Applied Materials: Prioritising Strategic Supplier Relations

California-based Applied Materials has revealed substantial advancements towards its sustainability objectives within its 2024 Impact Report.

The report highlights the company's dedication to enhancing procurement processes for sustainability, aiming to secure 100% renewable energy usage across its facilities.

However, following the construction of various new facilities, Scope 1 and 2 emissions now sit above a 2019 baseline.

Procurement's role in emissions reduction

Chris Librie, who serves as CSO, Head of ESG, Corporate Sustainability and Reporting at Applied Materials, emphasised the organisation's focus on emissions reduction.

He stated: “I’m pleased to share that Applied Materials has published our 2024 Impact Report detailing great progress in reducing our Scope 3 emissions (down 24% since 2022), controlling our Scopes 1 and 2 emissions in spite of business growth and continuing to invest in the communities where we operate."

The report outlines a number of headline sustainability targets and the company's progress towards achieving them, as well as procurement's role: 

• The goal of using 100% renewable electricity worldwide by 2030 stands at a 73% globally and has been fully realised in the US
• Aiming for a 50% reduction in Scope 1 and 2 by 2030, these emissions sit 4% above a 2019 baseline
• Applied Materials has achieved a 27% reduction per million USD of Scope 3 emissions from a 2019 baseline for semiconductor products
• With ambitions to reduce equivalent energy consumption per wafer pass by 30%, Applied has made a 13% improvement.

These objectives emphasise the pivotal role procurement plays in reducing carbon footprints and enhancing energy efficiencies across the semiconductor supply chain.

Collaborative supplier engagement

Applied Materials' collaboration within its supply chain, accounting for about 10% of its carbon footprint, represents a pivotal area for sustainability impact. 

The report specifies: “Advancing a more energy- and carbon-efficient supply chain reduces the overall impact of the semiconductor industry to enable more sustainable innovation.”

The SuCCESS2030 programme, for example, illustrates a decade-long roadmap, engaging top spend suppliers in emissions data sharing and GHG goal setting. In 2024, 183 suppliers participated in the survey, with 109 offering Scope 1 and 2 site-level data.

Working closely with suppliers to align on emissions-reduction plans showcases the importance of procurement in driving sustainability. The commitment to these initiatives underlines how pivotal strategic supplier relationships are for achieving long-term environmental goals.

AI and supply chain challenges

Applied Materials CEO Gary E. Dickerson, writing in his foreword, singles out artificial intelligence as the greatest challenge to sustainability ambitions. 

He notes: “Tectonic shifts in technology are reshaping our lives and the global economy. Transformative innovations, like artificial intelligence and the internet of things, have near-infinite potential and we’re only beginning to explore what’s possible.

“Semiconductors are the foundation of these technological megatrends.”

For procurement leaders, Gary's message underscores the necessity to innovate responsibly in AI-driven processes while anticipating the associated environmental challenges.

As he points out, sustainable growth must be woven into the industry's fabric, indicating a pressing need for strategic procurement planning.