2022
Corporate Social Responsibility Report
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ABOUT THIS REPORT
This report has been prepared with the Global Reporting Initiatives (GRI) guidelines in mind but is not intended to be fully compatible with all GRI requirements. We have used an internal process, supplemented by our stakeholder engagement work, to identify the sustainability areas that are the most important to Sanmina and our stakeholders. Other topics that are important and are of interest to our stakeholders have also been disclosed in the Index at the back of this document. We are reporting against our most notable topics, identified during our first CSR report, providing a baseline using the calendar year 2019 data. This report covers our activities through the calendar year 2022. The environmental data provided in this report encompasses all major manufacturing locations. Our quarterly and annual filings with the SEC provide regular insight into our business and the company’s financial performance. They address material risks as defined by the SEC, whereby a reasonable stakeholder would deem the risk important. This report has been written for a broad range of stakeholders, including but not limited to our customers, employees, suppliers, investors and communities where we do business. We value stakeholder feedback and encourage you to engage with us. Please direct inquiries to csr@sanmina.com
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TABLE OF CONTENTS
Message from Our CEO....................................................4
About Sanmina................................................................6 What We Do Sanmina’s Key Industries Sanmina’s End-to-End Solutions. Corporate Social Responsibility at Sanmina....................14 Our CSR Commitment Our Stakeholders Areas of Focus Affiliations People. ............................................................................ 18 Our Objectives Diversity, Equity and Inclusion 2022 Workforce Data Positive Work Environment Career Growth Performance Management Promoting Health and Wellness Sanmina Wellness Programs Keeping Employees Safe Sanmina Giving Back Supply Chain...................................................................24 Supplier Commitment Supplier Engagement Supplier Diversity Supplier Code Of Conduct RBA Online Platform Environmental................................................................. 28 GHG Emissions: 2030 and 2050 Goals Tracking Our Progress Governance .....................................................................32 Board Composition Committee Responsibilities Role of the Board Shareholder Engagement Ethics and Business Conduct Open Door Reporting
Index................................................................................38
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MESSAGE FROM OUR CEO
As a global technology leader, Sanmina delivers products and solutions that have an impact on our daily lives. Our technologies are included in mission critical solutions that our customers and their customers depend on and can have a positive impact on our communities. I am incredibly proud of our long-standing leadership in corporate responsibility and sustainability. Our focus in this area has positioned us to effectively create long-term value and respond to the growing importance of environmental, social and governance issues for our investors, customers, employees and other stakeholders. We foster a culture of trust, diversity, equity and inclusion where everyone is treated with dignity and respect. We benefit from our outstanding employees bringing their ideas, motivation and full capabilities to life. It is our goal to give them a vibrant and inclusive environment where everyone feels they can belong. We remain committed to conducting our business with integrity, strong corporate governance, respecting human rights and responsibly sourcing materials throughout our global supply chain. As a founding member of the Responsible Business Alliance (RBA), Sanmina supports the RBA’s vision of a global electronics industry that creates sustainable value for workers, the environment and business. Our global corporate responsibility efforts are guided by our management team and Board of Directors who are dedicated to the highest standards of ethics and integrity. Their efforts are measured against our Business Code of Conduct, which shapes our values and guides our decisions and actions.
In this report we have highlighted our progress in key areas related to environmental, social and corporate governance over the past year. I am very proud of these efforts and recognize the importance of our role and that our job is not done. I look forward to the opportunities ahead and our role in helping ensure a better, more equitable and sustainable world.
“Our global corporate responsibility efforts are guided by our management team and Board of Directors who are dedicated to the highest standards of ethics and integrity. “
Jure Sola Chairman and CEO
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OUR VISION, MISSION AND VALUES
VISION To be the trusted leader providing products, services and supply chain solutions to accelerate customer success.
MISSION Provide competitive advantage for customers with mission critical products, services and supply chain needs while driving value for customers, employees and investors.
VALUES Our culture emphasizes honesty, integrity, transparency, personal accountability, ethical business practices and good corporate citizenship.
We recognize the importance of doing business the right way. At Sanmina, we foster a work environment that is built on the beliefs of our vision, mission and values. We believe our core values can help ensure our employees, from top leadership to entry-level staff, work towards the same common goal and share in a bigger purpose. We believe our culture is embedded in everything we do as we strive to exceed customer expectations, build strong supplier partnerships and consistently deliver superior technology and performance.
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ABOUT SANMINA
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SANMINA PROFILE
24 34K
1980
SANM
EMPLOYEES
FOUNDED IN SAN JOSE, CA
SERVICE CUSTOMERS FROM COUNTRIES
TRADED ON NASDAQ
FY 2022 FINANCIAL HIGHLIGHTS
NON-GAAP OPERATING MARGIN*
NON-GAAP DILUTED EPS*
REVENUE
CASH FLOW FROM OPERATIONS
$331M
5.3%
$7.89B
$4.99
Sanmina Corporation, a Fortune 500 company, is a leading global provider of integrated manufacturing solutions, components, products and repair, logistics and after-market services. We provide these comprehensive offerings primarily to original equipment manufacturers (OEMs) in the following industries: industrial, medical, defense and aerospace, automotive, communications networks and cloud infrastructure. The combination of our advanced technologies, extensive manufacturing expertise and economies of scale enable us to meet the specialized needs of our customers.
* Refer to Appendix B of the 2023 Proxy Statement for a reconciliation of the non-GAAP measures contained in this report to their most directly comparable GAAP equivalents. 7
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WHAT WE DO... WE BUILD PRODUCTS
THAT SAVE YOU
THAT POWER YOU
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THAT PROTECT YOU
THAT MOVE YOU
THAT CONNECT YOU
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Sanmina designs, manufactures and repairs some of the most complex and innovative optical, electronics and mechanical products in the world. Recognized as a technology leader, Sanmina provides end-to-end design, manufacturing and logistics solutions, delivering superior quality and support to Original Equipment Manufactures, primarily in the industrial, medical, defense and aerospace, automotive, communications networks and cloud infrastructures technology sectors.
Vertically integrated global manufacturing capabilities
Customer focused organization with 34,000 employees
Mission critical end-to-end solutions
Product design and engineering resources
Expertise in industry standards and regulatory requirements
Comprehensive IT systems and global supplier base
Expertise in serving diverse end markets
Advanced component technologies
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SANMINA’S KEY INDUSTRIES
INDUSTRIAL
DEFENSE & AEROSPACE
MEDICAL
AUTOMOTIVE
CLOUD INFRASTRUCTURE
COMMUNICATION NETWORKS
For over 40 years, Sanmina has been providing technology, designing products and building global supply chains for companies across the industrial, medical, defense and aerospace, automotive, communications networks and cloud infrastructures industries. Leading companies in these industries can more effectively bring their products to market because of Sanmina’s industry-specific supply chain, manufacturing, design and technology expertise. Our deep technology experience includes engineering, advanced interconnect solutions, test systems, manufacturing automation and supply chain management. Applying this expertise makes our customer’s products more competitive, while reducing their global supply chain costs.
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SANMINA’S WORLDWIDE MANUFACTURING LOCATIONS
EMEA
ASIA
AMERICAS
APAC
AMERICAS
EMEA
Kanata/Ottawa Kenosha Manchester Markham Monterrey Newark Reynosa Salt Lake City San Jose Turtle Lake
Austin Carrollton Colorado Springs Costa Mesa El Paso
Ma’alot Örnsköldsvik Plovdiv Port Glasgow Tatabánya
Basingstoke Fermoy Gunzenhausen Haukipudas Johannesburg
Chennai Kunshan Pathum Thani Penang Shenzhen Singapore Wuxi
Fort Mill Fremont Guadalajara Houston Huntsville Juárez
GLOBAL MANUFACTURING, INFORMATION TECHNOLOGY AND INNOVATION Sanmina provides complete global supply chain solutions to premier brands. For many customers, we provide design, global manufacturing, distribution and repair operations. This means seamlessly manufacturing their core technology and finished products in several different Sanmina factories located around the world. It also means designing advanced products for them in our design centers and servicing and refurbishing products in other key Sanmina facilities. TECHNOLOGY INNOVATION AND GLOBAL SUPPLY INTELLIGENCE Sanmina invests heavily in the latest manufacturing technology and systems. For some products, Sanmina operates fully automated production lines. We are a leader in digital transformation, leveraging Industry 4.0 practices and IIoT (Industrial Internet of Things) technologies. Our cloud-based 42Q manufacturing system connects more than 30,000 items of manufacturing equipment around the world, providing critical manufacturing execution system information in real time, such as yields, throughput and inventory levels. This visibility empowers our employees and customers to accelerate decision making, reduce errors and optimize production.
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FULL LIFE CYCLE SOLUTIONS
Design Services & Technology
Printed Circuit Boards & Backplanes Electro Mechanical Cables
42Q Smart Connected Manufacturing
Sanmina Global Services (Repair & Logistics)
Precision Plastics
Precision Mechanical Systems
Viking Memory
Viking Enterprise Solutions Storage
Energy Technology
SCI Defense & Aerospace
Optical & Micro-Electronics
INTEGRATED MANUFACTURING SOLUTIONS
END-TO-END SERVICES
TEST ENGINEERING
DOF & REPAIR
SUPPLY CHAIN
NPI & PROTOTYPE
MANUFACTURING
DESIGN & ENGINEERING
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CSR AT SANMINA
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CORPORATE SOCIAL RESPONSIBILITY AT SANMINA At Sanmina, we are committed to our Corporate Social Responsibility (CSR) mission to improve the lives of the people we employ and the communities in which we operate. We carry out this mission through the work of each and every one of our employees, through our diversity, equity and inclusion initiatives and by implementing environmentally responsible business practices. We strive to exceed customer expectations in quality, delivery and service as we build long-term relationships based on exceptional customer satisfaction.
ACCOUNTABILITY AND SUSTAINABILITY We recognize that reporting on environmental, social and governance practices is vital to a successful business. Sanmina defines corporate social responsibility as integrating social, environmental, safety, ethical and human rights concerns in our business operations and interactions with stakeholders. Our customers work hard to maintain an excellent brand image and company reputation and we see this as our job as well. Maintaining excellent stakeholder relationships is very important at Sanmina. CSR is fundamental to Sanmina’s culture, core values and principles of the Responsible Business Alliance (RBA). It reflects the corporate social and environmental sustainability commitments we make to our customers, stakeholders, employees and communities around the world. These commitments drive us to perform with the highest standards of good governance and ethics; provide products and services that meet the rising expectations of our customers and business partners; attract and retain quality employees; provide meaningful support in our communities; and improve the social and environmental impacts of our business practices and those of our suppliers.
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OUR CSR COMMITMENT • Ensure sound corporate governance and compliance practices, and increased transparency of reporting on those activities. • Maintain ethical policies and provide training to ensure that all employees perform with high standards of integrity and trust. • Develop and enhance products and services that provide social and environmental options for clients and prospects. • Continue to provide talent management and well-being programs committed to supporting a diverse environment where employees can thrive and excel. • Drive corporate philanthropy that advances the quality of life where our employees and stakeholders work, live and do business. • Implement and/or expand environmentally sustainable management and business practices. • Build relationships with suppliers whose CSR goals and activities are aligned with our expectations. • Provide active and engaged CSR oversight, including the establishment of key performance indicators, management systems and communication of progress.
CUSTOMERS
INVESTORS
OUR STAKEHOLDERS We engage with a wide range of stakeholders to inform our corporate social responsibility strategy. Our internal engagement includes all levels of the organization. Our external engagement includes representatives from global, national and local interests.
GOVERNMENT & REGULATORS
EMPLOYEES
INDUSTRY LEADERS
SUPPLIERS & DISTRIBUTERS
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AFFILIATIONS The principles of the Responsible Business Alliance (RBA) are part of our corporate culture and core values and are reflected in our commitments to our customers, stakeholders, employees and communities in which we do business around the world. These commitments drive us to provide a safe and positive work environment for our employees that emphasizes learning and professional development, respect for individuals and ethical conduct, and that is facilitated by a direct management-employee engagement model. AREAS OF FOCUS Our corporate social responsibility report is an opportunity to communicate key environmental, social and governance topics that we believe are meaningful to our stakeholders. We have identified topics that represent our strategic priorities and other important topics that are of interest to our stakeholders have also been disclosed in our GRI Index. Our quarterly and annual filings with the SEC provide regular insight into our business and the company’s financial performance. They also address material risks as defined by the SEC whereby a reasonable stakeholder would deem the risk important.
GOVERNANCE • Ethical Business Practices • Regulatory Compliance • Board Diversity
ENVIRONMENTAL • Climate Change • Waste Management
SOCIAL • Diversity, Equity and Inclusion • Human Capital Development • Health and Safety • Employee Support • Responsible Supply Chains
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SANMINA EMPLOYEES
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OUR EMPLOYEES ARE KEY TO OUR SUCCESS We cultivate an agile, innovative workplace and a culture fueled by collaboration, diversity, equity and inclusion. Having highly engaged employees is essential to our culture and achieving our mission. At Sanmina, we embrace diverse perspectives and empower our employees to improve our organization, help us innovate and continuously strengthen our workplace. We strive to create an environment where differences are truly valued, authenticity is a state of being and everyone feels they belong and can do their best work. OUR OBJECTIVES We strive to promote an inclusive and innovative workplace, powered by passionate people. To achieve this we must: • Foster an environment where people feel that Sanmina is a great place to work.
• Embed diversity, equity and inclusion in all that we do. • Offer employees the resources and support they need to bring their personal best every day and reinforce our culture of caring. • Acquire and grow extraordinary talent and teams. • Prioritize our employee safety and wellness. DIVERSITY, EQUITY AND INCLUSION At Sanmina, we recruit and hire people based on their skills for the job without regard to gender, ethnicity or other protected traits. It is our policy to comply fully with all domestic, foreign and local laws related to discrimination in the workforce. Sanmina’s culture is about respect, integrity,
innovation, passion, pride and trust. We believe our ability to attract and retain talent supports our future growth. Recognizing and respecting our global presence, we strive to maintain a diverse and inclusive workforce everywhere we operate. Our diversity and inclusion principles are also reflected in our employee training, particularly regarding our policies against harassment and bullying and the elimination of bias in the workplace. Our diverse workforce spans across 24 countries. Our greatest asset is our employees and we believe that promoting from within leads to significant advantages. We continue to invest in supporting and elevating our employees, creating opportunities to reach their fullest potential. We believe that continuous learning and improvement is the best way to grow our business.
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FY 2022 GLOBAL WORKFORCE DATA 2022 GLOBAL WORKFORCE DATA
Workforce
New Hires by Region
New Hires by Age
5%
11%
31%
55%
34%
64%
Americas 55% APAC 34% EMEA 11%
Americas 64% APAC 31% EMEA 5%
Age (18 - 30) 57% Age (31 - 50) 37% Age (51 and above) 6%
FY 2022 GLOBAL LEADERSHIP BY GENDER 2022 GLOBAL LEADERSHIP BY GENDER
51% 49% 29% 71% 49% 51%
NON-SUPERVISOR
SUPERVISOR
TOTAL COMPANY
FY 2022 U.S. WORKFORCE DATA FEMALE MALE 2022 U.S. WORKFORCE DATA
54%
37%
Data is based on full-time regular employees.
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POSITIVE WORK ENVIRONMENT Our adherence to the principles of the Responsible Business Alliance (RBA) contributes to Sanmina’s overall commitment to providing a positive work environment that encourages professional development growth. Sanmina is one of the eight founding members of the EICC (now RBA), which was established in 2004. These principles are fundamental to our corporate culture and core values. They are reflected in our commitments to our customers, employees, stakeholders and communities where we do business around the world. We also apply industry-leading safety standards to all of our facilities, seeking to create a secure and hazard-free work environment for our employees. For over a decade, we have assessed human capital metrics that we consider to be key to our business, including health and safety, career growth and development, turnover, hiring and diversity, equity and inclusion. These metrics and reviewed regularly by management. ENCOURAGING CAREER GROWTH THROUGH TRAINING Employee development is a key component to the long-term success of Sanmina. We offer training at many levels that are designed according to the individual’s specific needs and career aspirations. We believe in supporting employee advancement and empowerment through knowledge. We aim for our employees to enjoy a long and fulfilling career at Sanmina. From soft skills to technical knowledge, we empower our employees to shape their careers, taking advantage of the opportunities to progress at Sanmina. We also provide training in environmental conservation,safety awareness and health matters. Employees have access to courses through our learning and development platforms , including Sanmina Online Education and Sanmina University, in addition to on the job training.
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PERFORMANCE MANAGEMENT PROCESS Our performance review process is intended to promote transparent communication of team member performance, which we believe is a key factor in our success. The performance reviews enable ongoing assessments, reviews and mentoring to identify career development and learning opportunities for our employees. Our emphasis on employee retention, talent reviews, employee evaluations and succession planning contributed to a promotion rate of approximately 5% in 2022. SANMINA’S WELLNESS PROGRAM At Sanmina, we believe our employees are our biggest asset and we nurture this by offering ways to stay healthy, encourage wellness and stay active. In a number of countries SanminaWell helps employees achieve strong health measures and healthy lifestyles. The program offers incentives for tracking and improving key health measures and optional activities designed to educate and encourage healthy behaviors. WELLNESS EVENTS Sanmina sponsors numerous events each year around the world that promote the health of our employees and other members of the community. INDIVIDUALIZED SUPPORT In the U.S., our Health Promotion Consultants provide one-on-one wellness counseling for employees who wish to get expert Sanmina’s Employee Assistance Program in the U.S. provides a free and confidential professional counseling service to employees and their families. These services provide support for a wide range of situations that employees may face, including but not limited to: legal and financial counseling, stress and emotional counseling, life improvement and goal setting. KEEPING EMPLOYEES SAFE The health and safety of our employees is of the utmost importance to us. In the U.S., we adhere to the requirements of United States Department of Labor’s Occupational Safety & Health Administration (OSHA) and we are guided by the Environmental Health and Safety principles as described in the RBA’s Code of Conduct worldwide. We conduct regular self-assessments and audits to ensure compliance with our health and safety guidelines and regulatory requirements. Our ultimate goal is to achieve a level of work-related injuries as close to zero as possible through continuous investment in our safety programs. We provide protective gear (e.g. eye protection, masks and gloves) as required by applicable standards and as appropriate based on employee job duties. Additionally, during the COVID-19 pandemic, we invested heavily to help ensure the health of our employees. Through education and awareness, provision of necessary PPE, onsite vaccination clinics at certain locations and changes to our manufacturing sites and screening, we strive to make our workplace a safe place for employees during the workday. WE ARE COMMITTED TO ENSURING: • Strong Occupational Safety Standards - We proactively and continually assess physically demanding tasks and exposure to safety hazards with our goal to minimize injury and illness. If an incident occurs, we provide the necessary medical treatment. • Effective Emergency Preparedness Procedures - All employees have access to our emergency plan, which includes emergency reporting, employee training and drills, fire safety and recovery plans. • High Industrial Hygiene and Sanitation Standards. We maintain sanitary manufacturing facilities. advice on fitness, nutrition and other health-related goals. EMPLOYEE ASSISTANCE PROGRAM
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Sanmina consistently demonstrates low lost workday case rates, a measure of injury/illness severity and business impact. Days away from work were 0.019% and days of restrictions were 0.021% . The injury rates assume an average of 2,080 hours worked per employee, per year and is based on domestic and international operations in 2022. Because of the differences in governmental reporting requirements, a direct comparison between countries is not appropriate. Sanmina continues to improve safety through various prevention programs including hygiene, ergonomics, training, self-assessments and third-party audits. RESOLVING EMPLOYEE COMPLAINTS AT THE LOCAL LEVEL Sanmina is firmly committed to and encourages fair and equitable resolution of employee grievances to foster a positive employee relations environment through effective and local facility employee complaint resolution processes. Our local employee complaint resolution policies are described within regional employee handbooks, and during orientation and training. We aim to resolve employee concerns and complaints quickly with openness and respect. At Sanmina, local HR Representatives are trained at investigating and resolving any HR related issues. This means listening and responding promptly to employee concerns professionally and confidentially. Our local employee complaint resolution processes ensure that employees’ concerns are resolved quickly and successfully. SANMINA GIVING BACK Sanmina believes in supporting the communities where we do business, as well as national and international organizations. We have made community outreach an integral part of our company values and culture. Sanmina’s outreach includes financial support and the personal commitment of our employees through initiatives such as collecting donations for local food banks, clothing drives, children’s toy and book charities and by supporting regional homeless shelters.
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SUPPLY CHAIN
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SUPPLIER COMMITMENT Our suppliers are critical to our mission. Together, we can have a greater positive impact on our customers’ success and in the communities in which we operate. Our global supply chain consists of numerous suppliers, sub-contractors, channel partners, manufacturing sites, distribution centers and customers. While we manage global supply chains, we believe in supporting qualified suppliers located in our local business areas. We recognize the unique capabilities that local suppliers can bring. SUPPLIER ENGAGEMENT Sanmina engages with our suppliers on a daily basis, and we take the opportunity to make social and environmental responsibility a part of our ongoing dialogue. We believe it is important to work with suppliers who share our commitment to integrity, and who support an ethical and compliant culture. Our suppliers are held to the same high standards of business conduct that we set for ourselves. We require our suppliers to adhere to the standards of behavior, social responsibility and environmental stewardship as defined by the Responsible Business Alliance. (RBA). The RBA Code of Conduct was created to ensure that working conditions in the electronics industry supply chain are safe, workers are treated with respect and business operations are environmentally responsible and conducted ethically. We require all of our suppliers representing Sanmina to adhere to these specific supplier requirements. Prior to Sanmina approving a supplier for use in a customer product, our team conducts an initial assessment to ensure that the supplier abides by the RBA Code of Conduct. The RBA Code of Conduct is available through the partner portal on Supply Chain 29, our website Supplier Requirements and included in our purchase order terms. Our supplier surveys, which are used for the initial assessment of new suppliers for classification purposes, as well as a tool for corrective action follow-up, utilize the RBA Code of Conduct as a framework for questions around social and environmental responsibility.
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SUPPLIER DIVERSITY Sanmina is committed to establishing collaborative partnerships with qualified, small and diverse suppliers and recognizes the importance of ensuring our supply base reflects the diversity of the communities where we live and do business. We believe that having a diverse supply base gives us a competitive advantage by harnessing the unique experiences, creativity and innovative solutions of small and diverse suppliers. Purchasing goods and services from minority, female and disabled veteran suppliers allows us to provide economic empowerment to a diverse supply base. CONFLICT MINERALS Sanmina complies with the due diligence and reporting requirements in Dodd-Frank and the relevant SEC rules regarding Conflict Minerals. On an annual basis, we collect data from our suppliers in line with Dodd-Frank Conflict Mineral legislation, on the use of Conflict Minerals in their supply chain. Each year Sanmina files with the SEC its Conflict Mineral Report outlining our methodology, the results of our country of origin inquiries and our due diligence efforts around Conflict Minerals. Our policy and SEC filings are publically available at Conflict Minerals. As a member of the RBA, Sanmina leverages the information and resources of the RBA and the Conflict-Free Sourcing Initiative (CFSI) in our country of origin inquiry and due diligence regarding sourcing of conflict minerals. Sanmina seeks to source responsibly and we encourage our customers and suppliers to do the same. CODE OF CONDUCT Sanmina prides itself on conducting its business ethically and responsibly and seeks to employ best practices in corporate governance and supply chain management. Sanmina has developed and implemented its Business Ethics Code of Conduct which sets out the measures we take to ensure we conduct business ethically and responsibly for the benefit of our shareholders, customers, employees, suppliers and other stakeholders. Sanmina has a zero tolerance approach towards any form of slavery, servitude, forced or bonded labor or human trafficking. Sanmina has adopted the RBA Code of Conduct (the “Code”). The Code provides that adopters must not use forced, bonded, indentured or prison labor, that work shall be voluntary and that workers shall be free to leave their employment. This policy precludes the use of unlawful child labor in accordance with the RBA and international standards. All of Sanmina’s plants adhere to this provision of the Code and Sanmina has notified all of its suppliers of its expectation that they adhere to the Code. In addition, Major Suppliers (as defined by the RBA) must complete a questionnaire by which they confirm whether they, too, have adopted the Code or participate in an equivalent social code in the countries in which they operate. This information is used to help Sanmina decide whether to select a supplier (other factors include cost, alignment of operations with our own, customer equirements, quality, shipping time and warranty). We conduct our supplier reviews internally and not through a third party or independent, unannounced audit. If a supplier fails to live up to our standards, including those contained in the code with respect to labor rights and conditions, we may terminate our engagement with them and replace them with a supplier which does. Suppliers are requested to complete a human trafficking survey consisting of questions which are intended to gather information on the suppliers’ labor practices and their understanding and activities to help combat human trafficking. Sanmina evaluates the responses to identify any potential risks in the supply chain. We also provide periodic training to supply chain and other relevant employees in our company on the risks of human trafficking.
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RBA ONLINE PLATFORM The RBA online platform helps us manage and share sustainability information, including data from audits and self-assessment questionnaires (SAQs) that assess risk at the corporate and facility level. Key functions of the RBA online platform include: the online completion of the RBA self-assessment questionnaire, including online analysis by a company’s customers; company self-registration and maintenance, including supply chain trading relationship specifications; ability for a company to invite its suppliers to use the RBA online platform; identification of risk in the supply chain through major supplier completion of SAQs for their facilities and secure sharing of common supplier social responsibility data with customers. CALIFORNIA SENATE BILL 657 California Senate Bill 657 requires retailers and manufacturers that do business in California and have annual worldwide gross receipts over $100 million to describe the extent to which they: • Verify their product supply chains to evaluate and address risks of human trafficking and slave labor. • Conduct audits to ensure their suppliers adhere to company standards, require their direct
suppliers to certify that materials used to make their products are from countries that do not engage in slavery and human trafficking. • Maintain internal accountability standards for employees or contractors that fall short of company requirements. • Ensure that employees who are responsible for supplier management receive training on human trafficking and slavery, with a focus on the risks within supply chains. MODERN SLAVERY ACT 2015 – U.K Every organization that has a business in the UK with a
total annual turnover of £36m or more is required to produce a slavery and human trafficking statement for each financial year of the organization. Sanmina meets this threshold for reporting under the Modern Slavery Act. The statements made in this section of our CSR report are intended to satisfy the disclosure requirements under California Senate Bill 657 and to constitute Sanmina’s annual statement required by the Modern Slavery Act.
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ENVIRONMENTAL
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SANMINA IS COMMITTED TO ENVIRONMENTAL STEWARDSHIP We invest in sustainable solutions across our facilities, supply chain and products. We are committed to integrating environmental stewardship into the fabric of how we operate. We recognize the importance of the environment in creating a healthy, sustainable future for our business, stakeholders and communities. We believe sustainability is an area of continuous improvement, knowing there will always be more opportunities for us to do our part. As a Responsible Business Alliance (RBA) member with a global ISO 14001 certification, our environmental management system helps maintain a safe and healthy environment for our employees, while ensuring our commitment to environmental responsibility. To achieve these goals, our environmental management programs comply with relevant environmental legislation and regulations prescribed by the cities, states and countries in which we do business. Sanmina seeks to comply with all applicable laws, regulations and customer requirements regarding the proper disposal of chemicals and hazardous waste. We train and educate our employees on the proper use, reuse, recycling and disposal of chemicals and hazardous waste. GHG EMISSION 2030 AND 2050 TARGETS Our target to reduce our carbon emissions 40% by 2030 and be net-zero by 2050 was established based on 2019 baseline data. Our targets were created from a science based methodology. We partner with countries and local government agencies where we operate to achieve net-zero carbon emissions. We have established corporate goals for emission reduction and are working on prioritization and implementation using multiple forms of renewable energy such as solar, wind, biomass, hydro and geothermal to aid in the reduction of GHG emissions. Our corporate campus is enrolled in GREENSOURCE, a program under which at least 95% of our electricity is derived from carbon-free sources. We continue to look for opportunities to participate in programs to reduce GHG emissions at all of our locations where doing so still allows us to meet our customers’ requirements. We are committed to integrating green design principles in new construction projects and when upgrading our facilities. We will disclose our progress toward our targets in our annual CSR report. It is important to understand that our non-carbon free energy use on an annual basis may fluctuate as a result of the output in our operations to meet the demand requirements of our customers. ACTIONS WE HAVE TAKEN At Sanmina, we continue to look for ways to be more environmentally conscious and energy efficient. We have made significant investments over the years to upgrade our operations, processes and manufacturing equipment to energy efficient systems. We will continue to invest in these efforts globally to support this important initiative. Energy Conservation • LED Lighting • Occupancy controls for lighting and HVAC
Water Conservation • Use recycled water for irrigation • Irrigation timers and controls • Drought tolerant landscape • Low flow fixtures
• Solar power installation • Energy efficient windows
• Wall and roof efficient insulation • Energy efficient HVAC systems • Smart thermostats • Energy efficient production equipment • Compressed air management systems / leak detection • Motor and drive upgrades Green Transportation • Free EV charging installed at certain sites • Carpool and commuter benefits
• High-efficiency bathroom fixtures – motion sensors • Reuse RO reject water in scrubbers and WWT washing Waste Reduction • Increased recycling through sorting • Reduction in plastics used • Grinding of plastics for resins recycling • Zero waste to landfill initiative • Paperless office initiative
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TRACKING OUR PROGRESS
ENERGY CONSUMPTION We continue to identify and implement projects that will create reductions in our energy consumption. We measure the environmental impact at our main sites, which account for the majority of our total floor space. Compared to the 2019 baseline level of 451 GWh, energy consumption of 457 GWh in 2022 is further evidence that our usage has essentially plateaued. Energy conservation efforts at Sanmina are making a real, positive impact which is illustrated by the fact that energy consumption from 2021 to 2022 was minimized to only a 1.9% increase while still supporting a 25.7% increase in calendar year sales. We remain committed to finding ways to further reduce our energy consumption and to increase our usage from carbon-free sources to achieve our 2030 and 2050 goals. DIRECT GHG EMISSIONS - SCOPE 1 At Sanmina, we take greenhouse gas emissions seriously. We continue to look for ways to drive efficiencies in our operations around the world. While direct emissions were trending upward from the 2019 baseline value, our efforts have been effective in first limiting this increase to only 0.2% from 2020 to the apex in 2021, and now reversing this trajectory downward 3.9% in 2022 when compared as a ratio with sales. This can be better seen in a comparison of yearly GHG intensities which follows. The continuous pursuit and implementation of energy conservation projects have allowed us to curb direct emissions. We continue to look for ways to lower our direct emissions through areas like electrification. GHG EMISSION INTENSITY The above dialogue for energy consumption and direct emissions explains how our continued efforts at Sanmina are driving measurable success. In order to truly justify these achievements and to further explain the graphical illustrations of the data totals, a look at GHG emission intensity is needed. For the purpose of this comparison, we define GHG emission intensity as the total of Scope 1 and Scope 2 emissions divided by calendar year revenue for a given year. This ratio allows for the comparison of normalized data thus preventing workload fluctuations from skewing results. The resulting intensity comparison further illustrates the achievements made from the 2019 baseline value of 42.61 to the 2022 value of 37.23; (MT / $M CY Revenue).
Energy Consumption (GWh)
457
451
448
425
CY 2019 CY 2020 CY 2021 CY 2022
Direct GHG Emissions (MT)
165,948
137,187 137,418
121,902
CY 2019 CY 2020 CY 2021 CY 2022
GHG Emission Intensity
GHG emission intensity 49.28 42.67
42.61
37.23
CY 2019 CY 2020 CY 2021 CY 2022
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WATER CONSERVATION Conserving water and all natural resources remains a priority at Sanmina. Water is a vital component of our manufacturing process, and every Sanmina site makes an effort to minimize water consumption in its processes. Years ago, we developed a program that focused on reducing our water consumption using the standards of ISO 14001 and RBA principles. We continue to use recycled water in our production process and landscaping. We continue to look for ways to further conserve water where possible. In calendar year 2022, our water draw from the source was 2,467,654 MT and recycled or reused was 435,971 MT. INDIRECT GHG EMISSIONS - SCOPE 2 Indirect emissions continued trending downward from the 2019 baseline value of 214,087 MT to the 2022 value of 150,361 MT. This decrease has been made possible by our continuing energy conservation efforts and by the increased use of carbon-free energy being purchased from our global suppliers and being produced at or for Sanmina sites. Efforts to reduce our indirect emissions have culminated in a 29.8% decrease from the 2019 baseline to 2022. Sanmina’s focus is to continue to drive indirect emissions down through the purchase of greater amounts of carbon-free electricity and the increase in the amount produced through several solar system projects. WASTE MANAGEMENT We work with ISO-certified third-party recyclers to appropriately dispose of our waste. Our total waste in calendar year 2022 was 32,118 MT of which 25,988 MT was recycled. Since the 2019 baseline was established, recycling efforts at Sanmina have improved every year.
Indirect GHG Emission (MT) INDIRECT GHG
214,087
201,671
150,976 150,361
CY 2019 CY 2020 CY 2021 CY 2022
Water Recycled or Reused (MT) Water Recycled or reused
2,508,305
2,386,304 2,439,788 2,467,654
18%
16%
14% 14%
CY 2019 CY 2020 CY 2021 CY 2022
Water Withdrawn(MT)
Water Recycled Percentage
Waste Management
Waste Management (MT)
35,449
32,118
28,721
24,925
81%
76% 78%
65%
CY 2019 CY 2020 CY 2021 CY 2022
ENVIRONMENTAL MANAGEMENT SYSTEM Sanmina’s Environmental Management System is based on ISO 14001, which establishes the requirements for an environmental management standard. At Sanmina, we strive to ensure that each of our locations not only meets but exceeds this standard. We participate in programs such as e-waste, chemical replacement, reuse and recycle, and we have developed metrics to track and examine our environmental performance. Sanmina complies in all material respects with all applicable laws, regulations and customer requirements regarding proper disposal of chemicals and hazardous waste. We train and educate our employees on the proper use, reuse, recycling and disposal of chemicals and hazardous waste. EU DIRECTIVES – ROHS AND WEEE The European Union’s (EU) Restriction of Certain Hazardous Substances (RoHS) and Waste from Electrical and Electronic Equipment (WEEE) directives require the reduction and/or removal of a number of hazardous substances, including lead and other materials, from most electronic components, products and assemblies, and the recycling of most electrical and electronic equipment. We materially comply with these directives and continue to monitor and improve key metrics in these areas. Total Waste Percentage Recycled
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GOVERNANCE
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COMPANY LEADERSHIP The Board of Directors oversees the management of the company. The Board delegates responsibility for day-to-day management to the Chief Executive Officer and other senior management. Directors provide the CEO and senior management with guidance and strategic oversight to help build stakeholder value. CORPORATE GOVERNANCE We believe that good governance leads to high levels of board effectiveness, promotes the long-term interests of our shareholders, strengthens the accountability of the Board of Directors and management and improves our standing as a trusted member of the communities we serve. High standards and rigorous policies ensure that Sanmina’s activities to pursue our objectives are aligned with responsible conduct and ethics. Our Board of Directors oversee these standards, providing accountability, objectivity, perspective and judgment when monitoring performance. These standards are in addition to the Board of Directors, standard duties and incorporate the principles of the Responsibility Business Alliance (RBA). BOARD COMPOSITION Each of our Board members has an extensive background that provides diverse industry knowledge and perspective. As of December 31, 2022, the Board was comprised of eight independent members, as defined by Nasdaq rules and our Chairman and CEO, Jure Sola. The Board believes that its ability to promote the long term, sustainable growth of Sanmina depends on attracting and retaining board members with a high level of industry-specific experience, who have a deep familiarity with the Company’s business and who will actively engage with management and other stakeholders. The Board seeks to ensure these characteristics in board members through regular succession planning activities and through its Board evaluation process.
BOARD OF DIRECTORS COMPO
BOARD INDEPENDENCE BOARD INDEPENDENCE
DIVERSITY DIVERSITY
AGE
2 Female 3 Diverse
8 out of 9 are Independent Directors 8 Out of 9 are Independent Directors
AGE AGE
TENURE TENURE
61 - 65 yrs 50 - 60 yrs Over 70 yrs 66 - 70 yrs
6 - 10 yrs 0 - 5 yrs
Over 15 yrs 11 - 15 yrs
Board composition is as of December 31, 2022.
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LEAD INDEPENDENT DIRECTOR • Serve as the principal representative of and contact between the independent directors and the Executive Chairman; • Preside over meetings of the independent directors; • Assist the Executive Chairman in establishing the agenda for Board and stockholder meetings; • Monitor the quality, quantity and timeliness of information sent to the Board; • Ensure that he is available for consultation and direct communication with stockholders; • Recommend the retention of outside advisors and consultants; • Provide assistance to Committee Chairs and Committees; and • Provide assistance and counseling to individual directors as needed following the Board’s annual evaluation process. CHAIRMAN AND CHIEF EXECUTIVE OFFICER • Guide the strategic direction of Sanmina; • Provide oversight and guidance to Company management on other Company matters as appropriate; • Develop, in consultation with the Lead Independent Director, agendas for all Board meetings; • Oversees our corporate financial reporting and external audit, including, among other things, our internal control environment, the results and scope of the annual audit and other services provided by our independent registered public accounting firm and our internal audit function. • Is responsible for the appointment, compensation, oversight and assessment of the performance of our independent registered public accounting firm and is involved in the selection of the lead audit partner. • Oversees certain risks relating to the preparation of our financial statements, investment policies, casualty risk insurance policies and legal and regulatory compliance, among others. • Oversees our ethics program and reviews related party transactions and legal matters that could have a significant impact on our financial statements. COMPENSATION COMMITTEE • Reviews and approves the salaries and equity, incentive and other compensation of our executive officers. • Administers our equity incentive plan. • Approves the terms of our annual bonus program, monitors our global compensation policies and practices and serves as the administrator under our equity compensation plans. • Assists the Board in the oversight of risks relating to recruitment, retention, labor standards compliance and bonus and equity compensation plans and practices and reviews our talent planning process. • Preside over all meetings of the Board and the stockholders; • Review matters being considered by Board Committees; • Communicate with stockholders as needed; and • Make himself available for consultation and communication with all Board members. AUDIT COMMITTEE
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NOMINATING AND GOVERNANCE COMMITTEE • Responsible for evaluating the size and structure of the Board and its committees, determining the appropriate qualifications for directors and nominating candidates for election to the Board. • Develops overall governance guidelines for the Board, including director succession planning policies, conducts an annual Board and committee evaluation and considers stockholder proposals for action at stockholder meetings, including stockholder nominees for director. • Reviews and recommends for Board approval of non-employee Board member compensation program. • Reviews and reports to the Board on ESG matters. ROLE OF THE BOARD IN STRATEGY
Our Board actively oversees management’s establishment and execution of our corporate strategy, including major business and organizational initiatives, annual budget and long-term strategic plans, capital allocation priorities, financial results and corporate development opportunities. Our Board regularly receives information and formal updates from our management and actively engages with the senior leadership team with respect to the implementation of our corporate strategy at Board meetings and throughout the year. Our independent directors also hold regularly scheduled executive sessions during which they review and discuss our corporate strategy. Consistent with our corporate transaction approval
policy, our Board also reviews and approves strategic transactions that are material to our business, including significant acquisitions and collaborations. ROLE OF THE BOARD IN RISK MANAGEMENT The Board has developed an enterprise risk management framework that assigns oversight of various enterprise level risks to either the full Board or one of its committees. Pursuant to this framework, the Board and its Committees
regularly receive presentations from management concerning enterprise level risks that could have a significant adverse impact on Sanmina’s business and operations, including economic conditions, strategy, supply chain, trade risks, legal and regulatory matters, compensation programs, cybersecurity and credit exposures. This process permits the Board and its Committees to provide guidance to management in scoping and managing each of the Company’s enterprise risk areas. OVERSIGHT OF CYBERSECURITY RISK Our Board has primary responsibility for overseeing risks associated with our information technology, including cybersecurity. Our Board receives regular reports
from our Chief Information Officer regarding our company’s information systems and technology and associated policies, processes and practices for managing and mitigating cybersecurity and technology-related risks. As part of our risk mitigation program, we provide annual information security training for our employees. We also provide additional specialized training for our Security Operations team and employees with access to certain sensitive information systems. In addition, we engage a third-party advisory firm to review our security controls and program maturity.
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