Innovating fora Better Future2023 Task Force on Climate related Financial Disclosures(TCFD) Framework

Table of Contents

Introduction

Our Business

Protecting Our Planet and Environment

Ensuring Workplace Social Responsibility

Impacting Our Community Through Giving

Committing to a Responsible Business

Appendix

Task Force on Climate-related Financial Disclosures (TCFD) Framework
TCFD RECOMMENDEDDISCLOSURE

LOCATION OFDISCLOSURE

BRIEF DESCRIPTIONTCFD RECOMMENDEDDISCLOSURE

LOCATION OFDISCLOSURE

BRIEF DESCRIPTION

Governance

Governance

Disclose the organization’s governance around climate-related risks and opportunities.

(b) Describe

CDP Climate

At onsemi, climate-related risks and opportunities are assessed,(a) Describe the board’s

CDP Climate

As stated in its charter, the Governance and Sustainability

management’s role in

Change,managed and realized at the highest level of the organization. We

oversight of climate-related

Change,(GS) Committee of the Board of Directors is tasked with formal

assessing and managing

Questionsbelieve that the responsibility of operationalizing mitigation andrisks and opportunities.

C1.1, C1.1a, C1.1b

responsibility and oversight of matters related to environmental,

climate-related risks andC1.2, C1.3,

adaptation strategies in response to climate-related risks andopportunities.

C1.3a

opportunities must be integrated at every level of the company,

health and safety (EHS), environmental, social and governance(ESG) and sustainability issues at onsemi. The committee
also oversees ESG, climate-related and sustainability-related
initiatives regarding related strategy, risk management,

ensuring the success of our risk management program and giving us
the ability to act nimbly at all levels when needed.

opportunities, major capital expenditure and investments.

Our ERM program is overseen by a Risk Committee comprising the

The GS Committee holds at least four regular meetings per year

Risk Committee is responsible for the identification, management

and is composed of three or more independent members of theBoard. Additionally, the entire Board reviews progress against
climate and sustainability-related goals and targets, including
progress towards onsemi’s goal to achieve net zero emissions
by 2040 (Net Zero 2040) across Scopes 1, 2 and 3 andother metrics like energy usage, waste generation and water
withdrawal. Progress of the company’s sustainability projects
is communicated by the Chief Marketing Officer on a quarterly
basis for review by the Board.

CEO, CLO, CFO, CSO and EVP of Operations & Manufacturing. The
and mitigation of risks faced by onsemi. To maintain accountability at
the highest functional level, executive staff members are appointed
as risk sponsors for individual risks and work with risk owners
who manage the risk on a day-to-day basis. ERM findings arecommunicated to the Risk Committee monthly to ensure that thisinformation is communicated to executive staff and our Board of
Directors.
Climate-related risks and opportunities impact business units (BUs)
and functional departments across the organization in unique andnuanced ways. BU and department leaders are responsible forunderstanding, monitoring and acting as the risk and opportunity
landscape changes, ensuring they have the information, capacity
and resources needed to respond quickly and effectively to trigger
events. Groups engaged in climate-related risk and opportunity
assessment include our three BUs, finance, legal, manufacturing,business continuity, new product development, supply chain, ESG,
human resources and customer experience.

2023 Task Force on Climate-related Financial Disclosures (TCFD) Framework			

Appendix |2

Table of Contents

Introduction

Our Business

Protecting Our Planet and Environment

Ensuring Workplace Social Responsibility

Impacting Our Community Through Giving

Committing to a Responsible Business

Appendix

Task Force on Climate-related Financial Disclosures (TCFD) Framework
TCFD RECOMMENDEDDISCLOSURE

LOCATION OFDISCLOSURE

BRIEF DESCRIPTION

Strategy
Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s
businesses, strategy and financial planning where such information is material.
(a) Describe the

CDP Climate

At onsemi, we have identified potential climate-related risks

climate-related risks

Change,and opportunities that could impact our business continuity,and opportunities theQuestions C2.3,

strategy and financial planning. Risks identified include

organization has identified

C2.3a, C2.4,

transitional and physical risks with the capacity to impact ourover the short, medium andC2.4aown operation and value chain, including our financials, supply

long term.

chain, workforce, company disclosure and reputation. Climaterelated opportunities identified include transitional and physicalopportunities related to increased demand of onsemi products
and an increase in tangible and intangible asset values. Our
identified climate-related risks and opportunities can impact
onsemi over the near, medium and long term depending on therisk or opportunity development and maturity.
For a full list of onsemi’s climate-related risks andopportunities, see the Risk and Opportunity Disclosure tables
below.

(b) Describe the impact

CDP Climate

Identified climate-related risks and opportunities may poseof climate-related risks

Change,potential impacts to our business across different impact

and opportunities on the

Questions C3.1,

categories such as finance, supply chain, customer demandorganization’s businesses,

C3.3, C3.4

and direct operations. These impacts can be general andstrategy and financial

applicable across our business and value chain, or they can beplanning.

location-based, requiring specific plans and actions localized to
the region or country where the risk or opportunity is realized.
Realized potential impacts of the identified climate-related risks
and opportunities are to be integrated into strategic decisionmaking across onsemi in business continuity planning, capital

TCFD RECOMMENDEDDISCLOSURE

LOCATION OFDISCLOSURE

BRIEF DESCRIPTION(c) Describe the resilience CDP Climate

Using three plausible, distinctive, consistent, relevant andof the organization’s

Change,challenging climate scenarios, onsemi executive leadership, various

strategy, taking into

Questionsfunctional owners and the ESG team participated in a climate

consideration different

C3.2, C3.2b

scenario analysis to inform a climate adaptation and resilience plan

climate-related scenarios

for implementation at the company. Scenarios used assume various

including a 2°C or lower

degrees of warming by 2100 and include social, technological,

scenario.

economic and political developments considered plausible undereach warming trajectory.
The three scenarios used to inform the development of a climate
action plan for onsemi include:
1. Failure to Decarbonize: runaway climate change resulting
in warming above 3°C by 2100, international cooperation
breakdowns and increased potential for irreversible effects ofclimate change.
2. Orderly Decarbonization: orderly decarbonization resulting inwarming limited to 1.5°C by 2100, advancement, development
and adoption of sustainable technology and global policies for
decarbonization, including carbon pricing.
3. Disorderly Decarbonization: disorderly decarbonization
resulting in warming around 2°C by 2100, the abrupt anduneven introduction of climate policies and increased financial
consequences of climate change.
Through this exercise, relevant climate-related risks andopportunities were identified and socialized for inclusion in ouroverall business strategy. We’re exploring the development ofinternal controls and procedures, adaptation and mitigation plans,
identification of trigger events to inform future action and no-regret
actions to be taken in response to the outcomes of our climate
scenario analysis.

expenditure planning and new product development.

2023 Task Force on Climate-related Financial Disclosures (TCFD) Framework			

Appendix |3

Table of Contents

Introduction

Our Business

Protecting Our Planet and Environment

Ensuring Workplace Social Responsibility

Impacting Our Community Through Giving

Committing to a Responsible Business

Appendix

Task Force on Climate-related Financial Disclosures (TCFD) Framework
TCFD RECOMMENDEDDISCLOSURE

LOCATION OFDISCLOSURE

BRIEF DESCRIPTIONTCFD RECOMMENDEDDISCLOSURE

LOCATION OFDISCLOSURE

BRIEF DESCRIPTION

Risk Management

Metrics and Targets

Disclose how the organization identifies, assesses and manages climate-related risks.

Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities(a) Describe the

CDP Climate

onsemi uses scenario analysis to understand the impacts oforganization’s processes for

Change,climate change on our business operations, corporate strategy

identifying and assessing

Questions C1.2,

and value chain. By understanding the presumed operational

climate-related risks.

C2.1, C2.1a,context of different decarbonization trajectories, we can

C2.1b, C2.2,

identify potential climate-related physical and transitional

C2.2arisks that could conceivably pose an impact to our businessand strategy. These scenarios are not intended to predict
the future, but instead help us understand our potential risk

where such information is material.
(a) Disclose the metrics

CDP Climate

Our scenario analysis detailed important metrics to help us assess

used by the organization

Change,and monitor climate-related risks and opportunities in line with ourto assess climate-related

Sections C5,

strategy and risk management process. Monitored metrics include:risks and opportunities

C6, C7, C8

in line with its strategy
and risk management• R&D expenditures for low-carbon products

process.

• Percentage of expenditure on energy efficiency

exposure and build resilience through activities to enhance our
preparedness.
(b) Describe the

CDP Climate

Through our scenario analysis, we have identified variousorganization’s processes for

Change,action planning and trigger monitoring activities to build

managing climate-related

Questions C2.2,

resilience to potential climate-related risks. We’re exploring therisks.

C2.2a, C2.3,

development of internal controls and procedures, adaptation

C2.3aand mitigation plans, identification of trigger events to informfuture action and no-regret actions to be taken in response to
the outcomes of our climate scenario analysis. Owners will beassigned to monitor and manage relevant climate-related risks
to ensure actions are being taken when appropriate to ensure
the resilience of business operations and strategies.

(c) Describe how processes

CDP Climate

The process of identifying, assessing and managing corporate

for identifying, assessing

Change,risks falls within ERM. Our climate-related risks identified

and managing climate-

Questions C2.2,

through scenario analysis have been mapped to relevant

related risks are integrated

C2.2a

risk definitions within our current risk registrar for ease of

into the organization’s

integration into our ERM framework. Risk owners have been

overall risk management.

identified and assigned to ensure continuous management ofidentified climate-related risks.

• Product energy, water and emissions intensity• Total energy consumption included percentage from renewables• Total greenhouse gas emissions• Investment in climate adaptation measures• R&D expenditure on products that support customer
decarbonization(b) Disclose Scope

CDP Climate

In Fiscal Year (FY) 2023, our GHG emissions were as follows:

1, Scope 2 and, if

Change,Scope 1 – 828,620 MTCO₂eappropriate, Scope 3

Sections C5,

Scope 2 – 727,464 MTCO₂egreenhouse gas (GHG)

C6, C7, C8

Scope 3 – 1,573,417 MTCO₂eemissions and the related

For a breakdown of Scope 3 by category, see the Annual Inventoryrisks.

of Energy Consumption and Emissions section of our 2023
Sustainability Report, pg. 25.
As regions and nations develop regulations aimed at accelerating
local or global decarbonization efforts, onsemi may encounter risks
associated with our GHG emissions including carbon prices andcarbon border adjustments. These can result in increased operational
expenditures if we continue to emit GHG emissions through ourbusiness operation activities.

2023 Task Force on Climate-related Financial Disclosures (TCFD) Framework			

Appendix |4

Table of Contents

Introduction

Our Business

Protecting Our Planet and Environment

Ensuring Workplace Social Responsibility

Impacting Our Community Through Giving

Committing to a Responsible Business

Appendix

Task Force on Climate-related Financial Disclosures (TCFD) Framework
TCFD RECOMMENDEDDISCLOSURE

LOCATION OFDISCLOSURE

BRIEF DESCRIPTION(c) Describe the targets

CDP Climate

We have a goal of achieving net zero emissions by 2040 (Netused by the organization

Change,Zero 2040) across Scopes 1, 2 and 3, along with using 50

to manage climate-related

Questions C4.1,

percent renewable energy by 2030 and 100 percent renewable

risks and opportunities

C4.1b, C4.2,

energy by 2040. This goal will guide how we operate ourand performance against

C4.2b, C4.3,

business over the coming years and is essential to ensuring wetargets.

C4.3a, C4.3b,

operate in a socially thoughtful and environmentally responsible

C4.3c

manner.

onsemi blog,

We are working to create a climate transition plan to meet

Risk and Opportunity Disclosures Tables Continue on pg. 97

2040 Emissions Net Zero 2040. We’re exploring the use of available levers for
Goal for onsemi

reducing emissions across Scopes 1 and 2 internally at ourfacilities, along with pathways for engaging suppliers and otherreduction strategies in the value chain for Scope 3 emissions
reductions outside onsemi’s direct control. We’re determining
the appropriate milestone tasks, metrics and key performanceindicators to use for our climate transition plan, allowing us totrack our progress over time.
By identifying and monitoring our climate-related risks andopportunities, we can work to set further targets used to build
resilience and reduce potential negative impacts from identified
risks and realize potential positive impacts from identified
opportunities.

2023 Task Force on Climate-related Financial Disclosures (TCFD) Framework			

Appendix |5

Table of Contents

Introduction

Our Business

Protecting Our Planet and Environment

Ensuring Workplace Social Responsibility

Impacting Our Community Through Giving

Committing to a Responsible Business

Appendix

Risk and Opportunity Disclosures
Transition risks
Transition risks were most prevalent under the Orderly Decarbonization and Disorderly Decarbonization scenarios.
RISK

VALUE
CHAIN

FINANCIAL IMPACTTIMEFRAME OF IMPACTONSEMI RESPONSE

Risk Management
Introduction of

Own

Increased

Negligible impact at

onsemi’s approach to enhancing

national carbon

operations

expenditurepresent; however,

the resilience of its own

pricing schemes

associated with

impact increases in theoperations to transition risks

and/or carbon

manufacturing andmedium term (before

includes:border adjustment

corporate activity.

2030) under some

• Achieving net zeromechanisms

Potential reduction

scenarios.

emissions: through energy

in product margins.

efficiency projects, renewable

Increased exposure

energy procurement andto legal liability.

reducing greenhouse gas
emissions from process gases

Regulatory limits

Own

Reduced revenue

Negligible impact at

on carbon-related

operations

from the reduction inpresent; however,production capacity.

impact increases in the

Increased exposure

medium term (before

to legal liability.

2030) under someprocesses

scenarios.
Varied availability of

Own

Increased

Some impact at

renewable energy

operations

expenditurepresent, the impact

in locations where

associated withincreases into theonsemi operates

sourcing renewablemedium term (before

energy (in order2030), mostly in theto meet regulation

Failure to Decarbonize

and/or strategic

scenario.

objectives).

through process swaps,
gas swaps and abatement
technology.

RISK

VALUE
CHAIN

FINANCIAL IMPACTTIMEFRAME OF IMPACTONSEMI RESPONSE

Carbon pricing

SupplyIncreased

Negligible impact at

onsemi’s approach to enhancing

schemes and/chain

expenditure for raw

present; however,

the resilience of its supply chainor carbon bordermaterials, products

impact increases in theto transition risks includes:

adjustment

and services, as

medium term (before• Understanding emissions:mechanisms applied

suppliers pass2030) under somedeveloping a baseline of

to onsemi suppliers

costs on to onsemi.

scenarios.

supplier emissions throughand their emissions

Potential reduction

our Scope 3 emissionsin product margins.

inventory.

Limitations on

SupplyReduced revenue

Negligible impact ataccess or availability chain

if raw materials

present; however,to raw materials

cannot be supplied

impact increases in thesuch as rare

to meet demand,medium term (before

earth minerals

and increased2030) under somedue to increasing

expenditure

scenarios.

regulations

associated with

• Integration with strategic

suppliers andmanagement: such as

materials.

exploration of incorporating
an internal carbon price incapital expenditure planning.
• Enhancing disclosure:through ongoing alignment
with global climate-related
reporting frameworks

Increased

Own

Increased

Impact is present today

and comprehensive data/sustainability

operations

expenditure on staff

and increases in theinformation controls.

reporting andand data/information

medium term (before

assurancesystems and2030) under somerequirements

controls

scenarios.

2023 Task Force on Climate-related Financial Disclosures (TCFD) Framework			

exploring ways to incorporate
public reporting of GHG
emissions by our suppliers
and other ESG matters into
our supplier scorecard,
which is used to track andsourcing alternate

planning and risk

• Supplier engagement: we areencourage enhancement of
supplier performance.

Pressure to

SupplyIncreased

Negligible impact atdemonstratechain

expenditurepresent; however,

deforestation-freeassociated with

impact increases in the

supply chain

investigating

medium term (before

deforestation2030) under somein onsemi’s

scenarios.

supply chain, andpotentially switchingsuppliers.

Appendix |6

Table of Contents

Introduction

Our Business

Protecting Our Planet and Environment

Ensuring Workplace Social Responsibility

Impacting Our Community Through Giving

Committing to a Responsible Business

Appendix

Physical risks
Physical risks were most prevalent under the Failure to Decarbonize scenario.
RISK

VALUE
CHAIN

FINANCIAL IMPACTTIMEFRAME OF IMPACTONSEMI RESPONSE

RISK

VALUE
CHAIN

FINANCIAL IMPACTTIMEFRAME OF IMPACTONSEMI RESPONSE

Production

Own

Reduced revenue

Impact already occurs

onsemi’s approach to enhancing

Extreme weather

SupplyReduced revenue

Impact already occurs

onsemi’s approach to enhancing

disruption fromoperations

chain

from lost production.

from lost production

in some locations,the resilience of its own

impacts onsemi

in some locations,the resilience of its supply chain

extreme weather

and increased

frequency and severity

operations to physical risks

supplier locations

frequency and severity

to physical risks includes:(including indirect

expenditureof impact increases inincludes:and/or supply chainof impact increases in• Existing suppliers: Exploring

impacts such

associatedthe medium term under• Enhanced businesslogistics

the medium term underincorporation of future

as government-with restarting

all scenarios.

all scenarios.

scenarios into supplier

imposed power

production.

continuity planning: weare exploring incorporating

engagement, including audit

restrictions and/future scenarios into existing

specifications.

or impacts tobusiness continuity planning,surrounding

prioritizing sites at higher risk

infrastructure)of climate-related impact.

Damage to onsemi

Own

Increased

Impact already occurs

facilities

operations

expenditure toin some locations,repair facilities andfrequency and severity

increased insuranceof impact increases incosts.

the medium term under
all scenarios.

Limits to energy and

Own

Reduced revenue

Impact already occurs

water availability inoperations

from lost production.

in some locations,specific locations

Increasedfrequency and severityat specific times of

expenditure isof impact increases inyear

associated withthe medium term underhigher energy andall scenarios.

water costs.

• Infrastructure planning:• Prospective suppliers:
Exploring incorporation of
future scenarios into business
continuity requirements.

exploring the considerationof climate scenarios whenplanning for facility and/or equipment upgrades or
acquisitions.
• Accelerated resource
efficiency: adopting energy
conservation and efficiency
measures and increasingwater recycling practices,
reducing the number ofExtreme weather

Own

Increased

Impact already occurs

resources needed to operate

impacts employee

operations

expenditure andin some locations,effectively.

health, safety andliability risk. Potential frequency and severity

productivity

reduced revenueof impact increases inassociated with lostthe medium term under

production fromall scenarios.

absenteeism.

2023 Task Force on Climate-related Financial Disclosures (TCFD) Framework			

Appendix |7

Table of Contents

Introduction

Our Business

Protecting Our Planet and Environment

Climate-related opportunities
Climate-related opportunities are most prevalent under the Orderly Decarbonization and Disorderly

Ensuring Workplace Social Responsibility

Impacting Our Community Through Giving

Committing to a Responsible Business

AppendixGlobal Reporting Inititative (GRI) Index Tables Continue on pg. 100

Decarbonization scenarios.
OPPORTUNITY

VALUE
CHAIN

FINANCIAL IMPACTTIMEFRAME OF IMPACTONSEMI RESPONSE

onsemi products

Customer/

Increased revenue

Impact already occurs

onsemi’s approach tosupporting

marketassociated within some locations andcapitalizing on climate-related

electrification

demandincreased market

sectors; impact may

opportunities includes:of transport,

demand forincrease within existing• Sustainable productinfrastructure andelectrification

geographies/sectors

ecosystem: onsemi’swider renewable

technologies.

and expand to newstrategy targets thegeographies/sectors

use of our products inunder some scenarios.

decarbonization andefficiency applications suchenergyonsemi products

Customer/

Increased revenue

Impact already occurs

supporting solutions

marketassociated within some locations andfor energy, water

demandincreased market

sectors; impact may

and other resource

demand forincrease within existing

efficiency

technology solutions

geographies/sectorsthat increaseand expand to new

resource efficiency.

geographies/sectors
under some scenarios.

onsemi products

Customer/

Increased revenue

Negligible impact at

supporting

marketassociated withpresent; however,technology for

demandincreased market

impact increases in the

avoided emissions

demand for avoided

medium term (before

and carbon

emissions and2030) under someremovalscarbon removal

scenarios.

technology.

as electric vehicles, factory
automation and renewableenergy infrastructure• Integration into strategicplanning: onsemi
incorporates climate-related
opportunities, including
market developments indecarbonization technology,
in its processes for new
product development,
expansion of manufacturing
capacity and other strategicplanning processes.

2023 Task Force on Climate-related Financial Disclosures (TCFD) Framework			

Appendix |8

Table of Contents

Introduction

Our Business

Protecting Our Planet and Environment

Ensuring Workplace Social Responsibility

Impacting Our Community Through Giving

Committing to a Responsible Business

Appendix

Report Revision History
VERSIONDESCRIPTION OF REVISION AND REASONEFFECTIVE DATE

A

2023 Sustainability Report Document Initial Release

26 June 2024

2023 Task Force on Climate-related Financial Disclosures (TCFD) Framework			

Appendix |92023 Task Force on Climate-Related
Financial Disclosures (TCFD) Frameworkonsemi
Investor Relations and Corporate Development
5701 N. Pima Road
Scottsdale, Arizona 85250
investor@onsemi.com
www.onsemi.com