Corporate Environmental Report

Message from the President

At ST we have long recognized the importance of sustainable development and our objectives in the last fifteen years have always closely interlinked the three aspects of economic prosperity, environmental protection and social equity.

Our strong commitment to the protection of the earth is rooted in our Environmental Decalogue first published in 1995, with a revised 1999 edition setting even more aggressive targets. Probably our most ambitious goal is to become a CO2-neutral company by 2010, largely surpassing the Kyoto Protocol targets, and this report shows our progress in reaching that goal.

The deep recession in the microelectronics industry during 2001 brought a sharply declining demand for our products and a corresponding down turn in manufacturing activity. Since key environmental measurements are normalized on financial added value, our performance in 2001 was therefore slightly below target in some areas. Even in this difficult situation, however, the application of our new environmental accounting index shows that our environmental strategy still produces considerable savings, reinforcing our conviction that “ecology is free”.

This year, in addition to reporting on the environment, we move a step further and include a short review of social issues: how we care for our people; our approach to managing individual and corporate performance; and our interaction with local communities and the broader society. This social reporting will be further developed in the future, and we will follow the Global Reporting Initiative (GRI) guidelines for sustainability reporting.

The real world in which we do business is complex and challenging – as is the achievement of sustainability in economic, environmental and social issues. As a member of the United Nations Global Compact which addresses corporate social citizenship, we will remain total in our pledge to our people, to our planet and to the prosperity of our stakeholders.