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2023#WeAreWBAEnvironmental,Social and Governance(ESG)ReportEnabling Healthy Communities23_11 WBA ESG Front Cover Concept.indd 105/01/2024 15:212Environmental,Social and Governance Report 2023SUSTAINABLE MARKETPLACEA Letter From Rajnish Kapur 84Our Owned Brands 85Responsible Sourcing 88Sustainable Materials 91Sustainable Packaging 94APPENDIXGlobal Reporting Initiative(GRI)Index 98Sustainable Accounting Standards Board(SASB)Index 110Task Force on Climate-Related Financial Disclosures(TCFD)Response 111United Nations Global Compact (UNGC)Index 116Management Assertion Table 117Assurance Report 119Basis of Presentation 121Legal Notice 128OVERVIEWAbout This Report 3A Message to Our Stakeholders 4Q&A With Our ESG Committee Chair 5Our Purpose,Vision and Values 6At a Glance 6Fiscal 2023 Achievements and Recognition 7Our Approach to ESG 9ESG Materiality 11Commitments and Progress 14Stakeholder Engagement 16GOVERNANCECorporate Governance and Risk Management 22Health and Safety 25Information Security 27 Patient and Customer Privacy 28 HEALTHY PLANETA Letter From Una Kent 71Energy and Emissions 72Waste and Plastics 78HEALTHY AND INCLUSIVE WORKPLACEA Letter From Sal Venegas 57Employee Health,Safety and Well-being 58Diversity,Equity and Inclusion(DEI)61Employee Engagement and Development 68HEALTHY COMMUNITIESA Letter From Alethia Jackson 30Health Access and Awareness 31Partnerships for Good 42Corporate Donations and Supporting Causes 46Information and Education 52Walgreens Boots Alliance,Inc.(Walgreens Boots Alliance or WBA”or the Company)is an integrated healthcare,pharmacy and retail leader with a long-standing heritage of caring for customers and patients.References in this Environmental,Social and Governance Report(ESG Report or Report)to the Company,“WBA,”“we,”“us,”or“our”refer to Walgreens Boots Alliance,Inc.and and its subsidiaries,and in each case do not include unconsolidated minority-owned entities and majority-owned subsidiaries acquired during the fiscal year.PAGE 20PAGE 29PAGE 70PAGE 97PAGE 56PAGE 83OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities 3Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities About This ReportData management processWalgreens Boots Alliance,Inc.publishes this report on an annual basis to transparently disclose its Environmental,Social and Governance(ESG)targets and achievements.This report includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.See cautionary note regarding forward-looking statements on page 128.Reporting standards Our ESG Report has been prepared in accordance with the Global Reporting Initiative(GRI)Universal Standards.The Report also contains disclosures following the Sustainability Accounting Standards Board(SASB),and the Task Force on Climate-Related Financial Disclosures(TCFD)reporting standards and definitions,and this report serves as the Companys Communication of Progress as a participant of the United Nations Global Compact(UNGC).Reporting periodThe reporting period covered in this report is September 1,2022 to August 31,2023,unless otherwise stated.Our fiscal year ends on August 31,and references herein to“fiscal 2023”,“fiscal 2022”,and“fiscal 2019”refer to our fiscal years ended August 31,2023,August 31,2022,and August 31,2019,respectively.Reporting boundaries1The performance and other data contained in this report focus on the achievements and plans of Walgreens Boots Alliance,Inc.and its subsidiaries.More on our approach to ESG reporting can be found on page 9.Reporting assuranceDeloitte&Touche LLP reviewed specified indicators within this report in accordance with attestation standards established by the American Institute of Certified Public Accountants(AICPA).Deloitte&Touche LLP has been ratified as our independent registered public accounting firm at our annual meeting of stockholders.Their limited assurance report can be found on pages 119-120.GRI 2-3,2-5We have a company-wide approach to recording,measuring and reporting ESG performance,including a set of reporting criteria and a set of ESG measures and performance indicators.Across all of our businesses,we capture data on corporate giving,carbon emissions,energy use,waste by disposal method,employee retention and diversity,and use the data to inform and assist in the development of individual ESG programs.In addition,in the U.S.Retail Pharmacy and U.S.Healthcare segments we capture data on employee race and ethnicity,and for our owned brands we collect data on palm oil and packaging.In January 2023,Village Practice Management Company,LLC(VillageMD)acquired WP CityMD TopCo(Summit Health-CityMD),a provider of primary,specialty and urgent care.Consistent with past acquisitions,we take one calendar year to integrate all data capture and reporting processes.As such,Summit Health-CityMD data included in this report is limited to workplace figures.All Summit Health-CityMD data will be presented in the fiscal 2024 report.The data presented within this report reflects the operations of the company during fiscal 2023 and was produced in accordance with the Basis of Presentation,which can be found on pages 121-122 of this report.Our Statement of Greenhouse Gas(GHG)Emissions for fiscal 2023 and its limited assurance from Deloitte&Touche LLP can also be found on pages 119-120.ESG performance data are collected comprehensively on an annual basis.All submissions by individual businesses are prepared by local finance and ESG champions and are reviewed by executives and senior finance leaders.In fiscal 2016,WBA collected environmental and social data across its operations for the first time,forming the baseline for our fiscal 2017 and fiscal 2018 CSR Reports.We reset baselines for our environmental performance metrics in fiscal 2019 because,for the first time,we included energy and waste data from 1,932 Rite Aid stores.This was done to provide meaningful comparatives as required by the GHG Protocol.While most of our environmental performance data has a 2019 baseline year,there are a few exceptions which are clearly stated.Every effort is made to ensure that we report accurate data,and our processes are designed to support this.In cases where we become aware of updates to data from previous years,we consider providing updated data in subsequent reports if the changes result in a discrepancy that is material.In these cases,we provide details in the footnotes of our data tables.FOR MORE ABOUT THIS REPORT For additional information or inquiries on this report,please contact us at ESG.1 On June 1,2021 the Company completed the sale of the majority of the Companys Alliance Healthcare business as well as a portion of the Companys retail pharmacy international businesses in Europe(“discontinued operation”)to Cencora,Inc.(“Cencora”),formerly known as AmerisourceBergen Corporation.Disclosures in this report reflect continuing operations only.Certain prior period data,primarily related to discontinued operations,have been recast to conform to the current period presentation.A Message to Our StakeholdersGRI 2-3,2-22It is a great honor to introduce our 2023 Walgreens Boots Alliance ESG Report in this landmark year,as Boots celebrates its 175th anniversary.It is a milestone that reinforces the vital role our incredible team plays in local communities across the world,serving the health and well-being of our patients and consumers.Our companys heritage and longevity are a testament to the hundreds of thousands of passionate people who work with us today and all of those who,throughout our history,have made us what we are.We are truly standing on the shoulders of giants.It also provides us with a rich and unique opportunity to build upon nearly two centuries of insight into the ever-changing needs of consumers and the critical role we play in providing access to trusted pharmacy and healthcare services in the communities we serve and beyond.At a moment when,across the globe,we face significant challenges,we have never been more confident that our commitment to people and the planet will help us show up to meet,and exceed,the needs of our customers,patients,team members and communities for the future.To succeed,we are committed to remaining agile.This provides us with an opportunity to bring fresh leadership and insight,while not wavering from our deep-rooted commitment to healthy communities,a healthy planet,a healthy and inclusive workplace and a sustainable marketplace.In a world where topics such as climate change,affordable healthcare and cost of living impact healthcare systems,and in turn our consumers and our teams every day,we have stayed committed to addressing every opportunity we must improve health outcomes and overall well-being.On climate change,our goal is clear.By 2030 we are targeting a 30 percent reduction of total Scope 1 and 2 emissions from a 2019 baseline.We will meet this by reducing our energy,waste,plastics and other raw materials.Our consumers,patients and our team are all feeling the challenges of inflation and access to affordable healthcare.As a responsible employer,we are focused on creating a safe and inclusive place to work,with competitive compensation and attractive benefits.Our work to contribute to a fair and equitable world,building a truly inclusive culture and fostering a diverse workplace has been recognized by the National Organization on Disability,the American Association for People with Disabilities,Seramount Top Companies for Executive Women,Stonewall,and others.We understand the need to keep up this work,as we continue to make investments that improve the prospects and environment for our people and our consumers.We cannot achieve this alone,and indeed,our unwavering commitment to the United Nations Sustainable Developments Goals underscores the power of great partnership in its 17th goal,Partnerships for the Goals.We work with many long-standing partners whose commitment to improving healthcare support and outcomes in local communities remains unwavering.As we take a moment to reflect on the progress we have made,we are focused on our legacy for the future;addressing the most urgent needs for our people,patients and consumers today.We look forward to working with you over this next year as we continue to build on our progress,and appreciate your thoughts,feedback and ongoing collaboration.January 24,2024Tim WentworthChief Executive Officer Walgreens Boots Alliance,Inc.Stefano PessinaExecutive Chairman Walgreens Boots Alliance,Inc.OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities 4Environmental,Social and Governance Report 2023Ornella BarraChief Operating Officer,International and Chair of the Environmental,Social and Governance Committee Q&A With Our ESG Committee ChairGRI 2-22This is a significant year for WBA as Boots celebrates 175 years while Walgreens and Farmacias Benavides are 123 and 107 respectively.What is the secret to this longevity?To understand this requires us to look back at where we started.Every day,I take inspiration from the incredible people who founded our company or who have shared their passion and vision over the years.From John Boot to Charles Walgreen,we have remained committed to providing trusted pharmacist support to bring affordable community healthcare to all.Our vision today remains to be the leading partner in reimagining local healthcare and well-being.Our health-centered ESG strategy plays an integral role in our ambition.At the heart of that responsibility is delivering affordable,accessible and quality healthcare and we have always understood the power of partnerships to achieve this.We have many long-standing partnerships such as Vitamin Angels(globally and U.S.),Macmillan Cancer Support(UK),European Organisation for Research and Treatment of Cancer EORTC(Europe and beyond)and Fundacin Alma(Mexico).Over the past eight years,we have donated$373 million1 to support the health and well-being of the communities we serve.It is the dedication of our team members that brings these partnerships to life.They are on the front lines,and we thank them for their efforts.Speaking of team members,what do you value most about their contribution?Our people make us who we are:the service we give,the products we make,the positive impact we have;it is their desire to innovate and imagine the future that ensures we continue to move forward.Take,for example,our brands Liz Earle,Soap&Glory and 17 which have all achieved Cruelty Free International Leaping Bunny approval,and,this year,following huge strides in packaging in 2022,No7 launched its most inclusive skin care range yet:Future Renew.Creating a culture where innovation thrives has always been in our DNA;in 1934 Boots introduced the five-day working week and were early pioneers of extended education for young employees.Today,we believe that providing learning and development opportunities for our 331,000 team members is no less essential.Since launching in 2013,Walgreens University has provided training,leadership development and career advancement for team members at all levels.My roots are in pharmacy,and with our experienced leaders,I am committed to fostering an environment for personal and professional growth for the long term.Last year you set ambitious health equity goals.How have you performed?We introduced goals on key ESG topics including reduction of carbon emissions and waste as well as driving our inclusive culture with a focus on women in leadership,supplier diversity,people of color and people with disabilities.I am pleased to confirm that we exceeded most of our goals2,including a nearly 3 percentage point increase in U.S.team members identifying as having a disability and continued strong progress to reducing carbon emissions by 25 percent from our 2019 baseline.I invite you to read more in this Report.What does the future hold for ESG at WBA?Our health-centered ESG strategy remains as relevant today as it always has been.In 2023 we completed our first forward looking double materiality assessment which,once again,reinforced our focus supporting the health and well-being of people,patients and customers,communities and planet.It is my continued pleasure to Chair the WBA ESG Committee and I would like to thank the WBA Board,my fellow committee members,our teams and our incredible partners around the world for their unwavering commitment.1Cash and Non-cash valuation of community contributions.Further details on page 46.2U.S.People of color goal partially achieved.5Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities 6Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities OUR PURPOSE More joyful lives through better healthOUR VISION To be the leading partner in reimagining local healthcare and well-being for all.OUR VALUES AND BEHAVIORS Walgreens Boots Alliance takes seriously its aim of more joyful lives through better health,reflected in our core values:COURAGEOUSChallenging the status quo,addressing conflict directly and driving informed risk-takingCONNECTEDReflecting the communities we serve,understanding the needs of others and innovating togetherCOMMITTEDLeading with integrity,building on our legacy and striving boldly toward the futureCURIOUSContinuously learning and adapting,following the science and the data and creating paths where none existedOur Purpose,Vision and ValuesGRI 2-22Walgreens Boots Alliance is an integrated healthcare,pharmacy and retail leader serving millions of customers and patients every day,with a long-standing heritage of caring for communities.A trusted,global innovator in retail pharmacy with approximately 13,000 locations across the United States,Europe and Latin America,WBA plays a critical role in the healthcare ecosystem.The Company is reimagining local healthcare and well-being for all as part of its purpose to create more joyful lives through better health.WBA is going beyond pharmacy to coordinate with health plans and health systems,as well as with providers to engage patients in underserved communities to help improve the quality of care and outcomes,while also lowering overall costs.The Company offers a connected healthcare experience that can help drive better outcomes within communities,as it continues to accelerate the shift to value-based care,which prioritizes the quality of patient care over the quantity of services provided.Our deepened focus on healthcare includes expanding services across primary,multi-specialty and urgent care providers serving patients in traditional clinic settings,in patients homes and virtual platforms.The Company operates in three reportable segments:U.S.Retail Pharmacy,International and U.S.Healthcare.Our retail and business brands include retail drugstores Walgreens,Boots,Duane Reade and Benavides and product brands include No7,Soap&Glory,Free&Pure,NICE!,Liz Earle,Botanics,Sleek MakeUP and YourGoodSkin.For more on WBA owned brands see page 85.GRI 2-1,2-2,2-6,3-3,201-1 At a Glance1Approximately 13,000 stores and pharmacy locations globally A presence in nine countriesSales of$139.1 billion in fiscal 2023Headquartered in Deerfield,IllinoisMore than 331,000 employees1 manufacturing facility,53 distribution centers,10 micro-fulfillment centers,1 prescription mail service facility and 50 principal office facilities1As of August 31,2023.On October 31,2023,the Company completed the sale of Farmacias Ahumada business in Chile.7Environmental,Social and Governance Report 2023Fiscal 2023 Achievements and Recognition GRI 3-3,413-1 Healthy and Inclusive WorkplaceWhen we can be our full selves at work,we create an environment that is welcoming and inclusive.Throughout WBAs history,we have worked to ensure our team members feel supported and celebrated,knowing our strength as a business lies with our people.Healthy Communities Helping communities thrive by improving the health of our neighbors is at the heart of WBA.Whether we are investing in programs to support people living with health conditions or addressing availability of vaccines,vitamins or mental health services,we understand that it takes advocacy,collaboration and leadership to build healthy communities.In its 14-year partnership,Boots UK and Macmillan Cancer Support have raised almost 22 million($26,739,000)Page 49Boots Soltan brand no longer produces sunscreen with SPF under 30 for adults to encourage sun safety as part of our longstanding partnership with Macmillan Cancer SupportPage 49Over 400 Walgreens locations offered free HIV testing on National HIV Testing Day on June 27,2023Page 36Boots has completed over 100,000 appointments for the NHS research program Our Future Health which aims to develop new ways to prevent,detect and treat diseasesPage 36In fiscal 2023,our partnership with Vitamin Angels achieved a major milestone celebrating 10 years of partnership and reaching over 400 million women and children with life-changing vitaminsPage 48Page 46Over the past eight years,WBA has donated$373 million1 to support the health and well-being of the communities we serveIn fiscal 2023,Walgreens distributed flu shot vouchers worth over$1.8 million to bring our total since 2019 to$8.6 millionPage 39Since the inception of our partnership with The Hygiene Bank,Boots&No7 Beauty Company have donated over 1.5 million products to over 700 donation locations across the UKPage 50Page 53Walgreens has engaged 200,000 students through Expressions since the program began in 2009Across WBA,Business Resource Groups(BRG)continue to flourish.More than 6,200 employees have joined at least one of our 24 BRGs.We recently introduced two new groupsPage 67Award winning DEI strategy-Disability:IN recognized Walgreens as its Employer of the YearPage 61The Princes Trust partnership with Boots UK has supported over 500 young people through employability programs since its inceptionPage 49WBA once again achieved Bronze status in the Stonewall Equality Index and Boots placed 139th in the Stonewall Workplace Equality Index(UK)for LGBTQ inclusionPage 61Boots Ireland raised funds for 340 nights of care($135,000)for the Irish Cancer Society Night Nursing service for 2023 Daffodil DayPage 50In fiscal 2023 WBA introduced Health Equity goals for People of Color,Women in Leadership and individuals with disabilities,committing to achieving more equitable representation throughout the organizationPage 61Boots UK and No7 Beauty Company continued their focus on supporting people through menopause by becoming the first health and beauty company to receive a menopause-friendly employer accreditationPage 591Cash and Non-cash valuation of community contributions.Further details on page 46.OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities 8Environmental,Social and Governance Report 2023Fiscal 2023 Achievements and Recognition GRI 3-3,413-1WBA expects products are produced in responsible ways and has the same expectations for our suppliers.As our products have grown over the years,we continue to use our influence to prioritize sustainability and fair labor practices in their production.WBAs goals help keep us and our supplier partners accountable and we are encouraged by our shared progress.The climate crisis is also a health crisis,presenting even greater challenges for the health and well-being of our communities.As leaders in our industry,WBA remains committed to meeting our reduction targets for emissions,waste and plastic and expanding efforts around recycling and awareness of our impacts.Healthy PlanetSustainable MarketplacePage 80Boots UK reduced food waste by 36%,keeping Boots UK on track with the goal to reduce food waste by 50%by 2030Boots Thailand changed from offering plastic to paper carrier bags in storesPage 82Page 94Expanded Boots and No7 Beauty Company owned-product categories made from recycled or natural materials,including reusable makeup remover pads,cleansing pads,reusable baby wipes,lipsticks,compacts and Botaniq eyewearPage 87Liz Earle Beauty Co and the World Wildlife Fund(WWF)created a three-year partnership to restore biodiversityPage 90Walgreens exceeded its target of spending$700 million with diverse Tier 1 suppliers in the U.S.by$26 millionPage 93Boots owned-brand cotton wool products are now Global Organic Textiles Standard(GOTS)certifiedWBA reported out to Roundtable on Sustainable Palm Oil(RSPO)as an entire organization for the first time.Boots and No7 Beauty Company exceeded 80%physically certified RSPO palm oil in their owned brand productsPage 92WBA continued to grow and expand supplier participation in our online sustainability assessment tool THESIS growing by 68%for owned brands.Suppliers engaging with the tool now represent over$1.3B cost of goodsPage 88Page 82Boots no longer sells wet wipes made with plastic fibers.In fiscal 2023,Boots sold over 800 million wipes from 140 product lines across its skincare,baby,tissue and health care ranges and is actively supporting a UK ban on plastic wipes Page 95No7 Beauty Company launched its most inclusive skincare brand yet:Future RenewThe 17.brand has joined Liz Earle,Botanics,A Little Something and Soap&Glory in achieving Cruelty Free International Leaping Bunny approvalPage 91In fiscal 2023 WBA reduced Scope 1 and 2 carbon emission by 3.7%,bringing our reduction to 25%compared with our 2019 baseline.This represents over 80%completion of our goal of 30%reduction by 2030Page 75CO2Page 82Recycle at Boots scheme expanded into Republic of Ireland with a further 50 store locationsBoots Ireland achieved zero waste to landfill for the second consecutive yearPage 80Page 77In fiscal 2023,the Environmental Protection Agency(EPA)again named Walgreen Oshkosh1 a SmartWay High PerformerFollowing the introduction of Health Equity Goals in the first year,WBA globally met its targets which include targets associated with waste and emissionsPage 701Walgreen Oshkosh is a subsidiary of Walgreens.OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities 9Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities Our drive to deliver healthcare and support for local and global communities stems from our business values and is evidenced through our day-to-day operations.These essential commitments shape our approach to ESG,which is central to fulfilling our purpose to help people live more joyful lives through better health.Healthcare is at the center of our ESG framework,reflecting our operations and our corporate vision to be the leading partner in reimagining local healthcare and well-being for all.Our corporate responsibility efforts are embedded in our business strategy,which includes commitments to serve the needs of every community and create greater access to care.WBA operates a fast-changing global business that continues to affect the health and social landscape.We continue to provide essential products and services while remaining diligent in our responsibility to keep our people and customers safe,At WBA,our health-centered ESG strategy is concentrated on four focus areas:Healthy Communities,Healthy and Inclusive Workplace,Healthy Planet and Sustainable Marketplace.All of our ESG efforts are embedded in our broader business strategy and are at the center of our corporate vision to be the leading partner in reimagining local healthcare and well-being for all.Our Approach to ESG GRI 2-5,3-3A healthy and inclusive planet for all as well as updating our ESG programs to reflect the changing needs of global communities.As demand for sustainable products continues to grow,we have expanded our goals across No7 Beauty Company and within owned brands to reduce negative impacts on the planet and improve our responsible sourcing practices.More information on this can be found in the Sustainable Marketplace section of the report.Our ESG strategy includes permanent,ongoing consultations with a range of stakeholders who have joined us in agreement that we can have a profound impact on the world by working to improve health access and affordability,with a particular emphasis on health equity.We are increasingly aware of the links between the environment,climate change,equity and health.Our sustainability targets on emissions and plastics support a healthy planet and healthy communities.Joyful lives,Better healthHealthy PlanetSustainable MarketplaceReducing the environmental impact of our business,including waste,emissions and plasticsProviding quality,safe products and services to our customers with a focus on traceability,transparency and ethical sourcingHealthy Communities Healthy and Inclusive WorkplaceCreating a DEI-centered culture and positive workplace environment that supports the health and well-being of our team membersImproving health equity and societal well-being10Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities Sustainability Accounting Standards Board(SASB)United Nations Global Compact(UNGC)WBA is a participant in the UNGC,a voluntary leadership platform of responsible business practices.The UNGC is a call for companies to align their operations and strategies with 10 universally accepted principles in the areas of human rights,labor,environment,and anti-corruption,and to take action in support of goals and issues embodied in the United Nations Sustainable Development Goals(SDGs).Task Force for Climate-Related Disclosure(TCFD)We report in alignment with the Task Force on Climate-Related Financial Disclosures(TCFD)recommendations.To meet these guidelines,we are actively analyzing scenarios to identify and assess climate-related risks and opportunities,as well as evolving our governance,strategy,risk management,metrics,and targets accordingly.This is our fourth year reporting against the SASB Standards,and our second since SASB was made part of the International Sustainability Standards Board(ISSB)of the IFRS Foundation.We disclose metrics as part of the drug retailers industry,which includes companies that operate retail pharmacies and distribution centers that supply retail stores.Global Reporting Initiative(GRI)Consistent with past reports,our fiscal 2023 report has been prepared in accordance with the GRI Universal Standards.Our approach to reporting GRI 2-5WBA continues to enhance the transparency and credibility of its ESG disclosures using widely accepted sustainability reporting standards that provide confidence in our ongoing corporate responsibility efforts and progress.Boundaries for information presented within this report are evaluated based on the location and level of impact WBA has on each ESG material topic.Details on the boundary for each topic can be found in the relevant sections of the report.11Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities ESG MaterialityGRI 2-25,2-29,3-1,3-2,3-3This report was prepared using WBAs 2020 materiality assessment and includes the 2020 matrix.Our sustainability strategy during the fiscal period was guided by the materiality assessment conducted in 2020(see our 2021 ESG Report for topic definitions and more information).Consistent with best practices,the 2020 assessment was reviewed at the beginning of fiscal 2023 to ensure that the material topics outlined represented our most significant impacts.In response to this review,WBA conducted a new ESG materiality assessment which was finalized at the end of fiscal 2023.It is our first materiality assessment to consider double materiality by identifying ESG topics that are most material from both financial and impact perspectives to our Company.The assessment was conducted in alignment with leading market practice from the Global Reporting Initiative(GRI)and the European Union Corporate Sustainability Reporting Directive(EU CSRD).The 2023 matrix will be published in next years report.Keeping with best practices in sustainability reporting,WBA conducts a materiality assessment at least every three years to understand our impacts,encourage insightful stakeholder dialogue,inform our sustainability strategy and form the basis for our ESG reporting.We systematically survey a range of global stakeholders to understand the issues they see emerging over the next decade that will potentially impact WBA and their interaction with the Company.12Environmental,Social and Governance Report 2023Importance to Stakeholders1Very HighHighModerate PrioritySignificance of Walgreens Boots Alliances Impacts1235698301011122813161718323119212229232625242720714154Access to affordable and quality healthcareProduct safetyReduce negative impacts of plasticResponsible and ethical supply chainsEmployee health,safety and well-beingData privacy and securityEmployee wages and hiring practicesProduct packagingEnvironmental impacts of materialsCustomer responsibilityProduct labeling and transparencyCancer care and preventionTobacco salesPublic policy practicesCorporate governanceProduct end-of-lifeChemical use and managementAnimal testingSupplier diversity and inclusivityTalent and developmentStakeholder transparencyInnovation and digitalizationGeopolitical events and trendsDiversity,equity and inclusionPrescription drug abuseConsumer health education and marketingEnergy use and climate impactsCommunity engagement and partnershipsHealthcare antimicrobial stewardshipHuman rightsWaste managementWater consumption and useMateriality matrixThe matrix at the right shows the results of our 2021 materiality assessment that identified the issues most material to the business from an ESG perspective.Sustainable MarketplaceGovernance and EconomicHealthy and Inclusive WorkplaceHealthy PlanetHealthy CommunitiesDISCOVER To preview the WBA 2023 Double Materiality matrix visit the Report Resources page on our website.1 Importance rankings are based on the weighted average from four sources of stakeholder input:consumer survey(50%),internal stakeholder survey(20%),external stakeholder survey(20%),Datamaran inputs(10%).OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities 13Environmental,Social and Governance Report 20231 Access to affordable and quality healthcare2 Product safety3Reduce negative impacts of plastic4Responsible and ethical supply chains5Employee health,safety and well-being6Diversity,equity and inclusion7Data privacy and security8Waste management9Human rights10Prescription drug abuse11Consumer health education and marketing12Community engagement and partnerships13Energy use and climate impacts14Employee wages and hiring practices15Product packaging16Environmental impacts of materials17Product labeling and transparency18Cancer care and prevention19Corporate governance20Product end-of-life21Customer responsibility22Chemical use and management23Supplier diversity and inclusivity24Innovation and digitalizationWBA 24 Priority Topics alignment to the United Nations Sustainable Development GoalsOverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities Commitments and ProgressOur TargetsHealthy Communities Improving health equity and societal well-being:A specific focus on health equity addressing access to local,quality healthcare Partnerships and investments that focus on creating meaningful impact in the health of our communitiesHealthy and Inclusive WorkplaceCreating a DEI-centered culture and positive workplace environment that supports the health and well-being of our team members:Ensures employees are cared for as whole people and provided with an opportunity where they can show up as their authentic selves Reflects the diversity of perspectives,backgrounds and cultures in the communities where we live and workWalgreens:Raise more than$25 million for the Susan G.Komen and The Leukemia and Lymphoma Society.Exceeded.By fiscal 2024:WBA:Provide 100 million vaccinations for children in developing countries through Get a Shot.Give a Shot.and the UN Foundation.On track.By fiscal 2025:WBA:Help 500 million women and children by providing vitamins and minerals through Vitamin Angels.On track.Achieved in fiscal 2023:14Environmental,Social and Governance Report 2023Our Targets In fiscal 2023:WBA International:Maintain baseline of women in leadership from fiscal 2023.Exceeded.Walgreens:Increase women in leadership by 2.1 percentage points over previous years baseline.Exceeded.Walgreens:Increase representation of people with disabilities across the Company by 0.7 percentage point over previous years baseline.Exceeded.Walgreens:Increase people of color by 0.7 percentage point over previous years baseline.Partially achieved,0.5 percentage point.OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities Commitments and ProgressOur Targets Our TargetsHealthy PlanetReducing the environmental impact of our business,including waste,emissions and plastics:Continuing to reduce and optimize use of energy across our operations Reducing the negative impacts of plastics and waste in our operations and seeking to increase reuse,recycling,recycled content and recovery to enable circular systemsSustainable MarketplaceProviding quality,safe products and services to our customers with a focus on traceability,transparency and ethical sourcing:Managing the end-to-end sustainable lifecycle of our owned brand products Addressing environmental and social impacts and opportunities by increasing traceability,transparency and diversity across our suppliers and within our supply chainAchieved in fiscal 2023:By fiscal 2030:WBA:Reduce absolute Scope 1 and Scope 2 global carbon emissions by 30 percent,as compared with 2019 baseline.On Track.Boots UK:Reduce food waste by 50 percent from the 2015 baseline,as part of WRAP Food Waste Reduction Roadmap.On Track.By fiscal 2040:British Retail Consortium Climate Roadmap,Boots UK:Support the UKs wider net zero transition by collaborating with other UK retailers on a roadmap for the industry to achieve complete net zero emissions by 2040,including net zero Scope 2 emissions by 2030 and Scope 1 emissions by 2035.On Track.Boots and No7 Beauty Company:Achieve 80 percent certified RSPO(Roundtable on Sustainable Palm Oil)palm oil through physical certification.Exceeded.Walgreens:Source 100 percent of palm oil from Roundtable on Sustainable Palm Oil(RSPO)certified sources,physically certified and credits.Achieved.Each following year,Walgreens aims to increase the physical certified portion by 5 percent.On Track.By fiscal 2030:Walgreens:Achieve 30 percent reduction in plastic packaging compared with fiscal 2020 baseline;100 percent of plastic packaging reusable or recyclable by consumers;and achieve 30 percent average recycled content across plastic packaging.On Track.By fiscal 2025:Boots and No7 Beauty Company:Achieve the UK Plastics Pact 2025 targets:30 percent reduction in plastic packaging compared with fiscal 2018 baseline;100 percent of plastic packaging reusable or recyclable by consumers;and achieve 30 percent average recycled content across plastic packaging.On Track.15Environmental,Social and Governance Report 2023Walgreens:Increase spend with Tier 1 diverse suppliers to$700 million,from$625 million in fiscal 2022.Exceeded.OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities 16Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities Stakeholder EngagementGRI 2-12,2-28,2-29,3-1,3-3 Nongovernmental organizationsEngaging and collaborating with our stakeholders helps us address the most relevant ESG issues for our Company and deliver products and services that make positive impacts in the communities we serve.We regularly consult with our internal and external stakeholders across a range of sectors,geographies and organization types and sizes to receive their feedback on our strategy and performance in the areas where we have the greatest impact.Each of these engagements seeks the stakeholders unique and valued opinion on specific areas.However,certain topics are addressed across groups given their propensity to touch every area of our business,such as:health equity;healthcare costs;DEI;responsible and ethical sourcing;and prescription drug and opioid abuse.These topics have a broad impact across all business areas,so we require all stakeholders to provide feedback on our approach and management.Stakeholders impacted by and who influence our business,such as customers,stockholders and nonprofit groups,frequently approach us with issues during our regular engagements.During fiscal 2023,we meaningfully engaged stakeholders proactively on numerous matters for which we can have significant impact and are aware of evolving expectations.This proactive engagement covered topics such as health equity;vaccine equity;plastic packaging;beauty industry sustainability;and DEI.In the following pages(16-18)you will find the form and frequency of engagement with key categories of stakeholders during fiscal 2023,their expectations,matters they raised and actions we have taken to address them.Our relationships with nongovernmental organizations(NGOs)and long-standing charity partnerships are cultivated in the areas we desire to make the greatest impact:removing barriers to access and identifying social determinants to improve health equity.Other topics we have engaged with partners on at the national and international level include poverty,disease prevention,mental health,dementia and cancer.Through these partnerships that often span years,and even decades,we can define areas of need and advance our mutual goals.Through the support of and interaction with NGOs and charity partners,we are prioritizing our efforts on the factors where we can have the most positive impact.Our engagement with stakeholders is done through regular surveys,conference participation and meetings.We met with key charity partners and NGOs at least quarterly in fiscal 2023.Discussions covered a range of topics including climate impacts and reduction strategies,our supplier diversity,product considerations(labeling,ingredients,transparency,safety)and community engagement and partnerships.These engagements translated to a number of actions,chief among them including a carbon emissions reduction target,a vaccine equity initiative in the U.S.to address vaccine hesitancy and expanded mental health training for employees and pharmacists.GET IN TOUCHWe are always open to stakeholder feedback on our ESG reporting and strategy.Substantive issues brought to our attention by stakeholders are escalated to our ESG Committee.One way to reach us is by email at ESG.17Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities Internal stakeholdersGovernment bodies and agenciesWe focus on improving the health and well-being of our employees through comprehensive benefits,inclusive culture building and opportunities for career development.We strive to mirror the communities we serve and know that the needs of our team members reflect those of their communities.To engage on issues that matter most,we keep an open dialogue with employees at all times through annual employee surveys and offer informal platforms for discussion.We also provide performance reviews and development programs and hold regular listening sessions.In practice,our internal engagement leads to training and upskilling,modifications to benefit offerings and financial and mental health support.Our Business Resource Groups(BRGs)are another way we engage with internal stakeholders to directly tie back to the business.Employees can connect with others having similar experiences,which fosters a sense of community and creates additional leadership opportunities for team members to express insights to management.WBA conducts twice-annual employee feedback surveys and regular performance reviews and appraisals,in addition to quarterly town halls and regular email and bulletin board communications.These engagement methods cover topics including employee health,safety and well-being,and talent development and compensation practices.Investors and lendersWe hold frequent dialogue with investors and lenders through regular outreach via our investor relations and governance teams,annual meetings and quarterly earnings calls.We also conduct proactive outreach to our financial stakeholders.Ahead of our annual meeting of stockholders,we conducted robust shareholder engagement to gain insight into institutional investors view of our ESG and compensation practices and to continue to strengthen the Companys relationships with key shareholders.Discussions centered around executive compensation,climate risk and transparency,leadership diversity,supplier inclusion,prescription drugs and other pressing issues.A major part of these conversations focused on how we set priorities and goals,as well as identifying areas to drive impact and progress.Our engagement with these stakeholders reiterated the importance of many of our existing ESG programs and strategies.CommunitiesOur local communities are the foundation of our business;when they thrive,we thrive.Our ESG strategy is designed to improve societal health and well-being while providing economic opportunities in our communities.Our engagement with these priority stakeholders spans hundreds of grassroot organizations,retail pharmacy operations,partnerships with trusted institutions and intentional outreach through ESG initiatives and media engagement.Our dialogue with these groups seeks to eliminate barriers to access and address the needs of communities,like prescription drug affordability and vaccine equity.Understanding the needs of and collaborating with these stakeholders is core to our success as a business.We rely on our communities to help us identify growth opportunities and support one another to overcome challenges by taking our listening exercises and engagements as seriously as possible.Our employees are also a key pillar of our community engagement due to their dedication to volunteering time and funding in the places where they work and live.Government bodies and regulatory agencies are a priority stakeholder group for WBA.We frequently engage with government institutions and agencies across all levels national,international,and local around affordable access and quality healthcare,transparency,prescription drug abuse,affordability,sustainability and workforce development.We worked closely with governments and municipalities to reach underserved communities and address accessibility barriers.These efforts are especially crucial at a local level where our collaboration with municipalities gets at the heart of improving health at personal levels.18Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities SuppliersOur desire for responsibility extends throughout our value chain and beyond.We pride ourselves on creating and building close relationships with suppliers and how they reflect our values.We understand the link between ethical behavior,sustainability and respecting human rights when it comes to implementing our ESG strategy.As such,our Supplier Code of Conduct clearly outlines our expectations informed by regular assessments,policies and communications.Through our Global Supplier Sustainability Program,annual supplier conferences,regular surveys(some of which include sustainability components),risk assessments and trainings,we routinely align with stakeholders by sharing our ESG goals.Responsible sourcing at WBA means collaborating with suppliers to respect and maintain human rights and improve diversity,in addition to prioritizing operational sustainability.Another crucial part of our engagement with suppliers is to ensure safety in the products and services we consume and sell by auditing the facilities,policies,procedures and practices of our suppliers.We consider these quality control activities to be indicative of something more than a license to operate we require these standards of all our supplier partners,whether evaluated within a quarterly business review or a single interaction.Peers and industry groupsWe are constantly engaging with our peers and industry trade groups.Through collaborative projects,meetings and regular dialogue,individual interactions and more,we discuss retail and pharmacy topics.From solving industry challenges as a retailer to minimizing virgin plastics in supply chains,we lean on our peers and fellow industry groups to help us move forward.We are collectively pushing one another to improve our sustainability,access to healthcare,data privacy and security,removing barriers and more.These engagements keep us accountable to one another and result in a more successful business operation and happier customers.AcademicsOur engagement with academics is primarily focused on building a stronger,more diverse pharmacy talent pipeline.Additionally,the research done by this group is a key factor in addressing the worlds most pressing health and well-being challenges.Whether supporting ongoing research partnerships and presentations or participating in conference and roundtable speaking opportunities,our academic stakeholder engagement is critical to achieving our ESG strategy.MediaMedia plays a critical role in educating the public about health issues and communicating accurate health and science information is critical to public health and safety.As such,we prioritize close relationships with key media to properly reach customers and patients around the healthcare topics they need to know about.In addition to providing educational resources through our media contacts,these stakeholders help us tell our business story to target audiences.We are in constant communication with the media to properly disseminate our message and understand public sentiment through regular,proactive outreach conducted by our media and investor relations teams,in addition to individual meetings.Patients and customersWe maintain regular contact with our customers and patients through purposeful stakeholder engagement and daily interactions to understand what they need from us.These groups provide valuable insight into opportunities for us to foster trust while holistically serving the whole patient.Our interactions with these groups are a dialogue that gets to the heart of our purpose:creating joyful lives through better health.Engagements focus on healthcare and service needs,front of store products,payment options and optimizing benefits from insurance providers.Through surveys,social media,retail pharmacy interactions and our ESG initiatives,these groups provide input on everything from our community partnerships to healthcare accessibility and product transparency.19Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities Memberships and associationsGRI 2-28WBA,its businesses,and employees participate in numerous nongovernmental and advocacy organizations,industry associations,organizations and networks.This collaboration is central to our corporate responsibility and ESG agenda because we cannot make meaningful change on our own.Select memberships and associations include:American Pharmacists Association(APhA)American Society of Health-System Pharmacists(ASHP)Beyond 34:Scaling Circularity for a Sustainable Economy Black Young Professionals(BYP)British Beauty Council British Retail Consortium(BRC)The Business Council Business for Societal Impact(formerly the London Benchmarking Group(LBG)Business in the Community(BITC)Business in the Community Ireland(BITCI)The Business Roundtable Carbon Disclosure Project(CDP)Community Pharmacy(CP)England;CP Northern Ireland;CP Scotland;and CP Wales Company Chemists Association(CCA)Cosmetic,Toiletry and Perfumery Association(CTPA)Cosmetics Europe The Council for Responsible Nutrition Cruelty Free International Leaping Bunny The CSR&ESG Board Diversity in Retail EcoBeautyScore Consortium EuroCommerce European Retailers Palm Oil Group Forum for the Future Global Reporting Initiative(GRI)Global Organic Textiles Standard(GOTS)Global Shea Alliance(GSA)Henpicked HITRUST How2Recycle International Federation of Pharmaceutical Wholesalers(IFPW)International Health Partners Industry Council for Packaging and the Environment(INCPEN)Institute of Corporate Responsibility and Sustainability(ICRS)Irish Business and Employers Confederation and Retail Ireland(IBEC)Irish Organic Association Irish Pharmacy Union National Association of Chain Drug Stores(NACDS)National Council for Mental Wellbeing National Association of Specialty Pharmacy On-Pack Recycling Label(OPRL)Palm Oil Transparency Coalition(POTC)Pharmaceutical Society of Ireland(PSI)Pharmacist Advice and Support Service(PASS)Pharmacist Support Pharmacy Technician Certification Board(PTCB)Proprietary Association of Great Britain(PAGB)Purple Tuesday RangeMe REPAK Retail Energy Forum Retail Excellence Ireland Retail Industry Leaders Association(RILA)Retailer Palm Oil Transparency Coalition RE-TURN Roundtable on Sustainable Palm Oil(RSPO)Stonewall Sustainable British Beauty Council(SBBC)Sustainable Medicines Partnership(SMP)Sustainable Packaging Coalition Sustainable Packaging Initiative for Cosmetics(SPICE)Sustainable Procurement Pledge(SPP)The Sustainability Consortium United Nations Global Compact(UNGC)U.S.Business Action to End HIV U.S.Environmental Protection Agency(EPA)SmartWay Program Waste and Resource Action Program(WRAP)World Wide Fund for Nature(WWF)GovernanceGovernanceOverview21Environmental,Social and Governance Report 2023AppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities GovernanceGRI 2-9,2-10,2-12,2-13,2-14,2-23,2-24,2-26,3-3Monitoring and benchmarking best industry ESG practicesOngoing review of ESG-related policies and publication of policy statementsConducting a WBA-wide materiality assessment at least every three years Tracking ESG-related long-term strategic partnerships and their impact Managing WBAs engagement with external stakeholders and other interested parties regarding ESG-related matters Integrating ESG processes into WBAs broader business,social and environmental risk management program and reputation management priorities Ensuring WBA is taking appropriate measures to successfully prioritize and implement ESG projectsReporting progress against WBA Health Equity Goals quarterly to WBA BoardContinuing limited assurance by Deloitte&Touche LLP for certain reported data and disclosures Participating regularly in various external ESG disclosure surveys Assessing the outcomes of our organizations impact on the economy,environment and people in coordination with the WBA ESG committeeWe are committed to transparent reporting in all aspects of our business,including around our ESG activities and goals progress.As we continue our transformation to a healthcare company,we are increasingly focused on health equity and ESG.Our ESG strategy is a key pillar of our purpose and is overseen by the WBA ESG Committee,which reports on a bi-annual basis to the WBA Nominating and Governance Committee of the Board.The Nominating and Governance Committee oversees the ESG agenda on behalf of the board of directors(Board)and receives updates on the full range of activities undertaken by the Company,including,but not limited to:GovernanceOverview22Environmental,Social and Governance Report 2023AppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities Corporate governance and risk managementOur commitment to strong governance and risk management processes is clearly prioritized.We are dedicated to continuously looking for ways to improve these practices because they are essential to achieving our objectives and being a responsible organization.Much of our governance work is underpinned by our health equity framework where we seek to prioritize key areas that impact health and well-being,especially for disproportionately impacted,underserved communities and recognize the irrefutable connection between the health of people and the health of our planet.This is of the utmost importance to our organization and has the support of leadership at all levels.Our board of directors,comprised of a majority of independent directors,is actively engaged in strengthening our governance practices and providing oversight of the Companys strategic,operational,potential and actual risk and financial matters.This engagement enables the Board to fulfill its fiduciary duties to our stockholders and steer the long-term success of the Company.36 percent of the board are female and 100 percent of our board are over the age of 50.GRI 2-9,2-10,2-12,2-13,2-14,2-23,2-24,2-26,3-3,405-11Our Boards oversight extends to our ESG program.Biannually,the Nominating and Governance Committee,made up of independent directors,reviews our ESG reporting policies and activities and assesses our risk management in those areas.The Audit Committee regularly reviews and discusses the key risks identified in the Companys Enterprise Risk Management(ERM)program with leadership,their potential impact on us and our operations,and our risk mitigation strategies and related disclosure matters.These risks may be related to climate change,sustainability and other ESG-related matters.The Governance Risk and Compliance Committee,composed of senior management,works in tandem with the Audit Committee to ensure all levels of leadership are involved in the discussion and articulation of WBAs top risks.We routinely evaluate our risk mitigation activities,and when risks are identified above a certain threshold,WBA works to develop action plans with timelines and responsibilities that are monitored and reported upon following implementation.The WBA ESG Committee plays a key role in providing further oversight and governance of our ESG program.This committee meets four times a year to review our ESG program,policy statements,evolving ESG-related regulations,social and environmental risks and progress toward achieving our ESG goals,including our goal to drive responsible sourcing practices throughout our supply chain,protecting human rights and engaging with suppliers around ethical and environmental issues.Ornella Barra,Chief Operating Officer,International,chairs this committee.Members of this committee include other senior executives from across our key businesses and departments(operations,legal,human resources,accounting,finance,public affairs and communications).The WBA ESG Committee sets and approves our ESG commitments and targets and oversees our progress.The committee also approves the outcome of our regular assessments,annual objectives and ESG Report.Our ESG governance was further strengthened during fiscal 2023 in our International segment when senior leaders from No7 Beauty Company,Global Sourcing and International Retail came together to form the Sustainability Committee.We recognize in our fiscal year 2023 Annual Report that the long-term effects of global climate change present both physical risks(such as extreme weather conditions or rising sea levels)and transition risks(such as regulatory or technology changes),which are expected to be widespread and unpredictable.We disclose more information on the actions taken stemming from the completed climate scenario analysis and identified risks and opportunities within the TCFD Response of this report on page 111 and within our Annual Report on page 23.The Company will monitor best practices for disclosing physical and transition risk and opportunities associated with climate change and will continue to evolve our reporting.MORE INFO More information on material risks is included in WBAs most recently filed 2023 Annual Report.More information on the Boards involvement,evaluation,compensation,tenure,gender,ethnicity and conflict-of-interest processes can be found in the 2024 Notice of Annual Meeting and Proxy Statement.1 Board and senior leadership diversity disclosure is GRI 405-1 specified disclosure and is within the Deloitte&Touche LLP review scope as detailed on pages 119-120.2UD=undisclosedBoard diversity matrixThe table below provides certain highlights of the composition of our Board members as of December 8,2023.Each of the categories listed in the table below has the meaning as it is used in Nasdaq Rule 5605(f).Board Diversity Matrix(as of December 8,2023)Total Number of Directors 11FemaleMaleNon-BinaryUD2Gender IdentityDirectors47-Demographic BackgroundAfrican American or Black1-Asian-1-White36-LGBTQ 1GovernanceOverview23Environmental,Social and Governance Report 2023AppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities PoliciesWBA is committed to creating a clean,safe and respectful environment for our entire value chain.We understand good governance is underpinned by accessible,objective policies and clear behavior expectations that are consistent throughout the organization,regardless of geography or level.As such,we have outlined how we expect our people to behave through robust organization-wide and business segment-specific policies that incorporate internationally accepted human rights.These policies are how we hold ourselves to a high standard of conduct.Our Companys policies cover a range of topics,from environmental impact and compensation to data privacy and procurement practices.We are dedicated to upholding and implementing new policies where needed because clear guidance is a pillar of successful governance.New policies are developed in accordance with regular due diligence that cover a range of topics,including human rights.Internal policies are reviewed at least every two years,while external policies are reviewed annually.These documents are made available to all relevant parties through our intranet and corporate website,including external partners and suppliers.Functional leadership within WBA for each of our internal policy commitments rests with designated employees at the executive level as delegated by the Board to the WBA Finance Committee,CEO and Global CFO,in addition to segment CFOs and other relevant management.Each business must also have executives at the Operating Committee level responsible for implementation and management of all internal policies.We require all team members to familiarize themselves and comply with requirements of all internal policies,in addition to following our Code of Conduct and Ethics,Ethical Trading Standards,standards for Enterprise Risk Management Policy,Environmental,Health and Safety and all published WBA internal controls relevant to their operational duties.We hold presentations and training with relevant parties,as stipulated in select policies,with frequency dependent on business and role.These accountability actions and our work with accredited third-party auditors and extensive organizational policy library available to relevant stakeholders are how we hold ourselves accountable.First and foremost,we prioritize creating and encouraging a safe environment for employees,customers,patients,contractors and suppliers across all our business segments.We continuously work to improve our management of health and safety guided by the WBA Health,Safety and Environmental(HSE)Committee and WBA HSE policy.Within the WBA HSE policy,employees can find guidance on reduction and mitigation processes,in addition to guidance on determining corrective actions for workplace incidents and investigations.GRI 2-23,2-24,2-27,3-3,403-4As a community pharmacy and healthcare provider,everything we do,everything we sell,every supplier we work with and everything in between has a far-reaching impact.We are committed to respecting and upholding the dignity,well-being and human rights of every individual affected by our business activities,including our patients and customers,employees,suppliers and local communities.This commitment applies to all Walgreens Boots Alliance affiliates and extends to respecting all internationally recognized human rights as detailed in the United Nations Guiding Principles.Our Human Rights Policy Statement is based on the International Bill of Human Rights and adopts the core labor standards from the United Nations International Labor Organization.This commitment also extends to fairly compensating our people.Please see page 101 for additional information on our living wage efforts.All of these values and more are explicitly laid out in our ESG Policy Statements,which are available on our website.These statements shape our approach to our sustainability and ESG activities and help ensure we are working the right way.GovernanceOverview24Environmental,Social and Governance Report 2023AppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities Code of conduct and ethicsThe WBA Code of Conduct and Ethics is our compass for how we behave.It guides us as a company,a team and individuals to make ethical decisions that stay true to our values while abiding by the laws and regulations in the places where we do business.We rely on our code to support us in doing what is right in our fast-paced,dynamic environment.The code also supports strong governance of our behaviors and our approach to ESG.The code extends to our Board;Company officers;team members;team members of our subsidiaries;officers and employees of any business in which WBA or a subsidiary has a controlling interest;and parties acting on behalf of WBA or its subsidiaries,including consultants,agents,suppliers,intermediaries or representatives.We expect everyone at WBA to read,understand and commit to complying with our code.As part of our“speak up”culture,our confidential Compliance and Ethics Hotline and online portal are available for any team member to raise concerns about inappropriate business conduct or unethical behavior.The hotline is managed by an independent third party and is available 24/7 in local languages.We expect our people to behave ethically and responsibly when acting on our behalf and as their own representative.This extends to all levels of our organization,including our Board.Further guidance on conflicts of interest at the Board level can be found within section 16 of the WBA Corporate Governance Guidelines and in the 2024 Notice of Annual Meeting and Proxy Statement.More information on our corporate governance guidelines and the code of conduct,including mechanisms for reporting suspected violations of the Code of Conduct and Ethics,concerns about ethics and questions about applying our code,can be found on our corporate website here.GRI 2-26,3-3GovernanceOverview25Environmental,Social and Governance Report 2023AppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities Health and SafetyGRI 2-26,3-3,403-1,403-2,403-3,403-4,403-5,403-6,403-7,416-1,416-2,417-1,417-2,417-3DISCOVERPlease see pages 16-19 for how we have engaged with priority stakeholders on health and safety matters.Please see page 58 for further details on employee and workplace safety.Annual pharmacy operations reviews include the following:Monitoring procedures for the professional qualifications for pharmacists and pharmacy-related employeesProcesses to facilitate compliance with pharmacy staff professional development requirementsProcesses to help ensure concerns about pharmacy professionals fitness to practice are referred to the appropriate regulatory body when required by law Mechanisms for compliance with standard operating procedures across dispensing,pharmacist control checks,patient counseling,record keeping,management of controlled drugs and narcotics,medicines date checking,quality assurance,error management and other issuesCompliance with safe storage,preparation,dispensing,compounding and sale and supply of medicinal productsRecording,managing and reporting of dispensing errors,including a formal review process and action planning to minimize the risk of such errors occurring1 GRI 416-1 required disclosures are within the Deloitte&Touche LLP review scope as detailed on pages 119-120.Patient safety:Pharmacy dispensingGRI 3-3,416-11,417-1Dispensing and distributing pharmaceuticals is the most significant part of our business,with 62 percent of our sales in fiscal 2023 coming from the sale and distribution of prescription medications and pharmacy-related services.Millions of people count on us to safely dispense medications and we deliver on that promise everyday.Patient safety lies at the heart of our management of pharmacy operations.We strive to be the industry leader by continuously seeking ways to minimize risks to patients in our dispensing and pharmacy services.In fiscal 2023,we continued providing pharmacists with training on how to appropriately manage clinical considerations in patient drug therapy through our clinical decision support software.In addition,we provide our pharmacists with a robust drug information library to help support their professional practice decisions.All WBA pharmacy dispensing businesses annually review and evaluate pharmacy operations for compliance with our Pharmacy Operations Governance Policy.During fiscal 2023,the WBA Patient Safety Forum continued to convene representatives from all pharmacy dispensing businesses to share best practice operations,facilitate a culture of openness and shared learning,and develop innovative patient safety solutions.The forum included senior leaders and executives across the Company,including International Public Affairs,Pharmacy Quality and Patient Safety and Ethics and Compliance,among others.Additional information on patient safety can be found on the following page.WBA is committed to creating and encouraging a safe environment for employees,customers,patients,contractors and suppliers across all our business segments.We continuously work to improve our management of health and safety guided by the WBA Health,Safety and Environmental(HSE)Committee and WBA HSE policy.Within the WBA HSE policy,employees can find guidance on reduction and mitigation processes,in addition to guidance on determining corrective actions for workplace incidents and investigations.GovernanceOverview26Environmental,Social and Governance Report 2023AppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities There are also obligations on pharmacists to confirm products are sourced via a licensed and legitimate supply chain.Our pharmacy systems are designed for the safe dispensing of medications.Our standardized dispensing processes detail each step in the fulfillment process,from receipt of prescription through consultation and dispensing of the medication.There are multiple digital safety checks,including bar code scanning,safety-enhancing automation processes and digital safety alerts utilizing cutting edge technology.To help ensure patient safety,our prescription labels are designed to meet both regulatory requirements and our internal standards.Descriptions of medications are affixed to each prescription dispensed,and each prescription is dispensed with a patient leaflet that informs patients of the name and use of the medication,potential adverse reactions,information about drug interactions,safe medication disposal and other important health information.At Walgreens,this information is available in 14 languages,and additional services are available for hearing and visually impaired patients.In fiscal 2023,we operated 10 microfulfillment centers supporting roughly 4,000 stores.By the end of fiscal 2024,we plan to operate 14 centers to continue driving significant efficiencies and cost savings.All WBA businesses must have documented processes in place to facilitate the collection of key performance metrics on health and safety,including pharmacy incidents.Safety performance is supported by robust systems such as continuous quality improvement(CQI)programs,procedures and monitoring to reduce and prevent incidents.Our CQI programs support and uphold our long-standing patient safety culture by empowering and encouraging all team members to report pharmacy incidents,near misses and overall safety opportunities to the U.S.Patient Safety Research Foundation,a patient safety organization listed with the Agency for Healthcare Research and Quality(AHRQ).Multiple safety data sources are reported and analyzed,and opportunities for process,systems,physical environment and educational materials are constantly evaluated.Technology and process solutions as well as ongoing team member activities and training are developed based on the evaluation of results.Walgreens continues to maintain National Association of Boards of Pharmacy(NABP)accreditation for Durable Medical Equipment,Prosthetics,Orthotics and Supplies(DMEPOS).It is also accredited for Community Pharmacy,being recognized for an advanced level of patient care services,quality and safety.In addition,Walgreens has current chainwide Community Based Specialty(CBS)Utilization Review Accreditation Commission(URAC)accreditation for specialty pharmacy as well as Accreditation Commission for Health Care(ACHC)accreditation for select CBS sites.URAC and ACHC are independent third-party organizations that provide healthcare accreditations based on industry standards.Product safetyAt WBA,product safety is the foundation to our commitment to our customers.We ensure our owned brand products spanning health,beauty,home and cleaning products,food,paper goods and other categories are rigorously analyzed for compliance with all applicable laws and regulations along with our own high performance,safety,and quality standards.We proactively seek feedback on our products and services,and address those incidents that dont meet our customers needs,expectations and our own high standards.Manufacturers of our owned brand products use a third-party product testing lab that we select to validate safety and quality before our products reach our customers and patient.We have established a multistage product testing program to ensure products are tested across the full product lifecycle.Our program builds in required and periodic testing from independent third-party laboratories validating that quality,safety,compliance and applicable regulatory standards have been satisfied,including but not limited to analytical tests(chemical/composition),performance tests(durability/functionality),packaging validation(labeling)and flammability standards.See page 96 for additional information on our marketing and labeling practices.Our suppliers are expected to implement best practices,including clearly defined and well-documented good manufacturing and quality processes,training and record keeping.Through our rigorous supplier and vendor qualification process and factory assessment process,we evaluate our suppliers ability to deliver consistent,safe and quality products.WBA reserves the right to audit supplier manufacturing sites of products in non-regulated categories.Our Quality team helps ensure customer feedback is actively reviewed and analyzed.If we learn about an issue with one of our products,our quality incident process is activated and we systematically investigate,take corrective action,and,when necessary,quickly withdraw the product from our stores and e-commerce platforms.If a product needs to be withdrawn from the market,we ensure it is not sold by issuing a lock on the product at our distribution centers,at point of sale in the store and online.We take our customers safety seriously,and understand their desire to know more about the products they used and consume,and so provide information for any recalled owned brand products.These details are available anytime on our websites for Walgreens and Boots.GRI 3-3,416-11,416-2,417-1,417-2,417-31 GRI 416-1 required disclosures are within the Deloitte&Touche LLP review scope as detailed on pages 119-120.GovernanceOverview27Environmental,Social and Governance Report 2023AppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities Information SecurityGRI 3-3,418-1We understand the importance of ensuring the integrity of data and the protection of our customers,patients,employees and Company information.The Companys security processes and controls for information technology(IT)systems and resources;our business;and employees,contractors and third parties help ensure the confidentiality,integrity and availability of our IT systems are maintained.During fiscal 2023,the Global Chief Information Security Officer role reported directly to Walgreens Chief Information Officer and the International Chief Information Officer who jointly oversaw the security of the Companys computer systems,data,networks and other assets,with oversight from the Audit Committee.The Walgreens and International Chief Information Officers reported to a member of the Executive Management team and into the Audit Committee.The Company conducts multiple information security audits and vulnerability assessments on different sections of our IT systems,data and networks on at least an annual basis.WBA also has an information security incident response team and maintains a data security event plan to effectively manage and respond to information security incidents.Our global information security policies,which are based on industry frameworks such as the National Institute of Standards and Technology and the International Organization for Standardization,set the compliance guidelines for our people,processes and systems.At the request of our business partners,WBA also engages with HITRUST,a third-party organization,to assess the security and privacy controls around Walgreens patient data.HITRUST certification is valid for two years and was last renewed in December 2023.WBA works with an independent assessor to conduct interim assessments to ensure continued adherence to HITRUST requirements.Additionally,Walgreens is subject to an annual Payment Card Industry(PCI)assessment that includes a review of our policies and procedures to protect Walgreens customer credit card data.Building and nurturing a culture of security is key to protecting information.New employees receive training on a variety of issues,including security and privacy.This training is embedded in our security fundamentals training,which is refreshed on an annual basis.This training applies to pharmacists,pharmacy technicians,retail team members and team members at our support offices.We also build awareness about phishing through regular employee campaigns.Training and information is available to employees on our corporate intranet sites.Additionally,we use screen savers,timely internal news articles and other communication channels to engage employees about the importance of being alert to cybersecurity risks.GovernanceOverview28Environmental,Social and Governance Report 2023AppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealthy Communities Patient and Customer PrivacyAs a global healthcare leader and retailer,personal information is provided to WBA through purchasing and filling prescriptions,enrolling in promotional and loyalty programs,registering on our websites or otherwise communicating with us.We are committed to protecting patient and customer privacy and data with leading data protection standards.GRI 3-3,418-11The Global Chief Privacy Officer oversees the privacy of WBAs patient,consumer and employee data,with oversight from the Audit Committee.We conduct privacy impact assessments regularly.Our privacy program reporting is shared with the Audit Committee on a routine basis.We are transparent with our customers about how we use their data.Statements are posted on our websites and include information about data usage and safeguards.We publish our policies about individual rights requests regarding the use and deletion of personal information for customers in applicable jurisdictions.We comply with EU and UK law on data protection and privacy.Our policy is to notify all data subjects of reportable data incidents in accordance with applicable laws.In the U.S.,where approximately 80 percent of the WBA personal health data resides,the Health Insurance Portability and Accountability Act(HIPAA)privacy rule compliance program incorporates administrative,technical and physical safeguards.Under our HIPAA policy,we receive written authorization from the data subject where required,and collection and processing are limited to the stated purpose.We also have a program to receive,investigate and respond to privacy complaints.Annual privacy training is mandatory for applicable team members,including pharmacy,retail and support office.Applicable U.S.contractors are legally obligated to receive privacy training.We also have policies and procedures in place that govern data transfers to third parties,including appropriate methods and controls,such as standard contractual clauses.1 GRI 418-1 required disclosures are within the Deloitte&Touche LLP review scope as detailed on pages 119-120.Healthy CommunitiesOur TargetsAchieved in fiscal 2023:By fiscal 2024:Walgreens:Raise more than$25 million for the Susan G.Komen and The Leukemia and Lymphoma Society.Exceeded.WBA:Provide 100 million vaccinations for children in developing countries through Get a Shot.Give a Shot.and the UN Foundation.On track.By fiscal 2025:WBA:Help 500 million women and children by providing vitamins and minerals through Vitamin Angels.On track.OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceAlethia JacksonWe understand that our work globally entails us taking a local approach to meeting the specific needs of communities and thats where partnerships are invaluable.Over the past eight years,WBA has donated$373 million1 to support the health and well-being of the communities we serve.Our work includes partnering with our consumers,governments,charities,non-governmental organizations,industry bodies and other healthcare providers on disease prevention,detection,treatment,and education.We have also worked closely alongside our partner organizations to address social determinants of health,support people living with cancer in the U.S.,UK,and Ireland,Mexico,Thailand and across Europe,and support youth mental health and awareness across the U.S.Together with our partners we are uniquely able to support our patients,our consumers,and our communities and have a long-term impact.Our work with our partners and in our stores provides tangible and visible examples of what we mean by health equity.Our ambitions are bold.This includes overcoming barriers to medication adherence,providing greater access to care regardless of an individuals personal background,addressing cost challenges or providing vaccine or In this milestone year,I feel privileged to be part of an incredible team that follows a long tradition of healthcare pioneers,who are committed to enabling healthier communities across the U.S.and around the world.Community is the backbone of our society and as recognized by the World Health Organization,health is the underpinning of productive,resilient and stable economies.Our commitment to championing healthier communities is of critical importance to current and future generations.Senior Vice President of ESG and Chief DEI Officer,Walgreens Boots Alliance A Lett er F rom.testing equity.This work is embedded in who we are as a company.Every day our team members engage with patients and customers globally and seek to improve their health and well-being.In 2023,the World Health Organization(WHO)confirmed climate change as an urgent threat to pregnant women,newborns and children and I am enormously proud to mark our 10-year anniversary with Vitamin Angels.With the support of our customers,team members and their incredible network,we have helped reach over 2.6 million expectant mothers and their babies in the U.S.and Puerto Rico,and over 400 million women and children around the world with life-changing vitamins and supplements.I invite you to read in this chapter all that we have done to build on our long and rich heritage of reimagining how local healthcare improves societal health and well-being,and what we are doing to enable communities to bring about more joy through better health.1Cash and Non-cash valuation of community contributions.Further details on page 46.Healthy Communities OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable Marketplace30Environmental,Social and Governance Report 2023Healthy Communities 31Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceHealth Access and AwarenessGRI 3-3,203-1,203-2,413-1Health equityWe strive to provide essential care to the communities in which we are embedded.As one of the worlds largest providers of pharmacy and other healthcare services in local communities around the world,WBA understands the needs of the communities we serve.WBA is uniquely positioned to make an impact on healthcare access and affordability.You can learn more about our endeavors to improve access to healthcare for millions of people on the following pages.These efforts are reflected throughout our business activities,advocacy work and ESG initiatives.GRI 3-3,203-1,203-2,413-1Healthy Communities 32Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceChampioning health equityGRI 3-3,413-1The COVID-19 pandemic taught us valuable lessons about the important role our stores,services and pharmacy team play in the health of our communities.We see our pharmacists as our frontline educators.They are not only accessible in the communities where they work but are also often active and trusted members of those communities.Walgreens and other pharmacies were able to make a huge impact throughout the COVID-19 pandemic.Between February 2020 and September 2022,it is estimated that services provided by pharmacies such as administering vaccines and antiviral medications helped to save over 1 million lives and avoid over 8 million hospitalizations in the U.S.Through new policy changes coming out of the COVID-19 pandemic,Walgreens will continue its work to increase access to vaccines and healthcare services and reach underserved communities.Education and information:We are committed to ensuring our communities have access to the information necessary to promote good health outcomes.Because our pharmacy team members live and participate in the communities they serve,they are seen as a credible source of information among their community members.Our pharmacy team members are actively combating misinformation and encouraging healthcare access.Partnerships:We understand that to reach those who need the most help,we cannot work alone.In fiscal 2023 the Company hosted over 1,000 clinics to address vaccine hesitancy and provide vaccines working with community organizers and faith-based organizations to major companies.These events and partnerships have been instrumental in breaking down barriers and providing the tools needed to engage communities and overcome obstacles to care.Additionally,these partnerships will be leveraged across other health services.Access:78 percent of Americans live within 5 miles of a Walgreens or Duane Reade retail pharmacy.For those who do not,we continued the effort to go the extra mile to reach medically underserved communities with our mobile clinics.Our coach buses outfitted for health providers traveled coast to coast,meeting people where they were while distributing thousands of vaccines and other services.The Company established three pillars by which we ensure our care remains accessible to communities:Across these pillars,Walgreens is focusing on 4 key activation areas:social determinants of health,vaccination and testing,medication adherence and chronic care management and wellness and care.In fiscal 2023,Walgreens launched the Health Equity Champions Network.Health Equity Champions connect team members and customers to the work Walgreens does in health equity and serve as a point of contact for health equity work in their region.The work we have done to establish internal forums for improved awareness,transparency and knowledge sharing regarding health equity is demonstrative of our organizational focus on health equity and empowering each employee to be a health equity ambassador.Healthy Communities 33Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceAt the start of the 2022 calendar year,we established a network of Health Equity Champions across Boots UK.These champions work across the support office and stores to help ensure that new initiatives meet the standards of Boots efforts to address health inequities.Whenever we launch a new initiative,the champion will ask their Boots team members to complete a Health Equity Assessment Tool(HEAT)to test the accessibility of the service in a range of scenarios,ensuring it has the best chance of reaching all members of the community.In May 2023,Boots attended and presented at the NHS England Health Inequalities Improvement Board on“Improving Equity Access to Healthcare through Boots.”In the presentation,we discussed how Boots aligns with health equity goals from the NHS and is working to increase access to vulnerable communities,improve health outcomes and lower the cost of care for all.To help address heath inequity in the communities we serve,Boots established the Health Equity Stakeholder Group in 2021.This group outlined four key themes that would guide store activities and internal initiatives to promote health equity across Boots UK:Turning awareness into advocacy:Ensuring all Boots communications are written through the lens of promoting equity in its education programs and services.Black,Asian and Minority Ethnic(BAME)inequalities:Recognizing the disparities in access to healthcare among Black,Asian and minority ethnic communities in the UK and working to achieve parity,especially in the treatment and prevention of COVID-19.Digital inequalities:We are committed to improving digital access to healthcare.Recognizing that as of the latest Ofcom technology tracker data published in 2023 seven percent of UK households do not have internet access,Boots is committed to maintaining care options that do not exclude those without digital access.Local solutions:Our pharmacists live and work in their local communities.We want our local teams to keep us apprised of inequalities they may encounter and feel empowered to suggest their own ideas about how to tackle them.At the same time,we will continue to empower our team members with research from our partners,including The Kings Fund,and shared best practices to address inequities together.As the largest pharmacy in the UK,Boots is uniquely positioned to address health equity and create greater access to health services across the country.Healthy Communities 34Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceAccessGRI 3-3,203-1,203-2,413-1 Overcoming barriers to medication adherenceThe failure to take medications as prescribed is associated with adverse health outcomes and rising healthcare costs.WBA strives to improve medication adherence by addressing systemic barriers to care.Barriers can include everything from a misunderstanding of prescription interactions with other drugs to a lack of access to transportation.Lack of insurance,financial insecurity,inconvenience and forgetfulness are also commonly identified as factors in adherence failure.GRI 3-3,203-1 Our pharmacists and healthcare providers take the extra step to help ensure adherence among their patients.Analytics help us predict the patients most likely to become non-adherent and identify custom ways to reach them and help them maintain their regimen.Adherence programs for the most complex treatments and disease-state management programs include phone,virtual and in-person consultations to address potential side effects and offer remedies,digital solutions including medication synchronization,delivery,consultations and patient education and efforts to connect patients to financial assistance to help them stay on track.Our pharmacists are continuously learning and updating their training on common chronic conditions including hyperlipidemia and diabetes management.Recognizing that diabetes,high cholesterol and hypertension are prevalent among Americans,we tailored specific programs to help improve outcomes for patients living with these disease states.Across these conditions,Walgreens PDC(Proportion of Days Covered)rates improved by 0.3%in fiscal 2023 compared to fiscal 2022.PDC is a common measurement for adherence referring to the percentage of time a patient has medication available based on refill records.Medication non-adherence remains a significant barrier to positive health outcomes for those with mental health conditions.To help support greater adherence,outcomes,and lower overall costs for patients and payers,Walgreens has added oncolytics,estrogen hormones,antiandrogens and continuous glucose monitoring(CGM)devices to its New to Therapy pharmacy program in addition to anti-anxiety medication,anti-psychotics and anti-depressants.Walgreens works to improve medication adherence,manage chronic disease and overcome barriers to care through numerous programs,which are detailed in this section.Walgreens Chicago Health IncubatorThe Walgreens Chicago Health Equity Incubator is a pilot program designed to address health inequities and impact patient outcomes.Driven by a cross-functional team of individuals across pharmacy operations,data analytics and involved pharmacies,the program is designed to create direct lines of communication between patients in vulnerable communities and providers who can interpret feedback into actionable change.The first phase of the pilot launched in August 2020 and focused on Chicagos South and West Sides.Phase 1 focused on diabetes outreach,pediatric asthma consultations and reducing delayed medications pick up.The incubator moved from its first phase,where outreach concentrated on prescription management for patients living with diabetes and asthma,to its second phase in July 2022,when a mental health wellness check for patients new to mental health prescription therapy was added to the program.The pharmacies involved are situated in underserved areas where mental health disparities may be worse due to institutional racism,health insurance access and coverage,inadequate care and treatment and cultural acceptance,among other social determinants of health.The program has now expanded beyond the South and West Sides of Chicago to include pharmacies in Texas,Arizona,Nevada and New Mexico,for a total of nearly 50 pharmacies offering proactive mental health support to patients.Between July and December 2022,more than 1,200 wellness checks were made 45 days post pick-up across Chicago-area pharmacies.Of the patients who received a 45-day outreach call,they were more likely to refill their medication when due and did so within fewer days than patients who did not receive an outreach call.The proportion of patients in the initiative who refilled their medications within seven days of the outreach call rose by 8.7 percent.GRI 3-3,203-1,203-2,413-1Healthy Communities 35Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceTransforming accessGRI 3-3,203-1,203-2Furthering our commitment to increasing access to care for everyone,continues to be a priority for WBA.The U.S.Healthcare segment was launched in fiscal 2022 to facilitate WBAs consumer-centric healthcare strategy in the communities we serve across the U.S.,which includes investment in Village Practice Management Company,LLC(VillageMD),Shields Health Solutions Parent,LLC(Shields),CCX Next LLC(CareCentrix)and the companys organically grown healthcare business.The U.S.Healthcare segment plans to become a leading provider of local clinical care services by leveraging its consumer-centric technology and pharmacy network to deliver value-based care.In addition to the investments within U.S.Healthcare the company also plans to continue to transform its core pharmacy and retail business and its goal is to provide better consumer experiences,improve health outcomes and lower costs.This strategy is foundational to WBA as a leading provider of local clinical care services and addresses all dimensions of physical,emotional and mental health.We will continue to leverage our consumer-centric technology,pharmacy network and partnerships to deliver and enable others to deliver value-based care,including vaccinations,diagnostic testing,chronic care management and specialty management.Walgreens Health Corners and Health Advisors provide accessible,local healthcare services.Locations offer services ranging from preventive care and wellness checks to support with managing chronic conditions.Health Advisors provide a range of health and clinical services that supplement care received from primary care physicians and specialists.Through the Walgreens and VillageMD coordinated care model,patients receive full-service primary care alongside convenient and cost-effective pharmacy services.Walgreens and VillageMD are leveraging their combined expertise in pharmacy and primary care to deliver a series of programs that allow physicians and pharmacists to collaborate closely and coordinate patient care to help make healthcare easier and more accessible for improved long-term outcomes.With these programs,Walgreens and VillageMD can keep patients more connected to care by delivering the right care,at the right time,with more personal service,and by encouraging the adoption of behaviors that can help them get and stay healthy.Boots works closely with the NHS on its Core20PLUS5 initiative.Core20PLUS5 is an approach designed to reduce healthcare inequalities at both the national and system level.The name Core20PLUS5 comes from the population groups identified as vulnerable and lacking healthcare access,and the five clinical areas of focus.Core20 represents the most deprived 20 percent of the national population as identified by the national Index of Multiple Deprivation(IMD).PLUS population groups should be identified at a local level,mostly likely minority communities,people with disabilities and multiple long-term health conditions.The five clinical areas of focus are maternity care,severe mental illness,chronic respiratory disease,early cancer diagnosis and hypertension.In Germany,Alliance Healthcare Deutschland provides pharmacy teams with high-quality training content onsite and online to provide the best care to patients and customers.At the end of fiscal 2023,more than 10,000 people in Germany were trained on topics such as long-COVID,diabetes prevention and“Digital Pharmacy.”More than 90 percent of the people trained work in our customers pharmacies.Healthy Communities 36Environmental,Social and Governance Report 2023OverviewGovernanceAppendicesHealthy and Inclusive WorkplaceHealthy PlanetSustainable MarketplaceClinical trials and researchWalgreens launched its Clinical Trials business in June 2022 and remains committed to increasing diversity in clinical trials and helping drive more equitable and inclusive research.Walgreens combines its trusted relationship with patients in communities throughout the U.S.with health insights and proprietary selection software to proactively match potential patients to trials across a range of disease areas.Walgreens looks forward to reaching eligible patients for enrollment at the right time to deliver the right message and help orchestrate their participation seamlessly,addressing access barriers through a compliant,validated and secure decentralized clinical trial platform built on a rigorous compliance and regulatory framework to protect patient privacy and security.This approach leverages owned and partner digital and physical assets to directly engage patients at home,virtually or in person.Collaboration with AllianceRx Walgreens Specialty Pharmacy,as well as investments made by Walgreens Boots Alliance in VillageMD,CareCentrix and Shields will also support new clinical trial approaches,particularly for specialty treatments.In one U.S.clinical trial for an Atherosclerotic Cardiovascular Disease (ACSVD)study,Walgreens leveraged real-world insights to identify potential study participants w
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AT&T 2022 Sustainability SummaryContentsOverview 3Shareholders&Customers 5Communities 9Employees 16Environment 23Suppliers 28Progress toward Goals 30About this reportThis report reflects the global operations of AT&T,Inc.,and relates to the financial year ending December 31,2022,except where otherwise noted.Inclusion of information in this report should not be construed as a characterization of the financial materiality or impact of that information.Please see our corporate Annual Report or Form10-K for the year ended December 31,2022 and other publicly-filed documents available at .This Sustainability Summary is one component of our comprehensive ESGreporting,accessible via our ESG reporting website:ESG Issue Briefs TCFD Report CDP Climate Change Disclosure Political Engagement Report Transparency Report 2023 Proxy Statement1AT&T 2022 SUSTAINABILITY SUMMARYOVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSLetter from our Chief Executive OfficerEvery year,the internet continues to improve how we live,work and communicate.Fast and reliable connectivity provides extraordinary access to real-time information and better opportunities for education,healthcare,employment and commerce.At AT&T,we take pride in the role we play to connect people to greater possibility.From helping NASA call a man on the moon in 1969 to our work today helping bridge the digital divide,what we do matters.This report details how we continue to address our most important environmental,social and governance issues for the long-term success of our business and better futures for all of us.For example:Employees are dedicated to our mission to help close the digitaldivide.At AT&TConnectedLearningCenters across the country,were helping underserved students and parents access theinternet and get the most out of free AT&T resources focusedon digital learning,literacy,online safety and career readiness.Itsall part of the 3-year,$2billioncommitment we made in 2021 toprovide greater access to affordable high-speed internet and helppeople use it in a safe and positive way.Guided by our science-basedtarget,were taking action to addressclimate change in ways relevant to our business,and to prepare forits impacts on our operations,customers and communities.Weveset meaningful goals by year-end 2035,including to be carbonneutral across our global operations and to save our businesscustomers a gigaton of greenhouse gas emissions throughAT&Tconnectivitysolutions.Were also using cutting-edge climateprojections to build a more climate-resilient network,and weresharing that data publicly to help communities better prepare forextreme weather events.We remain committed to building a“big tent”that fosters adiverse,equitable and inclusive environment for our workforce.OurEmployeeGroups are at the forefront of this effort.Wecontinue to integrate DE&I considerations into hiring,engagementand training activities,and Im proud our efforts have earnedAT&Trecognition as one of the best workplaces for diversity.Weve come a long way,but we know theres more to do.Our commitment to stewardship ensures we are here for our employees,customers and communities as we continue to deliver on our purpose to connect people to greater possibility.I invite you to read on and learn more about how our work is creating long-term value across our operations and how were making adifference in the lives of others and the environment around us.John Stankey Chief Executive Officer,AT&T Inc.2OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYOverview2022 HighlightsOur commitment starts at the top,with oversight from the AT&T Board of Directors and guidance from the Governance and Policy Committee,Audit Committee,and Human Resources Committee.Our Chief Sustainability Officer leads our CSR Governance Council,comprising more than a dozen officers responsible for business operations aligned to our most important ESG focus areas.We also convene 5 core issue committees to implement or enhance ESG programs and policies.READ MORE 2023 Proxy StatementCORPORATE SUSTAINABILITY AT AT&TOur Company purpose is to connect people to greater possibility,and that focus on a better tomorrow is why the sustainability of our company,our communities and our world are so important.Were taking bold action to help bridge the digital divide,and were innovating with connectivity solutions to address some of societys greatest challenges such as climate change.Werealsocreating long-term value by reducing our environmental footprint,enhancing workforce diversity,and integrating ESG considerations into corporate risk management.SHAREHOLDERS&CUSTOMERS$9.9Bdividends returned to stockholders99.5%network reliabilityCOMMUNITIES50 Connected Learning Centers committed through 20244.4MFirstNet connectionsEMPLOYEES75%of open positions were filledbywomen and/or people ofcolorcandidates169%of internal promotions were filled by women and/or people ofcolor candidates1ENVIRONMENT45%Scope 1 and 22 emissions reductions since 20153 2.9M MWhannual energy production of our U.S.renewable energy portfolioSUPPLIERS53%suppliers by spend4 have set science-based targets$16.3Bspend with diverse suppliers5 EnvironmentalGovernanceSocialCORPORATE SOCIAL RESPONSIBILITY BUSINESS UNITSEnvironment Community Employee Activation Human Rights Online SafetyTOPIC-LEVEL COMMITTEESCSR GOVERNANCECOUNCIL BOARD OF DIRECTORS OVERSIGHT ENVIRONMENTAL&SOCIALIMPACTSUSTAINABILITY GOVERNANCE3OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYHow We Create ValueOur PurposeConnecting people to greater possibilityNetworkThe physical infrastructure thatsupports our world-leadingcommunications network.EmployeesOur 163K employees,located across 50 states and more than 55 countries.Customers&CommunitiesOur millions of customers and the local communities where we live and work.FinancialResources and the strength of our balance sheet.Brand and Intellectual CapitalOur brand,our reputation and our capacity for innovation.EnvironmentThe energy,water and other natural resources that we use to support our operations.SuppliersOur network of suppliers across the globe.Shareholders&CustomersWere helping more people connect to greater possibility by investing in network reach,quality and reliability.EmployeesWe empower our people to deliver on our corporate purpose and advance their careers,while fostering a diverse,equitable and inclusive workforce.CommunitiesWere providing communities with the resources and support needed to bridge the digital divide and enhance their resilience.SuppliersWe partner with responsible suppliers who enhance the resilience of our business and advance industry practice.EnvironmentWere reducing our environmental impact and innovating to help customers achieve their environmental goals.page 5page 9page 16page 23page 28Key inputsSocial ImpactESG OperationalIntegrationEnvironmentalImpactOutcomes5G&WirelessNarrowing the Digital DividePublic Sector&FirstNetAT&T Business Disaster RecoveryTechnology&InnovationFiber&InternetFast,reliable and affordable broadband internetAmericas most reliable5G networkOutcomesThe stakeholder value that we create through delivering on our purpose.What we doWe create connection by bringing the benefits of high-quality connectivity and digital access.Key inputsThe resources that we rely upon to create value.ESG approachWe integrate ESG issues into our operations and use our platform to drive positive impact.ESG approachWhat we do6 74OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYShareholders&CustomersBy 2025,we estimate that broadband and wireless users will consume at least five times more data than they did in2021.Through investment in innovation,were sharpening our customer focus and transforming our operations to provide connectivity in ways that benefit both shareholders and society at large.Financial Performance 2022 Page 6 Network Quality&Reliability Page 7 DIVIDENDS RETURNED TO STOCKHOLDERS$9.9BADJUSTED EPS8 FROM CONTINUING OPERATIONS$2.57NETWORK RELIABILITY99.5PITAL INVESTMENT9$24.3BPERFORMANCE SUMMARY(FULL-YEAR 2022)5OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYFinancial Performance 2022Our solid financial performance in 2022 reflected our renewed focus on being the best connectivity provider through 5G and fiber.The divestiture of WarnerMedia in April 2022 created a more streamlined AT&T and helped enable us to invest at record levels to bring the benefits of our 5G and fiber technologies to even more people(page 7).Our network investment supports increasing customer demand for reliable,high-quality connectivity solutions.In 2022,we realized a 7.7%increase in mobility subscribers,3.5%increase in postpaid phone subscribers from the previous year,and 15.6 million mobility net subscriber additions.We had 1.2 million net additions of AT&T Fiber broadband connections,an increase of 17.5%in 2022.From July 2020 through the end of 2022,weve demonstrated sustainable momentum,with 7.5million postpaid phone net customer additions and 2.9millionAT&T Fiber net adds.This momentum,combined with continued demand for high-quality connectivity services,gives us confidence in our trajectory to deliver profitable and durable growth in 2023andbeyond.READ MORE 2022 AnnualReport 2022 10-K 2023 ProxyStatementOur focus on fiberand 5GOur world is being transformed by the widespread and growing availability of 5G and fiber.And AT&T is leading the charge with our ongoing investments in these technologies across ournetwork.Fiber network connections support more bandwidth and faster uploads than standard cable in addition to 99.5%proven reliability.We remain committed to our target of passing more than 30 million fiber locations including 5 million business locations by the end of 2025,having achieved the milestone of passing approximately 24 million fiber locations(including 4 million business locations)at the end of 2022.Our expanding fiber footprint also helps more people enjoy 5G,as fiber provides critical bandwidth connecting our cell towers back to the internet.Weve enhanced 5G reliability and launched our mid-band 5G spectrum.At the end of 2022,our 5G network covered more than 285 million people.People across the country rely on our fast and secure 5G network,which is critical to our efforts to help close the digital divide(page 10),reimagine healthcare and tackle supply chain challenges.AT&T 5G also supports FirstNet Americas public safety network providing first responders with the critical connectivity they need to save lives(seepage14).Increase in mobility subscribers7.7%Increase in AT&T Fiber broadband connection net adds17.5%AT&T fiber passed at24Mlocations at year-end 2022At year-end 2022,more than285Mpeople covered by AT&T 5GCONNECTING MORE PEOPLE TO GREATER POSSIBILITYTotal U.S.Mobility Subscribers(thousands)202020212022182,558201,791217,397U.S.Postpaid Phone Subscribers(thousands)20202021202264,21667,26069,596AT&T Fiber Broadband Connections(thousands)2020202120224,9515,9927,2156OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYNetwork Quality&ReliabilityWe provide customers with the connectivity they need via a network built for speed,security,reliability and overallperformance.Over the past 5 years,weve invested more than$140 billion primarily in our U.S.wireless and wireline networks,including capital investments and acquisitions of wireless spectrum.10 Our network covered more than 2.9 million square miles at the end of 2022,including:Reliable 5G that covered more than 285 million people in nearly24,000cities and towns.Fiber passed at approximately than 24 million locations acrossmore than 100U.S.metro areas.Reliability when its needed mostBecause network connectivity is central to our lives,we are collecting and analyzing data on our network 24/7 to ensure its working correctly,to improve its performance and to deliver the best customer experience.Weve developed a comprehensive network resilience program to maximize service continuity in the face of extreme weather and other disruptions.The AT&T Weather Operations Center helps us stay prepared by proactively monitoring potential nature-related threats to our network,employees and communities.For example,in the lead up to Hurricane Ian,AT&T was able to position disaster response equipment and personnel in strategic areas to respond faster when the storm made landfall(see page 14 for more on our response to Hurricane Ian).When disaster strikes,AT&T is there.Our Network Disaster Recovery program helps rapidly restore communications to affected areas.We have invested more than$650 million in the program,and our employees have dedicated 160,000 working hours to recovery exercises that test the preparedness of our equipment andcapabilities.AT&T was awarded most reliable 5G network according to Global Wireless Solutions OneScore for the 2ndyearinarow.READ MORE Network Quality&Reliability Issue BriefINCREASE IN WIRELESS NETWORKCOVERAGE (SQUARE MILES)100KINCREASE IN LENGTH OF FIBERLAID IN THE U.S.(MILES)60KNETWORK TRAFFIC ON AN AVERAGE BUSINESS DAY(PETABYTES)594CAPITAL INVESTMENT9$24.3B$140Binvested primarily in our U.S.wireless and wireline networks over the past five years (20182022),including capital investments and acquisitions of wireless spectrum10 More than$650Minvested in our Network Disaster Recovery program7OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYPRIVACY AND NETWORK SECURITYEveryone deserves a safe,secure online experience,and AT&T is committed to protecting the privacy and security of all our customers.Our products and services are designed with privacy inmind,and we give customers controls over how their information is shared.We also invest in customer solutions and trainings to help customersprotectthemselvesfromfraud.A safe customer experience depends on a secure network.Our experts are always looking for emerging challenges,and we regularly evaluate and deploy new tools and systems that deliver highly effective safeguards against attemptedcyberattacks.OUR PRIVACY PRINCIPLESTRANSPARENCY Were open and honest about how we use your data.CHOICE AND CONTROL We give you choices about how we use your data.SECURITY We use strong safeguards to keep your data confidential and secure.INTEGRITY We do what we say.Network Quality&ReliabilityIncreasing climate resilienceOur approach to climate risk recognizes that we must not only transition to a low-carbon economy(page 24),but importantly,address the physical impacts of climate change.Building climate resilience means understanding the threats we face from climate change and taking steps to prepare our infrastructure to withstand more frequent extreme weather.Fortifying our network helps ensure continuity for the millions of people who depend on our connectivity services every day.In collaboration with the U.S.Department of Energys Argonne National Laboratory(Argonne),we developed AT&Ts Climate Change Analysis Tool(CCAT),which helps visualize wind,drought,wildfire and flooding at the neighborhood level up to 30 years in the future.With CCAT,we can take climate change into account as we plan for network buildouts,maintenance and disaster preparedness.We also collaborated with Argonne and the Federal Emergency Management Authority to share our climate expertise more widely through the launch of ClimRR,a climate risk and resilience portal that offers CCAT data for community preparedness initiatives across the U.S.(page 15).In 2022,we continued to enhance our climate risk management by engaging an external vendor to conduct a scenario analysis,building on our existing climate impact assessment work.Relevant insights will be incorporated into AT&T sustainability governance,risk management,and financial and strategic planning processes.READ MORE Privacy Issue Brief Network&DataSecurity Issue BriefREAD MORE Climate Change&Greenhouse GasEmissions Issue Brief Network Quality&Reliability Issue Brief8OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYDigital Divide Page 10 Community Resilience Page 14 CommunitiesThe internet is increasingly vital to our everyday lives,whether it be learning in and outside the classroom,accessing healthcare,finding jobs,or socializing and staying close to family.But many people cant reliably access the internet,as millions of Americans still dont have broadband internet access at home.Others also miss out because they dont have the skills necessary to take full advantage of its potential.Through our ongoing investment to help close this digital divide,were helping more people get online and connected to greater possibilities.AT&T CONNECTED LEARNING CENTERS(AT YEAR-END 2022)20FIRSTNET CONNECTIONS4.4M9OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYWeve committed$2 billion to helping close the digital divide by focusing not only on access to affordable high-speed internet,but also the skills and community resources that encourage safe and successful adoption.Digital DivideCONNECTING TOWNS ACROSS AMERICANearly 1 in 4 rural Americans say that broadband internet access is a major problem in their communities.11 Throughout 2022,AT&T continued to partner with state and local authorities in smaller towns and cities to address this issue.These efforts contribute to our target to pass more than 30 million fiber locations,including business locations,in the United States by the end of 2025.We began work on a$24 million collaboration between AT&T and the city of Amarillo,Texas to bring reliable,high-speed internet to more than 22,000 residential and business locations in the city.One of the areas that will benefit directly is East Amarillos Barrio neighborhood,which has been the focus of a revitalization plan since 2018.In Kentucky,Oldham County selected AT&T to build a state-of-the-art fiber network that will connect every home and small business in the county.In neighboring Indiana,weve been working with the City of Martinsville,the City of Boonville and Vanderburgh County on fiber projects that will bring the benefits of broadband to their communities.All these investments help narrow the digital divide so all Americans have the opportunity to connect to a betterfuture.ACCESSWere keeping customers and communities connected through investing in our network(page 7)and working with state and local officials to extend our broadband networks.Were also providing access to AT&T Fiber,Wi-Fi,and computers at AT&T Connected Learning Centers in underserved neighborhoods(page 11).AFFORDABILITY AT&T is participating in the FCCsAffordable Connectivity Program(ACP)12to help make wired and wireless services more affordable for millions of American households.By combining the federal ACP benefit with one of the Access from AT&Tplans,eligible households can take advantage offree high-speedinternet.ADOPTIONHaving a broadband connection and digital resources isnt enough.The AT&T Connected Learning initiative equips people and communities with digital literacy skills so they can thrive online(page13).It also helps communities understand and appreciate the value of their connectivity.10OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYDigital DivideExpanding access to low-cost broadbandEstablished in 2016,Access from AT&T makes low-cost internet service available for qualifying low-income households.In 2022,weexpanded the programs eligibility to all households that qualify for ACP and apply the federal benefit to AT&T internet service.We also updated the program to include speeds up to 100 Mbps where available.We work with grassroots organizations to ensure low-income people and families are aware and can take advantage of theoffer.$2Bour 3-year commitment to address the digital divide20Connected Learning Centers opened by end of 202250 Connected Learning Centers to be opened by end of 2024READ MORE Digital DivideIssue Brief Access fromAT&T websiteAT&T Connected LearningThrough AT&T Connected Learning(SM),were investing in technology,digital literacy and digital learning solutions to help connect todays learners with success.Were guided by our target to reach 1millionpeople in need with digital resources by year-end 2025,and had reached more than 290,000 by the endof2022.Weve established AT&T Connected Learning Centers in underserved neighborhoods across the country,working with local community organizations to provide students and families free access to high-speed fiber internet,Wi-Fi and Dell computing devices.AT&T employees also serve as tutors and mentors at these centers through our AT&T Believes(SM)volunteerism initiative(page 21).In 2022,we opened centers in citiesincluding:Atlanta Detroit Tupelo,Mississippi Augusta,Georgia Houston Raleigh,NorthCarolina Chicago Los Angeles Cleveland San FranciscoWe reached our target to open at least 20 AT&T Connected Learning Centers by 2023 and have increased our ambition to establish more than 50 centers by the end of 2024.PROGRESS:PROVIDE 1 MILLION PEOPLE IN NEED WITH DIGITAL RESOURCES BY YEAR-END 202501,000,000290,000 people reachedPROGRESS:OPEN MORE THAN 50 CONNECTED LEARNING CENTERS BY YEAR-END 2024050 centers20 centers openedWere also providing technology and equipment directly to low-income learners who need it most.We partnered with nonprofit device refurbishers such as Digitunity,Compudopt and Human-I-T to get more than 40,000computers into the handsof students and families nationwide.More than40,000computers distributed to those in need through nonprofit device refurbishment organizations40,610Wi-Fi hotspots distributed to underserved students in 2022READ MORE Digital Divide Issue Brief11OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYDigital DivideConnectivity for all ages in ClevelandCleveland resident Ivy Fontanez came to the AT&T Connected Learning Center at Esperanza after her kids left home and she had no idea what to do next.The Esperanza center offered her free access to high-speed broadband,Wi-Fi and computers,as well as educational and mentoring resources.Despite thinking it was too late at age 42 to learn digital skills,Ivy got online at Esperanza and has started taking college classes.On the other side of Cleveland,the AT&T Connected Learning Center within the Ashbury Senior Computer Community Center hosted a block party in 2022 that brought together more than a hundred neighbors.At the event,attendees learned about how they can access low-cost internet through Access from AT&T and many parents with school-age children took home refurbished laptops.Our 2 Cleveland AT&T Connected Learning Centers and the growing number of others across the country demonstrate one way AT&Tis committing to closing the digital divide,from school kids to retirees and everyone in between.“There are a lot of people like me,who are struggling,and the AT&T Connected Learning Center at Esperanza brings us hope.”Ivy Fontanez,Esperanza client Read more about Ivys experience at Esperanza.READ MORE Digital DivideIssue Brief AT&T ConnectedLearning website12OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYDigital DivideCOLLABORATING FOR IMPACTThrough our collaboration with the Public Library Association(PLA),we worked to bring bilingual,in-person digital literacy workshops to 160 libraries in 2022.To help us gauge the effectiveness of our workshops,we collaborated with the PLA to survey participants about their experience.As indicated by the results below,the vast majority felt more confident and knowledgeable about digital resources as a result of their participation in a library workshop and intend to apply what theyve learned.88el more confident using digital resources90el more knowledgeable about using digital resources91%intend to apply what theyve learnedDigital literacy and digital learningEven with access to affordable internet,many lack the skills,tools and resources to navigate the web safely and effectively.Through AT&T Connected Learning,we provide free digital literacy and learning resources for parents,caregivers and families.In 2022,we made hundreds of educational videos,lessons and learning activities available to students through The Achievery,a free and safe online distance learning platform offering educational content and lesson plans aligned with academicstandards.We also collaborated with organizations including All4Ed,National After School Association,Connected Nation,Digitunity and others to help bring The Achievery to students in and out of school.In 2022,more than 78,000 students participated in learning with The Achievery.78,000 studentsparticipated in learning activities through The AchieveryOur impact is amplified when we equip community members with the tools and expertise necessary to act as digital navigators-facilitators that help others in their community develop digital skills necessary to leverage their internet access.In 2022,we invested$2.5 million to launch our digital navigator program and community-based IT helpdesk that will provide training to community members in navigator roles.Deploying digital navigators within local communities has been proven to drive adoption across underrepresented communities because residents feel more comfortable and safer receiving help through localorganizations.13OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYCommunitiesCommunity ResilienceWhen disaster and tragedy strike,its crucial that people are able to connect with loved ones and access what they need to get back on their feet.Recognizing the important role we play as a connectivity provider,weve set a target to help 1 million people prepare for and recover from the impacts of disasters by year-end 2030.This commitment focuses on essential support for communities and public safety through strategic partnerships beyond our normal emergency response and network disaster recovery operations.For example,we have partnered with Information Technology Disaster Resource Center,a volunteer organization that provides connectivity and charging solutions to support survivors in times of crisis.Since establishing the target in 2021,we have helped more than 500,000 individuals prepare for and recover from natural disasters.Connecting first responders through FirstNetWhen first responders get the call,a reliable network is essential to coordinate their response.To address this critical need,the First Responder Network Authority(FirstNet Authority)partnered with AT&T to deliver FirstNet,Built with AT&T the only network built specifically for Americas first responders and extended public safety community.FirstNet stands above commercial offerings by providing first responders with truly dedicated coverage and capacity when they need it,unique benefits like always-on priority and preemption and innovative mission-ready solutions.Throughout 2022,FirstNet played an important role in supporting community safety,including during and after the Colorado and Yosemite fires,flooding in Kentucky,and Hurricane Ian.Recognizing that disasters have contributed to a mental health crisis among our nations first responder community,we established the FirstNet Health&Wellness Coalition to coordinate holistic health and wellness support.Through the Coalition,we provided health and wellness training to nearly 12,000 first responders.99%U.S.population covered by AT&T and FirstNet networksPROGRESS:HELP 1 MILLION PEOPLE PREPARE FOR AND RECOVER FROMNATURALDISASTERS BY YEAR-END 203001,000,000500,000 individuals helpedOUR RESPONSE TO HURRICANE IANHurricane Ian struck Florida in September 2022,bringing record flooding and significant devastation to Gulf Coast communities.Prior to landfall,the AT&T Weather Operations Center(page 7)tracked Ians approach to help us set up resources in strategic locations to expedite our response.As the storm passed,the FirstNet Response Operations Group at AT&T responded to more than 110 public safety requests with first responders and deployed more than 85 full-scale communications solutions to support response efforts.In the aftermath,we opened our networks so people from all carriers could connect with loved ones even if their carriers services were not available because of the storm.To ease financial pressures as communities recovered and rebuilt,we waived various service charges and fees for affected residents and businesses.AT&T and the AT&T Foundation provided further support by donating$400,000 to local organizations for recovery efforts(page 22).READ MORE Community Engagement&Philanthropy Issue Brief FirstNet website14OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYCommunity ResilienceHelping communities adapt toclimatechange1 in 3 Americans say they have been personally affected by an extreme weather event in the past 2 years.As these events become more frequent and intense,community leaders need to understand how they can better protect critical infrastructure and vulnerable populations.Were helping communities enhance their resilience through the launch of a climate data platform called the Climate Risk and Resilience Portal(ClimRR)developed in partnership with the Federal Emergency Management Agency and ArgonneNationalLabs.ClimRR gives local and state leaders free access to localized climate data about potential future climate-related risks and how their community could be affected.Similar to how AT&T uses climate data to inform its own investment decisions(page 8),ClimRR can inform where and how communities can make their own infrastructure more resilient.It can also support community preparation initiatives through an enhanced understanding of how climate hazards may evolve into thefuture.READ MORE Climate Change&Greenhouse GasEmissions Issue Brief ClimRR onAT&T website“Our resilience is interconnected with that of our communities thats why were helping others prepare for the impact of severe weather in the years to come.”Charlene Lake AT&T Chief Sustainability Officer&SVP Corporate Social Responsibility15OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYEmployee Engagement Page 17 Training&Career DevelopmentPage 20 Diversity,Equity&InclusionPage 18 Community Engagement Page 21 EmployeesAcross all 50 U.S.states and in more than 55 countries,AT&T employees deliver technology and telecommunications services to millions of consumers and businesses every day.We strive to be an employer of choice and invest in our people through well-paying jobs,competitive benefits and skills development programs that open advancement opportunities.We aim to ensure a workforce that is representative of the communities where we live and work.Our approach seeks to establish diversity at all levels and instill a sense of belonging across our entireworkforce.EMPLOYEE ENGAGEMENT SCORE82%TOTAL HOURS OF EMPLOYEE TRAINING178MOPEN POSITIONS FILLED BYWOMEN AND/OR PEOPLE OF COLOR CANDIDATES175OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYEngaged employees are essential to bringing our companys purpose to life.We are committed to helping employees to feel connected to and fulfilled by their work.The annual AT&T Employee Survey is a key input to our employee listening program.Through this survey,we obtain feedback on employee sentiment and gain actionable insights on how to enhancethe employee experience at AT&T.The 2022 AT&T Employee Survey recorded a strong employee engagement score of 82%.13 The feedback behind this score demonstrates that employees are proud to be associated with AT&Tand feel a sense of personal accomplishment from their work,among other factors.Engagement scores and other AT&T Employee Survey results are shared throughout the organization,and leaders take responsibility for targeted initiatives based on feedback from their teams.Forexample,as part of our ongoing cultural transformation initiative,weve been amplifying our most effective corporate behaviors and empowering employees to simplify or discontinue business practices that no longer aid in the success of our company.READ MORE Human CapitalManagement Issue Brief AT&T Careers websiteEmployee EngagementCONNECTING OUR PEOPLE TO WHAT MATTERSEmployees who participate in community engagement programs are significantly more likely to stay with the business,recommend AT&T as a place to work,and generally feel better about working for the company.Recognizing the importance of connecting our people to our social and environmental efforts,were working to increase employee awareness of our commitments to address the digital divide and climate change.AT&T employees are volunteering to bridge the digital divide in their local communities(page 21),stepping up as Environmental Champions(page 22),and innovating to help our business customers reduce their emissions(page 26).163Kemployees7 across 50states and 55 countries 82%employee engagement score in 202202040608020202021202277%year-over-year employee engagement17OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYDiversity,Equity&Inclusion(DE&I)By building a diverse,equitable and inclusive workforce,we help strengthen and empower the many communities in which welive,work and play.Our approach to DE&I puts our employees and their experiences at the heart of our inclusive culture,valuing and celebrating the diversity of their backgrounds,perspectives and abilities.We prioritize recruiting and hiring talented people who reflect the world in which we live,with heightened focus on growing our senior leadership pipeline of diverse talent.We also continue to focus on ensuring diversity in promotions and professional development(see page 20 for more on how we integrate DE&I into our training efforts).Employee Group members are our organizations cultural lifeblood and at the forefront of our efforts to advance DE&I.In 2022,more than 40,800employees participated in networking,volunteering and fundraising opportunities sponsored by Employee Groups.In addition,our Employee Groups awarded more than 300 scholarships totaling more than$565,000.Were proud to be recognized by top DE&I organizations for our support of diverse communities in 2022.READ MORE Diversity,Equity&Inclusion Issue Brief AT&T Diversity,Equity&InclusionwebsiteEMPLOYEE DEMOGRAPHICS(END OF YEAR 2022)1437%women in senior management15 49%people of color inU.S.workforce6.7Kindividuals with disability inU.S.workforce16 11.4Kveterans inU.S.workforce16 2.7Kindividuals identify as LGBTQ inU.S.workforce16 HIRING AND ADVANCING AT AT&T(2022 REPORTING PERIOD)37%of new hires were women65%of new hires were peopleofcolor75%of open positions were filledby women and/or people of color candidates1 69%of internal promotions were filled by women and/or people of color candidates1 Bloomberg Gender EqualityIndexDiversityInc Top 50 Companies for DiversityBest Places to Work for LGBTQ EqualityBest Place to Work for Disability Inclusion18OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYDiversity,Equity&Inclusion(DE&I)PEOPLE,PURPOSE AND POSSIBILITYThe annual AT&T Employee Group conference is one of the most anticipated employee events of the year.Under the banner of People,Purpose and Possibility,the 2022 conference brought together 1,000employees in five locations across the U.S.and Mexico,and another 15,000online attendees from 21 differentcountries.Employees said that the conference showcased how AT&T is truly living diversity and inclusion,and more than 90%ofattendees said they would recommendthe conferenceto acolleague.When surveyed about the AT&T Employee Group conference,our people said:“Ilovedtheenergy,itreallyhelpedtokeepmeengaged andIwouldattendthiseventagain.”“Greatevent,itreallyprovidedabigpictureofthelevel ofdiversityatAT&T.”READ MORE Diversity,Equity&Inclusion Issue Brief AT&T Diversity,Equity&Inclusion websiteEquality FirstIn 2021,we began our Equality First movement with the launch of the Equality First mobile app,giving employees access to an immersive hub of content and hands-on tools.The content within the app continues to grow,including personal storytelling from employees across the broad spectrum of diversity at AT&T,as well as major film festival shorts that bring stories from the communities we serve to employees.We provide this content at nocost to our employees,all while investing back in the filmmakerswho create it to continue their art and connect with greater possibilities.In 2022,we expanded the Equality First offering to introduce a desktop experience focused on building inclusive leadership practices.This imperative provides people leaders the tools needed to make small,incremental changes to their behaviors that add up to big cultural changes over time.The platform offers bite-sized learning on our key DE&I pillars that can be integrated into daily operations and provides a safe,private forum for discussing the content,asking questions,and sharing challenges.With this experience,our peopleleaders:Improve trust-building know-how,built on a foundationofpsychological safety.Learn how to communicate to inspire broader audiences.Sharpen their ability to recognize and counteract how bias impactstheir teams work and relationships.Upskill in assessing team members contributions through thelenses of inclusion and equity.Gain expertise to more consciously and comfortably builddiverseteams.19OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYTraining&Career DevelopmentWhen our employees succeed,our company does better.We invest in skills development programs for our people throughout their careers.Through these efforts,we help our employees and our business thrive.In 2022,our employees completed an average of 30 courses per employee1 through AT&T Learning&Development our award-winning internal training organization that engages our team with training,mentoring and career development programs.We also partner with learning institutions such as Harvard Business and LinkedIn Learning to offer leadership and career courses.Key outcomes of our training and development programs in 2022 include:$135Minvestment in employee trainingand professional development programs17 197Kemployees reached17 8Mtotal hours of employeetraining17 326Khours devoted to upskilling forfuture roles17$10.5Mtuition assistance foremployees1 READ MORE Human CapitalManagement IssueBriefDEVELOPING LEADERSHIP SKILLSIn 2022,we reimagined our approach to leadership development.We focused on developing and enhancing leadership skills and capabilities that aim to develop leaders who can play a role in developing others and who can role model key future capabilities for the rest of the organization.Participants in programs AT&T Learning&Development facilitates gain strategic exposure and engagement opportunities with their peers and other AT&T leaders.Consistent with our talent strategy to meaningfully improve leadership diversity at AT&T,AT&T Learning&Development facilitates several programs targeted at developing diverse leaders.Examplesinclude:Leadership Education for Asian PacificsSMU Rising Latino Leaders ProgramBlack Enterprise Black Men Xcel SummitBlack Enterprise Black Women of Power SummitPROGRAMS FOR ALL CAREER STAGESOur training and skills development activities are designed to maximize our employees success in their current roles and support their future aspirations.NEW HIRE TRAINING We focus on creating a positive onboarding experience for all candidates to ensure their job readiness and continued engagement.In 2022,we delivered 4 million hours of new hire training to help incoming employees learn about the company and their department-specific roles andresponsibilities.ROLE-SPECIFIC SKILLS We help employees develop role-specific skills through training optimized to their current position.For example,our Real Time Training method helps employees develop role-specific skills by using machine learning to deliver short-form training content to the right employees at the right time.With Real Time Training,we are able to identify who needs training and when,as well as which training solution is most likely to drive the greatest performance improvements for the employees respective key performance indicators.ADVANCED LEARNING PROGRAMS Our advanced learning programs help employees identify the most impactful path to grow their skills.In 2022,employees recorded 2.1 million training hours on advanced learning programs,with 326,000 hours registered toward employee upskilling for a future role.17 20OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYAT&T BELIEVES AND THE DIGITAL DIVIDEThrough AT&T Believes(SM),our global employee volunteer program,our people participate in grassroots efforts to create positive change in local communities.Addressing the digital divide was a major focus for AT&T Believes in2022.Throughout the year,U.S.employees volunteered to support underserved learners at AT&T Connected Learning Centers both virtually and in-person(see page 11 for more on AT&T Connected Learning Centers).Our employees helped students reach their full potential by serving as tutors and mentors,teaching digital literacy workshops,and participating in computer distribution events.Helping close the digital divide was the focus of a company-wide employee engagement campaign,Bridge to Possibility:Closing the digital divide,together.During the campaign,AT&T employee volunteers beautified five Connected Learning Centers and our Employee Groups(see page 18)assembled 10,000connected learning kits for distribution to 18local communities.The kits provide tools to support students in completing their schoolwork online.Community EngagementThrough their jobs and beyond,our employees connect people to greater possibility every day.Our people are dedicated to amplifying their positive impact through a range of community engagement initiatives.Throughout the year,AT&T employees contribute their time and resources to organizations and causes including bridging the digital divide,disaster relief,and environmental stewardship.Recognizing the importance of community engagement to our team,we established a target to engage 50%of employees in grassroots volunteering and charitable giving initiatives by year-end 2030.At the end of 2022,wehad engaged 31%of employees and continue to progress toward ourtarget.18 PROGRESS:ENGAGE 50%OF EMPLOYEES IN VOLUNTEERISM AND GIVING BY YEAR-END 20300P1%engagementREAD MORE Community Engagement&Philanthropy Issue Brief AT&T Believes website21OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYCommunity EngagementOur Environmental ChampionsOur Environmental Champions program engages employees in our work to protect the environment by equipping them with information and skills to help them live and work more sustainably.The program has grown to include more than 1,800 individuals,who incorporate learnings into their own lives and share information with colleagues and friends.Our employees also took part in environmental stewardship projects including building bee habitats,planting seed balls,and cleaning up parks and lakes.The generosity of our peopleWe encourage our employees to donate to causes they care about through a year-round giving program.In 2022,more than 40,000 AT&T employees generously donated$15.7 million to more than 17,000charities.19 AT&T is committed to helping employees further their philanthropic impact.We offer a program that matches employee charitable contributions to 501(c)(3)nonprofits and allows employees to earn Volunteer Rewards grants based on time volunteering in the community that can be directed to the 501(c)(3)charity of their choice.In 2022,more than 45,000employeesearned Matching and Volunteer Rewards.Our people also supported special fundraisers throughout the year.Employees donated more than$250,000 to support the citizens of Ukraine,the communities of Uvalde and Buffalo,survivors of Hurricanes Fiona and Ian,and more(see page 14 for additional information on our community resilience efforts).TOTAL AMOUNT OF CORPORATE AND AT&T FOUNDATION GIVING20$89.1MTOTAL AMOUNT CONTRIBUTED OR DIRECTED THROUGH CORPORATE,EMPLOYEE AND AT&T FOUNDATION GIVING PROGRAMS$104.8MTOTAL VALUE OF EMPLOYEE VOLUNTEERISM21$11.6MPERCENTAGE OF EMPLOYEES WORLDWIDE ENGAGED IN COMMUNITIES THROUGH GRASSROOTS VOLUNTEERISM AND GIVING INITIATIVES 31%READ MORE Community Engagement&Philanthropy IssueBrief22OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYGigaton Goal Page 26 Carbon Neutrality Page 24 Waste Management Page 27 EnvironmentAs one of the worlds largest companies,we can play a role in creating a better,more environmentally sustainable future.Were acting to address climate change and prepare for its impacts because it is good for our business,for the stakeholders we serve and for our planet.Were on our way to carbon neutrality by the end of 2035 and are actively working with our suppliers and customers to help reduce their environmental impact as well.ANNUAL ENERGY PRODUCTION OF OUR U.S.RENEWABLE ENERGY PORTFOLIO3 2.9M MWhU.S.EPA GREEN POWER PARTNER LISTRANKING6thCUSTOMER EMISSIONS REDUCTIONS ATTRIBUTABLE TO AT&T SMART CLIMATE SOLUTIONS SINCE 2018(METRIC TONS CO2e)149.2MGROSS ANNUALIZED COST SAVINGS SINCE 2015 FROM ENERGY EFFICIENCY PROJECTS$663M23OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYCarbon NeutralityClimate change is one of the worlds most pressing challenges.Ourconnectivity can be part of the solution.Guided by our Climate Strategy and Transition Plan,were acting to address climate change and prepare for its impacts.We have set a goal to be carbon neutral,targeting net zero Scope 1 and 2 greenhouse gas(GHG)emissions2 for our operations by the end of 2035,guided by a science-based target(SBT)aligned with keeping global temperature increases to below 1.5 degrees Celsius.We continue to progress toward our carbon neutral and SBT ambitions,having reduced emissions by more than 41%at the end of2022(2015 baseline).3 Looking beyond AT&Ts operations,weve achieved our objective for at least 50%of our suppliers22 to set their own science-based targets(page 29).Weve also committed to supporting a gigaton of customer emissions reductions through our Gigaton Goal(page 26).PROGRESS:REDUCE SCOPE 1 AND 2 GHG EMISSIONS 63%BY YEAR-END 203030cE%reductionPROGRESS:ACHIEVE NET ZERO SCOPE 1 AND 2 GHG EMISSIONS BY YEAR-END 2035300E%reductionEnhancing our efficiencyOur greatest opportunity for emissions reductions is to reduce electricity consumption and accelerate our energy efficiency efforts.Being smarter with purchased electricity also brings financial savings as we drive kilowatts out of the business,we remove both emissionsand energy-related costs.From 2015 through 2022,weve implemented approximately 161,000energy efficiency projects across the organization.These projects reduced our Scope 2 emissions and amounted to gross annualized savings of approximately$663 million.23 We will continue toact on opportunities to drive down energy consumption in support ofour carbon neutralgoal.161Kenergy efficiency projects implemented since 20157M MWhof annual energy savings since 2015$663Mgross annualized cost savings since 2015 Reducing fleet emissionsOur carbon neutral goal also includes reducing emissions from our global fleet.We expect to reduce our fleet emissions which currently account for 51%of our Scope 1 emissions at least 76%by 2035.Our strategy involves optimizing routes,switching to hybrid and electric vehicles and reducing the overall size of the fleet.READ MORE Energy ManagementIssue Brief Climate Change&GreenhouseGas Emissions Issue Brief24OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYCarbon NeutralitySupporting clean energyAT&T is one of the largest corporate buyers of renewable energy in the U.S.24 Over the past few years,AT&T has transitioned from generating only a few megawatt-hours of renewable energy to being#6 on the EPA Green Power Partner List.Going big on renewable energy also benefits local communities.AT&T-backed renewable energy projects are creating hundreds of construction jobs and dozens of permanent jobs in the fast-growing clean energy sector.In early 2022,we confirmed 2 virtual power purchase agreements from new solar projects in Maryland and Pennsylvania generating up to 300 construction jobs in each state.We also administered a national request for proposal in 2022 to procure community solar subscriptions.This resulted in executed agreements with 38 vetted community solar projects across 4 states totaling a maximum capacity of 55 MW that are projected to saveAT&T$15 million over a 15-year term.These agreements will enablethe production of over 191,000,000 kWh of clean energy per year,avoiding over 135,000 metric tons of CO2 emissions.We remain committed to expanding our clean energy efforts and expect to continue to grow our renewable energy portfolio.This will be an integral part of how we meet our emissions reduction goals.2.9M MWhannual energy production of our U.S.renewable energy portfolio“Were investing in renewable energy because it is good for the planet and good for our business.”Joe Taylor AT&T Vice President of Global Infrastructure Optimization&Implementation25OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYGigaton GoalWe are amplifying our climate efforts by developing innovations that help others become more efficient and manage their carbon footprints.Since 2015,we have been working with business customers and nonprofits to drive adoption of AT&T Smart Climate Solutions that reduce GHGemissions.Recognizing the opportunity for connectivity solutions to support emissions reductions at scale,we established the Gigaton Goal acommitment to help our customers collectively reduce a gigaton of GHG emissions by the end of 2035(2018 baseline).At the end of 2022,weve supported 149.2 million metric tons of customer emissions reductions approximately 15%of the way toward our Gigaton Goal.25Connected Climate InitiativeThrough the Connected Climate Initiative(CCI),we convene the brightest minds from leading technology companies,AT&T Business customers,universities and nonprofits to identify best practices,develop new products and scale innovations.The CCI drives our Gigaton Goal progress through increasing the adoption of Smart Climate Solutions that use AT&T connectivity to reduce emissions.Some of the Smart Climate Solutions that the CCI worked on in2022include:SALESFORCE Integrating AT&T Internet of Things(IoT)solutions into the Salesforce Net Zero Cloud to make it easier for customers to monitor assets in near real-time and quickly identify emissions reduction opportunities.GEOTABWorking with GeoTab to help customers make informed decisions about how to electrify their fleets.MICROSOFT AND DELOITTECollaborating with Microsoft and Deloitte to bring the ConnectedSpaces product to market,which helps facility operatorstrack emissions data with more accuracy.PROGRESS:GIGATON GOAL SUPPORT 1 BILLION METRIC TONS OF CUSTOMER GHG EMISSIONS REDUCTIONS BY YEAR-END 203501,000,000,000149,200,000DATA MANAGEMENT FOR NET ZEROMonitoring and reducing an organizations GHGemissions can be complex.Our IoT solutions enable customers to monitor and manage many different types of equipment,including lighting,heating,cooling and other mechanical equipment to optimize their use.For example,AT&T developed Equipment and Machinery Solutions to better track,monitor,control and optimize heavy machinery and equipment,such as dozers,forklifts and cranes,and help companies manage their performance all in a single view.This IoT solution helps companies collect and survey vital equipment data,such as engine hours and fuel consumption of machinery,to calculate emissions within the Salesforce Net Zero Cloud-enabling businesses to better track their sustainability goals from the job site to the boardroom.NetZero Cloud provides AT&Ts customers with critical data accessible from virtually any location via a web portal or mobile app.This AT&T capability is available for any of our business customers.READ MORE Climate Change&Greenhouse GasEmissions Issue Brief AT&T Reducing Emissionswebsite26OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYGIVING A SECOND LIFE TO OLD DEVICES14.9Mconsumer devices reused or recycled in 202227 11%materials from take-back programs recycled28 89%materials from take-back programs reused or sold28 0%materials from take-back programs landfilled28 Waste ManagementAs the scale of human impact on our planet continues to grow,its become clear that conventional,linear methods of production and disposal need to be reconsidered.We must move toward a circular economy,which involves embedding sustainability throughout the life cycle of a product or service.Many materials that we work with can be reused or repurposed instead of being sent to landfill.Together with our waste management partners,weve progressed closer toward our target to reduce the amount of U.S.waste sent to landfill by 30%by year-end2030(2019 baseline).At the end of 2022,we reduced the amount of landfill waste by 27.9%from 2019.26We worked to reduce our waste footprint in 2022 through:Improving data accuracy in our supply chain through targetedtraining for mobility and fleet vendors.Contracting with more vendors located closer to our wastestreams,which increases diversion opportunities and reduceswaste-related emissions.Continuing to divert fiber-optic cable scrap,which can be shreddedand milled to serve as components for roofing materials.PROGRESS:REDUCE AMOUNT OF U.S.WASTE SEND TO LANDFILL 30%BY YEAR-END 20300.9%reduction 30%READ MORE Product Life CycleIssue Brief Waste ManagementIssue BriefProgressing toward circularity All electronic devices should be reused,refurbished or recycled.Reusing devices contributes to a circular economy and helps create more affordable product options for consumers.In 2022,we recovered 14.9 million devices including mobile phones,internet gateways and television set top boxes.27 Some of these devices are refurbished and distributed to students affected by the digital divide(page 10).If a device cannot be reused in its entirety,we extract individual parts that may be reusable and recycle any remaining plastics and metals.AT&T makes it easy for customers to give a second life to their old devices,including:Encouraging customers to return old phones during the upgradeprocess or by taking advantage of our trade-in programs.Refurbishing or recycling broadband internet devices throughin-home appointments where an AT&T technician will recoverusedequipment.Offering options for customers to mail their devices back toustorecycle.Were proud that 0%of materials from take-back programs went tolandfill in 2022.28 These efforts provide a solid foundation for our circular economy approach,which we expect to expand in 2023.27OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYSuppliersWhether its combatting climate change,enhancing diversity,or upholding human rights,we accomplish more when we work together with our trusted suppliers.As a global company,we rely on a diverse set of suppliers around the world.29 We partner with suppliers who hold themselves to high ethical standards and who work with us to advance sustainable business practices throughout our supply chain.SUPPLIERS4 WITH THEIR OWN SCIENCE-BASED GHG TARGETS53%SPEND WITH DIVERSE SUPPLIERS IN 20225$16.3B28OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYResponsible Supply ChainCombatting climate change togetherWere using our scale and influence to encourage AT&T suppliers to reduce their own carbon emissions.Part of AT&Ts science-based target(page 24)includes a commitment to ensure 50%of our suppliers4 set their own science-based GHG targets by year-end2024.Were proud to report that we achieved our goal as of year-end2022,53%of our suppliers have set science-based targets.Through the year,we also trained suppliers on using environmental reporting to track progress and reduce their environmental impact over time.Suppliers representing more than$7 billion in annual spend participated in the training.Enhancing supplier diversityAT&T is proud to be a long-standing leader in supplier diversity.Over the last 54 years,we have spent more than$230 billion with businesses and enterprises owned by minorities,women,veterans,LGBTQ persons,and people with disabilities.In 2022,we met our annual goal to exceed 21.5%of supplier spend and$10 billion in total procurement expenditures with diverse suppliers,reaching$16.3billion.5 This represents 26.3%of our overall procurement spend.As we adopt new and emerging technologies critical to our business initiatives,were focused on ensuring diverse businesses are part of our transformation.We participate in regional and national supplier diversity events and work with several diversity business organizations,such as the National Minority Supplier Development Council,for targeted supplier identification.In 2022,AT&T sponsored or participated in roughly 250in-person and virtual supplier diversity outreach events.Our supplier financing programs allow small,diverse businesses to leverage the credit power of AT&T.In 2022,participants in our supplier financing program included 96 certified women-owned business enterprises,91 certified minority business enterprises and 10certified disabled-veteran enterprises.Supplier sustainability integrationWe engage our strategic suppliers to integrate sustainability performance metrics into sourcing decisions.These assessments cover a range of ESG factors such as environmental management,circular economy,stakeholder engagement and a suppliers management of its own supply chain.Our objective is for at least 80%of spend to be covered by supplier sustainability assessments through 2025.As a signatory to the UN Global Compact,we recognize the importance of upholding human rights in our supply chain.Through our membership in the Joint Alliance for CSR(JAC)we conduct audits annually within our supply chain using a common audit framework that includes facility evaluations,management interviews,confidential worker interviews and supplier documentation reviews.The JACauditframework addresses 10 focus areas,including human rights considerations such asthe use of child labor and forced/bonded labor.In 2022 JAC audited 79 factory locations,30 including 41 AT&T suppliers,impacting over 133,000 individuals.AT&T led a combination of 6 audits and Mobile Worker Surveys of AT&T suppliers factory locations.JACidentified 549 corrective actions and closed 51%of all open and newly identified corrective actions including 61%rated as major,30%rated as minor and 10%flagged for priority.31 READ MORE Responsible Supply ChainIssue Brief AT&T SupplierDiversity website$16.3Bsupplier spend in 2022 with businesses owned by minorities,women,veterans,LGBTQ ,and people with disabilities582%of spend had sustainability performance metrics embedded in sourcing decisions in 202232PROGRESS:ENSURE 50%OF SUPPLIERS ADOPT SCIENCE-BASED GHG TARGETS BY 2024 0S%of suppliers 50)OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYProgress toward GoalsCommunitiesGOAL/TARGETPROGRESSInvest$2 billion to help bridge the digital divide by the end of 2023.Invested$1.35B across programs including Access from AT&T and AT&T Connected LearningAs part of our 3-year$2 billion digital divide commitment,we reached our goal of opening at least 20 AT&T Connected Learning Centers across the U.S.With our original goal met,wehave set a new goal to open more than 50 AT&T Connected Learning Centers by the end of2024.Access from AT&T helps bridge the digital divide by making low-cost internet service available for qualifying low-income households.In 2022,we expanded the programs eligibility to allhouseholds that quality for ACP and apply the Federal benefit to AT&T internet service.We also updated the program to include speeds up to 100 Mbps where available.Provide 1million people in need with digital resources through AT&T Connected Learning bythe end of 2025.Reached more than 290,000 individuals Through AT&T Connected Learning,were investing in connectivity,technology,digital literacy and digital learning solutions to help connect todays learners with success.As of year-end 2022,we have reached more than 290,000 people with digital resources through AT&TConnectedLearning.Engage 50%of our employees worldwide in communities through grassroots volunteerism and giving initiatives bythe end of 2030.31%of employees engaged in volunteerism andgiving18Through a variety of corporate community engagement opportunities and programs,employees donate time and money to their communities.In 2022,31%of our workforce engaged in volunteerism and giving through AT&T.Beyond emergency response and network disaster recovery,help 1 million people prepare for and recover from the impacts of disasters bythe end of 2030.Delivered humanitarian relief and connectivity solutions serving more than 500,000 individuals since2021In 2022,through strategic partnerships,we supported the delivery of connectivity solutions,humanitarian relief,and resiliency and recovery resources serving more than 290,000individuals impacted by Hurricanes Fiona and Ian,the historic Eastern Kentucky floods and other disasters around theworld.EnvironmentGOAL/TARGETPROGRESSReduce absolute Scope 1 and 2 GHG emissions 63%(2015 base year)aligning with a 1.5Cpathway bytheendof 2030.2(Approved by the Science Based Targets initiative in 2020.)Reduction of more than 45tween 2015-2022,we reduced reported Scope 1and2GHGemissions by more than 45%,reaching 71%of our 2030 target.33Achieve carbon neutrality(netzeroScope 1 and 2 emissions)by the end of2035.2Reduction of more than 4 million metric tons ofCO2e32022 Scope 1 and 2 GHG emissions were approximately 4.8 millionmetric tons of CO2e.This represents more than 45%attainment toward carbon neutrality from our 2015base year(approximately 8.8metric tons of CO2e).Deliver connectivity solutions that enable business customers to reduce a gigaton(1billion metric tons)of GHG emissions between 20182035.Enabled 38.9 million metric tons of customer emissionssavingsAT&T-enabled customer GHG emissions reductions measured between 2018 and 2022 totaled 149.2 million metric tons ofCO2e,approximately 15%attainment toward our GigatonGoal.25Reduce the amount of U.S.waste we send to landfill 30%(2019baseyear)bytheend of 2030.Reduction of 27.9&2022 waste sent to landfill totaled 110,063 metric tons(MT).This represents a 27.9%reduction from our 2019 base year(152,784MT).SuppliersGOAL/TARGETPROGRESSLead our supply chain to improve its social and environmental impacts by integrating sustainability performance metrics into our sourcing decisions for 80%ofour spend bytheend of 2025.Reached 82%of spend,exceeding our goal for the secondconsecutive yearAT&T Global Supply Chain continues to require suppliers to adhere to our Principles of Conduct for Suppliers through our Supplier Portal and contract agreements.We continue to incorporate sustainability-oriented standards and analyses into sourcing decisions,including the addition of sustainability clauses into requests for proposal and agreements,training our sourcing managers on the principles of sustainability,and providing updates to sourcing managers on the sustainability performance ofexisting suppliers.Work to ensure 50%of our suppliers(covering purchased goods and services,capital goods,and downstream leased assets as a portion of spend)set their own science-based Scope 1 and 2 GHG targets by theend of 2024.(Approved by theScience Based Targetsinitiative in2020.)53%of suppliers have set science-based GHGemissionstargetsIn 2022 we met our Scope 3 science-based target by ensuring that suppliers representing 53%our spend(against our goal of 50%)have set their own science-based Scope 1 and 2 targets.Reach 21.5%of supplier spend and exceed$10 billion in total procurement expenditures with minority-,women-,veteran-,LGBTQ -and disability-owned business enterprises(annual target).Spent$16.3 billion with certified diverse businesses representing 26.3%of overall procurement spend5 16.5%of spend with minority-owned businessenterprises 8.8%of spend with women-owned businessenterprises 1%of spend with veteran-owned business enterprises$9.4M spent with LGBTQ -owned business enterprises$11.5M spent with disability-owned businessenterprises30OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARY12345678I nclusive of AT&T Corporate and AT&T Communications.Scope 1 emissions include direct emissions from sources owned or controlled by the company(such as our fleet).Scope 2 emissions include indirect emissions that result from the generation of purchased energy.2018-2022 data is inclusive of all AT&T operations(U.S.and international).Starting in 2022,data does not include DIRECTV,Vrio,Xandr and WarnerMedia.Note:In July 2021,we completed a transaction with TPG Capital involving our North America video business including DIRECTV,AT&T TV and U-verse to form a new company called DIRECTV.In November 2021,we completed the sale of our Latin America video operations,Vrio,to Grupo Werthein.In April 2022,we completed a transaction to combine our WarnerMedia segment,subject to certain exceptions,with a subsidiary of Discovery Inc.In June 2022,we completed the sale of the programmatic advertising marketplace of Xandr Inc to Microsoft.Refers to 50%of our suppliers covering purchased goods and services,capital goods and downstream leased assets as a portion of spend.Supplier diversity spend excludes content and programming spend,and reflects the activities of the AT&T Global Connections and Supply Chain organization within AT&T Communications.Based on nationwide GWS drive test data.GWS conducts paid drive tests for AT&T and uses the data in its analysis.AT&T 5G requires compatible plan and device.5G not available everywhere.Go to for details.Data inclusive of AT&T Communications,AT&T Corporate and AT&T International;does not include DIRECTV or WarnerMedia.Adjusted diluted EPS from continuing operations includes adjusting items to revenues and costs that we consider non-operational in nature,including items arising from asset acquisitions or dispositions.We adjust for net actuarial gains or losses associated with our pension and postemployment benefit plans due to the often-significant impact on our results(we immediately recognize this gain or loss in the income statement,pursuant to our accounting policy for the recognition of actuarial gains and losses).Consequently,our adjusted results reflect an expected return on plan assets rather than the actual return on plan assets,as included in the GAAP measure of income.The tax impact of adjusting items is calculated using the effective tax rate during the quarter except for adjustments that,given their magnitude,can drive a change in the effective tax rate,in these cases we use the actual tax expense or combined marginal rate of approximately 25%.For 2022,Adjusted EPS from continuing operations of$2.57 is Reported EPS from continuing operations of($1.10)adjusted for$3.59 impairments,abandonments and restructuring,$0.19 benefit-related and other costs,$0.16 proportionate share of intangible amortization at the DIRECTV equity method investment,and$0.06 impact of ASU No.2020-06,minus$0.20 actuarial gain on benefit plans and$0.13 benefit from tax items.Further information is included in our Form 8-K dated January 25,2023.9 Capital investment from continuing operations is a non-GAAP financial measure that provides an additional view of cash paid for capital investment to provide a comprehensive view of cash used to invest in our networks,product developments and support systems.In connection with capital improvements,we negotiate with some of our vendors to obtain favorable payment terms of 120 days or more,referred to as vendor financing,which are excluded from capital expenditures and reported in accordance with GAAP as financing activities.Capital investment from continuing operations includes$19.6 billion of capital expenditures from continuing operations and$4.7 billion of cash paid for vendor financing.10 The years ended December 31,2020 through 2022 present results from continuing operations,and the years ended December 31,2018 and 2019 include comparable adjustments to remove capital expenditures from discontinued operations.11“Broadband Access Still a Challenge in Rural Affordable Housing.”The Pew Charitable Trusts.12 Eligibility determined by the National Lifeline Eligibility Verifier(National Verifier),managed by the Universal Service Administrative Company.For more information on eligibility criteria for the ACP,visit https:/acpbenefit.org.13 The 2022 AT&T Employee Survey response rate was 65%.14 Data does not include WarnerMedia,DIRECTV or Vrio.15 Senior Management Positions are defined as roles that are a maximum of two levels away from the CEO or comparable positions.16 As self-identified via AT&T iCount.AT&T Inc and AT&T Communications only.These metrics are only tracked in the U.S.Employees in other countries do not have the ability to identify in any of these areas.This data is voluntarily self-reported,which means there may be a discrepancy between employees who are part of these groups and employees willing to report that they are part of these groups.17 Inclusive of AT&T Communications,AT&T Corporate and AT&T International.18 Representative of all AT&T operations,excluding AT&T Mexico.19 Representative of all AT&T operations,including WarnerMedia.20$67.5 million of 2022 philanthropic giving was provided by AT&T and$21.6 million was provided through the AT&T Foundation.21 The value of volunteer time was calculated using the Independent Sector value of a volunteer hour,which was$29.95 for 2022.22 Covering purchased goods and services,capital goods and downstream leased assets as a portion of spend.23 2022 increase in annualized energy costs savings driven by large scale renewable energy and decommissioning projects.24252627282930313233 U.S.Environmental Protection Agency.Green Power Partnership National Top 100.https:/www.epa.gov/greenpower/green-power-partnership-national-top-100.Data does not include DIRECTV or Vrio.2022 data is inclusive of AT&T Communications,U.S.operations.2018-2022 data include mobility devices,broadband devices and internal AT&T devices.Data(2018-2022)covers AT&Ts U.S.operations.2018-2021 data have been restated to exclude DIRECTV.Note:In July 2021,we completed a transaction with TPG Capital involving our North America video business including DIRECTV,AT&T TV and U-verse.2018-2022 data include AT&Ts U.S.operations.Our Global Supply Chain(GSC)organization manages the supply chain of AT&T Communications and AT&T International operating companies.This represents the largest and most complex portion of our supply chain.Because of the scale of this work,supplier-related content in this document reflects the efforts of GSC unless otherwise noted.Supplier diversity and supplier sustainability metrics represent the effort of our entire U.S.operations.AT&Ts Global Supplier Diversity team administers the Supplier Diversity program on behalf of all AT&T affiliates(herein referred to as“AT&T”).This report includes results for all affiliates of AT&T Corporate.This number reflects Joint Audit Cooperation(JAC)and Validated Assessment Program(VAP)audits.Totals may not add to 100cause of rounding.The supplier sustainability management approach reflects the activities of the AT&T Global Connections and Supply Chain organization within AT&T Communications.AT&T follows the GHG Protocol for Scope 1,Scope 2 and Scope 3 reporting.2022 GHG emissions data contains Q4 estimations.Endnotes31OVERVIEWSHAREHOLDERS&CUSTOMERSCOMMUNITIESEMPLOYEESENVIRONMENTSUPPLIERSPROGRESS TOWARD GOALSAT&T 2022 SUSTAINABILITY SUMMARYThe AT&T ESG reporting website provides comprehensive disclosure additional to this Sustainability Summary:ESG Issue Briefs TCFD Report CDP Climate Change Disclosure Political Engagement Report Transparency Report 2023 Proxy StatementATTimpactATT
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Investing in growth Innovating for sustainabilityAramco Sustainability Report 2022We are Aramco,one of the worlds largest integrated energy and chemicals companiesOur approach to sustainability reportingIn this Sustainability Report,we provide an overview of how we have integrated sustainability within our corporate strategy and operations;the material sustainability issues that impact our business and stakeholders;and a summary of key initiatives and sustainability performance during 2022.Reporting standardsThe following sections of this report have been prepared with reference to and guidance from the following frameworks,standards and guidelines:Reporting guidelines for our Environment,Social and Governance(ESG)disclosures:Ipieca;For developing and reporting our materiality matrix:Global Reporting Initiative(GRI)Sustainability Reporting Principles;For measuring and reporting on our greenhouse gas(GHG)emissions:Greenhouse Gas Protocol;and For developing and reporting our health and safety performance metrics:Occupational Safety and Health Administration(OSHA)Standards and the American Petroleum Institute Recommended Practices.Reporting boundaries,scope and basis of preparationThis report contains data for the full year 2022(January 1 December 31).Where available,we have compared 2022 performance with 2021 and 2020 data.We have followed industry guidance on defining the boundary scope for performance data.For clarity and transparency,the specific reporting boundaries of each metric for 2022,2021,and 2020 data have been noted in detail on page 86 in the Data section of this report.As we progress on our reporting journey and our controls around ESG data mature,we have expanded the scope of our reporting for some metrics,which were limited to the Kingdom of Saudi Arabia in 2021,to cover our operational control reporting boundary for 2022.Acquisitions made during the year will not be reportable until after the first full year of operation.Therefore,acquisitions made during 2022 will be reportable from FY2024 onwards.Any site that is not fully operational will be excluded from reporting to ensure effective data controls and systems are in place.The basis of preparation on how we measure and report on the sustainability performance metrics that undergo external independent assurance can be found online here.For the avoidance of doubt,SABIC and S-Oils non-financial performance data are not in the scope of this report.Both subsidiaries are publicly listed and issue separate annual sustainability reports.Internal controls and data validationAll figures in this report represent the latest available,internally validated data,unless specifically referenced.Some of the totals presented may reflect the rounding-down or rounding-up of subtotals.Aramcos internal reporting systems capture and record the data used in this report.All data has been subject to internal validation,including data reviews by the reporting businesses and internal subject matter experts.Independent assuranceThird-party independent assurance has been sought against 16 prioritized performance metrics,including GHG emissions and fatalities,in accordance with the revised International Standard on Assurance Engagements 3000(ISAE 3000 revised).Data that has undergone assurance has been referenced throughout the report and the assurance statements can be found online here.More information on assured data and assurance statements can be found online hereCover image:To protect the highly sensitive ecosystem in Manifa,we followed strict environmental policies enforcing drilling,land,and air protection measures.We also designed a causeway to improve and increase the density of marine life.Learn more about Manifa oil field.About this reportInvesting in growthInnovating for sustainabilityOur visionAramcos vision is to be the worlds preeminent integrated energy and chemicals company,operating in a safe,sustainable and reliable manner.Our missionAramco strives to provide reliable,affordable,and more sustainable energy to communities around the world,and to deliver value to its shareholders through business cycles by maintaining its preeminence in oil and gas production and its leading position in chemicals,aiming to capture value across the energy value chain and profitably growing its portfolio.ContentsOverviewAt a glance .02Sustainability and our strategy.04 Chairmans message .06President and CEOs message.07Executive summary.08Our stakeholders .10Sustainability framework .12Materiality.13DataOur metrics .86Abbreviations,terms and glossary.94Forward-looking statements.99Governance .83Our sustainability focus areasClimate change and the energy transitionsee page 19Safe operations and people developmentsee page 43Minimizing environmental impactsee page 57Growing societal valuesee page 710101OVERVIEWCLIMATE CHANGE AND THE ENERGY TRANSITIONSAFE OPERATIONS AND PEOPLE DEVELOPMENTMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATAOur business in 2022Net income$161(billion)Total hydrocarbon reserves1258.8(billion boe)Net refining capacity4.1(MMbpd)Total hydrocarbon production213.6(MMboed)Employees70,496as at December 31,2022R&D spend4$1.2(billion)Lost time injuries/illnesses rate5 0.014(per 200,000 work hours)Countries50 in which we operate$1.5 billion Sustainability FundAs part of a long-term strategy of investing(e.g.,via our contribution to the Oil and Gas Climate Initiative(OGCI)in innovative solutions to achieve lower carbon and lower energy intensity,Aramco established a new$1.5 billion Sustainability Fund to invest in technologies needed to address climate challenges.Voluntary carbon marketAramco participated in the first carbon credit auction held in the MENA region through the Regional Voluntary Carbon Market.Circular economyFor the first time in the Middle East and North Africa(MENA)region,Aramco and its partners produced International Sustainability and Carbon Certification (ISCC )certified circular polymers from plastic waste derived oil at SATORP.1.Hydrocarbon reserves of Saudi Arabian Oil Company(the Company)as at December 31,2022,under the Concession agreement.2.Total hydrocarbon production(mboed)is derived from MMscfd(for natural gas and ethane)by dividing the relevant product production by 5.400(in the case of natural gas)and 3.330(in the case of ethane).3.Excludes SABIC Agri-Nutrients and Metals(Hadeed)businesses.4.Total Group R&D including SABIC.5.This figure has undergone external limited assurance in accordance to the ISAE 3000(revised).The assurance report can be found online here.Maximum Sustainable Capacity(MSC)12.0(MMbpd)Capital expenditures$38(billion)Net chemicals production capacity356.3(MMtons/year)Upstream carbon intensity510.3(Kg CO2e/boe)Nationalities85 globallyAramco Sustainability Report 202202At a glanceReinforced supply chainThrough its In-Kingdom Total Value Add(iktva)program,Aramco signed over 90 corporate procurement agreements valued at$17.3 billion(SAR 64.9 billion)with manufacturers in Saudi Arabia,which are expected to reinforce Aramcos robust supply chain.Our Jafurah unconventional gas fieldContaining an estimated 200 trillion standard cubic feet(scf)of natural gas,the Jafurah unconventional gas field development is now underway,targeting one of the largest liquid-rich shale gas plays in the Middle East.The Jafurah facility is expected to play a key role in the Saudi Arabian domestic energy sector,displacing significant volumes of oil with gas and in turn lowering emissions.Maximizing liquids-to-chemicals value chainAs part of plans to utilize more hydrocarbons for non-combustion uses,Aramco agreed to develop one of the worlds largest refinery-integrated petrochemical steam crackers in South Korea through its S-Oil affiliate,which will convert crude oil into petrochemical feedstock.Blue ammonia and blue hydrogen certificationAs we explore the development of blue hydrogen as a commercial opportunity that could support emissions reductions in hard-to-decarbonize sectors,two Aramco subsidiaries(SASREF and SABIC Agri-Nutrients(AN)received the worlds first independent certification for production of blue ammonia and blue hydrogen.Manifa field developmentThe Manifa field development project was recognized as the Upstream Project of the Year at the 2022 Middle East Energy Awards for its development,management,and production,and its innovative solutions for protecting the fragile marine ecosystem in Manifa Bay.Building one of the worlds largest carbon capture and storage hubsA joint development agreement between Aramco,SLB and Linde was signed to construct one of the worlds largest planned carbon capture and storage(CCS)hubs,in Jubail,Saudi Arabia,with a capacity target of 9 MMtpa by 2027.0303OVERVIEWCLIMATE CHANGE AND THE ENERGY TRANSITIONSAFE OPERATIONS AND PEOPLE DEVELOPMENTMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATAIncreasing shareholder and societal value sustainablyAramco supports the aims of the Paris Agreement;all of us have a vested interest in protecting the world from human-caused climate change while pursuing economic and social sustainable development.As one of the worlds largest integrated energy and chemicals companies,we have an important role to play along our value chains.As the world emerges from the effects of COVID-19 lockdowns and deals with the on-going impacts of the conflict in Ukraine,we are facing significant global energy challenges.In Aramcos view,these challenges have confirmed the worlds need to increase oil and gas investments,especially capacity development.Importantly,investing in conventional resources does not mean that alternative energy resources and technologies should be ignored.We believe that any energy transition requires a new global energy consensus built on three long-term strategic pillars:Recognition by policy makers and other stakeholders that supplies of affordable conventional energy will continue to be required over the longer term;Further reductions in the carbon footprint of conventional energy and improved energy intensity across the economy are priorities,and technology will be a critical enabler for this;and New,lower carbon energy sources,steadily complementing proven conventional resources.At Aramco,we are addressing all three.We are investing to increase our maximum sustainable oil production capacity to 13 million barrels per day by 2027.We are also growing our gas production,potentially increasing it by more than half through 2030 with a mix of conventional and unconventional gas.At the same time,we are working to lower our upstream carbon intensity,our gas flaring intensity,and our methane intensity,which are already among the lowest in the world.We are also intensifying efforts to advance key enabling technologies,particularly CCS,which is mission-critical to a sustainable future.Importantly,we are gradually adding new,lower carbon energy products to our own portfolio,such as blue hydrogen and blue ammonia,renewables,and low carbon synthetic fuels.Meanwhile,chemicals will become a much larger and more strategic part of our portfolio,growing the non-combustible,and lower emission,uses of oil.This is our plan to be part of a practical,stable,and orderly energy transition.We must partner to drive innovation and value on an unprecedented scale and speed to deliver results across the three pillars successfully.In our view,technologies of the Fourth Industrial Revolution are ripe for such partnerships,especially the rapid digital transformation of our industry.The right digital investments now could help deliver greater efficiency,lower costs,lower emissions,higher reliability,and higher profits over decades.Transforming the massive existing worldwide energy system,and delivering a secure and sustainable future for everyone,is a truly formidable task that will require both individual and collaborative efforts across industries,along value chains and involve governments,regulators and consumers.Positioning Aramco for the futureAramco Sustainability Report 202204Sustainability and our strategyOur strategic themesOur key enablersLocalization and the promotion of national championsAramco focuses on four strategic themes across its businesses:The Company facilitates the development of a diverse,more sustainable and globally competitive in-Kingdom energy ecosystem to underpin the Companys competitiveness and support the Kingdoms economic development.PeopleAramco recognizes the need to prepare its workforce for the future,thereby ensuring its capabilities match the requirements of its strategies,by advancing technical and professional skills,developing commercial and leadership competencies and supporting the progress of localization,and focusing on diversity and inclusion.TechnologyAramcos technology program strives to develop new solutions for its Upstream and Downstream businesses,and to help in diversifying its product portfolio,grow its business sustainably and achieve its net zero ambition.Portfolio optimizationAramco seeks to unlock value,enhance its capital structure and reallocate capital to higher growth and return investments.Aramco has a comprehensive and disciplined internal approval process for capital expenditures,new projects and debt issuance.Aramcos strategy requires a number of enablers to be successful,including:As the principal engine of value generation,the Company intends to maintain its position as the worlds largest crude oil company by production volume and one of the lowest cost producers.The Companys vast reserves base,spare capacity,and unique operational flexibility allow it to effectively respond to changes in demand.Upstream preeminenceDownstream integrationThe Company has a dedicated linkage to domestic and internationally wholly-owned and affiliated refineries and chemicals operations that are critical to monetizing its upstream production.Through continued strategic integration,the Company captures additional value across the hydrocarbon chain.Lower carbon initiativesThe Company plans to reduce the net carbon emissions of its operations and to support the global energy transition through the development of lower carbon products and solutions across the energy,chemicals,and materials sectors.Our sustainability focus areasClimate change and the energy transition See page 19Safe operations and people development See page 43Growing societal value See page 71Minimizing environmental impact See page 57Our strategy0505OVERVIEWCLIMATE CHANGE AND THE ENERGY TRANSITIONSAFE OPERATIONS AND PEOPLE DEVELOPMENTMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATAInvesting in growthWhen we talk about sustainability at Aramco,we understand that it is about balancing the economic benefits to our owners,the social value and utility that our activities and products generate for customers and consumers,and minimizing any negative environmental and social impacts,to build something that will last:a company that will still be standing strong,generations from now.At Aramco,we recognize the challenge of sustaining our business and supporting the worlds climate ambitions.As we set out in this report,all plausible pathways to global net zero show that ample supplies of conventional energy will still be needed in 2050 and beyond.With one of the lowest upstream carbon intensities per barrel of oil equivalent and an ambition for near zero routine flaring,Aramco is ideally placed to help meet that demand.Demand continues to rise,though not always reliably matched by global supply.2022 provided an unwelcome reminder that high and volatile energy prices are deeply damaging to the global economy.This could also impede the energy transition itself by raising the costs related to energy policies as well as the cost of material inputs needed for a lower carbon energy system.At a time of great geopolitical stress and underinvestment across our industry,we view our commitment to invest in new upstream production as a responsible course.However,ensuring security of supply is not where Aramcos responsibilities end.We also have a responsibility to the environment and to the communities in which we are privileged to operate.In 2022,we took further action to reduce Aramcos emissions impact,by enhancing our energy efficiency,participating in the Kingdoms inaugural carbon credit auction,and unlocking the Kingdoms first large-scale carbon sequestration opportunity.All of these activities are designed to ensure that as long as oil is needed,a barrel of Aramco crude will be among the least carbon intensive on the market.We are also continuing to support a global orderly energy transition towards a lower carbon emissions future,as we seek to develop blue hydrogen,advanced fuel combustion systems and lower carbon synthetic fuels.While the climate challenge remains central,for Aramco,sustainability also means having a robust local supply chain,operating in resilient local communities,and being part of a vibrant Saudi economy that excels in many other fields besides crude oil.As you will see in this report,we continue to make progress in all these areas.The Companys recent achievements in supply chain localization including the first ever“made in Saudi Arabia”drilling rigs are a personal highlight for me.As ever,our gratitude goes out to The Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud,and His Royal Highness Prince Mohammed bin Salman Al-Saud,Crown Prince and Prime Minister of the Kingdom of Saudi Arabia.Guided by their vision,Aramco is a global energy and chemicals powerhouse securing our future as the worlds indispensable energy supplier.H.E.Yasir O.Al-RumayyanChairman of the Board of DirectorsWe are also continuing to support a global orderly energy transition towards a lower carbon emissions future,as we seek to develop blue hydrogen,advanced fuel combustion systems and lower carbon synthetic fuels.”Aramco Sustainability Report 202206Chairmans messageInnovating for sustainabilityOver the last year,there has been increasing acceptance of the fact that there needs to be a better balance between maintaining energy security,energy affordability and environmental sustainability.As you will see in this years Sustainability Report,Aramco has strengthened its unique and central role in providing the world the reliable energy it requires for an orderly energy transition.In 2022,we made significant progress on interim targets toward our net zero ambition.We also proudly established a$1.5 billion Sustainability Fund through Aramco Ventures,which will invest in technologies that will make a difference in addressing the challenge of balancing energy security and sustainability.In addition,we announced plans for one of the largest scale CCS hubs in the world.Aramco,in partnership with SABIC Agri-Nutrients,shipped 25,000 metric tonnes of the worlds first commercially accredited blue ammonia to South Korea in 2022.We have made significant strides in increasing diversity in the workplace,employing more women and people with disabilities,including a 23%increase in the number of women in leadership roles at Aramco.As the world seeks to strike the right balance with the energy transition,Aramco is maintaining positive momentum through our ambitious chemicals program and a focus on the materials transition.We are striving to convert up to 4 million barrels of liquids-to-chemicals per day by 2030.In addition to significant advancements in CCS and hydrogen,we are also investing in renewables.We are also placing an enhanced focus on innovation and technology to maintain our leadership position as one of the lowest average upstream carbon intensive producers in the world,along with seeking to improve on our upstream methane intensity of 0.05%which is already well below the Oil and Gas Climate Initiative ambition(0.20%by 2025).Safety is one of Aramcos core values,and each health and safety incident must be reported and investigated to avoid recurrence.While we recorded enhancements in a number of safety metrics in 2022,unfortunately,we suffered the loss of five lives from our dedicated team of employees and contractors.These incidents underscore the critical importance of focusing on safety above all else,and we are fully committed to ensuring that we learn from these incidents,and that each and every person returns home safely,every day.As you will see in the following pages of this report,Aramco continues to make significant progress in key areas of sustainability,biodiversity,localization and more.These improvements are a direct result of the talented people who work for Aramco,and credit goes to them for their commitment,passion and drive to succeed.While our Company has plentiful oil and gas reserves,our number one asset is our people.Our successes are their successes,and I look forward to achieving and reporting continued progress as we advance on our sustainability journey together.Amin H.NasserPresident and CEOAramco has strengthened its unique and central role in providing the world the reliable energy it requires for an orderly energy transition.”0707President and CEOs messageOVERVIEWCLIMATE CHANGE AND THE ENERGY TRANSITIONSAFE OPERATIONS AND PEOPLE DEVELOPMENTMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATAOur sustainability performance1.This figure has undergone external limited assurance in accordance to the ISAE 3000(revised).The assurance report can be found online here.2.The Jazan Refinery(our downstream refinery)is excluded from our current GHG reporting because in 2022,it remains in the startup and stabilization phase and is not fully operational.Aramco is working to stabilize the refinerys operations and complete all necessary reporting configurations before the end of 2023.Reporting on the refinerys environmental and sustainability elements will commence immediately thereafter,in line with the Companys commitment to operational transparency.In line with our ambition to achieve net zero Scope 1 and Scope 2 GHG emissions across wholly-owned operated assets by 2050,we strive to provide reliable energy while maintaining leadership as one of the lowest carbon intensity producers of hydrocarbon products.Committed to build one of the worlds largest CCS hubs(capacity target of 11 MMtpa by 2035)Established a$1.5 billion Sustainability Fund to invest in technology to address climate challenges An ambition to reduce our emissions by 52 MMtCO2e and lower our upstream carbon intensity by 15%by 2035 Delivered an upstream methane intensity of 0.05%,well below the OGCI ambition(0.20%by 2025)Participated,and purchased credits,in the first carbon credit auction through the Regional Voluntary Carbon MarketClimate change and the energy transitionOur focus areasAramco has an important role in helping the world navigate the energy transition.What we do as a global community will determine the legacy we leave for future generations.Our intention is to be a part of the solution that creates a stable energy environment which fosters innovation and growth opportunities in developing and developed countries.We are also committed to providing a healthy,safe,and rewarding environment for our people,our suppliers and communities where we operate while rehabilitating and mitigating the impact on our natural environment.We have identified four focus areas:Minimizing environmental impactGrowing societal valueClimate change and the energy transitionSafe operations and people developmentEach of these focus areas support Aramcos strategic themes and align with both Saudi Arabias Vision 2030 and the UN Sustainable Development Goals(SDGs),directly and indirectly.These elements form our sustainability framework,which is presented on page 12.As part of ongoing materiality reviews and engagement with our stakeholders,we continue to build on this framework,and in 2022 we have measured and added an additional 25 ESG metrics(5 environmental metrics,17 social metrics and 3 governance metrics)to the 36 metrics we reported in 2021.These metrics allow us to continue to prioritize key issues most material to our Company and our stakeholders,which we discuss further on page 10.Scope 1 emissions2(MMtCO2e)55.7(2021:52.3)Scope 2 emissions2(MMtCO2e)16.1(2021:15.5)Upstream carbon intensity1(kg CO2e/boe)10.3(2021:10.7)For more details,see page 19Aramco Sustainability Report 202208Executive summary1.This figure has undergone external limited assurance in accordance to the ISAE 3000(revised).The assurance report can be found online here.2.The Net positive impact(NPI)metric is a new KPI developed in 2022 and there is no prior year comparative.The purpose of the NPI is to aspire to achieve net gains for biodiversity and ecosystem services.This is when overall negative impacts on biodiversity are outweighed by the biodiversity gains that are achieved through conservation projects.For the formula of the metric,please refer to page 86 in the Data section of this report.*Metric reported for the first time externally.Growing societal valueMinimizing environmental impactWe seek to grow value wherever we operate.With our biggest footprint in Saudi Arabia,we have invested in the Kingdoms oil and gas ecosystem to enhance the reliability of our supply chain,providing employment and economic opportunities to thousands of Saudi nationals.Aramco entered into over 90 agreements with an estimated value of$17.3 billion to build long-term collaborative relationships with strategic local suppliers Via our investments,encouraged suppliers to have an aggregate investment of over$600 million in capex,which also created over 4,000 jobs in our supply chain in Saudi Arabia Via iktva,facilitated creation of 31 new local manufacturers Spent$370 million on a range of global socio-economic and environmental initiativesWe are committed to providing a safe and respectful working environment for all,on-site and within the community,supported by appropriate safety procedures,policies and resources.We strive to support,diversify,and empower our workforce.28%of direct hires were female 50%of enrollment in Aramcos college preparatory programs were female 23%increase in female employees in leadership positions 26%increase in apprentices(1,728 in 2022 versus 1,369 in 2021)66%increase in interns(3,190 in 2022 versus 1,922 in 2021)Conducted over 1,100 exercises for emergency preparednessSafe operations and people developmentWe strive to conserve natural resources,apply circular models across our value chain,and to have a legacy of projects that improve both natural habitats and shared resources.Launching refurbishment and recycling programs for material streams and equipment Over 20 initiatives incorporating circular economy principles Ambition to deliver net positive biodiversity and ecosystem impacts Continued investments in tail gas treatment facilities ISO 14001 certification for 98%1 of applicable facilities in 2022,with a view to complete coverage in 2023 Pursuing a water neutrality strategy Planted 11 million mangroves and an additional one million trees Fatalities1(number)5(2021:1)Tier 1 process safety events(number)11(2021:11)Female employees(%)6.4(2021:5.61)Freshwater consumption(million m3)93.61(2021:94.6)Hydrocarbon spills(number)15(2021:13)Net positive impact on biodiversity*1,2(%)53(2021:N/A)iktva spend(%in-Kingdom)63(2021:59)Saudi nationals employed(%)90.9(2021:90.5)Social investment*($million)370(2021:N/A)For more details,see page 43For more details,see page 57For more details,see page 710909OVERVIEWCLIMATE CHANGE AND THE ENERGY TRANSITIONSAFE OPERATIONS AND PEOPLE DEVELOPMENTMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATAAramco recognizes that there is a social contract between our Company and the society within which it operates.Aramco interacts with a range of stakeholders to ensure that their perspectives are considered in the development of our business plans,sustainability plans and objectives;from project planning,to execution,long-term operations and of course,customer service.During the year,we engaged with key stakeholders on a diverse range of topics.Communication channels and examples of engagement:Town halls Employee engagement surveys Employee networks Young Leaders Advisory Board Training Intranet Human Resources Recognition events Senior leadership meetings Safety meetings Quarterly engagement talks on current eventsDiscussion topics:Our vision and mission Corporate ethics and values Professional development Career progress Our strategy Sustainability Remuneration HSE performance Industry trends,current events Community support/volunteeringOur peopleCommunication channels and examples of engagement:Business performance reviews On-boarding program Supplier facility visits Workshops Training programsDiscussion topics:Engagement on supply chain disruption and mitigation plans Safety requirements Agreeing ESG initiatives with suppliers to improve their capabilities Performance on quality,delivery and price Supplier Code of Conduct iktvaOur suppliers,partners and contractorsCommunication channels and examples of engagement:Customer feedback forms Face-to-face meetings Regular engagement between sales teams and our business customers Customer service centres Trade shows and conferences Email/newslettersDiscussion topics:Sustainability Health and safety performance Quality controlOur customersCommunication channels and examples of engagement:Semi-annual earnings calls External disclosures Direct investor communication Annual General Meeting Annual insurance renewals Revolving credit facility meetings Engagement with ClimateAction100 Conferences and non-deal roadshowsDiscussion topics:Climate change and the energy transition Environmental performance Human capital management Financial and operational performance and outlook Sustainability(including GHG emissions)related targets and performance Risk managementInvestors,financial institutions,rating agencies,and insurersCommunication channels and examples of engagement:Volunteer events Student mentoring Community events Citizen Advisory Panel meetings Employee service on community boardsDiscussion topics:Corporate donations Matching contributions Community needsLocal charities and nonprofit organizationsStakeholder engagementAramco Sustainability Report 202210Our stakeholdersAramcos Co-ChairmanshipAramcos Co-Chairmanship of the Energy,Sustainability,and Climate Task Force was demonstrated through the year-long active negotiations that led to the publishing of a policy paper proposing three policy recommendations as part of the B20 communique to the G20,which were centred around enhancing global cooperation to:Reducing carbon intensity of energy use through multiple pathways;Ensuring a just,orderly,and affordable transition to sustainable energy use across developed and developing countries;and Enhancing consumer level access and ability to consume clean,modern energy.Aramco B20 Co-Chairmanships message:“Meeting the worlds energy needs in a sustainable manner,without compromising energy security,reliability and affordability,is more essential today than ever before.The B20 Energy,Sustainability,and Climate Task Force plays a key role in leveraging existing capacities and aligning collectively to solve energy transition challenges.”What are we doing?Communication channels and examples of engagement:Volunteer events Student mentoring Community events Citizen Advisory Panel meetings City Council meetings School board meetings Economic development associations Local industry groups meetings Quarterly community newsletters Plant tours Direct mailings ConferencesDiscussion topics:Social impacts of operations and expansion plans Pipeline awareness Workforce development Local content Community development and outreach Economic and social investments Charitable giving Emergency response and preparedness Environmental stewardship Health and wellness programs Mentoring programs and scholarships Small business supportOur local communitiesCommunication channels and examples of engagement:Business20(B20)Energy,Sustainability and Climate Task Force under G20 Indonesia 2022 Saudi ministries and regulators Various working groups in Ipieca US Environmental Protection Agency(EPA)American Petroleum Institute International Emissions Trading Association(IETA)American Fuel and Petrochemical Manufacturers American Society for Testing and Materials Community of ESG Practitioners Working Group within the World Economic Forum(WEF)OSHA International Sustainability Standards Board(ISSB)Saudi Organization for Chartered and Professional Accountants(SOCPA)OGCI Saudi Exchange,Capital Market Authority,London Stock ExchangeDiscussion topics:Standards setting Compliance with regulatory standards Project specific discussions Supply disruptions Balancing the energy transitions Permits Knowledge sharing on best practices Collaboration on industry standardsRegulators and industry associations1111OVERVIEWCLIMATE CHANGE AND THE ENERGY TRANSITIONSAFE OPERATIONS AND PEOPLE DEVELOPMENTMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATAOur sustainability frameworkOur sustainability framework sets out the areas that hold the greatest potential for our business to have long-term positive impacts,connecting the UN SDGs and Vision 2030 to our four focus areas,and which encapsulate the material ESG topics stakeholders expect us to address.United Nations Sustainable Development GoalsSaudi Arabias Vision 2030Climate change and the energy transitionGrowing societal valueSafe operations and people developmentMinimizing environmental impactRenewableAttractingtalentIncreasingwomensReducingunemploymentDiversifying the economymanagementWaste Reducing airpollutionPreservingmarine lifeCombatingdesertificationEmpoweringsocietySupporting small and medium enterprisesInvesting for the long termAlternative energy:hydrogen and ammoniaSaudi GreenInitiativeparticipation in the workforceenergyHow we workAramcos sustainability focus areasAramco Sustainability Report 202212Sustainability frameworkOur material ESG topicsDuring 2022,we performed an annual materiality1 refresh to assess whether our sustainability focus areas,ESG material topics,prioritized SDGs and metrics remain relevant and appropriate.The materiality assessment is an in-depth analysis of the risks and opportunities that we face in our stakeholders topics of interest and serves as an essential process for selecting key sustainability topics for Aramco.The exercise consisted of:External stakeholder engagement (details on pages 10 and 11);Internal stakeholder engagement (details on page 10);Review of existing(e.g.,Ipieca sustainability guidelines)and upcoming standards (particularly the ISSB);and Peer benchmarking.From our benchmarking,internal analysis,and stakeholder engagement,we identified and evaluated over 150 ESG topics.The outcomes of these assessments were tested with external and internal stakeholders to evaluate the relative significance of multiple topics impacts on our business.Prioritizing topics enables us to focus on where we can make meaningful differences.Upon completion of our materiality refresh exercise and extensive stakeholder engagement,a summary of conclusions and subsequent actions,where appropriate,are provided below:Our four focus areas and 13 material topics(plus our focus on corporate governance2)remain relevant and appropriate;Greater quantitative and qualitative information is required on some material topics,e.g.,biodiversity and human rights,which had no metrics in the prior year.Therefore,for this report,we have introduced metrics and more information on our approach toward biodiversity and human rights;Reconfirmed that Aramcos roadmap to establish additional metrics to better monitor and report on our performance under each focus area and material topic is correct.Due to the increasing maturity of existing KPIs and new metrics,we have increased the number of KPIs and metrics in this report to 61(an increase of 25 metrics from the 36 metrics in the 2021 Sustainability Report);Ensure our metrics present a more complete picture of our total footprint.Therefore,various metrics(e.g.,water consumed and waste generated)have expanded in scope from Company in-Kingdom to the operational control boundary level;Increase our prioritized SDGs from 10 to 12 by including SDG 4(Quality Education)and SDG 17(Partnerships for the Goals)more details on how weve contributed to these are provided over the next few pages;and Increasing the number of our metrics in our Sustainability Report undergoing external assurance;from 6 metrics in 2021 to 16 metrics in 2022.1.The concept of“materiality”refers to the guidance on external reporting from the Global Reporting Initiative,and does not necessarily correspond to the concept of materiality used in connection with Aramcos financial reports.2.For more information on our governance,relevant material topics and our governance metrics,please refer to page 83 in this report and also page 90 in the 2022 Aramco Annual Report.1313MaterialityOVERVIEWCLIMATE CHANGE AND THE ENERGY TRANSITIONSAFE OPERATIONS AND PEOPLE DEVELOPMENTMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATAMapping our material ESG topicsRelevant metric to monitor performance against each material topicClimate change(including GHG emissions)Scope 1 emissions(million metric tonnes of CO2e)Scope 2 emissions(million metric tonnes of CO2e)Upstream carbon intensity(kg CO2e/boe)Upstream methane emissions(metric tonnes of CH4)Upstream methane intensity(%)Flaring intensity(scf/boe)Flared gas(MMscf)Energy intensity(thousand Btu/boe)Example of our contributions to UN SDGsInvesting in more than 12 GW in solar and wind energy by 2030,expanding CO2 storage capacity(e.g.,CCS and CCUS)to support clean and affordable energy production,as well as investing in innovative flaring reduction technologies contribute to improved access to affordable,reliable and sustainable energy for all.Given the material impact climate change can have on human life and economic opportunities,Aramco continuously invests in lower carbon energy and alternative energy sources.This will create jobs and contribute to economic growth.Being one of the worlds lowest upstream carbon intensity major producers in line with the Kingdom of Saudi Arabias Vision 2030 toward cleaner energy,having an ambition to reach net zero emissions by 2050 from wholly-owned operated assets,and also leveraging our influence in non-operated assets,within the timeframe set by the Paris Agreement.As part of our commitment to this SDG in 2022,we planted 11 million mangroves and have set a target to plant another 31 million mangroves by 2025 along the Arabian Gulf and Red Sea shorelines.Partnering with organizations with a climate focus,such as the OGCI,Ipieca and WEF,via collaboration with governments,the private sector across the different industries and civil society.Focus areaClimate change and the energy transitionMaterial topicsImpactClimate change (including GHG emissions)For more details,see page 19Impact on our businessVery high High Moderate Impact on our stakeholdersAramco Sustainability Report 202214MaterialityRelevant metric to monitor performance against each material topicWorkforce protection Number of fatalities Lost time injuries/illnesses rate(number of LTI cases x 200,000/total work hours)Total recordable case frequency(total recordable incidents x 200,000/total work hours)Health performance*(number of overdue major health findings)x(100)/total number of open major health findings)Process safety and asset integrity Number of Tier 1 process safety eventsHuman rights Number of grievances raised*Sites with a grievance mechanism in place*(%)Labor practices Attrition rate*(%)Number of company employees Number of female employees*Female(%)of total employees Female(%)of total number of new hires*Number of female employees in leadership positions*Female employees(%)in leadership positions Number of contractor employees*Employee engagement score*(%)Employees receiving regular performance reviews(%)Number of hired graduates Number of apprentices Number of interns Total hours of training and development*Average hours of training and development*(per employee)Examples of our contributions to UN SDGsAramco has various health and safety and well-being programs for our employees(mental health initiatives,workplace standards and technology to minimize exposing our workers to unnecessary risk).Aramco believes in lifelong learning and development and continues to provide world-class learning experiences that drive personal growth and effective operations at all levels of the Company through innovative platforms such as corporate e-Learning,the Hosted University Programs,Advance Development Programs and others.Aramco is improving the gender balance of its workforce via a range of female empowerment initiatives.In Saudi Arabia,Aramco funds the STEMania program for school-age girls,offering university scholarships for science,technology,engineering and mathematical degrees.We have strong policies and processes to manage our ethics,bribery and corruption risks,and ensure a decent working environment for our workforce.Focus areaSafe operations and people developmentMaterial topicsImpactWorkforce protectionProcess safety and asset integrityHuman rightsLabor practicesFor more details,see page 43*Metric reported for the first time externally.Impact on our businessVery high High Moderate Impact on our stakeholders1515OVERVIEWCLIMATE CHANGE AND THE ENERGY TRANSITIONSAFE OPERATIONS AND PEOPLE DEVELOPMENTMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATAMapping our material ESG topicsFocus areaMinimizing environmental impactMaterial topicsImpactLocal environmental impactBiodiversity and ecosystemsWater managementProduct stewardship and waste managementFor more details,see page 57Relevant metric to monitor performance against each material topicLocal environmental impact Number of hydrocarbon spills Volume of hydrocarbon spills(bbl)Recovered hydrocarbon*(%)Hydrocarbon discharge to water(barrels)SO2 emissions(kilotonnes)Number of sites with ISO 14001 certification*(%)Biodiversity and ecosystems Net positive impact(%)*Water management Freshwater consumption(million m3)Freshwater withdrawal(million m3)Product stewardship and waste management Industrial waste generated(metric tonnes)Industrial waste recycled*(%)Examples of our contributions to UN SDGsGiven water scarcity in Saudi Arabia,the Company has a large seawater treatment and injection network of facilities.Seawater is used as the primary source of water for oil production and to ensure clean water is available for our workforce and local communities.Embracing circular economy(reduce,reuse,recycle and remove)principles and business models across our operations and activities.For example,our recent scrap-to-commodity program successfully recycled over 200,000 drum containers and over 80,000 tons of steel.Reintroducing these materials to local manufacturers as feedstocks eases the pressure on raw materials extraction and allowed us to recover over$30 million of value.For more information,please refer to Aramcos circular economy section on our website.Aramco has systems in place to manage all discharged water to the sea,meeting Government requirements by investing in maintenance and monitoring systems while proactively managing operations to avoid hydrocarbon leaks and spills by maintaining asset integrity throughout the life cycle.Committed to delivering biodiversity net gain in support of SDG15,Vision 2030 and the Saudi Green Initiative.Partnering with organizations,such as Ipieca,WEF and others,to help promote good industry practice and better environmental performance.We are also working closely with our suppliers and creating incentives to reward them for improvements in their environmental performance.*Metric reported for the first time externally.Impact on our businessVery high High Moderate Impact on our stakeholdersAramco Sustainability Report 202216MaterialityRelevant metric to monitor performance against each material topicLabor practices Number of people on Aramco sponsored programs*1National content Saudization(%)Saudization of construction contracts(%)Saudization of service contracts(%)iktva procurement spend in-Kingdom(%)Human rights(supply chain)%of active suppliers signed up to Aramcos Supplier Code of Conduct*Number of active suppliers*Community and society Social investment*($million)Number of volunteers*Number of volunteer hours*Economic contribution Direct economic value generated and distributed($million)Total R&D spend($million)Examples of our contributions to UN SDGsAramco has various social investment programs,which look to improve the health and well-being of our host communities around the world.Aramco believes in lifelong learning and development and continues to provide world-class learning experiences in our community.With a mission to equip the Saudi market with a highly motivated and qualified Saudi workforce,the Company has historically been building and maintaining schools for children and is also creating market/demand driven national training centers,which offer high standard vocational training programs to sponsored trainees.The Company also has a history of supporting the community via financing various education centers for people with development disabilities,such as Hiba Center for Down Syndrome and the Abdullatif AlFozan Autism Center(the first community center of its kind in Saudi Arabias Eastern Province to support children on the autism spectrum).Supporting the economic development of our employees and communities in Saudi Arabia via our iktva spend,various home ownership and Aramco initiatives to seed micro industries(e.g.,Roseyar,beekeeping in al-Baha,fisheries in Yanbu and Baish,olive products in al-Jouf,coffee cultivation in Jazan).Industry:Creating a world-class local supply chain to serve the needs of the Company and its partners,facilitating the development of a diverse,sustainable,and globally competitive energy sector in the Kingdom.Innovation:At the heart of our business lies a commitment to innovate and maximize production from our resources,to deliver energy as efficiently as possible from the wellhead to customers.Infrastructure:The Kingdoms Master Gas System delivers natural gas to industry across Saudi Arabia;while Aramco has also built various roads,educational facilities,cultural centers(e.g.,Ithra,which delivered over 8,000 programs and welcomed more than one million visitors during 2022)and numerous other facilities across the Kingdom.Partnering with governments,suppliers,non-profit organizations and education institutions.During 2022,$370 million was invested in various social initiatives,supporting more than 30 non-profit organizations around the world.Focus areaGrowing societal valueMaterial topicsImpactLabor practicesNational contentHuman rights(supply chain)Community and societyEconomic contributionFor more details,see page 71*Metric reported for the first time externally.1.These programs include the Vocational College Internship Program(VCIP),University Internship Program(UIP),Summer enrichment program,Tomooh program,Advantage program,and ACCEL International Ajyal Center.Impact on our businessVery high High Moderate Impact on our stakeholders1717OVERVIEWCLIMATE CHANGE AND THE ENERGY TRANSITIONSAFE OPERATIONS AND PEOPLE DEVELOPMENTMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATAAramco Sustainability Report 202218Climate change and the energy transitionAs one of the worlds largest integrated energy and chemicals company,we have an important role to play to support energy security and promote sustainable practices in response to climate change.We are investing in technology needed for a stable energy transition that utilizes all sources of energy to meet the worlds growing energy demand while reducing GHG emissions.Our focus is on leading in lower carbon intensity energy production and supporting the development of non-fuel applications for crude oil,targeting the highest impact solutions across our value chain.The challenge is to develop and deploy technology solutions at speed and scale,to provide the benefits of oil and gas for future generations,while minimizing emissions.It is a complex,multidimensional,and capital intensive challenge that will span generations.Material topicsRelevant UN SDGsClimate change(including GHG emissions)Scope 1 emissions(million metric tonnes of CO2e)Scope 2 emissions(million metric tonnes of CO2e)Upstream carbon intensity(kg CO2e/boe)Upstream methane emissions(metric tonnes of CH4)Upstream methane intensity(%)Flaring intensity(scf/boe)Flared gas(MMscf)Energy intensity(thousand Btu/boe)Relevant metricsFor more details on relevant metrics,see page 86.Learn more about Aramcos GHG emissions management program.Scan here1919OVERVIEWCLIMATE CHANGE AND THE ENERGY TRANSITIONSAFE OPERATIONS AND PEOPLE DEVELOPMENTMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATANavigating the energy transitionToward a low carbon systemAramco supports the aims of the 2015 Paris Agreement to limit global temperature increase in this century to 2 degrees Celsius,while pursuing efforts to limit the increase even further to 1.5 degrees,and the commitment of the Kingdom of Saudi Arabia to achieve net zero emissions in its economy by 2060.This requires a transition of the global energy system toward a low carbon system,requiring thousands of large-scale projects across multiple sectors.This presents unprecedented design,engineering,and implementation challenges.The McKinsey Global Institute has estimated that a net zero world will cost around$275 trillion by 20501.Policymakers,industrial suppliers and customers recognize that this transition will not be uniform across geographies.What might be achievable today in more developed economies will be distinct from what is appropriate and effective in emerging markets.Growing markets,particularly in developing countries,face additional challenges to their ability to achieve sustainable development while meeting their needs for affordable,reliable energy.Reduction in GHG emissions across Europe and North America will proceed at a different pace from developing countries.What does unite all economies and societies is not only the desire to address the impacts of climate change,but also the need for affordable,reliable energy.Across any society,higher energy prices are a burden that disproportionately impacts lower income households.Balancing energy security,affordability and emissionsEvents of the last few years,particularly COVID-19 and the conflict in Ukraine,have highlighted the risks of under-investment in energy sources and underlined the importance of energy security and energy access.Alternatives to traditional hydrocarbon-based energy sources are progressing,but on their own will be insufficient to meet the worlds energy demands today and ensure an orderly energy transition.As COP27 in Sharm El Sheikh highlighted,many developing economies depend upon the low-cost and reliability of hydrocarbons to avoid energy shortages and cost inflation and they need realistic solutions now to ensure economic security,even while the energy transition develops in parallel.Although global energy systems are becoming more efficient each year,requiring less energy to meet the same level of economic activity,the demands of a growing middle-class and facilitating access to economies and communities that lack access to energy is leading to a growing energy demand.The definition of“affordable,reliable energy”diverges depending on the society and its position in the development index.Accordingly,prudent solutions will require a variety of energy sources and technologies.For example,around 800 million people do not have access to electricity and some 3 billion people still depend on indoor fires for cooking2 their requirements differ substantially from those living in a highly advanced economy.With the focus on energy security and affordability,Aramcos continued investment and capital expenditure to increase supply,combined with our high level of reliability and low carbon intensity of production,will support a global orderly energy transition.Our 2050 net zero ambition and 2035 GHG emissions reduction targets keep us focused on advancing in lower carbon intensity and abatement technologies and supporting the development of non-fuel applications for crude oil.We also continue to invest in the ability to meet the worlds need for energy sourced from hydrocarbons.This includes expanding the gas supply in Saudi Arabia,and exploring new markets,including for blue hydrogen and additional non-combustible uses for oil.A parallel materials transitionAt the same time,the global economy is facing the realities of having to invest in new supply chains for minerals,metals,and materials.Without adequate investment in oil and gas,there remains the risk of raising the cost of the critical inputs needed for any transition.Hydrocarbons will increasingly be used without combustion or where carbon emissions can be captured and removed.Fuels,such as blue hydrogen,using CCS technologies,are projected to increase in demand.Petrochemicals will provide feedstock essential to the development of new materials that will play a significant role in the energy transition advanced,durable materials are essential for manufacturing wind turbines,solar panels,all modes of transportation,McKinsey Global Institute has estimated that a net zero world will cost around$275trillion by 205011.McKinsey Report:“The Net Zero Transition”,January 2022.2.Overseas Development Institute Oil and gas,poverty and energy access.Aramco Sustainability Report 202220The energy landscapeEnergy securityEnvironmental sustainabilityAffordabilitystorage devices,and infrastructure.The faster we accelerate the transition,the more of these materials we will need.Today,chemical products made from oil and gas enable over 90%of all manufactured goods.Energy transition scenariosScenario planning has been integral to Aramcos decision-making process for around a decade.The first scenarios were developed in 2014,depicting four pathways to the future energy landscape our business operates in.We have updated the scenarios five times since the start of this journey,each time successively incorporating the increasingly complex nature of our business amid a fast-paced transition.During this decade,the energy world has endured a major downturn in oil price cycles,a pandemic,and several geopolitical events.Scenarios and outlooks have been critically important to strategic dialogues within our Company.The Company employs in-house expert economists and analysts to develop these scenarios.A wide range of internal and external stakeholders are engaged to determine the drivers of future energy landscapes,our strategies,and investment decisions.These and other important determinants,such as policy developments and climate goals,and technological progress form the basis of our scenario pathways.Once the scenario pathways are defined,they are modeled using a proprietary energy analytics system.Scenario outputs include global economic indicators,energy market fundamentals,and GHG emission projections.In our latest set of scenarios,we have used the energy trilemma framework,first developed by the World Energy Council,to determine alternate pathways for the future.The framework utilizes affordability,energy security and environmental sustainability as three policy objectives that require balance and trade-offs.Each of our scenarios accentuates one dimension of the energy trilemma triangle,while a fourth scenario depicts a balanced approach to these trade-offs.Aramcos integrated energy and economic modeling systemAramco developed its proprietary energy solutions platform in collaboration with a number of industry-leading energy data providers and modelers.The platform is a computer-based integrated solution comprised of global economic and energy models.These models represent energy supply(oil,gas,and coal),demand(transportation,residential,commercial,and industrial),conversion(refining,power,and petrochemicals),and macroeconomics.The system operates in an integrated manner with eight different sub-modules including economics,energy demand,climate,oil supply,gas supply,coal supply,refining,and petrochemicals.The system is capable of modeling at a country-level on 26 sub-sectors,25 fuel types,energy carriers including electricity and hydrogen,and GHG emissions.Macro-economyClimate modelNatural gasPetro-chemicalsOil supplyPricesRefiningEnergy demand2121OVERVIEWCLIMATE CHANGE AND THE ENERGY TRANSITIONSAFE OPERATIONS AND PEOPLE DEVELOPMENTMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATALeading in low carbon intensity operationsGHG emissions managementFlaring and methane reductionEnergy managementIn-Company renewablesSupporting the transition to low-impact energy pathwaysLower carbon fuels and transport technologiesHydrogenDeveloping and growing low-impact value chainsNon-metallicsLiquids-to-chemicalsRenewable energy investmentDifferentiateSustainDiversifyCollaboration with partners to develop and deploy technologies and infrastructure at speed and scaleCarbon capture and storageLeveraging technologyDeveloping offsets and supporting carbon markets EnableOur climate change and energy transition frameworkOur corporate strategy is based on producing hydrocarbons that have one of the lowest upstream production costs and carbon intensities in the world,and supporting a global orderly energy transition towards a lower carbon emissions future through investing in technologies and offering lower carbon products,including e-fuels.Our climate change and energy transition framework is informed by the circular carbon economy principles of reduce,reuse,recycle and remove.We have four areas of focus that provide the framework for our climate change initiatives and investments:Read about how Aramco seeks to adopt the principles of the circular carbon economy.Scan hereAramco Sustainability Report 202222Climate change and the energy transitionGHG emissions managementWe recognize the need to reduce our GHG and methane emissions and have ambitions and targets to reduce carbon emissions associated with our operations.Our emissions reduction strategy includes investing in low-emission technologies,including CCS,energy efficiency programs and energy mix diversification.We are committed to developing and deploying innovative solutions,optimizing operations,and adopting efficient project designs.Aramcos industry leading low carbon intensity production performance is the result of almost half a century of careful reservoir management and investment in efficiency,reducing flaring and produced water management.This has yielded an environmental advantage that forms a key pillar of our corporate strategy.We are confident that we can help the world meet its rising energy needs,while reducing emissions from our operations.Net zero ambitionAramcos ambition is to reduce GHG emissions from our operations and achieve a net zero GHG emissions footprint by 2050 across our wholly-owned operated assets.Having undertaken analysis to support this corporate ambition,we know that achieving net zero operational emissions while we grow our business to meet global energy demand will be a huge challenge.It requires internal targets to be set for our businesses and assets,and for these targets to be embedded into our business planning,to ensure capital expenditure and resource requirements are in place.Leading in low carbonintensity operationsWhat are we doing?Climate change risk and mitigationClimate change is considered a top corporate priority for us and we assess this on a medium to long-term horizon.Our response to climate change is embedded in our business strategy,supported by our climate change and energy transition framework and our five GHG reduction initiatives.RiskMitigationPolicy:Policies restricting or banning use of fossil fuels,or applying a cost on carbon Climate-related demand scenarios to inform business decision makingTechnology:Adoption of disruptive technologies and/or slow development of GHG reduction technologies Accelerated development of our technology portfolios,including synthetic fuels,CCUS and CCS technologies,e.g.,Jubail CCS HubMarket:Loss of demand for hydrocarbons as customers move to achieve their GHG targets Diversification into low GHG emitting products,e.g.,chemicals and hydrogenLegal:Potential exposure to climate-related litigation Accurate and transparent reporting and disclosures with independent assuranceReputation:Impact on corporate reputation Stakeholder engagement,including independent external consultants and subject matter experts to advise on reporting and disclosures,and explain the Companys energy transition pathwayEmissions management starts at the subsurfaceOur philosophy of sustainable reservoir management is key in reducing our upstream carbon intensity.Instead of maximizing production from wells which could irreversibly damage them,we prioritize the long-term health of our reservoirs.This entails producing our fields at low depletion rates to prevent premature water breakthrough,reducing the quantity of produced water.Using advanced reservoir modeling and real-time data,our geoscientists and engineers steer multilateral wells with maximum reservoir contact to ensure optimum well placement which help minimize water production.Additionally,these wells are equipped with smart completions which enable shutting off when detecting water.Such practices result in superior produced water management and low water oil ratios(WOR).When the production of water is minimized,less energy is required for fluid separation,treatment and disposal.These energy savings result in lower carbon emissions.As a consequence,Aramcos average WOR is significantly lower than the global average,and hence our upstream carbon intensity is amongst the lowest globally.What are we doing?2323DifferentiateSustainDiversifyEnableOVERVIEWCLIMATE CHANGE AND THE ENERGY TRANSITIONSAFE OPERATIONS AND PEOPLE DEVELOPMENTMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATAGHG emissions targetsIn parallel with our intensity targets,we are aiming to reduce our net annual Scope 1 and Scope 2 GHG emissions from both the upstream and downstream businesses by 52 MMtCO2e from our business as usual 2035 forecast emissions.By 2035,consistent with the corporate growth strategy in oil and gas production and development of new businesses,particularly hydrogen and liquids-to-chemicals,we forecast our business as usual Scope 1 and Scope 2 GHG emissions for our wholly-owned operated assets will increase to 119 MMtCO2e.Our goal is to mitigate this growth in emissions and reduce our emissions to 67 MMtCO2e by 2035.Targeted GHG reductionOur Yanbu Refinery facility successfully obtained the International Sustainability and Carbon Certification under its circular cracker oil initiative.The initiative drives the certification relates to an in-house sustainable circular route to produce circular cracker oil from waste oil to reduce our Scope 2 GHG carbon footprint.What are we doing?During 2022,we have made progress toward achieving our 2035 and 2050 ambitions across our five identified levers:energy efficiency,reduced methane and flaring;increased renewables;CCS;and offsets to address emissions we cannot reduce or capture.For more information on our 2022 efforts and impact,please refer to pages 26 and 27.We have also been conducting site-level bottom-up assessments of what it would take to decarbonize our assets.Once this is completed in 2023,we will update our decarbonization strategy in the next report.GHG emissionsThe Companys GHG emissions management program monitors direct(Scope 1)and indirect(Scope 2)emissions from wholly-owned operated assets,in a manner consistent with the GHG Protocol.Despite increased hydrocarbon production by 10%in 2022,total emissions(Scope 1 emissions and Scope 2 emissions)from the Company and its operationally controlled entities increased by only 6%(71.8 MMtCO2e in 2022 versus 67.8 MMtCO2e in 2021)compared to the previous year.This was enabled by more efficient operations and a reduction in flaring intensity by 17%compared to the previous year due to improved operations of the Companys in-house flare gas recovery systems across several facilities.For more information on our flaring,please refer to page 28.Digital twinsOur EXPEC Computer Center developed a solution to reduce energy intensity and emissions associated with operating subsurface artificial lift systems,leveraging digital twin technology by optimizing the performance of our electric submersible pumps(ESP).The system was trial tested across 42 ESP lifted wells resulting in a 22%average reduction in power consumption,equivalent to 12 GWh of energy savings during 2022.It is projected that deploying this solution across all fields will result in a 25%average reduction in artificial lift energy intensity at Company level.What are we doing?Scope 1 and Scope 2emissions upstreamintensity:15%reduction by 2035(kg CO2e/boe)-15.218.720182035-15%Scope 1 and Scope 2 emissions GHG reduction targeted by 2035(MMtCO2e)1195267203520357222022-52Forecast business-as-usual growthTargeted GHG reductionOur Southern Area Oil Operations won a 2022 Society of Petroleum Engineers Regional Distinguished Corporate Support Award for reducing its emissions by 600,000tCO2e1.2018 was the first year our GHG inventory was independently assured.2.This figure has undergone external limited assurance in accordance to the ISAE 3000(revised).The assurance report can be found online here.Aramco Sustainability Report 202224DifferentiateSustainDiversifyEnable1.This figure has undergone external limited assurance in accordance to the ISAE 3000(revised).The assurance report can be found online here.2.The Jazan Refinery(our downstream refinery)is excluded from our current GHG reporting because in 2022,it remains in the startup and stabilization phase and is not fully operational.Aramco is working to stabilize the refinerys operations and complete all necessary reporting configurations before the end of 2023.Reporting on the refinerys environmental and sustainability elements will commence immediately thereafter,in line with the Companys commitment to operational transparency.3.Fadhili Gas Plant is excluded from 2020 GHG emissions inventory.4.These emission reductions were calculated from real vessel performance data at different speeds and application of the International Maritime Organization guidelines.Prior to implementation,terminals benchmarked the initiative with other worldwide ports,such as Los Angeles and San Diego in the United States,and other countries including Canada and Singapore.Scope 1 emissions(MMtCO2e)55.755.71,220202021202252.31,250.21,2,3Scope 2 emissions(MMtCO2e)16.116.11,220202021202215.51,218.11,2,3Upstream carbon intensity(kg CO2e/boe)10.310.3120202021202210.7110.63Upstream carbon intensityThe Companys 2022 upstream carbon intensity figure remains among the lowest in the industry at 10.31 kg CO2e/boe(2021:10.71 kg CO2e/boe).This improvement is predominantly driven by energy efficiency,and reduced flaring across Upstream operations due to improved reliability and performance of our flare gas recovery systems(FGRS).In 2022,two new FGRS became operational in both Abu Ali and Qatif central processing facility resulting in estimated annual flared gas recovery of over 1.0 bscf per year.Aramco is leveraging its R&D and technology initiatives to develop,and implement innovative approaches that could help lower emissions across our industry and have potential application in other industries.For more details on what we have done during 2022 regarding our progress on our five levers to meet our 2035 interim GHG targets,please refer to pages 26-27.Scope 3 value chain emissions Our focus is on measurement,reporting,and management of those emissions within our direct control.To date,we have not reported Scope 3 emissions from our supply chain or from customers use of our products.We are working on supporting the global energy transition towards a lower carbon emissions future through investing in technologies and working with suppliers to integrate ESG performance measures through our iktva program.Vessel Speed Program To support the national and corporate GHG reduction aspirations,our terminals instituted the Vessel Speed Program reducing the speed of vessels sailing through the Ras Tanura and Juaymah Port to 12 knots from 15 knots.12 knots was determined as the optimal speed based on vessel engine efficiency,while minimizing impact on customers satisfaction or our reliability.It is estimated that the program has reduced the GHG emissions of visiting ships by more than 90,000 tCO2e per year4.What are we doing?Our investment in hydrogen,chemicals and renewable energy sources and the increasing share of gas in our production provide products that will support the global energy transition towards a lower carbon emissions future.We continue to invest in a number of product stewardship partnerships and technologies to reduce emissions,this includes research and development into low emissions transport solutions.During 2022,we increased our R&D spend on developing potential solutions that will assist the global energy transition towards a lower carbon emissions future notably over a 45%increase in sustainable mobility R&D spend and over 380%increase in crude to chemicals R&D spend,reflecting the increasing importance of these areas to our future business.For more details on our R&D spend,please refer to pages 40-41.2525OVERVIEWCLIMATE CHANGE AND THE ENERGY TRANSITIONSAFE OPERATIONS AND PEOPLE DEVELOPMENTMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATAGHG reductions targeted by 2035521MMtCO2e1MMtCO2e11MMtCO2eGHG reduction initiatives to 2035Levers to achieve interim targetsTo achieve reductions in GHG emissions by 2035,we are focusing on five key levers:energy efficiency across our upstream and downstream assets;further reductions in methane and flaring;increased use of renewable energy sources;CCS;and development or purchase of offsets to help address hard-to-abate emissions.Energy efficiencyOur plans Continue to sustain/improve energy intensity Optimize co-generation and steam systems Ensure energy efficiency in new project design Expand utilization and application of the energy efficiency digital solutions Initiatives include gas turbine upgrades,boiler and fired heater efficiency improvementsOur actions in 2022 Achieving a 3%improvement in energy intensity performance compared to last year Implementation of new energy efficiency technologies in our industrial and non-industrial facilities Using modern low NOx burner technologies to boost fuel efficiency Enhancing hydrogen blending capabilities for current boilers Upgrading and optimizing operation of boilers,steam traps,and fired heaters 36 organizations received the ISO 50001 certification for their energy management system Introducing new strategies for implementing energy conservation initiatives for more than 700 buildings Flaring and methaneOur plans Commitment to OGCI near zero upstream methane intensity by 2030 and the World Banks“Zero Routine Flaring by 2030”initiative Further enhance LDAR(Leak Detection and Repair)Program Unmanned aerial vehicles and satellite methane detectionOur actions in 2022 Achieved our lowest ever flaring intensity Upstream methane intensity of 0.05%Implementing a Flaring Minimization Roadmap,with site-specific priorities across Aramco operations Investing in and developing innovative flaring reduction technologies Introducing a smart flaring monitoring system Installing high efficiency burners As part of the LDAR program,surveyed thousands of points across our operations in the Kingdom to minimize methane leaks Installed two new Flare Gas Recovery Systems at Abu Ali and Qatif Central Processing Facility1.This figure may not match up due to rounding.Aramco Sustainability Report 202226DifferentiateSustainDiversifyEnable14MMtCO2e11MMtCO2e16MMtCO2eRenewablesOur plans Commitment to invest in 12 GW of solar and wind energy by 2030 for our business and also in support of the Kingdoms National Renewable ProgramOur actions in 2022 Sudair Solar PV Plant has reached 56%completion power generation expected to start in Q4,2024 Approved installation of renewable systems to power 20 offshore water injection wells at Berri and Zuluf Installing PV systems to power Aramcos remote pipelines loadCCSOur plans Jubail CCS hub to capture up to 11 MMtpa by 2035 contributing towards the Kingdom reaching its goal of 44 MMtpa of CCUS by 2035 Jubail Hub targeted to store 9 MMtpa,with Phase 1 capturing around 6 MMtpa by 2027 from gas plants at Wasit,Fadhili and Khursaniyah,plus circa 3 MMtpa from other industry sources Phase 2 will capture around 5 MMtpa and may include CO2 from other facilitiesOur actions in 2022 Joint Agreement signed with SLB and Linde to build the Jubail CCS hub Identified 9 MMtpa of storage capacity with CO2 injection expected by 2027 Captured around 238 MtCO2 from our pilot Hawiyah Natural Gas Plant resulting in a cumulative total of about 1,570 MtCO2 stored in the reservoir,since the CO2 injection started in 2015OffsetsOur plans Develop carbon offsets from natural climate solutions Ambition to plant 300 million mangroves in Saudi Arabia and 350 million mangroves outside the Kingdom by 2035 expected to remove and offset an estimated 16 MMtCO2e by 2035 Assist in developing a credible and functioning carbon credit market in the Kingdom for carbon offsets and credits produced in the MENA regionOur actions in 2022 Participated,and purchased credits,in the first carbon credit auction held in 2022 through the Regional Voluntary Carbon Market in Saudi Arabia2727OVERVIEWCLIMATE CHANGE AND THE ENERGY TRANSITIONSAFE OPERATIONS AND PEOPLE DEVELOPMENTMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATAUpstream methane intensity(%)0.050.052020202120220.050.063Flaring intensity(scf/boe)4.604.601,22020202120225.5125.972,3Flaring and methaneFlaring of waste gases has long been recognized as one of the most significant contributors to GHG emissions in the oil and gas sector.Aramco has been a pioneer in gas flaring reduction and now has industry-leading methane intensity and gas flaring metrics.Minimizing flaring Aramco is a signatory to the World Banks“Zero Routine Flaring by 2030”initiative and is committed to sharing best practices with industry partners to accelerate global flaring reduction.During 2022,our flaring intensity fell by 17%,(4.601 scf/boe in 2022 versus 5.51 scf/boe in 2021)due to significant investments,installations and improved operations of our in-house flare gas recovery systems across several facilities and a reduction in routine and non-routine flaring.From April 2022,two new FGRS became fully operational in both Abu Ali and Qatif central processing facility,which will result in an expected annual reduction of 1.5 bscf per year.Substantial investments and developments in innovative flaring reduction technologies continued throughout 2022.These included implementing the Flaring Minimization Roadmap,which has identified priorities across Aramco operations,with every operating facility having a flare minimization plan and targets.Aramcos operations are monitored in real-time at our Fourth Industrial Revolution(4IR)Center in Dhahran.This has enabled us to achieve near zero routine flaring already.We have maintained a flare volume of 1%of total raw gas production since 2012.MethaneAddressing methane emissions is one of the fastest,most effective ways to slow the rate of global temperature rise.An enhanced Leak Detection and Repair program for the Companys methane emissions in the Kingdom prioritizes actions at operating facilities.Hundreds of thousands of points are surveyed across our operations to minimize potential methane leaks.We use drones to monitor and measure methane emissions from our operating facilities.In addition to LDAR,we are assessing and deploying remote detection solutions and technologies such as the use of satellite monitoring.Aramcos upstream methane intensity measures the ratio of our upstream methane emissions for operated assets against the quantity of marketed natural gas.Our upstream methane intensity remained low in 2022 at 0.05%(0.05%in 2021)and is already well below the OGCI ambition to achieve at least 0.20%by 2025.Two technologiesIn 2022,two technologies were piloted to enhance the management of flaring emissions:A flaring monitoring system detects flaring performance and optimizes burner feed inputs via cameras equipped with artificial intelligence programs.We piloted portable ignition systems for on-demand flaring needs,replacing continuous flaring and emissions.What are we doing?We have maintained a flare volume of 1 bbl15Operational control13Operational control6Operational controlLocal environmental impactVolume of hydrocarbon spills Total volume of liquid petroleum hydrocarbon accidentally released into the environment,where the spill incident is 1 bbl142,8851Operational control14,447Operational control134Operational controlLocal environmental impactRecovered hydrocarbon Percentage of liquid petroleum hydrocarbon removed from the environment through recovery methods*(%)91Operational control94Operational controlMetric not disclosed previouslyLocal environmental impactHydrocarbon discharge to water2 The total of hydrocarbons that are systematically released to surface water through regulated industrial wastewater discharges(barrels)16.41Operational control 30.7Operational control 20.2Operational control Local environmental impactSO2 emissions3,4 Quantity of sulfur dioxide(SO2)(kilotonnes)1671Operational control 141Operational control 163Operational control Local environmental impactNumber of sites with ISO 14001 certification*(%)981Operational controlMetric not disclosed previously*Metric reported for the first time externally.1.This figure has undergone external limited assurance in accordance to the ISAE 3000(revised).The assurance report can be found online here.2.As we progress on our reporting journey and our controls around ESG data mature,for this metric,we have expanded the reporting boundary from Company in-Kingdom to operational control.To allow comparability,we have restated the 2021 and 2020 figures in line with the expanded reporting boundary.3.The Jazan Refinery(our downstream refinery)is excluded from our SO2 emissions reporting.In 2022,it remains in the startup and stabilization phase and is not fully operational.Aramco is working to stabilize the refinerys operations and complete all necessary reporting configurations before the end of 2023.Reporting on the refinerys environmental and sustainability elements will commence immediately thereafter,in line with the companys commitment to operational transparency.4.For this metric,the reporting boundary has been reclassified from operational control excluding ATC,ASC,AOC and SAAC to operational control for 2022,2021 and 2020.This is because ATC,ASC,AOC and SAAC are office-based entities and therefore,have no SO2 emissions.Aramco Sustainability Report 202290Our metricsMaterial topicMetric definition (unit of measure)2022 actual2022 boundaries2021 actual2021 boundaries2020 actual2020 boundariesMinimizing environmental impactBiodiversityNet positive impact*(total biodiversity areas(km2)/Footprint area(km2)x 100)(%)531Operational controlMetric not disclosed previouslyWater managementFreshwater consumption2 (million m3)The difference between the volume of freshwater removed from the environment,incl.surface water,groundwater,for use in operations,and freshwater returned to the source.The total dissolved solids concentration of this type of water is up to 2,000 mg/l93.61Operational control excluding ATC,ASC,AOC and SAAC 94.6Operational control excluding ATC,ASC,AOC and SAAC 90.2Operational control excluding ATC,ASC,AOC and SAAC Water managementFreshwater withdrawal2 (million m3)136.6Operational control excluding ATC,ASC,AOC and SAAC 137.3Operational control excluding ATC,ASC,AOC and SAAC 142.9Operational control excluding ATC,ASC,AOC and SAAC Product stewardship and waste managementIndustrial waste generated2The total amount of industrial waste,hazardous and non-hazardous,generated from operating facilities,not including waste recycling,re-using,and recovery(metric tonnes)318,656Operational control 240,225Operational control 313,348Operational control Product stewardship and waste managementIndustrial waste recycled*(%)39.91Operational control 39.8Operational control 49.5Operational control*Metric reported for the first time externally.1.This figure has undergone external limited assurance in accordance to the ISAE 3000(revised).The assurance report can be found online here.2.As we progress on our reporting journey and our controls around ESG data mature,for this metric,we have expanded the reporting boundary beyond just Company In-Kingdom.To allow comparability,we have restated the 2021 and 2020 figures in line with the expanded reporting boundary.9191OVERVIEWSAFE OPERATIONS AND PEOPLE DEVELOPMENTCLIMATE CHANGE AND THE ENERGY TRANSITIONMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATAMaterial topicMetric definition (unit of measure)2022 actual2022 boundaries2021 actual2021 boundaries2020 actual2020 boundariesGrowing societal valueLabor practicesNumber of people on Aramco sponsored programs*112,160Company in-Kingdom9,010Company in-Kingdom737Company in-KingdomNational contentSaudization(%)90.9Company in-Kingdom90.5Company in-Kingdom89.6Company in-KingdomNational contentSaudization of construction contracts(%)Percentage of construction saudi contractors relative to the total construction contractors workforce in Saudi Arabia28.0Company in-Kingdom25.6Company in-Kingdom21.6Company in-KingdomNational contentSaudization of service contracts(%)Percentage of Saudi service contractors relative to the total service contractors workforce in Saudi Arabia57.2Company in-Kingdom56.6Company in-Kingdom51.0Company in-KingdomNational contentiktva procurement spend within the Kingdom(%)63.0Company in-Kingdom59.0Company in-Kingdom57.5Company in-KingdomHuman rights%of active suppliers signed up to Aramcos Supplier Code of Conduct*100%Company in-Kingdom100%Company in-Kingdom100%Company in-KingdomHuman rightsNumber of active suppliers*3,199Company in-KingdomMetric not disclosed previouslyCommunity and societySocial investment*2 ($million)370Operational controlMetric not disclosed previouslyCommunity and societyNumber of volunteers*4,9413Operational control4,153Company in-Kingdom1,503Company in-KingdomCommunity and societyNumber of volunteer hours*168,5903Operational control136,284Company in-Kingdom52,408Company in-KingdomEconomic contribution Direct economic value generated and distributed2:GroupGroupGroup Revenue ($million)535,188359,181204,829 Other income related to sales($million)69,17841,28725,062*Metric reported for the first time externally.1.These programs include the Vocational College Internship Program(VCIP),University Internship Program(UIP),Summer enrichment program,Tomooh program,Advantage program,and ACCEL International Ajyal Center.2.This metric is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.3.As we progress on our reporting journey and our controls around ESG data mature,for this metric from 2022 onwards,we have expanded the reporting boundary from Company in-Kingdom to operational control.The 2021 and 2020 figures are at a Company in-Kingdom level only.In 2022,at a Company in-Kingdom level,the number of volunteers were 4,397 and the number of volunteer hours were 166,734.Aramco Sustainability Report 202292Our metricsMaterial topicMetric definition (unit of measure)2022 actual2022 boundaries2021 actual2021 boundaries2020 actual2020 boundariesGrowing societal valueEconomic contribution Operating costs($million)299,279194,624127,662 Employee wages and benefits ($million)14,66514,06613,670 Dividends paid($million)78,86376,91169,841 Payments to government ($million)225,866148,542110,076Economic contributionTotal R&D spend1($million)1,178Group1,033Group755GroupGovernanceCorporate governanceBoard composition by average age63Group62Group61GroupCorporate governanceBoard composition by average tenure6Group5Group5.6GroupCorporate governanceBoard members average attendance*(%)100Group97Group98GroupCorporate governanceNumber of independentBoard members*5Group5Group5GroupCorporate governanceBoard diversity*(number of females on the Board)1Group1Group1GroupEthics,anti-bribery and anti-corruption(compliance)Number of allegations received through the 24-hour hotline655Company in-Kingdom539Company in-Kingdom619Company in-KingdomEthics,anti-bribery and anti-corruption(compliance)Anti-bribery and anti-corruption training hours22,575Company in-Kingdom7,300Company in-KingdomMetric not disclosed previously*Metric reported for the first time externally in our Sustainability Report.1.This metric is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.9393OVERVIEWSAFE OPERATIONS AND PEOPLE DEVELOPMENTCLIMATE CHANGE AND THE ENERGY TRANSITIONMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATACurrenciesCurrency conversion All financial amounts in SAR and USD in this Report are reported in line with the exchange rates reported in Saudi Aramcos 2022 Annual Report.SAR/Saudi RiyalSaudi Arabian riyal,the lawful currency of the Kingdom$/USD/US$/DollarUS dollar Units of measurement Barrel(bbl)Barrels of crude oil,condensate or refined productsboeBarrels of oil equivalentbscfBillion standard cubic feetbscfdBillion standard cubic feet per dayBtuBritish thermal unitGWGigawattsMboedThousand barrels of oil-equivalent per dayMMboedMillion barrels of oil-equivalent per dayMMscfMillion standard cubic feetMMtpaMillion metric tonnes per annumper dayVolumes are converted into a daily basis using a calendar year(Gregorian)scfStandard cubic feettscfTrillion standard cubic feetTerms and glossaryAffiliateWith respect to financial information,the term Affiliate is defined by IFRS,meaning the Companys subsidiaries,joint arrangements and associates.Aramco NamaatAramcos industrial investment program.ARLANXEOARLANXEO Holding B.V.,a wholly-owned specialty chemicals subsidiary.ATCAramco Trading Company,a wholly-owned subsidiary of Aramco.Carbon creditA carbon credit is a tradable instrument that represents either;a permit to emit one tonne of CO2 or equivalent GHG(tCO2e)into the atmosphere or;a certificate that represents the avoidance or removal of one tonne of CO2 or equivalent GHG(tCO2e)from the atmosphere.Carbon dioxide(CO2)A naturally occurring gas,and also a byproduct of burning fossil fuels and biomass,as well as land-use changes and other industrial processes.It is the principal human-caused greenhouse gas that affects the Earths radiative balance.It is the reference gas against which other greenhouse gases are measured and therefore has a Global Warming Potential of 1.Carbon capture,and storage(CCS)A set of technologies that can reduce CO2 emissions from new and existing coal-and gas-fired power plants,industrial processes,and other stationary sources of CO2.It is a three-step process that includes capture of CO2 from power plants or industrial sources;transport of the captured and compressed CO2(usually in pipelines);and underground injection and geologic sequestration,or permanent storage,of that CO2 in rock formations that contain tiny openings or pores that trap and hold the CO2.Sequestration and Storage are often used interchangeably.Utilization is where CO2 is reused in other applications,e.g.,food preparation,carbonated drinks manufacturing,etc.Carbon dioxide equivalent(CO2e)A metric measure used to compare the emissions from various greenhouse gases based upon their global warming potential(GWP).Carbon dioxide equivalents are commonly expressed as“million metric tonnes of carbon dioxide equivalents(MMtCO2Eq).”The carbon dioxide equivalent for a gas is derived by multiplying the tonnes of the gas by the associated GWP.MMtCO2Eq=(million metric tonnes of a gas)*(GWP of the gas).Aramco Sustainability Report 202294Abbreviations,terms and glossaryCarbon intensityA measure of greenhouse gas emissions in carbon dioxide(CO2)equivalent per barrel of oil equivalent.Carbon markets Two types of carbon market exist:(1)Regulatory compliance markets used by companies and governments that by law have to account for their GHG emissions.It is regulated by mandatory national,regional or international carbon reduction regimes.(2)Voluntary markets the trade of carbon credits is on a voluntarily basis.Carbon offsetReduction credits generated in one location that are transferred to another location or entity,and are usually denominated in metric tonnes of a reduced emission or megawatt hours of renewable energy produced.CHPCombined Heat and Power.Circular carbon economyA circular carbon economy is a framework for managing and reducing emissions.It is a closed loop system involving 4Rs:reduce,reuse,recycle,and remove.Circular economyA circular economy is an economic model of closed loops designed to retain the maximum value of resources,assets and products by design,improve environmental performance and systems thinking is at the core.ClimateUsually defined as the“average weather,”or more rigorously,in terms of the mean and variability of relevant quantities over a period of time ranging from months to thousands of years.Climate changeAny significant change in the measures of climate lasting for an extended period of time.Climate change includes major changes in temperature,precipitation,or wind patterns,among others,that occur over several decades or longer.Company/Aramco/Saudi AramcoAs used herein,and unless the context or additional text suggests otherwise,the terms“Aramco,”“Saudi Aramco,”“Company,”“we,”“us,”or“ours”refer to Saudi Arabian Oil Co.and its consolidated subsidiaries.ConcessionAs defined and discussed on page 126 of the Saudi Aramco Annual Report 2022.CO2Carbon dioxide.CO2eCarbon dioxide equivalent.CondensateLight hydrocarbon substances produced with raw gas,which condenses into liquid at normal temperatures and pressures associated with surface production equipment.DecarbonizationThe process of reducing CO2(GHG)emissions from the companys operations.Direct Air Capture(DAC)Technologies and processes that extract CO2 directly from the atmosphere.The CO2 can be permanently stored in geological formations or used as a feedstock in the production of fuels,chemicals,building materials,and other products containing CO2.DomesticRefers to the Kingdom of Saudi Arabia.EmissionsThe release of a substance(usually a gas when referring to the subject of climate change)into the atmosphere.Emissions reductionCarbon reduction projects result in a net reduction in absolute CO2/GHG emissions relative to current emission levels or relative to an historical baseline.Energy efficiencyUsing less energy to provide the same service.Energy efficiency is one of the core strategies for reducing greenhouse gas emissions from fossil fuels.Energy intensity An index for measuring the total energy consumed to generate a unit of product,represented in thousand Btus per total production in barrel of oil equivalent.Energy transitionA significant structural change in an energy system.EnvironmentThe natural world,as a whole or in a particular geographical area,especially as affected by human activity.ESGEnvironmental,social and governance.Flaring intensityVolume of gas flared per barrel of oil equivalent produced(scf/boe).FreshwaterNon-brackish water with total dissolved solids concentration up to 2,000 mg/l.9595OVERVIEWSAFE OPERATIONS AND PEOPLE DEVELOPMENTCLIMATE CHANGE AND THE ENERGY TRANSITIONMINIMIZING ENVIRONMENTAL IMPACTGROWING SOCIETAL VALUEGOVERNANCEDATAG20Group of Twenty is an intergovernmental forum comprising 19 countries and the European Union(EU).GDPGross domestic product.The broadest quantitative measure of a nations total economic activity,representing the monetary value of all goods and services produced within a nations geographic borders over a specified period of time.Greenhouse gas(GHG)Any gas that absorbs infrared radiation in the atmosphere rather than allowing it to radiate into space.Greenhouse gases include CO2,methane,nitrous oxide,ozone,chlorofluorocarbons,hydrochlorofluorocarbons,hydrofluorocarbons,perfluorocarbons,and sulfur hexafluoride.GHG avoidanceThe avoidance of GHG emissions that would otherwise occur without the protective actions implemented by an offset project.GHG reductionQuantified absolute decrease in GHG emissions specifically related to/arising from an activity.GHG removalWithdrawal of a GHG and/or a precursor from the atmosphere by a GHG sink or GHG removal technology.GovernmentThe Government of the Kingdom of Saudi Arabia(and“Governmental”shall be interpreted accordingly).Greenhouse gas(GHG)emissions Any gaseous compound in the atmosphere that is capable of absorbing infrared radiation.Generally,consists of water vapor,CO2,methane,nitrous oxide,hydrofluorocarbons,perfluorocarbons and sulfur hexafluoride.Aramcos inventory includes CO2,methane and nitrous oxide.Greenhouse Gas Protocol GHG Protocol establishes comprehensive global standardized frameworks to measure and manage greenhouse gas emissions from private and public sector operations,value chains and mitigation actions.It was a product of the collaboration between the World Resources Institute(WRI)and World Business Council for Sustainable Development(WBCSD).GroupSaudi Arabian Oil Company,together with its consolidated subsidiaries,and where the context requires,its joint operations,joint ventures and associates.HSSEHealth,Safety,Security and Environment.HydrocarbonsSubstances containing only hydrogen and carbon.Fossil fuels are made up of hydrocarbons.Hydrocarbons lawLaw governing hydrocarbons,hydrocarbon resources,and hydrocarbon operations existing within the territory of the Kingdom,enacted by Royal Decree No.M/37,dated 2/4/1439H(corresponding to December 20,2017),as amended.IFRSInternational Financial Reporting Standard(s)that are endorsed in the Kingdom and other standards and pronouncements endorsed by SOCPA.iktvaIn-Kingdom Total Value Add.The companys program to promote the development of a localized energy/industrial eco-system.Income tax law/tax lawIncome Tax Law issued under Royal Decree No.M/1 dated 15/1/1425H(corresponding to March 6,2004)and its Implementing Regulations issued under Ministerial Resolution No.1535 dated 11/6/1425H(corresponding to August 11,2004),as amended from time to time.IPIECAInternational Petroleum Industry Environmental Conservation Association.IPOThe initial public offering.ISOInternational Organization for Standardization.Joint venture/JVThe term joint venture,as defined by IFRS,means a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement.KAUSTKing Abdullah University of Science and Technology.KFUPMKing Fahd University of Petroleum and Minerals.KingdomKingdom of Saudi Arabia.KPIsKey performance indicators.LTILost time injuries/illnesses.Master Gas System(MGS)An extensive network of pipelines that connects Aramcos key gas production and processing sites throughout the Kingdom.Ministry of EnergyMinistry of Energy of the Kingdom.Successor to MEIM.Aramco Sustainability Report 202296Abbreviations,terms and glossaryMethane(CH4)A hydrocarbon that is a greenhouse gas with a global warming potential most recently estimated at 25 times that of carbon dioxide(CO2).Methane is produced through anaerobic decomposition of waste in landfills,animal digestion,decomposition of animal wastes,production and distribution of natural gas and petroleum,coal production,and incomplete fossil fuel combustion.MotivaMotiva Enterprises LLC located in the US.NationalRefers to the Kingdom of Saudi Arabia.Natural gasUnderground deposits of gases consisting of 5090%methane(CH4)and small amounts of heavier gaseous hydrocarbon compounds such as propane(C3H8)and butane(C4H10).Net zero emissions This is achieved when anthropogenic GHG emissions to the atmosphere are balanced by anthropogenic removals.NGLNatural gas liquids,which are liquid or liquefied hydrocarbons produced in the manufacture,purification and stabilization of natural gas.For purposes of reserves,ethane is included in NGL.For purposes of production,ethane is reported separately and excluded from NGL.Nitrogen oxides(NOx)Gases consisting of one molecule of nitrogen and varying numbers of oxygen molecules.Nitrogen oxides are produced in the emissions of vehicle exhausts and from power stations.In the atmosphere,nitrogen oxides can contribute to formation of photochemical ozone(smog),can impair visibility,and have health consequences;they are thus considered pollutants.Operational controlSaudi Arabian Oil Company in-Kingdom wholly-owned operated assets,SASREF,Motiva,ARLANXEO,Aramco Trading Company(ATC),Aramco Services Company(ASC),Aramco Overseas Company B.V.(AOC)and Saudi Aramco Asia Company Ltd.(SAAC).Original concessionSee definition to“Concession.”Paris AgreementThe United Nations Framework Convention on Climate Change Paris Agreement.PIFPublic Investment Fund of Saudi Arabia.Production costsThe sum of operating costs and depreciation,reflecting both the erosion of asset value over time on an accounting basis and the cost of operating the business.R&DResearch and development.ReservesThose quantities of liquids and gas,which by analysis of geoscience and engineering data,can be estimated with reasonable certainty to be economically producible from a given date forward,from known reservoirs,and under existing economic conditions,operating methods and government regulations prior to the time at which contracts providing the right to operate expire,unless evidence indicates that renewal is reasonably certain,regardless of whether deterministic or probabilistic methods are used for the estimation.The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.ReliabilityTotal products volume shipped/delivered within 24 hours of the scheduled time,divided by the total products volume committed.Any delays caused by factors that are under the companys control(e.g.,terminal,pipeline,stabilization,or production)negatively affect the score,whereas delays caused by conditions that are beyond the companys control,such as adverse weather,are not considered.A score of less than 100%indicates there were issues that negatively impacted reliability.SABICSaudi Basic Industries Corporation.SASREFSaudi Aramco Jubail Refinery Company,a subsidiary of Aramco,formerly known as Saudi Aramco Shell Refinery Company.Saudi Aramco/AramcoSaudi Arabian Oil Company,together with its consolidated subsidiaries,and where the context requires,its joint operations,joint ventures and associates.Any reference to“us,”“we,”or“our”refers to Aramco except where otherwise stated.Unless otherwise stated,the text does not distinguish between the activities and operations of the company and those of its subsidiaries.Saudi Green Initiative(SGI)A national initiative for the Kingdom that strives to increase the Kingdoms reliance on clean energy,offset the impact of fossil fuels and combat climate change.Scope 1 GHG emissionsDirect emissions,which include GHG emissions from on
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OverviewCR Focus AreasAbout Our ReportingContentsOverviewCR Focus AreasAbout Our ReportingAbout AMD 4Leadership Letters 5Our Approach to CR 7Goals and Progress 8 CR Management and Governance 10Stakeholder Engagement 13Our Value Chain 152022-23 in Review 16Digital Impact 18Environmental Sustainability 27Supply Chain Responsibility 38Diversity,Belonging&Inclusion 46Community Involvement 56Reporting Standards and Scope 62Summary ESG Data Tables 63Sustainability Accounting Standards Board Standards 65Task Force on Climate-related Financial Disclosures 67Endnotes 702022-23 AMD CORPORATE RESPONSIBILITY REPORT2OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingOverviewAbout AMD 4Leadership Letters 5Our Approach to CR 7Goals and Progress 8CR Management and Governance 10Stakeholder Engagement 13Our Value Chain 152022-23 in Review 162022-23 AMD CORPORATE RESPONSIBILITY REPORT3OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingAbout AMDAMD drives innovation in high-performance and adaptive computing technologies that help to enable the future and push the boundaries of what is possible.Billions of people around the world rely on AMD technology daily.Our high-performance processors are at the heart of devices and services across a broad set of customer markets,including data center,communications,healthcare,aerospace,automotive,PC,gaming and more.In February 2022,AMD acquired XilinxTM to ofer one of the strongest and most diversified portfolio of high-performance and adaptive computing solutions.We also expanded our data center solutions capabilities to further address the significant demand for computing by acquiring Pensando SystemsTM in April 2022.With more than 90 locations worldwide including engineering facilities,sales and business service sites and corporate ofces we aspire to embed environmental sustainability across our business,promote safe and responsible workplaces in our global supply chain and advance stronger communities where we live and work.Solving the Worlds Most Important ChallengesAMD ofers high-performance and adaptive computing solutions to power the workloads of the future,combining the best of architecture,packaging and process technology with software.We design and develop semiconductor technology in four primary product markets:Accelerating Todays DataTodays data centers,supercomputers and cloud environments require vast amounts of computing performance to enable the digital experiences that enhance our daily lives.AMD ofers a broad portfolio of solutions,including server central processing units(CPUs),data processing units(DPUs),graphics accelerators(GPUs),field programmable gate arrays(FPGAs)and adaptive system-on-chip(SoC)products.In 2022,we released 4th Gen AMD EPYC CPUs,bringing leadership performance and energy efciencyi to modern data centers and announced our next-generation AMD Instinct MI300 accelerators,designed for leadership high-performance computing(HPC)and artificial intelligence(AI)performance.Enabling Intelligent Embedded DevicesAMD is the leader in adaptive and embedded computing,CPUs,FPGAs and adaptive SoCs for a variety of markets,including healthcare,automotive,industrial,storage and networking.Our products reach beyond our planet too:AMD expanded on its long history of powering space exploration in 2022,with the first space-grade Versal adaptive SoCs that help enable on-board AI processing in space.Powering Incredible Gaming ExperiencesHigh-performance AMD computing and graphics technologies including discrete GPUs,semi-custom SoC products and development services work together with software to power immersive gaming experiences for personal computers(PCs),the latest game consoles and cloud gaming services.In 2022,we launched the Radeon RX 7900 Series graphics cards the worlds first gaming graphics cards to feature an advanced AMD chiplet design to deliver extreme performance and energy efciency.Delivering Powerful and Efcient Personal ComputingAMD continues to drive innovation in premium PCs with AMD Ryzen processors and AMD Radeon graphics.Our lineup of CPUs,accelerated processing units and chipsets for desktop and notebook PCs brings performance,efciency and modern security features to gamers,creators,consumers and enterprises.In early 2023,we unveiled Ryzen AI,the first dedicated AI hardware in an x86 processor,available on select models,to deliver more performance for real-time AI experiences.Who We Are2022-23 AMD CORPORATE RESPONSIBILITY REPORT4OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingLeadership Letters2022-23 AMD CORPORATE RESPONSIBILITY REPORTA Message from Dr.Lisa Su,AMD Chairand Chief Executive OfcerAt AMD,we push the limits of high-performance and adaptive computing to solve the worlds most important challenges.Our technology touches the lives of billions of people around the world,playing a vital role accelerating scientific research,exploring deep space,keeping drivers safe on the road and powering businesses.But its not enough to deliver next-generation experiences.At AMD,we are committed to doing so responsibly,with integrity and in a way that fundamentally aligns with our values and inclusive culture.Our 28th annual report is the first since Xilinx and Pensando joined AMD to create a larger company with an expanded team and a broader set of products all of which helped us grow annual revenue 44 percent to a record US$23.6 billion in 2022.Thanks to our customers,partners,suppliers and employees,I am proud to say we also made significant progress in 2022 on our focus areas,spanning digital impact,environmental sustainability,supply chain responsibility and diversity,belonging and inclusion.Our digital impact initiatives,such as the AMD University program,cloud-based grants and on-site hardware donations,put AMD technology in the hands of those solving pressing challenges in healthcare,climate,education and beyond.We introduced new products in support of our goal to deliver a 30 x increase in energy efciency by 2025 for AI-training and high-performance computing applications.Our focus on energyefcient computing is also gaining momentum,with seven of the worlds top 10 most energy efcient supercomputers powered by AMD ranked on the June 2023 Green500 list.These achievements reflect our diferentiated IP portfolio,strong collaboration across our value chain and expanded partnerships.As one of the worlds largest fabless semiconductor companies,we work with a carefully chosen network of suppliers to address collective needs throughout the value chain,from human rights risks to environmental impacts,including greenhouse gas emissions and water usage.In 2022,we made progress toward our goals for supplier capacity-building and audits.And we again received the CDP Supplier Engagement Leadership recognition for addressing climate risks in the supply chain,which is reserved for the top 8%of reporting companies.At AMD,our true strength lies in our people.I am excited to report that 92%of our employees say they are proud to work for AMD.We remain committed to pursuing diversity,belonging and inclusion in our workforce,given its tangible value to innovation and company performance;in 2022 we were recognized as a member of the 2022 Bloomberg Gender-Equality Index for the fourth consecutive year.To amplify the good work of our employees around the world,in 2022 we also launched a year-round employee matching program,which contributed to the total US$11.6 million in cash and technology that AMD,AMD Foundation and our employees donated to nonprofit organizations,universities and research institutes.You can read more about our progress and priorities throughout this report.While we have accomplished so much in recent years,I am even more excited about what AMD,together with our partners,can accomplish moving forward.5OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingLeadership Letters2022-23 AMD CORPORATE RESPONSIBILITY REPORTA Message from Susan Moore,Corporate Vice President,Corporate Responsibility and International Government Afairs,AMD,and President,AMD Foundation Our approach to corporate responsibility has remained fundamentally consistent for almost three decades:we listen to our stakeholders and embrace the business value of corporate responsibility across our products,operations,supply chain and engagement.But what has changed over the past year is our extended reach through programs,measured progress and disclosure following the acquisitions of Xilinx and Pensando.To inform our priorities,we updated our ESG materiality assessment and conducted a human rights saliency assessment.A key aspect of the companies integration was incorporating them into our internal corporate responsibility(CR)governance our Executive ESG Steering Committee,Executive Team and Board helping fully embed CR across the broader company.We also increased our collaboration on related issues,with more employee briefings,customer dialogues and supplier engagements on climate,labor and human rights.AMD shares many of the same challenges facing our industry,including the increasing urgency of the climate crisis.We are driving meaningful change with a science-based target for our operations and increased accountability:we have received external limited assurance on Scope 1 and 2 GHG emissions(including historical Xilinx data for 2020 and 2021),Scope 3 business travel and five of our ESG goals.We continue to deliver market-leading products to help our customers to advance their sustainability goals,too.As of mid-2023,we are on track toward achieving a 13.5x improvement in energy efciency for AMD processors and accelerators powering servers for AI-training and high-performance computing,compared to the 2020 baseline.We were honored to receive a 2022 SEAL Sustainable Product Award for innovative and impactful products purpose-built for a sustainable future in data centers.In the larger ecosystem,we continue to work with customers,suppliers and peers to address the significant sources of GHG emissions.This includes my service as vice chair of the Responsible Business Alliance Board of Directors,with its focus and programs to advance responsibility in supply chains worldwide.AMD values our site communities worldwide,and in 2022 we saw a return to in-person volunteer engagement.In a remarkable efort to fight hunger,during our annual day of community service,AMDers packed 350,000 meals for people globally facing food insecurity.We also continued to support local communities financially,investing US$10 million through the CNote platform to increase economic mobility and financial inclusion in underserved U.S.communities.I invite you to learn more about these and other initiatives in this report,which is aligned with the GRI Standards,SASB Standards and TCFD recommendations.In closing,I thank my AMD colleagues for their drive to deliver exceptional semiconductor technologies while pursuing sustainable development for a better future in our world.6OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingOur Approach to Corporate ResponsibilityOur Approach to CR 2022-23 AMD CORPORATE RESPONSIBILITY REPORTWe look at CR through the lens of environmental,social and governance(ESG)issues,which enables us to focus our eforts,operationalize our goals into the business and make the most impact.It also helps us focus our reporting and transparency eforts on the issues that have the largest impact on our business and society.We continuously monitor and address a broad range of topics.We also conduct periodic evaluations to better understand the overall landscape,set priorities and evolve our practices,policies and programs.In 2023,we engaged with BSR,a global sustainable business network and consultancy,to complete an impact-based ESG materiality assessmentii.This assessment took into account the evolution of our business(including our acquisitions in 2022),evolving investor and other stakeholder ESG information needs and the continuing evolution of reporting expectations informed by organizations such as the Global Reporting Initiative and the Sustainability Accounting Standards Board.The resulting ESG materiality matrix reflects our most material issues based on their potential impact on the business and the potential impact the business has on society and the environment.As a result,the assessment adopts a double materiality approach.Although this assessment has resulted in some changes to the placement of topics within our matrix compared to previous assessments,the issues themselves remain fairly consistent.The main exception is the emergence of responsible AI and product use as a top-tier material issue based on the double materiality approach used for the purposes of this assessment.The results of the materiality assessment reafrm our companys CR strategic focus areas(on page 8)while providing valuable insight into new facets that need to inform our business strategy and operations moving forward.We also consider several of the issues noted in the matrix as part of our foundational approach to conducting business responsibly.These issues include responsible sourcing,corporate governance,ethical conduct,product security,data privacy,business continuity planning and supply chain resilience.Read more about our latest materiality assessmentESG Materiality MatrixIMPACT ON THE ENVIRONMENT AND SOCIETYIMPACT ON AMDEnvironmentalImpacts on AMDOperationsand Supply ChainProducts as Climate SolutionsResponsible SourcingProduct Securityand Data PrivacySustainable Materialsand DesignCorporate Governanceand Ethical Conduct Technology for Social Impact(Digital Impact)BusinessContinuityPlanning andSupply ChainResilienceHuman Rights inthe Supply ChainResponsible AIand Product UseDiversity,Belongingand InclusionRecruitmentRetentionand Development-Increasing ImportanceEnergy Efciencyof ProductsGovernance Social Environmental Increasing Importance7OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingOur Approach to CROur Goals and Progress2022-23 AMD CORPORATE RESPONSIBILITY REPORTDigital ImpactWe design products that help improve peoples lives through high-performance and adaptive computing solutions spanning healthcare,education,manufacturing,scientific research and other critical needs.Goal100 million people to benefit from AMD and AMD Foundation philanthropy and partnerships that enable STEM education,scientific research and the workforce of the future by 2025(base year 2020).31.7 million people benefited from our HPC Fund and STEM initiatives between 2021-2022 iii Environmental SustainabilityWe are steadfast in our commitment to sustainability by sourcing renewable energy,engaging our employees and suppliers on environmental initiatives and helping end users reduce energy use and emissions.Goals 30 x increase in energy efciency for AMD processors and accelerators powering servers for artificial intelligence-training and high-performance computing by 2025(base year 2020).iv As of mid-2023,we are on track toward achieving a 13.5x improvement.v 50solute reduction in greenhouse gas(GHG)emissions from AMD operations(Scope 1 and 2)by 2030(base year 2020).19%reduction in emissions in 2022 vii 100%of AMD direct manufacturing suppliers ix to have a public GHG emissions reduction goal by 2025.70%had public GHG goals in 2022 x 80%of AMD direct manufacturing suppliers to source renewable energy by 2025.68%sourced renewable energy in 2022 x Supply Chain ResponsibilityWe work with our suppliers to deliver high-quality products,while helping ensure that working conditions are safe,workers are treated with respect and manufacturing processes are environmentally responsible.Goals 100%of AMD direct manufacturing supplier factories to have a Responsible Business Alliance(RBA)audit or equivalent by 2025.74%had audits between 2020-2022.x 80%of AMD direct manufacturing suppliers by spend to participate in a capacity-building activity by 2025.81%participated in 2022 viii Diversity,Belonging and InclusionWe encourage and support creative minds from diverse backgrounds to work together in an engaging and open environment.Goal 70%of our employees to participate in AMD employee resource groups and/or other AMD inclusion initiatives by 2025.51%of AMD employees participated in 2022 vi 8OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingOur Approach to CR 2022-23 AMD CORPORATE RESPONSIBILITY REPORTIn 2022,AMD closed two major acquisitions,Xilinx and Pensando Systems,advancing our companys continued opportunities for technology and product leadership,market diversification and expanded customer partnerships.We have been investing and working diligently since the close of the acquisitions to support efective integration for our shareholders,customers and employees,ensuring our view of AMD remains clear through the ESG lens.Examples include:How We Are Integrating Xilinx and Pensando,Recent Acquisitions,into Our CR Priorities and Programs Digital ImpactTo advance research in areas related to the worlds biggest challenges,AMD integrated the Xilinx Heterogeneous Accelerated Compute Clusters(HACC)with the AMD HPC Fund,providing researchers with access to AMD EPYC processors,AMD Instinct accelerators,Xilinx Alveo accelerators and Xilinx Versal ACAPs.Their eforts are addressing issues in climate change,healthcare,transportation and big data.In addition,we have consolidated our academic initiatives into the AMD University Program,including collaboration with universities and research organizations,research grants and hardware donations.Environmental Sustainability To reflect the current business,AMD reset the 2020 baseline for our 2020-2030 operational GHG goal(Scope 1 and 2).AMD obtained third-party,limited level assurance of Scope 1 and 2 GHG emissions of Xilinx operations for 2020 and 2021(prior to the acquisition),and for the combined company in 2022.With regard to Scope 3 GHG emissions,Xilinx and Pensando did not have Scope 3 inventories(covering areas like the supply chain and product use)upon acquisition.Upstream GHG emissions related to the acquisitions,including supply chain,are included in our 2022 Scope 3 estimates.In the second half of 2023 we will continue our work to estimate related downstream GHG emissions,including product use.Diversity,Belonging and Inclusion Our Diversity,Belonging and Inclusion(DB&I)program and initiatives apply globally,and in 2022,we focused on integrating our new employees and expanding our DB&I eforts across our larger company.For example,employee resource group(ERG)leaders from AMD and Xilinx aligned on our DB&I philosophy and highlighted the integral role of ERGs in our companys purpose and priorities.We also added two new ERGs Incredible India and Multicultural bringing the total to 13.By sharing ideas and best practices we amplified our collective eforts,helping build a stronger culture.Supply Chain ResponsibilityAMD is committed to responsible business throughout our supply chain,which has grown with our acquisitions.In 2022,we shared the AMD Supply Chain Responsibility Guide with new direct manufacturing suppliers and began to monitor their conformance to the requirements set out in the AMD Code of Conduct and Supply Chain Responsibility Guide.Community InvolvementWe celebrated our first AMD Day of Service as a combined company an initiative for employees to join one another in volunteering to benefit our communities while meeting one another in enjoyable,meaningful activities.In addition to a number of events held across our sites globally,AMD partnered with the nonprofit organization Rise Against Hunger to host meal packing events at 11 sites to empower and nourish communities and respond to severe emergencies and disasters.9OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingCR Management and Governance 2022-23 AMD CORPORATE RESPONSIBILITY REPORTCR Management and Governance The AMD Board of DirectorsThe highest level of ESG oversight(including risks and opportunities)at AMD resides with our Board.The Nominating and Corporate Governance Committee maintains formal oversight of the companys focus on ESG.The Audit and Finance Committee oversees the companys voluntary and required ESG reporting and associated regulatory compliance.The Compensation and Leadership Resources Committee oversees our focus on diversity,belonging and inclusion.Each of these groups receives reports from and engages with management on ESG matters at least annually.The AMD ESG Executive Steering CommitteeOur ESG Executive Steering Committee is responsible for overseeing progress on our CR priorities,goals and disclosures while communicating regularly with the AMD Executive Team(AET).It is comprised of cross-functional leaders(director level or higher)from Finance,Global Operations,Human Resources,Investor Relations,Information Technology,Legal,Public Afairs and other departments.In addition to ongoing collaborative initiatives,the Committee meets at least quarterly.At AMD,we are committed to doing the right thing and conducting our business ethically.Our approach to CR management and governance applies to all aspects of our business,spanning product design,supply chain,AMD operations and external engagement.Embedding CR across the business in this way requires commitment and accountability throughout AMD,from our leaders who set the strategy to those working hands-on to improve our performance.We pursue this through executive leadership and efective cross-functional team coordination.Along with actionable stakeholder engagement,this enables us to set clear objectives,track progress and promote accountability through transparent disclosure.The AMD Corporate Responsibility TeamThe CR team works cross-departmentally to help operationalize the day-to-day management of many ESG-related policies,practices and infrastructure.The CR team also leads ESG reporting and communications.In its role,the CR team regularly engages with other AMD departments such as EHS,Engineering,Global Operations,Human Resources,Investor Relations,Legal and Quality to help us manage environmental and social issues efectively and efciently.CR resides within Public Afairs and reports to our Senior Vice President of Legal,General Counsel and Corporate Secretary,who reports to our Chief Executive Ofcer.OVERSIGHT OF OUR APPROACH IS MULTI-FACETED:The AMD Executive TeamAET including our Chief Executive Ofcer,executive vice presidents and certain senior vice presidents helps set CR strategic priorities and goals for their departments,while providing company investments and resources to demonstrate progress.Relevant AET members receive regular updates,at least monthly,on ESG topics.Needs and proposals are discussed throughout the year when warranted.10OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingCR Management and Governance 2022-23 AMD CORPORATE RESPONSIBILITY REPORT Risk ManagementAMD takes a multi-faceted approach to CR-related risk management.For example,a cross-functional team focused on product energy efciency meets bi-monthly to discuss regulatory and standards developments that may pose short,medium or longer-term risks or opportunities.The team is led by our Corporate Vice President of International Government Afairs and Corporate Responsibility,with the participation of product engineers and business teams.Business continuity planning is another area of risk management that brings together Environmental,Health and Safety(EHS),Finance,Human Resources,Global Operations,Information Technology and other teams to identify and plan for events that could disrupt AMD or supplier operations.We also monitor risks in our value chain.While we cannot guarantee our suppliers compliance with our corporate responsibility priorities,we conduct facility-level due diligence of our direct manufacturing suppliers to help address risk factors related tohuman rights(e.g.forced labor),environmental factors(e.g.water risk)and ethics(e.g.corruption).For our non-manufacturing(indirect)suppliers,we annually conduct a risk assessment based on geography,sector and spend to identify the highest risk suppliers for additional due diligence steps such as self-assessment questionnaires and other direct engagements.We also contribute to industry eforts to advance sub-tier supplier mapping to identify and address risks further into the supply chain.To manage EHS risk within our own operations,we apply our Global EHS Standards,which include periodic risk assessments of operational EHS risks at the site and corporate level.We complete these at least annually,but an assessment may also be triggered when there is a significant change in operations.We evaluate risks to the EHS controls in place,and we use the results,as well as compliance audits and internal inspections,to identify focus areas and corrective actions and continually improve our programs.Anti-corruptionIn 2021,building on our existing anti-corruption guidelines in the WWSBC,we created a standalone global policy to help employees and key personnel address anti-corruption issues when conducting company business.The AMD Global Anti-Bribery and Anti-Corruption Policy describes prohibitions and required processes related to specific areas of risk,such as gifts,meals and entertainment and our companys policy prohibiting facilitation payments.The policy also describes the expansive definitions of government ofcial and government entity,together with special considerations for transactions involving them.Additionally,it sets forth the companys policy on engaging with third parties or intermediaries to work for the company.Read our Global Anti-Bribery and Anti-Corruption Policy PrivacyAMD has implemented systems,processes and procedures to protect the personal information of AMD employees,job applicants,temporary workers,contingent workers,contractors,users and business partners worldwide.AMD maintains a full suite of policies and processes that govern how we process personal information,comply with privacy laws and enter into privacy agreements,when applicable,with third parties and service providers.The global Privacy Team,which reports to the Chief Compliance Ofcer,oversees and coordinates privacy-related activities across diverse business functions responsible for handling various aspects of privacy.The Privacy Team is supported by regional counsel in major regions like the European Union and Asia Pacific on local privacy requirements.Our website Privacy Policy,directly linked from the footer of the AMD home page,provides details about privacy practices governing the personal data of users,customers and various third parties.Employees and other personnel have access to a detailed employee privacy notice posted on the AMD intranet about privacy practices governing employee personal data,and when applicable,they can access bilingual and local privacy notices.Ethics and Compliance AMD is committed to conducting our business in a fair,ethical and honest manner and in compliance with all applicable laws,rules and regulations.Senior leadership,starting with our CEO,communicates to all employees the importance of acting in concert with our core values.Employees are assigned ethics and compliance training focused on anti-corruption,anti-harassment,import/export compliance,and the prevention of insider trading,conflicts of interest and antitrust,among other topics.The AMD Board of Directors has governing authority with oversight responsibility of all business ethics issues.Our Corporate Compliance Committee is responsible for oversight of the AMD Worldwide Standardsof Business Conduct(WWSBC)and related policies and procedures(pliance with the U.S.Foreign Corrupt Practices Act,export control policies,privacy regulations and conflict of interest rules).The Corporate Compliance Committee provides quarterly activity reports of ethics and compliance cases to the Board and undertakes a program overview annually.Additionally,in 2022,a new Chief Compliance Ofcer(CCO)role and ofce were formed to manage and implement company-wide ethics and compliance programs and initiatives.A Compliance Team,reporting to the CCO,coordinates with various other business functions to drive compliance with the WWSBC and related policies and procedures.All employees are required to complete the WWSBC training when hired and every three years thereafter.To further mitigate risks,we provide additional training for specific groups on relevant topics,including anti-corruption,export compliance and contracting.We maintain a process for reporting misconduct and encourage employees to raise concerns and ask questions.Employees and other stakeholders are informed of our non-retaliation policy.AMD Aware is a multilingual web portal and telephone service that accepts reports,including anonymous reports,about suspected illegal activity or violations of the WWSBC,as permitted by law.AMD Aware is available to all AMD employees and third parties worldwide 24 hours a day,seven days a week.Read more about business ethics and compliance 11OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingCR Management and Governance 2022-23 AMD CORPORATE RESPONSIBILITY REPORT CybersecurityCybersecurity is a top priority for AMD.We focus on continuously strengthening protection of our companys technology infrastructure,intellectual property and other critical information assets against cyber threats.To enhance our companys competitive advantage and security posture,our Enterprise Information Security(EIS)team strives to align our security controls to leading industry cybersecurity frameworks,such as CIS Critical Security Controls,NIST,COBIT and SOX.These controls help us create a strong defense-in-depth,risk-based,scalable and outcome-driven cybersecurity program across all our sites.Our information security policies and processes provide a foundation for our cybersecurity program.Through our periodic mandatory cybersecurity awareness training,we educate and evaluate our employees on their awareness to protect the intellectual property and information assets of AMD,our customers and our vendors.The training includes business conduct,ethics and cybersecurity.AMD implements these information security policies and processes with a cross-functional approach.Our Business Information Security Ofcers(BISO)program fosters the active participation of individual business units in cybersecurity strategy,risk and control discussions.BISOs are responsible for assisting our cybersecurity team with identifying,communicating and managing risk,and they help implement appropriate security and privacy measures within each BISOs business organization.In 2022,AMD did not have any material cybersecurity incidents.The confidentiality,integrity and availability of our systems and data are vital,and we have organizational,technological,physical and personnel controls in place to support these aspects.Our Cyber Operations,Incident Command and Response and Insider Threat functions continuously monitor the global threat landscape and manage a 24/7 Security Operations Center to help protect AMD against,detect and respond to potential threats from inside and outside the company.Governance Guidelines and Policies AMD Responsible Mineral Policy Anti-Bribery and Anti-Corruption Policy Climate Change Policy Code of Ethics Environmental,Health and Safety Policy Export Policy Human Rights Policy Product Quality Policy Statement on Forced Labor Supplier Code of Conduct Worldwide Standards of Business Conduct Public Policy As a global company,we believe CR includes being an active,informed participant in the development of public policies that afect our business,industry and customers in the countries and communities in which we operate.Good public policy begins with diverse stakeholders participating in open and transparent proceedings to carefully examine issues and ofer diferent perspectives that promote efective solutions.AMD works with governments and authorities,non-governmental organizations(NGOs),industry associations and other groups to deepen our understanding of diferent issues and viewpoints and to share our experience and expertise as part of an informed public policy development process.Some of the public policy priorities for AMD include:Emerging Technologies Environmental Protection Movement of Goods/IP Product Energy Efciency Responsible Supplier Management Secure Technology Trade,Competition and Market Access Workforce Talent The Audit and Finance Committee of our Board of Directors oversees enterprise risk,and it reviews and provides feedback to EIS on matterspertaining to information security risk.Internal and external auditors conduct periodic audits of our information technology and cybersecurity programs and processes.The eforts of the EIS function are overseen by management at multiple levels,including our Chief Information Ofcer,AMD Executive Team and Board of Directors.Our companys activities in government and regulatory afairs are overseen by our Senior Vice President of Legal and General Counsel,who reports to our CEO.The AMD Worldwide Standards of Business Conduct support our companys commitment to high ethical standards and compliance with the law in our engagement.Among other terms,the Standards include provisions that address political activities and contributions;bribery and anti-corruption;and giving or accepting gifts,entertainment and other gratuities.Read about our public policy engagement and political activities12OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingStakeholder Engagement 2022-23 AMD CORPORATE RESPONSIBILITY REPORTONGOING ENGAGEMENT Our key stakeholders are the groups and individuals who are most connected to AMD those with an interest that may afect or be afected by our activities.They include our workforce,customers,suppliers,shareholders and analysts,communities and key non-governmental organizations(NGOs).EmployeesEmployees want to work on compelling high-performance and adaptive computing while also developing their own professional careers and livelihoods.They value a purpose-driven culture in which diversity,belonging and inclusion are celebrated.We ofer our employees the opportunity to advance on well-defined career pathways at a company that innovates and makes important contributions to the world while upholding business ethics and integrity.CustomersCustomers enjoy more options to help them achieve their visions and goals and they want the companies they choose to share their values.AMD collaborates with customers to create innovative products that meet emerging needs and tackle some of the worlds most important challenges,spanning medical advances,advanced engineering,data analytics,scientific breakthroughs,education and more.Partnering with customers is how we bring to life our purpose:to enable the worlds creators,researchers,inventors and explorers to transform the lives of those around them through high-performance and adaptive computing.Shareholders Shareholders care about the long-term sustainability of their investments,including how well the companys purpose is integrated with its value proposition and financial performance.Investors also often assess the companys strategy and performance on ESG issues.We continue to regularly engage in important conversations with our ESG-minded shareholders,and we believe AMD is well positioned to participate in growing markets that prioritize ESG disclosures and performance.CommunitiesCommunities expect AMD to contribute positively to economic growth and employment while also being a good neighbor.This is an ideal we embrace across our operations worldwide.Beyond our site communities,our technology can enable communities to successfully connect across remote locations and enable services to their citizens.It can also help bring together and support virtual communities,from gamers to doctors to scientists.SuppliersSuppliers help make AMD a strong business.We work with our direct suppliers to deliver high-quality products and help promote working conditions that are safe,and enable workers to be treated with respect and manufacturing processes to be environmentally responsible.We recognize that collaborating with our supply chain partners is vital for achieving our business and sustainability goals.Through our membership in the Responsible Business Alliance(RBA),we work together on short-and long-term goals,help navigate industry challenges and work toward Stakeholder Engagement It is not just what our technology can do that matters to our stakeholders,but also how we develop and deliver it responsibly.We strive to create shared value by working with our stakeholders to understand their interests,communicate our strategies and positions clearly and respond transparently to evolving issues.Non-Governmental OrganizationsNon-governmental organizations can inform,shape and,in some cases,accelerate solutions to challenges afecting our customers,industry,communities or company.We actively engage in key eforts by participating in open,transparent proceedings.We strive to understand the issues,listen to diferent perspectives and share our experiences to promote efective partnerships.Topics vary around the world,and they include the deployment of technology to deliver public services,workforce development,research,trade,product energy efciency,renewable energy and supply chain practices.solutions.This partnership approach enables us to strategically collaborate and continually improve performance.Our suppliers are expected to do business in accordance with the RBA Code of Conduct,including steps to advance environmental sustainability and respect the human rights of their workers and those in their supply chain.13OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingStakeholder Engagement 2022-23 AMD CORPORATE RESPONSIBILITY REPORTCOLLABORATIONAMD embraces collaboration and innovation in the technology sector.We recognize that meaningful improvement in corporate responsibility requires collaboration on a global scale,which can be transformative when it is done well.We appropriately engage with governments and authorities,non-governmental organizations(NGOs),industry peers and other groups to deepen our understanding of diferent issues and viewpoints and to share our experience and expertise.lxxi Organizations With Which We Collaborate on CR Topics and InitiativesNote:The table does not include all organizations AMD collaborates with in CR eforts.OrganizationEngagement Areas BSRIn 2023,AMD became a member of BSR,which is a sustainable business network and consultancy focused on creating a world in which all people can thrive on a healthy planet.CDPAMD participates in CDPs annual disclosure system for climate change and water surveys to share strategies,data and progress across our operations,supply chain and products.China Electronics Standardization Association(CESA)AMD is a member of CESA,which promotes social responsibility in the electronic information industry in Greater China.AMD shares best practices in CR to help inform upstream and downstream enterprises in the industrial supply chain.DigitalEuropeWe participate in meetings led by DigitalEurope,including on product compliance and sustainability topics,to support a regulatory environment in Europe that enables public agencies,citizens and businesses to prosper from digital technologies.Environmental Protection Agency(EPA)Green Power PartnerAMD has been an EPA Green Power Partner since 2000 by sourcing renewable energy in the U.S.and reporting procurement amounts each year.Information Technology Industry Council(ITI)We are a member of ITI and actively participate in several committees,including Environment and Sustainability,Product Stewardship Climate as well as the Green Grid organization.Responsible Business Alliance(RBA)AMD is an elected board member and vice chair of the RBA and holds full membership.The company actively participates in several working groups,including the Environmental Sustainability Workgroup and Senior Environmental Advisory Taskforce.Responsible Labor Initiative(RLI)To promote diligence in our supply chain,we actively participate in the RLI a multi-industry,multi-stakeholder initiative focused on enabling the rights of workers vulnerable to forced labor in global supply chains to be respected.Responsible Minerals Initiative(RMI)We have been a member of the RMI since it was founded and continue to participate actively in industry dialogues to advance the use of shared tools and resources with the aim of supporting responsible mineral production and sourcing on a global scale.U.S.Semiconductor Industry Association(SIA)AMD Chair and CEO,Dr.Lisa Su,serves on the SIA Board of Directors,and AMD staf participate in SIA committees to promote through public policy a responsible,vibrant semiconductor industry with its contributions in health,travel,communication,scientific discovery,education and more.Semiconductor Climate ConsortiumIn 2022,AMD became a founding member of the Semiconductor Climate Consortium group newly formed by companies across the semiconductor value chain to accelerate their collective impact in the reduction of GHG emissions.14OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingOur Value Chain 2022-23 AMD CORPORATE RESPONSIBILITY REPORTEmbedding CR Across our Value Chain Our impacts vary throughout the value chain.To put our action in context,we have mapped our CR programs and initiatives to the primary activities of our value chain.DesigningAMD engineers design the circuitry for our broad portfolio of products,which includes CPUs,GPUs,DPUs,FPGAs,SoCs and APUs.Our employees work at more than 90 locations worldwide.Product Environmental SustainabilityProduct Security Silicon Manufacturing Our foundry partners manufacture AMD designs on a silicon wafer.Typical wafers originate from a cylindrical ingot of high-purity monocrystalline silicon,which are sliced into 300mm diameter circular Assembly and Testing In the assembly process,each die is attached to a small interconnection board called a substrate so it can function with other devices on a larger circuit board.The die on substrate combination is then further assembled into a protective package to dissipate heat and protect it from other elements.Once fully assembled,each chip is tested for functionality.Supply Chain ResponsibilityResponsible Mineral Sourcing Product ShippingQualified chips are packaged for shipping to our customers.AMD CPUs,GPUs,FPGAs and Adaptive SoCs are sold in diverse ways.For CPUs and GPUs,AMD works with Original Equipment Manufacturers(OEMs)that integrate our technology into their branded devices;hyperscale and cloud data center providers that integrate our technology into their custom-built servers;channel partners that sell standard and customized solutions;and retailers that sell processors in a box direct to the computer enthusiast community.For FPGAs and adaptive SoCs,AMD sells these devices and board-level products primarily through channel partners and to direct customers.Product Environmental Sustainability Anti-Counterfeit wafers of about 0.775 mm thickness.Each wafer undergoes multiplemultiple steps in the wafer fabrication process to produce an AMD-designed processor or die.The working die is cut from the silicon wafer and sent to be assembled into a chip.Supply Chain ResponsibilityResponsible Mineral Sourcing Our Value Chain Leading companies create opportunities to accelerate meaningful action.They do this by deepening their understanding of social and environmental issues and expanding their view of their responsibilities in these areas.They look beyond their own operations and work closely with value chain partners and other key stakeholders.At AMD,we are pushing the boundaries of what we can do by embedding corporate responsibility(CR)across our value chain.Our approach extends from how our products are designed,manufactured and assembled to how they are packaged,shipped and used.End Product ManufacturingAMD technology powers billions of intelligent devices made by our customers,including PCs,game consoles,servers and industrial devices.Following acquisitions in 2022,AMD is powering even more automotive and telecommunications applications.These products are defining the new era of high-performance and adaptive computing.Product SecurityIndustry Collaboration Customer Use AMD solutions enable people everywhere to realize the full potential of their favorite devices and applications and push the boundaries of what is possible.The worlds creators,researchers,inventors and explorers are using high-performance and adaptive computing to tackle challenges across disciplines like science,medicine and manufacturing,transforming the lives of those around them.Supply Chain ResponsibilityResponsible Mineral Sourcing Product End of UseTo protect the environment and move toward a more circular economy,it is important to promote proper reuse,recycling and disposal of electronic products.We are helping make better use of our planets limited natural resources by engineering our products for longer life,reducing the number of devices potentially needed to begin with and,in some cases,helping design for modular CPU and GPU upgrades to enable backward compatibility with our customers existing systems.Product Environmental Sustainability Anti-Counterfeit 15OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our Reporting2022-2023 AMD CORPORATE RESPONSIBILITY REPORT2022-23 in Review 2022-23 in Review Here are some of the periods highlights:Powered seven of the top 10MOST ENERGY EFFICIENT SUPERCOMPUTERS(June 2023 Green500)Launched regional pilotTAKEBACK CAMPAIGNSfor customers to trade in used devices and upgrade to a new AMD-powered PCReceived the 2022 SEAL SUSTAINABLE PRODUCT AWARDfor“purpose built”data center sustainabilityRecognized as a 2022 CDP SUPPLIER ENGAGEMENT LEADERfor supply chain climate engagementCompleted a HUMAN RIGHTS IMPACT SALIENCY ASSESSMENTto enhance our human rights strategyIncluded in the BLOOMBERG GENDER EQUALITY INDEX and maintained Best Places to Work for LGBTQ Equality standing Increased investment in DB&I PROGRAMS AND INITIATIVES including our ERGs,with 95%of new hires joiningat least one ERG Received 96%participation in ourANNUAL EMPLOYEE SURVEYthat informs our continuous improvement in employee experience DonatedUS$11.6 MILLION IN CASH AND TECHNOLOGYin 2022 from AMD,AMD Foundation and employees to nonprofit organizations,universities and research institutesProvided 350,000 MEALSTO FIGHT HUNGER through global volunteering eforts during AMD Day of Service Invested US$10 MILLION to underserved U.S.communities through the CNote platform to increase financial inclusion(2022-2023) 16OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT232022-23 AMD CORPORATE RESPONSIBILITY REPORTOverviewCR Focus AreasAbout Our ReportingCR Focus AreasDigital Impact 18Environmental Sustainability 27Supply Chain Responsibility 38Diversity,Belonging&Inclusion 46Community Involvement 5617OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingDigital ImpactDESIGNING HIGH-PERFORMANCE AND ADAPTIVE COMPUTING SOLUTIONS TO SOLVE THE WORLDS MOST IMPORTANT CHALLENGES 2022-23 AMD CORPORATE RESPONSIBILITY REPORT“High-performance and adaptive computing are transforming our lives.These technologies,including artificial intelligence,are enabling exciting advancements in scientific research,STEM education,energy and climate,healthcare,data centers,communications and automotive.Together with our employees,partners and customers,we are working to drive further advancements,while recognizing our responsibility to help mitigate undesired impacts.”Victor Peng President,AMD18OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingDigital ImpactDigital Impact Why It MattersOur lives are increasingly dependent on and intertwined with technology.What we thought was impossible yesterday may not only be possible today,but fast becoming part of the fabric of our lives.Combined with human ingenuity,our advances in semiconductor technology and high-performance and adaptive computing are accelerating research to enable the solutions we need for the future.AI is the defining technology shaping the next generation of computing and our most strategic long-term growth opportunity.With this immense opportunity comes the challenge of keeping the technology focused on positive outcomes and helping solve some of humanitys most complex problems.While we take the opportunity to extend our impact by putting leading-edge technology in the hands of the worlds researchers,entrepreneurs and creators,we recognize our industrys responsibility to protect and enable peoples right to share in scientific advancement and its benefits.And while the goal is to improve our world,we recognize the potential unintended negative impact our technology could have.The same technologies that promote equity and increase efciency can also be deployed in ways that potentially disadvantage vulnerable communities or contribute to environmental degradation.One way to address the opportunities and risks from technology is to expand access to science,technology,engineering and math(STEM)education.According to the World Economic Forums Global Gender Gap Report(2018),75 percent of jobs will be related to STEM areas by 2025 this includes roles at AMD.By inspiring and encouraging tomorrows leaders,we can help them develop the skills and knowledge they need for a STEM career,ultimately helping enable them to make a positive impact on society.Our ApproachAt AMD,we do not operate in isolation:while we create solutions that stretch the perception of what is technically possible,we innovate for users.We believe that in the hands of the best and brightest,our technology can help address our shared challenges,so we can create a better future together.This makes it vital for us to understand the goals of our customers and partners and work together to pursue a shared vision.We therefore engage and collaborate with stakeholders to design world-class high-performance and adaptive computing solutions that users can put to work to spark new ideas that benefit society,as well as to mitigate the potential negative impacts of the technology itself.Our approach entails fostering strategic relationships with researchers,nonprofits,educators and students who are positioned to expand horizons and develop the groundbreaking innovations of tomorrow.Whether it is donating technology to help develop students sense of discovery or enabling scientists to responsibly push the boundaries of what is possible,we believe that when processing power meets brainpower,the future comes alive.AMD is also committed to working with the industry to innovate and deploy AI responsibly.We aim in part to deliver AI solutions,making the benefits of AI pervasive while enhancing energy efciency.We will also work to enable an open ecosystem to give broader access of resources to the AI community and accelerate innovation.We established an internal cross-functional Responsible AI Council that is defining parameters and guidelines based on industry frameworks like the National Institute of Standards and Technology(NIST),UNESCO and Organization for Economic Cooperation and Development(OECD)principles.We intend to shape both our internal usage of AI and to collaborate with the industry to design AI for good while reducing risks.We will invest in research and education to increase access to technology and advance research to reduce risks and shape public policy.Our Chair and CEO,Dr.Lisa Su,sits on U.S.President Joe Bidens Council of Advisors on Science and Technology and is helping to advise policy makers on technology.Our Goal and Progress100 million people to benefit from AMD and AMD Foundation philanthropy and partnerships that enable STEM education,scientific research and the workforce of the future by 2025(base year 2020)Since 2020,more than 70 institutions have received AMD technology through our HPC Fund and STEM initiatives,benefiting approximately 31.7 million people.iiiFor 2022,the majority of these beneficiaries came from our collaborations with Stanford University,Texas State University and Oregon State University.Using AMD high-performance servers,Stanford University continued their calibration of their epidemic models.Oregon State University is analyzing graphs for drug interactions and discovery around Covid-19 and Texas State is working with scientists on vaccine and cancer simulation.Each of these organizations estimates the impact of the HPC Fund donations to be 1 million people or more.2022-23 AMD CORPORATE RESPONSIBILITY REPORT19OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingDigital ImpactAMD Adaptive Computing and AI Technology Helps Enable HD Ultrasound Scanning in Handheld DevicesUltrasound scanning helps doctors diagnose an array of conditions.But many doctors and their patients lack access to traditional ultrasound systems,which are expensive,large and possibly hard to use.For remote locations like the small city of Fernie in Canada,patients often have to travel long distances in dangerous conditions for a diagnostic ultrasound.Now,AMD technology is putting diagnostic power into the hands of healthcare professionals in more settings.AMD Zynq UltraScale technology is helping Clarius Mobile Health bring high-resolution,hospital-quality ultrasound imaging to remote locations and small clinics by providing a platform where software,automation and AI can be combined.Similarly,the ultrasound company eZono AG,which focuses on point-of-care uses of ultrasound for everyday clinical practices,uses AMD technology in its eZono 4000 portable ultrasound device.The AMD Embedded G-Series Accelerated Processing Unit(APU)provides the optimal balance of processing performance,3-D acceleration and power efciency.Watch the video about AMD-powered portable ultrasound from Claris Mobile Health AMD University ProgramThe AMD University Program is a comprehensive initiative that supports universities using AMD technologies in their teaching and research,in addition to other engagements.By collaborating with academic institutions,the program provides students,researchers and educators with the latest technologies,products and tools from AMD.As a global leader in HPC,AI and machine learning,AMD shares its state-of-the-art technology with schools around the world.In computer science,electrical and computer engineering and other departments throughout the sciences,AMD CPUs,GPUs and adaptive computing hardware are advancing teaching and research.Students and researchers benefit from a wide range of resources through the AMD University Program,including software development tools,hardware products,training and technical support from AMD experts.The program keeps professors up-to-date with the latest developments,ensuring they can deliver curricula that prepare students for the evolving needs of industry and society.Students are excited to learn about new technologies.Through the program they benefit from opportunities to connect with industry professionals and prepare themselves for successful careers in the semiconductor industry.At AMD,we take pride in our partnerships with academia and remain committed to the continuous advancement of education through our University Program.For example,AMD and the University of Strathclyde co-developed the new textbook Software Defined Radio with Zynq UltraScale RFSoC.The book,suitable for seniors,graduate students,professors and engineers,teaches the fundamentals of advanced digital communication system theory and architecture and how to implement them with the AMD Zynq UltraScale RFSoC platform.machines will help enable researchers to employ exponentially morepowerful models and simulations with the potential to create breakthroughs in areas such as climate science,biomedical engineering and the development of new materials.Originally established in 2020 with a focus on powering research to fight the COVID-19 pandemic,the AMD HPC Fund puts computational power in the hands of those conducting groundbreaking research to accelerate solutions to the worlds toughest challenges.In 2022,the HPC Fund expanded beyond COVID-19 research to include science for the public good with the addition of 7 petaflops of computing power to assist global researchers working on solving the most demanding challenges facing society today.Since our acquisition of Xilinx,the AMD HPC Fund and Xilinx Heterogeneous Accelerated Compute Clusters(HACC)program have integrated,providing researchers with access to AMD EPYC processors,AMD Instinct accelerators,Xilinx Alveo accelerators and Xilinx Versal ACAPs to advance research in areas including climate change,healthcare,transportation and big data.The additional computing resources build on the original fund,bringing the total amount of computing capacity donated by AMD since 2020 to nearly 20 petaflops with a total market value of more than US$31 million,as of the end of 2022.The combined processing power donated through the AMD HPC Fund would rank among the fastest supercomputers in the world,according to the TOP500 list(June 2023).xiii Thirty grantees from nine countries are now benefiting from AMD hardware and technology via the HPC Fund.At a few institutions,we doubled the processing power available on campus.For other grantees,this was their first opportunity to work on a heterogeneous system with AMD CPUs,GPUs and FPGAs,so qualified support and training were key to enabling their research objectives.The grantees have used the AMD systems for applications such as evolutionary modeling of the coronavirus,transmission science and large-scale fluid dynamics simulations of COVID-19 droplets as they travel through the air.This processing power is helping institutions aim to tackle previously intractable problems,accelerate response timelines and understand biological and medical data on a deeper level.Learn more about the AMD HPC Fund Scientific ResearchTogether with industry and research partners,AMD is helping to deliver a new generation of supercomputers that cross the exascale performance barrier for the first time,with the ability to perform more than 1018(one quintillion)or more calculations per second.xi These pathbreaking Key Activities and Initiatives 2022-23 AMD CORPORATE RESPONSIBILITY REPORT20OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingDigital Impact STEM Education As we imagine a future enhanced by what computing ofers,we must also empower tomorrows citizens to continue innovating and making constructive use of its capabilities.We are passionate about enabling the imagination and creativity of the next generation.Technology in their hands encourages exploration and learning that open doors to new careers and possibilities.This is why we partner with schools,educators and local nonprofit organizations to outfit AMD Learning Labs with AMD processor-based equipment,helping inspire students to pursue STEM education and empower their teachers.As of December 2022,AMD-sponsored labs are installed in Markham,Shanghai,Singapore,Penang,Austin and San Jose.These AMD Learning Labs support the expansion of STEM curricula and opportunities for students who are under-resourced.They gain hands-on experience with computer hardware and software alongside engagement with AMD employee volunteers.Students learn to build websites,designcomputer games,program in Scratch and Python and improve their Heterogeneous Computing ResearchHeterogeneous computing involves combining diferent types of processors,such as CPUs,GPUs and adaptive compute accelerators,to perform computational tasks more efciently.The AMD Heterogeneous Accelerated Compute Clusters(HACCs)are a joint initiative between AMD and five of the worlds leading universities.The HACCs provide critical infrastructure and funding to support novel research in high-performance heterogeneous computing.HACCs have been set up at each of the five partner universities:ETH Zurich in Switzerland,the University of California,Los Angeles(UCLA)and the University of Illinois at Urbana Champaign(UIUC)in the U.S.,National University of Singapore(NUS)in Singapore and Paderborn University in Germany.Each HACC is equipped with the latest AMD EPYC CPUs,Instinct,Alveo and Versal accelerators.The systems are specially configured to enable some of the worlds leading academics to conduct state-of-the-art heterogeneous computing research.Priority areas for the program include HPC,machine learning,computer architecture,compilers,energy-efcient computing and database acceleration.In addition to giving researchers access to the latest AMD technologies,the HACC program also fosters interdisciplinary research and collaboration.AMD researchers work directly with the HACC user community,and the program provides a forum for researchers to discuss and share ideas around hardware,software and development tools through webinars,tutorials,workshops and user group meetings.Over 400 researchers have participated worldwide in the program since 2020,which has resulted in over 30 publications to date,including two best paper awards at international conferences.ETH Zurich:Advancing Recommendation Models with AMD TechnologyRecommendation models are a type of machine learning tool used by online retailers and streaming services to predict user preferences and suggest personalized products or content.While these models ofer great benefits for improving the customer experience,they can be computationally intensive due to their large size.Typically,a combination of CPU and GPU is used to optimize the performance of these models.However,by integrating FPGA technology,significant gains in performance and energy efciency can be achieved.The ETH Zurich HACC team collaborates with leading companies to take advantage of heterogeneous computing to advance recommendation systems.For instance,they developed the FleetRec project a state-of-the-art large-scale recommendation system on hybrid GPU-FPGA clusters.Professor Gustavo Alonso,head of the Systems group in the computer science department at ZTH Zurich and lead for the universitys HACC,said,The HACCs are a unique initiative instrumental in enabling innovative and relevant research.They provide researchers with an opportunity to develop proof-of-concept prototypes relevant to both industry and academia.digital literacy skills.For some students,this may lay the groundwork for a future technical career,while for others it supports reasoning and skills development to thrive in a range of other pursuits.Equipping Learning Labs to Support Tomorrows STEM StarsIn 2022,AMD expanded its reach with two new Learning Labs at KIPP Collegiate High School in Austin and at the Cerebral Palsy Childrens Association of Penang.KIPP Collegiate High School serves more than 800 students with a focus on college and career readiness.Our gift of 25 computer systems benefits two Career and Technical Education classrooms and supports learning in robotics,engineering,graphics design and animation,engineering design and Advanced Computer Science.Students enrolled in these courses through the Career and Technical Education program also learn career skills,and they can work towards earning certifications and gain work experience via internships.The Cerebral Palsy Childrens Association of Penang is a nonprofit organization dedicated to providing comprehensive services for the development of people with cerebral palsy.It focuses on special education,various therapies,computer education and vocational training to enhance the abilities and knowledge of their clients so they can be an integral part of the community.This AMD Learning Lab is equipped with 10 Dell Inspiron computers with assistive devices that provide accessibility for all students.With the addition of this technology,students learn much needed digital literacy skills,including proficiency in multiple software applications,such as Microsoft Publisher,Microsoft Ofce 360 and other coding tools.AMD also provided funding to update the electrical and cooling systems in the lab space to enable a safe and functional environment for the students and teachers.We are not only proud to make products that advance society;we are also proud to donate technology that can make a diference in a persons life.Learn more about AMD Learning Labs2022-23 AMD CORPORATE RESPONSIBILITY REPORT21OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingDigital Impact Inspiring Students and Strengthening Critical Thinking Skills with Robotics Robotics is a rapidly evolving field,and there is a lot of excitement around its potential for increased efciency,improved safety and the development of new technologies.Robotics is also a popular topic in education,as it provides an opportunity for students to prepare for the jobs of the future in a practical and engaging way.AMD has been involved with the FIRST(For Inspiration and Recognition of Science and Technology)Robotics Competition since 2009,when NIs CompactRIO(powered by AMD FPGAs)became the main robotic controller supplied to every team for the FIRST competition.That platform was eventually replaced by NIs roboRIO in 2015,which is based on our AMD Zynq adaptive SoCs.Founded more than 30 years ago,FIRST is a nonprofit organization that designs accessible,innovative programs that motivate young people to pursue education and career opportunities in STEM,while building self-confidence,knowledge and life skills.Regional SpotlightAMD in Ireland:Uncovering Exceptional Engineering Talent Through our partnership with Connecting Women in Technology(CWIT),our team in Ireland participates in the Digital Futures initiative.It aims to raise students awareness of the diverse nature of career opportunities in the technology sector and promote STEM careers throughout the country.In 2022,a team of AMD volunteers went into the classroom to share their own personal experiences and career paths,giving more than 700 secondary school students(age 15-18)insights into the possibilities of a career in technology.Over the past three years,AMD in Ireland has also brought trainee teachers into the workplace by participating in CWITs STEM Teacher Internship Program.Through this program in 2022,we recruited two teachers to work alongside our engineering team,ofering first-hand experience of what it is like to work in the technology sector.Taking part in an internship at AMD helps teachers better guide their students,especially girls and young women,toward pursuing an education and career in STEM.AMD also supports the Digital School Awards Europe initiative in partnership with HP.The Digital Schools Awards launched its European program in 2021 with the aim of advancing digital skills in teaching and learning as well as encouraging the creation of digital schools in communities across Europe.So far,the program has helped over 730 schools in Europe to enhance their digital education practices,and more than 266,000 students have benefitted from the initiative.The program is free to all primary and secondary schools.In 2022,AMD sponsored the Up a Creek robotics team during the FIRST competition season,where teams of students are challenged to design a team brand,hone teamwork skills,engage with the community and build and program industrial-sized robots to play difcult field games against competitors.It is as close to real-world engineering as a student can get.Volunteer professional mentors lend their time and talent to guide each team.Each season ends with an exciting FIRST Championship and in 2022,the divisional first-place title went to Up a Creek robotics.Investing in programs like the FIRST Robotics Competition gives AMD the chance to help kids explore their creativity through technology,said Salil Raje,senior vice president and general manager of the Adaptive and Embedded Computing Group at AMD.To date,nearly 2.5 million students have discovered the power of adaptive computing through their robot builds.Learn more about AMD-sponsored robotics teams2022-23 AMD CORPORATE RESPONSIBILITY REPORT22OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingDigital Impact AMD in Canada:Empowering Tomorrows Innovators and Thinkers Through our companys long-term and short-term co-op programs,future engineers and computer scientists can learn their craft with the help of experienced AMD staf,taking an active role in developing the next generation of hardware or software that powers our products.These programs also help develop the leadership potential of existing employees.Following graduation,a large proportion of our interns return as full time AMDers,building our next league of technical talent in Canada.We onboarded more than 350 co-op students in 2022,bringing diversity of thought,experience,skills,culture and age to AMD.We also funded cutting-edge research through the Master of Science in Applied Computing Internship Program at the University of Toronto in 2022.This helps us create job opportunities for graduate students and develop the local talent pipeline for the semiconductor ecosystem.Case StudyUniversidad Catlica del Maule Expands Access to Education with HP Notebooks Powered by AMD Ryzen CPUs When the COVID-19 pandemic hit,many students at the University Catlica del Maule in Chile were at risk of losing access to their education.Upon learning that not every student owned a personal computer to attend their virtual classes,the universitys administration formulated a plan to enable remote studies for the student body and incentivize high academic performance.Five hundred qualifying students received HP notebooks powered by AMD Ryzen 3000 series CPUs that were lightweight but powerful enough to handle a full range of student workloads,from daily productivity tasks to heavy quantitative analyses.The university plans to continue their program and provide future worthy students with AMD processor-powered devices to help them complete their studies and change their lives.Read the case study AMD in Greater China:Advancing STEM Education in Rural SchoolsThe AMD Shanghai Research and Development Center launched the“Inspire the Future”initiative in 2018 to promote STEM education in K-12 schools in Shanghai,and in 2021,we expanded this initiative to Beijing.In 2022,we extended beyond the cities:working with Give2Asia,we reached out to rural schools in need.We also support primary school students in underdeveloped areas.In partnership with Give2Asia,we provided one-year STEM courses for students in Jiuzhaigou County.With an AMD Foundation grant of US$37,000,300 students from four rural primary schools receive 24 hours of STEM teacher live-streaming courses per academic year.The students complete a scientific experiment to learn about a topic in each class.In November 2022,the AMD China Design Center held a successful computer science popularization class online as part of the“Inspire the Future”project,and eight classes from four primary schools in Jiuzhaigou joined.Our volunteers stimulated students interest in computers and technology with a very interactive class and printed classroom materials about microprocessors.2022-23 AMD CORPORATE RESPONSIBILITY REPORTRegional Spotlights 23OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingDigital Impact AerospaceAMD FPGAs have been used in space exploration and satellites for more than 20 years,helping as humanity explores the universe beyond our planet.AMD technology has been an integral part of NASAs Mars rover missions,including Spirit,Opportunity and Curiosity.The NASA rover Perseverance is the most advanced machine to touch down on Mars.AMD FPGAs power the rovers computer vision to detect samples as small as a grain of salt.Its powerful AI keeps learning and adapting through the entire mission,advancing discoveries on the red planet to seek out signs that the planet once supported life.Read about AMD and the NASA rover Artificial Intelligence(AI)AI is increasingly pervasive in the modern world and has the potential to propel smart technology for retail,cities and factories and transforming our digital homes.AMD data center and embedded products ofer advanced AI acceleration,enabling high performance and high efciency to make the world smarter.AMD AI technology in the data center is delivering high throughput at low latency for cloud-end image processing,speech recognition,recommender system accelerations and natural language process accelerations.Outside the data center in edge computing,our technology is enabling extreme AI inference capabilities to help accelerate deep learning processing in self-driving cars and advanced driving assistance systems,healthcare facilities,smart cities,retail locations,robotics and autonomous machines.Where the Worlds Most Advanced Processors Meet the Worlds Most Important Challenges Leadership products and deep partnerships help advance the world together.From aerospace and automotive,through energy and climate,to healthcare and beyond,partnerships advance almost every facet of the world we live in.Together,we turn the hardest problems into the greatest possibilities.and more efcient materials for use in solar power systems.Collectively,these applications serve an important role in supporting the transition to a low carbon economy.Meanwhile,the performance delivered from AMD-powered servers help advance research on climate change.By analyzing massive and complex data sets,researchers are better able to understand the causes of climate change and predict the impacts of extreme weather.In 2022,several new supercomputers powered by AMD were used in climate modeling,including the creation of a“digital twin”of our planet by the LUMI supercomputer.This virtual representation is being used in Europes Destination Earth initiative for forecasting models to predict various climate change scenarios.Learn about how the AMD-powered LUMI supercomputer is advancing climate science2022-23 AMD CORPORATE RESPONSIBILITY REPORT Automotive and Transportation From improving aerodynamics and efciency to advancing electrification and automation,AMD is improving automotive and transportation technologies through high-performance and adaptive computing.AMD-enabled AI is designed to make it safer to be on the roads,with advanced sensors and driver assistance systems paving the road to more autonomous driving.Energy and ClimateExponential increases in computing performance open doors for exploration and research.For example,AMD high-performance computing is used in complex engineering simulations like computational fluid dynamics to identify and optimize some of the most efcient designs across many products such as automobiles,airplanes,boat propellers and wind turbines.Renewable energy is a key sector that can benefit from significant efciency breakthroughs powered by AMD technology,such as rooftop wind turbines 24OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingDigital ImpactCase StudyOrca3D and Simerics Help Propel the Future of Electric-powered Marine Design with AMD Processors Award-winning director and avid boater Andrew Adamson began brainstorming ways to reduce his use of fossil fuels on the worlds oceans while improving the quality of marine transportation.Adamson partnered with Orca3D and Simerics to design,test and analyze new ideas for an electric boat design using systems powered by AMD Ryzen Threadripper PRO 3975WX processors.Utilizing thread pinning techniques to take advantage of the AMD processors speed,the team was able to accelerate simulations and increase iterations in their research.Adamson hopes that with the help of AMD hardware,he and other Orca3D software users will be able to bring their electric boat designs to life for personal and commercial use.Read the case study HealthcareDuring the COVID-19 pandemic,we were honored to help expedite the delivery of our embedded processors used in ventilators.We also design processors used to power medical imaging systems such as handheld and cart-based ultrasound systems,endoscopy systems and high-end MRI and CT scanners.From diagnostic imaging to imaging-assisted medical procedures,technology that maximizes visual clarity and fidelity is vitally important.With our recent acquisitions,AMD oferings in healthcare have expanded to include solutions such as clinical defibrillators and technology for robot-assisted surgery.AI has huge potential for healthcare,with opportunities in everything from mobile ultrasound to robotic surgery.In a podcast interview forthe technology research and consultancy firm Omdia,Subh Bhattacharya,AMD Worldwide Market Lead for Healthcare,Medical Devices and Life Sciences,spoke about his personal passion for how medical AI can assist medical professionals,ultimately helping them save lives.In episode 13 of The Medical AI Podcast,he talked about our companys involvement in healthcare AI and our focus on developing innovations and solutions for the future.Listen to the interview in episode 13 of The Medical AI PodcastCase StudyKTH Breaks New Ground in Science Using AMD EPYC CPUs and AMD Instinct GPUsHigh-performance computing(HPC)is increasingly important for science research.Now that the advancement of human knowledge is frequently determined by complex calculations,the more processing power researchers can deploy,the more discoveries they can potentially make.Universities around the world are investing in HPC,and one of the leading research institutions focusing on this area is the KTH Royal Institute of Technology(KTH)in Sweden.When KTH procured new supercomputing resources to enhance its HPC services for the needs of Swedish and European research communities,an HPE Cray EX cluster powered by AMD EPYC processors and AMD Instinct GPUs ofered exceptional performance per watt with consumption of about half the power compared to competitive oferings.KTH areas of research include climate prediction,sustainable sea transport and biomolecular modeling.Read the case study 2022-23 AMD CORPORATE RESPONSIBILITY REPORT25OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingDigital Impact Internet of Things(IoT)and Industrial Solutions Pushing the outermost boundaries of computing includes making more powerful,energy-efcient and security-minded processing available across a wider spectrum of devices and applications.For example,the AMD embedded product portfolio provides the performance and power efciency to enable a variety of Edge computing platforms,putting them closer to the end user and source of the data.We are also paving the way for a new generation of industrial solutions enabling intelligent factories.Our solutions serve a wide range of marketsegments and help customers realize a future in which things run seamlessly,keeping employees productive while they interact more naturally and intuitively with the technology around them.For example,AMD processor-powered industrial PCs are optimized for exceptional power-efcient processing and graphics performance with integratedCPU and GPU,multi-display support and other advanced features.Case StudyFrantom Designs Transforms Their Architecture and Design Capabilities with AMD and BOXX Frantom Designs,an architectural design and manufacturing company in Texas,U.S.,is rethinking the future of housing by implementing commercial construction techniques and innovative materials.Their houses incorporate Hebel,an extremely durable autoclaved aerated concrete,and are designed to be fireproof,mold-proof and well-insulated.To create their designs and tackle the complex 3D visualizations and renderings necessary to present each plan to potential and existing customers,Frantom Designs adopted BOXX workstations powered by AMD Ryzen 7950X processors and AMD Radeon graphics.Thanks to the power of this hardware,Frantom Designs is better prepared to create lumber-free homes to last hundreds of years.Watch the video Limiting Potential Negative Impacts of TechnologyWhile we work to enhance and accelerate the possible benefits of our technology,we also remain mindful of the potential for negative impacts.Potential risks to our industry and society associated with technology use include increased energy consumption,threats to privacy,human rights abuses and addictive behaviors.As a component supplier of semiconductor solutions,AMD is limited in our ability to direct or influence how our products are ultimately used by end consumers.Yet we recognize the seriousness of these risks and the important part we play in addressing and taking action to help reduce them.With our recent acquisitions,AMD IoT and industrial solutions expanded to applications such as smart grids,trains and railways,3D printers and robotics.Our ongoing eforts include monitoring and disclosing risks to processor security,increasing power efciency in the data center and collaborating with industry partners to provide input to policy frameworks and standards.For example,AMD actively engages in industry dialogues on these and other technological challenges through forums such as the Information Technology Industry Council(ITI),the Responsible Business Alliance(RBA)and the Semiconductor Climate Consortium(sponsored by SEMI).We will continue working to understand and collaborate more deeply on these and other important issues so that the computing we enable transforms our world for the better.2022-23 AMD CORPORATE RESPONSIBILITY REPORT26OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingEnvironmental SustainabilityADVANCING ENVIRONMENTAL SUSTAINABILITY ACROSS OUR OPERATIONS,SUPPLY CHAIN AND PRODUCTS“As a leader in high-performance and adaptive computing to address the worlds most compute-intensive workloads,AMD strives to enable and implement environmental solutions in our products,supply chain and operations,while accelerating energy efficiency improvements across our product portfolio.”Mark Papermaster Executive Vice President and Chief Technology Officer at AMD2022-23 AMD CORPORATE RESPONSIBILITY REPORT27OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingEnvironmental Sustainability Environmental Sustainability Why It MattersAMD has a part to play in mitigating climate change including making our products more energy efcient and by powering the research needed to transition to a low-carbon economy.According to the World Economic Forums 2023 Global Risks Report,five of the top six greatest risks we face as a global community based on severity over the next decade are related to climate and environmental risks.xv This is not only a future challenge the related issues are already manifesting.Globally,the 10 warmest years on record have all occurred since 2010,with the last nine years(2014-2022)among them.The International Panel on Climate Change has stated that an average temperature increase of 1.5C is the threshold for dangerous global warming.Beyond this,they foresee a risk of severely destabilizing social and economic structures around the world.xvii An immediate and meaningful global response is required to address the climate crisis.Accelerating the transition to a sustainable low-carbon economy is intended to produce benefits for economic growth,promote the health of people and our environment and increase resilience to natural disasters.xviii The technology sector plays a critical part in maximizing product energy efciency and enabling opportunities to reduce greenhouse gas(GHG)emissions across society.Our ApproachAt AMD,we embrace the responsibility to protect our planet and the opportunity to help others save energy and reduce GHG emissions.Our environmental programs and initiatives extend across our value chain,and we set ambitious goals and publicly report annually on our progress.AMD and our industry continue to mobilize and scale climate action,particularly for Scope 3 emissions,which occur outside of an individual companys operations.For instance,CDPestimates that supply chain emissions are on average 11.4 times higher than operational emissions.xix Because AMD operates in a fabless business model through carefully selected external suppliers to manufacture our products,our approach to environmental sustainability takes into account where we have control and where we have influence.For instance,AMD continues to pursue a science-based GHG emissions reduction goal for our operations(aligned with a 1.5C scenario)while charting a bold path to advance energy efciency for accelerated computing applications.Meanwhile,we work closely with direct manufacturing suppliers to increase efcient use of resources and renewable energy while investing in stakeholder engagement to support industry eforts.AMD was selected in 2022 to be a founding participant in the Responsible Business Alliances Senior Environmental Advisory Taskforce,in addition to our continued role serving on the Board of Directors and as vice chair.The taskforce shapes the sustainability strategy for the worlds largest industry coalition dedicated to CR in global supply chains.AMD also joined many of our suppliers and customers when we became a founding member of the Semiconductor Climate Consortium in late 2022 with its focus on GHG emissions across the electronics value chain.AMD continues to be an active participant and collaborator in several workgroups.In 2022,AMD was again honored to be named a CDP Supplier Engagement Leader for our eforts in the supply chain and related goals,governance and industry collaborations.This honor is reserved for the top 8 percent of the nearly 20,000 CDP survey respondents(in 2022)deemed to be taking leadership actions to help reduce emissions and climate risks in the supply chain.2022-23 AMD CORPORATE RESPONSIBILITY REPORTOur Approach to Environmental Sustainability Is Based on Three PillarsAddressing Environmental Impacts at AMD and in Our Supply ChainAdvancing Environmental Performance for IT Users Reducing AMD operational GHG emissions in line with science-based targets,while working closely with direct manufacturing suppliers to advance environmental performance.Optimizing system-level energy efciency to help our customers and end users save energy and advance their sustainability goals.Innovating on Collaborative Solutions to Address Environmental Challenges Enabling innovative solutions that optimize renewable energy generation,enhance smart solutions and power cutting-edge climate and scientific research.28OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingEnvironmental Sustainability Our Goals and Progress50 percent reduction in absolute GHG emissions from AMD operations by 2030(base year 2020).In 2022,we achieved a 19 percent reduction in our Scope 1 and 2 emissions compared to 2020.vii30 x increase in energy efciency for AMD processors and accelerators powering servers for artificial intelligence training and high-performance computing from 2020-2025.iv As of mid-2023,we are on track toward achieving 13.5x improvement in energy efciency for accelerated compute nodes from the 2020 baseline.v100 percent of AMD direct manufacturing suppliers have public emissions reduction goals by 2025.In 2022,70 percent of these suppliers had public GHG goals.x80 percent of AMD direct manufacturing suppliers source renewable energy by 2025.In 2022,68 percent of these suppliers sourced renewable energy.xProgress on both of our environmental supply chain goals was impacted by the addition of new manufacturing suppliers due to the acquisitions.Although some suppliers have GHG reduction goals and source renewable energy,the overall increase in suppliers led to a lower percentage to goal in 2022 compared to 2021.footprint without compromising on performance,and after testing several options,they chose state-of-the-art,high-core AMD CPUs that could save up to 30 percent in power consumption for the same compute capacity.With more efcient CPUs,per BNP Paribas,they could reduce the number of servers they required,saving power and cooling costs.We are laser focused on improving energy efciency,doing as much as possible compute per watt of power consumed.Yann Lewis Business Development Executive,AMD2022-23 AMD CORPORATE RESPONSIBILITY REPORTBNP Paribas Embraces Circular Economy and Energy Efciency at Its Data CentersAMD technology can make a significant impact in reducing a companys carbon footprint while maintaining its compute performance.In 2022,BNP Paribas opened a data center in Sweden,using a circular economy approach.By partnering with AMD and others,the new chosen solution not only has a lower environmental impact but also makes a positive contribution to the local economy.The data center increases BNP Paribas CIBs computing grid by 20 percentxx.Using direct liquid cooling,the center sells its waste heat to the City of Stockholm,where it warms up to 20,000 homes.BNP Paribas wanted to reduce their carbon 29OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingEnvironmental Sustainability Addressing Environmental Impacts OperationsWithin AMD operations,we aim to reduce energy use and resource consumption while aggressively reducing Scope 1 and 2 GHG emissions(aligned with a 1.5C scenario since 2014).As of December 31,2022,AMD operated more than 90 locations worldwide,including engineering facilities,sales and business service sites and corporate ofces.Across our facilities,we strive to apply the highest level of integrity and stewardship for environmental performance.Our Global EHS Standards provide the corporate-level environmental,health and safety framework for the development of best-in-class programs for our worldwide operations.These Standards are consistent with widely recognized management systems,such as the International Organization for Standardization(ISO)14001 standard for environmental management.Two of our sites in San Jose,California and Singapore are certified to the ISO 14001 standard.Our commitment to environmental sustainability is reflected in our long-standing corporate values and culture.For 28 years,we have been transparently reporting on our environmental initiatives and performance.With outsourced manufacturing operations,we include supply chain manufacturing in the scope of our environmental initiatives and goals,in addition to our global operations and product designs.Following the acquisitions of Xilinx and Pensando in 2022,we are reporting 2022 calendar year environmental data for the combined company.In line with the ISO 14001 standard,our Global EHS Standards cover key environmental elements,including:Global Climate Protection Pollution Prevention and Resource Conservation Waste Management Stormwater Protection Industrial Wastewater Management 2022-23 AMD CORPORATE RESPONSIBILITY REPORT Environmental Policies and Reporting Environmental Data Tables Environmental,Health and Safety(EHS)Policy Climate Change Policy GRI Standards Content Index CDP Climate Change Submission CDP Water Submission SASB and TCFD Reporting UN Sustainable Development Goals ISO 14001 Site Certifications30OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingEnvironmental Sustainability Energy and GHG EmissionsAfter exceeding our 2014-2020 GHG goal for operations,we set a new science-based target(aligned with a 1.5C scenario):a 50 percent absolute reduction in GHG emissions from AMD operations(Scope 1 and 2)by 2030(2020 base year).Following the acquisitions of Xilinx and Pensando in 2022,we recalculated our base year energy use and operating GHG emissions to reflect the combined company.As a result,our 2020 baseline for energy use changed from 123 to 199 GWh,and our operating emissions(market-based)changed from 30,009 to 61,754 metric tco2e.In 2022,we achieved a 19 percent reduction in operating emissions(market-based)compared to revised 2020 baseline.Our Scope 1 and 2 GHG emissions have received external limited assurance.Within our operations,our major corporate campuses account for the greatest energy use and associated GHG emissions.Our global energy use increased 7 percent from 2020 to 2022.xxi We increased the sourcing of renewable energy in 2022 to 66 GWh for the combined company.This is about 32 percent of our total global energy use(compared to the revised 2020 baseline of 18 percent)enough to power approximately 9,275 homes in the U.S.for a year.xxii AMD is evaluating ways to continue increasing renewable energy sourcing over the next three to five years and beyond,aligned with our business strategies.For 2022,in addition to sourcing renewable energy from third parties,our San Jose campus utilizes onsite solar generation:there is a large 1.4 MW solar system comprised of 3,600 panels elevated in the parking lot to provide shade for 500 employee parking spaces.The campus also features an additional 600 kW rooftop solar installation.The solar configuration can store excess energy generation in a 1 MWh battery storage system for later use when building loads are high and when utility rates are most expensive.We are also able to send surplus energy back to the power grid for the local community to use.To reduce energy and GHG emissions as outlined in our internal Global EHS Standards,major AMD sites maintain an inventory of emissions of global warming substances,including GHG emissions resulting from the sites direct energy use and potential emission sources of ozone-depleting substances(ODSs).We employ strategies to reduce the emission of global warming substances,eliminate or reduce the use of ODSs and decrease the sites energy use.We have also identified and implemented additional conservation projects to save electricity.In 2022,approximately 20 projects were implemented or recently implemented in the previous year,including equipment upgrades and optimizations that led to approximately 1.4 million kWh of electricity savings during the year.xxiii AMD GHG Emissions from Operations(MTCO2e)GraphAMD Energy Use from Operations(GWh)Graph2022-23 AMD CORPORATE RESPONSIBILITY REPORT EPA applauds AMD for its leadership position in the green power marketplace.AMD is an excellent example for other organizations in reducing greenhouse gas emissions through green power investment and use.James Critchfield Program Manager of EPAs Green Power PartnershipAMD GHG Emissions from Operations(metric tco2e)metric tco2e202020212022010,00020,00030,00040,00050,000Scope 1 GHG Emissions(metric tco2e)60,000Scope 2 GHG Emissions(metric tco2e)AMD Energy Use from Operations(GWh)xxiGigawatt Hours202020212022050100150200250Renewable Energy Use(GWh)Non Renewable Energy Use(GWh)31OverviewCR Focus AreasAbout Our Reporting2022-23 AMD CORPORATE RESPONSIBILITY REPORT23OverviewCR Focus AreasAbout Our ReportingEnvironmental Sustainability Water and WastewaterTo help reduce our use of water resources and to comply with our internal Pollution Prevention Standard,we assess major site activities and processes that could have significant impacts on the environment and put reductions strategies in place.We closely manage the environmental impacts of our wastewater and put industrial wastewater,stormwater and groundwater strategies in place where needed.In 2022,water use in our operations was 183 million liters.We continue to utilize rainwater harvesting and reuse gray water at facilities in Austin,Bengaluru and Hyderabad.In 2022,these three sites harvested more than 23.9 million liters of rainwater,a 74 percent increase from 2021 and over 100 percent of their combined annual water use.As a result,approximately 7.5 million liters of water were returned to local water resources like reservoirs,surface ponds and groundwater in communities where we live and work.xxiii WasteAMD aims to reduce the amount of waste produced through pollution prevention practices.We characterize,track and manage the chemical,electronic and other regulated waste generated onsite and through final disposition.The waste management facilities and transporters we use for the management of regulated waste are audited and approved prior to use and periodically to promote a high level of care.Our total amount of waste generated in 2022 was 816 metric tons,comprised of 97 percent non-hazardous and 3 percent hazardous waste streams.The non-hazardous waste diversion rate,or the amount kept out of landfill,was 80 percent in 2022.Eforts include recycling and composting 653 metric tons of non-hazardous materials.The amount of regulated hazardous waste generated,namely in product testing labs,was 24 metric tons in 2022.xxiii See our environmental data tables for complete data and footnotesSupply Chain We work with our direct manufacturing suppliersvi to advance environmental sustainability across a variety of metrics,namely emissions related to purchased goods and services(Scope 3 emissions).In 2022,we welcomed and integrated several new direct manufacturing suppliers into the AMD supply chain responsibility program.With each direct supplier,our engagement toward assertive,forward-looking progress in environmental sustainability is informed by the suppliers situation.Our eforts to advance sustainability in the supply chain include participation and even leadership roles in sector collaborations driving towards a 1.5C pathway.Silicon wafer manufacturing accounts for the bulk of our environmental footprint within our supply chain.Since 2014,we have partnered with our direct wafer suppliers to track performance against EHS metrics for AMD wafer production.Our work together aims to outperform industry averages across metrics that include energy use,GHG emissions,water use,hazardous waste recycling and injury and illness rates.Looking ahead to 2025,we have public goals for all of our direct manufacturing suppliers,and we report on our progress annually.By 2025,we aim for 100 percent of them to have their own public GHG reduction goal(s)and 80 percent to source renewable energy.x Although our performance on these goals decreased slightly in 2022 due to t
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