2019 Corporate Social Responsibility Report - Synopsys
2019Corporate SocialResponsibilityReport Copyright 2020
ContentsLetter from the co-CEOsAbout Synopsys05About CSR07Talent11Environment14Governance & Ethics16Cybersecurity & Privacy19Supply Chain21Community24Priorities for Improvement01The Synopsys 2019 Corporate Social Responsibility(CSR) report shares an overview of our strategy anddemonstrates the connection between our business andour commitment to social responsibility. Throughout thereport, we disclose how we are managing issues that areimportant to our organization as well as our priorities forimprovement as we continue to grow.Report ScopeThis report profiles activities for the 2019 fiscal year,which began on November 1, 2018, and ended on October31, 2019. The highlights and key performance metricspresented in this report are from FY19, with the exceptionof our environmental and community performancedata, which are collected and managed on a calendaryear basis. Unless otherwise indicated, all sustainabilityinformation and data included in this report refer to ourglobal business. Any use of “we” or “our” refers to ourglobal business. All financial information is presented inU.S. dollars unless otherwise noted.Defining Report Content03About this Report02This report is intended to help our key internal andexternal stakeholders better understand our non-financialperformance and to provide a unified document forstakeholders to access our sustainability content. TheGlobal Reporting Initiative (GRI) reporting standardsinformed the development of this report.
Co-CEO LetterWhen Synopsys was founded more than 30 years ago, our two objectives were to createa company that had impact on the world and that was a great place to work. We didn’tuse the words “corporate social responsibility” then, but in essence, that is preciselythe trajectory we set for ourselves. Today we’re proud of our leadership reputation asa trustworthy global citizen, committed to our Code of Ethics and Business Conductand the success, safety, security, and sustainability of our ecosystem, shareholders,employees, customers, communities, and planet.Our global semiconductor and systems customers across the ecosystem—from siliconmanufacturers to software application developers—use Synopsys silicon IP, design,and security testing tools to create the incredibly powerful computation demanded byour emerging world of “Smart Everything.” But “smart” doesn’t happen in an algorithmicvacuum. We live in a world where everything from energy demands and climate changeto social interactions and security challenges are connected. There has never been a timewhere the ability to lead and the willingness to take ownership for big challenges has beenmore critical. And our bright, global, engaged, and diverse employees are stepping up!From corporate-level accomplishments like becoming carbon neutral in 2019 to thecommitted individual employee who takes an extra two hours out of their day to tutor achild struggling in an underserved school, Synopsys is making an impact.We’re honored to present this snapshot of our efforts.02Sincerely,Aart de Geus and Chi-Foon Chan
AboutSynopsysSynopsys technology is at the heart ofinnovations that are changing the way peoplework and play. Autonomous vehicles. AI. Thecloud. The IoT. 5G. These breakthroughs areushering in the era of Smart Everything―wheredevices are getting smarter, everything isconnected, and must be secure. Poweringthis new era of digital innovation are high-performance silicon chips and exponentially03growing amounts of software content.Synopsys is at the forefront of SmartEverything with the world’s most advancedtechnologies for chip design, verification, IPintegration, and software security and qualitytesting. We help our customers innovate fromsilicon to software so they can bring SmartEverything to life.
Our TechnologyWe focus our technology around three essential pillars.Silicon Design &VerificationBuild high-performancesilicon chips, fasterSilicon IPIntegrate morecapabilities on SoCs(system on chip), fasterSoftware Security& QualityBuild secure, highquality software, faster 3.4B As of Q4 FY19Our ValuesFor more than 30 years, our core valueshave served to unite and guide our actions.These values—Integrity, Customer Successthrough Execution Excellence, Leadership,and Passion—are woven into the fabric ofour organization and characterize our visionfor the era of Smart Everything.Integrity is demonstrated by aligning ourwords and our actions.Customer Success through ExecutionExcellence is demonstrated by providingsuperior value to our customers.Leadership is demonstrated through ourbusiness achievements, our customers’success, and our enduring commitment toour communities.04Synopsys Values PyramidPassion is our differentiator. Actions thatdemonstrate our values are amplifiedby our passion.
Corporate SocialResponsibilityLeadership comes in many forms. Synopsyshas long promoted the idea that a truecorporate leader is also an innovative globalcitizen—not just a technology pioneer, buta leader as an employer, an active memberof local communities, and a champion ofenvironmentally sustainable operations.Corporate social responsibility (CSR) atSynopsys is about translating our company05values into action for the common good.CSR is a critical part of our ongoing effortsto empower our employees, reduce ourenvironmental footprint, ensure stronggovernance and ethics, manage an ethicalsupply chain, and make a positive impact onour communities.
Priority CSR IssuesIn 2018, we completed a materiality analysis with the assistanceof third-party consultants to determine our priority CSR issues. OurCSR leadership team helped to define the list of priority issues forthe company. Using a combination of internal as well as externalsource materials and internal survey input, we ranked CSR issuesrelevant to our business for their level of stakeholder concernand impact on the company. This analysis helps us understandand address gaps in internal and external perceptions, allocateresources effectively, enhance our public disclosures, and buildtrust with stakeholders.Synopsys is a member of the Responsible BusinessAlliance (RBA) and fully supports the vision andmission of the RBA.Among the CSR issues identified for FY19, those that weredetermined to be of highest priority for Synopsys and ourstakeholders were: Talent Management and Employee Engagement Climate Change and GHG Emissions Corporate Governance and Ethics Cybersecurity and Privacy Environmental and Social Supply Chain Management RBA Vision: A global electronics industry thatcreates sustainable value for workers, theenvironment, and business. RBA Mission: Members, suppliers, andstakeholders collaborate to improve workingand environmental conditions through leadingHow We Drive CSRstandards and practices.CSR at Synopsys is managed by a program team with the guidanceof our CSR Leadership Committee. The Corporate Governanceand Nominating Committee of the Synopsys Board of Directorsand the full Board receive regular CSR program updates. Employeeengagement is an integral part of the success of CSR at Synopsys.We implemented a management system to ensurealignment with the provisions of the RBA Codeof Conduct in the areas of labor, health & safety,environment, and ethics. We encourage our suppliersdo the same.Board committee oversees Synopsyspolicies and practices regardingcorporate social responsibility andsustainability performanceEmployeeEngagementCSR LeadershipCommitteeVolunteer programs, communityand environmental inititatives,and other campaigns to engageand inform employees on ourCSR policies and expectationsCSRCross-functional committeecomprised of senior leaderswho provide oversight of ourCSR roadmapProgram TeamTeam provides strategy, guidance,best practices, and engagement withstakeholders; works closely with HR,Facilities, IT, Legal, and Security tomanage assigned priority issues06Corp. Governance &Nominating Committee
TalentOur talent is the driving force behind everythingwe do, and we are committed to providing asafe, secure, and productive environment inwhich our employees can do their best work.07We are proud to have employees who arecommitted to Synopsys’ values and take pridein the impact we make. Our employees valueour commitment to their career development,ethical business conduct, customer success,and strong leadership across our industriesand communities alike.
TalentTo ensure a successful future for our organization and industry, ourglobal recruiting is focused on attracting a diverse and technicalpipeline of talent. Equally important to our vision are our ongoingefforts to retain, develop, and equip our existing workforce for thechallenges ahead. At Synopsys, we take innovation and technologyadvancement to heart. Engineers are at the core of this innovationwith 80% of our workforce in an engineering role.Managing people in today’s workplace is rewarding and complex.Our managers are the pivot point to drive innovation, customersatisfaction, and team performance, and we expect them to guideindividual career aspirations by engaging in ongoing discussionswith their employees. People managers have access to a broadselection of online tools and resources to engage and motivatetheir teams. We also facilitate highly rated, in-person managementtraining and networking sessions globally. 80% of our employees utilize our trainingand development catalog14,000 EMPLOYEES5,517 1,051MASTER’SDEGREESPHD’S3,213PATENTSWe cultivate multi-faceted global internship programs, sponsorearly career hires, and activate a buddy system to accelerate a newemployee’s productivity as they join the company. Championing a Culture of Performance ExcellenceWe believe each employee deserves comprehensive, constructivefeedback to help them improve throughout their tenure at Synopsys.To complement the ongoing dialog among employees and theirmanagers, all employees participate in an annual performancedevelopment process. Our three-pronged approach encouragesemployees to work in partnership with their managers as theyassess previous year’s performance, establish goals for the comingyear, and focus on their professional development.Internship programs – We focus on providing opportunitiesfor the future workforce to learn and master real-world, usableskills, such as problem solving, networking and businesscommunications. Interns have visibility to Synopsys technology,business practices, and innovation challenges.Synopsys Hosted 697 Interns in 2019 New hire buddy system – All new employees are assigneda “buddy” when they join Synopsys. These peer-to-peerconnections infuse a sense of belonging and accelerate our newteam members’ contributions and level of performance.Early career hires –31% of our new employees have recentlyreceived their degrees and have access to importantdevelopment resources especially suited for early careeremployees.A Culture of Agile LearningWe understand the pressure employees feel to balance theirfocus on today’s job while keeping their skills sharp for futureopportunities. Leveraging partnerships with training anddevelopment providers, we offer a unified platform with awide spectrum of mobile-friendly content such as educationaltalks, workshops, and technical training. Employees areencouraged to customize their learning to suit their priorities,interests and schedules.08Commitment and satisfaction:Synopsys employees havebeen with the company anaverage of 6.5 years. Talent integration: 25% of our workforce joinedthrough an acquisition,contributing to our strong talent,product and technology portfolio.
Employee Engagement and FeedbackOur annual employee survey, SHAPE Synopsys, tracks employee engagement and feedbackon various topics. We believe in continual improvement and use employee feedback to driveour comprehensive engagement efforts from celebrating innovation, to improving processesthat support our customers, to ensuring a deep understanding of our strategy and vision. In2019, 84% of our employees participated in the engagement survey.Inclusion & DiversityOur global impact is made possible through the diverse talents, ideas, and perspectives ofour unique workforce. We enthusiastically build and develop diverse teams while ensuringa sense of belonging for everyone. We are driving a culture where different perspectivesand backgrounds are leveraged and celebrated. We actively monitor the diversity of ourteams, talent pipelines, and candidate sources, and we regularly review and advise oncompensation levels, promotions, and salary adjustments to ensure equity.Women in TechSynopsys is committed to addressing gender representation disparity in the technologyindustry. Our executives are actively engaged in discussions, initiatives, and actions tosupport women working at Synopsys. We are deploying a multi-year, multi-faceted plan toattract and advance women in technology. Through partnerships with leading organizationslike Anita Borg Institute, the Society of Women Engineers, Watermark, and the annualGrace Hopper Celebration, we are committed to recruiting, retaining, and recognizingwomen in technology.Synopsys offers regional programs to address the unique needs of women in theworkplace—from a comprehensive business leadership program, to a buddy systemsupporting women returning from maternity leave, to women-focused intern scholarships.Our “Women in Network” program connects colleagues to aspects of the business throughinternal talks and provides networking, development, and coaching opportunities.09Synopsys Employees Attending the2019 Grace Hopper Conference
Compensation and BenefitsThe health and welfare of our global team is of paramount importance. We providelocally competitive and relevant health benefits, and in many of our locations we enjoy acomprehensive wellness program. Our wellness program aims to give employees and theirfamilies tools and resources to improve their overall wellbeing in five key areas: Purpose,Physical, Financial, Emotional, and Community.Emergency Preparedness and ResilienceTo protect all employees, customers, and visitors, we encourage a perpetual state ofalertness throughout our organization. Synopsys locations have employee teams trainedin first-aid, CPR, and (in many sites) Automated External Defibrillators (AED); together, theycomprise the local Synopsys Emergency Response Team (SERT). In addition, we deployan emergency preparedness and response program that helps identify and evaluate sitevulnerabilities. We evaluate the potential of natural hazards such as earthquakes or floods,as well as potential business disruptions. We design and test emergency action plans asappropriate for all locations, including detailed action plans for business continuity sites.We continually refine our approach to inspire and support our employees while ensuringproductive, safe, and healthy environments. When employees feel a sense of inclusion andsecurity, they are free to focus on innovation and customer success.10Our Synopsys talent is motivated by the impact of their work and is recognized withcompetitive compensation and comprehensive benefits programs. Through ourcompensation philosophy and reward programs we link remuneration with company andindividual achievement. Our programs include market-competitive salary, robust health andwelfare benefits, cash bonuses, equity compensation, an Employee Stock Purchase Plan(ESPP), and in the U.S., we offer a 401(k) contribution match.
EnvironmentSynopsys is committed to building asustainable future. Our Environmental Policyhighlights Synopsys’ focus on greenhousegas (GHG) emissions reduction, resourceefficiency, green buildings, employee11engagement, and incorporating environmentalconsiderations into our procurementdecisions. In 2019, we strengthened ourapproach to measuring, managing, andimproving our environmental performancethrough the adoption of a comprehensiveEnvironment, Social, and Governance (ESG)management system.
Our Carbon FootprintIn 2019, we also measured our calendar year 2018 global scope 1 and 2 emissions(primarily driven by energy used by our offices and data centers) and estimated thefollowing indirect emissions (scope 3) for the same period: business travel, employeecommute, electricity transmission and distribution losses, operational waste, and producttransportation.We then embraced carbon neutrality in line with The CarbonNeutral Protocol, a detailedframework for the design and implementation of corporate carbon neutral programsand became a worldwide carbon neutral business in 2019. We believe our carbonneutrality underscores the important role of business in leading and financing the globaltransformation to a low-carbon economy.In addition to our ongoing commitment to carbon neutrality, we are currently finalizing along-term GHG emissions reduction goal using science-based methods.CY2018MTCO2eEmission SourceSCOPE 1 EMISSIONSFugitive Emissions (Refrigerants)1,179Natural Gas Combustion3,462Diesel Fuel Combustion25TOTAL SCOPE 1CY2018 - Metric Tons ofCarbon Dioxide Equivalent4,666SCOPE 2 EMISSIONS (PURCHASED ELECTRICITY)Offices18,675Colocated Data Centers17,016TOTAL SCOPE 2* (MARKET) 35,691SCOPE 3 EMISSIONSAir & Road Business Travel18,536Employee Commute19,972Electric Grid Transmission & Distribution Losses3,209Operational Waste484Product Transport524TOTAL SCOPE 3Scope 142,725*Scope 2 (location based) emissions are 39,019 MTCO2e“ Climate change is one of the most pressingglobal challenges of our time, and it can only besolved through the efforts of every government,business organization, and individual.”– Synopsys co-CEO Aart de Geus12Scope 2Scope 3
Greening Our BuildingsWe actively seek U.S. Green Building Council Leadership in Energy and EnvironmentalDesign (LEED) certifications for our office buildings and currently have seven certifiedsites in four countries.We are excited about our employees’ commitment to sustainability. Employees haveformed green teams at Synopsys offices around the world to implement sustainablepractices and minimize the environmental impacts of our offices.Building on the success of these existing green teams, we developed Global GreenTeam Guidelines to support new team efforts and arranged for ongoing presentationsaddressing top-of-mind topics.The Energy-Saving Potential of our Chip Design SoftwareThe tech industry has tremendous potential to minimize energy consumption through thedesign and integration of more energy-efficient silicon chips.The future of Smart Everything depends on silicon chips running faster, scaling down tofit into smaller devices, integrating more capabilities, and processing massive amounts ofdata―all while consuming less power.Synopsys has more than 25 years of low-power design and verification technologyleadership and has contributed extensive technical input to industry groups advancingstandards on this topic. Our advanced silicon chip design technologies directly enableour customers to optimize power consumption—for example, by extending battery lifeor reducing heat generated or adding cooling structures—as they develop their nextgeneration products.Case StudyJuniper Networks, a long-time Synopsys customer and partner, has a13primary objective to significantly reduce power through the design oftheir high-performance networking products. In 2019, Juniper Networksdeployed Synopsys’ innovative IC Compiler II place-and-route solutionwith Advanced Fusion Technology to optimize power and reliabilityfor their next-generation networking design that comprises billions oftransistors. Through the specific application of several IC Compiler IItechnologies, Juniper Networks achieved 14% power savings with zeronegative impact on performance.Employee Green TeamsDISCLOSURE INSIGHT ACTIONTo provide transparency on ourGHG emissions and climatechange initiatives to interestedstakeholders, we disclose tothe CDP’s Climate ChangeQuestionnaire.
Governanceand EthicsSynopsys was founded on the premisethat integrity is fundamental to the long-14term success of our company, and we sethigh standards and expectations for ethicalconduct by our leadership, employees, andbusiness partners.
Corporate GovernanceEmployee TrainingSince the formation of the company, we have attracted and built astrong, qualified Board of Directors who have expertise relevant toour business, are diverse in skills and background, and have strongethics and integrity. Seven of our nine Directors are independent.We recruit Board members who understand our industry, help usnavigate evolving market needs, and stay in front of technologicaladvancements. Key corporate governance policies and practicesare available on our Governance website.All Synopsys employees are required to show their commitment toact with integrity by acknowledging that they’ve read, understand,and agree to abide by the letter and spirit of our Code. Employeesare required to do this when they are hired. They renew thiscommitment annually through training on compliance topicsrelating to our Code of Ethics.Board of Directors201720182019Board Size1099Independent Directors80%78%78%Lead Independent DirectorYesYesYesFemale Representation30%22%22%Board Election FrequencyAnnuallyAnnuallyAnnuallySay on Pay Results94%93%94%Board of Directors StatisticsFor the past six years, we have required 100% of our employees totake these annual ethics and compliance courses. Employees withspecific roles and responsibilities are also required to completeadditional certifications, disclosures, and trainings. In 2019, werequired all contractors with access to our systems to completeour Code of Ethics and Business Conduct (as well as securityawareness) training.Reporting ConcernsEmployees are expected to promptly raise ethics and complianceconcerns about any Synopsys personnel or any supplier, vendor,reseller, or distributor and immediately report suspected unethical,illegal, or suspicious behavior. Employees are encouraged to speakwith their manager or another member of management; talk withHuman Resources, the Legal Department, Internal Audit, or Ethics& Compliance; or access our Whistleblower Hotline to report theirconcern anonymously, without fear of retaliation. The WhistleblowerHotline is externally available for contractors, customers, suppliers,and other business partners to report concerns as well.EthicsPublic PolicyOur Code of Ethics and Business Conduct is a roadmap thatguides the behaviors and actions of our workforce across theglobe in accordance with our core values, high ethical standards,and applicable laws. The Code addresses areas such as equalopportunity and non-discrimination, financial transparency, avoidingconflicts of interest, offering or accepting gifts, avoiding insidertrading, safeguarding our assets, fair competition, and anti-briberyand corruption, among other topics. Our Ethics & Complianceprogram is led by our Chief Ethics & Compliance Officer, whoprovides regular reports to the Audit Committee of the Board as wellas the full Board.Synopsys advocates for public policy solutions that promoteinnovation, the global economy, and our industry interests. Weare committed to engaging in public policy processes relevantto our operations in areas such as innovation, IP, taxation, globaltrade, and workforce.We also have a Business Partner Code of Conduct and a SupplierCode of Conduct, which underscore our high expectations for legaland ethical behavior.15As part of our commitment to transparency, our Political ActivitiesPolicy explains how political activities are managed withinSynopsys. We comply with applicable laws, rules, and regulationsincluding, but not limited to, lobbying registration and disclosurelaws, ethics rules, the Foreign Corrupt Practices Act, and anti-briberylaws worldwide.A summary of our Political Corporate Contributions since 2013 ispublicly available on the Government Affairs website.
Cybersecurityand PrivacyA constantly evolving threat landscape andsophisticated, persistent threats make allbusinesses and industries potential targets.Synopsys takes cybersecurity and privacyseriously and maintains the adequate securityposture by embedding sound key concepts(confidentiality, integrity, and availability)across our entire cybersecurity program. Wefoster a culture of security for our employees,customers, and suppliers. Our commitment tosecurity is foundational to our ability to maintain16trust with our customers, employees, and otherstakeholders, and they expect us to meet highstandards with respect to providing appropriatesecurity for our own enterprise, their data, andthe security features we build into our products.
Through our unique position in the software assurance andsemiconductor industries—deep in the supply chain of electronics—the effect of our security practices is extended into the broadertechnology ecosystem and helps our customers achieve theirsecurity goals.EmployeesSynopsys Appoints FirstChief Security Officer in 2019Synopsys Cybersecurity ProgramOur program is designed and assessed regularly to strengthenthe security posture of Synopsys data, networks, and systems.Our focus is to leverage best practices to continually improve ourcybersecurity program by implementing best-of-breed technology,leveraging cyberthreat intelligence, and recruiting and retainingtop cybersecurity talent.Synopsys further demonstrated our commitmentto security by appointing one of our longestserving executives, Deirdre Hanford, as ChiefSecurity Officer. In this new role, Ms. Hanfordoversees multidisciplinary teams involved inour comprehensive security program, whichPolicies, Practices and Standardsprovides authorities and governance, roles andOur attention to cybersecurity starts with our standards, policies,and practices governing enterprise-wide security controls.Synopsys has formally adopted the National Institute of Standardsand Technology (NIST) Cyber Security Framework (CSF) to plan,structure, test, and measure our enterprise cybersecurity. Ourpolicies and procedures are assessed regularly by our internalauditors as well as third party consultants. We maintain anIncident Response Program (IRP) to respond to cybersecurityevents. We participate in cybersecurity policy engagements withgovernments, industry consortia, and academia to ensure we stayabreast of emerging developments and maintain best-of-breedcybersecurity practices.Our Board of Directors is comprised of multiple individualswith significant experience in cybersecurity-related mattersand is actively involved in overseeing our cybersecurity riskmanagement efforts.CybersecurityAwareness Monthinformation and communications technologysecurity, physical security, supply chain security,and product security activities.Ms. Hanford works collaboratively to leadSynopsys’ accomplishment of three broad goals:1. Securing our own assets: protecting ourown intellectual property and confidentialinformation as well as our customers’,Board Oversightresponsibilities, and functional processes for ouremployees’, and partners’ information2. Securing our products and services: ensuringthat the solutions we deliver are appropriatelysecure for their intended application3. Securing the ecosystem: optimizing theability of our products and services to help ourcustomers build more secure systems thatprotect their customers’ data“Own IT, Secure IT, Protect IT”Throughout the month of October, we engaged employees on the topic of cybersecuritythrough a variety of activities and events. With the objectives of continuously improvingcybersecurity and building a culture of security, we shared tips and resources through ourinternal network. Our Software Integrity Research and Development team took the day offfrom coding and put on their hacker hats for a 24-hour capture-the-flag competition. At thesame time, we sponsored a charity fundraiser for Women in Cybersecurity (WiCyS).Synopsys donated money to WiCyS for every hour that the team spent hacking.17
Synopsys Security Business –Software IntegrityWhen it comes to securing the broader ecosystem—our customersand their customers—the Synopsys Software Integrity Businessoffers a full spectrum of security-enhancing products and servicesthat help our customers build more secure systems: Our product portfolio includes a comprehensive set of softwaresecurity testing tools such as static analysis, dynamic analysis,software composition analysis, interactive application securitytesting, and fuzz testing; Our products and new cloud-based platform help customersaccelerate security, quality, and compliance testing for anyapplication and rapidly respond to evolving threats;Our Professional Services team comprises hundreds ofindustry-leading experts who help companies integrate qualityand security best practices, tools, and strategies into theirorganization’s architecture and designs; and Our Strategy & Planning services help organizations build astrong foundation for their software security initiative (SSI),communicate security and quality requirements across teams,and measure the results that matter. 18PrivacyThe personal data of our employees, customers, business partners,and other stakeholders is of paramount importance to us. Synopsysadheres to a set of data privacy principles documented in ourpolicies and standards, which are reviewed and updated regularlyfor compliance with relevant laws and regulations.We ensure compliance with the requirements of the General DataProtection Regulation (GDPR), which took effect in the EU in 2018,and with the California Privacy Act (CCPA), which came into effect in2020. Our Chief Privacy Officer is responsible for reviewing policies,procedures, contracts, services, and technology platforms to ensureproper compliance controls are implemented.Beginning in 2018, every employee has been required to completean online training module focused on data privacy and how toidentify personal data. Additional
The Synopsys 2019 Corporate Social Responsibility (CSR) report shares an overview of our strategy and demonstrates the connection between our business and our commitment to social responsibility. Throughout the report, we disclose how we are managing issues that are important to our organization as well as our priorities for improvement as we .
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