Corporate Social Responsibility Report 2012-2013 - SanDisk

Collaborative partnershipsPartner organizationsArea of collaborationSustainable Silicon Valley (2012)Set goals for CO2 emissions and water use reduction and report their energy useannuallyElectronic Industry CitizenshipCoalition (EICC) (2013)Development of due diligence processes to comply with the Dodd-Frank Wall StreetReform and Consumer Protection Act’s reporting requirements to disclose and reporton the use of conflict metalsStop Hunger Now, Akshaya Prataand Second Harvest Food Bank2014 goal for SanDisk is to pack and distribute 1,000,000 meals to the hungryworldwide and provide locally-targeted food distribution to families and communitiesin need in areas in which SanDisk is locatedHow we engage with key stakeholdersGovernance and EthicsConduct. Continuity. Fulfillment.We believe thatethical conduct andgood governanceare critical tobusiness success.Our governancesystems aredesigned to helpus manage risks,plan for long-termcontinuity andfoster resilience forsustainable growth.Social responsibilitymanagementThe membership of our social responsibilitysteering committee is drawn fromOperations, Quality, Human Resources,Facilities, Procurement, Legal, InvestorRelations, Corporate Communications andManufacturing. This committee is responsiblefor all aspects of social responsibilityreporting, stakeholder engagement andbenchmarking. We collaborate with oursubject matter experts on strategies andinitiatives, engage with employees from allbusiness functions and work with executiveleadership to set goals, review performanceand prioritize programs.Corporate governanceOur corporate governance policies providea framework for the proper operation of thecompany, consistent with our shareholders’best interests, with clearly documentedpolicies, committee charters and bestpractices that define the principles by whichwe efficiently and transparently operate.The Board of Directors has three standingcommittees: an Audit Committee, aCompensation Committee and the Nominationand Governance committee. Our internalaudit function is responsible for overseeingour operational and financial processes, andreports regularly to the Audit Committee.Risk managementOur Enterprise Risk Management (ERM)program has developed comprehensiveenterprise risk profiles and appropriatemitigation plans. Our robust incident6SANDISK CSR REPORTmanagement and business continuityprograms manage risks and limit employeeand business impact. Our Board’s AuditCommittee receives regular reports on ERMfunctions; and sub-committees of the Board ofDirectors and cross-functional teams manageexisting and emerging risks that could affectour business, customers and society.Public policyWe engage globally with governments onofficial requirements and business operationneeds. We also collaborate with industrypeers to develop strong relationships withgovernment and non-governmental leaderswhile strictly adhering to our Worldwide Codeof Business Conduct and Ethics (“Code ofBusiness Conduct”).External partners andstakeholder engagementWe collaborate with stakeholders, opinionleaders, experts, partner organizationsand corporate peers to improve our socialresponsibility strategy and to improvesupply chain standards, to prioritize issuesand to build ongoing relationships with keyinfluencers.We have established close, long-termrelationships with non-governmentalorganizations worldwide whose efforts alignwith our Foundation’s focus areas and resonatewith our employee’s desired volunteerism.Our global and local hunger relief, disasterpreparedness and response and academicpromise program efforts, funded through ourFoundation and employee matching programs,are particularly noteworthy.Stakeholder groupHow we engageCommunitiesEvents, philanthropy and donationsCustomersPolicy inputs and compliance reviewsEmployeesSuggestions, event participation volunteerism and success storiesRegulatorsPolicies definition and compliance auditsIndustryForum membership and working groupsInvestorsSocially responsible investment reviewsSuppliersPolicy inputs and compliance reviewsNon-Government OrganizationsMembership and representative reviewsWorldwide code of businessconduct and ethicsSanDisk’s ‘Code of Business Conduct’ setsour expectations and commitment for ethicalbehavior. It guides our business decisions,and it helps us attract and retain customers,business partners and talented employees.Privacy and data protectionWe continuously work to raise awareness ofprivacy and data protection and to improveour systems and processes to protect customerand employee data. SanDisk uses best-practicesecurity systems to keep our networks,systems and information secure. We regularlyanalyze new security trends, changing threatsand innovations in data security to identify newopportunities and early warnings.Supply chainAs an organization committed to responsiblesourcing, we have carefully documentedprocesses that aim to engage our suppliers inlong-term relationships to ensure both highperformance and maximum integrity.Human rightsOur approach to human rights is basedon our unwavering values of integrity andhuman dignity, and is consistent with thecore tenets of the International LaborOrganization’s fundamental conventions andthe United Nations’ Universal Declaration ofHuman Rights.Links for referenceStakeholder groupHow we engageSocial Responsibilityand orporate-responsibility/Corporate l?c 86495&p irol-govHighlightsWorldwide Code of BusinessConduct and esponsilbilty/pdf/Code and sk Ethics Violation Reporting.pdfPrivacy and Data vacy-policy/Supply ndisk/Corporate-Social-Responsibility/SanDisk Supplier Code of Ethical Conduct.pdfCarbon Disclosure ponses.aspx?Search True&Keyword sandiskGreen r-management/Conflict Minerals ineralsPolicy.pdfEnvironmental ms 20ems 20policies 201-17-08.pdfGovernance and Ethics7

In all our operations,environmental sustainabilityis a priority. At everyopportunity, we strive toreduce our materials use,make smarter choices anddo our part for agreener tomorrow.EnvironmentReduce. Nurture. Sustain.Our environmental practices are certifiedto ISO 14001:2004 standards. This drives asystematic approach for setting, tracking andimproving environmental objectives throughassignment of resources and responsibilities,identifying, monitoring and evaluating theenvironmental impact of our activities,processes and products.Our specific areas of environmental focusinclude limiting waste and promotingrecycling, improving energy efficiency,adhering to environmental regulations andminimizing the environmental impact of ourmanufacturing and packaging activities.8SANDISK CSR REPORTOur social responsibility group engageswith different industry organizations,environmental advocacy groups, standardsbodies and policymakers to achieve practicaland effective solutions, develop potentiallegislation and enhance environmentalresponsibility of electronics companies andtheir suppliers. SanDisk will continue to leadby example and encourage our businesspartners to develop and implement bestpractices.Climate change initiativesEmployee business travelOur climate change strategy drives ourefforts in: Reducing energy consumption Creating consumer awareness ofopportunities to reduce energy usage Material composition and product safety Recovery of discarded products,components or materials at the end oftheir useful life (product take-back)Our target is to reduce our GHG emissions(measured by levels per petabyte shipped)by 30% based on our 2012 levels. We reporton our performance and disclose overallclimate change strategies through the globalCarbon Disclosure Project (CDP). Our CDPassessments for the last three years haveshown us to be in line with many industrypeers; however, our goal is to becomea global CDP leader.Our travel policy recommends that employeesminimize travel by utilizing audio and videoconferencing and web meetings. We havesignificantly increased video conferencingcapabilities at all key sites in the last fewyears.Proactive accountability inour products and packagingWe have eliminated the use of heavy metalsand toxic substances (including lead, mercury,bromine, chlorine and antimony) in ourproducts. Our comprehensive ”Green Policyon Controlled and Reportable Substances forParts and Materials” details exacting standardsfor all parts and materials that we purchase,use and prohibit in our products. This is basedon worldwide environmental compliance withinitiatives such as ROHS, REACH, China ROHS,InitiativeSavings in 2013Savings in 2012Energy saving system for chiller2.5 M kilowatt hours2.5 M kilowatt hoursReduced use of sodium hydroxide109 tons109 tonsWater savings991,049 tons401,500 tonsDeployment of LED lighting2.6 M kilowatt hours1.5 M kilowatt hoursThermo-reclamation;-gas savings650K cu.m413K cu.mEnvironment9

Best practices in facilities management Cooling through airflow management; fuzzylogic control is applied in chilled watersystem to reduce energy consumption Save gas by using thermo reclamation,reclaiming heat from the clean, dry airsystem Use of energy-efficient lighting; replacefluorescent lamps with LED lighting Maintaining global equipment standardsthat meet or exceed ENERGY STARefficiency guidelines Performance of LEED evaluations tomaximize efficiencies Use of alternative energy sources Enhancing energy efficiency of equipment,data storage management using SSDs ande-waste disposal Saving water through Recycling ofEquipment Wastewater and ReverseOsmosis Thick Water RecyclingPackaging Directive, Battery Directive andOEM customer requirements. This policy isapplicable to our direct suppliers, contractedmanufacturing partners, and their suppliers.Today, we restrict or monitor the use of morethan 100 substances in our operations.To decrease our environmental impact, we: Reduced the size and weight of ourproduct packaging Use packaging materials that are easy torecycle Replaced polyvinyl chloride (PVC)packages with much smaller polyethyleneterephthalate (PET) and paper packing Post our warranties and quick start guidesonline for most products, reducing the needfor paper insertsRecycling throughtake-back programsOur products are designed to have a longand useful life and to withstand extremeworking conditions and environments.Such durability helps reduce demand forraw materials. In addition, we encouragecustomers and consumers to recycle theirproducts in a secure and environmentallyfriendly manner.10 SANDISK CSR REPORTA diligent approach toconflict mineral eliminationCommunity engagementaround the worldOur Conflict Minerals Policy and Programaims to exclude the use of materialscontaining tungsten, tin, tantalum and gold(3TG), originating from illegal mines in theDemocratic Republic of Congo (DRC) andneighboring countries (‘conflict areas’)throughout our supply chain. This policyreaffirms our support of conflict-free sourcingand our adherence to the Dodd-Frank WallStreet Reform and Consumer Protection Act.Internal audits monitor our compliance andwe use the EICC-GeSI due diligence tool forsupply chain assessments.Tree plantingForward thinking in ourfacilities managementWe identify the most significantenvironmental impacts at our sites and setrelevant corporate and local environmentalobjectives and targets. Our internal andsurveillance site audits for ISO 14001and OHSAS 18001 standards ensure ourcommitted compliance.Employees in China partnered with ZizhuYouth League and the Kao R&D Center toplant trees in the Zizhu High-Tech IndustrialZone Park.Employees in Israel partnered with the Amchaorganization for the third successive year,planting 300 trees in the “SanDisk Grove”to celebrate Tu Bishvat, ‘the new year of thetrees,’ in anticipation of spring.Promoting awareness forenvironmental protection Deploying desktop power management andthin-client technologies Purchase of energy-efficient printers,employ duplex printing and recycle toners Increase use of video and webconferencing, email and instant messagingto meet locally and globally and to shareinformation and project materialsSustainability through reuseand recyclingEmployees in Shanghai, China celebrated2012’s World Environmental Day bycreating reusable shopping bags, learningabout sorting waste for composting andrecycling, and committing to practice goodenvironmental principles.Celebrating earth dayOur employees worldwide commemoratedthe 43rd Earth Day with Earth Day Fairs,Household Electronic Waste pick-up,quizzes, environmental impact-related moviescreenings and awareness drives.37 volunteers in China participated inan environmental protection activityat the Xinzhuang Metro Station toincrease awareness of the importance ofenvironmental protection.Helping preserve theRed Sea turtlesEmployees in Japan extended support forWel-KAME Yokkaichi Beach Clean-Up Projectto clean the natural beach where Red Seaturtles return every summer to lay their eggs.Tree PlantingEnvironment 11

The SanDisk FoundationOur mission at SanDisk Foundation is to beexemplary corporate citizens in the globalcommunity. We believe everyone can make animpact and we encourage a spirit of giving asan important part of our culture. We focus oursupport on four specific areas.K-12 Education Enhance academic performance,technology skills and social developmentof students from underserved communitiesPromoting Science, Technology,Engineering and Math (STEM) Work with departmental, special project andresearch grants to focus on STEM programs Target secondary, junior or communitycolleges, public and private four-yearcolleges and universities, graduate andprofessional schools, and technical andspecialized schoolsHealth and welfare initiativesfor children and youth Develop curriculum, innovative instructionmethods, hands-on student projects andinfrastructure improvements Improve access to quality health care andhealth promotion Provide teachers with professionaldevelopment, materials and support Community support for disadvantagedchildren and families and victims of abuseor neglect Utilize the arts to enhance the qualityof education Hunger and homeless assistance programsCommunityContributions on criticaldisaster response Match employee donations to disaster reliefValue. Volunteer. Impact.We greatly valuethe societies inwhich we work.We leverageour expertise,technology,partnerships,and financialresources to helpsupport thrivingcommunities thatimprove people’slives. We give backin many ways,including providingfinancial supportand volunteeringtime.We invest in scalable and selfsustaining programs to support resilientcommunities, economic stability anda healthy pipeline of talent. Throughour corporate philanthropy programsand employee volunteering we take atargeted approach in the four areas ofeducation, healthcare, children and youthwelfare, and critical disaster response.The cornerstone of our philanthropyprogram is the SanDisk Foundationwhich focuses on achieving excellenceand efficiency in our community grantsand volunteer activities. Since 2003,the SanDisk Foundation has awarded1,041 community grants totaling over 25 million worldwide. In addition, wehave assisted with disaster relief andhumanitarian aid worldwide.Our Signature Partners program is aninitiative by the SanDisk Foundationto forge long-standing relationshipswith organizations that share our corevalues in communities where we havea significant presence. In addition toproviding financial support throughour Foundation, our employees alsocollaborate with our partners to volunteerand raise additional funds and extendtheir reach in the community. OurCommunity engagement metrics201120122013Social investments(donations to Foundation) 5,655,000 4,889,951 7,659,363Total amounts disbursed 3,896,377 4,160,196 7,307,910111292 80,377 244,000 1,358,000% of employees participatingin employee giving programsDonations by employees12 SANDISK CSR REPORTSignature Partners include, among others,the American Red Cross, Second HarvestFood Bank, Leukemia and LymphomaSociety (LLS), Citizen Schools/US2020,Family Giving Tree (USA), Kadima YouthCenter and Amcha Center for HolocaustSurvivors (Israel), SOS Children's Village,Samarthanam Trust for the Disabled, OneSchool at a Time, Dream a Dream, andNanhi Kali (India), World Vision, Save theChildren and Red Cross (Japan).Community 13

Employeesvolunteered over8,500hours,providing valuable timeand materials forHabitat for HumanityMilpitas: Second Harvest Food BankEfforts towards a hunger-free worldSanDisk shares a vision of a hunger-freecommunity with Second Harvest Food Bank(SHFB), and Stop Hunger Now. In the lasteight years of our collaboration with SecondHarvest, we have helped provide 4.5 millionmeals to local families struggling to put foodon the table.We provide financial support every yearthrough the SanDisk Foundation to helpSecond Harvest provide this vitally importantassistance with additional funding providedthrough our employee matching program.SanDisk partnered with Stop Hunger Now,a global hunger relief agency to package150,000 meals for distribution in thePhilippines and (via Akshaya Patra) to childrenand families throughout India. The fundsraised in this campaign were used to purchasethe food, vitamins and minerals that werepacked by SanDisk employees in the US andIndia.Employee volunteerengagementWe believe our volunteer efforts speak to ourcommitment to making a difference in thelives of others. Our employee matching giftand volunteer match programs encourageemployee contributions and volunteer effortsacross the world. Cash donations are matchedon a dollar-for-dollar basis, while hoursvolunteered by employees are matched bya cash grant of USD 45 for every volunteerhour performed, up to USD 2,000 peremployee per fiscal year. In 2012 and 2013,over 4,500 employees worldwide donatedfunds and volunteered their time, raising morethan USD 2,000,000 for 600 charitableorganizations globally.‘Celebration Through Service’commemorates SanDisk’s25th anniversaryEach major site worldwide identified andfacilitated employee volunteerism activities.SanDisk Secound Harvest Bank Contributions14 SANDISK CSR REPORTThe SanDisk Care Club was created in Indiato champion philanthropy and communityengagement. SanDisk employees packagedmeals, partnered with Sankara Eye Foundationto perform exams in communities withno established healthcare facilities, andsupported two SOS Children’s Villages homesfor orphaned, abandoned and neglectedchildren. Their efforts resulted in SanDisk Indiajoining Japan and China in achieving 100%employee volunteer participation.SanDisk US teams (Milpitas, CA; Longmont,CO; Plano, TX and Westford, MA) builtplayhouses and raised funds for their localHabitat for Humanity chapters. As one ofthe US’s largest donors to this program,employee volunteers, including our CEO andLeadership Team members, were invited tojoin former President Jimmy and RosalynnCarter's 30th annual Carter Build to benefitHabitat for Humanity International. Playhouseswere donated to Blue Star Mom families,American Cancer Society, Emmaus House(a domestic violence shelter) and San Mateoand Santa Clara County foster care programs.Employees volunteered over 8,500 hours,providing valuable time and materials forHabitat for Humanity.In Japan, employees partnered with Savethe Children, Red Cross Japan, “Make aWish” (MaW) Foundation, neighborhoodassociations and community centers toparticipate in a variety of volunteer activities—hosting blood donation drives, volunteering atchildren’s sports events, repairing playgroundequipment, cleaning school sites, recycling,performing trail maintenance and hostingbeach cleanup events.SanDisk employees in China hosted studentsand teachers from Minhang School forChildren with Mental Disabilities for a factorytour of SanDisk China. Employee volunteers,refurbished nearby schools and communitycenters, and packed food for seniors andfamilies with children.SanDisk Israel employees volunteered asmentors and tutors to promote STEM at thelocal high school level, helped holocaustsurvivors document their life stories, promotedrecycling awareness and supported publictransportation improvement initiatives.Community 15

Employeeslandscapedand beautifiedthe grounds at Russell MiddleSchool in Milpitas – USA.Milpitas: Russell Middle School2012 SanDisk ScholarsEducationWe believe that education transformsindividuals and that the educated individualtransforms lives. We work to improveeducation outcomes, student engagementand performance for people in need aroundthe globe, especially those in underservedcommunities.In 2012, SanDisk Foundation created theSanDisk Scholars Fund, a 1 million annualprogram that awards scholarships of up to 10,000 to undergraduate students andgraduate university research programs. TheSanDisk Foundation partners with the SiliconValley Community Foundation, InternationalScholarship and Tuition Services (ISTS),the Hispanic Scholarship Fund (HSF) andthe United Negro College Fund (UNCF) toidentify students fitting the SanDisk ScholarFund’s applicant profile, award scholarshipsand provide support services to scholarshiprecipients. This program encouragesstudents to pursue careers in engineeringand computer science, and supports theeducational goals of women and Latino andAfrican-American students pursuing careersin STEM fields. Additional awards targetstudents attending one of the following fiveUS universities: MIT, Stanford University,University of California at Berkeley, Universityof California at Los Angeles and University ofTexas at Austin.The Foundation also provides grants totaling 200,000 to the School of Engineering atboth UC Berkeley and Stanford University to16 SANDISK CSR REPORTaward additional scholarships to graduatestudents who pursue STEM-related studiesand meet the program's selection criteria.A portion of the Scholars Fund is allocated todependents of our employees to encourageand support them in their educationalpursuits. A total of 160 students were awardedscholarships in 2012 and 2013.In April 2013, as part of our 2013 ‘CelebrationThrough Service’ campaign, we joinedUS2020 as a Founding Leadership Partner.We have committed 1,000,000 towards thispartnership to (a) mobilize at least 20% ofour US STEM workforce to receive trainingas mentors and (b) provide a minimum of20 hours per year

Social responsibility management The membership of our social responsibility steering committee is drawn from operations, Quality, human resources, facilities, Procurement, Legal, Investor relations, Corporate Communications and Manufacturing. This committee is responsible for all aspects of social responsibility