Corporate Environmental Report

Social Issues

This year, for the first time, we briefly outline our approach to social issues within the context of sustainable development. This short review looks at the way we treat our people, our contribution to local communities and to the wider society. During 2002 we will re-align our present reporting systems and establish others so as to be able to report regularly on our social performance, following the guidelines being developed by the Global Reporting Initiative (GRI). Our aim is to apply the same discipline to our social policy as we do to our business strategies.

Training and career development

	Nurturing talent. We have a formal policy to provide effective career and personal development for our people. Annual performance reviews offer the opportunity to evaluate employee strengths and weaknesses, to compare existing skills against those required and to plan training or recruitment to fill the gap. Personal development plan discussions are an important part of these reviews as they identify career development possibilities in line with each employee’s aspirations and serve to define interim steps to further these plans. They also serve to identify possible future bottlenecks of talent or lack of skills within the industry. Exempt employees all have a job description, evaluated consistently across the Company and benchmarked each year with one or more external surveys.
	People on the move. We constantly expose employees to new situations, cultures and jobs that develop their strengths and skills, broaden their experience and foster adaptability. All job opportunities are placed on the intranet – anyone can apply - and mobility is encouraged across functions, sites and countries. The HR intranet provides possible career paths within the Company, giving information on cross-functional career moves, with the corresponding generic job descriptions and job grades.
	Sharing knowledge. There is a wealth of knowledge in our Company which, if we and our people are to benefit fully, must be shared. Half of ST professionals are involved in transversal, self-managed knowledge-sharing teams. There are also over 60 Communities of Practice that link people involved in the same areas of expertise, where problems are solved and further knowledge developed. Only by using the knowledge that exists in the Company as efficiently as possible can we transform our tacit knowledge into structural capital such as systems, processes and patents.
	A lifetime of learning. ST is committed to bringing education and opportunities for growth to all employees throughout their careers, and in 1994 ST established ST University, a dynamic and keenly tailored response to the needs of our business. As well as formal education at STU, Management ensures the personal development of its employees in the same way as the Company develops new products and technologies. Annual training plans are established at all sites, taking into account the foreseeable evolution of the Company, both from a technological and a business standpoint.

EDUCATION AND RESEARCH PARTNERSHIPS

Where ST is present with R&D activities, a strong link has been established with universities, academic and research institutes to address the need for engineers and scientists required by our industry and in the pursuit of common goals in Research and Development. Research partnerships include those with international research institutes and government agencies such as with LETI/CEA (Laboratoires d’Electronique et des Technologies de l’Information/Commissariat à l’Energie Atomique) and France Telecom R&D (formerly CNET) in France; in Italy, with the Consiglio Nazionale delle Ricerche, Istituto Nazionale per la Fisica della Materia and Ente per le Nuove tecnologie, l’Energie e l’Ambiente; and in Belgium, with the Interuniversity Micro Electronics Center. There are common research laboratories with the University of Bologna and Pavia in Italy and our sites at Agrate and Catania host labs with INFM and CNR respectively. At the University level ST partners many pre-stigious names including: in France with the universities of Bordeaux, Grenoble, Lille, Limoges, Lyon, Montpellier, Orsay, Paris, Toulon and Toulouse; in Italy, the university of Genoa, Milan State University, Milan Polytechnic and Bocconi University, Modena, Naples, Padova, Verona and Udine; in the USA, ST has formal research relationships with the universities of Carnegie-Mellon, Stanford and MIT.

On the job training takes place at all levels and within all functions. For example, all operators at manufacturing plants are certified before being authorized to run any kind of equipment on their own and are re-certified every 15 to 18 months. The obtaining of such certification and of multiple skills is recognized through job evaluation and ranking and helps define career path progression for operators.

On an average, all ST employees receive between 50 and 55 hours of training each year.

MOTIVATION
We want ST to remain a company of entrepreneurs characterized by high performance and motivation. Our remuneration packages are fair, benchmarked and individualized. We offer a wide range of benefits, including variable incentive pay, health insurance, savings and retirement plans, employee stock purchase and stock option plans as well as educational assistance. We recognize individual and team work through global and local recognition ceremonies and awards which underline the Company’s commitment to excellence. Our annual Corporate Recognition Day acknowledges the work of up to 300 employees across all functions and rewards those who have achieved excellence.

SALARIES AND BENEFITS

	Attractive total compensation package optimizes local social and legal opportunities in each country.
	Salaries are based on individual parameters of the job, market value, employee performance and personal skills as well as on global corporate guidelines.
	9,000 exempt employees have stock options.
	100% of ST employees are eligible for a stock purchase plan with 15% discount on market value.

COMUNICATION
Our management ethic is to be as transparent and open as possible according to normal business practices. Our management information system encourages efficient knowledge sharing, effective human resource management and real time reporting. These are some elements of ST’s in-house communications.

PeopleFirst. A unique system that handles employee administration, including recruitment, training, salary planning, headcount and global reporting. It provides instant information on any employee worldwide.

Social Issues	Our People	ST University	Health and Safety
ST in the community	Case studies	ST European works council	ST: Citizen of the world
STMicroelectronics foundation