ESG Trendsetters: How Applied Materials Prioritizes ESG Through Strategic Governance and Teamwork

Mar 26, 2024 10:15 AM ET


In this episode of ESG Trendsetters, we learn about Applied Materials. Founded in 1967, Applied Materials is a leader in designing and manufacturing the machines that make semiconductors, which can be found in virtually all digital devices. Applied Materials also provides equipment used to produce flat panel displays for TVs, IT, and mobile products.  

The semiconductor industry is growing, and the products people use every day are highly dependent on semiconductors, according to Chris Librie, Senior Director of ESG at Applied Materials. “The average electric vehicle contains about 6,000 semiconductors in it, which astounds even me. The point is you can’t have renewable and clean energy and the transmission of power without semiconductors.” As we witness the rise of AI and autonomous vehicles, Librie believes that the semiconductor industry could double in size by 2030, potentially crossing the trillion-dollar mark. Given this, he explains that “one of the challenges of that growth is that if we don’t take action and reduce our footprint, it could quadruple in that same time period. For us, this isn’t tolerable given the current situation the planet is in.” 

Librie joins Mike Stiller, New Initiatives for Capital Access Platforms at Nasdaq, to discuss prioritizing sustainability in a long-established industry, and how the organization is determining its ESG goals and developing a net-zero playbook. 

With many of Applied Materials’ customers having net-zero commitments, this drives the organization to do what it needs to do to not only distinguish itself, but for overall customer satisfaction, relationship building, and promoting deeper discussions needed for better ESG actions. 

Librie acknowledges that organizations looking to improve their ESG practices and programs may benefit from insights and data coming from a wide range of companies and industries. He shares, “One of the key things in building an ESG program is to see what others are doing. Having access to information from notable ESG and sustainability leaders, but more importantly, customers and competitors, helps us see what everyone is doing and what is important to them.” 

Having been involved in ESG and sustainability for 15 years, Librie understands the evolution of the sustainability narrative and recognizes how ESG has become central to Applied Materials’ business strategy. Librie also believes that it has brought the organization’s employees together and credits connectivity as the “conductor” of their achievements. “In terms of net-zero, it involves every part of the organization,” he says. “We need to have our supply chain, product design, customer service, and sales and R&D working together. It’s really a comprehensive effort.” 

Over the last 12 to 18 months, Applied Materials has focused on getting clear about its ESG objectives each fiscal year, which involves looking at the pioneering aspects of net-zero, leading the company to take advantage of new innovations and make the most impact they can—particularly with nature-based solutions. “The assumption is that there will always be emissions. So, we have to work hard to reduce as much as we can all the way up to 2040 and beyond,” shares Librie.  

For issuers looking to tell their best ESG story, Librie’s advises focus on the governance aspect in ESG. “My advice would be to spend the time in creating those teams and continue creating that connectivity within your organization.” Applied Materials has at least 100 employees across the organization solely dedicated to ESG. These subject matter experts work on different aspects, such as reporting, finetuning the company’s 2030 goals, and revising the net-zero playbook.  

In addition, Applied Materials has set up an ESG leadership council responsible for the different ESG and sustainability milestones the organization is trying to accomplish. Some leadership council members focus on climate strategy, while others focus on measuring carbon footprint and making sure the organization’s ESG data is assured. Collectively, they pay close attention to renewable energy and the financial discussions that come along with it to help reach their goal of getting to 100% renewable energy globally by 2030.