arm corporate responsibility report 2010
TRANSCRIPT
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OurcommitmentCorporate Responsibility Report 2010
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Contents
1. Introduction 1
CEOs Welcome and Statement 1
How ARM makes money 2
ARM at a glance 3
1.1. Organisational Prole 4
1.2. Reporting Period 5
1.3. Report Scope 5
1.4. Structural changes rom previous 51.5. Organisational Changes 5
1.6. External Advisors 5
2. Stakeholder Engagement 6
2.1. Employees 6
2.2. Shareholders 6
2.3. Value Chain 8
2.4. Surrounding Communities 9
2.5. Environment 11
3. Perormance Indicators 13
3.1. Economic Indicators 13
3.2. Environmental Indicators 13
3.3. Employment Practices and WorkEnvironment Indicators 15
3.4. Human Rights Indicators 17
3.5. Society/Community Impact Indicators 18
3.6. Product Responsibility Indicators 19
4. Looking Forward 22
4.1. Committment to charters and partnerships 23
4.2. Signicant awards and recognition 24
5. Appendix 25
5.1. Global Reporting Initiative 26
5.2. United Nations Global Compact 27
5.3. Blueprint ro Sustainable Leadership 28
5.4. Other Key Metrics 34
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1. Introduction
CEOs Welcome and Statement
CEOs Welcome and
Statement2010 marked ARMs 20th Anniversary and the yearin which the twenty-ve billionth energy-ecient ARMmicroprocessor was sold. It is impossible to say what taskit now perorms; it could be used in any one o a diverserange o devices: perhaps a heart monitor; a smart meter;an electric motor; car inotainment system or a tablet PC. Atotal o 6.1 Billion ARM-based chips were shipped by ourpartners in 2010. This unrivalled reach o ARM technologybrings together the semiconductor industrys largest partner
community, consisting o 800+ technology companies,and the opportunity to create a world in which all productsand services are based upon ecient and sustainabletechnology.
The next century will witness a dwindling supply o theworlds nite resources, a 50% rise in population and thesituation can be urther exacerbated by achanging climate and increasing demands orenergy. We believe that the global economy,rom the biggest countries and companies toeach o us as individuals, can make dramaticimprovements in energy-eciency andresource-sustainability. This will help people tomaintain or improve their quality o lie, and will
also help companies to grow and increase theirprotability.
I believe that technologys role in achievingthis will be o paramount importance.Everyone and everything needs to work moreeciently i we are to preserve and sustainour worlds resources; and technology willhelp us get there. Our appliances, transportsystems, industrial processes, buildings andperhaps even our ood will have embeddedsmart technology to ensure that: empty buildings arenot unnecessarily heated, cooled and lit; appliances onlyever use the energy and resources needed to do their
job; agricultural produce does not go to waste and newproducts are designed considering the needs and budgetso the billions o people yet to benet rom technology intheir lives.
ARM is committed to implementing and developing bestpractice Corporate Responsibility (CR) in our marketsegment (not just in our sector) and intends to become aglobal leader in CR. ARMs commitment to sustainabilityand CR extends beyond the eciency improvements thatour chip-designs help to achieve. As this report details,
ARMs CR strategy encompasses accountability to allstakeholders, including employees and their amilies,
providing excellentservice to our partnersand shareholders,ostering goodrelationshipswith suppliers,involvement with localcommunities, andminimising our impact
on the environmentas well as designingenergy-ecientproducts. During 2010, ARM joined the United NationsGlobal Compact (UNGC), took an active role by conveningan IT Sector panel at the World Climate Summit and joined
the UN Caring or Climate initiative. 1.3To take this urther, ARM is the one o therst companies to incorporate the UNGCsBlueprint or Sustainability Leadership intoits reporting. 2011 will see us re-armingour commitment to the UNGC as well aslaunching some exciting joint activities. Wehave also entered into a partnership with
the International Business Leaders Forum(IBLF) to research how the better use otechnology can reduce energy consumptionand improve living standards globally. ARMhas also been recognised by the NASDAQOMX CRD Global Sustainability 100 Index,demonstrating how corporate responsibilityhas been incorporated throughout the
ARM way o business. 2011 began with astrengthening o ARMs commitment to the
Global Compact through our membership o LEAD andsome exciting joint activities are planned or the comingyear.
ARMs heritage is in mobile devices, resulting in twentyyears experience o designing ecient processors. Thistechnology is now being used in new applications wheresmarter, more ecient products are needed to reduceresource consumption whilst maintaining and improvingliving standards or everyone.
With the right technology we will succeed: we canmaintain and extend a high quality o lie, sustainably. ARMis 100% ocussed on achieving this vision.
Warren East
With the righttechnology wewill succeed:
we can maintainand extend a
high quality olie, sustainably.ARM is 100%
ocussed onachieving this
vision.
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1. Introduction
How ARM makes money
ARM is the worlds leading semiconductorIP company and The Architecture or theDigital World.
How ARM makes
money
ARM has an innovative business model. We design andlicense IP rather than manuacturing and selling o actualsemiconductor chips. We licence IP to a network oPartners, called the ARM Connected Community, whichincludes the worlds leading semiconductor and systemscompanies. These partners utilise ARM IP designs to createand manuacture system-on-chip designs, paying ARM alicense ee or the original IP and a royalty on every chip orwaer produced. In addition to processor IP, we provide arange o tools, physical and systems IP to enable optimisedsystem-on-chip designs.
ARMs strategy is or our technology to continue to gainshare in long-term structural growth markets such asmobile phones, consumer electronics and embedded digitaldevices. An ARM processor design may be used in manydierent chips and ship or over 20 years.
2-3 years
ARM researchand development
20+ years
Multiple applicationsdevelopment and sales
3-4 years
Partner chipdevelopment
Cost incurredLicencerevenue
$
Royaltyrevenue
$
Licenses by end-market
Mobile 28Embedded 29Enterprise 16Home 18
How ARM makes money
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Our mission is to be the worlds number oneprocessor architecture, and we envisage a worldin which all electronic products and services arebased on energy-efcient technology rom ARM,
making lie better or everyone.
ARM at a glance
In order to achieve our mission we understand that ARMmust be committed to implementing and developingbest practice Corporate Responsibility (CR) in our marketsegment and intends to become a leader or CR in thesector.
ARM celebrated its 20th anniversary in November 2010.As a business recognised or its innovation and world classintellectual property, ARM has been built around the highestquality people in the sector.
1. Introduction
1.1. ARM at a glance
Figure 1
Worldwide ARM oces.
WashingtonOlympiaSeattle
CaliorniaIrvineSan JoseSan Diego
TexasAustinPlano
MassachusettsBoston
FranceParisGrenobleSophia Antipolis
UnitedKingdomCambridgeBlackburnMaidenheadSheeld
NorwayTrondheim
SwedenLund
BelgiumLeuven
GermanyMunich
Slovenia
Sentjernej
Israel
Kar Saba
ChinaBeijingShanghai
Shenzhen
JapanYokohama
TaiwanTaipei
SingaporeToa Payoh
IndiaBangalore
KoreaSeoul
MichiganDetroit
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1. Introduction
1.1 Organisational Profle
ARMs Corporate Governance and organisational structureand as well as company Market and Financial Analyses canbe ound in the current Annual Report, published onwww.arm.com.
Save or those shown above, the Company has not been
notied o any material interest o 3% or more or any non-material interest exceeding 10% o the issued share capitalo the company.
Shareholder percentages
ARM Corporate Governance Structure
Janus Capital Management
Thornburg InvestmentManagement
Legal and General InvestmentMangement
FMR
Other
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1. Introduction
1.2. Reporting Period
1.3. Report Scope
1.4. Structural Changes rom Previous
1.5. Organisational Changes
1.6. External Advisors
1.2. Reporting Period
This report covers the calendar year 2010.
1.3. Report Scope
Unless otherwise indicated, data published applies to allARM oces worldwide. However, our largest our ocesin Cambridge (UK), Bangalore (India), San Jose (Caliornia,USA), and Austin (Texas, USA) represent 78% o the estateportolio and 76% o the total headcount.
Headcount data used in the report is generally that on thenal day o 2010, unless otherwise stated. Any explanations
or exceptions or specic oces will be stated.
1.4. Structural Changes rom Previous
As part o our continued eorts to improve stakeholdercommunications, we have enhanced our 2010 CorporateResponsibility Report. In addition to employing the GlobalReporting Initiative (GRI), ARM is one o the rst companiesto incorporate the UNGCs ty-point Blueprint orSustainability Leadership into its ull CR Report.
Our most recent previous report was or calendar year2009.
1.5 Organisational Changes
There have been no signicant organisational changes (i.e.acquisitions, changes in ownership structure) over 2010.
1.6. External Advisors
The International Business Leaders Forum has reviewedan earlier drat and provided eedback that has beenincorporated into this version o the report.
About this report
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ARMs continued success has beenachieved through the strength and deptho our stakeholder relationships.
Stakeholder
engagement
Our corporate governance ramework and processesenable us to manage the Group eectively and todemonstrate transparent, consistent and eectivegovernance so that we remain accountable to ourshareholders, employees, partners, suppliers and the local,regional, and national communities we support and withwhom we interact.
ARM strives to maintain a positive reputation built oncorporate credibility and public trust. ARMs CR strategyencompasses accountability to all stakeholders, includingemployees and their amilies, providing excellent service to
our partners and shareholders, ostering good relationshipswith suppliers, on-going involvement with local communitiesand minimising our impact on the environment as well asdesigning energy ecient products. These stakeholdersrepresent the groups most aected by ARMs work andthose the company must careully consider in all decisionsor business success. Proper stakeholder consultationmeans engaged employees, supportive communities,healthy environments, an eective supply chain, andenthusiastic shareholders and customers. Each o these iscrucial to ARMs success.
2.1. Employees
The welare o ARMs employees around the world is one oour top priorities. ARMs Corporate Vision and ManagementCharter include commitments to provide a sector-leadingenvironment or employees to develop their personaland collective potential. The interests o employees andshareholders are aligned by providing equity participation toall employees through restricted shares under the EmployeeEquity Plan and the opportunity to buy shares throughsavings plans. When ARMs quarterly results are published,members o the executive committee also present the same
results internallyWe have established a Global Equal EmploymentOpportunities policy covering the recruitment, transer andpromotion o sta as well as their training and development.We have a ormal progress measurement system whichincludes a number o processes. At least once a year,employees and managers have a ormal discussion onperormance and development through the ARM Feedbackand Development System (AFDS). Training needs aretracked and delivered and progress is monitored throughour Learning and Development team, ensuring that theGroups skills base is increased in line with business needsand employees personal aspirations.
Figure 2
2010 ARM Austins 20th Anniversary TriviaChallenge raising money or the Capital AreaFood Bank.
2. Stakeholder Engagement
2.1. Employees
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2. Stakeholder Engagement
2.1. Employees
2.2. Shareholders
In order to nurture a culture o openness, ARM ocuseson open lines o communication in all directions (upward,downward, and across divisions and unctions). As parto this commitment ARM provides periodic question andanswer sessions at each site led by an executive committeemember where no question is o limits. Additionally, the
ARM Consultation Forum (ACF) meets every two months,and comprises nine employee representatives, who areexpected to represent the views and interests o theirrespective constituencies. The ACF is a key consultationmechanism or ARM to gather the views o UK employeesand or employee representatives to talk openly about awide range o issues that aect ARM employees. Amongstthe objectives are provision o a orum or employees andmanagement to consult one another and capitalise on thecompanys cultural diversity and various experiences. At the
ACF, management will consult representatives on the basiso a constructive exchange o views on matters relatedto the organisations industrial, economic, commercial,nancial, technological, structural and HR development inthe context o the overall business perormance.
Employee consultation groups advise the companyon various issues that impact employees, and acomprehensive engagement is conducted every two years
(with smaller ollow-ups annually) to monitor employee viewsand provide essential input on internal operations. Thisyears Engagement Survey had 1490 respondents (80% ototal established employees worldwide).
The Executive Vice President o Human Resources sits onthe Executive Committee and has responsibility or mattersrelated to employees.
2.2. Shareholders
Communicating to and consulting with all our shareholders,both institutional and private, is a key priority o thebusiness. The Executive Committee makes considerableeorts to establish and maintain good relationships withshareholders. The main channel o communicationcontinues to be through the Chie Executive Ocer, theChie Financial Ocer and the VP o Investor Relations,although the Chairman, the Senior Independent Directorand the other non-executive directors are available toengage in dialogue with major shareholders as appropriate.
There is regular dialogue with institutional shareholdersthroughout the year. The board encourages communicationwith private investors, and part o ARMs website isdedicated to providing accurate and timely inormation orall investors including comprehensive inormation about
347
241 98 71
8459258
416
716
576
387 122 72
44
16
34180 687
Percentage of respondents
1,490 (80%) employees responding
Overall engagement score: 86%
1,321 (90%)
1,233 (88%)
1,254 (87%)
I have no plans to leaveARM in the next 12 months
I am satisfied with my job
Overall I would recommendARM as a great place to work
Questions
0% 100%
2009 2010
87% 85% 85% 83% 86%
2006 2007 2008
85%
84%
93%
83%
84%
89%
83%
84%
88%
81%
81%
85%
85%
85%
89%
433 104 53 20136 731
Percentage of respondents
1,490 (80%) employees responding
Overall engagement score: 86%
1,477 (88%)ARM provides a collaborative
work environment
0% 100%
396
411 131 104
77111150
148
704
640
482 109 63
35
49
20135 668
1,473 (85%)
1,483 (81%)
1,477 (87%)
ARM actively caresabout its staff
ARM is a fun place to work
ARM provides open andhonest communication
299
510 184 127
4867238
95
766
484
457 124 76
20
63
181 43 6 49
1,483 (91%)
1,463 (74%)
1,467 (85%)
ARM is committed to mypersonal development
ARM provides opportunitiesto learn and develop new skills
My work is meaningful to me
496
333 75 50
9418497
245
552
762
442 161 93
20
45
36103 633
1,471 (78%)
1,485 (90%)
1,468 (80%)
ARM provides challengingand interesting work
ARM provides sufficientlyvaried work
ARM provides freedomto be creative
Questions
Employee global opinion survey engagement 2010
Engagement scores over time
Overall key drivers 2010
Strongly agreeAgreeSomewhat agreeSomewhat disagreeDisagreeStrongly disagree
I am satised with my jobI have no plans to leave ARM in the next 12 monthsOveral I would recommend ARM as a great place to workOveral Positive Engagement
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3. Stakeholder Engagement
2.2. Shareholders
2.3 Customers and Partners
the business, its partners and products, all press releases,and RNS and Securities and Exchange Commission (SEC)announcements. At present, around 30 analysts writeresearch reports on ARM which appear on the website.Shareholders can also obtain telephone numbers rom thewebsite, enabling them to listen to earnings presentationsand audio conerence calls with analysts. Webcasts oraudiocasts o key presentations are made available throughthe website. All shareholders may register to receive ARMspress releases via the internet.
Members o the Executive Committee attend the annual
analyst and investor day and develop an understandingo the views o major shareholders through direct contactwhich may be initiated by shareholders, or throughanalysts and brokers briengs. The Committee alsoreceives eedback rom ARMs brokers who ollow investorroadshows and nancial PR advisers who consult analysts.
The board actively encourages participation at the AnnualGeneral Meeting (AGM), held this year on 14 May 2010,which is the principal orum or dialogue with privateshareholders. A presentation was made outlining recentdevelopments in the business. An open question andanswer session ollowed. Results are available on ARMswebsite.
More inormation about shareholder engagement can beound in ARMs 2010 Annual Report, available onwww.arm.com.
2.3. Value Chain
ARM has built its business around a partnership model,working together with our customers to enable mutualsuccess. ARM maintains continuous eorts to achieveclass-leading levels o customer and ConnectedCommunity satisaction, measured through regular surveysand eedback channels including an annual worldwide ARMPartner Meeting and ARM Technology Conerences held in
India, Asia, and the US.
Engagement with customers happens at many levels in theorganisation, rom the executive committee level, throughsales, marketing and engineering. Customer satisaction ismonitored and reviewed by management through a rangeo key metrics including product and project delivery dates,product quality levels, customer support satisaction, anddirect eedback gathered rom customers and elsewherein the Connected Community. The output is reviewed bymanagement which, in turn, raises any pertinent issues withthe executive committee.
This year, ARM also undertook several special initiatives
Figure 3
ARM partner meeting 2010.
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2. Stakeholder Engagement
2.3 Customers and partners
2.4 Surrounding communities
designed to develop partner engagement. The ARMConnected Community Panel at the World Climate Summit(discussed urther in Section 3.6) convened industryrepresentatives rom ARM partners Microsot, HP, and
Texas Instruments, as well as ourselves, to discuss the roleIT can play in mitigating and adapting to climate change.Weve additionally contracted IBLF to research ways inwhich our technology can make strides in sustainability.
More inormation about customer engagement canbe ound in ARMs 2010 Annual Report, available onwww.arm.com.
As a Group which does not have any manuacturingoperations, ARM has a limited number o suppliers.Central procurement unctions were enhanced in 2010and the introduction o new policies and procedures, withtraining workshops, have enabled ARM to standardise theprocurement screening and eedback processes acrossthe Group. This new procurement system has enabled theintroduction o corporate responsibility requirements sothat any new supplier must demonstrate that they have acompatible ethical policy in place.
2.4. Surrounding Communities
It is ARMs policy to be a good corporate citizen whichinvests in and engages with surrounding communities. Thecompany President is responsible or cultivating high-levelrelationships with industry partners and governmentalagencies. ARM undertakes many initiatives within thecommunities in which it unctions.
In 2010, ARM invested 2.5 million in a charitable bondor Cambridge-based social enterprise Future Business, tosupport the development o a brand new incubation centreor social and environmental businesses in the region. This
bond will generate a 566k donation the creation o theFuture Business Centre, aiming to develop businesses witha social and/or environmental impact, whether operating ona or-prot or not-or-private prot basis. Examples includesocial businesses and clean-tech start-ups.
ARMs University Programme helps the next generationo ARM engineers by donating equipment and sotware,assisting students, helping to design courses and providingtechnical support and training. ARM is involved in anumber o STEM (science, technology, engineering andmathematics) programmes at regional schools, sharingemployees expertise with students. ARM is a oundingmember o The Learning Collaboration, enabling small and
Figure 4
The Future Business Centre site, set orcompletion in 2012.
Figure 5
ARM Bangalores Charity Fair.
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2. Stakeholder Engagement
2.4 Surrounding communities
medium sized organisations around Cambridge to sharetheir diverse experience and combine their buying powerto purchase quality training and development services.
ARM is also a ounder member o the Cambridge Networkwhich links people rom business and academia to theglobal high-tech community. This year, ARM partneredwith The Humanitarian Centre to encourage researchand partnerships that improve the ecacy o inormationtechnology in international development. ARM has alsohelped ound the Cambridge Responsibility Forum, a jointventure between multiple local businesses to promotecorporate responsibility and sustainability issues inCambridge.
ARM employees actively participate in multiple science,technology, engineering, and mathematics (STEM)educational eorts within the community. During the8-month long Engineering Education Scheme (EES), ARMengineers present problems to students and help themgenerate possible solutions. The students learn aboutproject liecycles, teamwork, time management, reportwriting, and presentation delivery. Example projects rom2010 are a progressive brake light, which was a retrotteddevice whose brightness corresponds to the deceleration othe vehicle, a Stargazer prototype handheld device showing
the stars in the night sky, and a Car Saety Controller deviceto monitor driving style. The company also supports anew scheme called Go4SET which encourages companymentors to work with teachers and younger pupils on anenergy and environment-themed technology problem inand around their school and home. This year, ARM mentorsworked with schools devising ways to collect energy romthe environment to reduce costs. One school built a mocksolar water heater. ARM mentors are valuable inspiration tothe pupils, demonstrating how science and technology canbe applied to solving the societys problems. ARM plans tosupport and expand Go4SET urther in the coming yearsas part o a longer term commitment to employee andcommunity development.
Team ARM, the Groups global team-building and und-raising employee network, raised over 100,000 or charitiesthrough sponsored cycle rides, marathons, boat races andeven moustache-growing. Amongst other events, Team
ARM Bangalore sponsored a local spelling bee with INR15,000 that aimed to build Basic English prociency andimprove the communication skills o nancially-challengedstudents rom government schools. They also held aCharity Fair, showcasing twelve local NGOs, that raised INR91,360 or the Marathahalli Government School. In May
Figure 6
Team ARM Austin in the Bowl or KidsSake Event.
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2. Stakeholder Engagement
2.4 Surrounding communities
2.5 Environment
2010, 67 employees participated in the Bangalore SuneastMarathon. The money raised rom individual sponsorshipand company matching was donated to Future and Lightor the Young (Fly). This allowed 30 talented children across7 states o India to continue their education by having theirees paid. This was in addition to our role in the Anvasprogramme, where ARM and its employees sponsora teacher in a government school to teach computereducation. TeamARM Bangalore also ran a number o otherevents including blood donation airs through to the 20th
Anniversary celebrations where money was raised to helpa 6 month old child be treated or glass bone disease. Thechild had already suered 10 ractures.
Team ARM Austin and San Jose have been part o eventssuch as the Susan G. Komen Race or the Cure, raisingmoney or breast cancer awareness, and the LiveStrongbike ride, benetting prostate cancer research.
ARM encourages employees to support their localcommunities by enabling them to act as school governors,mentors to young people, or volunteers to organiseevents to raise money or charity. ARMs sustainability andcommunications sta are available or consultation with localcommunities through phone calls, emails, and post andalso attend local events and hold consultation meetings withcommunity representatives in ARM acilities.
2.5. Environment
An expanding global population, rising energy costs andclimate-change concerns are all driving renewed interestin energy-eciency. ARMs technology is inherently low-power and enables smarter, more energy ecient productsto be created. As ARM-designed chips are in over 20% oall digital electronic products sold in 2010, this presents anenormous opportunity or improved eciency.
For 20 years, ARMs research and development hasocussed on getting the best processing perormance romthe least power. ARM technology allows partners to develop
smarter digital electronic products that can measure,manage and improve the environmental perormance oconsumer electronics and IT equipment, reducing thecarbon ootprint or many consumer products.
ARM encourages a culture o environmental responsibilitywithin its oces. T(n)S, the catering company contractedin the Cambridge headquarters, proudly sources locally-grown Cambridgeshire ood including baked goods, meat,and produce. ARM actively promotes employees useo alternative transportation by utilising the Cycle2Workscheme under which employees may choose to reducebasic salary through a sacrice arrangement to purchasebicycles and cycling saety equipment or commuting
to work. The Austin, TX, USA oce, in addition to usingreclaimed grey water to run toilet acilities, recently replacedall paper cups in the cae with reusable glasses and mugs.
Figure 7
ARM China planting trees on the20th Anniversary.
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2. Stakeholder Engagement
2.5 Environment
Many oces urthermore employ motion-sensing lights inconerence rooms to prevent unnecessary lighting use andprovide recycling acilities or paper, aluminium, plastic, andcardboard.
ARM has participated or two years running in the CarbonDisclosure Project. The monitoring and analysis o energyusage and methods to reduce associated impactsemployed by this eort ensures all our operations becomeengaged in improvement objectives.
ARM acilitated a panel at the new World Climate Summit.This collaborative, global 10-year initiative, launched by UN
Environmental Program partners such as World Bank, theUNGC, and the aorementioned Carbon Disclosure Project, isrunning in parallel with the Conerence o the Parties o the UNFramework Convention on Climate Change (COP16). Its goalis to help governments, businesses, and nanciers acceleratesolutions to climate change. ARM convened a panel o industrypeers rom within our Connected Community.
This year, we have also committed to the Caring orClimate platorm. This oers an interace or business andgovernments at the global level, transcending nationalinterests and responding to the global nature o the climate
issue at stake. Caring or Climate has been endorsed byARMs CEO.
ARM is constantly improving its current strategy or lowcarbon business operation, including setting goals o:
30% emission reduction in tons of CO2emission per
employee by 2020
15% energy use reduction measured in KW Hours peremployee by 2020
Both targets reer to reductions against 2009 baseline.
The goals, which will be urthered by adoption o ARM
technology wherever possible, are tracked monthly andreported to ARM management as well as stakeholders.
We are also reviewing behavioural change issues relatingto the adoption o existing video-conerencing acilities andare investing in more equipment with a view to reducingthe number o fights per employee each year. The centrallymanaged, reliable video-conerencing systems we areinstalling allow or monitoring, maintenance, and metric-collection.
The above goals are in line with the Environmental Issues Area o theUNGC. The goals are tracked monthly and reported to ARM managementas well as stakeholders, as required by Principle Eight. The commitment touse all ARM-powered products moreover supports Principle Nine, as theseproducts are highly energy ecient and will enable all o ARMs oces to
operate at a lower energy consumption level.
Global Compact Communication on Progress
Figure 8
Grundos pump on which ARM Cambridge isconducting smart water research.
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3. Perormance Indicators
3.1. Economic Indicators
3.2. Environmental Indicators
Perormance
Indicators
ARM endeavours to be a responsible member o thebusiness community by taking into account the interestso all its stakeholders, including employees, customers,suppliers, local communities, and environments in whichit operates and by entrusting the Chie Financial Ocer totake responsibility or these matters.
The ollowing indicators illustrate ARMs perormance to itsresponsible business commitments.
3.1 Economic Indicators
As our customers are the worlds largest semiconductormanuacturers, their regular royalty payments have provided
ARM with a highly reliable cash fow. Given our broad baseo partners and end markets, ARMs business model isstrongly cash generative. In 2010, we generated 125million. Since 2004, ARM has returned over 360 millionto shareholders through a mixture o share buybacks anddividends. Full economic indicators and analyses can beound in our 2010 Annual Report at www.arm.com.
3.2. Environmental Indicators
ARMs direct activities do not produce harmul wasteor emissions, and the Ethical Investment Researchand Inormation Service (EIRIS) grades ARM as anenvironmentally low impact business. However, ARMrecognises the need to mitigate any orm o environmentalimpact, and our environmental perormance is measuredagainst targets to reduce resource usage, increase reuseand recycling, and control carbon emissions. We have setcorporate goals o:
30% emission reduction in tons of CO2emission per
employee by 2020 15% energy use reduction measured in KW Hours per
employee by 2020
ARM works with Lloyds Register Quality Assurance(LRQA) environmental auditors to develop and improve ourenvironmental management system. LRQAs twice yearlyenvironmental and health and saety themed audits are nowintegrated with their other accreditation work, which hasincreased understanding o ARMs environmental objectivesamong the local management and provided action plansor achieving these objectives. Adopting LRQAs Business
Assurance approach provides an independent assessmento the ARM Management System and the various review
06
07
81.8
08
82.1
09
97.7
10
95.1
49.2
39.7
59.9
45.6
164.3107.0
Profit under IFRS Normalised profit
Growing revenues and continued financial discipline drive
ARMs profitability.
Proft rom operations m
06
07
82.1
08
87.6
09
89.7
10
81.1
483.6
514.3
546.2
489.5
199.0
208.8
266.8
244.3
202.5
217.9
189.7
164.1
87.8 631.3335.3 208.2
Roya lt y Licen sing Ot her
ARMs revenue growth is sustained by our customersincorporating ARM technology in more of their product lines.
44.9
44.4
47.7
51.1
263.3
259.2
298.9
305.0
107.8
104.1
147.7
155.4
110.6
110.7
103.5
98.5
56.4 406.6217.7 132.5
Roy alty L ic en sing Othe r
About 95% of ARMs revenues are in US dollars,but only about half of our costs are US dollar-based.
06
07
08
09
10
Revenue $m Sterling revenues m
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3. Perormance Indicators
3.2. Environmental Indicators
procedures in place within the company. This approachenables LRQA to veriy ARMs compliance with ISO9001and components o other relevant ISO standards.
At present, ARM is not certied to any industryenvironmental measurement standard. However, ARMworks with LRQA to make a habit o operating inormallyto ISO14001 requirements.
ARM recognises that climate change is a signicant riskto the human population. With regard to any immediateimpact to our business (such as climate change), ARM hasdeveloped business continuity plans or all o its operations
worldwide to enable business to continue should a seriousevent or incident occur. These plans are designed to protectthe interests o ARMs stakeholders and in particular ARMsemployees, property, and other assets and to provideacilities and inrastructure to reinstate business operationsas quickly as possible ater an event. The continual reviewo these plans orms part o the management reviewprocess alongside environmental management and health,saety and welare. ARMs Business Continuity Plan isbenchmarked against the British Standard BS25999.
ARMs Austin, Texas oce is located within or aroundseveral key areas o biodiversity. The building itsel is insidea protected habitat o the Turkey Vulture, or Cathartes aura,
a Threatened Species on the IUCN Red List . Thoughthe species is classied as being o Least Concern, ARMdiligently complies with all applicable United States laws,including the Migratory Bird Treaty Act. The ARM buildingis also adjacent to the Barton Creek Wilderness Park,a protected 1000-acre greenspace which is part o animportant watershed and home to many endangeredspecies, such as the Golden-Cheeked Warbler . ARMsimpact on the Wilderness Park is minimal, as there areno roads through it and no signicant emissions rom thebuilding.
ARMs CO2 emissions rom air travel were not availablein 2010, due to data inconsistencies. ARM contracted anew travel supplier during the middle o the year whosemethods or carbon emission calculations were inconsistentwith those o the previous supplier. Data will be available,however, or 2011. ARM recognises that because ourcustomer requirements call or regular ace-to-aceinteraction, business travel accounts or generally hal o ourCO
2emissions. We have undertaken a variety o initiatives,
including use o state o the art video conerencingequipment, to reduce this. We have set an inormalcompany goal o keeping all travel steady even while ourheadcount and sales increase.
1. BirdLife International 2009. Cathartes aura. In: IUCN 2010. IUCN Red List of ThreatenedSpecies. Version 2010.4. www.iucnredlist.org. 17 December 2010
2. Nature Conservancy of Texas 2010, Conservancy and Austin to Expand Bar ton CreekWilderness Park. www.nature.org/wherewework/northamerica/states/texas/news/news3409.html. 17 December 2010.
4.424.01 3.97
2008 2009 2010
Global CO2 emissions*tonnes/employees
Cambridge, UKSan Jose, CABangalore, IndiaAustin, TX**Overall
* Largest 4 oces, 78% o the Estate Portolio.** Data not available or 2008.
20082007 2009 2010
1.7
2.1
1.91.8
UK waste and recycling*m3/employee**
General wasteCardboard and paper recycledPlastics and glass recycled
* All UK oces: Cambridge, Blackburn,Sheeld, Maidenhead, 41% o total headcount.
** Average number o all employees in year.
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3. Perormance Indicators
3.3. Employment Practices and Work Environment Indicators
3.3. Employment Practices and Work EnvironmentIndicators
With headquarters in the United Kingdom and oces inNorth America, Europe, the Middle East, and Asia, nearly1900 established employees worked or ARM in 2010.Ninety-one percent o employees are established, and
ARMs Processor Division is the largest by headcount.Including all employment contract types, ARM has a total o2,081 employees, with over hal being below the age o 40,in 2010. Analysis o our corporate governing bodies can beound in the Annual Report at www.arm.com.
Being a company with such wide-reaching infuence,ARM is committed to the equality o opportunity in itsemployment policies procedures and practices. ARMis strongly bound by our Global and Local EEO Policiesand will thereore take the necessary action to ensureadherence. To this end, within the ramework o the law,we are committed wherever practicable to achieving andmaintaining a workorce which broadly refects the nationalcatchment area within which we operate. As an item onote, we particularly believe our employment rates owomen to be above average, as the gender split o UKengineering graduates in 2010 was 90% men to 10%women. Per the above chart, 17% o ARM employees areemale.
IT Industry Average Gender Pay Gap:
US average womens salaries as %of mens 76% (2009)3
UK average womens salaries as %of mens 80% (2007)4
ARMs average womens salariesas % of mens 93%
All employees by contracttypes 2010
2010 establishedemployees by region
2010 establishedemployees by age group
2010 establishedemployees by gender
1,889 establishedemployees 71%
External 7%
Fixed term 3%
UK 41%
US 27%
India 15%
Continental Europe 11%
Far East/Asia 6%
21-31 25%
31-40 42%
41-51 25%
51-60 7%
61-70 1%
Male 83%
Female 17%
Gender split o engineering graduatesin the UK in 2010: 90% male, 10%emale.
06
07
08
09
1,747
10
1,657
1,728
1,704
1,889
Headcount Established employees
3. U.S. Bureau of Labor Statistics, Womens earnings and employment by industry, 2009,www.bls.gov/opub/ted/2011/ted_20110216_data.htm. 18 February 2011.
4. Taylor, Bill. Women in ICT today: A UK Perspective www.uniglobalunion.org/Apps/UNINews.nsf/7a1fe394b29b0003c12574c6004d8645/2b07e695e33a5061c125757d0033b0b
9/$FILE/Taylor_CWU.ppt. 18 February 2011.
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3. Perormance Indicators
3.3. Employment Practices and Work Environment Indicators
While the company does not maintain a specic policy inregards to local hiring, we maintain recruitment relationshipswith universities local to ARM oces. We have also adopteda Global Equal Employment Opportunities Policy coveringthe recruitment, transer and promotion o sta as well astheir training and development. We promote the best useo our human capital and encourage continuous learningand development, in order to ull career aspirationsand promote innovation and continuous improvementthroughout the Company. Composition o hired seniormanagement is discussed urther in our CorporateGovernance sections o the Annual Report onwww.arm.com.
ARM believes that every employee should have theopportunity or regular and comprehensive eedback on hisor her job perormance. As such, the group employs the
AFDS process to identiy gaps in employees abilities andto provide training or other suitable remedy. This ensures allsta have clear accountabilities and objectives that relate tothe wider organisational objectives is regulated by the ARMManagement System (AMS).
ARM employs a number o assistance and wellnessprogrammes or workers and their amilies. Employeesreceive benets including private medical insurance, traveland lie insurance, pensions/401k plans, sabbaticals,company sick pay, holiday pay, and fexible working.Unum LieWorks is an independent Employee AssistanceProgramme contracted by ARM or employee counsellingand support, and ARMs health insurance providers oermental health coverage. Core Cambridge is employedat ARMs headquarters or physical therapy and athletictraining, and on-site gym acilities are provided at many
ARM oces. ARM also oers amily-riendly programmessuch as maternity, paternity, and parental leave, a child carevoucher scheme in the UK, and a fexible spending accountin the US.
2009 2010
73% 82%76%
87%
95%
2006 2007 2008
66%
78%
85%
86%
83%
84%
83%
53%
99%
36%
81%
69%
90%
87%
81%
73%
96%
95%
96%
92%
2006 2007 2008
AFDS completions Percentage o employees completed
EMEA
UK
India
Asia Pacic
Overall
Dental
.
Medical
Vision
509
508
.
128
133
.
298
302
87.8509126 73
83
73
104
Employee only Employee + family Employee + spouse
Health insurance coverage: US employees
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3.3. Employment Practices and Work Environment Indicators
3.4 Human Rights Indicators
ARM has adopted UK health and saety legislation as theglobal corporate standard due to its depth and breadth andmaintains membership o the British Saety Council to refectthis standard. ARMs global internal audit programme, theFacilities Management Review, evaluates health and saetyperormance across all sites with a goal o consistency ohealth and saety provision world-wide.
Due to these eorts, rates o absence rom work due tosickness, injury, or occupational disease have decreased inrecent years. Missed work time in the UK in 2010 was 20.8hours per capita and 46.9 hours per capita in India.
3.4. Human Rights Indicators
As part o our commitment to the UNGC, ARM adheresto the Universal Declaration on Human Rights. ARMrecognises its ethical responsibilities to all stakeholders whichare maniested in a range o policies and processes. ARMconducts its business with integrity, respecting all cultures andthe dignity and rights o individuals. Although the nature andlocations o ARMs businesses make the risk or human rightsviolations minimal, the company takes seriously its obligationsto promote respect or and observance o human rights andundamental reedoms or all.
ARM engages in active dialogue with suppliers with whomwe have an ongoing, long-term relationship. In supplierscontracts, they are encouraged to abide by ARMs Codeo Business Conduct and Ethics policy in their ownorganisations. The supplier approval procedure is alsounder review to make such ethical policies a requirementand no longer optional.
2009 2010
5.5
5.
5
11.
20.
6
3.
7
15.
1
18.
1
32.
6
15.
4
18.
8
16.
1
49.
4
9.
6
24.
6
15.
7
46.
3
6.
4
27.
4
20.
6
36.
5
16.
4
20.323.5 23.2
25.2
2006 2007 2008
Figure 10
Team ARM Cambridge raising money or Breakthrough Breast Cancer inthe London to Cambridge Bike Ride.
Formal training hoursTraining (hours/established employee)
EMEA
UK
India
Asia Pacic
Average
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3. Perormance Indicators
3.4 Human Rights Indicators
3.5 Society/Community Impact indicators
ARMs Code o Business Conduct and Ethics is availableon the website at www.arm.com. This Code containsprovisions against conficts o interest, corruption, illegalactivity, inaccurate public reporting, insider trading,bribery, and anti-competitive behaviours. The companyregularly monitors employees awareness o ARM policiesand procedures, including its ethical policies. All ARMemployees are obliged to read the companys Global Codeo Business Conduct and Ethics Policy, mandating honestyand accountability in all business activities. In 2010, theCode o Conduct also became aligned with the new UKBribery Act 2010 which applies to oences committed inthe UK irrespective o nationality and those committed byUK companies or by UK citizens or residents even i the actor omission occurs abroad. As such, ARMs code regulatesconficts o interest, bribery, legal compliance, insider trading,inormation and company asset protection, political activities,and employee whistle-blowing.
Additionally, the employee handbook states that ARMis committed to human rights and ethical trading in itsbusiness activities and employment practices; ARMrequires respect or economic, social, cultural, politicaland civil rights, compliance with human rights law, andprevention o discrimination based on race, creed, colour,nationality, ethnic origin, age, religion or similar belie, political
aliation, gender, gender reassignment, sexual orientation,marital status, amily connections, membership or non-membership o a trade union, disability, or any other group.
As such, ARM takes internal charges o discrimination veryseriously. Any employee who has a concern o this sort canmake use o the Companys grievance procedure. Therewere two grievances raised in 2010, both relating to bullyingand harassment and in one case perceived discrimination.Human Resources ollowed a ormal investigation processin both cases, and ound no evidence to support eitherclaim. There were no other cases o discrimination or unair
treatment during 2010. There were 16 capability/disciplinarycases in 2010, however these were in the majority due topoor perormance and managed ormally in line with ourpolicies. Historically, numbers o such claims have been osimilar magnitude.
3.5. Society/Community Impact Indicators
It is the Companys policy not to make any politicalcontributions or donations to solely religious causes. Thispolicy applies to the use o company assets and is notintended to discourage or prevent individual employees,ocers, or directors rom making such contributions orengaging in these activities on their personal capacity.No one may be reimbursed directly or indirectly by the
Figure 11
ARM Trondheims 20th Anniversary RobotRacing Competition with local schoolchildren.
Figure 12
ARM Bangalores blood drive.
ARM is also committed to complying with the tenants o the UniversalDeclaration o Human Rights, rom which the First and Second UNGCPrinciples are derived. More inormation on the Declaration can be oundat www.un.org/en/documents/udhr.
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3.5 Society/Community Impact indicators
3.6. Product Responsibility Indicators
Company or personal political or religious contributions,subject to ARMs charity giving policy.
The company has also been actively working to improve thetransparency o its business practices. By joining multiplepartnerships with external organisations such as IBLF,the UNGC, and the CDP (see Section 1), ARM hopes todemonstrate improvement in this area.
Team ARM also actively raises money or charities localto ARM oces. In 2010, ARM raised, through employeeinitiative and corporate git-matching, nearly 100,000 orthe benet o community charities, sponsoring such causes
as hospices, homeless shelters, schools, and medicalresearch. Additionally, ARMs Matching Git DonationProgramme will double, up to a reasonable limit set by eachoce, employees own contributions to charity. Additionalinormation on our charitable contributions can be ound inthe Directors Report o ARMs Annual Report.
3.6. Product Responsibility Indicators
ARMs Quality Policy demands satisaction o Customerneeds and expectations by delivering products thatare veried to meet the agreed requirements on time.Understanding customer needs and expectations is anintegral part o ARMs product development process.Customer requirements are set out in product specications
and in contracts, then project progress, risks, and qualityo deliverables are managed using design reviews andassessments. Because our primary business is thelicensing o intellectual property, customer health and saetyimpacts rom our products are minimal. However, throughinternal communication tools, we do embed lessonslearnt into review and assessment templates, monitor anddevelop employee perormance through AFDS, activelyseek eedback rom customers to improve products andservices, and monitor business perormance using KeyPerormance Indicators. These are tracked at monthlyCustomer Satisaction Meetings to help drive improvementsin product and service quality.
Most ARM-powered goods are manuactured by theARM Connected Community o companies. However, aspart o our participation in the World Climate Summit andcommitments to IBLF and UNGC, we work continuouslywith our Partners to improve sustainability across thisConnected Community. We collaborate with research anddevelopment organisations such as university science andengineering programmes worldwide. We also participate inEuropean Union-unded research to improve the ecientand responsible development o ARM-powered productsand worked with the American Council or an Energy-Ecient Economy (ACEEE) to help ound its intelligent
Figure 13
Team ARM Cambridge raising money orEast Anglias Childrens Hospices in theDragon Boat Race.
Money raised or charity
Europe 71,000
US 18,000
India 7,000
Far East 2,000
Employees explicit acceptance o ARMs Global Code o BusinessConduct and Ethics Policy is tracked through internal systems anddemonstrates ARMs commitment to the Tenth Principle o the UNGC.
Global Compact Communication on Progress
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3.6. Product Responsibility Indicators
eciency advisory board.
Part o ARMs commitment to low-power products isdemonstrated in our Processor Optimisation Packages. Weoer optimised physical IP that will deliver a pre-determinedprocessor implementation, based on the customers choicerom amongst dierent options or higher perormance orlower power. Supporting a range o Cortex processors,process nodes, and oundries, we allow the customerto make the decision as to power-consumption versusprocessing perormance.
We have also taken responsibility to infuence how
inormation technology can be used to aid in povertyreduction. ARMs partnership with the Humanitarian CentresICT4D Year unded networking events, presentations,and research into the innovative use o inormation andcommunication technology to alleviate global poverty andinequality. Events in this series include Proessor Tim Unwin,UNESCO Chair in ICT4D at Royal Holloway, University oLondon, analysing evidence or how new technologiesimpact on poverty, and Pro. Geo Walsham, Pro. IanLeslie, Dr. Peter Gough, and the Hon. Minister o Health,Rev. Dr John Seakgosing, rom Botswana, examininge-Health or International Development. More inormation onthis can be ound at www.humanitariancentre.org/ict4d.
ARM believes ethics and accuracy must be maintained in
all company marketing and communications. Our corporatepolicies prevent sponsorship o illegal activities or those thatviolate Equal Opportunity and Discrimination laws. ARMsCode o Business Conduct and Ethics (available on thewebsite at www.arm.com) requires ull, understandable,and accurate inormation in our public disclosures aswell as complete compliance with all applicable laws andregulations, including those o the United States Securitiesand Exchange Commission and the United Kingdom Listing
Authority and Financial Services Authority, in all materialrespects about the companys nancial condition andresults o operations. We maintain the highest standards inall matters relating to accounting, nancial controls, internalreporting and taxation. All nancial books, records andaccounts must accurately refect transactions and events,and conorm both to required accounting principles andto the companys system o internal controls. Recordsshall not be distorted in any way to hide, disguise or alterthe companys true nancial position.. The companysDisclosure Committee consisting o senior managementassists in monitoring such disclosures.
ARM also is committed to saeguarding the protectiono data collected rom employees, suppliers, customersand other third parties. Our Global Data Protection Policy,owned by ARMs Data Protection Ocer, summarises the
Figure 14
ARM sponsored the Humanitarian Centresyear o ICT or international development(photo courtesy o Ken Banks).
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3. Perormance Indicators
3.6. Product Responsibility Indicators
standards ollowed to protect this data and is available onwww.arm.com. Except as expressly stated in the policy,we do not provide data to third parties without consent,though ARM may share data within the ARM group andmay be required to disclose or share personal data in orderto comply with legal obligation or to protect rights. Foremployees, we may process data in the ordinary course oemployment within the Group. With a supplier, customer,or other third party, ARM processes data in the ordinarycourse o business, including using outside companies tosend marketing inormation and ship orders. ARM alwaysuses industry-standard encryption technologies whentranserring and receiving data and has appropriate securitymeasures in place to protect against any loss, misuse,or alteration o inormation that it has collected. ARMmaintains all accounting and administration inormation orauditing purposes in accordance with International FinancialReporting Standards and generally accepted accountingprinciples.
ARMs work with R&D partners is urther evidence o our commitmentto the UNGCs Principle Nine, which calls or encouragement oenvironmentally-riendly technologies.
Global Compact Communication on Progress
Figure 15
Some o ARMs Processor Optimisation Packages
Dual Core Cortex-A9Speed opimised
Dual Core Cortex-A9Power optimised
Dual Core Cortex-A5Power optimised
Cortex-M0Ultra low leakage
2GHz
800MHz600MHz 50MHz
1.9W 0.5W 80mW 5mW
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4. Looking Forward
Over the next year ARM will continue itscommitment to the charters and partnershipsoutlined in this report. In particular we will reafrm ourcommitment to the United Nations Global Compact
and the Global Reporting Initiative. In 2011 we willassess and re-evaluate a number o ARMs CRpolicies and processes.
Looking Forward
Environment
Continue our efforts to reach our two emissions reductiontargets (see page -13)
Asses our emissions data management system
Encourage staff to contribute improving ARMsenvironmental impact.
Community
Review our Charitable Donations and Sponsorshippolicies and process.
Continue to improve external CR communications andreporting
Workplace
Assess our Corporate Governance structure in relationto CR to maintain and improve responsibility andaccountability.
Improve employee participation in Team ARM
Improve internal CR Communications and reporting.
Marketplace
Continue to explore how to engage the ARM ConnectedCommunity in relation to Corporate Responsibility,Sustainability and International Development.
Improve external CR communications and reporting.
Develop new programmes to demonstrate the positivepotential o ARM technology to improve global energyeciency.
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4. Looking Forward
4.1. Commitment to Charters and Partnerships
4.1. Commitment to Charters and Partnerships
ARM is certied to ISO9001 and audited externally byLloyds Register Quality Assurance (LRQA) or compliance.
ARMs current certicate was due or expiry in November2010. We were audited by LRQA during that time or
ISO9001 renewal and or the annual Sarbanes-Oxley(SOx) survey, which is a required corporate governancequalication or any company traded in the US market.
There were no major non-conormances raised in eitheraudit, and virtually all topic areas o the SOx review showedsome level o improvement over last years results. Assuch, LRQA made a recommendation to renew ARMsISO9001:2008 certication. More inormation can be oundin ARMs Annual Report atwww.arm.com or on LRQAs website at www.lrqa.co.uk/help/casestudies/arm/Deault.aspx.
ARM is a contributor to the Carbon Disclosure Project, anindependent database recording greenhouse gas emissions
and climate change strategies o major global corporations.More inormation can be ound at www.cdproject.net.
This year, ARM became a new participant in the UnitedNations Global Compact (UNGC), a voluntary strategicpolicy initiative or businesses that are committed to aligningtheir operations and strategies with ten universally acceptedprinciples in the areas o human rights, labour, environmentand anti-corruption. We are also an active member o thelocal UK-based UNCG member network. More inormationcan be ound at www.unglobalcompact.org.
As part o ARMs commitment to the UN Global Compact,the company has also committed to the Caring or Climateaction platorm or those who seek to demonstrateleadership on the issue o climate change. More inormationcan be ound atwww.unglobalcompact.org/Issues/Environment/Climate_Change.
In 2010, ARM partnered with the International BusinessLeaders Forum (IBLF), an independent, not-or-prot globalorganisation working with business leaders to deliverinnovative solutions to sustainable development challengesworldwide. This partnership will explore how more eectiveuse o smart technology can reduce energy consumptionand improve living standards. More inormation can beound at www.ibl.org.
ARM is committed to the National Association o PensionFunds Pension Quality Mark (PQM), a benchmark scheme
recognising high quality dened contribution pensionschemes with strength o employer contributions, undmanagement, and stakeholder communications.More inormation can be ound atwww.pensionqualitymark.org.uk.
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4.2. Signifcant Awards and Recognition
In 2010, ARM was again included in the FTSE4Good Index,designed to measure the perormance o companies thatmeet globally-recognised corporate responsibility standards.
www.tse.com/Indices/FTSE4Good_Index_SeriesARM was acknowledged by the techMARK group with anomination or 2010 Achievement o the Year and an awardor 2010 Company o the Year, identiying technologicalachievement along with sound commercial and nancialsuccess and long term growth potential.
www.techmark-event.co.uk
The 2010 Electronic Engineering Times Annual Creativityin Electronics award or Company o the Year, whichrecognises proessionalism, sta development and retention,customer ocus, technical excellence, and protable growth,was presented to ARM this year.
www.eetimes-ace.com
The National Microelectronics Institute recognisedARM with two Excellence Awards in 2010, one or LowPower Design and another or Services to Training andEducation. The ormer rewards innovative and noveldesigns that signicantly reduce energy consumptionwithout compromising end-user unctionality, and thelatter is or signicant commitment to a healthy and vibrantmicroelectronics industry in the UK and Ireland.
autodiscover.nmi.org.uk/events/annual-dinner-2010
ARM was again added to the Corporate ResearchFoundations list o Britains Top Employers, certiyingorganisations on the leading edge o growing proessionalcareers. Their research showed ARM to have outstanding
HR policies and excellent working conditions.www.britainstopemployers.co.uk
ARM was honoured by the Austin American-Statesmannewspaper as one o Austin, Texas Top Workplaces o2010. The Top Workplace Awards, which recognised 75companies in the Austin region, lead the way in measuringthe health o US companies based upon employeeopinions and survey responses. Over 2,000 designated TopWorkplaces nationally are now better positioned to attractand retain industry leading talent.
statesman.topworkplaces.com
ARM was included in the recent listing o the NASDAQOMX CRD Global Sustainability 100 Index, benchmarking
companies on a major US stock exchange makingadvances in sustainability perormance reporting. TheIndex, created through evaluation o more than 3,000global companies, is comprised o those that have taken aleadership role in disclosing their carbon ootprint, energyusage, water consumption, hazardous and non-hazardouswaste, employee saety, workorce diversity, managementcomposition, and community investing.
indexes.nasdaqomx.com
4. Looking Forward
4.1. Commitment to Charters and Partnerships
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5. Appendix
5.1. Global Reporting Initiative
Appendix
5.1. Global Reporting Initiative
5.2. United Nations Global Compact
5.3. Blueprint For Sustainable Leadership: CorporateAction Plan
5.4. Other Key Metrics
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5. Appendix
5.1. Global Reporting Initiative
GRI G3 Guideline Item Page Number
Standard Disclosures:
1.01
Statement rom the most senior decision-maker
o the organisation 12.01
Name o the organisation 1
2.02
Primary brands, products, and/or services 2
2.03
Operational structure o the organisation 4
2.04
Location o organisations headquarters 3
2.05
Number o countries where the organisation operates 3
2.08
Scale o the reporting organisation 4, 52.10
Awards received in the reporting period 24
3.01
Reporting period 5
3.02
Date o most recent previous report 5
3.04
Contact point or questions regarding the report o its contents 5
3.06
Boundary o the report 5
3.07
Specic limitations on the scope o the report 5
3.09
Data measurement techniques and assumptions 5
3.11
Signicant changes rom previous reporting periods 5
3.12
Table identiying location o Standard Disclosures 26
3.13
Current practice with regard to seeking external assurance or thereport 5
4.01 4.10
Governance 4
4.08
Internally developed statements o mission or vision 3
4.12
Externally developed economic, environmental, and socialcharters, principles, or other initiatives to which the organisationsubscribes or endorses 23
GRI G3 Guideline Item Page Number
Standard Disclosures:
4.13
Memberships in associations and/or advocacy organisations 23
4.14
List o stakeholder groups engaged by the organisation 6
4.15
Basis or identication and selection o stakeholders with whom toengage 6
4.16
Approaches to stakeholder engagement 6
5.00
Management Approach and Perormance Indicators
EC1 13
EC2 13
EC3 15
EC6 8,16EC7 8,16
EC8 8
EN1 13, 14
EN11 13, 14
EN12 13, 14
EN15 13
EN16 13, 14
EN22 13
EN25 1, 14
EN26 1
EN29 19
EN3 19
EN5 19
EN7 13, 14
HR2 17
HR4 18
HR6 17, 18
HR7 17, 18
LA1 15
LA10 17
LA11 16
LA12 16
LA13 15
LA14 15
LA3 16
LA7 16
LA8 15
PR1 16
PR5 8, 19, 20
PR6 19, 20, 21
SO3 18
SO6 18
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5. Appendix
5.2. United Nations Global Compact
5.2. United Nations Global Compact
The United Nations Global Compact holds at its core the ollowingten principles within our issue areas.
www.unglobalcompact.org
Human Rights Issue Area Principle 1: Businesses should support and respect the
protection o internationally proclaimed human rights; and
Principle 2: make sure that they are not complicit in human rightsabuses.
Labour Issue Area
Principle 3: Businesses should uphold the freedom of associationand the eective recognition o the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsorylabour;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect ofemployment and occupation.
Environment Issue Area Principle 7: Businesses should support a precautionary
approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmentalresponsibility; and
Principle 9: encourage the development and diffusion ofenvironmentally riendly technologies.
Anti-Corruption Issue Area
Principle 10: Businesses should work against corruption in all itsorms, including extortion and bribery.
Communication on Progress
As part o ARMs participation in the UNGC, we are submitting thisCorporate Responsibility report as our ocial Communication on
Progress (COP).The requirements o a COP report, and where in this CR reportthey can be ound, are summarised below.
Requirement: Page Number
1. A statement by the CEO (or equivalent) expressing continued support or theGlobal Compact and renewing the participants ongoing commitment to the initiativeand its principles 4
2. A description o practical actions (i.e., activities and, i applicable, policies) the companyhas taken to implement the Global Compact principles and to support broader developmentgoals. During the rst ve years o participation, a COP must address at least two o theGlobal Compacts principle issue areas.
Environmental Issues AreaTransparency and Anti-Corruption Issues Area
17, 2927
3. A measurement o outcomes (i.e., identiy targets, dene perormance indicators,or measure outcomes).
Throughout and inthe Blueprint overlea.
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5. Appendix
5.3. Blueprint or Sustainable Leadership
Blueprint or Sustainability Leadership:Corporate Action Plan
Plan Item Location and Explanation
Implementing the Ten Principles into Strategies and Operations
Full Coverage and Integration Across Principles
1. Implement all the ten UN Global Compact principlesinto strategies and operations
Environment and Anti-Corruption Issue Areas are alreadyembedded in our policies, as noted in the COP Index. HumanRights and Labour are respected by the culture and business o
ARM but not explicitly stated in our policies as our business streamis inherently low risk o violations due to child or compulsory labouror collective bargaining ailures.Reerence Sections: 2.1, 2.5, 3.4, 5.34
2. Design corporate sustainability strategy to leverage
synergies between and among issue areas and to dealadequately with trade-os.
ARM's environmental strategy has several checks and balances
to ensure trade-os are considered. Through R&D investments inenergy eciency, creation o more responsible business practices(e.g., video conerencing to reduce travel), and ormation o externalpartnerships such as IBLF, synergies are leveraged appropriately.
3. Ensure that dierent corporate unctions coordinateclosely to maximize perormance and avoidunintended negative impacts.
ARMs business is small enough that most are constantly in touchwith multiple unctional departments but large enough to demandan executive emphasis on teamwork. The ARM ManagementSystem (AMS) is a corporate-wide structure that standardisesprocedures and ensures all departmental objectives eed intooverarching corporate goals.Reerence Section: 3.3
Robust Management Policies and Procedures
4. Assess risks and opportunities on an ongoing basis
at both enterprise and product level and undertakedue diligence to ensure that the company identiesany negative impacts caused by its operations andactivities.
Direct impacts are assessed every year by the relevant employees
annual objectives (e.g., environmental waste reductions).Assessment o indirect impacts are an area o growth potential orARM, as we have historically assumed we were low risk due to thenature o our business. However, our Corporate Roadmap is drivingus to increase the sustainability o ARM-powered products.Reerence Section: 3.6
5. Develop strategies and policies specic to thecompanys operating context as well as scenarios orthe uture and establish measurable short, medium,and long term goals.
Macroscopic, corporate-wide business policies are in use andmandatorily reviewed by all employees annually. Corporate-widegoals are set by the Board, managed by the Corporate OperationsGroup (COG), and maintained in AMS. These goals are then foweddown to individual employees through the AFDS process.Reerence Section: 3.3
6. Engage and educate employees through trainingactivities, the development and adjustment o business
processes, and sound incentive schemes.
Training is perormed through the Learning and Developmentdepartment. Through on-the-job and ormal training we aim to
promote and support the development o everyone both individuallyand in teams to ull their ull potential and contribute to the widersuccess o ARM. ARM encourages each individual to embarkupon a path o sel-betterment by using a blend o: refectionand eedback, coaching, mentoring, training and education,experience and exposure and on the job training. ARM also oersequity participation and conducts regular Employee Engagement
Assessments.Reerence Sections: 2.1, 2.2, 3.3
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7. Implement a system to track and measureperormance based on standardised perormancemetrics.
Each employees perormance is tracked and measured throughthe ARM Feedback and Development System (AFDS). On acorporate level, ARMs sustainability perormance is trackedthrough reporting on the GRI and UNGCs Communication onProgress and Blueprint or Corporate Sustainability Leadership.Reerence Sections: 3.3, 5
Mainstreaming into Corporate Functions and Business Units
8. Place responsibility or execution o sustainabilitystrategy in relevant corporate unctions (procurement,government aairs, human resources, legal, etc.)and ensure that no unction is operating in confictwith sustainability commitments and objectives ocompany.
Corporate-wide sustainability goals have been set and approved.Human Resources, Marketing, Facilities, and Product Design allhave portions o the responsibility or this strategy, allocated byrelevance and ability. Appropriate goals or each unctional groupare managed by the AMS.Reerence Section: 2.5
9. Align strategies, goals and incentive structures oall business units and subsidiaries with corporatesustainability strategy.
See item 8 above. Corporate goals apply across all business unitsand subsidiaries.
10. Assign responsibility or corporate sustainabilityimplementation to an individual or group within each
business unit and subsidiary.
See item 8 above. Corporate goals apply across all business unitsand subsidiaries.
Value Chain Implementation
11. Analyse each segment o the value chain careully,both upstream and downstream, when mapping risks,opportunities and impacts.
An area o growth potential or ARM, as we have historicallyassumed we were low risk due to the nature o our business.However, through our Roadmap, we are striving or greater energyeciency and sustainability in our value chain.Reerence Section: 3.6
12. Communicate policies and expectations to suppliersand other relevant business partners.
This is in progress with continued partnership meetings as wellas more ormal arrangements such as through the CambridgeResponsibility Forum, Caring or Climate, the World ClimateSummit. We are also pushing or more sustainable ARM-poweredproducts. Our procurement policy is also changing in this regard.Reerence Sections: 2.3, 3.6
13. Implement monitoring and assurance mechanismswithin companys sphere o infuence.
ARMs Procurement policies are evolving to include ethicalrequirements.Reerence Sections: 2.3, 3.4
14. Undertake awareness-raising, training and other typeso capability building with suppliers and other businesspartners.
This is being accomplished through our partnerships such as thecommissioned research with IBLF, our Connected Communitypanel at the World Climate Summit, and our participation with
ACEEE.Reerence Sections: 2.3, 3.6
Taking Action in Support o Broader UN Goals and Issues
Core Business Contributions to UN Goals and Issues
15. Align core business strategy with one or more relevantUN goals/issues*.
ARMs vision is or a world in which all electronic products andservices are based on energy-ecient technology rom ARM,
making lie better or everyone. We are also extending this visioninto issues relating to education, health, and poverty reduction.
This is in line with the UNGCs Principles Eight and Nine, calling orenvironmental responsibility.Reerence Sections: CEO Welcome, 1 , 3.6
16. Develop relevant products and services or designbusiness models that contribute to UN goals/issues.
See item 15 above. ARM strives to create the most energy-ecientprocessors in the world and to enable products that drive intelligenteciency such as smart appliances, smart meters, and smartwater.Reerence Section: 3.6
17. Adopt and modiy operating procedures to maximisecontribution to UN goals/issues.
See items 15 and 16 above. This will also be developed as ourparticipation with the UNGC grows.
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Strategic Social Investments and Philanthropy
18. Pursue social investments and philanthropiccontributions that tie in with the core competences oroperating context o the company as an integratedpart o its sustainability strategy.
ARMs policy on charitable giving is to support Science,Mathematics, Technology, and Engineering (STEM) eldswithin communities local to ARM, as this is our core businesscompetency. We are also pursuing major investments with
organisations such as social enterprise/clean-tech non-protFuture Business.Reerence Section: 2.4
19. Coordinate eorts with other organizations andinitiatives to ampliy and not negate or unnecessarilyduplicate the eorts o other contributors.
ARM is a ounder/major contributor within several relevantpartnerships such as the ACEEE, Cambridge ResponsibilityForum, Learning Collaboration, and World Climate Summit whichinclude many other major corporations such as Schneider Electric,Microsot, Hewlett Packard, Texas Instruments, and IBM, as well assmall businesses local to ARM oces.Reerence Section: 2.4
20. Take responsibility or the intentional and unintentionaleects o unding and have due regard or localcustoms, traditions, religions, and priorities o pertinent
individuals and groups.
Each individual oce makes decisions on local charitable giving,allowing them to appropriately consider community priorities.
Additionally, ARM has a policy against donations that target political
and religious causes in order to prevent eects other than those orcontributing to the common good.Reerence Section: 3.4
Advocacy and Public Policy Engagement
21. Publicly advocate the importance o action in relationto one or more UN goals/issues.
We are taking a leadership role by incorporating UNGCs Blueprintor Sustainability Leadership into the companys CR Report, whichno one has done prior to this year. We are also participating in theWorld Climate Summit alongside UNGC.Reerence Sections: 2.4, 5.2,5.3
22. Commit company leaders to participate in keysummits, conerences, and other important publicpolicy interactions in relation to one or more UNgoals/issues.
See item 22 above. Company leaders are committed to a series osustainability-related events. ARMs CEO attended and presentedat the Cambridge Responsibility Forum.Reerence Section: 2.4
Partnerships and Collective Action
23. Develop and implement partnership projectswith public or private organizations (UN entities,government, NGOs, or other groups) on corebusiness, social investments and/or advocacy.
We have help ound the Cambridge Responsibility Forum,designed to acilitate networking and idea-sharing, with severalother local Cambridge businesses. We have also partnered withthe Humanitarian Centre to promote the use o IT in internationaldevelopment. ARM also entered into a partnership with non-protIBLF to research sustainability in the IT sector and coordinaterelevant events. We are additionally instrumental in ounding
ACEEEs Intelligent Eciency Board.Reerence Sections: 2.4, 3.6
24. Join industry peers, UN entities and/or otherstakeholders in initiatives that contribute to solving
common challenges and dilemmas at the global and/or local levels with an emphasis on initiatives thatextend the companys positive impact on its valuechain.
See item 23 above. We also joined the World Climate Summit, area regular participant in the local UK Network o the UNGC, and
worked with the American Council or an Energy-Ecient Economy(ACEEE) to help ound its intelligent eciency advisory board. ARMendeavours to have a positive impact on its value chain, as listed initem 19.Reerence Sections: 1, 4.1, 4.2 , 3.6
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Engaging with the UN Global Compact
Local Networks and Subsidiary Engagement
25. Contribute to the building and operating o at least oneUN Global Compact Local Network and help elevate
perormance o other companies through training,mentoring, COP peer review, etc.
We regularly attend meetings o local UK Network and areinvestigating how we can help with training, mentoring, etc.,
amongst our peers. ARMs Director o Sustainable Developmentrecently joined the Local Networks Advisory Board.
26. Encourage subsidiaries to engage with UN GlobalCompact Local Networks and to participate activelyin events and activities.
Our commitment to the UNGC is corporate-wide.
27. Publish sustainability inormation related to eachindividual subsidiary separately or reerence it explicitlyin the Communication on Progress o CorporateHeadquarters.
This report covers all o ARM Holdings corporately. ARM has nosubsidiaries involved in anything outside our core business osemiconductor IP.
Global and Local Working Groups
28. Participate in relevant global or local working groupsand share experiences, networks, tools and good
practices with other UN Global Compact participants.
We participate in meetings o our local UK network and aremembers o the Caring or Climate Working Group. ARMs Director
o Sustainable Development recently joined the Local NetworksAdvisory Board.
29. Take active part in dening scope and objectives onew working groups when relevant.
ARM is one o the rst companies to suggest incorporation o thisBlueprint in a CR Report.Reerence Section: 6.2
Issue-Based and Sector Initiatives
30. Join and help advance one or more existing UN GlobalCompact initiatives, e.g. Caring or Climate, CEOWater Mandate, Womens Empowerment Principles,and Global Business Initiative on Human Rights.mentoring, COP peer review, etc.
We are committed to the Caring or Climate initiative.Reerence Section: 4.1
31. Spearhead need-driven development o new issue-based or sector initiatives within the UN GlobalCompact and the wider United Nations.
See item 29. This is an area o potential growth or ARM. This willbe developed as we progress in our participation.
Promotion and Support o the UN Global Compact
32. Advocate the UN Global Compact to businesspartners, peers and the general public.
We invite the UNGC to participate in many o our ARM-sponsorednetworking events to allow them interaction with ARMs ConnectedCommunity. We have also sponsored UNGC research projects.
33. Encourage suppliers and other business partners tojoin the UN Global Compact, and take on mentoringrole on issues related to the initiative.
This is also accomplished on a one-to-one basis during ourinteractions with suppliers and partners. We invited several to theWorld Climate Summit.
34. Participate in activities to urther develop andstrengthen the UN Global Compact.
We have suggested use o this Blueprint as possible ramework orCR reports. We are also a participant in the World Climate Summitand are developing urther activities in close cooperation with theUNGC.
Reerence Sections: 2.3, 2.5The Cross-Cutting Components
CEO Commitment and Leadership
35. CEO publicly delivers explicit statements anddemonstrates personal leadership on sustainabilityand commitment to the UN Global Compact.
Our CEOs statement in this report demonstrates the commitment.He also presented at the Cambridge Responsibility Forum andattended the Technology or Sustainability conerence.Reerence Section: CEOs Welcome and Statement.
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36. CEO promotes initiatives to enhance sustainabilityo the companys sector and leads development oindustry standards.
The CEO supports the corporate vision o energy-ecient ARM-powered products through integration o sustainability within the
ARM Connected Community.Reerence Section: CEOs Welcome and Statement, 3.6
37. CEO leads executive management team in
development o corporate sustainability strategy,dening goals and overseeing implementation.
CEO has endorsed the companys low carbon goals and initiatives
and communicated them to the entire ARM workorce personallythrough emails and presentations. The CEO receives regularupdates on these issues through the Executive Committee.Reerence Section: 2.5
38. Make sustainability criteria and UN Global Compactprinciples part o goals and incentive schemes orCEO and executive management team.
Executive goals include transparency, employee engagement, anddevelopment o more energy-ecient ARM technologies, which allsupport the principles o the UNGC.
Board Adoption and Oversight
39. Board o Directors (or equivalent**) assumesresponsibility and oversight or long term corporatesustainability strategy and perormance.
ARMs Board and executive team recognise that continuedsuccess has been achieved through the strength and depth o ourstakeholder relationships, and thus manage the Company via atransparent, consistent and eective governance ramework so thatwe remain accountable to all stakeholders.
Reerence: Annual Report40. Board establishes, where permissible, a committee or
assigns an individual Board