster
achievement and advancement,
especially in STEM fields.
Our education and technicalcertification sponsorships
for 2021 aim to reduce theopportunity gap for women andother underrepresented groups,
amplify their voices and harness
their talents.

Talent reviews assessteam members across theorganization, identify highpotential employees andrising talent and identify
opportunities for advancement.
While we actively recruit newhires, we’re intent on retention,
development and advancementof the talent we already have.

Our Education Sponsorship
Program helps team members
pursue an associates orbachelor’s degree. We partnerwith seven North Carolina
community colleges and two
universities and pay for all fees
and tuition for certain degreed
programs to minimize any outof-pocket costs.

Building Leaders48

Diversity, Equity and Inclusion: Nurture All
We have initiatives in place to reduce our global employee turnover rates, which are monitored and reviewed quarterly. Our
strategy for employee retention includes converting contract workers to full-time employees and promoting internal mobility.
Our goal is to ensure employees can find development and career growth without having to leave Cree | Wolfspeed. Some of ouremployee retention initiatives include:• Developing a culture of promoting employees from within. To provide upward mobility within Cree | Wolfspeed, our goal isfor more experienced positions. In 2020 we had 42 employees complete our Technician Certification Program, which trains
current entry level operators to become eligible for a technician role. In addition, 21% of our total 2020 vacancies were filled bycurrent employees.
• Offering workshops and guidance to employees on how to enhance their resume for seeking other jobs within Cree |Wolfspeed. During these workshops, employees receive one-on-one attention from a recruiter.
• Targeting the recruitment of college graduates for entry-level positions. Our Internship program hosted more than 125
students in 2020. For those interns who were graduating seniors, 78% accepted a full time role with us, and will start either
in a full time entry level role or in our Wolfspeed rotational program in 2021.
• Developing a Career Pathing program. The program communicates the minimum qualification required for each positionlevel and how employees can grow in their careers.
• Submitting all internal applicants who meet the minimum requirements of a role for consideration.
• Hosting internal job events to connect employees with active hiring managers.
• Offering many in-person and virtual professional development opportunities, in various learning formats like self-paced
virtual courses, classroom-based workshops, virtual live webinars, assessment tools, and one-on-one career coaching.
• Developing an innovative approach to mentoring called MPower that creates diverse opportunities for employees to be
mentored in large group, small group, and one-on-one settings.

2020 New Employee Hires1
Diversity
Category

New
Hires

New Hire
Rate

North America

751

23.3%

APAC

114

7.6%

Female

331

7.0%

Male

534

11.3%

<30

391

8.3%

30-50

359

7.6%

50<

115

2.4%

Our Remuneration Practices
Our remuneration decisions are based on relevant businessfactors, including but not limited to the job requirements
and responsibilities for the job in which an employee isperforming, location of where the work is being performed,
and job performance. We comply with all federal, stateand local laws and regulations, and prohibit remuneration
discrimination based on many factors, including but notlimited to race, age, religion, and gender. We annuallyengage an external consultant to perform a race and gender
pay equity assessment to validate our processes for making
non-discriminatory remuneration decisions. Results of theassessment and any actions taken as a result are reviewed
and approved by company management.

RegionGenderAge[1] Data presented here is for our significant locations ofoperations, which represents approximately 98.5% of our total
number of 2020 employees.

49Diversity, Equity and Inclusion: Celebrate All
Thanks to the hard work and dedication of the 3,500+ people who have helped build a competitive, sustainable enterprise, we are able
to fulfill our obligation to be a visible, active community-corporate partner. As we continue to strengthen relationships with community
organizations, special attention will be paid to communities which are struggling economically, those with marginalized populations,and where students of color can be mentored and provided resources and opportunities.

Learning Together, Growing Together
A number of Employee Resource Groups (ERGs) support our inclusion and diversity goals and business objectives. These ERGs
are collaboration and advocacy vehicles which benefit and advance their group members in addressing both internal andexternal strategies.

The AAPI Employee Resource Group aims to connect Wolfspeed employees with a shared passion for
Asian and Pacific Islander interests through networking, professional development, cultural celebration,and community engagement.

The mission of the Black | Hispanic | Latinx (BHL) ERG is to openly embrace Black, Hispanic, andLatinx employees by creating an inclusive environment that celebrates cultural diversity and mostimportantly, authenticity. BHL will create an intentional space and opportunity for Black, Hispanic,
and Latinx employees to directly impact Cree | Wolfspeed’s continuous mission to be an equitable andinclusive organization.

The Mental Health Allies' mission is to create a safe environment to support employees who live withmental, emotional, and/or cognitive health conditions, illnesses or disabilities, including their own or afamily member's, as we build our careers at Cree | Wolfspeed.

The PRIDE group provides support, awareness, and resources for all lesbian, gay, bisexual, transgender,
queer employees and their allies. PRIDE aims to help promote a safe and inclusive environment for all
employees to be their authentic selves.

The Veterans Pact’s mission is to focus on enhancing and supporting the Veteran employee experience andincreasing development opportunities for Veterans while leveraging the diverse capabilities and qualities
that Veterans bring to strengthen our organization. The Veterans Pact wants to make Cree | Wolfspeed theemployer of choice for Veterans, while tapping into the unique skill sets of leadership and camaraderie thatveterans bring to an organization to build next level leaders and innovation in our organization.

The Women’s Initiative was created in recognition of the value women bring to Cree | Wolfspeed. Our goals are
to attract and retain top talent, including women, and to cultivate and celebrate the rich diversity of thought,
perspectives and life experiences so critical to Cree’s success. Through programs and events sponsored by the
Women’s Initiative, we get to know each other better across organizations and functions, and promote balanceand effectiveness in our professional and personal lives, as well as in service to our communities.

50

Diversity, Equity and Inclusion: Celebrate All
Diversity, Equity & Inclusion along with our Employee Resources Group are dedicated to expanding our celebrations to Celebrate All.
We invite all employees to participate in these events. Here’s how Cree | Wolfspeed employees celebrated in 2020.

MARCH 2020

APRIL 2020

JUNE 2020

SEPTEMBER 2020

OCTOBER 2020

OCTOBER 2020

NOVEMBER 2020

DECEMBER 2020

Celebrated Black History Month by providing
educational content to employees thathighlights contributions African Americans
have made and continue to make to oursociety and STEM

Celebrated Pride Month by hosting aninteractive LGBTQ Active Ally Workshop tolearn how to be a strong supporter of the
LGBTQ community

Celebrated Native American Heritage Month byinviting employees to participate in a four-part
Native American Heritage Month Virtual Series

We hosted our second Diversity, Equity &Inclusion (DEI) Conference, a three-day virtual
event open to all Cree | Wolfspeed employees.
The conference explored workplace-related
topics on cultivating and celebrating the richdiversity of thought, perspectives and life
experiences so critical to our success, including
what it means to be intentional about
diversifying through inclusion. The conference
highlighted DEI experts, who spoke on crucial
topics together with our Senior Leaders.

Celebrated Earth Day with an Earth Day
Family Coloring Contest for employees andtheir families hosted by our CEO

Celebrated National Hispanic Heritage Monthby providing education content to employeesthat highlights some of the contributions madeby Hispanic and Latino Americans to art andculture across the US

Celebrated National Coming Out Day with apanel discussion and Q&A around the topic of“Being Out at Work” hosted by our PRIDE ERG

In 2020 we added 3 Mother’s Rooms and 1
Prayer and Meditation Room to our US sites,
bringing our total spaces in the US to 11
Mother’s Rooms and 2 Prayer and Meditation
Rooms. In 2021, our Women’s Initiative ERG will
be holding discussions about how to meet theneeds of our employees and standards needed
for these spaces.

51

Diversity, Equity and Inclusion: Celebrate All

James’ Story
During a regular video update to employees, Cree | Wolfspeed CEO Gregg Lowe challenged the Cree | Wolfspeed team to come up
with a phrase that the team could use to proudly show support for our diversity, equity and inclusion efforts. The winning phrase,#AllWalksOnePath, was submitted by our employee, James Norman. Read further to find out where James got his inspiration for#AllWalksOnePath.
“For as long as I can remember, music has been a passion of mine. I was a drummer throughout school, including classicalpercussion instruments, marching in the drumline, to learning the basics on a drum set. It was rare you would find me without apair of drumsticks sticking out of my backpack.
This love of music gave me a window into different cultures and connected me with people from varying backgrounds and beliefs
from an early age. I found it amazing how one thing can bind together so many different people to a common purpose. This is thefoundation and inspiration for #AllWalksOnePath.
During my eleven years at Cree, I have had the privilege to work with many amazing people. Many great accomplishments havehinged on the collaboration, teamwork, and common purpose of people with different ways of thinking, a mix of backgrounds,
and from every corner of the world. Seeing these diverse teams succeed time and time again reminds me that our differences
are not a disadvantage, but like the many instruments in an orchestra, they make us more powerful, more adaptable, and more
beautiful.
By confronting our biases, striving for equity and inclusion internally, and being a catalyst for change in our community, I believe
things can only go up from here. I am proud to be on this path to success with every member of my Cree family, and know that wewill continue to achieve great things together.”– James Norman, Creator of #AllWalksOnePath

52

EMPLOYEE ENGAGEMENT
In 2017, we held our first employee engagement initiative consisting of one-on-one email communication with our CEO.
We completed our first formal enterprise employee engagement survey in 2018, receiving more than 2,500 responses from
employees. Results of the survey have indicated positive steps and the areas in which we can improve. Employee feedback
has helped shaped our evolving culture, resulted in updated time off and attendance policies, the creation of new training
opportunities, and many other initiatives. We are planning to implement a new enterprise employee engagement survey in
2021. The areas of our employee engagement focus include global leadership, culture and employee personal development.
We also launched our new internal Internet site for global Cree I Wolfspeed employees in 2019. The site was improved from ourprevious version to provide helpful new content, enhanced capabilities and a cleaner, more organized look. Employees can visit the
Intranet site to find all the news, applications, tools and resources they need to more efficiently do their job and collaborate with
their teams. The Intranet provides a searchable, easy-to-understand window into all the applications, content, news, people andtransactions our employees need to do their job. The Intranet site has frequent articles that all employees can access, focusing on
topics such as news related to our business activities and products, information and cyber security tips, how to sign up for training
opportunities, and much more.
To ensure employees are engaged, historically, our CEO hosted quarterly Town Hall events that discuss our performance, strategy
and direction. Due to COVID-19 restrictions, in 2020 our CEO started developing regular CEO Video Updates that are available
on our internal Intranet site and available to all Cree | Wolfspeed employees. The video updates cover a variety of topics. As a fun
addition to the video updates, our CEO also held a number of different contests with awards.

53

BENEFITS
Cree | Wolfspeed offers a benefit package designed to promote the physical and emotional well-being and financial health of ouremployees. Unless otherwise noted, the following benefits are offered to all Cree | Wolfspeed US employees who work more than
30 hours per week. Cree | Wolfspeed employees working outside of the US are eligible for country-specific benefits, which include
statutorily-mandated benefits and supplemental programs.

HEALTH AND WELLNESS
Health Benefits

On-site Café (Durham)

On-site Fitness Center (Durham)

We offer flexible heath and insurance
programs to suite your needs. You’ll
find Dental and Vision coverage as well
as options for Health Savings Accounts,
Flexible Spending Accounts and HealthReimbursement Accounts.

Our award-winning café serves breakfast,
lunch and dinner. Weekly menus include
specialty dishes, made-to-order pizzas
and sandwiches, soup and salad bar,sushi, fountain and espresso drinks andmuch more.

Our fitness center includes a basketballgym, running track, racquetball courts
and weight room. Facilities are open to
our employees’ spouse and dependents.
Due to COVID, in 2020 we provided
virtual fitness programs to employees.

Employee Assistance Programs

On-site Physical Therapist &Massage Therapists

Life Insurance

We fund programs that provide personal
assistance through access to resources
as well as confidential counseling, at no
cost to our employees.

Our on-site physical therapist provides
upper and lower extremity orthopedic
services.

Ergonomic Evaluations

Award-Winning Wellness Program

Employees receive personalizedrecommendations, such as custom
workstation arrangements and standing
desks, from our on-staff specialist.

Our employees can join interactive
workshops, work one-on-one withwellness coaches to design personalized
fitness goals that match their lifestyle,and earn Wellness Program participation
incentive dollars for their HSA or HRA.

We offer a variety of life insurance
options for you and your dependents.

2021 WELCOA Well
Workplace Award
We have been honored as one of 18
companies and organizations to receivea 2021 Well Workplace Award (Bronze)

COMPENSATION
Performance Based Compensation

401(k) Match

Employee Stock Purchase Plan

Our people are our most valued asset,
and competitive compensation is justthe first step in demonstrating ourcommitment to our employees.

Our financial planning programs help
our employees feel confident about
their retirement. We offer matching
contributions to their 401(k) saving plan.

Want to diversify your financial
portfolio? Employees have the option
to purchase shares of Cree stock at a
discounted rate.

Referral Bonus

Annual Bonus

We offer employee referral bonuses to
employees who find talent to help us
grow our team.

We continually reward our passionate
efforts to raise the bottom line. All
employees receive an annual bonus
based on Cree’s financial performance.

DEI-Related Activities
In addition to financial performance,
progress toward DEI-related activities
are part of our employees’ annual
bonus structure54

BENEFITS
TIME OFF
Leave of Absence & Disability Coverage

Paid Holidays

Paid Vacation

Our policies cover unexpected timeaway. Simply meet certain eligibility
requirements and receive paid shortand long-term disability.

We love to innovate, but we also know
it’s important to take a break frombreakthroughs.

Our employees can accrue paid timeoff (PTO) throughout the year and use it
when they’re readyTraining & Development

Internal Promotion

Educational Assistance

We offer on- and off-site learning
opportunities for personal andprofessional growth. Attend regulartraining sessions for leadershipdevelopment and effectiveness.

Employees can grow their career with
opportunities for advancement andinternal movement.

Our employees can receive tuition
reimbursement for job- and companyrelated courses and degrees.

Employee Resource Groups

EV Charging Stations

Employee Resource Groups (ERGs) help
our employees support our inclusionand diversity goals.

Thanks to our SiC components, EV
usage is accelerating worldwide. Take
advantage of electric vehicle charging
stations at our Durham, NC headquarters.

EMPLOYEE GROWTH

Reducing CO2
Our EV charging stations used by
employees saved approximately
38,000 lbs of CO2 emissions in 2020

FAMILY BENEFITS
Paid Parental Leave

Adoption AssistanceFamily Care

We know our employees need time off
to bond with a new child. If they have a
new birth, adoption, or foster placement
we offer six weeks of paid parental leave
for our employees.

We offer adoption assistance that helps
cover adoption-related expenses suchas agency and placement fees, homestudy fees, and other applicable costs.

Employees are eligible to set aside
pre-tax money for childcare support
through our family care program.

2020 Parental Leave1
Diversity
Category

Employees
Eligible for
Parental
Leave

Employees
Who Took
Parental
Leave

Employees
Who Returned
to Work After
Parental
Leave

Employees
Who Were Still
Employed 12
Months After
Parental Leave

Return to
Work Rate for
Employees
Who Took
Parental Leave

Retention
Rate for
Employees
Who Took
Parental Leave

Female

935

20

19

17

95.0%

85.0%

Male

2,314

73

72

68

98.6%

93.2%

Total

3,249

93

91

85

97.8%

91.4%

[1] Data presented here is for our significant locations of operations in the United States, which represents approximately 61%
of our total number of 2020 employees.

55

TRAINING AND DEVELOPMENTAt Cree | Wolfspeed, we strive to be the best at getting better. We are committed to offering an environment in which employees are
ensured equal job opportunities and have a chance for advancement. Cree | Wolfspeed employees receive an annual performance
review rating in addition to ongoing coaching and feedback throughout the year. It is expected that leaders meet with each employee atleast once per quarter to discuss goal progression and development.
Our educational assistance program is designed to support the skill development and knowledge that will have a direct positive impact
on Cree | Wolfspeed. The program encourages self-development for a current assignment or expanded job responsibilities in the future.
Employees are encouraged to seek out higher-education degree programs that will aid in their current role and better qualify themfor new assignments. To take advantage of this benefit, employees must be US-based employees and have been employed with Cree |Wolfspeed for at least six months. Educational expenses that are reimbursable include professional exam costs, registration fees, tuition,required texts/books/materials, lab fees, entrance/placement exams upon completion, and other fees and materials.

Technician Certification Program and Education Sponsorship Program
We developed two new training programs that were officially launched in 2020, the Technician Certification Program and the Education
Sponsorship Program. The Technician Certification Program and the Education Sponsorship Program programs were created to support
business needs and employee career growth.

42 EMPLOYEES

completed our Technician
Certification Program in 2020

The Process and Equipment Technician Certification Program combines science theory andskills with hands-on activities. Successful completion of the program will equip participants tomeet the requirements needed to be considered for an entry-level Technician role.

The Education Sponsorship Program is an education development program designed toencourage graduates of the Technician Certification Program to pursue their Associate’s or
Bachelor’s Degree in engineering degrees. This offering is separate from our employee tuition
reimbursement program and we have partnered with local colleges and universities to cover
the cost of tuition and books for employees.

56Cree | Wolfspeed Training Offerings
Leadership Development
Lead the Way (LTW)

Training program designed for new managers of employees and is broken
into three separate classes. This program helps new leaders learn about
the tactical aspects of leading people.

1

Training program designed to help leaders affect culture change anddevelop skills to be better leaders. The program is designed around thefour pillars of our culture: Lead, Support, Communicate and Trust.

Leadership Fundamentals1

Technical Skills Development

Technician Certification Program

3

The Process and Equipment Technician Certification Program combines
science theory and skills with hands-on activities. Successful completionof the program will equip participants to meet the requirements needed
to be considered for an entry-level Technician role.

Education Sponsorship Program3

Education development program designed to encourage graduatesof the Technician Certification Program to pursue their Associate’s or
Bachelor’s Degree. This offering is separate from our employee tuition
reimbursement program and we have partnered with local colleges anduniversities to cover the cost of tuition and books for employees.

JMP Training1

Training on statistical analysis software to help with mission critical
calculations and analytics.

DDI Micro Courses1

Short web-based courses designed to help employees build and/or
reinforce basic concepts.

8D Training1

The 8D (Eight Disciplines) Problem Solving Process is a team oriented andstructured problem-solving methodology that is mainly used to identify,
correct and eliminate recurring problems. The 8D Problem Solving
Process focuses on the origin of the problem by determining root causes,and establishes corrective and preventive actions.

Core Tool Training1

Training on developing employees’ skills in quality by learning quality
standards. Employees also learn new tools and how utilize tools they
currently have to quickly and more efficiently solve problems.

Online Courses

These are online learnings that are self-paced and focus on what any
individual employee would like to learn, including technical skills, soft
skills, or even just learning a new hobby.

157

Personal and Professional Development

On-The-Job Training (OJT)2Program designed to help new operators develop the skills needed
to perform their job functions while on-the-job. The program allows
operators to work alongside an experienced operator/trainer.

Project Management1

Training programs designed to help the employee develop the skills
needed to manage projects more effectively.

English as a Second Language (ESL)

Training program focused on helping speakers of non-English languages
to better their communications skills by practicing the English language.
The program includes didactic and hands-on portions.

Lunch and Learns2

Short in-person developmental courses designed to help employees build
and/or reinforce basic concepts.

Mobility Programs1

Program designed to guide new graduates hired to Cree | Wolfspeed.
The participants will rotate through various job roles within the sameclassification to get a well-rounded view of what that classification entails.

Wellness Workshops2

Program designed to focus on all aspects of our employees’ wellbeing.
Topics include Injury Prevention and Exercise, Stress Management,
Understanding Diversity, and much more. We host Wellness Workshops
every month.

Financial Workshops2

Program designed to focus on employees’ financial wellbeing. Topics
include Financial Health, Budgeting and Saving, Preparing for Retirement,
and much more. We host Financial Workshops every month.

Career Coaching1

Career Coaching is a development tool that helps employees define andachieve their professional goals. Employees partner with a Career Coach
who will help them discover their strengths, explore their career options
and create an action plan for success. A session may cover typical job
openings and what managers look for and/or discuss gap areas in an
employee’s knowledge or skills and ways in which to improve them.

3[1] Training opportunity is offered at all Cree | Wolfspeed global sites.
[2] Training opportunity is offered at all Cree | Wolfspeed US sites.
[3] Training opportunity is offered at Cree | Wolfspeed Durham, NC sites.

58

HEALTH AND SAFETY
Our products are innovatively designed and undergo various testing to promote the health and safety of our customers. Our
Occupational Health and Safety and wellness programs ensure the health and safety of our employees and contractors.

HEALTH AND SAFETY — OUR EMPLOYEES AND CONTRACTORSThe safety, health, and overall well-being of our employees and contractors is integrated
into the way we do business.

Health and Safety Philosophy
CREE | WOLFSPEED AIMS TO PROVIDE A SAFE AND HEALTHY WORKENVIRONMENT BY:• Fixing accountability for health and safety performance with line management, justas it is for productivity, quality, and other business performance metrics• Hiring, developing and retaining a team of health and safety professionals dedicatedto assisting line management fulfill its mission of every employee going home as wellas or better than how they arrived» OUR AMBITION
Providing a safe and healthfulwork environment isparamount to our success andprotects our most valuable
resource, our employees.

» OUR GOAL
Establish a certified Occupational
Health & Safety Management
System for 100% of ourmanufacturing sites​by 2025

• Recognizing, identifying and evaluating operations or processes which could
negatively affect employee and contractor health• Evaluating health and safety incidents to prevent recurrence• Providing contractors information regarding EHS risks and relevant precautions and periodically reviewing
contractor ratings to evaluate if they continue to meet safe and adequate performance standards• Setting acceptable levels of risk based on government regulation or industry best practice• Designing control measures for those operations or processes which are found to be potentially harmful• Providing training to affected individuals• Monitoring the effectiveness of our Occupational Health and Safety (OHS) programs and services to ensure thehighest level of quality and support is being achieved

EHS and Code of Conduct Policies
Our Environment, Health & Safety (EHS) Policy outlines our approach to continuous improvement.
Our Code of Conduct describes standards of conduct for our employees and directors in performing their duties and it applies
throughout Cree | Wolfspeed and all its subsidiaries. In addition to including specific core principles relating to Occupational
Health and Safety, it also provides examples of policy violations in the areas of employee health and regulatory compliance.
Our Supplier Code of Conduct requires that all suppliers comply with applicable health and safety laws and regulations to create
safe working conditions and a healthy work environment for all workers.

59

Occupational Health and Safety Programs
The following OHS programs have been implemented within Cree | Wolfspeed:

Elements of Protection for Workers Exposed to Hazards
Cree | Wolfspeed
Program or Procedure

Safe Work
Practices1

Engineering
Controls

2

Personal
Protective

Hazardous
Substance

3

Information

Equipment

Measurement
and Medical
4

Checks5

Management Systems
Management of Change Program
Undesired Condition
Identification and Screening
Occupational HealthBloodborne Pathogens
Industrial Hygiene
Hearing Conservation
Ionizing Radiation Safety
Laser Safety
Ergonomics
International Travel HealthGeneral Safety
General Safety Requirements
Job Safety Analyses
Personal Protective Equipment
Permit Required Confined Space
Hot Work
Fire Extinguisher
Electrical Safety
Lock Out/Tag Out
Machine Guarding
Shop Tool Safety
Fall Protection
Ladder Safety
Cranes, Hoists and Slings
Walking Working Surfaces
Powered Industrial Vehicles
Process Safety Management
Process Hazard Analysis
PSSR Pre Start Up Safety Review
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60

Occupational Health and Safety Programs (continued)
Elements of Protection for Workers Exposed to Hazards
Cree | Wolfspeed
Program or Procedure
Incident Management
Eyewash and Safety Shower
Preparing for and Responding toEmergencies
Emergency Action Plans
Transportation
Hazardous Materials Transport
Sustainable Business Practices
Contractor Safety
Chemical Management
Hazard Communication
Chemical Hygiene Plan
Qualitative Exposure Assessment
Respiratory Protection
Compressed Gas Cylinders

Safe Work
Practices•1

Engineering
Controls

2

Personal
Protective

Hazardous
Substance

3

Information

Equipment

Measurement
and Medical
4

Checks

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• Indicates that this is an element of protection for workers exposed to hazards, and depending on the program:[1] Examples of safe work practices at Cree | Wolfspeed include providing adequate training, maintaining good housekeeping in work areas, lifting no more thanspecific weight for repetitive and one time lifting, and acceptable working temperatures and humidity.
[2] Examples of engineering controls at Cree | Wolfspeed include proper ventilation, work performed inside enclosed equipment, substitution to less hazardous
chemicals and automation of equipment.
[3] Examples of personal protective equipment at Cree | Wolfspeed include the requirement to wear safety glasses in all manufacturing areas; using gloves, faceshields and chemical aprons when working with hazardous chemicals; and using hearing protection when working in areas above the regulatory threshold fornoise.
[4] Examples of information on hazardous substances at Cree | Wolfspeed include providing information to employees about safe handling and storage ofhazardous substances, providing information to employees and contractors about recognizing hazardous conditions, and ensuring proper signage and labeling of
hazardous areas, piping and equipment.
[5] Examples of measurement and medical checks at Cree | Wolfspeed include testing of ventilated areas to ensure proper ventilation, performing exposure
assessments to determine ambient concentrations and exposure potentials, and requiring medical surveillance per regulatory requirements.

61

Occupational Health and Safety Programs (continued)
The Health and Safety portion of the Environment, Health and Safety Management System (EHSMS) is based on the US ANSI/
AIHA/ASSE Z10-2012 Occupational Health & Safety Management Systems and the ISO 45001:2018 standards. All employees andcontractors are covered under our EHSMS. Our health and safety management system is internally audited but not externallycertified. Our environmental management system is internally audited and externally certified through ISO 14001. Our raw
material suppliers are not yet screened using EHSMS criteria. Our US-based contractors performing potentially hazardous work on
any Cree | Wolfspeed site are screened using health and safety criteria.
Each internal written OHS program describes the hierarchy of controls when identifying hazards and assessing risks. Each
program having a regulatory driver is tracked within our EHSMS and thoroughly reviewed at an appropriate frequency. These
reviews aim to ensure the program has considered any new regulations or best practices, is being implemented effectively within
the affected business unit, is being supported financially by line management and is producing desired results overall. We ensure
the quality of the review processes through hiring competent, trained EHS professionals and monitor and coach them to provide
feedback, training, and ongoing professional development toward their jobs. Each EHS professional is assigned periodic EHS
program reviews. Any findings are recorded and tracked to completion.
Capital investments are subject to our management of change program which aims to minimize potential adverse impacts
on employees, consumers, property, or the environment arising from process, operational or facilities change. The triggers or
thresholds for EHS involvement along with examples are described in our internal management of change program.

Employee Involvement in OHS
Employee involvement in OHS takes many forms including EHS Teams, EHS Point-of-Contact interaction in the production areas,
Lean Kaizen events, and Management of Change processes. Our EHS training is connected to a learning management systemand the on-boarding process for a new or transferred employee. Training is developed and tracked for all regulatory mandated
programs and effectiveness is measured by observations, incident evaluations, team walk-throughs and audits or inspections.
We initiated our Safety Fundamentals program in 2020, which describes all employees’ responsibilities for ensuring healthand safety throughout our organization. The purpose of the Safety Fundamentals program is to drive employee engagement
through clearly defined key safety actions and expected behaviors. Clearly communicating safety expectations is fundamental
to supporting our desired safety culture. The four main components of the Safety Fundamentals program include Communicate,
Demonstrate, Challenge and Motivate.

Employee Health and Well-Being
Cree | Wolfspeed supports the well-being of our employees through programs that support a healthy lifestyle. We are committed
to offering benefits to employees and their families to assist in improving health and lifestyle choices. Programs throughout ouroperations are tailored to the needs of the employees in the region and include many health-related benefits. In our international
locations, we adhere to regulatory benefits and health and wellness requirements. In our US locations, we offer programs such as our
Bright Choices wellness program, which is designed to encourage employees and their families to adopt healthy lifestyle habits. This
program provides options for employees to receive annual biometric screenings for important health markers, on-line classes, healthcoaches, and incentives for preventive health care. Employee benefits include medical and dental insurance, health and retirementsavings accounts, fitness centers at some locations, paid time off, and family leave programs. Employee assistance programs provide
professional counseling to help resolve personal issues. Refer to the Benefits section of this report to learn more.

62

Incident Management
Incident Management applies to all employees (temporary, permanent, full-time and part-time) who are involved in an incident
or supervise an affected individual. If an incident involves a contract worker, contractors must refer to the Cree | Wolfspeed
Contractor EHS Handbook, applicable to their service location, for guidance on incident reporting and notifications.
Our policies require employees to immediately report incidents or when they become aware of symptoms or any indication of a workrelated complaint. Any concerns regarding hazards in the workplace can be reported to the employees’ supervisor, any EHS staff, byentering a non-conformance in our electronic reporting system or through our corporate whistleblower reporting platform.
Employees are protected from reprisal when reporting incidents. Our policies inform employees that they have the right to report
work related injuries and illnesses and that Cree | Wolfspeed is prohibited from discharging or in any manner discriminating
against them for reporting work-related injuries or illnesses. Supervisors are also expected to create a work environment thatencourages the reporting of incidents and near misses. Supervisors are required to immediately report incidents to Cree |Wolfspeed’s Emergency Response Team, depending on the situation, and electronically to EHS within 24 hours so incident details
can be properly evaluated and corrective actions assigned where appropriate.
Cree | Wolfspeed follows confidentiality regulations in the country of operation (e.g., Health Insurance Portability andAccountability Act (HIPAA) laws are followed at our US locations). Our information management system has audit trail capability
and control on who can view employee records. Anyone who can view employee records is granted access on a need to knowbasis. If the incident is industrial hygiene-related, our certified industrial hygienists are bound to ethical codes of conduct throughtheir certifications and know to maintain employee confidentiality. Certification maintenance requires ongoing ethics training.
Select employees in the US take HIPAA - Privacy Rules for Business Associates training.
Once initial information about the incident is gathered and documented, EHS assesses the incident severity. The incident severity
assignment will determine the type of cause evaluation required and the time required to complete it. Evaluations are thenperformed, usually by the supervisor of the affected employee, to develop corrective actions to prevent recurrence of the incident
and help improve our EHSMS. The incident evaluation process includes:• Developing and reviewing a problem statement with the incident investigation team;• Collecting all potentially relevant data (e.g., interviewing employees involved, performing walkthroughs of the affected
area, reviewing security videos recorded during the event);• Performing a cause analysis to identify the primary and contributing causes using the 5-Why method;• Developing and assigning corrective actions using the S.M.A.R.T. (Specific, Measurable, Attainable, Realistic, Timely)
criteria method
All evaluations and corrective actions are reviewed and approved by EHS staff prior to finalizing an incident review. After anincident, operations are then monitored using our incident management system.

OHS Metrics
Cree | Wolfspeed tracks all work-related injuries and illnesses and works to improve the safety of our workplace throughevaluation and prevention measures. We have a comprehensive program to address workplace safety issues. Cree | Wolfspeed has
had no work-related fatalities since our business began operations in 1987. We are not aware of any occupational exposure issues
in our manufacturing processes that would increase an individual’s risk of any specific disease.

63

Recordable Work-Related Injury-Illness Cases1,2,3,4,5
45
40
35
30
25
41

20
15

38
31

27

25

10

16

13

5

6

6

0 2 1

0

12

2016

6

0 1 0

4

2017

1 0 0
2

0

2018

4 4 1 3 1

0

0
2019

2020

Employee Injuries

Contract Employee Injuries

Employee Illnesses

Contract Employee Illnesses

Employee High-Consequence Injuries

Employee High-Consequence Illnesses

Recordable Employee Work-Related Injury-Illness Rates1,2,3,4,5,6
1.00

12.5

0.90

12.0

11.5

0.70
0.60

11.0

0.50
0.88
0.40

0.77

0.71

0.30

0.68

10.5
0.68

0.67

0.60

0.54

0.48

10.0

0.43

0.20

9.5

0.29
0.21

0.10
0.00

Hours Worked (millions of hours)

Rate (based on 200,000 hours worked)

0.80

0.04

0.02

0.05

2016

0.10 0.02

0.00

0.02

0.03

2017

0.00 0.00 0.00

2018

0.11

0.00

2019

0.11

0.08 0.06 0.02 0.08

Injury-Illness Rates

Injury Rates

Illness Rates

High-Consequence Injury Rates

High-Consequence Illness Rates

High-Consequence Injury-Illness Rates

Hours Worked

9.0

2020

64

Recordable Work-Related Injury-Illness Types1

100%
90%
80%
70%
60%

50%
40%
30%
20%
10%

0%
2016

2017

2018

2019

Contact with objects and equipment

Overexertion and bodily reaction

Falls, slips, trips

Exposure to harmful substances or environments

Transportation Incidents

Violence and other injuries by persons or animals

2020

2020 Health and Safety Data Trends
2020 Information:» Our total number of recordable injuries and illnesses and rates decreased in 2020 compared to 2018 and 2019. Incidence rate
reduction may be attributed to our ongoing commitment to employee engagement and company values; for example, frequent
employee/management collaboration for improving safety, sharing lessons learned, and ongoing training opportunities.
Future Look:» We are continuously focusing on EHS performance improvement through enterprise-wide leading metrics, increased EHS presence
in day-to-day operations, global EHS management system alignment, focused Management of Change, and enhanced contractor
management.
» We have a new health and safety goal to help implement a certified Occupational Health & Safety Management System for 100% of
our manufacturing sites​, which will help to further drive health and safety improvements throughout our organization.

[1] Data presented here is for our significant locations of operations and our smaller United States locations, which represents approximately 99% of our total number of 2020 employees.
[2] Recordable Work-Related Injury-Illness = Work-related injury or ill health that results in any of the following: death, days away from work, restricted work or transfer to another job,
medical treatment beyond first aid, or loss of consciousness; or significant injury or ill health diagnosed by a physician or other licensed healthcare professional, even if it does not result
in death, days away from work, restricted work or job transfer, medical treatment beyond first aid, or loss of consciousness.
[3] Contract Employee = Any worker who is not a Cree | Wolfspeed employee but whose manager is and whose work and workplace may or may not be controlled by Cree | Wolfspeed.
[4] High-Consequence Recordable Work-Related Injury-Illness = Work-related injury or ill health that results in an injury from which the worker cannot, does not, or is not expected torecover fully to pre-injury health status within 6 months.
[5] From 2016-2020, we have not had any cases of high-consequence recordable work-related injuries-illnesses for contract employees.
[6] Rates are calculated using 200,000 hours worked (Rate = cases/total hours worked * 200,000)

65

EHS Organizational Structure
Cree | Wolfspeed has dedicated staff to implement EHS programs:

Board of Directors

Chief Executive Officer(CEO)

Senior Vice Presidentof Global Operations

Senior Vice Presidentof Human Resources

Emergency
Operations

Vice President of Global
Facilities

Director of Global
Environment, Healthand Safety (EHS)EHS Manager
Durham, NC

EHS Staff

Environmental
Manager
Durham, NC

EHS Staff

Life Safety

Sr. Manager
Corporate EHS
Programs
Durham, NC

EHS Manager
Marcy, NY

EHS Manager
Morgan Hill, CA

EHS Manager
Huizhou, China

EHS Staff

66

HEALTH AND SAFETY — OUR CUSTOMERS AND PARTNERS
We design and test our products to ensure the health and safety of our customers and partners.

Electrical Isolation TestingElectrical isolation testing is a direct current (DC) or alternating current (AC) dielectric withstand test that confirms our power
products will not transfer high or hazardous voltages, thus helping safeguard our customers from electrical insulation failures.
We also perform electrical testing for our RF products, which involves a direct current (DC) or Radio Frequency (RF) test that
confirms our RF products will meet the spectral emission requirements of our customers.

Harsh Environments Testing
To ensure our power modules will not fail or corrode in harsh environments we perform temperature and humidity bias (THB)
testing, which exposes our products to high temperature and high humidity. This testing ensures our power modules can be
operated in outdoor applications, such as renewable energy and electric vehicles.
To ensure our RF products will display adequate reliability under harsh environments we perform stress testing under accelerated
temperature, humidity and bias conditions. This testing ensures our RF products can be operated in our customers applications,such as telecommunication, aerospace and defense.

Guidance on Safe Use of RF Products
RF products emit high power density of RF radiations that can present hazards to sensitive biological tissues. Each RF application
can be unique, so consideration should be given to ensuring that the RF product will be manipulated in the proper environment.

Reduced Flickering
Our LED products are designed to eliminate Temporal Light Modulation (Flicker). Flicker has been a concern among the LED
lighting community for a number of reasons: negative health effects on people susceptible to epileptic seizures and headaches,making rotating equipment appear stationary, and an increase in fatigue among other issues associated with a visual change inperception of the environment.

Guidance on Safe Use of LEDs
LED products, like natural sunlight, include shorter wavelengths (blue and green light) that can still present hazards to sensitive
biological tissues. Thus, we routinely performs either irradiance or radiance testing to provide customers and end users withguidance on how to ensure our LEDs are not used in a manner where they could damage the end user’s eyes and skin. This
standardized IEC/EN testing is performed using custom equipment (i.e., no animal testing), designed to simulate the shape of theface and structure of the human eye, and includes peer reviewed and agreed to safety factors and measurement distances. Eachlighting application can be unique, so consideration is also given to whether a lighting product includes a light diffuser, or focusing
element, during testing.
Click here for more information about Cree’s LEDs and eye safety.

67

COMMUNITY ENGAGEMENT
We believe that many societal disadvantages can be overcome with adequate resources
and support so that all are free to pursue and achieve a productive, fulfilling life. We
partner with municipalities, civic organizations and advocacy groups to close theopportunity gap and provide those in need the opportunity to excel. Through corporate
events, sponsorships and employee-led initiatives, we live our values by doing the rightthing at work as well as in the communities where we live.
We focus our efforts on increasing awareness of the opportunities provided throughscience, technology, engineering and math (STEM), while helping remove potential
obstacles such as not a having a safe place to sleep and enough food to eat. We also
shine a light on the importance of diversity and social justice as we work to create
communities and a society that support and value all people and their contributions.

» OUR AMBITION
Close the opportunity gap by
providing more opportunities
for STEM education, at all levels,
to people in need, particularly inunderserved communities.

» OUR GOAL
Establish STEM partnerships
at 100% of our major locations
by 2025

The pandemic brought challenges to individuals and businesses. It also brought us the opportunity to rethink how we serve
our communities and reshape our outreach to deliver what our neighbors needed most during this difficult time. We also
focused on keeping our team and their families as well as those on the front lines of the pandemic safe and healthy, while
keeping our traditions alive to support our employees and their children as we weathered the storm together.
COVID-19 exacerbated the people’s most basic needs: to stay healthy, to have shelter and to eat. We increased our supportof the Food Bank of Eastern & Central North Carolina and Feeding America, Inc. to feed those in need, many of whom foundthemselves suddenly unemployed, in the U.S. locations where we operate. We also empowered employees at each of our
U.S. locations to choose how to support local hunger relief and STEM programs in their regions. In addition, although the
pandemic kept us from physically participating in our sponsored whole-house build for Habitat for Humanity of Durham,
we welcomed a family into their new home during Winter 2020. Importantly, we also provided extra funding to Habitat for
Humanity’s mortgage relief fund to help keep families in their homes during this time when many lost their jobs. Many of
our community partners with STEM-focused programs were able to put the sponsorship dollars we provided for in-person
STEM events towards virtual events; with Cree | Wolfspeed employees volunteering their time and expertise. While somecommunity partners canceled their events altogether, our sponsorship funds supporting those events were redirected
towards other COVID-relief efforts.
We also continued to look for opportunities to serve our communities in different ways during the pandemic. The health andsafety of our team was, and remains, a top priority, and it was important to us to be able to support those who keep our teamhealthy and safe as well. With personal protective equipment (PPE) masks in short supply during the onset of the pandemic,
we were able to donate 65,000 KN95 masks to healthcare workers and first responders serving on the front lines of thepandemic in New York and North Carolina.
While there were many unknowns during the pandemic, we were able to continue providing support to families in ourcommunities throughout, and when needed, able to pivot our support to ensure the greatest needs were met.

68

U.S. LOCATIONS

Mohawk Valley

Morgan Hill
Durham (HQ)
Mesa

Fayetteville

PARTNERING WITH OUR NEIGHBORS TO SERVE THE COMMUNITY AND CLOSE THE OPPORTUNITY GAP
Durham (HQ)
Alpha Academy
Arts in Action
Duke University Health
KN95 Mask Donation
Durham Bulls Pollinator
GardenFood Bank of Central &Eastern NC

NC Chamber Workplace
Diversity & Inclusion
Conference
Raleigh Chamber
Women’s Leadership
Conference
Shelton LeadershipCenterSociety of WomenEngineers (SWE)

Habitat for Humanity

Urban Ministries of
DurhamNational Society ofBlack Engineers (NSBE)

Women in Science andTechnology (WIST)

Fayetteville, AK
Cooperative Emergency
OutreachSeeds that Feed
The Pack Shack

Mesa, AZ
Arizona Brainfood

Mohawk Valley, NY

FIRST Robotics andRome Free Academy
FIRST Robotics and
SUNY Poly Foundation
Marcy 5K Walk & Run

National
Feeding America
STEM Goes Red | Go Red
for Women

Utica Comets & “Save of
the Day” Foundation, Inc.
Utica Rescue Mission

Morgan Hill, CA

Boilermaker Road
Races

Chamber of Commerceof Morgan Hill ‘Rock the
Mock’ Interview

Empire State
Development KN95
Mask Donation

The Edward Boss Prado
Foundation

KEY
Community event

Educational event

69

Continuing the Tradition: STEM Day 2020
Since 2018, it has been a tradition for Cree | Wolfspeed employees in North Carolina to host their children on the Durham campus
to help them understand what we do and to celebrate the wonders of science, technology, engineering and math (STEM) during
our annual STEM Day event. Each year, as part of STEM Day, we collaborate with our community partners to provide K-12 students
and adults with an opportunity to investigate what it means to do what others say can’t be done through live demonstrations,hands-on activities and more. And whenever possible, we extend an invitation for children from underserved communities toparticipate in the event as well. All STEM Day activities are coordinated and led by Cree | Wolfspeed employees who volunteer
their time before and during the events.
In 2020, even during a pandemic, our tradition continued. While we were unable to host employees and their children in person,
our STEM Day event went virtual, and as a result, we were able to open up participation to all of our U.S.-based employees andtheir families. Over the course of two days, and through the use of a virtual platform, we were able to provide participants with theopportunity to enjoy STEM Day 2020 from the comfort of their own homes.
Highlights of STEM Day 2020 included a live keynote address by NASA Astronaut Christina Koch followed by a live question andanswer session with Christina answering participants’ questions directly and in real time on day 1. As we wanted to ensure that
all Cree | Wolfspeed employees were able to participate along with their families, no matter their work or shift schedule, on day 2
participants were able to watch a recording of Christina’s keynote address and then engage with her directly during a live question
and answer session after viewing the recording. And finally, we closed the event with a 3-day virtual, interactive scavenger hunthosted by North Carolina Science Olympiad (NCSO). More than 70 teams made up of employees and their family members took
part in the scavenger hunt with prizes awarded to the team with the highest number of points as well as the teams submitting thevideos chosen as “Best Karaoke Star” and “Most Creative Moon Walk.” There also was a general raffle with $25 Kiwico gift cards
given to four of the teams.
And to ensure that all of our employees across the globe had the opportunity to hear Christina’s presentation as well as theanswers to participants’ questions, a recording of her day 1 keynote address as well as recordings of the question and answer
sessions on day 1 and 2 were posted on our intranet homepage for all employees to access.
Our STEM Day 2020 event was recognized with an Honorable Mention in the Virtual Events/Celebrations category in Ragan’s
Employee Communications Awards Class of 2020. And with more than 300 attendees from across all of our U.S. locations, somehave advised that they felt STEM Day 2020 was our best event to date.
Though we had to navigate challenges such as transitioning our plans from a face-to-face to virtual engagement and becomeacquainted with the functionality of Microsoft Teams in only two weeks, our STEM Day 2020 event turned out to be a huge success,and allowed us the opportunity to further build on our tradition of working with our community partners to share the possibilities
that STEM can bring to the world.

70

Continuing the Tradition: STEM Day 2020

71

ENVIRONMENT
2021
Processes that Protect the Environment,
Products that Improve it

72

PROCESSES THAT PROTECT THE ENVIRONMENT,PRODUCTS THAT IMPROVE IT
We strive to minimize resource use and reduce the environmental impact of our production process. We are committed toresponsibly managing environmental impacts, including being in compliance with environmental legislation as a minimum,and ensuring continual improvement in our environmental performance. Our product sustainability goals are simple: enable
our customers to invent power and wireless systems for a responsible, energy efficient future. We are committed to responsibly
managing our products from cradle to grave as we lead the innovation and commercialization of silicon carbide and GaN.

PRODUCT SUSTAINABILITYEVS AND EV CHARGING
Wolfspeed’s Silicon Carbide MOSFETs enable faster, more efficient charging and increase power density of theelectric circuits while reducing range anxiety. Wolfspeed’s 1200V and 650V SiC MOSFETs enable a reduction of EV
drivetrain losses by up to 80%, which means increased range and performance for your EV.

5G TELECOM
Wolfspeed products allow 5G to transmit more data at faster speeds and with greater precision. GaN on Silicon
Carbide has demonstrated to be a better solution overall for wireless communications because of its thermal
conductivity, materials matching, efficient and total lifecycle cost.

SOLAR ENERGY
Solar power systems designed around Wolfspeed Silicon Carbide offer huge efficiency gains and permit smaller
system size, weight and cost, increasing solar energy adoption worldwide. Using Silicon Carbide power components
instead of Silicon for solar inverters can save 10 megawatts for each gigawatt and 500 watts/sec in operation.

AEROSPACE AND DEFENSE
Using Wolfspeed GaN on SiC RF solutions enables system designers to achieve maximum performance with smaller
and lighter systems that consume less power.

DATA CENTERS
Silicon Carbide based products are expected to result in 620 billion kWh of energy savings for US data centers from2010 to 2020, which is equivalent to powering 560 million homes in the US for one year.

73

PRODUCT ECOLOGY
Cree | Wolfspeed maintains an active program to minimize harmful materials, including lead and cadmium, in our products. Visit
the Product Ecology section of our Sustainability page on wolfspeed.com to view our REACh and RoHS declarations.

PRODUCT END OF LIFE
Even though Cree | Wolfspeed’s products have a long life, all good things do come to an end of their useful life. How should our
products be disposed of when removed from service?
All Cree | Wolfspeed power devices, RF devices, LED chips and LED components are electronic components and should beconsidered for electronics recycling when feasible. Disposing of electronic waste in landfills is banned in many locations. In someareas of the world, depending on the recycle vendors available, individual LEDs and power and RF devices may not be able to berecycled due to their small size and product composition. End users are encouraged to check their local regulations or with yourlocal recyclers for advice on disposal of these components.

ENVIRONMENTAL MANAGEMENT AND ISO 14001
Cree is committed to responsibly managing environmental impacts, including being in compliance with environmental legislation
as a minimum, and ensuring continual improvement in our environmental performance.
The benefits of implementing an environmental management system include improved environmental risk management,
cost savings, meeting external stakeholder expectations, ensuring compliance with environmental laws, and decreasing ourenvironmental footprint through discovering new possibilities for energy, water and waste usage reductions. Our certificates canbe found on our ISO 14001 page on wolfspeed.com.

Durham, North Carolina• ISO 14001:2015

Morgan Hill, California• ISO 14001:2015

RTP, North Carolina• ISO 14001:2015

Huizhou, China• ISO 14001:2015

74

ENVIRONMENT, HEALTH AND SAFETY POLICY
Cree endorses and adheres to Environment, Health and Safety (EH&S) standards for all Cree sites. It is Cree’s EH&S goal todesign and develop products safely, that realize energy efficiency, minimize environmental impacts, and have sustainable life
cycles. In this manner, the Company is continuously improving our EH&S performance and reducing the overall impacts of ourmanufacturing processes. To further ensure that Cree can implement such standards, Cree is dedicated to:• providing a safe and healthy work environment for our employees;• complying with regulatory and other requirements;• using natural resources, energy, and materials efficiently;• substituting sustainable resources in place of non-renewable resources;• reusing or recycling materials wherever technically possible and economically reasonable;• minimizing waste and disposing of waste safely and responsibly;• sourcing raw material responsibly;• implementing specific measures to prevent and minimize hazards to humans; and the environment including pollution
prevention; and• consulting with and encouraging the participation of workers and workers’ representatives, as applicable.

NC ENVIRONMENTAL STEWARDSHIP INITIATIVE
Our North Carolina manufacturing facilities are members of the North
Carolina Environmental Stewardship Initiative (ESI).
ESI is a voluntary program, provided by the state of North Carolina
through the Department of Environmental Quality, to encouragecompanies to go beyond compliance to reduce impacts on thelocal environment. The program requires companies to havea mature environmental management system and aggressive
environmental goals. ESI has three levels of participation. Our North
Carolina facilities entered the program in 2018 at the first levelas an Environmental Partner with the goal of rising to the highest
level as an Environmental Steward in the future. In 2019, our North
Carolina facilities rose to the second level as a Rising Steward. Moreinformation about the ESI program can be found here.

75

ENERGY AND GREENHOUSE GAS EMISSIONSOur Products» OUR AMBITION

Our power and radio frequency products are created with energy-efficiency in mind. Our
power and radio frequency products allow other industries to develop leading energy
efficient products in applications such as renewable energy, wireless communication,
electric vehicles, and electric vehicle charging.

Actively fight against climatechange and reduce our and others’
carbon footprint; Stay efficient,stay productive. Be a company
that makes a difference for future
generations.

Our Manufacturing
We recognize the future possible environmental, social, and economic impacts associatedwith climate change and increasing energy demands. In addition to providing energy
efficient products, we strive to reduce GHG emissions and improve energy efficiency at all
Cree | Wolfspeed sites.

EP100
EP100 is a global, collaborative initiative of influential businesses that
pledge to double their energy productivity.
We first joined EP100 in 2017. Since our new strategic focus is to build
a powerhouse semiconductor company around our power and radio
frequency products, we developed a new EP100 goal in 2019. We
pledged to double our manufacturing energy productivity in termsof revenue per MWh of energy consumed during manufacturing from2017 to 2040. In 2020, we achieved a metric of 1742 (revenue/MWh).
The decline was caused by the divestiture of our LED business. Our
total energy consumption (MWh) decreased in 2020 compared to2019, but our last quarter relevant to the metric did not include LED
revenue, causing our total revenue for the year to decline. Because
the revenue value decreased, it caused our EP100 metric to also
decrease in 2020.

4500» OUR GOAL
• Reduce Scope 1 and 2 greenhousegas (GHG) emissions by 50% by 2030
• Achieve net zero Scope 1 and 2 GHG
emissions by 2050

EP100 Progress
Revenue per MWh Consumed in Manufacturing

4000
3500
3000

2500
2000

3817

1500

1000

1909

2227

2099

1742

500
0

2017

2018

2019

EP100 Metric

2020

2040

Goal

CDP Climate Change Score Progress

CDP
CDP runs a global disclosure system of self-reported environmental data.
A

In 2016, we disclosed our company-wide GHG emissions andclimate change risks and opportunities to CDP for the first time. We
will continue calculating our GHG emissions in the future because
measuring GHG emissions helps us recognize and work toward
lowering our impact. Visit cdp.net or our Sustainability Reporting
page to view our responses to the CDP Climate Change Survey.

AB
BC

B

B

B

B

2017

2018

2019

2020

CD

C-

DF
2016

76

Energy Consumption

2020 Energy Purchases

in Gigawatt Hours

0.6%

500
450
400

0.2
73.1

0.2

0.7

0.6

74.4

74.4

74.9

7.3%

0.5
70.8

350

45.3%

300
250

46.8%

200
351.3

357.1

394.3

388.0

375.7

150
100

Direct Purchases of Renewable
Energyof(e.g.,
Wind, Solar)
Direct Purchases
Renewable
Energy (e.g., Wind, Solar)ed
Other Low-Carbon Energy (e.g., Nuclear) Purchases Based on
orBasedLocal Utilities’
Energy Gridor
Mix
Estimated RenewableCountry-Specific
Energy Purchases
on Country-Specific
Local Utilities' Energy Grid

50
0
2016

2017

Fuel Oil, Gasoline, Propane

2018

2019

Natural Gas

2020
Electricity

Estimated Renewable Energy Purchases Based on CountrySpecific or Local Utilities’ Energy Grid Mix
Direct Purchases of Non-Renewable and Non-Carbon-Free Energy (e.g., Natural Gas, Diesel)
Direct Purchases of Non-Renewable and Non-Carbon-Free
Energy (e.g., Natural Gas, Diesel)
Estimated Other Low-Carbon Energy (e.g., Nuclear) Purchases Based on Country-Specific or Local
Estimated Other Low-Carbon Energy (e.g., Nuclear) Purchases
Utilities' Energy Grid Mix
Based on Country-Specific or Local Utilities’ Energy Grid Mix

Our Carbon Footprint

Greenhouse Gas (GHG) Emissions

in Percent of Total GHG Emissions

in Thousand Metric Tons CO2 Equivalents
100%

500

Reducing CO2e

450

The GHG emissions
associated with using our
products over their lifetimes
represent roughly 99% of our
total GHG footprint.

400
350

167.2

300
250

152.8
166.1

154.6
167.9

99.06%

99.11%

98.21%

200
150

100

179.5

211.7

253.4

247.2

2018

2019

280.6

50

2%

0
2016

2017

Scope 1Our Scope 3 emissions from theuse of our sold products over theirestimated lifetimes

2020

Scope 2

Scope 1: Our direct GHG emissions (e.g., fuel combustion, fluorinated gases
used in manufacturing).

Compared to traditional lessefficient alternatives, our LED,
power and radio frequency
products sold in 2020 willsave approximately 327
million MWh and 125 million
metric tons CO2 equivalents
over their estimated lifetimes.

0.94%

0.89%

1.79%

2018

2019

2020

The total of our Scope 1, Scope 2
and Scope 3 emissions from allother Scope 3 categories

Scope 2: GHG emissions from the consumption of purchased electricity
at our facilities

77

Our Carbon Footprintin Metric Tons CO2 Equivalents
2020

Scope 12019
2018

Scope 2

2017

Use of Sold
Products Over
Estimated Lives
Purchased
Goods & Services

Capital Goods
Fuel- andenergy-related
activities

Contract
Manufacturers

Scope 3

Downstream
Transportation& Distribution
UpstreamTransportation& Distribution

Employee
Business Travel
Manufacturing
Waste Generation& Transportation
Disposal ofSold Products
at End of Lives

EmployeeCommuting

1

10

100

1,000

10,000100,000

1,000,000

10,000,000

100,000,000

1,000,000,000

metric tons CO2e2020 GHG and Energy Data Trends
SCOPE 1SCOPE 22020 Information:2020 Information:» Our usage of fuel and fluorinated gases
in our manufacturing processes changed
in 2020 compared to 2019 due to changes
in output and product mix, causing our
Scope 1 emissions to increase.

» Our total electricity use at two of our manufacturing facilities decreased, resulting in an
estimated decrease in 7,489 metric tons CO2e in 2020 compared to 2019 electricity use.

Future Look:» We are currently exploring GHG
abatement technologies for our facilities
and in 2020 and 2021 began installingabatement devices at our Durham and RTP
fabrication facilities.
» In 2019, we began planning for a
project to eliminate the use of one ofour greenhouse gases with a high global
warming potential (GWP) in one of ourmanufacturing processes. In 2020, thisproject entered the testing phase and isplanned to start transitioning over to fullproduction during 2021.
» We have new GHG goals to help further
reduce our climate change impacts.

» The electricity grid mix at our North Carolina facilities used more nuclear andrenewable energy sources, causing our Scope 2 (market based) emissions to decrease by
about 4,100 metric tons CO2e in 2020 compared to 2019 emissions.
» In 2020 we made changes to one of our gas distribution systems at our Durham, NC
facility, which resulted in an annual reduction of about 53,000 kWh or 19 metric tons
CO2e.
» We incorporated updated emission factors in 2020, leading to about a reduction of
6,200 metric tons CO2e in Scope 2 location based emissions (e.g., new EPA eGRID2019
were available for use for our 2020 emissions inventory. This reduction for US facilities
was calculated using electricity use and eGRID 2018 factors versus new eGRID 2019
factors).
Future Look:» We continuously explore options for energy reduction and efficiency improvements to
help offset expected increases in energy use and Scope 2 GHG emissions as we expand.
» Our new Mohawk Valley Fab is planned to be LEED certified with energy efficient
processes built into the design of the building. Learn more in the Capacity Expansion
section of this report.
» We have new GHG goals to help further reduce our climate change impacts.

78

2020 GHG and Energy Data Trends
SCOPE 32020 Information:» Purchased goods and services and capital goods: Our usage of raw materials in our manufacturing processes changed in 2020
compared to 2019 due to changes in output and product mix, causing our Scope 3 emissions in this category to increase. Because weare expanding our operations, our Scope 3 emissions from capital goods also increased in 2020.
» Fuel-and-energy-related activities (not included in Scope 1 or 2): Our usage of fuel and electricity in our manufacturing processeschanged in 2020 compared to 2019 due to changes in output and product mix, causing our Scope 3 emissions from fuel-and-energyrelated activities to decrease. We also used updated DEFRA factors, which were lower in 2020 compared to 2019 factors, for ourpurchased electricity calculation.
» Upstream and downstream transportation and distribution: Our emissions from upstream and downstream transportation anddistribution increased due to differences in shipment types and amounts in 2020 compared to 2019.
» Business travel and employee commuting: During the COVID-19 pandemic, we continued to operate the company globally, but due
to travel restrictions were unable to travel for business purposes during most of 2020, causing our Scope 3 emissions from businesstravel to decline by 2,446 metric tons CO2e in 2020 versus 2019 emissions. In 2019, we began the transition to a new software as ourprimary communication and collaboration solution, which enabled our employees to easily collaborate with each other and external
stakeholders, instead of traveling to meet in person, during the COVID-19 pandemic.
Emissions associated with employees working from home are included in the employee commuting category. The COVID-19 pandemic
caused our employee commuting GHG emissions to increase in 2020 compared to previous years, due to the fact that more employees
were working from home during 2020.
» Waste generated in operations: The GHG emissions associated with the disposal and transportation of our waste increased in 2020
compared to 2019 due to an increase in the amount of waste we generated through expansion efforts as well as due to the use of
updated EPA Waste Reduction Model (WARM) factors. More information about our trends in waste generation data can be found in the
Waste Management section of this report.
» Use and end of life treatment of sold products: The GHG emissions from the use of our sold products over their estimated lifetimes
decreased slightly in 2020 due to product mix differences in 2019 versus 2020. Because our products are small, the GHG emissions
associated with the end of life treatment of our sold products did not change significantly.
» Contract manufacturing: Because we are expanding our operations, our Scope 3 emissions from contract manufacturing also
increased in 2020.
Future Look:» We are continuously exploring ways to decrease our Scope 3 GHG impacts. We expect our emissions in some categories to increase inline with our growth, as well as emissions in some categories to decrease due to technology improvements.
» We have new GHG goals to help further reduce our climate change impacts. Our primary focus will be to first reduce the GHG impactsof our operations (Scope 1 and 2).

79

OTHER AIR EMISSIONS
When applicable, our manufacturing sites are subject to local air emissions regulations for criteria pollutants (NOx, SO2,etc.), hazardous air pollutants (HAP)1 and toxic air pollutants (TAP)1. Our sites comply with regulations through each site’s air
permit requirements. For select processes we use air emissions control devices, including dust collectors, thermal oxidizers
and scrubbers.

Other Air Emissions
in Metric Tons

70
60
50
40
30

54.9

20

51.2 49.2

45.6

57.4

35.1

10

17.0 16.2

12.4

0

NOx

VOC

CO
2018

8.7 9.1 10.6

9.2 9.8 11.2

2.7 2.3 2.4

0.13 0.14 0.13

HAP

TAP

PM

SO2

2019

2020

Air pollutants are classified as hazardous air pollutants (HAP) based on the US EPA list of HAP. Air
pollutants are classified as toxic air pollutants (TAP) per the regulations applicable at each facility.

12020 Other Air Emissions Data Trends
2020 Information:» Our usage of raw materials and fuel in our manufacturing processes changed in 2020 compared to 2019 due to changes in output
and product mix, causing our air emissions to either decrease or increased depending on the pollutant.
Future Look:» We are continuously exploring ways to decrease our air emission impacts. When appropriate, we will continue using and installing
air emissions control devices, including dust collectors, thermal oxidizers and scrubbers. Our Mohawk Valley Fab will also beconstructed with air emissions control devices to reduce our air emissions as we expand.

80

WATER MANAGEMENT
Water Management
Because water quality and scarcity are growing concerns that affect all people and industries,
we are committed to proper water use management practices for all Cree | Wolfspeed sites.
We continuously strive to implement best management practices that conserve and recycle
water and prevent and reduce water pollution:•

Our Durham, NC site has been recycling process water since 2005, and currently recycles
an average of 120,000 gallons of water per day. Our Huizhou site installed a new water
recycling system in 2017 and now recycles approximately 200,000 gallons of water per day.

» OUR AMBITION
Ensure sustainable and efficientuse of water across all sectors.
Become a leader in addressing
water scarcity.

» OUR GOAL
Increase water recycling rate by
25% by 2025•

Our new Marcy, NY facility is planned to use a water recycling system similar to that used
at our Durham, NC facility. More information about our Marcy facility can be found in the
Capacity Expansion section of this report.

•

In the past we have had facility-specific water goals. We developed our first corporate-wide water recycle goal to increase ourwater recycle rate by 25% by 2025. More information about our goal can be found in the Sustainability Goals section of thisreport.

•In 2007, our Durham NC and RTP, NC sites initiated a wastewater pre-treatment system, which prevents approximately 30,000
pounds of fluoride from entering a local water supply each year.

•

In 2020, we disclosed our water-related information to CDP Water Security and performed our first corporate-wide water risk
assessment for the first time.

•

At all sites, we have implemented best management practices for control of stormwater to minimize the effects of stormwaterrun-off.

•

Our Durham, NC site is reducing the risks associated with chemical spills by using a stormwater conveyance system whichallows for containment in the event of an incident.

•

In 2018, we installed additional rainwater collection at our Durham, NC site, and now collect rainwater to supplement waterused in the production process. In 2020, we expanded the catchment area, which will help us increase the amount of rainwater
harvested in future years.

Water Withdrawals, Discharges, and Consumption
All of our manufacturing facilities’ water withdrawals primarily come from municipal (third-party) sources. Our other source of water
withdrawal includes rainwater (fresh surface water), depending on the facility. All water used at our manufacturing sites is thirdparty freshwater. Most of our water is used during manufacturing including cooling tower use, but water is also used for irrigationand human consumption (i.e., drinking water, sanitary sewer and water used in locations where we have an on-site cafeteria).
We work internally to ensure each department receives the water required for each step of the manufacturing process, as to notcompromise product quality. We engage with our local water supply and wastewater treatment plants to plan for infrastructureneeded for future water use, and have a water conservation and management plan in the event that water from local sources isreduced due to a drought. We have not yet worked with other suppliers or customers on water related issues.
Both our Durham and Huizhou sites have water recycle systems to offset municipal water purchases and reduce the consumptionof water. In the past, our water recycle rate goals were developed for individual sites that are Cree | Wolfspeed’s largest water users.
We developed our first corporate-wide goals to increase our water recycle rate by 25% by 2025. Our goals are set based on thetechnology available, the quality of water needed as an output of the process, the availability of water in the operating region, water
recycle regulations in place, and to align with our ISO 14001 environmental management systems. The goal aims to ensure our sites
optimize their water recycle systems, including ensuring better operation and maintenance of the systems to reduce down time.
Refer to our Sustainability Goals section of this report for more information about our water recycle goal.
81

All facilities discharge to a municipal (third-party) waste water treatment plant and are subject to local discharge requirements.
Water discharged meets local regulatory requirements for water quality, including nutrients levels, metals, pH, temperature, etc.
All our manufacturing sites have wastewater permits and/or requirements that mandate the quality of water discharged. Our
stormwater is also monitored to ensure it meets discharge criteria, which prevents degradation of local water supplies.

Water Risk Assessments
Our Approach
At this time, our water-related risk assessment scope only includes direct operations, but other stakeholders, like customers, local
communities, regulators and investors, are tangentially included in our assessment. A variety of risks for our direct operations are
considered during our assessment, which have the potential to affect our value chain. We have not yet included our suppliers in ourassessment. Suppliers are relevant, and we expect to include them in water-related risk assessments in the coming years.
Depending on the facility, we use the WRI Aqueduct and/or the WWF Water Risk Filter tool to assess our water risks. We use the
WWF Water Risk Filter tool to analyze the water risks of our owned manufacturing facilities, which represent our largest water users,
because the tool allows us to answer questions related to our specific industry (i.e., semiconductors) and specific questions related
to each of our facilities to obtain a deeper look at our risks. We used the WRI Aqueduct tool to assess water stress of all facilities andrisks for smaller leased facilities because it is a good first step to easily assess water risks based on location and allows us to view
future (2030 and 2040) water risks for all facilities.
The WRI Aqueduct and WWF Water Risk Filter tools provide our risks in a number of different categories, such as quantity physicalrisks (e.g., water scarcity, water stress, flooding and drought risks), quality physical risks (e.g., quality of wastewater, potential for
eutrophication), regulatory risks (e.g., drinking water/sanitation issues, environmental regulations) and reputational risks (e.g., ESG
performance, community conflicts).
We consider risks that have the potential to greatly impact our business. We define a substantive financial or strategic impact
as something that will cause significant impact to our business both internally (i.e., our direct operations) or externally (i.e.,
our upstream and downstream value chain). We use $1 million USD to establish a threshold for substantive financial impact
when determining potential impacts due to water-related impacts. An example of a substantive financial impact could bewater scarcity issues affecting the ability for us to manufacture our products, causing brand image, revenue and/or customer
relations issues. Good quality freshwater is vital for direct use (rinsing, cooling, cutting) for our manufacturing processes. Because
our manufacturing processes require a specific quantity and quality (ultra-pure) of freshwater to operate without productcontamination, any disruptions to our supply of water at our manufacturing facilities could result in a substantive financial impact
to us and other members of our value chain (e.g., our customers).
Our Results
2020 was our first year to use different tools (WWF Water Risk Filter and WRI Aqueduct) to analyze all our facilities (both owned andleased) for current and future water risks. We also assessed the risks of our new fabrication facility currently being constructed inMarcy, New York. We plan to use the results of the analyses to inform our internal decision-making process, including planning for
future water stewardship projects and goals and targets setting.
We believe that some of our manufacturing facilities exposed to water risks have the potential for a substantive financial or
strategic impact on our business. Using the results of our WWF Water Risk Filter analysis, two of our existing manufacturing sites
exhibit Physical risks that could affect our business, including water scarcity and quality. Other existing manufacturing facilities
were analyzed using the WWF Water Risk Filter but not found to have high risks in terms of the potential for a substantive financial
or strategic impact our business. We also assessed our smaller leased facilities using the WRI Aqueduct tool, and although theresults of the analysis show varied levels of risk depending on location, we do not feel that these risks have the potential to cause
a substantive financial or strategic impact on our business based on the activities and size of those operations.
82

Water-Related Risks
We have analyzed water-related risks for our manufacturing facilities exposed to water risks that have the potential for a
substantive financial or strategic impact on our business.

Potential
Risk

Increased water
scarcity

Potential Impacts

Direct Operations (Durham and RTP):
We feel that increased water scarcity could be a potential risk
for us in the Raleigh/Durham/Research Triangle Park area in thelonger-term future, which is where two of our main manufacturing
operation are located, based on the current and future expected
growth in the area. Raleigh is one of the fastest growing cities
in the United States and increased growth in the area could
potentially lead to water availability issues in the future.
We have assessed our future risks out to 2030 and 2040 for water

Estimated
Financial
Implications
We understand the

Our Durham facility operates a water recycle system

potential for theseto offset municipal water purchases and reduce therisks but do not yet

consumption of water. We continuously explore options

have a financial impact

for water recycle improvements to help offset thecalculated. However, we

expected increase in water withdrawals as we expand.

feel the impacts could besubstantive (i.e., could
be more than $1 million
depending on the event).

attackwere man-made to provide flood control and watersupply to the Raleigh/Durham/Research Triangle Park
area, and specifically designed to provide sufficient

located. The WRI Aqueduct tool shows that there will be “nearWe have a business continuity plan, which takes

normal” change in water scarcity and water supply in the area by

into consideration potential risks that could cause a2030 and 2040.

significant business interruption and describes strategies
for how we mitigate and respond to major events.

About 10 years ago, we experienced a drought at these facilities

ransom ware

The reservoirs in the area from which we receive water

water even in severe drought situations.

stress and water supply of the area in which these facilities are

Malware/Management Method

and were required to evaluate alternative sources for water

We have a crisis response team, which is comprised ofwithdrawals. Although the WWF Water Risk Filter indicates a very

key personnel in different departments throughout the

low Drought Frequency Probability for these facilities, we believe

company, that reviews possible solutions in the event

water scarcity still has the potential to have a substantive financialof a situation that could cause a significant businessor strategic impact.

interruption.

Direct Operations (Durham and RTP):
We purchase water through the city government’s utility anddischarge our water to the county’s Publicly Owned Treatment
Works. In 2020, the city and county government systems wherethese facilities are located experienced a malware attack, causing
their data servers to be taken offline for a few days.
Although the malware attack in 2020 did not affect our ability toreceive or discharge water during the event, this kind of event has
the potential to have a substantive financial or strategic impact on
our business.
If a malware or ransom ware attack affects our city and county,
we may have issues being able to purchase water if the city
government’s utility is forced to shut down and/or issues being
able to discharge water if the county’s Publicly Owned Treatment

We understand the

Our Durham facility operates a water recycle system

potential for theseto offset municipal water purchases and reduce therisks but do not yet

consumption of water. We continuously explore options

have a financial impact

for water recycle improvements to help offset thecalculated. However, we

expected increase in water withdrawals as we expand.

feel the impacts could besubstantive (i.e., could
be more than $1 million
depending on the event).

We have a business continuity plan, which takes
into consideration potential risks that could cause asignificant business interruption and describes strategies
for how we mitigate and respond to major events.
We have a crisis response team, which is comprised of
key personnel in different departments throughout thecompany, that reviews possible solutions in the eventof a situation that could cause a significant businessinterruption.

Works is unable to operate.
If we are unable to receive water, it could cause us to stop some ofour manufacturing processes. If we are unable to discharge waterto our Publicly Owned Treatment Works it could also stop some ofour manufacturing processes or we would be required to find analternative method to dispose of our water, such as dispose of ourwastewater as waste.

83

Water-Related Opportunities
We have analyzed water-related opportunities for our manufacturing facilities exposed to water risks that have the potential for a
substantive financial or strategic impact on our business.

Potential
Opportunity
Improved water
efficiency inoperations

Potential Impacts
Direct Operations (Durham):$400,000 - $1 million annually

We continuously explore options for water recycle improvements to help offset
the expected increase in water withdrawals as we expand.

The potential financial impact represents
the amount of money saved annually by
harvesting rainwater and recycling ourwater versus purchasing water from thelocal utility. The financial impact includes
the savings from our current system aswell as estimated savings from potential
additional opportunities.

We operate a water recycle system and rainwater harvesting system at thisfacility exposed to water risks that has the potential for a substantive financial
or strategic impact on our business.
We continue to evaluate newer technologies with respect to rainwater
harvesting and water recycling and reuse, and plans to implement them when
feasible. Additional water recycle and rainwater capture opportunities havebeen identified at this facility and are currently under review for technicalfeasibility, cost, and potential timeline.
Improved water
efficiency inoperations

Estimated Financial Implications

Direct Operations (Marcy):$100,000 - $300,000 annually

We continuously explore options for water recycle improvements to help offset
the expected increase in water withdrawals as we expand.

The potential financial impact represents
the estimated amount of money thatwill be saved annually by various water
efficiency projects built into the designof the new wafer fabrication facility weare constructing and recycling our waterversus purchasing water from the local
utility.

Because we are constructing a new state-of-the-art, automotive-qualified
200mm-capable wafer fabrication facility in Marcy, New York, complemented
by our mega materials factory expansion currently underway at our Durham
headquarters, we will remain dependent on good quality water and anticipate
our total water dependency to increase in the future. Our Marcy, New Yorkfacility is planned to use a water recycling system similar to that used at our
Durham facility.

84

Water Stress
We used the WRI Aqueduct Water Risk Atlas tool to assess the current and future (2030 and 2040) water stress of all our facilities.
We consider areas with water stress to be those locations with the risk category “High (40-80%)” or “Extremely High (>80%)” forbaseline water stress. Based on that criteria, six of our small leased facilities are located in areas with the risk category “High” or“Extremely High.” These offices use small amounts of water and represent only 0.03% of our total 2020 global water withdrawals.
One of our manufacturing facilities is located in an area with the risk category “High.” Its 2020 water withdrawals represent
approximately 12.8% of our total 2020 global water withdrawals.

2020 Water Usage by Water Stress Category
Water Discharges1

Water Withdrawals1
Extremely High(>80%)
0.002%

Extremely High(>80%)
0.002%High (40-80%)
13%

Low (<10%)33%

Water Consumption1

High (40-80%)
14%

Low (<10%)23%

Extremely High(>80%)
0.000%High (40-80%)
10%Low (<10%)37%

Low - Medium (1020%)
0.000%
Low - Medium (1020%)
0.001%

Medium - High (2040%)
54%

Medium - High (2040%)
49%

Low - Medium (1020%)
0.001%

Medium - High (2040%)
67%2020 Water UsageAll
Facilities

Facilities Locatedin Water Stress
Areas1

Facilities Not
Located in Water
Stress Areas1

Third-Party Water

382.9

49.3

333.6

Fresh Surface Water (Rainwater)

0.06

0

0.06

Total Water Withdrawals

383.0

49.3

333.7

118.5

0

118.5

293.8

40.3

253.5

89.1

8.9

80.2

SourceWater Withdrawals (millions of gallons)

Water Recycled (millions of gallons)
Total Water Recycled
Water Discharges (millions of gallons)
Total Third-Party Wastewater
Water Consumption (millions of gallons)
Water Consumed[1] All of our global facilities were assessed for baseline water stress using the World Resources Institute Aqueduct Water Risk Atlas. Baseline water stress measures the ratio of total water
withdrawals to available renewable surface and groundwater supplies. Low water stress indicates the facility(ies) scored 0% to 10% for water stress. Low-medium water stress indicatesthe facility(ies) scored 10% to 20% for water stress. Medium-high water stress indicates the facility(ies) scored 20% to 40% for water stress. High water stress indicates the facility(ies)scored 40% to 80% for water stress. Extremely high water stress indicates the facility(ies) scored 80% to 100% for water stress. (Source: WRI Aqueduct Water Risk Atlas)

85

Water Demand

Water Discharges and Consumption (Water Out)in Millions of Gallons

in Millions of Gallons

600

600

500

0.2
87.6

0.0
97.6

0.1

0.1

0.1

132.3
118.5

155.7

400

400

300

300

200

500

414.3

426.1

402.3

382.9

364.1

128.4

97.6

246.8

212.7

251.3

235.8

2018

2019

293.8

0

0
2016

2017

Municipal Water

2018

2019

Recycled Water

2020

2016

2017
Waste Water

Rainwater

Water Recycling

2020

Water Consumed

2020 Water Data Trends% of Total Water Recycled
2020 Information:

35%» Because we purchased more water for withdrawals at some of our manufacturing
facilities, it caused our total withdrawals and discharges to increase. We havealso made process changes at some of our facilities, causing water to be used anddischarged at an increased rate.

30%» The withdrawal and discharge volume also increased slightly in 2020 compared toour reported 2019 value because in 2020 we included water withdrawals for all ourleased facilities in our scope for the first time, as data related to such withdrawals was
not available previously.

25%» At one of our facilities we initiated a new process that increased our water usage,
but that discharges water directly (i.e., very little water consumption), causing our
total water consumption and percent of total water recycled to decrease.

20%

15%

Future Look:

29.9%

24.7%
10%

89.2

200

100

100

87.6

132.3

17.4%

23.6%

18.6%

5%

» Our water demand is expected to increase in the future because we are building
our new facility in Marcy, New York, complemented by our expansion currently
underway at our Durham headquarters. We continuously explore options for water
use efficiency and water recycle improvements to help offset the expected increasein water use as we expand. Refer to the Water-Related Opportunities subsection tolearn more about our future water opportunities.
» Our new Mohawk Valley Fab is planned to have a water recycle system and water
efficiency built into the design of the building. Learn more in the Capacity Expansion
section of this report.

0%
2016

2017

2018

2019

2020

» We have a new water recycle goal to help further reduce our water impacts.

86

WASTE MANAGEMENTOur Products
Our Power and RF products made from silicon carbide (SiC) outperform conventional silicon(Si) components. In many applications, fewer SiC components are required compared to Si
components when creating an electrical circuit with a similar output. To sustain a required
current and voltage, Si components must be larger, meaning SiC components perform betterwith less materials required. Using less SiC components for a circuit and reducing the amountof materials in a SiC versus Si component means less materials are required to be disposed of at
the end of their lives.

» OUR AMBITION
Be a company that directs
to zero waste through waste
reduction and recycling.

» OUR GOAL
Achieve 85% waste diversion
rate from landfill by 2025

Our Manufacturing
The responsibility for waste generation spans from cradle to grave, and Cree | Wolfspeed isdedicated to minimizing waste and disposing of waste safely and responsibly. We use many different hazardous and non-hazardous
raw materials to manufacture our products, including acids, bases and solvents, which results in waste. We also generate solid wastefrom miscellaneous activities at our facilities, including pallets and cardboard from incoming raw materials and equipment, general
office waste, and cafeteria waste. Along our value chain, our largest impacts come from waste generated from our own activities. The
transportation of our waste and spills or releases on our property or to the environment are possible negative impacts of our waste.
For some of our waste, we seek ways to turn our waste to fuel, which we consider a positive impact of our waste. Because our products
are small and long-lasting we do not foresee large impacts associated with the waste of our products. Guidance for how to dispose of
our products at the end of their lives can be found in the Product End of Life section of this report. We have not yet assessed the waste
generation of our upstream activities.
We have processes in place to ensure our waste is stored and managed to minimize impacts to employees and the environment and aim
to operate our facilities according to applicable waste regulations. Our policy is to reduce the amount of waste sent to landfill and ensure
we choose waste disposal methods that we feel reduce the impact on the environment as much as possible. When choosing a vendor
for our waste streams, we ensure the vendors are reputable and utilize the appropriate technology for the waste stream. We require all
waste vendors to have a contract and sign our Supplier Code of Conduct, which outlines requirements for environmental performanceand compliance.
In addition to reducing waste generation, we are dedicated to reusing or recycling materials whenever technically possible andeconomically reasonable. We seek opportunities for waste to be recycled or become a feedstock for use in other manufacturing
processes. This not only lowers costs but helps us and other manufacturers to decrease virgin raw material consumption and reduce
environmental impacts. We have implemented the following practices as part of our commitment to reduce, reuse and recycle materials:• From 2014 to 2015, we reduced our chemical waste generationfrom manufacturing by 277,000 pounds.
• We reduced the consumption of chemicals in our manufacturing
processes, specifically the use of one of our major raw materials
by 70% in 2016.
• We recycle solid waste materials in manufacturing and officesites, including metal, plastic, glass, paper, cardboard, wood,cans and bottles.
• Since 2016, we have sent waste liquid solvents to a facility for use
as alternative fuel. We also send specific solid waste streams foruse as fuels in waste to energy facilities.
• In 2016, our Durham facility began composting waste at thecafeteria. The composting program diverts approximately 50,000
pounds of waste from the landfill per year.

• In 2016, we set our first waste to landfill reduction goals at our
North Carolina facilities. We developed our first corporate-wide
waste goal to increase our waste diversion from landfill to 85%
by 2025. More information about our goal can be found in the
Sustainability Goals section of this report.
• In 2019, we developed a program that successfully diverted
130,000 pounds of a specific material at our Durham facility fromthe landfill to a recycling facility. This is in addition to the 430,000
pounds of a different form of the same material shipped to a
recycling facility that year.
• In 2020, we worked to enhance one of our key manufacturing
processes, which resulted in a reduction of approximately 132,000
lbs of raw materials in 2020 compared to 2019 usage

87

Waste Generation

Waste Generation

by Disposal Method

Waste Disposal Methodin Millions of Pounds

2016

2017

2018

2019

2020

Wastewater Treated

52.6%

47.1%

61.2%

50.2%

61.2%

Recovery, including Energy
Recovery

21.6%

39.1%

29.1%

38.8%

27.0%

Landfill

2.8%

4.6%

3.6%

5.8%

3.4%

16

Hazardous Waste

14

Incineration

5.6%

2.5%

3.6%

2.9%

7.0%

Recycling

17.4%

6.6%

2.5%

2.3%

1.4%

12
10
8
9.2

33.5%

28.7%

31.7%

35.1%

30.0%

Wastewater Treated

41.4%

42.2%

32.1%

25.0%

20.6%

Landfill

21.3%

18.5%

21.2%

22.1%

34.8%

Recovery, including Energy
Recovery

0.4%

5.4%

11.3%

10.8%

9.0%

Reuse

3.1%

4.7%

3.0%

6.3%

5.1%

Composting

0.1%

0.5%

0.6%

0.7%

0.2%

Incineration

0.1%

0.1%

0.1%

0.1%

0.2%

3.5

3.9

4.4

2018

2019

2020

9.9

4
2
2.4

2.8

2016

2017

0

Hazardous Waste

Non-Hazardous Waste

2020 Total Waste Generation

2019 Total Waste Generation

by Disposal Method

by Disposal Method
Composting
0.5%

9.3

6

Non-Hazardous Waste (including Solid Waste)
Recycling

9.5

10.6

Incineration
0.9%

Composting
0.2%

Reuse
4.4%

Recycling
21.0%

Recycling
25.1%

Incineration
2.3%
Reuse
3.5%

Wastewater Treated
32.1%

Wastewater Treated
33.4%

Landfill
24.9%

Landfill
18.1%

Recovery, Including
Energy Recovery
14.7%

Recovery, Including
Energy Recovery
18.9%

2020 Waste Data Trends
2020 Information:» Our usage of raw materials in our manufacturing processes changed in 2020 compared to 2019 due to changes in output and productmix, causing our total waste generation to increase.
» Our percent of waste to landfill increased in 2020 due to less employees being in the office (e.g., our total waste composted in 2020
decreased by about 28,000 lbs because less employees were using our cafeteria) and due to our expansion efforts. We had moreconstruction and demolition activities in 2020, which resulted in the generation of non-recyclable materials.
Future Look:» We are continuously exploring ways to decrease our waste generation impacts. We have a new waste to landfill reduction goal to help
further reduce our waste to landfill impacts.

88

APPENDIX
2021

89

GRI CONTENT INDEXGENERAL DISCLOSURES

Organizational Profile
GRI Standard

GRI Standard Description

Location

Comments

102-1

Name of the organization

Who We Are

102-2

Activities, brands,
products, and services

Who We Are

102-3

Location of headquarters

Who We Are

102-4

Location of operations

Who We Are

The majority of our products are manufactured at our
production facilities located in North Carolina, California,
Arkansas and China. We also use contract manufacturers
for certain products and aspects of product fabrication,assembly and packaging. We operate research anddevelopment facilities in North Carolina, Arizona,
Arkansas, California and China (including Hong Kong).

102-5

Ownership and legal form

GRI Content Index

Publicly traded company

102-6

Markets served

Who We Are
2020 Annual Report*

102-7

Scale of the organization

Who We Are
2020 Annual Report*

102-8

102-9

Information on employees
and other workers

Our Employees

Supply chain

Supply Chain

Our Interns and Recent
Graduates

We employ over 5,000 regular full and part-time employees.
We also employ individuals on a temporary full-time basis
and use the services of contractors as necessary. We also
have a rapidly-developing intern program. A significant
portion of the organization’s activities are not performed
by workers who are not employees. Only employees
located in significant locations of operations are reported.
Significant locations of operations refer to our owned
manufacturing facilities located in the US and China, which
represents approximately 98.5% of our total number of2020 employees.

Supplier Codeof Conduct*
Responsible Minerals
Sourcing Policy
California
Proposition 65* can be found on wolfspeed.com

90

GRI CONTENT INDEXGENERAL DISCLOSURES

Organizational Profile (continued)
GRI Standard

GRI Standard Description

Location102-10Significant changes to theorganization and its supply
chain

CEO Message

Precautionary Principle
or approach

Risk Management

External initiatives

Environment, Healthand Safety Policy

Our first EHS Policy was adopted in December
2015 and applies to all global Cree | Wolfspeed
operations.

Environmental
Management andISO 14001

Our Durham, Research Triangle Park (RTP), andHuizhou sites became certified to ISO 14001 in
May 2016. Our Morgan Hill site became certifiedin early 2020.

Product Quality

Our Durham, Research Triangle Park (RTP),
Morgan Hill, Mesa, Fayetteville and Huizhou
sites are certified for quality standards (ISO
9001, IATF 16949, AS9100).

Energy andGreenhouse Gas
Emissions

We joined EP100 in 2017. EP100 is acollaborative initiative of influential
businesses that pledge to double their energy
productivity. We also disclose our global
manufacturing GHG emissions and climatechange risks and opportunities to CDP
Climate Change.

Community
Engagement

We support local organizations in the areas inwhich we operate.

NC Environmental
Stewardship

Our North Carolina manufacturing facilities
became members of the North Carolina
Environmental Stewardship Initiative in 2018.

GRI Content Index

At the corporate level, we are a member ofEP100, PowerAmerica, The Semiconductor
Industry Association, Automotive Industry
Action Group (AIAG), and JEDEC Solid State
Technology Association’s committee JC-70
Wide Bandgap Power Electronic Conversion
Semiconductors.

102-11

102-12102-13

Membership of associations* can be found on wolfspeed.com

Comments

2020 Annual Report*

2020 Annual Report*

91

GRI CONTENT INDEXGENERAL DISCLOSURES

Strategy
GRI Standard

GRI Standard Description

Location102-14

Statement from seniordecision-maker

CEO Message

Comments

Ethics and Integrity
GRI Standard

GRI Standard Description

Location

Comments

102-16

Values, principles, standards,
and norms of behavior

Code of Conduct*

Our Code of Conduct reflects our commitment
to integrity and describes standards of conduct
for our employees and directors. Our executive
officers and other senior financial personnel arealso subject to additional policies stated in the
Code of Ethics for Executive Officers and Other
Senior Financial Personnel.

Code of Ethics for
Executive Officers andOther Senior Financial
Personnel*

102-17

Mechanisms for advice andconcerns about ethics

Code of Conduct*

Our Code of Conduct contains our guidelines
for ethical business practices, including how
employees can report breaches of Cree |Wolfspeed policies.

GRI Standard

GRI Standard Description

Location

Comments

102-18Governance structure

Board of Directors andCommittee Composition

Governance* can be found on wolfspeed.com

92

GRI CONTENT INDEXGENERAL DISCLOSURES

Stakeholder Engagement
GRI Standard

GRI Standard Description

Location

102-40

List of stakeholder groups

Materiality Assessment

102-41

Collective bargaining
agreements

GRI Content Index

102-42

Identifying and selecting
stakeholders

Materiality Assessment

102-43

Approach to stakeholder
engagement

Materiality Assessment

102-44

Key topics and concerns raised

Materiality Assessment

Comments

The vast majority (more than 99.9%)of employees are not covered bycollective bargaining agreements.

Reporting PracticeGRI Standard

GRI Standard Description

Location

102-45

Entities included in the
consolidated financial
statements

2020 Annual Report*

102-46

Defining report content andtopic Boundaries

Sustainability
ReportingComments

Materiality Assessment

102-47

List of material topics* can be found on wolfspeed.com

Materiality Assessment

93

GRI CONTENT INDEXGENERAL DISCLOSURES

Reporting Practice (continued)
GRI Standard

GRI Standard Description

Location

Comments

102-48

Restatements of information

GRI Content Index

Any information that was reported in both this report
and the previous report indicates the information
was still relevant to 2020 operations. Refer to 102-49
for more information about changes in our reportingfor current and previous years’ data.
There was an error on the title of the Global
Manufacturing GHG Emissions graph on page 63
of our 2020 Sustainability Report. The units werereported as metric tons CO2 equivalents, but shouldhave been reported as thousand metric tons CO2
equivalents. This change has been reflected correctly
within this report.
The way we report high-consequence injuries andillnesses has changed in this report. In the past,
the data we reported only included recordable
injuries and illnesses that resulted in days away fromwork past 6 months. We have expanded our highconsequence injuries and illnesses to include thetotal of days away and restricted days past 6 months.
We have updated previous years’ data in this report
to reflect this change.

102-49Changes in reporting* can be found on wolfspeed.com

GRI Content Index

In 2019, we divested our Lighting Products business
unit operations, which included a facility in Racine,
Wisconsin and Durham, North Carolina (referred to as
the Weck Drive site). The data presented in this reportfor years prior to 2019 exclude these facilities as well as
another Durham, North Carolina facility (referred to as
Alston Avenue, which was a Lighting Products facility
that was closed in 2018) so that we can establish a new
baseline around our LED, power and radio frequency
operations. 2019 is also the first year we included all
global facilities (owned and leased manufacturing
facilities, R&D only facilities, sales offices andwarehouses) in our energy and GHG emissions totals.
The scope of all other energy and GHG emissions
data prior to 2019 in this report remains as owned
manufacturing facilities only. We started incorporatingother data (e.g., water use, waste) for our leased
manufacturing facilities, R&D-only facilities, sales
offices and warehouses in our 2020 data. The scopeof all other water and waste data prior to 2019 in thisreport remains as owned manufacturing facilities only.
More information about the data in this report can befound in the Independent Assurance Statement.

94

GRI CONTENT INDEXGENERAL DISCLOSURES

Reporting Practice (continued)
GRI Standard

GRI Standard Description

Location

Comments

102-50

Reporting period

GRI Content Index

Calendar Year 2020. The majority of the data
included in this report is on a calendar year
basis (January to December). Financial data isreported on a fiscal year basis (June to July).

102-51

Date of most recent report

GRI Content Index

9/28/21102-52

Reporting cycle

GRI Content Index

The reporting cycle is annual. However,content may be updated throughout thereporting cycle. Refer to our Sustainability
website pages on wolfspeed.com for the mostrecent information.

102-53

Contact point for questions
regarding the report

GRI Content Index

Cree_Sustainability@cree.com

102-54Claims of reporting inaccordance with the GRI
Standards

Sustainability
Reporting102-55

GRI content index

GRI Content Index

102-56External assurance

Sustainability
Reporting
Independent
Assurance Statement

95

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Financial Performance
Material TopicGRI Standard

GRI Standard
Description

Location

Economic
Performance(2016)

103-1,2,3

Management approach2020 Annual Report*

Economic
Performance(2016)

201-1

Direct economic value
generated and distributed

2020 Annual Report*

Economic
Performance(2016)

201-2

Financial implications
and other risks andopportunities due toclimate change

TCFD Disclosures

Comments

Energy Efficiency of Operations
Material TopicGRI Standard

GRI Standard
Description

Location

Comments

Energy(2016)

103-1,2,3

Management approach

Energy and Greenhouse
Gas Emissions

No Cree | Wolfspeed locations
are subject to any country,
regional, or industry
regulations and policies forenergy. When applicable, state
air permit requirements limit
the amount of fuel usage.

Energy(2016)

302-1

Energy consumption
within the organization

Energy and Greenhouse
Gas Emissions

All energy usage reported ispurchased from the local utilities’
energy grid. Our Morgan Hill, CA
facility purchases energy directlyfrom renewable sources basedon a standard product offering(i.e., a third-party company
supplies renewable energy
through our local utility’s grid).
All other renewable energy used
at our facilities are based on theenergy mix from the local utility.
We do not sell energy. Energy
consumption is determined using
monthly supplier invoices or
estimated using square feet ofbuilding space where invoices are
not available.

Sustainability Data

* can be found on wolfspeed.com

96

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Energy Efficiency of Operations (continued)
Material TopicGRI Standard

GRI Standard
Description

Location

Comments

Energy(2016)

302-2

Energy consumption
outside of the organization

Energy and Greenhouse
Gas Emissions

This metric is reported in termsof Scope 3 GHG emissions.

Sustainability Data
Energy(2016)

302-3

Energy Intensity

Energy and Greenhouse
Gas Emissions
Sustainability Data

Energy(2016)

302-4

Reduction of energy
consumption

We measure our energy
intensity metric in terms of ourEP100 goal. Our goal includes
all energy (fuel and electricity)
consumed at our manufacturing
operations.

Energy and Greenhouse
Gas Emissions
Sustainability Data

Energy(2016)

302-5

Reductions in energy
requirements ofproducts and services

Product Sustainability
Energy and Greenhouse
Gas Emissions
Sustainability Data

The savings data reported
represent what our products
sold in 2020 will save over theirestimated lifetimes. Energy usage
and GHG emissions from our
products were compared to theirless efficient alternative products
to derive energy use savings. For
lighting applications, our LED
products were compared to nonLED lighting fixtures (e.g., metal
halide lamps, fluorescent bulbs,etc.). For applications where
LEDs are currently the standard
choice we assumed no energy
savings. Our power products,
made from silicon carbide, werecompared to similar products
made from silicon. Our radio
frequency products, made fromsilicon carbide, were comparedto similar products made fromeither silicon or gallium-arsenide.

97

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Climate Change
Material TopicGRI Standard

GRI Standard
Description

Location

Comments

Emissions(2016)

103-1,2,3

Management approach

Energy and Greenhouse
Gas Emissions

We are not currently subject
to any country, regional, or
industry regulations andpolicies for GHG emissions.
When applicable, our US
manufacturing sites are subject
to local air pollution regulations
for criteria pollutants (NOx, SOx,etc.) and toxic air pollutants. Our
sites comply with regulations
through each site’s air permit
requirements.

Other Air Emissions
Our Contributions to the
UN SDGs
TCFD Disclosures

Emissions(2016)

305-1

Direct (Scope 1)
GHG emissions

Energy and Greenhouse
Gas Emissions
SASB Disclosures
TCFD Disclosures
Sustainability Data

All Scope 1 emissions were
calculated using methodologies
and emission factors from the
US EPA Mandatory Greenhouse
Gas Reporting Rule:• Global warming potentials:
40 CFR 98, Table A-1(IPCC AR4 - 100 year)• Fuel usage emissions:
40 CFR 98 Subpart C• Electronics manufacturing
emissions: 40 CFR 98 Subpart I

The gases included in thecalculations are CO2, CH4, N2O,
HFCs, PFCs, SF6, NF3, refrigerants
and heat transfer fluids (HTFs).
We do not emit biogenic CO2.

Emissions(2016)

305-2

Energy indirect (Scope 2)
GHG emissions

Energy and Greenhouse
Gas Emissions
SASB Disclosures
TCFD Disclosures
Sustainability Data

We used the 2019 EPA eGRID
subregional emission factors
to calculate Scope 2 emissions
from the use of electricity at
our US facilities. For ourfacilities outside of the US,
International Energy Agency(IEA) emission factors wereused. We used global warming
potentials from the US EPA
Mandatory Greenhouse Gas
Reporting Rule, 40 CFR 98, Table
A-1 (IPCC AR4 - 100 year). We do
not emit biogenic CO2.

98

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Climate Change (continued)
Material TopicGRI Standard

GRI Standard
Description

Location

Comments

Emissions(2016)

305-3

Other indirect (Scope 3)
GHG emissions

Energy and Greenhouse
Gas Emissions

Scope 3 emissions were
calculated for all relevant
categories except processing ofsold products, which is relevant
but not yet calculated. Sourcesof emission factors include EPA
eGRID, International Energy
Agency (IEA), EPA GHG Emission
Factors Hub, EPA WARM, DEFRA
and Greenhouse Gas Protocol(Quantis). We used global
warming potentials from the US
EPA Mandatory Greenhouse Gas
Reporting Rule, 40 CFR 98, Table
A-1 (IPCC AR4 - 100 year).

TCFD Disclosures
Sustainability Data

Emissions(2016)

305-5

Reduction of
GHG emissions

Energy and Greenhouse
Gas Emissions
Sustainability Data

Emissions(2016)

305-7

Nitrogen oxides (NOX),
sulfur oxides (SOX), andother significant air
emissions

Other Air Emissions
Sustainability Data

99

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Water and Wastewater Management
Material TopicGRI Standard

GRI Standard
Description

Location

Water andEffluents(2018)

103-1,2,3

Management approach

Water Management

Water andEffluents(2018)

303-1

Interactions with water as ashared resource

Water Management

Water andEffluents(2018)

303-2

Management of water
discharge-related impacts

Water Management

Water andEffluents(2018)

303-3

Water withdrawal

Water Management

Water andEffluents(2018)

303-4

Water andEffluents(2018)

303-5

Comments

Our Contributions to the
UN SDGs

Sustainability Data

Water discharge

Water Management
Sustainability Data

Water consumption

Water Management
Sustainability Data

Water withdrawal data is either
collected from meters or water
utility bills.

Water discharge data iseither collected from meters
or water utility bills. The
recycled water is reused in our
process. Wastewater is sent tolocal wastewater treatment
facilities. Water consumed inprocess refers to water thatis consumed or evaporated
during manufacturing. Water
discharged meets local
regulatory requirements forwater quality.

Other than small rainwatercollection tanks, we do nothold water in water storage
facilities or reservoirs.

100

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Waste Management
Material TopicGRI Standard

GRI Standard
Description

Location

Waste(2020)

103-1,2,3

Management approach

Waste Management

Waste(2020)

306-1

Waste generation andsignificant waste-related
impacts

Waste Management

Waste(2020)

306-2

Management of significant
waste-related impacts

Waste Management

Waste(2020)

306-3

Waste generated

Waste Management

Comments

Our Contributions to the
UN SDGs

SASB Disclosures
Sustainability Data

We use various methods to collectand monitor waste-related data,
including manifests, invoices,
vendor reports, estimated weights
based on container size andspreadsheets.
We determine whether a waste ishazardous or non-hazardous basedon the applicable regulation where
the facility is located (e.g., RCRA for
our US facilities).
We report our waste numbers inpounds throughout this report. In
2020, we generated 1,992.5 metrictons of hazardous waste and 4,313.1
metric tons of non-hazardous waste(including solid waste).

Waste(2020)

306-4

Waste diverted from
disposal

Waste Management
SASB Disclosures
Sustainability Data

Waste
(2020)

306-5

Waste directed to disposal

Waste Management

We do not import or export
hazardous waste and do not ship
hazardous waste internationally.
All of the hazardous waste reported
in our Waste Management section
is transported for treatment. We
do not include waste treated forelementary neutralization on site in
our hazardous waste totals. Waste
disposal method information isprovided by our waste disposal
vendors. Non-hazardous wastewateris excluded from our non-hazardous
waste totals.

Refer to comment for 306-4 above.

SASB Disclosures
Sustainability Data
101

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Employee Attraction, Development and Retention
Material TopicGRI Standard

GRI Standard
Description

Location

Employment(2016)

103-1,2,3

Management approach

Our Employees

Comments

Our Interns and Recent
Graduates
Diversity, Equity andInclusion
Employee Engagement

Employment(2016)

401-1

New employee hires andemployee turnover

Diversity, Equity andInclusion
Sustainability Data

For competitive and othervalid business reasons, we
do not report our employee
turnover rates.
New hire data can be foundin the Diversity, Equity
and Inclusion section.
Only employees locatedin significant locations ofoperations in the UnitedStates are reported.
Significant locations ofoperations refer to ourowned manufacturing
facilities, which represents
approximately 98.5% of
our total number of 2020
employees.

Employment(2016)

401-2

Benefits provided tofull-time employeesthat are not provided
to temporary or
part-time employees

Benefits

102

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Employee Attraction, Development and Retention (continued)
Material TopicGRI Standard

GRI Standard
Description

Location

Comments

Employment(2016)

401-3

Parental leave

Benefits

Only employees locatedin significant locations ofoperations in the UnitedStates are reported.
Significant locations ofoperations in the UnitedStates refer to our owned
manufacturing facilities
located in the UnitedStates, which represents
approximately 61% of
our total number of 2020
employees.

Training and
Education(2016)

103-1,2,3

Management approach

Training andDevelopment

Training and
Education(2016)

404-2

Programs for
upgrading employee
skills and transition
assistance programs

Training andDevelopment

Sustainability Data

Programs to upgrade
employee skills can befound in the Training andDevelopment section of thisreport.
We also offer transition
assistance programs. We
offer outplacement services
to employees terminatedas a result of reduction in
workforce.

Training and
Education(2016)

404-3

Percentage of employees
receiving regularperformance and careerdevelopment reviews

Training andDevelopment

103

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Employee Diversity and Equal Opportunity
Material TopicGRI Standard

GRI Standard
Description

Location

Diversityand Equal
Opportunity(2016)

103-1,2,3

Management approach

Diversity, Equity andInclusion

Comments

Our Contributions to the
UN SDGs
Code of Conduct*

Diversityand Equal
Opportunity(2016)

405-1

Diversityand Equal
Opportunity(2016)

405-2

Ratio of basic salary andremuneration of women tomen

Diversity, Equity andInclusion

Nondiscrimination(2016)

103-1,2,3

Management approach

Our Employees

Diversity of governancebodies and employees

Diversity, Equity andInclusion
Sustainability Data

Governance Bodies is definedas our Board of Directors, which
has 9 members.
Only employees locatedin significant locations ofoperations are reported.
Significant locations ofoperations refer to our owned
manufacturing facilities locatedin the US and China, which
represents approximately 98.5%
of our total number of 2020
employees.
For competitive and othervalid business reasons, we
do not report this metric. Our
approach to remuneration canbe found in the Diversity, Equity
and Inclusion section.

Diversity, Equity andInclusion
Code of Conduct*

Nondiscrimination(2016)

406-1

Incidents of discriminationand corrective actions
taken

GRI Content Index

For privacy and other valid
business reasons, we do notreport this metric.

104

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Community Engagement (Local & Global)
Material TopicGRI Standard

GRI Standard
Description

Location

Local
Communities(2016)

103-1,2,3

Management approach

Community Engagement

Local
Communities(2016)

413-1

Comments

Our Contributions to the
UN SDGs
Operations with local
community engagement,
impact assessments, anddevelopment programs

Community Engagement

We currently have community
engagement programs at all of
our North American facilities,
which represents the majorityof our material operations.
More information about ourcommunity engagement efforts
can be found in the Community
Engagement section of thisreport.
At relevant locations,
we have work councils,
occupational health andsafety committees andother worker representation
bodies (Employee Resource
Groups) that address work,
environmental and social
matters within the company.

Local
Communities(2016)

413-2

Operations with significant
actual and potential
negative impacts on local
communities

GRI Content Index

We believe that our operations
do not have a higher than
average potential of negative
impacts, or actual negative
impacts, on the social,economic or environmental
well-being of the local
communities in which we
operate. We conduct ouractivities in a manner thatreflects our Code of Conduct
and Values, which include
being a good corporate citizen,
dealing fairly in business,behaving ethically, supporting
basic human rights and a safeand healthy workplace, doing
business in an environmentally
responsible manner, and incompliance with applicablelaws and regulations.

105

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Occupational Health and Safety
Material TopicGRI Standard

GRI Standard
Description

Location

Comments

Occupational
Health and
Safety(2018)

103-1,2,3

Management approach

Health and Safety—
Our Employees andContractors

Our Health & Safety
information has also beenreported using guidancefrom the Center for Safety &Health Sustainability.

Our Response to
COVID-19
Our Contributions to the
UN SDGs
Code of Conduct*

Occupational
Health and
Safety(2018)

403-1

Occupational health andsafety management system

Health and Safety—
Our Employees andContractors

Occupational
Health and
Safety(2018)

403-2

Hazard identification, risk
assessment, and incident
investigation

Health and Safety—
Our Employees andContractors

Occupational
Health and
Safety(2018)

403-3

Occupational healthservices

Health and Safety—
Our Employees andContractors

Occupational
Health and
Safety(2018)

403-4

Worker participation,
consultation, andcommunication on
occupational health andsafetyHealth and Safety—
Our Employees andContractors* can be found on wolfspeed.com

106

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Occupational Health and Safety (continued)
Material TopicGRI Standard

GRI Standard
Description

Location

Occupational
Health and
Safety(2018)

403-5

Worker training on
occupational health andsafetyHealth and Safety—
Our Employees andContractors

Occupational
Health and
Safety(2018)

403-6

Promotion of worker health

Health and Safety—
Our Employees andContractors

Occupational
Health and
Safety(2018)

403-7

Prevention and mitigationof occupational healthand safety impacts
directly linked by business
relationships

Health and Safety—
Our Employees andContractors

Occupational
Health and
Safety(2018)

403-8

Workers covered by an
occupational health andsafety management system

Health and Safety—
Our Employees andContractors

Occupational
Health and
Safety(2018)

403-9

Work-related injuries

Health and Safety—
Our Employees andContractors

Occupational
Health and
Safety(2018)

403-10Comments

All employees and workers
who are not employees but
whose work and/or workplaceis controlled by Cree |Wolfspeed are covered byour occupational health andsafety management system.

Sustainability Data

Work-related ill health

Health and Safety—
Our Employees andContractors
Sustainability Data

107

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Labor and Employment Practices
Material TopicGRI Standard

GRI Standard
Description

LocationLabor/
Management
Relations(2016)

103-1,2,3

Management approach

Code of Conduct*

Labor/
Management
Relations(2016)

402-1

Minimum notice
periods regarding
operational changes

GRI Content Index

Child Labor(2016)

103-1,2,3

Management approach

Code of Conduct*Child Labor(2016)

408-1

Comments

Supplier Codeof Conduct*
Depending on themagnitude of the change,
the notification time
afforded to employees
is measured more in monthtimeframes instead ofweek timeframes.

Supplier Codeof Conduct** can be found on wolfspeed.com

Operations and suppliers
at significant risk forincidents of child labor

GRI Content Index

We maintain hiring age
restrictions and health andsafety standards for both
employees and employeesof suppliers. Our Supplier
Code of Conduct specificallyprohibits the use of childlabor in violation of local
laws and regulations in
the country or countries
in which Cree | Wolfspeed
does business. Based on
available information, we
do not have any operations
or suppliers considered
to have significant risk forincidents of child labor oryoung workers exposed tohazardous work.

108

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Labor and Employment Practices (continued)
Material TopicGRI Standard

GRI Standard
Description

Location

Comments

Forced orCompulsory
Labor(2016)

103-1,2,3

Management approach

Code of Conduct*

Forced orCompulsory
Labor(2016)

409-1

Operations and suppliers
at significant risk forincidents of forced orcompulsory labor

GRI Content Index

We maintain standards
prohibiting forced orcompulsory labor forboth employees andemployees of suppliers. Our
Supplier Code of Conduct
specifically prohibits forced
or compulsory labor by our
suppliers. Based on available
information, we do not haveany operations or suppliersconsidered to have significant
risk for incidents of forced orcompulsory labor.

Human Rights
Assessment(2016)

103-1,2,3

Management approach

Code of Conduct*

Per our Code of Conduct,
Cree | Wolfspeed policies
and procedures apply
to all subsidiaries. If wemaintain the majority of theownership of joint ventures,its policies and procedures
will closely mirror those ofCree | Wolfspeed.

Supplier Codeof Conduct** can be found on wolfspeed.com

109

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Labor and Employment Practices (continued)
Material TopicGRI Standard

GRI Standard
Description

Location

Comments

Human Rights
Assessment(2016)

412-1

Operations that havebeen subject to humanrights reviews or impact
assessments

GRI Content Index

None of our operations havebeen subject to human rights
reviews or human rights
impact assessments.

Human Rights
Assessment(2016)

412-2

Employee training on
human rights policies
or procedures

GRI Content Index

Human rights policies
are outlined in our Codeof Conduct. Annually, allemployees are required to reread and sign off on our Codeof Conduct. Every other year,
all non-US employees undergo
Code of Conduct training.
All US based employees are
required to annually complete
and acknowledge a numberof compliance courses. The
course topics vary from year
to year, but regularly include
human rights related subject
matter. Training topics are
assigned to employees basedon their role within thecompany. The total number ofhours devoted to this training
is between 2 to 4 hours per
employee (over 10,500 hours
total).

Human Rights
Assessment(2016)

412-3* can be found on wolfspeed.com

Significant investment
agreements and contracts
that include human rights
clauses or that underwent
human rights screening

Code of Conduct*
Supplier Codeof Conduct*
Purchase Order Terms
and Conditions*

Our Code of Conduct,
Supplier Code of Conduct,
and Standard Purchase Order
Terms and Conditions include
human rights clauses. We
require that any supplier thatworks with us follows our
Supplier Code of Conduct.
Cree | Wolfspeed is committed
to abiding by human rights
laws and expects our
suppliers and vendors to do
the same.

110

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Ethical Business Practices
Material TopicGRI Standard

GRI Standard
Description

Location

Comments

Anti-corruption(2016)

103-1,2,3

Management approach

Code of Conduct*

Anti-corruption(2016)

205-1

Operations assessed forrisks related to corruption

GRI Content Index

Included in our Code of
Conduct, and associatedtraining, which applies to all
Cree operations, are specificpolicies directed to ensurecompliance with the Foreign
Corrupt Practices Act (FCPA)
and UK Bribery Act, among
other anti-corruption statutes.

Anti-corruption(2016)

205-2

Communicationand training aboutanti-corruption
policies and procedures

GRI Content Index

Our Code of Conduct contains
our guidelines for ethicalbusiness practices, including
bribery and corruption.
Annually, all employees
are required to re-readand sign off on our Code of
Conduct. Every other year, allemployees undergo Code of
Conduct training.
All US based employees are
required to annually complete
and acknowledge a numberof compliance courses. The
course topics vary from year
to year, but regularly include
human rights related subject
matter. Training topics are
assigned to employees basedon their role within thecompany. The total number ofhours devoted to this training
is between 2 to 4 hours per
employee (over 10,500 hours
total).

* can be found on wolfspeed.com

111

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Ethical Business Practices (continued)
Material TopicGRI Standard

GRI Standard
Description

Location

Comments

Anti-competitive
Behavior(2016)

103-1,2,3

Management approach

Code of Conduct*

Anti-competitive
Behavior(2016)

206-1

Legal actions foranti-competitive
behavior, anti-trust, andmonopoly practices

GRI Content Index

In 2020, Cree | Wolfspeed
did not have any legal
actions regarding anticompetitive behavior or
violations of anti-trust andmonopoly legislation.

Comments

Supply Chain/Sourcing Issues
Material TopicGRI Standard

GRI Standard
Description

Location

Procurement
Practices(2016)

103-1,2,3

Management approach

Supply Chain
Supplier Codeof Conduct*
Purchase Order Terms
and Conditions*
Responsible Minerals
Sourcing
California Proposition 65

Procurement
Practices(2016)

204-1* can be found on wolfspeed.com

Proportion of spendingon local suppliers

Sustainability Goals
Supply Chain

Where possible, we seek toobtain goods and services
from local suppliers in thelocations where we conductbusiness. We do not currently
track proportion of spendingon local suppliers. We havedeveloped new supply chain
sustainability goals andare currently updating our
procurement policy to betterreflect our commitment to
responsible purchasing andsupplier diversity.

112

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Supply Chain/Sourcing Issues (continued)
Material TopicGRI Standard

GRI Standard
Description

Location

Supplier
Environmental
Assessment(2016)

103-1,2,3

Management approach

Supplier Codeof Conduct*

Supplier
Environmental
Assessment(2016)

308-1

New suppliers thatwere screened using
environmental criteria

GRI Content Index

Supplier
SocialAssessment(2016)

103-1,2,3

Management approach

Supplier Codeof Conduct*

Supplier
SocialAssessment(2016)

414-1

Comments

Purchase Order Terms
and Conditions*Cree | Wolfspeed expects
all suppliers to make aclear commitment toenvironmental compliancethrough the Supplier
Code of Conduct and theStandard Purchase Order
Terms and Conditions.

Purchase Order Terms
and Conditions** can be found on wolfspeed.com

New suppliers thatwere screened usingsocial criteria

GRI Content Index

Through the Supplier Codeof Conduct and the Standard
Purchase Order Terms andConditions, Cree | Wolfspeed
expects all suppliers tomake a clear commitment tosocial compliance, including
health and safety, laborand diversity, and ethicalbusiness practices.

113

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Customer Satisfaction
Material TopicGRI Standard

GRI Standard
Description

Location

Customer
Satisfaction

103-1,2,3

Management approach

Customer Satisfaction

Customer
Health and
Safety(2016)

103-1,2,3

Management approach

Health and Safety - Our
Customers and Partners

Customer
Health and
Safety(2016)

416-1

Comments

No GRI Topic
Available

Customer Satisfaction
Assessment of thehealth and safety
impacts of product andservice categories

Product Ecology
California Proposition 65

We maintain an active
program to minimize harmful
materials, including lead andcadmium, in our products.
All changes that occur at our
manufacturing sites undergo
a Management of Change
process. During this process,changes are assessed basedon a number of criteria
including whether thechanges will affect productsafety.

Product Quality
Material TopicGRI Standard

GRI Standard
Description

Location

Product
Quality103-1,2,3

Management approach

Product Quality

Comments

No GRI Topic
Available* can be found on wolfspeed.com

114

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURESIntellectual Property Security (Cyber & Data Security)
Material TopicGRI Standard

GRI Standard
Description

Location

Comments

Intellectual
Property103-1,2,3

Management approach2020 Annual Report*

We maintain sophisticatedphysical and digital security
measures to protect ouremployees, systems anddata. In 2020, our Information
Security and various otherteams continued to advancesecurity controls. Employees
play an active role in protecting
Our systems and data byparticipating in regular
Information Security AwarenessTrainings, supporting system
updates and following security
policies and procedures such asreporting suspicious activity.

Licensing*No GRI Topic
Available

Product Innovation
Material TopicGRI Standard

GRI Standard
Description

Location

Product
Innovation

103-1,2,3

Management approach

Why Cree | Wolfspeed

Comments

Our Contributions to the
UN SDGs

No GRI Topic
Available

Product Sustainability

Acceleration of Sustainable Technologies
Material TopicGRI Standard

GRI Standard
Description

Location

Accelerationof Sustainable
Technologies

103-1,2,3

Management approach

Why Cree | Wolfspeed

No GRI Topic
Available

Comments

Product Sustainability
Energy and Greenhouse
Gas Emissions
Our Contributions to the
UN SDGs* can be found on wolfspeed.com

115

GRI CONTENT INDEXSPECIFIC STANDARD DISCLOSURES

Risk Management
Material TopicGRI Standard

GRI Standard
Description

Location

Risk
Management103-1,2,3

Management approach

Risk Management

Comments

TCFD Disclosures

No GRI Topic
Available

2020 Annual Report*

International Trade Regulations
Material TopicGRI Standard

GRI Standard
Description

LocationInternational
Trade
Regulations

103-1,2,3

Management approach

Global Trade
Compliance

Comments

No GRI Topic
Available

Contribution to Regional/Local Development
Material TopicGRI Standard

GRI Standard
Description

LocationIndirect
Economic
Impacts(2016)

103-1,2,3

Management approach

Our Response to
COVID-19

Comments

Capacity Expansion
Community Engagement
Our Contributions to the
UN SDGs

Indirect
Economic
Impacts(2016)

203-1

Infrastructure investments
and services supported

GRI Content Index

Based on GRI’s definition of
infrastructure, we currently do notprovide any infrastructure projects
or provide any infrastructure
related-projects.

Indirect
Economic
Impacts(2016)

203-2

Significant indirect
economic impacts

Capacity Expansion

Examples of our significant
identified indirect economic
impacts can be found in the
Capacity Expansion and Community
Engagement sections of thisreport. We have not yet assessed
the significance of our indirect
economic impacts in the context
of external benchmarks andstakeholder priorities.

* can be found on wolfspeed.com

Community Engagement

116

SASB DISCLOSURESSEMICONDUCTOR STANDARD

SASB Topic

SASB CodeSASB Accounting Metric

SASB Disclosure

Location

Greenhouse
Gas Emissions

TC-SC-110a.1(1) Gross global Scope 1 emissions(1) 280,566 metric tons CO2e(2) amount of total emissions
from perfluorinated compounds(2) 74,204 metric tons CO2e

Energy and Greenhouse
Gas Emissions

Discussion of long-term and shortterm strategy or plan to manage
Scope 1 emissions, emissions
reduction targets, and an analysis
of performance against thosetargets

We disclose this information in
our various Sustainability Reportsections and CDP Climate Change
responses(1) Total energy consumed(1) 433,374 gigajoules(2) percentage grid electricity(2) 84% grid electricity(3) percentage renewable(3) 7.9% renewable, estimatedbased on local utilities grid mix(0.6% directly renewable, due
to standard product offering byenergy supplier)

Sustainability Data

(1) Total water withdrawn(1) 1,450 thousand cubic meters

Water Management(2) total water consumed,
percentage of each in regions withHigh or Extremely High Baseline
Water Stress(2) 13% of water withdrawn,
10% of water consumed in Highor Extremely High Baseline Water
Stress areas

Sustainability Data

Amount of hazardous waste frommanufacturing, percentage
recycled(1) 1,992 metric tons

Waste Management(2) 28% of hazardous waste
reclaimed, recycled or recovered

Sustainability Data

Greenhouse
Gas Emissions

TC-SC-110a.2

EnergyManagement in
Manufacturing

TC-SC-130a.1

WaterManagement

TC-SC-140a.1

WasteManagement

TC-SC-150a.1

Sustainability Data
Energy and Greenhouse
Gas Emissions
Sustainability Goals
TCFD Disclosures
CDP Climate Change*
Energy and Greenhouse
Gas Emissions

1.4% of hazardous waste
reclaimed, recycled or recovered(does not include energy recovery)

Employee
Health & Safety

Employee
Health & Safety

TC-SC-320a.1

TC-SC-320a.2* can be found on wolfspeed.com

Description of efforts to assess,monitor, and reduce exposureof employees to human healthhazards

We disclose this information in our
Sustainability Report and Code of
Conduct

Health and Safety—Our
Employees and Contractors

Total amount of monetary losses
as a result of legal proceedings
associated with employee healthand safety violations

In 2020, Cree did not have any
monetary losses or legal actions
regarding employee health andsafety violations

SASB Disclosures

Code of Conduct*

117

SASB DISCLOSURESSEMICONDUCTOR STANDARD

SASB Topic

SASB CodeSASB Accounting Metric

SASB Disclosure

Location

Recruiting &Managing a
Global & Skilled
Workforce

TC-SC-330a.1

Percentage of employees that are(1) 0.70% foreign nationals

Sustainability Data

(1) foreign nationals and(2) 0.03% located offshore

Product Lifecycle
Management

TC-SC-410a.1

Percentage of products byrevenue that contain IEC 62474
declarable substances

Approximately 1.7% of our
products sold in FY2020 byrevenue contained IEC 62474
declarable substances.

SASB Disclosures

Product Lifecycle
Management

TC-SC-410a.2

Processor energy efficiency at asystem-level for:This metric is not relevant to anyof our products sold in 2020

SASB Disclosures

We disclose this information in
our Sustainability Report, Codeof Conduct, Responsible Minerals
Sourcing Policy, Conflict Minerals
Filing (Form SD), and California
Proposition 65 Policy

Supply Chain(2) located offshore(1) servers;(2) desktops;(3) laptops
Materials
Sourcing

TC-SC-440a.1

Description of the managementof risks associated with the use ofcritical materials

Responsible Minerals
Sourcing
California Proposition 65
Conflict Minerals Filing(Form SD)*
Code of Conduct*

Intellectual
Property
Protection &Competitive
Behavior

TC-SC-520a.1

Total amount of monetary losses
as a result of legal proceedings
associated with anticompetitive
behavior regulations

In 2020, Cree did not have any
monetary losses or legal actions
regarding anti-competitive
behavior regulations

SASB Disclosures

Activity Metric

TC-SC-000.A

Total production

We do not disclose confidential
or competitively sensitive
information

SASB Disclosures

Activity Metric

TC-SC-000.B

Percentage of production from
owned facilities

We do not disclose confidential
or competitively sensitive
information

SASB Disclosures* can be found on wolfspeed.com

118

UN SDGs DISCLOSURESThe 2030 Agenda for Sustainable Development was adopted by all United Nations Member States and provides a shared blueprint
for peace and prosperity for people and the planet, now and into the future. The 17 Sustainable Development Goals (SDGs) are an
urgent call for action by all countries in a global partnership. We have reported on how the UN SDGs and their specific targets alignwith our business focus, strategy and material issues. Refer to the Our Contributions to the UN SDGs section of this report for
more information about how our business activities contribute to the UN SDGs.

SDG

Relevant SDG Target

Related Material
Issue

Relevant
Sections of
this Report

Community
Engagement (Local
and Global)

Community
Engagement

1.2 By 2030, reduce at least by half the proportion of men,
women and children of all ages living in poverty in all its
dimensions according to national definitions

2.1 By 2030, end hunger and ensure access by all people,
in particular the poor and people in vulnerable situations,
including infants, to safe, nutritious and sufficient food allyear round

4.4 By 2030, substantially increase the number of youth
and adults who have relevant skills, including technicaland vocational skills, for employment, decent jobs andentrepreneurship

3.9 By 2030, substantially reduce the number of deaths
and illnesses from hazardous chemicals and air, water andsoil pollution and contamination

6.3 By 2030, improve water quality by reducing pollution,
eliminating dumping and minimizing release of hazardous
chemicals and materials, halving the proportion of
untreated wastewater and substantially increasing
recycling and safe reuse globally

Occupational Healthand Safety
Employee Attraction/
Development/
Retention

Water and Wastewater
Management

Health and
Safety— Our
Employees andContractors
Diversity, Equity
and Inclusion

Water
Management

119

SDG DISCLOSURES

SDG

Relevant SDG Target

Related Material
Issue

Relevant
Sections of
this Report

7.a By 2030, enhance international cooperation tofacilitate access to clean energy research and technology,
including renewable energy, energy efficiency andadvanced and cleaner fossil-fuel technology, and promote
investment in energy infrastructure and clean energy
technology
8.4 Improve progressively, through 2030, global resource
efficiency in consumption and production and endeavour
to decouple economic growth from environmental
degradation, in accordance with the 10-year frameworkof programmes on sustainable consumption andproduction, with developed countries taking the lead

Accelerationof Sustainable
Technologies
Product Innovation

Why Cree |Wolfspeed
Capacity
Expansion
Product
Sustainability

9.4 By 2030, upgrade infrastructure and retrofit
industries to make them sustainable, with increased
resource-use efficiency and greater adoption of clean
and environmentally sound technologies and industrial
processes, with all countries taking action in accordancewith their respective capabilities

10.2 By 2030, empower and promote the social, economic
and political inclusion of all, irrespective of age, sex,
disability, race, ethnicity, origin, religion or economic orother status12.5 By 2030, substantially reduce waste generation
through prevention, reduction, recycling and reuse

13.2 Integrate climate change measures into national
policies, strategies and planning

Employee Diversity
and Equal Opportunity

Diversity, Equity
and Inclusion

Community
Engagement (Local &Global)Community
Engagement

Waste Management

Waste
Management

Climate Change

Energy andGreenhouse Gas
Emissions
TCFD Disclosures

120

TCFD DISCLOSURESWe are committed to transparency of our GHG emissions and climate-related risks and opportunities, and as a result, weare disclosing this information according to the recommendations of the Task Force on Climate-related Financial Disclosures(TCFD). These disclosures help describe our climate-related impacts and how we understand and manage climate-related risks
and opportunities. Further information about our GHG emissions can be found in the Energy and Greenhouse Gas Emissions
section of this report and in our CDP Climate Change* responses.

Governance
TCFD Recommended
Disclosure

TCFD Disclosure

Describe theorganization’s
governance aroundclimate-related risks
and opportunities

Our Board of Directors is responsible for all Sustainability matters at Cree | Wolfspeed, including
climate change, through our Governance and Nominations Committee. Further information about
our Board’s oversight of Sustainability can be found in the Sustainability Oversight section of thisreport.
Our CEO, who is also a Board member, is also responsible for climate-related issues impacting thecompany because he has oversight of departments within Cree | Wolfspeed, including those thatmanage climate-related issues (e.g., Environment, Health and Safety, Sustainability, Emergency
Management, Product Development, Operations, etc.). More information about our CEO’s role with theBoard of Directors can be found in the Board of Directors and Committee Composition section of thisreport and on our Board of Directors web page.
Sustainability-related information is presented to our Board of Directors at least once per year, which
covers a range of topics, including environmental performance (GHG emissions/climate change, water,etc.) and social responsibility efforts.
Our Board of Directors also discusses climate change risks as important matters arise because ourmanufacturing facilities are not located in areas that are typically directly impacted by climaterelated events (e.g., tropical storms, droughts, etc.). Indirectly, our Board discusses climate-related
opportunities often, as our business, and more specifically our products, are designed to reduce energy
usage and therefore, greenhouse gas emissions, which directly affect climate change. For example,
our Board helps guide our business strategy, part of which focuses on the development of siliconcarbide products that enable auto manufacturers to reach their goals of electric vehicle production andadoption around the world.
Our Board of Directors also help guide our Sustainability strategy, including goals and targets
development. Refer to the Sustainability Goals section of this report for more information about ourcurrent Sustainability goals and targets.

* can be found on cdp.net or wolfspeed.com

121

TCFD DISCLOSURES
Governance
TCFD Recommended
Disclosure

TCFD Disclosure

Describemanagement’s rolein assessing andmanaging climaterelated risks andopportunities

Our Board of Directors is responsible for all Sustainability matters at Cree | Wolfspeed, including
climate change, through our Governance and Nominations Committee. Further information about
our Board’s oversight of Sustainability can be found in the Sustainability Oversight section of thisreport. Sustainability-related information is presented to our Board of Directors at least once per year
by our Senior Vice President of Legal & General Counsel, which covers a range of topics, including
environmental performance (GHG emissions/climate change, water, etc.) and social responsibility
efforts.
The group with responsibility for climate-related issues, and that develops Sustainability and climaterelated content to be presented to the Board of Directors, consists of Cree | Wolfspeed employees
from various departments, including Environment, Health and Safety, Corporate Sales and Marketingand Legal. When relevant, we also engage with employees from the Operations and Investor Relations
departments. Our Legal and Corporate Sales and Marketing departments report directly to the CEO.
Our Environment, Health and Safety department reports to the Operations department, which reports
to the CEO. Our Investor Relations group reports to the Finance department, which reports to the CEO.
The titles of employees involved in the group include the Senior Vice President of Legal & GeneralCounsel; Vice President Legal, Chief Compliance Officer; Vice President Corporate Marketing; Global
Environment, Health & Safety Director; and Environmental Engineer. Climate-related issues aremonitored by this committee because it is a multi-disciplinary group that represents all of Cree’s
business units (power and radio frequency) and provides different perspectives of how climate change
could potentially affect Cree’s product sales and financial performance, reputation, direct operations
and supply chain. On a day to day basis, the individuals of this committee work with their departments
to address climate-related issues. For example, our Environment, Health & Safety department is
responsible for various corporate sustainability initiatives and compliance with health, safety, andenvironmental regulations.

122

TCFD DISCLOSURES
Strategy
TCFD Recommended
Disclosure

TCFD Disclosure

Describe the climaterelated risks andopportunities theorganization has
identified over the
short, medium, andlong term

Our climate-related risks and opportunities over the short-, medium-, and long-term can be found in
the Our Climate Change Risks and Our Climate Change Opportunities subsection. The risks andopportunities reported here refer to those that could have a substantive financial or strategic impact toour business.
We define a substantive financial or strategic impact as something that will cause significant impact
to our business both internally (i.e., our direct operations) or externally (i.e., our upstream anddownstream value chain). We use $1 Million USD to establish a threshold for substantive financial
impact when determining potential impacts due to climate change.
Our short-term horizon was chosen to be 0-1 years because our budgets are currently established
on a shorter-term time frame. Our medium-term horizon was chosen to be 1-10 years based on our
anticipated timeline for our current capacity expansion efforts that are planned to be completed in
2024. Our long-term horizon of 10-100 years is not currently aligned with other business practice time
horizons.

Describe the impact ofclimate-related risks
and opportunities
on the organization’s
businesses, strategy,
and financial planning

We have reviewed various stages of our value chain to understand how our climate-related risks
and opportunities have influenced or could potentially influence our strategy. This information canbe found in the How Climate-Related Risks and Opportunities Have Influenced Our Strategy
subsection.
We have reviewed various financial elements to understand how our climate-related risks andopportunities have influenced or could potentially influence our financial planning and strategy. This
information can be found in the How Climate-Related Risks and Opportunities Have Influenced Our
Financial Planning subsection.
We consider different risk types when understanding and determining our climate-related risks. This
information can be found in the What We Consider When Determining Our Climate-Related Risks
subsection.
We have used a qualitative climate-related scenario analysis to better understand how climate change
could potentially affect our business and strategy. This information can be found in the Our ClimateRelated Scenario Analysis: IRENA subsection.

Describe the resilienceof the organization’s
strategy, taking into
consideration different
climate-related
scenarios, including a
2°C or lower scenario

We have used a qualitative climate-related scenario analysis to better understand how climate change
could potentially affect our business and strategy. This information can be found in the Our ClimateRelated Scenario Analysis: IRENA subsection.

123

TCFD DISCLOSURES
Risk Management
TCFD Recommended
Disclosure

TCFD Disclosure

Describe theorganization’s
processes for
identifying andassessing climaterelated risks

Direct Operations:

Describe theorganization’s
processes for
managing climaterelated risks
Describe how
processes for
identifying, assessing,and managing climaterelated risks areintegrated into theorganization’s overallrisk management

Risk management at Cree is a process undertaken by all functions within the business, including a review of risks
related to financial and market performance, operational performance, emergency preparedness and response,
environment, health and safety compliance, among other areas. Cree assesses and prioritizes risks based on
impacts to our business and products, our employees, the communities in which we operate, and our customers.
Cree also assesses and prioritizes risks based on regulatory impacts. In addition, Cree has established a formal
Enterprise Risk Management program in order to identify, assess, prioritize and manage key enterprise risks.
Climate-related risks and opportunities are discussed and addressed as part of this program.
Our Finance, Internal Audit, Legal, and Investor Relations departments identify and assess both domestic andinternational business risks, financial risks, and market risks. These risks, as well as environmental compliancerisks, are reviewed as part of financial disclosure requirements (e.g., US SEC Form 10-K). Situationally,
departments including Environment, Health and Safety, Corporate Sales and Marketing, Legal, Operations, andInvestor Relations, among others, assess Cree-specific physical and transitional risks and opportunities due toclimate change. Potential physical climate change risks to major facilities have been reviewed, including sea level
rise flooding, susceptibility to and preparation for high intensity storms, increased rainfall, drought, and water
stress and availability. Both company-level and asset level physical and transitional risks have been considered.
We have also considered raw material sourcing issues, and distribution channel impacts that could result fromglobal climate-related impacts. We use $1 Million USD to establish a threshold for substantive financial impact
when determining potential impacts due to climate change.
Cree uses a materiality assessment to review and prioritize sustainability topics, including corporate governance,
products, environmental protection (including climate change), social responsibility, and economic performance.
Cree’s senior management have been interviewed to discuss which aspects are most relevant for Cree’s future
success. We also conducted outreach to external stakeholders (e.g., customers, suppliers) to understand whichaspects they believe are most important for Cree’s future success. The results from the materiality assessment
guide us toward which areas to focus on in the future.
Cree’s Environment, Health & Safety department is responsible for maintaining our ISO 14001 certifications.
Cree’s ISO 14001 environmental management systems involve assessing environmental impacts of ourmanufacturing operations, including those that impact or are impacted by climate change. ISO 14001 defines anenvironmental aspect as an element of an organization’s activities, products, or services that has or may havean impact on the environment. Our significant impacts for each site covered under an ISO 14001 certification aredetermined using a ranking system. Each environmental aspect (e.g., greenhouse gas emissions, energy usage)
is ranked from 0 through 4 based on each of the following criteria: Severity, Magnitude, Probability, Frequency,
Controllability, Business Impact and Regulatory. Each aspect receives a total score and the highest scoresdesignate what our significant impacts are, which we focus on in more detail in our environmental management
systems.
Cree has also established corporate-wide goals to manage climate-related risks. Cree joined The Climate Group’s
EP100 initiative, which is a global, collaborative initiative of influential businesses that pledge to double theirenergy productivity. We met our first EP100 goal for our lighting products in 2017. Cree’s new strategic focus
is to build a powerhouse semiconductor company around our power and radio frequency products and a newcorporate-wide EP100 goal was developed in 2019, where we proposed to double our energy productivity in termsof revenue per MWh of energy consumed in manufacturing. We also developed corporate Sustainability goals,
which includes climate change-related goals to help further reduce our greenhouse gas impacts. Refer to the
Sustainability Goals section of this report for more information about our current Sustainability goals and targets.

124

TCFD DISCLOSURES
Risk Management
TCFD Recommended
Disclosure

TCFD Disclosure

Describe theorganization’s
processes for
identifying andassessing climaterelated risks(continued)

Upstream:

Describe theorganization’s
processes for
managing climaterelated risks(continued)
Describe how
processes for
identifying, assessing,and managing
climated-related risks
are integrated into theorganization’s overallrisk management(continued)

Situationally, departments including Environment, Health and Safety, Corporate Sales and Marketing, Legal,
Operations (Procurement), and Investor Relations, among others, assess Cree-specific physical and transitionalrisks and opportunities due to climate change. During our climate-related risk assessments we have considered
the affect climate change could have on the suppliers of our raw materials. We rely on global suppliers for raw
materials, who depending on their location, may be subject to various supply constraints, including those due
to climate change. In an instance where Cree depends on a number of limited source supplier for certain raw
materials, components, services and equipment used in the manufacturing of our products, climate changerelated risks could affect Cree. For example, chronic drought or flooding could increase instability in regions of
the world that supply critical raw materials, causing business interruption. We use $1 Million USD to establish athreshold for substantive financial impact when determining potential impacts due to climate change.
Cree also assesses upstream risks by calculating our upstream Scope 3 GHG emissions, which helps us better
understand our impact. Our Procurement department also manages both physical and transitional risks andopportunities in our supply chain. Our dedicated staff, Supplier Code of Conduct, Purchase Order Terms andConditions, and Responsible Minerals Sourcing Policy help Cree manage potential supply chain risks, including
those associated with climate change. Where possible, Cree seeks to obtain goods and services from local
suppliers in the locations where Cree conducts business, which helps to reduce our risk of business interruptions
when climate-related issues may arise and lowers transportation emission impacts.
Downstream:
Situationally, departments including Environment, Health and Safety, Corporate Sales and Marketing, Legal,
Operations, and Investor Relations, among others, assess Cree-specific physical and transitional risks andopportunities due to climate change. During our climate-related risk assessments we have considered the affectclimate change could have on our business downstream. We feel that climate change is a potential opportunity for
us because our products are specifically designed to reduce energy consumption and GHG emissions compared
to incumbent technologies. However, since climate-related events could cause delays in product distribution,
there are commercial risks associated with delivering our products in a timely manner. We use $1 Million USD toestablish a threshold for substantive financial impact when determining potential impacts due to climate change.
Cree also assesses downstream risks by calculating our downstream Scope 3 GHG emissions, which helps us
better understand our impact. Our Corporate Sales and Marketing department manages Cree’s climate-relatedtransitional risks and opportunities, including those related to our product sales, our reputation, market
projections, and consumer preferences. Cree assesses market trends and technology advancements to suggest
what our business focus should be. For example, we have shifted our strategic focus toward our semiconductorbusiness due to the anticipated increased adoption of energy efficient technologies that use our products (e.g.,renewable energy, electric vehicles).

125

TCFD DISCLOSURES
Metrics and Targets
TCFD Recommended
Disclosure

TCFD Disclosure

Disclose themetrics used by theorganization to assessclimate-related risks
and opportunities inline with its strategy
and risk management
process

We calculate our Scope 1, 2 and 3 greenhouse gas emissions annually to better understand our climate-related
impacts. Our Scope 1, 2 and 3 greenhouse gas emissions can be found in the Energy and Greenhouse Gas
Emissions and Sustainability Data sections of this report and in our CDP Climate Change* responses. Moreinformation about how our greenhouse gas emissions were calculated can be found in the GRI Content Index ofthis report. We use an independent third party to perform a limited assurance verification of our Scope 1, 2 and 3
greenhouse gas emissions. More information about the verification of our Sustainability data can be found in the
Independent Assurance Statement section of this report.
The products we produce and sell globally actually result in a net positive impact on climate change and we
calculate this impact annually. Our LED, power and RF products sold in 2020 will save approximately 327 million
MWh and 125 million metric tons CO2e over their estimated lifetimes compared to less efficient alternative
products (e.g., silicon-based power products, silicon- or gallium arsenide-based RF products). More information
about how these greenhouse gas emission savings were calculated can be found in the GRI Content Index of thisreport.
We have established corporate-wide goals to manage climate-related risks. We joined The Climate Group’s EP100
initiative, which is a global, collaborative initiative of influential businesses that pledge to double their energy
productivity. We met our first EP100 goal for our lighting products in 2017. Our new strategic focus is to build apowerhouse semiconductor company around our power and radio frequency products and a new corporate-wide
EP100 goal was developed in 2019, where we proposed to double our energy productivity in terms of revenue per
MWh of energy consumed in manufacturing. More information about progress toward our EP100 goal can be foundin the Energy and Greenhouse Gas Emissions and Sustainability Data sections of this report. We also developed
corporate Sustainability goals, which includes climate change-related goals to help further reduce our greenhousegas impacts. Refer to the Sustainability Goals section of this report for more information about our current
Sustainability goals and targets.

Disclose Scope
1, Scope 2 and, if
appropriate, Scope 3
greenhouse gas (GHG)
emissions and therelated risks

We calculate our Scope 1, 2 and 3 greenhouse gas emissions annually to better understand our climate-related
impacts. Our Scope 1, 2 and 3 greenhouse gas emissions can be found in the Energy and Greenhouse Gas
Emissions and Sustainability Data sections of this report and in our CDP Climate Change* responses. Moreinformation about how our greenhouse gas emissions were calculated can be found in the GRI Content Index ofthis report. We use an independent third party to perform a limited assurance verification of our Scope 1, 2 and 3
greenhouse gas emissions. More information about the verification of our Sustainability data can be found in the
Independent Assurance Statement section of this report.

Describe thetargets used by
the organization to
manage climaterelated risks andopportunities andperformance against
targets

We have established corporate-wide goals to manage climate-related risks. We joined The Climate Group’s EP100
initiative, which is a global, collaborative initiative of influential businesses that pledge to double their energy
productivity. We met our first EP100 goal for our lighting products in 2017. Our new strategic focus is to build apowerhouse semiconductor company around our power and radio frequency products and a new corporate-wide
EP100 goal was developed in 2019, where we proposed to double our energy productivity in terms of revenue per
MWh of energy consumed in manufacturing. More information about progress toward our EP100 goal can be foundin the Energy and Greenhouse Gas Emissions section of this report. We also developed corporate Sustainability
goals, which includes climate change-related goals to help further reduce our greenhouse gas impacts. Refer to the
Sustainability Goals section of this report for more information about our current Sustainability goals and targets.

* can be found on cdp.net or wolfspeed.com

126

TCFD DISCLOSURESOur Climate Change Risks
Potential
Risk

Time
HorizonCarbon taxes

Long-term

Potential Impacts
Direct Operations:
Requires reduction in Scope 1
emissions and potentially additionof abatement technologies.
Difficult to alter manufacturing
inputs since our products rely on
the use of very specific inputs.
Changing the types and amountsof gases used in our manufacturing
processes used could greatlycompromise product quality.

Fluctuating
socioeconomic
conditions

Long-term

Unsuccessful
investment
in new
technologies

Mediumterm

Upstream (supply chain):
Many of our critical raw materials
are sourced from areas of theworld vulnerable to instability
as a result of drought and otherclimate-related issues.

Direct Operations and Downstream(customers):
Local utilities in some of the areas
we operate are not adopting
policies that promote theeconomical adoption of renewableenergy sources.
We also see a risk with utilities
not upgrading their grid system
to be able to accept and manage
renewable energy.

Estimated Financial
Implications
Potential financial impact:$24 million annually
Potential cost of response:$6.6 million

Management Method
Improving yield.
Increasing the size of our silicon carbide
wafers produced which yields more productper similar amount of input.
Currently exploring options for abatementat our facilities and in 2020 and 2021 began
installing abatement devices at our Durham,
NC, USA and RTP, NC, USA facilities.
Currently exploring a project to eliminate
the use of one of our greenhouse gases witha high GWP. In 2020, this project entered
the testing phase and is planned to starttransitioning over to full production in 2021.

Severe cost to our supply
chain and businessinterruption. The financial
implications for this risk
affecting our supply chain
is currently unknown.
Depending on the material,
it could have a substantive
impact (i.e., could be morethan $1 million dependingon the event).

Our dedicated staff, Supplier Code of
Conduct and Responsible Minerals Sourcing
Policy help to manage potential risks in our
supply chain.

The financial implications
for this risk affecting ourdirect operations andproduct sales is currently
unknown. However, we
feel the impacts could besubstantive (i.e., could
be more than $1 million
depending on the event).

We have dedicated staff to manage ourfacilities’ electricity systems and interactions
with local utilities and policy makers.

These issues affect continued
adoption of our technologies.

127

TCFD DISCLOSURESOur Climate Change Risks (continued)
Potential
Risk

Time
HorizonWater scarcity/
availability

Long-term

Potential Impacts
Direct Operations:
We require ultra-pure water for our
manufacturing processes.
Water availability and quality issues
due to climate change could affect our
manufacturing operations and productquality.

Estimated
Financial
Implications
The financial
implications for thisrisk affecting our direct
operations is currently
unknown. However, we
feel the impacts could besubstantive (i.e., could
be more than $1 million
depending on the event).

Management Method
Assessing our water risks using the WRI
Aqueduct and WWF Risk Filter tools
Assessing all facilities’ water stress using
the WRI Aqueduct tool for current andfuture (2030 and 2040) water stress.
Currently operating water recycle systems
at our Durham, NC, USA and Huizhou,
China facilities.
Continuously explore options for water
recycle improvements to help offset the
expected increase in water usage as we
expand.

Sloweradoption oftechnologies
due to global
issuesShort-term

Direct Operations, Downstream(customers), Upstream (supply chain):
The impact of the global COVID-19 pandemic
has certainly affected every aspect oflife, including industries such as ours. As
impactful as the pandemic has been in 2020
and 2021 we are hopeful that the impacts are
truly short-term, thereby not impacting our
medium-term or long-term objectives. Our
power and radio frequency products are used
in applications such as renewable energy,
EVs and EV charging. Highlighting this fact,
BloombergNEF’s Electric Vehicle Outlook
2020 Report anticipated global passenger
vehicle sales to drop by 23% in 2020. They
also reported that EV sales in 2020 dropped
and global auto sales may not recover to2019 levels until 2025. However, according toan International Energy Agency 2020 study,
EVs are expected to fare better than theoverall car market. BloombergNEF’s Electric
Vehicle Outlook 2021 Report disclosed thenumber of EVs on the road is planned to risefrom 12 million EVs to 54 million EVs by 2025.
Since COVID-19 stay at home orders resulted
in short-term improvements in global air
quality, people have seen the effects ofreducing combustion-based transportation
first hand, which we foresee as being an
opportunity for increasing EV demand in the
future.

We continue to invest toensure our employees
are safe from thepandemic at ourfacilities. As we are in the
middle of this pandemic,
these costs have notbeen totaled.

During the COVID-19 pandemic, we havecontinued to operate the company globally.
We have a robust business continuity planthat balances employee safety with theability to get our products to market, run
logistics and manage the supply chain
from multiple locations with a wide rangeof suppliers and partners. We remaincommitted to delivering to our customers,
and our sales teams are available tosupport them as always, along with ourdedicated engineering and support staff.

128

TCFD DISCLOSURESOur Climate Change Opportunities
Potential
Risk

Time
HorizonCarbon taxes
and productefficiency
regulations
and standards

Long-term

Increased
adoption ofrenewableenergyPotential Impacts
Downstream (customers):
We have always focused ourpriorities on improving thedesign and energy efficiencyof our products. Our power
and radio frequency products
substantially reduce the amountof customer energy consumption
and associated GHGs emitted
compared to incumbent
technologies. If a carbon tax
system is established in the future,
we will be able to provide energy
efficient, less-emissive, and longlasting products to meet customer
needs. Carbon taxes may alsoenable us to gain new customers
seeking products that emit less
GHGs to lower their carbon tax
payments.

Mediumterm

Downstream (customers):
We are transparent regarding
product efficiency and information
about our products’ efficiency
can be found on our website. Our
power products can also be usedin renewable energy applications,
including solar power systems.
Solar power systems designed
around our silicon carbide powerdevices offer huge efficiency gains
and permit smaller system size,
weight and cost.

Estimated Financial
Implications
Potential financial impact:$1.5 billion annually(estimated FY2024
revenue)
Potential cost of response:$720 million over 5 years
and approximately $184.2
million annuallyManagement Method
In 2019 we announced plans invest up to $720
million over five years in the expansion of oursilicon carbide capacity, which will generate up to a
30-fold increase in silicon carbide wafer fabrication
capacity and 30-fold increase in silicon carbide
materials production. We also announced our plansto build a brand new, state-of-the-art, automotivequalified 200mm-capable wafer fabrication facility
in Marcy, New York, complemented by our megamaterials factory expansion currently underway at
our Durham headquarters.
In addition, our research and development
employees are responsible for developing energy
efficient, long-lasting, and innovative products. We
will continue to innovate for the future and develop
industry-leading energy efficient products. We
are constantly developing new technologies andcreating new markets for our products. We invest
significant resources in research and development($184.2 million in fiscal year 2020). Research anddevelopment costs listed here are for all of our
product types produced in 2020 (LED, power, andradio frequency).

Potential financial impact:$1.5 billion annually(estimated FY2024
revenue)
Potential cost of response:$720 million over 5 years
and approximately $184.2
million annually

In 2019 we announced plans invest up to $720
million over five years in the expansion of oursilicon carbide capacity, which will generate up to a
30-fold increase in silicon carbide wafer fabrication
capacity and 30-fold increase in silicon carbide
materials production. We also announced our plansto build a brand new, state-of-the-art, automotivequalified 200mm-capable wafer fabrication facility
in Marcy, New York, complemented by our megamaterials factory expansion currently underway at
our Durham headquarters.
In addition, our research and development
employees are responsible for developing energy
efficient, long-lasting, and innovative products. We
will continue to innovate for the future and develop
industry-leading energy efficient products. We
are constantly developing new technologies andcreating new markets for our products. We invest
significant resources in research and development($184.2 million in fiscal year 2020). Research anddevelopment costs listed here are for all of our
product types produced in 2020 (LED, power, andradio frequency).

129

TCFD DISCLOSURESOur Climate Change Opportunities (continued)
Potential
Risk
Changes in
consumer
behavior

Use of more
efficientmodes oftransport

Time
HorizonMediumterm

Mediumterm

Potential Impacts
Downstream (customers):
We may benefit from changes
in consumer/customer behavior
because we have always focused
our priorities on improving thedesign and energy efficiency ofour products. We believe thatour power and radio frequency
products appeal to the growing
number of eco-conscious
consumers and commercial
customers who want energy
efficient, less-emissive, and longlasting products. We believe wewill be able to meet the growing
demand for energy efficient
products resulting from changes incustomer preferences.

Downstream (customers):
We foresee an increased demand
for more efficient forms oftransportation, including electricvehicles. Many automotive
companies are increasingly
investing in the electric vehicle
market and our power products
can be used in electric vehicles.
Our silicon carbide MOSFETs,for example, enable faster, more
efficient charging and increase
power density of the electric
circuits. Our silicon carbide
products allow electric vehicles
to go farther, charge faster, andperform better.

Estimated Financial
Implications
Potential financial impact:$1.5 billion annually(estimated FY2024
revenue)
Potential cost of response:$720 million over 5 years
and approximately $184.2
million annuallyManagement Method
In 2019 we announced plans invest up to $720
million over five years in the expansion of oursilicon carbide capacity, which will generate up to a
30-fold increase in silicon carbide wafer fabrication
capacity and 30-fold increase in silicon carbide
materials production. We also announced our plansto build a brand new, state-of-the-art, automotivequalified 200mm-capable wafer fabrication facility
in Marcy, New York, complemented by our megamaterials factory expansion currently underway at
our Durham headquarters.
In addition, our research and development
employees are responsible for developing energy
efficient, long-lasting, and innovative products. We
will continue to innovate for the future and develop
industry-leading energy efficient products. We
are constantly developing new technologies andcreating new markets for our products. We invest
significant resources in research and development($184.2 million in fiscal year 2020). Research anddevelopment costs listed here are for all of our
product types produced in 2020 (LED, power, andradio frequency).

Potential financial impact:$1.5 billion annually(estimated FY2024
revenue)
Potential cost of response:$720 million over 5 years
and approximately $184.2
million annually

In 2019 we announced plans invest up to $720
million over five years in the expansion of oursilicon carbide capacity, which will generate up to a
30-fold increase in silicon carbide wafer fabrication
capacity and 30-fold increase in silicon carbide
materials production. We also announced our plansto build a brand new, state-of-the-art, automotivequalified 200mm-capable wafer fabrication facility
in Marcy, New York, complemented by our megamaterials factory expansion currently underway at
our Durham headquarters.
In addition, our research and development
employees are responsible for developing energy
efficient, long-lasting, and innovative products. We
will continue to innovate for the future and develop
industry-leading energy efficient products. We
are constantly developing new technologies andcreating new markets for our products. We invest
significant resources in research and development($184.2 million in fiscal year 2020). Research anddevelopment costs listed here are for all of our
product types produced in 2020 (LED, power, andradio frequency).

130

TCFD DISCLOSURESOur Climate-Related Scenario Analysis: IRENA
We reviewed all climate-related scenarios listed in the CDP Climate Change survey and eliminated options that heavily relied oncarbon sequestration as a technology that is not progressing as rapidly as the scenarios require. Other scenarios were eliminatedbased on whether they included global carbon taxes. Where we operate, we do not feel global carbon taxes are perceived as being
realistic in the next 10 years, which is the timeframe we used during our analysis.
Cree used the International Renewable Energy Agency (IRENA) scenario because we feel that it is a scenario that could reasonably
occur in the future and because it promotes energy efficiency measures and increased adoption of renewable energy, which aligns
with our business focus and strategy. We also chose the IRENA scenario because it is in line with limiting global temperature rise to
1.5 degrees Celsius and bringing GHG emissions to net zero by 2050. We assessed our strengths, weaknesses, opportunities, andthreats in the IRENA scenario for all Cree operations and our value chain on a long-term (10 year) timeframe because the IRENA
climate-scenario considers CO2 emissions reductions by 2050. Even though IRENA is projected to 2050, the impacts within the next
10 years are significant with existing technologies.
The results from the IRENA analysis reinforce our new strategy toward significant investment in our power and radio frequency
division. The market for energy efficient products (i.e., renewable energy, electric vehicles) is expected to expand and our products
are more efficient than existing technologies. The results of our IRENA scenario analysis include:

Strengths
The energy efficiency impacts of our current products canhelp with the energy efficiency needs specified in the IRENA
scenario. Developing energy efficient products is part of oureveryday culture and what motivates our employees. Our
products also allow for the development of other energy
efficient products (e.g., renewable energy, electric vehicles).
Our research and development drives innovation and speed
to market for energy efficient products in the marketplace.
We are vertically integrated which helps minimize our supply
chain risks.

Weaknesses
Our planning processes are typically shorter than the 10 year
time frame used in this analysis. Electricity is a large input toour manufacturing process and we currently only purchaserenewable energy directly at our Morgan Hill, CA, USA facility,
which represents a small amount compared to other Cree’s
manufacturing sites’ electricity usage. Any use of renewableenergy at our other facilities is based on our electric utilities’
energy mix.

Opportunities
Our power and radio frequency products allow other industries
to develop leading energy efficient products in applications
such as renewable energy, wireless communication, electricvehicles, and electric vehicle charging. In the IRENA scenario,
all these technology changes will be required to reduce CO2
emissions. Regulation in the form of carbon taxes could
increase demand for our products and could offset increases
in operational cost from the tax. In our operations, we could
diversify our energy supply by implementing renewableenergy at our sites to replace our current electricity from nonrenewable sources. The increased adoption of energy efficienttransportation will require increased electrification andimprovements in the world’s current energy grid. The current
state of our energy grid will not support the large anticipatedshift to electric vehicle adoption and we believe that our
products can enable improvements in the energy grid.

Threats
It is possible that other more energy efficient technologies
not yet developed could replace ours, putting our business at
risk. If the impacts due to climate change worsen, Cree could
experience supply chain disruptions due to extreme weather
events and/or climate shifts. Energy grid capacity constraints
could affect the adoption of new technologies that use our
products.

131

TCFD DISCLOSURESHow Climate-Related Risks and Opportunities Have Influenced Our Strategy
We have reviewed various stages of our value chain to understand how our climate-related risks and opportunities haveinfluenced or could potentially influence our strategy.

Value Chain
Stage

Description

Downstream:
Products

Climate change opportunities have influenced our strategy regarding our products. Cree was founded upon the premisethat our silicon carbide (SiC) based technology for power and radio frequency (RF) devices could fundamentally change
the efficiency of energy use around the world. Our mission is to lead the innovation and commercialization of SiC andgallium nitride (GaN), liberating designers to invent power and wireless systems for a responsible, energy efficient
future. Our power and RF products allow other industries to develop leading energy efficient products in applications
such as renewable energy, wireless communication and electric vehicles. Our RF products help enable the transition
to 5G, which requires the transmission of more data at faster speeds with greater precision. Smart cities, smart
manufacturing, autonomous vehicles and connected transportation can all be realized through the availability of 5G.
Our products can achieve the greater bandwidth and efficiency that 5G requires. We have always focused our priorities
on improving the energy efficiency of our products, which in turn have a lower impact on the environment and climatechange. The products we produce and sell globally actually result in a net positive impact on climate change. Our LED,
power and RF products sold in 2020 will save approximately 327 million MWh and 125 million metric tons CO2e overtheir estimated lifetimes compared to less efficient alternative products (e.g., silicon-based power products, silicon- or
gallium arsenide-based RF products).

Upstream:
Supply chain

Our climate change risks have influenced our strategy regarding our supply chain. Situationally, various departments
including Environment, Health and Safety, Corporate Sales and Marketing, Legal, Operations, and Investor Relations,among others, assess Cree-specific physical and transitional risks and opportunities due to climate change. During our
climate-related risk assessments we have considered the affect climate change could have on the suppliers of our raw
materials. We rely on global suppliers for raw materials, who depending on their location, may be subject to various
supply constraints, including those due to climate change. In an instance where we depend on a number of limited
source supplier for certain raw materials, components, services and equipment used in the manufacturing of our
products, climate change-related risks could affect Cree.
We also assess upstream supply chain risks by calculating our upstream Scope 3 GHG emissions, which helps us better
understand our impact. Our Purchasing division manages both physical and transitional risks and opportunities in our
supply chain. Our dedicated staff, Supplier Code of Conduct, Purchase Order Terms and Conditions, and Responsible
Minerals Sourcing Policy help Cree manage potential supply chain risks, including those associated with climatechange. Where possible, Cree seeks to obtain goods and services from local suppliers in the locations where we conductbusiness, which helps to reduce our risk of business interruptions when climate-related issues may arise and lowers
transportation emission impacts.

DirectOperations:
Investment in
R&D

Our climate change opportunities have influenced our strategy regarding our investment in R&D. Climate change isinherently integrated into our business objectives and strategy. We are a market-leading innovator of semiconductor
products for power and radio frequency applications. Cree was founded upon the premise that our silicon carbide (SiC)
based technology for power and radio frequency devices could fundamentally change the efficiency of electricity use
around the world. We invest significant resources in R&D and our research and development employees are responsible fordeveloping energy efficient, long-lasting, and innovative products. We will continue to innovate for the future and develop
industry-leading energy efficient products. We are constantly developing new technologies and creating new markets for our
products.

132

TCFD DISCLOSURESHow Climate-Related Risks and Opportunities Have Influenced Our Strategy (continued)
Value Chain
Stage

Description

DirectOperations:
Our Operations

Our climate change risks and opportunities have influenced our strategy regarding our operations. We have improved
yield by increasing the size of the SiC wafers produced which yields more product per the same amount of input (e.g.,
electricity and GHGs used in the production process). Our manufacturing departments collect metrics for production
and product mix including energy efficiency and product yield. These metrics are then used to fuel internal decisions
regarding process operations, product design, sales goals, etc. We have an incentive program to increase manufacturing
yield, resulting in fewer wasted materials, lower usage of greenhouse gases in our manufacturing processes, andreduced costs.
Our business strategy has also enabled Cree to join The Climate Group’s EP100 initiative in 2017. Our new strategic
focus is to build a powerhouse semiconductor company around our power and RF products and a new corporate-wide
EP100 goal was developed in 2019, where we proposed to double our energy productivity in terms of revenue per MWhof energy consumed in manufacturing. We also developed corporate Sustainability goals, which includes climate changerelated goals to help further reduce our greenhouse gas impacts. Refer to the Sustainability Goals section of this report for
more information about our current Sustainability goals and targets.
The foreseen increased demand for energy efficient technologies like renewable energy and electric vehicles due totheir impacts on energy efficiency and climate change, further supports our focus and strategy. In 2019 we announcedplans invest up to $720 million in the expansion of our silicon carbide (SiC) capacity, which will generate up to a 30-foldincrease in SiC wafer fabrication capacity and 30-fold increase in SiC materials production. We also announced our plansto build a brand new, state-of-the-art, automotive-qualified 200mm-capable wafer fabrication facility in Marcy, New
York, complemented by our mega materials factory expansion currently underway at our Durham headquarters. The new
fabrication facility will be a bigger, highly-automated factory with greater output capability. More information about our
expansion efforts can be found in the Capacity Expansion section of this report.
We also use a materiality assessment to review and prioritize sustainability objectives. Product innovation (including
improvements in energy efficiency) and energy efficiency of operations have been identified as two of the mostimportant aspects by both internal and external stakeholders. More information about our materiality assessment canbe found in the Materiality Assessment section of this report.
Our Environment, Health and Safety department also collects environmental metrics and works with other departments,
including production and facilities, to ensure regulatory compliance and environmental operational efficiency.

133

TCFD DISCLOSURESHow Climate-Related Risks and Opportunities Have Influenced Our Financial Planning
We have reviewed various financial elements to understand how our climate-related risks and opportunities have influenced or
could potentially influence our financial planning.

Financial
Element

Description

Revenue

Our identified risks have not impacted our revenue financial planning since our risks are more on a medium-term or
long-term time frame. Our climate change opportunities are impacted because we foresee an increase in demand for our
power and radio frequency products in the short-, medium-, and long-term. Our power and radio frequency products
greatly reduce power loss, resulting in less electricity wasted (and thus fewer GHGs emitted) compared to incumbent
technologies. In 2020, these opportunities have allowed us to bring new products to market, contributing to an increase
our power and radio frequency revenue. We anticipate our power and radio frequency revenue could increase from
$470.7 million in FY2020 to about $1.5 billion in FY2024.

Indirect costs

Our operating costs are currently established in our budgets on a short-term time frame. Our identified risks have notyet greatly impacted our operating cost planning process since our risks are on a medium-term or long-term time frame.
Our manufacturing operations heavily rely on the use of electricity. We have not seen major changes in fuel or electricity
costs and do not anticipate major changes in the short-term and medium-term. However, in 2019 we developed a
new corporate-wide EP100 goal, which is to double our energy productivity in terms of revenue per MWh of energy
consumed in manufacturing by 2040, using 2017 as our baseline. Since we foresee an increase in demand for our power
and radio frequency products, in 2020 and beyond we are targeting the conversion of the majority of our Wolfspeed
power production from 100mm to either 150mm or 200mm substrates. Because we aimed to make the transition in a
cost-effective and timely manner, in many cases we relied on contractors for production capacity, logistics support andcertain administrative functions including hosting of certain information technology software applications. These addedfunctions affect our operating costs.

Capitalexpenditures

Our opportunities have been factored into our capital expenditures planning, as we foresee an increase in demand for ourenergy efficient power and radio frequency products and as a result plan to invest in expanding our operations in the shortterm. Further investment in our power and radio frequency division requires an increase in capital expenditures. At ourexisting sites, we have increased production capacity by adding new equipment and infrastructure to meet the increased
demand for our products. In 2019 we announced plans invest up to $720 million in the expansion of our silicon carbide (SiC)
capacity, which will generate up to a 30-fold increase in SiC wafer fabrication capacity and 30-fold increase in SiC materials
production to meet the expected market growth by 2024. We also announced our plans to establish a SiC corridor on the East
Coast of the United States with the creation of the world’s largest SiC fabrication facility. Our plans include building a brandnew, state-of-the-art, automotive-qualified 200mm-capable wafer fabrication facility in Marcy, New York, complemented byour mega materials factory expansion currently underway at our Durham headquarters. The new fabrication facility will be abigger, highly-automated factory with greater output capability. The plan enables 25 percent increased capacity with lower
net capital expenditures. Our expansion plan marks Cree’s largest investment to date in fueling our Wolfspeed silicon carbide
and GaN on silicon carbide business.

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TCFD DISCLOSURESHow Climate-Related Risks and Opportunities Have Influenced Our Financial Planning (continued)
Financial
Element

Description

Access to capital

Our identified risks have not yet impacted our access to capital since they are on a medium-term or long-term timeframe. We anticipate our climate change opportunities to be impacted because we foresee an increase in demand for ourenergy efficient LED, power and radio frequency products in the short-, medium- and long-term. In 2019 we announcedplans invest up to $720 million in the expansion of our silicon carbide (SiC) capacity, which will generate up to a 30fold increase in SiC wafer fabrication capacity and 30-fold increase in SiC materials production to meet the expectedmarket growth by 2024. We also announced our plans to establish a SiC corridor on the East Coast of the United Stateswith the creation of the world’s largest SiC fabrication facility. Our plans include building a brand new, state-of-theart, automotive-qualified 200mm-capable wafer fabrication facility in Marcy, New York, complemented by our megamaterials factory expansion currently underway at our Durham headquarters. The new fabrication facility will be abigger, highly-automated factory with greater output capability. The plan enables 25 percent increased capacity withlower net capital expenditures. Our expansion plan marks the Cree’s largest investment to date in fueling our Wolfspeed
silicon carbide and GaN on silicon carbide business.

Acquisitions anddivestitures

Our identified risks have not yet impacted our acquisitions planning but our climate change opportunities have been
impacted in the short-term. We are expanding our power and radio frequency division due to increased demand, and in
2018 we acquired Infineon’s RF Power Business for approximately € 345 million. This acquisition allows Cree’s wirelessmarket opportunity to expand, especially in terms of positioning our products to enable faster 4G networks and being
on the forefront of providing products to transition to 5G. To further our strategy to create a more focused, powerhousesemiconductor company, we divested our Lighting Products business unit in 2019 for approximately $310 million before
tax impacts. In 2020, we announced the divestiture of our LED business unit for approximately $300 million; this sale was
finalized in 2021. Both transactions have provided significant resources to help accelerate the growth of our power andradio frequency division.

135

TCFD DISCLOSURES
What We Consider When Determining Our Climate-Related Risks
Situationally, departments including Environment, Health and Safety, Corporate Sales and Marketing, Legal, Operations, andInvestor Relations, among others, assess Cree-specific risks and opportunities due to climate change. We have reviewed various
risk types along our value chain to better understand and determine our climate-related risks and opportunities.
Risk Type

Description

Current
regulation

Current regulation is relevant and has been included in our assessments. However, the current regulation that applies
to Cree only requires reporting of greenhouse gas emissions to the US EPA, which is done annually in accordance withsuch regulation. Our GHG emissions are included in our climate-related risk assessments, specifically when we discuss
our risks associated with regulations that could emerge because of the data collected from US EPA’s Greenhouse
Gas Reporting Program reporting requirements (e.g., carbon taxes, GHG emission threshold regulations). Throughcalculating emissions for EPA, we also assess our GHG emission impacts and how they compare to our competitors’
impacts. The data from US EPA’s Greenhouse Gas Reporting Program are available to the public. Having high direct
GHG emissions per revenue or production can put us at a reputational risk for stakeholders like customers, investors
and organizations that rate/score us based on our ESG performance. Assessing these risks pushes Cree to establish
goals. Cree joined the EP100 initiative in 2017. In 2019, we updated our corporate-wide EP100 goal, which is to double
our energy productivity in terms of revenue per MWh of energy consumed in manufacturing by 2040, using 2017 as ourbaseline. We also developed corporate Sustainability goals, which includes climate change-related goals to help further
reduce our greenhouse gas impacts. Refer to the Sustainability Goals section of this report for more information about ourcurrent Sustainability goals and targets.

Emerging
regulation

We have considered emerging regulation as both a risk and opportunity in our climate-related risk assessments. For
example, we have discussed how regulations assigning a cost of carbon would potentially impact our production costs
and operations. We could reduce our Scope 1 GHG emissions and reduce our carbon taxes by adding fluorinated gas
abatement. We are currently exploring abatement technologies for our facilities and in 2020 and 2021 began installingabatement devices at our Durham and RTP facilities. We have also considered the potential impacts to Cree’s businessdue to the proposed EPA HFC-phasedown rule associated with the AIM Act. It is more difficult to change manufacturing
inputs since our products rely on the use of very specific inputs. Changing the types and amounts of gases used in our
manufacturing processes could greatly compromise product quality. However, our power and radio frequency products
substantially reduce the amount of customer energy consumption and associated GHGs emitted. If a carbon tax systemis established in the future, we will be able to provide energy efficient, less-emissive, and long-lasting products to meetcustomer needs. Carbon taxes may also enable us to gain new customers seeking products that emit less GHGs to lower
their carbon tax payments. Assessing these risks also pushes Cree to establish goals. Cree joined the EP100 initiative in2017. In 2019, we updated our corporate-wide EP100 goal, which is to double our energy productivity in terms of revenue
per MWh of energy consumed in manufacturing by 2040, using 2017 as our baseline. We also developed corporate
Sustainability goals, which includes climate change-related goals to help further reduce our greenhouse gas impacts. Referto the Sustainability Goals section of this report for more information about our current Sustainability goals and targets.

Acute physicalWe have considered acute physical risks in our climate-related scenario analyses. Cree has assessed potential risks to major
facilities due to climate change, including flooding from sea level rise, susceptibility to and preparation for high intensity
storms, increased rainfall, drought, and water stress and availability. Acute physical risks are also incorporated into Cree’s
business continuity plan, which takes into consideration potential risks that could cause a significant business interruption.

136

TCFD DISCLOSURES
What We Consider When Determining Our Climate-Related Risks (continued)
Risk Type

Description

Chronic physicalWe have considered chronic physical risks in our climate-related scenario analyses. We have assessed how shifts in climate
could affect our facilities and supply chain in the long term. For example, sea level rise could impact the ports used forshipment of raw materials and products around the world. Chronic physical risks are also incorporated into Cree’s business
continuity plan, which takes into consideration potential risks that could cause a significant business interruption.

Legal

Various departments throughout Cree ensure we are maintaining compliance with all laws, including those related toclimate change. To date, legal issues have not been a significant climate change risk or opportunity for Cree, however
Cree continues to monitor future regulations as discussed in the emerging regulation section (e.g., we have discussed
how regulations assigning a cost of carbon would potentially impact our production costs and operations, and have
explored new projects to reduce the use of fluorinated gases with high GWPs in our manufacturing processes).

Technology

We have considered technology as both a risk and opportunity in our climate-related risk assessments. Through ourenergy efficient products, our success is tied, in part, to efforts to reduce product energy usage and resulting greenhousegas emissions, which directly affect climate change. Our power products enable other energy efficient technologies (e.g.,renewable energy, electric vehicles) to develop, and we have discussed the risks associated with the timely adoption
and scale of these technologies.

MarketWe have considered consider market risks in our climate-related risk assessments. The market for energy efficient products
affects our business because our products reduce product energy usage and greenhouse gas emissions, which directly affectclimate change. Market projections affect us because we are investing in our power division to meet the anticipated demand
for technologies that use our power products (e.g., renewable energy, electric vehicles). BloombergNEF estimates there
are currently over 127 million passenger EVs on the road and this number will continue to rise. There are risks associatedwith production planning based on the market for energy efficient technologies. If we project too low then we would not
be able to meet demand and lose our competitive advantage. If we project demand to be too high, then we risk investing in
unnecessary capital to develop our facilities.

Reputation

We have considered reputation in our climate-related risk assessments because our reputation is directly tied to
producing products that reduce product energy usage and greenhouse gas emissions. We have considered risks fromclimate change and how they would affect customer satisfaction and our external reputation. We also have considered
operational risks and how they affect our internal reputation with current and future employees. We also assess our
GHG emission impacts and how they compare to our competitors’ impacts. The data from US EPA’s Greenhouse Gas
Reporting Program and Sustainability Report are available to the public. Having high direct GHG emissions per revenue
or production can put us at a reputational risk for stakeholders like customers, investors and organizations that rate/
score us based on our ESG performance. Assessing these risks pushes Cree to establish goals. Cree joined the EP100
initiative in 2017. In 2019, we updated our corporate-wide EP100 goal, which is to double our energy productivity interms of revenue per MWh of energy consumed in manufacturing by 2040, using 2017 as our baseline. We also developed
corporate Sustainability goals, which includes climate change-related goals to help further reduce our greenhouse gas
impacts. Refer to the Sustainability Goals section of this report for more information about our current Sustainability
goals and targets.

137

SUSTAINABILITY DATAEMPLOYEES
Employees
Employees by Region [GRI 102-8]
North America
EuropeAsia
Employees by Employment Contract1 [GRI 102-8]
Full Time/Part Time
FemaleMale
Full Time/Part Time
North America
Asia
TemporaryFemaleMale
TemporaryNorth America
Asia
Employees by Employment Type1 [GRI 102-8]
Full Time
FemaleMalePart Time
FemaleMale
Foreign Nationals and Offshore Employees[SASB TC-SC-330a.1]

Foreign Nationals
Located Offshore
Employees by Gender1 [GRI 405-1]
FemaleTotal (%)
Admin Support Workers (%)
Craft Workers (%)
Executive/Senior Level Officials and Managers (%)
First/Mid Level Officials and Managers (%)
Operatives (%)
Professionals (%)
Sales Workers (%)
Service Workers (%)
Technicians (%)

2016

2017

2018

2019

2020

6,039
3,534
79
2,426
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

6,086
3,506
82
2,498
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

6,625
4,273
94
2,258
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

5,053
3,029
46
1,978
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

5,764
3,525
64
2,175
5,679
5,136
1,954
3,182
5,136
3,256
1,880
543
244
299
543
543
0
11,282
5,603
2,147
3,456
76
51
25

•

•

•

•

0.74%

•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•

0.70%
0.03%
5,679
2,198
38.7%
63.0%
0%
15.9%
23.8%
51.4%
28.3%
25.0%
33.3%
24.9%
138

SUSTAINABILITY DATAEMPLOYEES
Employees
Employees by Gender1 [GRI 405-1]
Male
Total (%)
Admin Support Workers (%)
Craft Workers (%)
Executive/Senior Level Officials and Managers (%)
First/Mid Level Officials and Managers (%)
Operatives (%)
Professionals (%)
Sales Workers (%)
Service Workers (%)
Technicians (%)
Employees by Age1 [GRI 405-1]<30
Admin Support Workers (%)
Craft Workers (%)
Executive/Senior Level Officials and Managers (%)
First/Mid Level Officials and Managers (%)
Operatives (%)
Professionals (%)
Sales Workers (%)
Service Workers (%)
Technicians (%)
30-50
Admin Support Workers (%)
Craft Workers (%)
Executive/Senior Level Officials and Managers (%)
First/Mid Level Officials and Managers (%)
Operatives (%)
Professionals (%)
Sales Workers (%)
Service Workers (%)
Technicians (%)>50
Admin Support Workers (%)
Craft Workers (%)
Executive/Senior Level Officials and Managers (%)
First/Mid Level Officials and Managers (%)
Operatives (%)
Professionals (%)
Sales Workers (%)
Service Workers (%)
Technicians (%)

2016

2017

2018

2019

2020

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

3,481
3,481
61.3%
37.0%
100%
84.1%
76.3%
48.6%
71.8%
75.0%
66.7%
75.1%
•
•
14.8%
20.0%
0%
2.1%
27.5%
25.3%
9.4%
18.5%
23.0%
•
61.7%
40.0%
36.4%
66.5%
55.5%
56.6%
56.3%
51.9%
53.3%
•
23.5%
40.0%
63.6%
31.4%
17.1%
18.1%
34.4%
29.6%
23.7%
139

SUSTAINABILITY DATAEMPLOYEES
Employees
Employees by Ethnicity1 [GRI 405-1]
American Indian or Alaska Native (Not Hispanic or Latino)

Admin Support Workers (%)
Craft Workers (%)
Executive/Senior Level Officials and Managers (%)
First/Mid Level Officials and Managers (%)
Operatives (%)
Professionals (%)
Sales Workers (%)
Service Workers (%)
Technicians (%)
Asian (Not Hispanic or Latino)

Admin Support Workers (%)
Craft Workers (%)
Executive/Senior Level Officials and Managers (%)
First/Mid Level Officials and Managers (%)
Operatives (%)
Professionals (%)
Sales Workers (%)
Service Workers (%)
Technicians (%)
Black or African American (Not Hispanic or Latino)

Admin Support Workers (%)
Craft Workers (%)
Executive/Senior Level Officials and Managers (%)
First/Mid Level Officials and Managers (%)
Operatives (%)
Professionals (%)
Sales Workers (%)
Service Workers (%)
Technicians (%)
Hispanic or Latino (United States of America)

Admin Support Workers (%)
Craft Workers (%)
Executive/Senior Level Officials and Managers (%)
First/Mid Level Officials and Managers (%)
Operatives (%)
Professionals (%)
Sales Workers (%)
Service Workers (%)
Technicians (%)

2016

2017

2018

2019

2020

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
0.3%
0%
0%
0%
0.2%
0.1%
0.3%
0%
0%
0.7%
48.9%
25.3%
13.3%
4.7%
25.9%
66.0%
36.1%
22.6%
14.8%
39.8%
18.1%
27.9%
33.3%
2.3%
7.9%
25.9%
5.0%
0%
66.7%
19.0%
2.4%
3.8%
0%
2.3%
4.8%
1.5%
2.5%
3.2%
3.7%
3.1%
140

SUSTAINABILITY DATAEMPLOYEES

2016

2017

2018

2019

2020

Admin Support Workers (%)
Craft Workers (%)
Executive/Senior Level Officials and Managers (%)
First/Mid Level Officials and Managers (%)
Operatives (%)
Professionals (%)
Sales Workers (%)
Service Workers (%)
Technicians (%)
Countries Represented by Employees
Job Vacancies Filled by Current Employees (%)

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
64
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
69
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
72
26%

•
0.1%
0%
0%
0%
0%
0%
0.3%
0%
0%
0.2%
0.9%
1.3%
0%
0%
0.5%
0.5%
1.6%
0%
3.7%
1.4%
29.3%
41.8%
53.3%
90.7%
60.7%
6.0%
54.1%
74.2%
11.1%
35.9%
77
21%

Number of New Hires1 [GRI 401-1]

•

•

•

884

•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•

865
865

Employees
Employees by Ethnicity1 [GRI 405-1]
Native Hawaiian or Other Pacific Islander (Not Hispanic or Latino)

Admin Support Workers (%)
Craft Workers (%)
Executive/Senior Level Officials and Managers (%)
First/Mid Level Officials and Managers (%)
Operatives (%)
Professionals (%)
Sales Workers (%)
Service Workers (%)
Technicians (%)
Two or More Races (Not Hispanic or Latino)

Admin Support Workers (%)
Craft Workers (%)
Executive/Senior Level Officials and Managers (%)
First/Mid Level Officials and Managers (%)
Operatives (%)
Professionals (%)
Sales Workers (%)
Service Workers (%)
Technicians (%)
White (Not Hispanic or Latino)

By Region

North America
Asia
By Gender

FemaleMale
By Age

<30
30-50
>50

751
114

865
331
534

865
391
359
115

141

SUSTAINABILITY DATAEMPLOYEES
Employees
Parental Leave2 [GRI 401-3]
Employees Eligible for Parental Leave

FemaleMale
Employees Who Took Parental Leave

FemaleMale
Employees Who Returned to Work After Parental Leave

FemaleMale
Employees Who Were Still Employed 12 Months After Parental Leave

FemaleMale
Return to Work Rate for Employees Who Took Parental Leave

FemaleMale
Retention Rate for Employees Who Took Parental Leave

FemaleMale
Board of Directors
Board of Directors by Gender [GRI 405-1]
FemaleMale
Board of Directors by Age [GRI 405-1]
<30
30-50
>50
Board of Directors by Ethnicity [GRI 405-1]
American Indian or Alaska Native (Not Hispanic or Latino)
Asian (Not Hispanic or Latino)
Black or African American (Not Hispanic or Latino)
Native Hawaiian or Other Pacific Islander (Not Hispanic or Latino)

Hispanic or Latino (United States of America)
Two or More Races (Not Hispanic or Latino)
White (Not Hispanic or Latino)

2016

2017

2018

2019

2020

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

3,249

100%
12.5%
87.5%
100%
0%
37.5%
62.5%
100%
0%
0%
0%
0%
0%
0%
100%

100%
12.5%
87.5%
100%
0%
25.0%
75.0%
100%
0%
0%
0%
0%
0%
0%
100%

100%
12.5%
87.5%
100%
0%
0%
100%
100%
0%
0%
0%
0%
0%
0%
100%

100%
33.3%
66.7%
100%
0%
0%
100%
100%
0%
11.1%
0%
0%
0%
0%
88.9%

935
2,314

93
20
73

91
19
72

85
17
68

97.8%
95.0%
98.6%

91.4%
85.0%
93.2%

100%
22.2%
77.8%
100%
0%
0%
100%
100%
0%
11.1%
11.1%
0%
0%
0%
77.8%

142

SUSTAINABILITY DATAEMPLOYEES
Employee Occupational Health & Safety
Work-Related Fatalities [GRI 403-9] [GRI 403-10]
3

Hours Worked (millions of hours) [GRI 403-9] [GRI 403-10]

Recordable Work-Related Injuries and Ill Health Cases3,4[GRI 403-9] [GRI 403-10]

Injury Cases
Ill Health Cases
Recordable Work-Related Injuries and Ill Health Rates3,5[GRI 403-9] [GRI 403-10]

Injury Rates
Ill Health Rates
High-Consequence Recordable Work-Related Injuries

and Ill Health Cases3,6 [GRI 403-9] [GRI 403-10]
Injury Cases
Ill Health Cases
High-Consequence Recordable Work-Related Injuries andIll Health Rates3,4,5,6 [GRI 403-9] [GRI 403-10]
Injury Rates
Ill Health Rates
Employee Recordable Work-Related Injuries and Ill
Health Rate Third-Party Verified (limited assurance)
Contract Employee7 Occupational Health & Safety
Work-Related Fatalities [GRI 403-9] [GRI 403-10]
Recordable Work-Related Injuries and Ill Health Cases[GRI 403-9] [GRI 403-10]

Injury Cases
Ill Health Cases
High-Consequence Recordable Work-Related Injuries
and Ill Health Cases6 [GRI 403-9] [GRI 403-10]
Injury Cases
Ill Health Cases

4

2016

2017

2018

2019

2020

0
11.2

0
11.5

0
12.1

0
11.3

0
10.3

43

31

43

50

35

27
16

25
6

41
2

38
12

31
4

0.77

0.54

0.71

0.88

0.68

0.48
0.29

0.43
0.10

0.68
0.03

0.67
0.21

0.60
0.08

3

1

0

6

4

2
1

1
0

0
0

6
0

3
1

0.05

0.02

0.00

0.11

0.08

0.04
0.02

0.02
0.00

0.00
0.00

0.11
0.00

0.06
0.02

No

No

No

Yes

Yes

0

0

0

0

0

6

13

5

0

5

6
0

13
0

4
1

0
0

4
1

0

0

0

0

0

0
0

0
0

0
0

0
0

0
0

143

SUSTAINABILITY DATAENVIRONMENT

2016

2017

2018

2019

2020

MWh

424,549

432,485

469,398

463,036

447,002MWhMWh351,311
73,239357,055
75,430394,301
75,098388,048
74,988375,652
71,350MWh••65,47264,56329,593

MWh

0

0

1,215

2,024

2,224

MWh

•

•

64,25762,53927,369MWh••

99,545

104,471

170,192

MWh

0

0

0

0

0

MWh

•

•

99,545

104,471

170,192MWh424,549

432,485

304,381

294,002247,217MWh351,311357,055

229,283

219,014

175,867MWh
MWh

73,058172

74,918247

74,368447

74,416
231

70,835215

Liquefied petroleum gas (LPG) purchased

MWh

8

0

0

0

0

Gasoline purchased
Propane gas purchased
Heat, Steam, Cooling Purchased [GRI 302-1]
Heat purchased
Steam purchased
Cooling purchased
Energy Sold [GRI 302-1]
Electricity soldHeat soldSteam soldCooling sold

MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh

•
•
0
0
0
0
0
0
0
0
0

165
100
0
0
0
0
0
0
0
0
0

150
132
0
0
0
0
0
0
0
0
0

221
119
0
0
0
0
0
0
0
0
0

173
126
0
0
0
0
0
0
0
0
0

•

1,909

2,227

2,099

1,742

No

No

No

Yes

Yes

Energy Use
Total Energy Purchased [GRI 302-1][SASB TC-SC-130a.1]

Electricity purchased
Other energy purchased
Estimated Renewable Energy Purchased[GRI 302-1] [SASB TC-SC-130a.1]

Direct purchase of renewable energy forelectricity (e.g., wind, solar)
Estimated renewable energy purchases
based on local utilities' energy grid mix
Estimated Other Carbon-Free (e.g., nuclear)
Energy Purchased [GRI 302-1] [SASB TC-SC-130a.1]
Direct purchase of other carbon-freeenergy for electricity
Estimated other carbon-free electricity
purchased based on local utilities' energy
grid mix or country-specific data when utility
information is unavailable or unknown
Estimated Non-Renewable Energy Purchased[GRI 302-1] [SASB TC-SC-130a.1]

Estimated non-renewable electricity
purchased based on local utilities' energy
grid mix or country-specific data when utility
information is unavailable or unknown
Natural gas purchased
Diesel purchased

EP100 Energy Productivity Goal [GRI 302-3]
Total Energy Purchased Third-Party Verified(limited assurance)

Revenue/MWhenergy consumed

144

SUSTAINABILITY DATAENVIRONMENT

2016

2017

2018

2019

2020

metric tons CO2e

179,507

211,684

253,411247,202280,566

CO2

metric tons CO2e13,273

13,666

13,64913,61012,948CH4

metric tons CO2e

47

44

67

64

62

N2O

metric tons CO2e

HFCs
PFCs
SF6

metric tons CO2e
metric tons CO2e

2,759
22,61035,44591,1733,091
14,232
49,567
115,798

3,689
14,252
57,906
133,868

3,445
11,64652,597
131,877

3,861
14,06874,204
152,708

NF3

metric tons CO2e
metric tons CO2e
metric tons CO2e

7,323
6,877
•

4,577
10,709•4,985
24,994•

3,959
28,602
1,401

4,203
15,0123,500

metric tons CO2e

179,507

211,684

253,411247,202280,566

metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e102,215
74,823

111,699
98,984

Not yet owned

Not yet owned

2,469

1,001

121,025
116,633
15,012
741

104,162
125,059
17,484
67

103,312
166,154
9,524
11

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

143
•
18
•
147
12
10
8
3
47
9
10
12
3
2
2
5
2

145
43
1,116
8
131
12
7
17
3
47
9
10
1
7
2
3
1
2

Greenhouse Gas (GHG) Emissions
Scope 1 GHG Emissions (by GHG Type)[GRI 305-1] [SASB TC-SC-110a.1] [TCFD Metrics and Targets]

Fluorinated Heat Transfer Fluids (HTFs)
Refrigerants
Scope 1 GHG Emissions (by Facility)[GRI 305-1] [SASB TC-SC-110a.1] [TCFD Metrics and Targets]

Durham, NC, USA
RTP, NC, USA
Morgan Hill, CA, USA
Huizhou, China
Other Leased Facilities
Durham (warehouse), NC, USA
Sanford, NC, USA
Albany, NY, USA
Utica, NY, USA
Fayetteville, AR, USA
Mesa, AZ, USA
Shanghai, China
Shenzhen, China
Beijing, China
Hong Kong, China
Munich, Germany
Kista, Sweden
Oulu, FinlandTokyo, Japan
Suwon, South Korea
Penang, Malaysia
Taipei, Taiwan
Gurgaon, India

metric tons CO2e

metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e

145

SUSTAINABILITY DATAENVIRONMENTGreenhouse Gas (GHG) Emissions
Scope 2 (Location-Based) GHG Emissions[GRI 305-2] [TCFD Metrics and Targets]

Durham, NC, USA
RTP, NC, USA
Morgan Hill, CA, USA
Huizhou, China
Other Leased Facilities
Durham (warehouse), NC, USA
Sanford, NC, USA
Albany, NY, USA
Utica, NY, USA
Fayetteville, AR, USA
Mesa, AZ, USA
Shanghai, China
Shenzhen, China
Beijing, China
Hong Kong, China
Munich, Germany
Kista, Sweden
Oulu, FinlandTokyo, Japan
Suwon, South Korea
Penang, Malaysia
Taipei, Taiwan
Gurgaon, India
Scope 2 (Market-Based) GHG Emissions[GRI 305-2] [TCFD Metrics and Targets]

Durham, NC, USA
RTP, NC, USA
Morgan Hill, CA, USA
Huizhou, China
Other Leased Facilities
Durham (warehouse), NC, USA
Sanford, NC, USA
Albany, NY, USA
Utica, NY, USA
Fayetteville, AR, USA
Mesa, AZ, USA
Shanghai, China
Shenzhen, China
Beijing, China
Hong Kong, China
Munich, Germany
Kista, Sweden
Oulu, FinlandTokyo, Japan
Suwon, South Korea
Penang, Malaysia
Taipei, Taiwan
Gurgaon, India

2016

2017

2018

2019

2020

metric tons CO2e167,894

154,595

167,247

166,055

152,808

metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e

101,528
14,82888,963
13,117

Not yet owned

Not yet owned

51,53852,515102,185
13,864051,19898,855
14,634049,96893,804
14,454391
41,610metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

516
•
57
•
791
87
139
108
35
601
75
4
55
22
17
13
48
31

590
174
50
23
636
79
82
195
29
496
57
4
4
51
14
23
13
29

metric tons CO2e•122,601

135,418

83,801

123,200

metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e••

106,847
15,754

Not yet owned

Not yet owned••

119,230
16,1880•72,665
10,757
0•

68,665
10,581041,610

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

379
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

432
127
50
23
636
79
82
195
29
496
57
4
4
51
14
23
13
29

metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e

146

SUSTAINABILITY DATAENVIRONMENT

2016

2017

2018

2019

2020

metric tons CO2e

3,346

146,023,704

208,574,100

219,594,362

181,873,179

Purchased goods and services
Capital goods
Fuel-and-energy-related activities notincluded in Scope 1 or 2

metric tons CO2e
metric tons CO2e

•
•

•
•

1,264,375
210,298

1,226,573
269,079

2,454,354
317,591

metric tons CO2e

•

8,101

39,576

40,06437,737

Upstream emissions of purchased fuels
Upstream emissions of purchased
electricity
Transmission and distribution losses

metric tons CO2e

•

•

227

934

2,289

metric tons CO2e••30,68830,222

27,036

metric tons CO2e
metric tons CO2e

•
•

8,101
•

8,661
•

8,909
5,534

8,412
5,926

metric tons CO2e

•

1,519

1,662

1,486

2,670

metric tons CO2e

3,346
•
•
•
•
•

2,925
•
3,014
•
146,000,000
45

3,422
257
9,009
•
207,000,000
78

2,997
507
1,368
•
218,000,000
10

551
1,278
1,436
•
179,000,000
11

Not relevant

Not relevant

Not relevant

Greenhouse Gas (GHG) Emissions
Scope 3 GHG Emissions[GRI 305-3] [TCFD Metrics and Targets]

Upstream transportation and distribution

Waste generated in operations, including
disposal and transportation of waste
Business travel
Employee commuting
Processing of sold products
Use of sold products
End of life treatment of sold products
Upstream leased assets

metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e

Downstream leased assets

metric tons CO2e

•

•

•

Franchises
Investments
Other (upstream contract manufacturers)
Other (downstream contract manufacturers)

metric tons CO2e
metric tons CO2e
metric tons CO2e
metric tons CO2e

Not relevant

Not relevant

Not relevant

Not relevant

Not relevant

Not relevant

Not relevant

Not relevant

•
•

•
•

•
5,845

Not relevant

Not relevant

6,679

13,889metric tons CO2e

1,105

150,022,017

180,000,939

140,013,111

125,013,716

metric tons CO2e

•

4,417

390

6,641

•

metric tons CO2e
metric tons CO2e

1,105
•

691
16,909

541
•

5,600
847

7,508
6,200

metric tons CO2e•

150,000,000

180,000,000

140,000,000

125,000,000

metric tons CO2e

•

•

7.5

22.9

7.5

[GRI 305-1][GRI 305-2][GRI 305-3]

IPCC AR4
100 year

IPCC AR4
100 year

IPCC AR4
100 year

IPCC AR4
100 year

IPCC AR4
100 year

CDP Climate Change Scores

C-

B

B

B

B

No

Yes, Scope 3
partialYes, Scope 3
partialYes, Scope 3
partialYes, Scope 3
partialDownstream transportation and distribution

GHG Savings [GRI 305-5]
Process optimizations, product mix changes(Scope 1)

Electricity optimizations (Scope 2)
New eGRID emission factors (Scope 2)
Use of sold products compared toincumbent technologies (Scope 3)8Employee use of EV charging stations at
owned facilities (Scope 3)
Global Warming Potentials Used

Total Scope 1, 2, 3 Emissions Third-Party Verified(limited assurance)

Not relevant
Not relevant
Included in Scope Included in Scope
1, 2
1, 2
Not relevant
Not relevant

147

SUSTAINABILITY DATAENVIRONMENTOther Air Emissions
Particulate Matter (PM) [GRI 305-7]
Durham, NC, USA
RTP, NC, USA
Morgan Hill, CA, USA
Huizhou, China
Other Leased Facilities
Nitrogen Oxides (NOx) [GRI 305-7]
Durham, NC, USA
RTP, NC, USA
Morgan Hill, CA, USA
Huizhou, China
Other Leased Facilities
Sulfur Dioxide (SO2) [GRI 305-7]
Durham, NC, USA
RTP, NC, USA
Morgan Hill, CA, USA
Huizhou, China
Other Leased Facilities
Carbon Monoxide (CO) [GRI 305-7]
Durham, NC, USA
RTP, NC, USA
Morgan Hill, CA, USA
Huizhou, China
Other Leased Facilities
Volatile Organic Compounds (VOC) [GRI 305-7]
Durham, NC, USA
RTP, NC, USA
Morgan Hill, CA, USA
Huizhou, China
Other Leased Facilities
Hazardous Air Pollutants (HAP)9 [GRI 305-7]
Durham, NC, USA
RTP, NC, USA
Morgan Hill, CA, USA
Huizhou, China
Other Leased Facilities
Toxic Air Pollutants9 [GRI 305-7]
Durham, NC, USA
RTP, NC, USA
Morgan Hill, CA, USA
Huizhou, China
Other Leased Facilities

metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons
metric tons

2016

2017

2018

2019

2020

•
•
•

•
•
•

Not yet owned

Not yet owned

•
•
•
•
•

•
•
•
•
•

Not yet owned

Not yet owned

•
•
•
•
•

•
•
•
•
•

Not yet owned

Not yet owned

•
•
•
•
•

•
•
•
•
•

Not yet owned

Not yet owned

•
•
•
•
•

•
•
•
•
•

Not yet owned

Not yet owned

•
•
•
•
•

•
•
•
•
•

Not yet owned

Not yet owned

•
•
•
•
•

•
•
•
•
•

Not yet owned

Not yet owned

•
•

•

2.7
2.4
0.3
<0.01
<0.01
•
54.9
51.6
3.1
0.01
0.2
•
0.13
0.12
0.01
<0.01
<0.01
•
17.0
15.1
1.8
0.01
0.04
•
51.2
24.7
10.8
0.4
15.3
•
8.7
5.9
0.9
<0.01
1.9
•
9.2
5.7
1.2
0.3
2.0
•

2.3
1.8
0.4
<0.01
0.02
0.03
45.6
42.3
2.5
0.03
0.4
0.4
0.14
0.10
0.01
<0.01
0.02
<0.01
16.2
14.1
1.5
0.02
0.2
0.3
49.2
20.3
10.7
2.1
15.9
0.2
9.1
5.9
1.3
<0.01
1.9
0.01
9.8
6.1
1.7
<0.01
2.0
<0.01

2.4
1.8
0.6
0.02
0.01
0.03
35.1
32.3
2.1
0.2
0.1
0.3
0.13
0.11
0.01
<0.01
<0.01
<0.01
12.4
10.6
1.3
0.2
0.07
0.3
57.4
26.6
11.2
1.3
15.5
2.8
10.6
6.7
1.6
<0.01
1.9
0.4
11.2
6.5
2.0
<0.01
2.0
0.7

•

148

SUSTAINABILITY DATAENVIRONMENT
Water Use
Water Withdrawals (by Facility)[GRI 303-3] [SASB TC-SC-140a.1]

Durham, NC, USA
Third-Party Water
Fresh Surface Water (Rainwater)
RTP, NC, USA
Third-Party Water
Fresh Surface Water (Rainwater)
Morgan Hill, CA, USA
Third-Party Water
Fresh Surface Water (Rainwater)
Huizhou, China
Third-Party Water
Fresh Surface Water (Rainwater)
Other Leased Facilities
Third-Party Water
Fresh Surface Water (Rainwater)
Water Recycled (by Facility)
Durham, NC, USA
RTP, NC, USA
Morgan Hill, CA, USA
Huizhou, China
Other Leased Facilities
Water Discharges (Third-Party Waste Water)(byFacility) [GRI 303-4]
Durham, NC, USA
RTP, NC, USA
Morgan Hill, CA, USA
Huizhou, China
Other Leased Facilities
Water Consumed (by Facility)[GRI 303-5] [SASB TC-SC-140a.1]

Durham, NC, USA
RTP, NC, USA
Morgan Hill, CA, USA
Huizhou, China
Other Leased Facilities

2016

2017

2018

2019

2020

million gallons

414.4

426.1

402.4

364.2

383.0

million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons

188.0
187.8
0.15
34.8
34.8
0

168.7
168.7
0.003
39.6
39.6
0

180.8
180.7
0.06
46.1
46.1
0
0.3
0.3
0
136.9
136.9
0
•
•
•
155.7
49.7
0
0
106.0
•

205.2
205.1
0.06
49.1
49.1
0
0.3
0.3
0
127.5
127.5
0
0.9
0.9
•
118.5
49.7
0
0
68.9
•

Not yet owned

Not yet owned

Not yet owned

Not yet owned

Not yet owned

Not yet owned

191.7
191.7
0
•
•
•
87.6
34.4
0

217.8
217.8
0
•
•
•
97.6
25
0

Not yet owned

Not yet owned

53.2
•

72.6
•

181.4
181.3
0.1
41.3
41.3
0
0.2
0.2
0
179.4
179.4
0
•
•
•
132.3
33.5
0
0
98.8
•

million gallons

246.8

212.7

251.3

235.8

293.8

million gallons
million gallons
million gallons
million gallons
million gallons

111.5
20.5

91.9
23.4

Not yet owned

Not yet owned

114.8
•

97.4
•

118.3
24.4
0.2
108.4
•

105.3
37.2
0.3
92.9
•

145.0
40.2
0.3
107.4
0.9

million gallons

167.6

213.3

150.9

128.4

89.2

million gallons
million gallons
million gallons
million gallons
million gallons

76.4
14.3

76.7
16.2

Not yet owned

Not yet owned

76.9
•

120.4
•

63.0
16.9
0
71.0
•

75.5
8.9
0
44.0
•

60.1
8.9
0
20.1
0

149

SUSTAINABILITY DATAENVIRONMENT
Water Use
Water Withdrawals (by Water Stress Regions)10[GRI 303-5] [SASB TC-SC-140a.1]

Third-Party Water
Low Water Stress
Low-Medium Water StressMedium-High Water StressHigh Water Stress
Extremely High Water Stress
Surface Water (Rainwater)
Low Water Stress
Low-Medium Water StressMedium-High Water StressHigh Water Stress
Extremely High Water Stress
Water Recycled (by Water Stress Regions)10[GRI 303-5] [SASB TC-SC-140a.1]

Low Water Stress
Low-Medium Water StressMedium-High Water StressHigh Water Stress
Extremely High Water Stress
Water Discharges (Third-Party Wastewater) (byWater Stress Regions)10

2016

2017

2018

2019

2020

million gallons

414.4

426.1

402.4

364.2

383.0

million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons
million gallons

414.3
•
•
•
•
•
0.15
•
•
•
•
•

426.1
•
•
•
•
•
0.003
•
•
•
•
•

402.3
0
0
402.0
0.2
0
0.1
0
0
0.1
0
0

364.1
0.3
226.9
136.9
0
0
0.06
0
0.06
0
0
0

382.9
128.5
0.004
205.1
49.2
0.007
0.06
0
0
0.06
0
0

million gallons

87.6

97.6

132.3

155.7

118.5

million gallons
million gallons
million gallons
million gallons
million gallons

•
•
•
•
•

•
•
•
•
•

0
0
132.3
0
0

0
49.7
106.0
0
0

68.9
0
49.7
0
0

million gallons

246.8

212.7

251.3

235.8

293.8

million gallons
million gallons
million gallons
million gallons
million gallons

•
•
•
•
•

•
•
•
•
•

0
0
251.1
0.2
0

0.3
142.5
92.9
0
0

108.5
0.004
145.0
40.3
0.0

million gallons

167.6

213.5

150.9

128.4

89.2

million gallons
million gallons
million gallons
million gallons
million gallons

•
•
•
•
•
•

•
•
•
•
•
•

0
0
150.9
0
0
•

0
84.4
44.0
0
0
•

20.1
0
60.1
8.9
0
C

No

No

No

PartialPartial

No
No
No
No

No
No
No
No

No
No
No
No

Yes
No
No
No

Yes
No
No
No

[GRI 303-5] [SASB TC-SC-140a.1]

Low Water Stress
Low-Medium Water StressMedium-High Water StressHigh Water Stress
Extremely High Water Stress
Water Consumed (by Water Stress Regions)10[GRI 303-5] [SASB TC-SC-140a.1]

Low Water Stress
Low-Medium Water StressMedium-High Water StressHigh Water Stress
Extremely High Water Stress
CDP Water Security Scores
Water Data Third-Party Verified(limited assurance)

Total Water Withdrawals
Total Water Recycled
Total Water Discharges
Total Water Consumption

150

SUSTAINABILITY DATAENVIRONMENT
Waste Management
Total Waste [GRI 306-3] [GRI 306-4] [GRI 306-5]
Reuse
RecycleComposting
Recovery, Including Energy Recovery
Incineration
Landfill
Wastewater TreatedHazardous Waste [GRI 306-3] [GRI 306-4] [GRI 306-5][SASB TC-SC-150a.1]

Reuse
RecycleComposting
Recovery, Including Energy Recovery
Incineration
Landfill
Wastewater Treated
Non-Hazardous Waste (not including solid waste)[GRI 306-3] [GRI 306-4] [GRI 306-5]

Reuse
RecycleComposting
Recovery, Including Energy Recovery
Incineration
Landfill
Wastewater Treated
Solid Waste [GRI 306-3] [GRI 306-4] [GRI 306-5]% Solid Waste Diversion from Landfill[GRI 306-4]

Reuse
RecycleComposting
Recovery, Including Energy Recovery
Incineration
Landfill
Wastewater Treated
Waste Data Third-Party Verified(limited assurance)

Total Waste
Total Hazardous Waste
Total Non-Hazardous Waste
Total Solid Waste

2016

2017

2018

2019

2020

thousand pounds

11,625
283
3,509
12
556
145
2,036
5,084

12,642
462
3,046
46
1,616
76
1,948
5,448

14,125
313
3,476
89
2,212
136
2,356
5,542

13,196
582
3,344
63
2,525
122
2,274
4,287

13,901
487
2,916
34
2,037
326
3,457
4,644

thousand pounds

2,387

2,778

3,536

3,917

4,393

thousand pounds

thousand pounds

0
414
0
516
134
67
1,256

0
185
0
1,088
71
128
1,307

0
90
0
1,030
126
126
2,164

0
89
0
1,521
112
227
1,968

0
62
0
1,185
309
147
2,690

thousand pounds

5,203

5,878

5,282

4,080

3,574

thousand pounds

thousand pounds

283
1,001
0
40
11
39
3,828
4,034

462
688
0
529
5
53
4,140
3,986

313
294
0
1,182
10
105
3,377
5,307

582
0
0
1,004
10
166
2,319
5,199

487
9
0
852
17
254
1,954
5,935

%

52.2%

55.7%

60.0%

63.8%

48.5%

thousand pounds

0
2,093
12
0
0
1,929
0

0
2,173
46
0
0
1,766
0

0
3,093
89
0
0
2,125
0

0
3,255
63
0
0
1,881
0

0
2,846
34
0
0
3,055
0

No

No

No

PartialPartial

No
No
No
No

No
No
No
No

No
No
No
No

Yes
No
No
No

Yes
No
No
No

thousand pounds
thousand pounds
thousand pounds
thousand pounds
thousand pounds
thousand pounds
thousand pounds

thousand pounds
thousand pounds
thousand pounds
thousand pounds
thousand pounds

thousand pounds
thousand pounds
thousand pounds
thousand pounds
thousand pounds
thousand pounds

thousand pounds
thousand pounds
thousand pounds
thousand pounds
thousand pounds
thousand pounds

151

SUSTAINABILITY DATA
Sustainability Data General Notes:
Clicking on the titles of all graphs and charts throughout this report will direct you to the Sustainability Data section.
In 2019, we divested our Lighting Products business unit operations, which included a facility in Racine, Wisconsin and Durham, North Carolina (referred to as theWeck Drive site). Except for number of employees, the data presented in this report for years prior to 2019 exclude these facilities as well as another Durham, North
Carolina facility (referred to as Alston Avenue, which was a Lighting Products facility that was closed in 2018) so that we can establish a new baseline around ourLED, power and radio frequency operations.
Unless otherwise noted in the Sustainability Data Footnotes, data presented in this report is for all our global facilities. Significant locations of operations refer toour owned manufacturing facilities located in the United States and China.
• Indicates data was not yet calculated or available.

Sustainability Data Footnotes:[1] Data presented here is for our significant locations of operations, which represents approximately 98.5% of our total number of 2020 employees.
[2] Data presented here is for our significant locations of operations in the United States only, which represents approximately 61% of our total number of 2020
employees.
[3] Data presented here is for our significant locations of operations and our smaller United States locations, which represents approximately 99% of our total
number of 2020 employees.
[4] Recordable Work-Related Injury-Illness is a work-related injury or ill health that results in any of the following: death, days away from work, restricted work ortransfer to another job, medical treatment beyond first aid, or loss of consciousness; or significant injury or ill health diagnosed by a physician or other licensed
healthcare professional, even if it does not result in death, days away from work, restricted work or job transfer, medical treatment beyond first aid, or loss of
consciousness.
[5] Injury-Illness rates are calculated using 200,000 hours worked (Rate = cases/total hours worked * 200,000).
[6] High-Consequence Recordable Work-Related Injury-Illness is a work-related injury or ill health that results in an injury from which the worker cannot, does not,or is not expected to recover fully to pre-injury health status within 6 months.
[7] Contract Employee is any worker who is not a Cree employee but whose manager is and whose work and workplace may or may not be controlled by Cree.
[8] The values reported represent what our products sold will save over their estimated lifetimes. Energy usage and GHG emissions from our products werecompared to their less efficient alternative products to derive energy use savings. For lighting applications, our LED products were compared to non-LED lighting
fixtures (e.g., metal halide lamps, fluorescent bulbs, etc.). For applications where LEDs are currently the standard choice we assumed no energy savings. Our
power products, made from silicon carbide, were compared to similar products made from silicon. Our radio frequency products, made from silicon carbide, werecompared to similar products made from either silicon or gallium-arsenide.
[9] Hazardous air pollutants (HAP) are based on the US EPA list of HAP. Air pollutants are classified as toxic air pollutants per the regulations applicable at eachfacility.
[10] For data prior to 2020: All of our global manufacturing facilities were assessed for water stress using the World Resources Institute Aqueduct Water Risk Atlas.
Overall Water Risk identifies regions that have a higher exposure to water-related risks and represents an aggregated measure of all indicators from the individual
water risk categories of Physical Risk Quantity, Physical Risk Quality and Regulatory & Reputational Risk:- Low water stress indicates the facility(ies) scored 0 to 1 out of 5 for Overall Water Risk.
- Low to medium water stress indicates the facility(ies) scored 1 to 2 out of 5 for Overall Water Risk.
- Medium to high water stress indicates the facility(ies) scored 2 to 3 out of 5 for Overall Water Risk.
- High water stress indicates the facility(ies) scored 3 to 4 out of 5 for Overall Water Risk.
- Extremely high water stress indicates the facility(ies) scored 4 to 5 out of 5 for Overall Water Risk.

For 2020 data: All of our global facilities were assessed for water stress using the World Resources Institute Aqueduct Water Risk Atlas. We consider areas with water
stress to be those locations with the risk category “High (40-80%)” or “Extremely High (>80%)” for baseline water stress:- Low water stress indicates the facility(ies) scored <10% for Water Stress.
- Low to medium water stress indicates the facility(ies) scored 10-20% for Water Stress.
- Medium to high water stress indicates the facility(ies) scored 20-40% for Water Stress.
- High water stress indicates the facility(ies) scored 40-80% for Water Stress.
- Extremely high water stress indicates the facility(ies) scored >80% for Water Stress.

152

INDEPENDENT ASSURANCE STATEMENT

LIMITED ASSURANCE

Independent Assurance Statement to Cree Inc.

Introduction & Objectives: Trinity Consultants, Inc. (Trinity) was engaged by Cree Inc. (Cree) to provide
independent assurance for specified calendar year (CY) 2020 environmental, health and safety (EHS) data
presented in the Cree Sustainability Report 2021. The overall objective of this process was to provide
assurance to Cree’s stakeholders on the accuracy, completeness, reliability, and objectivity of the specified
EHS information included in the Report. This Assurance Statement applies to the information included within
the subject Scope of Work.
Scope of Work: Cree requested that Trinity perform limited assurance of the following specified EHS
performance data for CY 2020 (January 1, 2020, to December 31, 2020) to determine whether they are fairly
presented, in all material respects, in a manner consistent with the designated reporting criteria:
•
•
•

•
•
•
•

Direct (Scope 1) greenhouse gas (GHG) emissions from stationary combustion and processsources (280,566 metric tons CO2e)
Indirect, location-based (Scope 2) GHG emissions from purchased electricity and steam (152,808
metric tons CO2e)
Indirect (Scope 3) emissions resulting from three of the 15 potential Scope 3 categories: waste
generation (2,670 metric tons CO2e), upstream transportation/distribution (5,926 metric tons
CO2e) and downstream transportation/distribution (1,436 metric tons CO2e)
Energy consumption (447,002 Megawatt Hours)
Total water withdrawal, including third-party water withdrawal and rainwater withdrawal (383.0
million gallons)
Total waste generated/disposed (13.901 million pounds)
Injury-illness rate (0.68)

The reported data was evaluated against Cree's internal GHG and sustainability reporting procedures, as well
as requirements for reporting GHG emissions data to CDP.
Our procedures assessed the appropriateness and effectiveness of underlying corporate reporting processes,
management controls and systems used to develop, compile, analyze and report the specified EHS data.
The boundary of the data included in this assurance is limited to the 22 owned manufacturing and warehousefacilities, and administrative offices under Cree operational control during the subject period. Text,
descriptions, interpretations, or other written statements in the Sustainability Report 2021 were not includedin the scope of Trinity’s work.
Reporting Criteria: Cree has developed the data subject to this verification as documented in their corporate
Sustainability Data Management Plan. This Plan incorporates specific definitions for each EHS performanceindicator and the basis on which these data are compiled, calculated and reported. External criteria utilized
to develop these data included:••••

The Greenhouse Gas Protocol, A Corporate Accounting and Reporting Standard, GHG Protocol
Scope 2 Guidance, and Corporate Value Chain (Scope 3) Accounting and Reporting Standard.
US EPA 40 CFR Part 98 Mandatory GHG Reporting Rule, Subpart I equations
GRI Standards 2016, Global Sustainability Standards Board
IPCC AR4 (100-yr) Global Warming Potentials
153

INDEPENDENT ASSURANCE STATEMENT••

LIMITED ASSURANCE

U.S. EPA eGRID 2021 (2019 data)
US EPA Center for Corporate Climate Leadership GHG Emission Factors Hub (2020)

Assurance Standard: Trinity’s work was conducted following our standard assurance methodology andapproach for external verification of sustainability data, in part based on the International Standard on
Assurance Engagements (ISAE) 3000, Assurance Engagements Other Than Audits or reviews of Historical
Financial Information (2012), suitably adapted. Greenhouse gas inventory verification was conducted toaddress CDP verification requirements, as well.
Responsibilities: Cree management is solely responsible for the EHS performance data and its presentation in
the Sustainability Report 2021. Trinity was not involved in the collection or development of the reported dataor development of the 2021 Sustainability Report.
Trinity’s responsibility is to perform an assurance engagement to provide conclusions on the agreed Scope ofWork based on the assurance activities performed, consistent with exercising our professional judgement.
Assurance Methodology: Trinity conducted the following activities during this assurance engagement:
•

•
•

•

•
•

•

•

Interviewed key staff from Cree’s corporate headquarters in Durham, NC responsible for Cree's
sustainability program, activities, and management systems for the specified GHG and EHS
performance data.
Ensured that Cree’s scope and boundaries reflected in the reported data are fair and accurate.
Reviewed documentation and interviewed other relevant staff to understand and evaluate theprocesses, systems and methodologies used to collect, compile, consolidate, analyze and report
data for the specified GHG and EHS performance indicators.
Reviewed Cree’s corporate GHG Inventory Management Plans and Sustainability DataManagement Plan, including suitability of calculations, GWPs, and conversion and emission
factors.
Reviewed the corporate consolidation of data for specified EHS performance data and compared
it to data submitted from six of the 22 individual facilities owned by Cree.
To meet CDP reporting and verification requirements, verification procedures were applied tomore than 70 percent each of the company’s enterprise-wide Scope 1 and location-based Scope
2 GHG emissions, and to specified categories of reported Scope 3 emissions.
Selected underlying facility source data on a test basis and conducted a desktop review of thesesample data to confirm specified site data for six facilities including Durham, Research Triangle
Park, Huizhou, Fayetteville, Morgan Hill, and Mesa.
Reviewed the presentation of the above performance data in the Sustainability Report 2021 toensure consistency with our findings, and to address changes and corrections with Cree where
necessary.

Trinity’s Opinion: Based on Trinity’s verification activities, nothing has come to our attention to indicate thatthe corporate CY 2020 data for the specified Scope 1, location-based Scope 2 and selected Scope 3 GHG
emissions, and EHS performance metrics listed under ‘Scope of Work’ and disclosed in the Cree Sustainability
Report 2021 are not fairly presented, in all material respects, in a manner consistent with the designatedreporting criteria.
Trinity has concluded that Cree has implemented sufficient processes, systems and controls for the accurate
collection and analysis of activity data used to determine the reported data.
154

INDEPENDENT ASSURANCE STATEMENT

LIMITED ASSURANCE

Trinity’s Observations: Trinity has provided Cree with a separate management report. Without affecting theconclusions presented above, we have the following observations:•••Cree has established GHG Inventory Management Plans and a Sustainability Data Management
Plan to guide the development and reporting of data with a focus on energy, GHG emissions andselected EHS parameters. Cree should ensure that the current methods and approach, processes
and controls around complete sustainability data development and review is formalized androlled out to all facilities.
Key Cree EHS staff at corporate and facilities conduct monthly and annual reviews of reported
data to confirm completeness and accuracy. Cree should consider improving the timeliness anddocumentation of this process, and interactions during this process.
Underlying facility source data supporting the reporting of GHG-related and EHS data were madeavailable during this verification process. Cree should consider establishing a more systematic
process for obtaining, compiling, and archiving these data for future internal QA/QC and reportverification.

Limitations: Our work did not include visits or physical inspections of any of Cree’s operating facilities, otherthan interaction with staff located at Cree’s Durham, NC headquarters.
Trinity’s approach to this verification was not intended to detect all weakness in management controls as
described above. The verification was performed on corporate management controls on a test basis. Further,it should be noted that the reliability of GHG and EHS data may be subject to inherent uncertainties, based on
the established methods used to measure or calculate the underlying information.
This Assurance Statement is only valid when it is published with the Sustainability Report 2021 to which it
refers and disclosed through Cree’s CY2021 CDP submittal, and may only be reproduced in its entirety.
Statement of independence: Trinity is an independent professional services firm that specializes inenvironmental, health and safety, and sustainability compliance, risk and performance management. We
have developed and maintain a quality management system, certified to ISO 9001:2015. No member of theassurance team has a business relationship with Cree, its managers or Directors other than for the purpose ofverification of the subject GHG and sustainability data and reporting, or has had any involvement in writing
the Report, data collection or validation, or the development or implementation of data systems. This
verification has been conducted independently and we believe that there has been no conflict of interest.

Rich Pandullo, MEM, CM
Director, Sustainability & Environmental Management
Trinity Consultants, Inc.
Dallas, TX
www.trinityconsultants.com
July 26, 2021
155