"Both companies contribute to our quality of life,” says Sjoerd Rozing, Senior Investment Analyst at Triodos Investment Management. In the past 50 years, innovations by primarily ASML and TSMC have made chips increasingly smaller, cheaper and more powerful. This enables progress in areas such as energy, mobility and health care. Rozing: “Making a diagnosis using a computer or, for instance, deciphering DNA has become so much cheaper.” Chips also offer environmental benefits: “Where in the past you would need various pieces of equipment, now you can often do the job with just your mobile phone. That saves a lot of waste material. And because chips have become smaller and smaller, their production requires relatively less material and energy." That is important, because we demand more and more from our phones, such as higher speeds and more pixels. Due to innovations in chip production, that can now be achieved without a great increase in energy consumption.
ASML also helps to reduce waste in other ways, says Marijn Vervoorn, the company's Director Sustainability Strategy. "The construction of our machines is based on a modular design whenever possible, so that customers can upgrade a machine and do not need to buy an entirely new machine. And if possible, we reuse components. This is something that needs to be done in close consultation with our customers”, says Vervoorn. They sometimes pay over EUR 100 million one of these huge machines that incorporate the latest technology. "Imagine buying the latest generation Tesla and it contains used parts. It takes a lot of preparation and paperwork to prove that ‘as new’ really is as good as new.”
Both ASML and TSMC have virtual monopoly positions. Is there any incentive for a monopolist to work more sustainably and act as a socially responsible employer, given that the world is dependent on the company and will buy its products anyway? In this respect, though, ASML and TSMC stand out in a positive sense. “Both companies are aware that they need to take their responsibility” says Sjoerd Rozing. “And that a strong market position does not mean that they do not need to focus on sustainability. Moreover, they have sufficient resources to invest in this area." Triodos Investment Management as an investor furthermore remains responsible for keeping companies on their toes: “We need to keep reminding them that they have a responsibility not only towards their shareholders, but also with respect to the environment. That they need to keep aiming for more transparency and sustainable business practices.”
According to Vervoorn it is deeply ingrained within ASML that long-term success is linked to making a positive contribution to “customers, investors, suppliers, employees and society." He gives the following example. “We accidentally developed a method for generating medical isotopes (which can be used in healthcare, ed.), which is normally done in a nuclear reactor. We do not need that technology, but it can help our society, so another company is now going to develop this further.” The potential financial benefit for ASML “…is hardly significant in the total amount of our sales. The main thing is that we feel it would be a shame to not use this technology." He also discerns this attitude among ASML's employees: “These are technical people who enjoy solving problems. They have, for instance, developed an app that makes carpooling with colleagues easier." Social responsibility is a must, if only to keep employees satisfied and attract new talent - which increasingly often selects an employer based on how that company contributes to making the world a better place.
Effectively reducing energy and water consumption
Triodos Investment Management only invests in companies that meet specific criteria. Rozing: “We believe it is important that companies make products that are sustainable and/or contribute to making the world more sustainable. Their social and environmental policies must be in order; they need to make an effort to reduce their energy and water consumption. These companies are doing that very effectively and increasingly use renewable energy."
ASML is in fact aiming for 100% renewable energy in 2020. "But only a small part of our footprint covers our own backyard,” says Vervoorn. “A large part of the energy is used on our behalf, by the supplier, and subsequently, by chipmakers and consumers. By making sure our machines are as efficient as possible, we reduce the energy consumption after the equipment leaves our premises.”
In order to positively impact the energy consumption of our suppliers, close cooperation is crucial, says Vervoorn. “Together, we define objectives for improvement, also in other areas; for instance, we are now jointly working on developing a circular system. Confidence, long-term thinking and transparency are essential to achieve this."
ASMLbuilds machines for producing semiconductors and counts companies such as Samsung, Intel and TSMC as its customers. The company is headquartered in the Dutch town of Veldhoven and employs 24,000 people worldwide. ASML contributes to the realisation of the following Sustainable Development Goals:
TSMC is the world’s largest independent chip manufacturer and is based in the Taiwanese city of Hsinchu. The company has a strong, externally verified policy for minimising its environmental impact. TSMC contributes to the realisation of SDGs:
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This article is a translation of an article by Leonie Hosselet, published in De Kleur van Geld