AMD Made Progress In 2021 In Corporate Social Responsibility

In recent years I’ve extended my beat as a tech analyst to include technology companies’ corporate social responsibility programs. I’ve found that these initiatives, spanning everything from environmental sustainability to diversity and inclusion to digital empowerment, communicate a lot about a company’s culture and workplace. As employees continue to age out, more people increasingly want to work for and support businesses that align with their values, so these programs have only grown in popularity over the last five-to-ten years.

This week AMD dropped its CSR report(summary here), an annual compendium of the company’s CSR initiatives, goals, achievements, and progress. AMD, for one, is not a newcomer to the world of CSR. This week’s report is the company’s 27th annual. This experience sets the company apart from others in the industry, many of whom did not even exist 27 years ago.

I’d like to share my takeaways from this latest report from AMD and insights gained from an analyst briefing I attended before its public release. It’s worth noting that AMD’s full CSR report is nearly 80 pages long. While I won’t dive deep on every topic included, the sheer size of the report speaks for its level of granularity and thoroughness.

Let’s take a look.

Going to bat for the environment

AMD divides its CSR program into four focus areas with some overlap: digital impact, environmental sustainability, supply chain responsibility and diversity, belonging and inclusion. We’ll lead off with environmental sustainability. According to the report, AMD reduced its scope 1 and 2 emissions last year by 25%, putting it ahead of schedule on its target of a 50% reduction in absolute greenhouse gas emissions from AMD operations by 2030 (based on 2020 levels). I’m curious to see when AMD will target net-zero carbon emissions—many others in the industry have set a 2040 goal, which seems attainable by AMD if it keeps reducing at the current rate.

AMD also shared that 74% of its manufacturing suppliers have public greenhouse gas reduction goals, on track to meet AMD’s goal to have 100% of its manufacturing suppliers put these goals in place by 2025. While I would need to dig deeper to see how aggressive these suppliers’ goals are, I think this is an excellent example of how tech leaders like AMD can pull those in its orbit towards net-zero carbon emissions. We also learned in the report that 74% of its manufacturing suppliers sourced their energy from renewables. This brings AMD within striking distance of its goal to have 80% of its manufacturing suppliers rely on renewables by 2025.

Another vital part of any credible sustainability program is a company’s efforts to increase the energy efficiency of its products so that they don’t contribute to scope 3 carbon emissions once they’re in the customers’ hands. To that end, AMD set a moonshot goal of a 30X increase, from 2020 to 2025, in energy efficiency for AMD processors and accelerators that power servers for AI training and HPC. This week’s report showed that last year AMD achieved a 3.9X increase. While that sounds far from 30X, AMD added the caveat that midway through the current year, 2022, that increase has swelled to a 6.8X improvement in efficiency. Let’s hope that momentum continues to snowball.

A few additional numbers to note—AMD achieved a net 12% reduction in operational energy consumption over 2020. Additionally, it claimed a 50% reduction in operational water use and a 14% reduction in waste.

I will say that I would like to hear more from AMD about the concept of modularity and engaging in the circular economy. I believe if it were most serious about reducing waste and maximizing circularity, it would lean into more modular designs. This approach could enable OEMs to have shells, whether racks or desktops, that customers could leverage for years. I’m not trying to pick on AMD specifically with this point—I’d say it to all the other chip manufacturers and device makers.

Supply chain responsibility

Moving away from the environmental side, the report shared more information on AMD’s efforts to ensure its suppliers engage in responsible, ethical business practices. AMD has pledged that 100% of its supplier manufacturing facilities will undergo a Responsible Business Alliance (RBA) audit, or an equivalent evaluation, by 2025. According to the report, 64% of these supplier factories underwent such an audit in the past year. This is especially critical because AMD is a fabless semiconductor company that outsources all its manufacturing operations.

With the Covid-19 aftereffects still rippling through the economy, one topic that has been top of mind across most industries is supply chain resiliency. While one can’t rule out the matter of another tanker getting wedged in the Suez Canal, manufacturers all over are searching for ways on their end to increase capacity, become more self-reliant and plan for successive crises. AMD would like to see 80% of its manufacturing suppliers, by spend, engage in capacity-building activity through 2025. So far, the company reports that 61% have participated in such activities in the past year, including ethical recruitment training to curb systems that lead to forced and bonded labor.

Diversity and inclusion

Pivoting to diversity and inclusion, AMD emphasized its commitment to increasing diversity, belonging and inclusion in its workforce, citing research that shows diverse teams to be more innovative and higher-performing. The company’s approach towards fostering these values includes listening to employee concerns via annual surveys, educating its workforce on the merits of inclusion and a diversity of voices and, perhaps most directly impactful, evaluating employee compensation programs every year to ensure equal and fair pay.

AMD also highlighted its commitment to increase the percentage of female hires in engineering roles and the percentage of under-represented group (USG) hires within its U.S. workforce year-over-year. AMD says it exceeded its previous hiring goals (which were not explicitly shared), resulting in a 1% increase in the total population of AMD female engineers and a 1.6% increase in URG representation.

The report also spotlighted AMD’s “employee resource groups,” or ERGs, which seek to create spaces for employees with a shared identity (and their allies) to meet, network and otherwise support each other. AMD says these groups add to employees’ sense of belonging at the company. Additionally, ERGs give workers a collective voice for communicating and working with senior leadership to better understand their communities. According to the report, 52% of its employees participated in these groups in 2021, making a decent dent in AMD’s goal of 70% participation in ERGs by 2025.

Community involvement

Lastly, the report outlined some of the community work AMD participated in over the last year. In 2021, AMD says over 2,800 of its employees logged over 9,000 hours of volunteer time through virtual and in-person volunteer activities. In addition to the year-round company-sponsored volunteering activities, AMD also hosts an annual company-wide day of service. This past year’s event was primarily virtual, but that did not stop 2,000 AMD employees from donating over 6,200 hours of volunteer time playing virtual games with seniors, reading books to children, planting trees and more.

AMD also highlighted the AMD Foundation in the report. Through monetary and in-kind contributions, the organization provides grants to various nonprofits, selected based on local need, strategic fit and recommendation by employee-led councils. In total, AMD says it gave over $2 million to nonprofits, universities, and research institutes in 2021, raised by the company, its employees and the AMD Foundation.

Wrapping up

Based on what we’ve seen in the 2021 report, AMD continues to chip away dutifully at its 2025 and 2030 targets, both inside and outside of its operations. I think we’ll see the company continue to build momentum with its internal carbon-reduction initiatives and transition to renewable energy. Again, I’d like to see more modularity in the industry. AMD could be one of the leaders of the charge if it acts soon.

One more statistic out of the report—94% of AMD employees surveyed say they’re proud to work for the company, specifically regarding its corporate responsibility programs. In a market where employers are struggling to retain talent, that number alone makes AMD’s CSR program a success, in my view.

Note: Moor Insights & Strategy writers and editors may have contributed to this article.

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Moor Insights & Strategy founder, CEO, and Chief Analyst Patrick Moorhead is an investor in dMY Technology Group Inc. VI, Dreamium Labs, Groq, Luminar Technologies, MemryX, and Movand