AMD hired SustainAbility to support the company in updating its biennial materiality assessment to identify and prioritize environmental and social issues for its business and stakeholders. This issue prioritization project helped AMD refine its strategic focus and resource allocation, build a foundation for an updated strategy, and communicate effectively with key stakeholders.
Like all companies, AMD has a wide range of issues that are critical to our business and to our stakeholders. It is important to focus our strategy on the issues that are especially significant to our operations – and to the impacts that we have on our customers and our communities.
In 2017, we updated our materiality assessment, which is aimed at prioritizing the most impactful environmental and social issues for our company. The process identified key areas of focus that will significantly impact the long-term sustainability of our company. The assessment helped us refine our strategic focus and resource allocation, build a foundation for an updated strategy, and communicate more effectively with key stakeholders.
While the analysis identified 12 material issues, it highlighted four core business issues to invest in.
Overview and Key Outcomes
In Phase 1, the consultancy SustainAbility developed a landscape snapshot of the semiconductor sector and an overview of current sustainability action from several information technology industry companies, including Intel, Nvidia, Samsung, Marvell, and Xilinx.
This context informed the potential needs, risks, and opportunities of a sustainability strategy for our company. Issues included, but were not limited to, how digital transformation is driving changes in customer needs, the tech-specific competition for talent, and increasing stakeholder expectations for the technology sector to solve social and environmental challenges. The benchmark revealed competitors’ and peers’ relevant responses to addressing sustainability challenges in the field and informed the selection of a broad landscape of potentially material issues across three key areas: environment, social and governance, and tech-sector.
As a component of Phase 2, in November of 2016, Ceres hosted a stakeholder engagement session to gather feedback on our most critical business risks and opportunities and to prioritize material issues. The stakeholders outlined several additional potential material issues and confirmed several earlier Phase 1 findings. SustainAbility then conducted internal interviews with eight members of our executive team, including president and CEO Dr. Lisa Su, regarding the greatest sustainability opportunities and challenges as they relate to our core business. Executives highlighted several key insights during the conversations, including but not limited to growing supply chain risk and recognition of our company’s size and scale relative to competitors as both an advantage (nimbleness) and a challenge (resource constraints). Executives also noted that customer expectations regarding energy efficiency, transparency, and overall sustainability performance are growing and will increasingly influence our success.
During Phase 3, the list of material issues was refined and consolidated to a final list of 12. SustainAbility drew on the Phase 1 research and interview findings as well as Phase 2 feedback from external stakeholders and additional desktop research, amounting to more than 30 reports and articles. SustainAbility developed a draft materiality matrix illustrating our priority issues based on stakeholder concern and impact on the business. SustainAbility then conducted a rigorous prioritization analysis of each issue according to relative business impact (reputational, operational, and financial) and stakeholder concern of relevant groups.
Our material issues are noted below. All of the issues listed represent important areas that we need to manage. However, SustainAbility grouped the issues into categories to help us think through priority areas of focus that will have the biggest impact on the long-term financial sustainability of our company.
1. Core Business Issues to Invest in:
- Role of IT in Society
- Data Privacy & Security
- Human Rights & Labor Issues
- Energy Efficiency & Climate Change
2. Key Issues for Long-term Success that Need Proactive Management:
- Innovation & IP Protection
- Talent Acquisition & Retention
- Diversity & Inclusion
- Governance & Business Ethics
3. Areas for Stakeholder Engagement:
- Conflict Minerals
- Product Lifecycle
4. Low-Risk Issues that Require Continued Attention:
- Water Use
- Materials Sourcing