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Strategy and Management

At the end of 2009, ASML decided to strengthen its sustainability policy and set a number of objectives to be reached by 2015. These objectives were outlined in our 2009 sustainability report. During 2010, our sustainability efforts were structured in four areas:

  • Defining specific targets in our identified four strategic domains (Operations, Products, Value Chain and Culture)
  • Establishing and effectively running a sustainability organization and governance
  • Capturing significant achievements in each area
  • Developing roadmaps and action plans to reach our 2015 targets

ASML's business strategy is based on maintaining and further developing its position as a technology leader in semiconductor lithography. ASML executes its strategy through customer focus, strategic investment in R&D and operational excellence with a responsibility for sustainability towards its stakeholders. To effectively manage the execution of this responsibility, the sustainability strategy rests on four strategic domains as mentioned in our CEO's foreword:

  • Sustainable Operations
  • Sustainable Products
  • Sustainable Value Chain
  • Sustainable Culture.

ASML's sustainability strategy is based on input from its main stakeholders. Our senior and executive managers are regularly involved in stakeholder dialogues across a range of business and company topics.

In 2010, ASML requested feedback from our main stakeholders on our 2009 sustainability report and 2010 sustainability activities. Regarding investors, we received detailed feedback from investor analysts SAM (from the Dow Jones Sustainability Index), FTSE4Good, VBDO, Oekom Research, Vigeo and Eumedion, as well as large Dutch pension funds. We also organized meetings with governmental bodies including the Community of Veldhoven, the Province of Noord-Brabant, the Dutch Ministry of Economic Affairs and Agentschap.NL.

Employee feedback came from e-mail conversations, intranet communications and regular dialogue with the ASML Works Council in Veldhoven.

Major outcomes of the stakeholder analysis include, but are not limited to: safety and environmental performance of our machines, community involvement, work-life balance, green energy, campus and mobility, supply chain sustainability and reducing CO2 emissions. These issues are addressed in this report.

ASML Holding N.V. is incorporated under Dutch law and has a two-tier board structure. Executive responsibility for the management of ASML lies with the Board of Management. The Supervisory Board - composed of independent, non-executive members - supervises and advises the Board of Management in performing its management tasks. While retaining overall responsibility, the Supervisory Board assigns certain of its tasks to its four committees: the Audit Committee, the Remuneration Committee, the Selection and Nomination Committee, and the Technology and Strategy Committee. Members of these committees are appointed from among the Supervisory Board members.

The Remuneration Committee reviews and proposes to the Supervisory Board corporate objectives and targets relevant to the compensation of the Board of Management. For 2011, the Remuneration Committee has set sustainability targets for the Board of Management, in line with the Sustainability Report described focus, action plan and targets.

The Supervisory Board has prepared a profile on its size and composition: it is subject to explicit composition requirements in terms of economic and social knowledge and experience, but not environmental knowledge and experience. The Supervisory Board addresses sustainability at least once a year.

The Board of Management currently consists of five members. It is chaired by the CEO while responsibility for ASML's sustainability policy lies with the Chief Operations Officer (COO). The COO chairs the Sustainability Board, and is responsible for formulating and mandating worldwide sustainability policies, and deploying a global sustainability management system.

In 2010, the ASML Board of Management decided to expand the Sustainability Board and established a new Corporate Sustainability department to coordinate and execute sustainability policies. Following the publication of the Sustainability Report 2009 on March 19 2010, the Sustainability Board met formally twice in 2010. These meetings focused on defining the renewed mandate, installing the sustainability dashboard and roadmap, assigning responsibilities throughout the ASML organization and calling for the execution of various analysis and action plans. From 2011 on, the Sustainability Board will meet at least four times a year. The composition of the Sustainability Board is presented in the following table:

Table 4

Sustainability Management

Sustainable Operations

Sustainable Products

Sustainable Value Chain

Sustainable Culture

  • Chairman (COO)
  • Secretariat (Corporate Sustainability)
  • Manufacturing & Logistics
  • Wilton, USA
  • Linkou, Taiwan
  • IT
  • System Engineering
  • Quality & Process Improvement
  • Sourcing
  • Sales
  • Customer Support
  • Human Resources & Organization
  • Communications

The Board of Management has given the Sustainability Board a mandate to:

  • review and recommend sustainability policies and management systems
  • authorize plans or make recommendations to the Board of Management
  • guide management on objectives and targets
  • provide oversight and guidance on sustainability performance and targets
  • oversee sustainability risk management reviews
  • monitor stakeholder relations
  • review major business decisions for their sustainability impact and make recommendations

The Sustainability Board also determines the scope, provides input, and recommends board adoption of this sustainability report. All ASML sectors involved in executing our sustainability roadmap are closely monitored by the Sustainability Board.

Targets

In our 2009 sustainability report, we took a big step in formulating targets that are key to improving our sustainability performance. These targets underpin our achievements and roadmaps in this report as well. The table 2 below shows short-tem (2011) and long-term (2015) targets. For transparency, we have also included key indicators that have no target but are closely monitored by our Sustainability Board. Detailed discussion on targets and data will be given in the four following chapters.

Table 2

Target Indicator

2008

2009

2010

Target 2011

Target 2015

Sustainable Operations

 

 

 

 

 

CO2-emissions (x10^6 kg)1

78.4

82.5

85.4

-10% vs 2010

- 50% vs 2010

Non-hazardous waste Veldhoven (%)

62

52

55

65

90

Hazardous waste Veldhoven (%)2

73

79

77

80

80

Employee Safety Accident Rate3

0.29

0.33

0.14

- 25%

<0.10

Sustainable Product

 

 

 

 

 

Product Safety Accidents4

1

2

1

≤2

t.b.d.

Customer energy use (nWh/Bit)5

71

49

31

25

10

Machine energy efficiency - NXT (kWh/wafer)6

n/a

n/a

0.45

n/a

2012:

0.41 (-10%)

Machine energy efficiency - NXE (kWh/wafer)7

 

 

 

9.0

6.0 (-33%)

Sustainable Value Chain

 

 

 

 

 

EICC compliant suppliers8

0

39

45

200

275

1 These are the scope 1 and 2 CO2 emissions stemming from operational consumption of electricity, natural gas and other fuels. Of the scope 3 emissions, which include CO2 emissions from transportation, supply chain-related activities and products, we estimate that around 85% is emitted as a result of energy use by our machines in operation at customer sites. We have taken several initiatives to manage those emissions, related to shrink and throughput improvements. For a detailed discussion of the energy use of our machines, see page 16.

2 The waste indicators represent the recycling percentages. An important part of our hazardous waste is resist waste. Because it is technically not feasible to recycle this material, we dispose of it by controlled incineration. In 2011, ASML will reduce the amount of resist waste which can lead to higher targets.

3 This indicator represents the lost time accidents ratio. In 2008 and 2009 corrections of the reported ratios had to be made due to the fact that some accidents with small injury were taken into account for the calculation of this indicator, whereas these accidents did not lead to lost working days. Target is 25% year on year improvement of target previous year, with 0.10 as long term target ratio.

4 The indicator represents 'Product related Lost Time Accidents at client sites'. There is no target for 2015, as ASML will introduce in 2011 another target indicator to ensure product safety.

5 This indicator was introduced in 2010, reflecting the effect of shrink on the energy our customers need to produce one NAND memory cell.

6 This indicator reflects the effect of productivity improvements on the energy our customers need to expose one wafer. The NXT is our current state-of-the art immersion lithography system used in volume production of semiconductors.

7 Same as 11. Specific measures to achieve 2015 objective are identified on page 18: "total system energy use". EUV is our next generation litho systems.

8 This indicator represents the number of suppliers that are compliant with the EICC sustainability requirements for the supply chain. In 2009 and 2010 an ASML assessment of the respective 39 and 45 suppliers was performed, but not formally checked for EICC compliancy. This indicator consolidates three separate indicators on environment, health and safety and social aspects, used in the 2009 report.

Besides these quantified targets, ASML also closely monitors a set of key performance indicators that do not have specific targets but are relevant to our performance. Where an upward trend can be observed, this is largely due to the almost threefold production increase in 2010. See table 3

Table 3

Key Performance Indicator

2008

2009

2010

Operation

 

 

 

Fuels Purchased (TJ)

316

317

365

Electricity Purchased (TJ)

459

498

538

Water use

681

692

686

Total waste materials disposed (x 1,000 kg)

1,103

796

1,216

Number of accidents with injury

60

53

57

...of which lost time accidents

17

20

10

Product

 

 

 

Number of systems sold

151

70

197

Culture

 

 

 

Employee turnover (%)

6.4

8.5

5.6

Absenteeism Europe1 (%)

3.0

2.9

3.1

Absenteeism US (%)

2.7

2.7

2.3

Absenteeism Asia2 (%)

0.7

0.5

0.5

Workforce by gender (Men / Women in %)

89 / 11

89 / 11

90/10

Non product related training hours per payroll FTE3

27

7

11

Total direct donations to community and charitable organizations (x1000 EUR)4

807

645

669

1 Figures are for ASML Netherlands only - which represents over 95% of our European workforce

2 In some countries, such as Japan, sick leave is deducted from the annual leave quota so illness-related absenteeism is recorded as 0%

3 2009 numbers have been corrected due to change in scope definition (was # Non-product related classroom training hours divided by # training attendees. Changed from participants to total # payroll FTE)

4 This indicator reflects donations by the ASML Foundation and direct sponsoring of community activities by ASML

Achievements

In 2010, the Sustainability Board developed and deployed a sustainability policy and roadmap, leading to multiyear programs and specific improvement projects. This resulted in a wide range of results and improvements including:

 Sustainable operations

  • Increased management attention to safety issue management, contributing to the Lost Time Accident rate falling by more than 50%
  • Implementation of energy-saving measures in the new cleanroom 5D in Veldhoven, reducing future local CO2 intensity
  • Implement a cogeneration plant in Wilton, USA, when fully operational in 2011, making power generation more efficient and reducing targeted future local CO2 intensity by 19%
  • Implementation of a CO2 reduction plan in Linkou, Taiwan, improving energy efficiency and reducing targeted future local CO2 intensity by 34%
  • A decision to re-use 50% of sulphuric acid in Veldhoven, reducing the volume of hazardous waste

 Sustainable products

  • A quick-scan Life Cycle Analysis of the TWINSCAN NXT:1950i
  • First shipment of NXE 3100 to customer, enabling long term continuous shrink and reduction energy use per bit
  • Highest R&D spend per employee for companies with more than 5,000 employees in Europe

 Sustainable value chain

  • Establishing an improved supplier sustainability review, aiming to ensure proper environmental and social behavior of our suppliers
  • Application for membership of the Electronic Industry Citizenship Coalition, developers of the international standard Code of Conduct for sustainable supply chains

 Sustainable culture

  • Execution of three worldwide improvement programs to increase employee satisfaction and productivity
  • Hosting 104 interns in 2010, 38% more than in 2009, expanding ASML's capacity to attract and retain highly qualified talent

Roadmap

The Sustainability Board has adopted a roadmap through 2015 that will enable ASML to reach all of its targets and measure performance. This roadmap consists of several action plans for our four strategic domains.

 Sustainable operations

  • Increased management attention to safety issue management, contributing to the Lost Time Accident rate falling by more than 50%
  • Implementation of energy saving measures in the new cleanroom 5D in Veldhoven, reducing future local CO2 intensity
  • Implement a cogeneration plant in Wilton, USA in 2011, making power generation more efficient and reducing targeted future local CO2 intensity by 19%
  • Implementation of a CO2 reduction plan in Linkou, Taiwan, improving energy efficiency and reducing targeted future local CO2 intensity by 34%
  • A decision to re-use 50% of sulphuric acid in Veldhoven, reducing the volume of hazardous waste

 Sustainable products

  • Upgrade the TWINSCAN NXT 2 platform, that will in 2012 reduce the energy consumption to expose one wafer with 10%.
  • Implementing a number of energy saving measures in our existing development activities of our machines.
  • Develop and execute product safety improvement plans

 Sustainable value chain

  • Implement and execute our improved supplier sustainability review from 45 to 200 suppliers
  • Be an active applicant member in the EICC with a view to gaining full membership in 2012
  • Non Product Related Supplier Strategy will be set and implemented.

 Sustainable culture

  • Increase the number of university internships from 104 to 200 in 2012.
  • Conduct a new "me@ASML" employee survey, to verify the effectiveness of measures taken in 2010
  • Update worldwide strategy on community involvement
  • Increase employee awareness of our Code of Conduct
  • Develop campus and mobility roadmap in Veldhoven

Risk Management

No major or moderate sustainability risks that would require changes to ASML's sustainability strategy and targets (such as climate change risks) were identified in 2010. Our internal risk management and control system is based on identifying external and internal risk factors that could influence our operational and financial objectives. It contains a system of monitoring, reporting and operational reviews. All material risk management activities are discussed with the Audit Committee and Supervisory Board. Major risk factors - including those specific to the semiconductor industry, ASML or its shares - are disclosed in our annual reports. These risks include, but are not limited to: economic conditions, product demand and semiconductor equipment industry capacity, worldwide demand and manufacturing capacity utilization for semiconductors, manufactur­ing efficiencies, new product development, customer acceptance of new products and reliance on a limited number of key component suppliers.

The ASML Board of Management and senior management conduct an annual review of key strategic risks and define mitigating actions. This risk review is based on the "ASML Risk Universe" - a framework of formal risk definitions, including sustainability issues such as environmental risks and Health and Safety. The results of the review and progress updates are reported to the Audit Committee.

To ensure we meet our long-term commitment to customers, we introduced business continuity procedures in 2006, including emergency response plans for all ASML locations. As a result of the 2008 annual risk review conducted with the Board of Management, a Corporate Business Continuity Policy was formalized in 2009. In 2010, we developed a Corporate Business Continuity Manual that focuses on corporate-wide preventive measures and responses to loss of critical resources. Our existing detailed business recovery plans for manufacturing sites will be reviewed in 2011 to ensure contingency scenarios are in place. Business continuity is also explicitly addressed in our supply chain risk management process.

Page updated on 2011-10-31 15:15

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