Improving the Climate Impact of a Growing Business

Applied Materials is purchasing clean energy from the White Mesa Wind project in Texas.
Jan 25, 2022 12:35 PM ET

The accelerating digital transformation of the economy is creating new levels of demand for semiconductors. As the chip shortages have demonstrated, semiconductors are more important to the world now than ever before. Applied Materials is mobilizing its entire team to meet this unprecedented need for our equipment and technical knowhow.

While this growth is certainly good news for the company’s revenue, it presents many challenges with managing our energy consumption and greenhouse gas footprint. In other words, it’s a good problem for the ESG team to solve.

Despite these challenges, Applied Materials was pleased to see our recently released 2020 CDP Climate score improve from B- to B when compared with 2019. This keeps us well above the overall CDP average.

The reasons for this improvement are straightforward. Although our revenue grew 18% from fiscal 2019 to 2020, our Scope 1 and 2 combined footprint grew just under 5%. Careful management of our footprint is aligned with the company’s ambitious goals to cut Scope 1 and 2 emissions by 50% by 2030.

To help achieve that goal, Applied has signed a power purchase agreement (PPA), putting enough new wind power on the grid to offset our entire North American footprint by the end of 2022. In fact, the White Mesa, Texas PPA is already online and has been delivering clean energy as of the fourth quarter of calendar 2021. The photo above is actually from that new wind farm.

While that project will help reduce our footprint for 2021 and 2022, the continued growth of our business means we need to keep searching for internal efficiencies and new-to-the-grid projects to maintain our momentum.

Toward that end, Applied Materials is committed not only to report our Scope 3 footprint in 2022, but also to set science-based goals aligned with the 1.5° C target set by the UN Paris Accord. We will also begin reporting our carbon impact and risks in-line with the Task Force on Climate-Related Financial Disclosures (TCFD) framework later this year.

Applied’s business grew 34% from fiscal 2020 to 2021, so the environmental challenge is clear. I’m confident that with these additional plans, we can effectively manage this “good problem” and our climate progress will continue to be recognized by CDP and other key stakeholders.