6-K 1 ss183081_6k.htm REPORT OF FOREIGN PRIVATE ISSUER

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
Report on Form 6-K dated July 30, 2013
Commission File Number: 1-13546

STMicroelectronics N.V.
(Name of Registrant)
WTC Schiphol Airport
Schiphol Boulevard 265
1118 BH Schiphol Airport
The Netherlands
(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
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If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- __________
Enclosure: The 2012 Sustainability Report of STMicroelectronics N.V.

    Life.  Augmented
    Sustainability
    Report 2012

    Reader's Guide
    Report scope and profile
    This Report describes our Sustainability performance in the
    calendar year 2012. It covers all of STMicroelectronics
    activities and sites, and it excludes ST-Ericsson sites and
    activities unless otherwise stated. You can find details of
    ST's structure and countries of operation in the chart on
    page 1. Historical information is available in previous
    years' reports at www.st.com/sustainability Change in scope
    and materiality ST has integrated in July 2012 the
    Application Processor activities from ST-Ericsson which led
    to the transfer of ST-Ericsson people in Grenoble and Paris
    and the former ST-Ericsson site in Sophia Antipolis
    (France). Additionally, some employees in India already
    based on ST sites were transferred from ST-Ericsson to ST.
    This change in scope has been integrated in the safety data
    but not in the social ones as we have not been able to
    rebuild the data and then had an incomplete reporting year.
    We will integrate those new sites in our 2013 reporting. In
    2011, ST completed an extensive materiality exercise
    involving a review of stakeholder concerns to fully align
    ST's Sustainability strategy with its business priorities
    and material issues. Twenty two global sustainability
    priorities, along with related targets, were agreed by ST's
    Vice Presidents and signed off by ST's President and CEO,
    Carlo Bozotti. In last year's report we set out how we
    planned to embed these Sustainability priorities within our
    business and measure progress against them. This year we are
    able to report performance against our new targets for the
    first time, providing concrete examples to illustrate the
    progress we have made and the challenges faced across the
    business. In 2012, ST undertook its first external
    stakeholder survey. We asked a wide range of stakeholders
    for their comments on our new Sustainability strategy and
    our 2011 Sustainability Report. More than 50 stakeholders
    accepted to participate in this survey, providing valuable
    feedback that has helped improve the content and structure
    of this Report (see more on page 6). We also used outputs
    from the following activities to develop the 2012 Report:
    o a review of additional stakeholder feedback (email, web requests)
    o high-level benchmarking of competitors and companies recognized
    for their Sustainability approach
    o a global review of existing and anticipated legislation
    Detailed information about each of our Sustainability
    priorities, as well as our corporate approach to
    Sustainability, can be found on our website:
    www.st.com/stonline/ company/sd/index.htm
    Accessibility
    Our Sustainability Report is also accessible on the web in
    interactive PDF format at www.st.com/ sustainability along
    with past reports. Printed copies are available on request.
    Assurance
    DNV (Det Norske Veritas) is the entity that has been
    appointed to provide assurance services to
    STMicroelectronics. In order to do so, DNV interviewed all
    relevant corporate departments and visited three sites
    (Catania - Italy, Calamba - The Philippines and Muar -
    Malaysia) to review and validate ST's data reporting process
    and to provide assurance of this year's Report. DNV's
    assurance statement can be found on page 72.
    THE GLOBAL COMPACT
    WE SUPPORT
    Alignment with GRI and the UN Global
       Compact
    This report is prepared and presented in accordance with the
    2006 Global Reporting Initiative (GRI) G3 Guidelines. We
    have self-declared an A+ application level which has been
    confirmed by GRI. If G3 indicators are not applicable or
    relevant to us, we have explained this in the Indicator
    Index, or in the text of the Report. ST has been a signatory
    of the United Nations Global Compact (UNGC) since 2000,
    which commits us to fulfilling its ten principles. This
    report describes actions we have taken to implement these
    principles, and serves as our Communication on Progress. On
    page 71 there is an index that references GRI indicators,
    Global Compact Principles and ISO 26000 core subjects that
    are contained within this Report. Indicators and use of
    symbols Following implementation of ST's revised
    Sustainability strategy in 2011, we are now in a position to
    report on performance against new objectives under each of
    our Sustainability priorities. Progress updates for each
    objective can be found in the "performance versus
    objectives" tables, illustrated by the following symbols:
    Target achieved
    In progress
    No Progress
    On hold
    ST Environment Health and Safety
       Decalogue
    We value your feedback
    We are committed to improving both our Sustainability
    performance and the ways we communicate with our
    stakeholders. We encourage contributions and debate from all
    stakeholders and welcome feedback on the content and
    presentation of this Report - as well as suggestions for
    next year. Suggestions and feedback can be registered using
    an online form, available at
    http://www.st.com/stonline/company/sd/contact.htm You can
    also email us at sustainable.development@st.com or write to
    us at: Corporate Sustainable Development Group
    STMicroelectronics International NV 39, Chemin du
    Champ-des-Filles - C.P. 21 CH-1228 Geneva - Plan-Les-Ouates
    Switzerland

    1
    ST at a glance
    Lake Oswego
    Longmont
    Santa Clara
    La Jolla
    Scottsdale
    Coppel
    Toronto
    Albany
    Fishkill
    Piscataway
    Lancaster
    Tours
    Bristol
    Rennes
    Crolles
    Rousset
    Edinburgh
    Marlow
    Paris
    Zaventem
    Sophia Antipolis
    Geneva
    Prague
    Azarno
    Istanbul
    Tel Aviv
    Madrid
    Grenoble
    Bouskoura
    Castelletto
    Agrate
    Palermo
    Tunis
    Catania
    Kirkop
    Greater Noida
    Shanghai
    Shenzhen
    Bangalore
    Longgang
    Ang Mo Kio
    Calamba
    Muar
    Design Centers
    Technology R&D Centers
    Front-end Manufacturing sites
    Back-end Manufacturing sites
    Headquarters
    o A global semiconductor leader
    o The largest European semiconductor company
    o 2012 revenues of $8.49B(1)
    o Approx. 48,000 employees worldwide(1)
    o Approx. 11,500(1) people working in R&D
    o 12 manufacturing sites
    o Listed on New York Stock Exchange, Euronext Paris and
    Borsa Italiana, Milan o 79 sales offices in 35 countries o
    Advanced research and development centers around the globe -
    about 16,000 patents
    - about 9,000 patent families
    - 12,000 people in technology, design, product and system R&D
    (1) Including ST-Ericsson, a 50:50 joint
       venture with Ericsson
    Focus on a site
    Zoom on Greater Noida (India)...
    HEADCOUNT:
    1,447 employees
    also 502 interns & subcontractors
    PROFILE:
    Men:  1,168 (81%)
    Women:  279 (19%)
    Average age:  32.8 years
    Split by job category:
    exempts:  1,421 (88%),
    non exempts:  26 (5%),
    Domains of expertise: electronics, embedded software,
    computer information systems MAIN ACTIVITIES: VLSI Design,
    Embedded Software, Application Engineering and Company's
    Information System KEY FIGURES: 306 Granted Patents, 431
    First filings; Campus area of approx. 72,000m(2) with a
    built up area of approx. 53,000m(2) SITE CERTIFICATIONS:
    ISO/TS 16949 (Quality), ISO 27001 (Information Security) and
    OHSAS 18001 (Occupational Health & Safety) INVESTMENTS: US$
    51m since 2001 in building Infrastructure, Test & IT
    Equipment SITE SPECIFICITIES: ST India has a rich history of
    providing high-value platforms, SoCs Systems on Chip),
    embedded systems, application-specific IP (Intellectual
    Property), and reference designs in various application
    segments, including home entertainment, multimedia,
    telecommunications, imaging, automotive, computer
    peripherals, and industrial control. ST Designers have
    contributed to library development in leading edge low power
    technologies from 45nm down to 28nm. Although reasonable
    efforts have been made to ensure the consistency of the
    summary financial information for the year 2012 in this
    report with ST's financial reporting, reliance should only
    be placed upon the complete financial reporting contained in
    ST's Annual Report on Form 20-F for the year ended December
    31, 2012, as filed with the SEC on March 4th, 2013, which
    can be found at www.st.com. Some of the statements contained
    in this report that are not historical facts are statements
    of future expectations and other forward - looking
    statements (within the meaning of Section 27A of the
    Securities Act of 1933 or Section 21E of the Securities
    Exchange Act of 1934, each as amended) based on management's
    current views and assumptions and involve known and unknown
    risks and uncertainties that could cause actual results,
    performance or events to differ materially from those in
    such statements. Certain such forward-looking statements can
    be identified by the use of forward-looking terminology such
    as 'believes', 'may', 'will', 'should', 'would be' or
    'anticipates' or similar expressions or the negative thereof
    or other variations thereof or comparable terminology, or by
    discussions of strategy, plans or intentions. Some of the
    relevant risk factors are described in 'Item 3. Key
    Information - Risk Factors' included in our Annual Report on
    Form 20-F for the year ended December 31, 2012. We do not
    intend, and do not assume any obligation, to update any
    information or forward-looking statements set forth in this
    report to reflect subsequent events or circumstances.

    2
    Content
    2012
    This report has been prepared by:
    Director of publication: Alain Denielle
    Editors in chief: Melanie Salagnat,
       Charlotte Yvard
    Editorial team: Estelle Hainry,
       Dominique La Mantia
    Editorial Services:  Malcolm Guy, Sally Henderson (Reassurance
    Network)
    Graphic designer:  MARSATWORK
    Photographers: Stephanie Joubert, San
       Kaung
    Printer: ProCo-Print
    Special thanks to: Charlotte Belleudi, Monica Bianchi,
    Alberto Della Chiesa, Ashish Kumar Chawla, Nelly Dimey,
    Antonio Dragotto, Karen Duhart, Saida El Basri, Anne
    Foerster, Julia Genovini, Philippe Laffargue, Olivier
    Leenhardt, Philippe Levavasseur, Giulia Mancini, Gerard
    Matheron, Florence Morel, Cosimo Musca, Pietro Palella,
    Antonella Redaelli, Philippe Quinio, Francois Suquet, Damien
    Tisserand, Stacia Vigne Thanks to: Nigel Atkins, Alessandra
    Asiaghi, Abu Bakar, Khalisha Banks, Xavier Baraton, Marc
    Bastianelli, Elisabeth Beronio, Taik Boon Boey, Celine
    Berthier, Giovanna Bottani, Claude Boumendil, Carol
    Brighton, Philippe Brun, Denise Ann Buhagiar, Denis Cazala,
    Fabio Chelli, HC Chew, Patrick Cogez, Clara Colombo, Leah
    Cruz, Philippe Dereeper, Sabrina Di-Paolo, Karine Dillion,
    Edwin Dobson, Patricia Dowdy, Pascal Droulez, Maneesh Dutt,
    Paolo Epigrafi, Franck Freymond, Christine Gombar, Federica
    Grotto, Tjerk Hooghiemstra, Ulrike Leger, Claudia Levo,
    Francis Ann Llana, Nada Lucas, Elisabetta Marelli, Michel
    Masselot, Guy Monier, Evangeline Nieva, Robin Noels, Serge
    Palmieri, Sandrine Parent, Alessio Pennisi, Luc Petit,
    Manisha Piyush, Delphine Rabaste, Raimondo Rannisi, Wolfgang
    Reiss, Valeria Riva, Andrew Roberts, Catia Rocca, Delphine
    Segura, Naginder Singh, Gautam Sinha, Alan Smith, Julie
    Stojic, Antonio Villaflor, Roma Zaborowska We also would
    like to thank everyone who kindly agreed to be quoted in
    this report and to provide testimony of their collaboration
    with ST. This report has been prepared following the GRI G3
    Guidelines. It represents a balanced and reasonable
    presentation of our organization's economic, environmental
    and social performance. It also demonstrates our commitment
    to the UN Global Compact, to which we have been a signatory
    since 2000. Carlo Bozotti President and CEO
    Copyright(c)STMicroelectronics - July 2013 All rights
    reserved.
    The STMicroelectronics corporate logo is a registered
    trademark of the STMicroelectronics group of companies. All
    other names are the property of the respective owners. All
    commissioned photography
    Copyright(c)STMicroelectronics
    Photo credits: (c)Shutterstock
    Company 3
    CEO Letter 3
    Materiality & Sustainability Strategy 4
    Governance 7
    Financial & Extra-financial Performance
       10
    Our People 12
    Recruitment, Learning & Development 14
    Employee Engagement 16
    Employee Safety 18
    Labor & Human Rights 20
    Global Diversity & Equal Opportunities
       22
    Employee Health & Well-being 24
    Our Products 26
    Customer Satisfaction 28
    Innovation Management 30
    Product Stewardship 32
    Conflict-free Minerals 36
    The Environment 38
    GHG Emissions from Operations 40
    Water Management 42
    Energy Management 44
    Chemicals Management 46
    Waste Management 48
    Transport & Logistics 50
    The Community 52
    Management of Sustainability in the
       Supply Chain 54
    Business Ethics & Compliance 56
    Local Sustainability Impacts 58
    Partnerships in R&D and Education 60
    Public Affairs & Industry Networking 62
    Awards 64
    New 2013 objectives 66
    Additional indicators & GRI statement 67
    Indicators Index 71
    Data reporting verification statement 72
    Glossary 73

    3
    Foreword by
    Carlo Bozotti,
    President and Chief Executive Officer
    2012 was an important year for ST, marked by our 25th anniversary
    and by the announcement of our new strategy.  It was also another
    challenging year, characterized by a difficult economic scenario as
    well as by significant structural changes in the market and in
    end-customer competitive dynamics.
    Our longstanding dedication to sustainable excellence helped
    us to deal with these challenges and ST ended the year
    showing strong progress in three main areas. First, despite
    the significant cash required by our Joint-venture
    ST-Ericsson and the weakness of the market, we actually
    improved our net financial position to $1.19 billion, thanks
    to careful management of ST's assets and resources. Second,
    our advances and breakthroughs in products and technologies
    in 2012 contributed to ST gaining market share in several of
    our targeted markets. In the Analog, MEMS and Sensors
    markets, we achieved 22% year-over-year revenue growth and
    saw ST's market share in the MEMS mobile and handset market
    rise to 48%1-more than twice the share of our closest
    competitor. In Automotive, ST reached the milestone of
    having more than 200 million cars in the world equipped with
    ST's leading infotainment technologies and we established
    important partnerships with leading car makers such as Audi
    and Hyundai. Microcontroller billings grew 30% year over
    year, while in trust and data security, we were confirmed as
    a leading Secure Element vendor2. Third, at the end of 2012,
    we made an important strategic decision and announced our
    new vision and strategy to be a leader in Sense & Power and
    Automotive products and Embedded Processing Solutions, the
    key drivers for our growth, our new financial model and the
    plan to exit from ST-Ericsson after a transition period. Our
    focus is now on five key growth areas: MEMS and Sensors,
    Smart Power, Automotive, Microcontrollers, and Application
    Processors including Digital Consumer. We target growing
    markets of approximately US$ 140bn that are driven by
    secular trends and societal needs: smart energy usage and
    the need for dramatic reduction of CO2 emissions, ubiquitous
    embedded intelligence and the humanization of technology,
    with more intuitive man-to-machine interfaces for a more
    natural, immersive and easier interaction of people with
    devices. This reflects our conviction that we can achieve
    our aim of being financially successful while remaining
    socially responsible. The loyalty, commitment and expertise
    of our people that helped us navigate a difficult year were
    also reflected in our continued focus on achieving our
    Sustainability priorities during 2012 and ensuring that our
    new Sustainability strategy, covering our people, products,
    the environment and the community, became firmly embedded
    throughout the business. Our people and organization
    development programs are aligned with our strategy and
    business needs. In 2012, we focused on very specific
    training programs to strengthen the competencies of our
    sales & marketing and research & development populations.
    While we focused more on leadership for our management
    staff, we also reinforced the way we develop individual
    career paths for technical staff through the "individual
    path technical and specialists functions" process. At the
    end of 2012, this process was deployed across 84% of the
    eligible sites and employee population, with a target to
    reach 100% by the end of 2013. Moreover, during the first
    half of 2012, several hundred highly skilled employees from
    ST-Ericsson started to join ST R&D teams, helping to fuel
    growth in several key product areas. Numerous integration
    seminars and workshops were held to welcome them into ST.
    Continually enhancing our technical expertise helps us to
    accelerate the development of products and solutions that
    contribute to the realization of the societal trends and to
    our vision. Our internal Product Stewardship program
    includes product compliance, eco-design and STAR responsible
    products. Our internal responsible products STAR initiative,
    which applies to all new products and classifies them into
    relevant environmental and social categories such as energy
    saving and healthcare, identified 196 new products that
    contribute to a more sustainable world. An example is our
    new Masterlux(tm) universal lighting controller family which
    makes lighting more energy efficient, more economical, safer
    and more flexible. We consider as social products those that
    relate to health (insulin pumps, remote patient monitoring,
    glaucoma diagnosis, management and treatment, etc ... ) or
    safety (airbags, ABS, etc ... ). We also remain on track to
    have 100% of our new devices eco-designed by 2015. From the
    point of view of our impact on the ecology, production
    fluctuations greatly impacted our use of energy, water and
    chemicals and affected our overall environmental performance
    in 2012. Nevertheless, we increased our green energy
    purchased by 85% and improved our water recycling rate by
    6%. Our 12 manufacturing sites have been certified ISO
    140643 for scope 1 and scope 2 emissions4 based on 2012
    results and three of our Front-end manufacturing sites have
    been certified to ISO 50001 (energy management system
    certification). In addition to these environmental efforts,
    we reinforced our community involvement approach during
    2012. By adopting the LBG methodology5, we are better able
    to evaluate the impact of nearly 400 initiatives taken
    worldwide by about 4,500 employees during the year. Young
    people and education remain the main domain of focus of ST
    at worldwide level and we will also continue to develop our
    community involvement in the areas of innovation and high
    technology, social welfare and charity, environmental
    involvement and economic development. During 2012, nearly
    30,000 people in developing countries benefited from our
    Digital Unify program, managed by the ST Foundation, which
    aims at overcoming the digital divide. As a committed
    supporter of the Electronic Industry Citizenship Coalition,
    our supply chain management program remains one of our key
    priorities and we implement controls designed to ensure that
    we do not source minerals from conflict zones. For example,
    we have been able to certify 100% of tantalum smelters
    through the Conflict-Free Smelters' Protocol. Safety of our
    employees comes first at ST. A well-established safety
    record places ST among the best-in-class in our industry.
    However, unfortunately in 2012, we experienced one employee
    fatality at one of our Chinese plants. As a result, we have
    strengthened even further our governance and programs,
    including an increase in field audits, additional learning
    modules, and more internal communication to reinforce our
    safety culture. Looking forward to the next 25 years, ST
    will continue to build on its strong heritage, rich
    technical expertise and its highly skilled and motivated
    people to provide high levels of sustainable excellence, in
    line with our vision to be everywhere microelectronics make
    a positive contribution to people's lives.
    Carlo Bozotti
    President and CEO
    1. IHS: MEMS H2 2012 Special Report
    2. ABI Research
    3. ISO 14064 is an international standard for calculating
    and reporting carbon emissions at the organizational level
    4. Scope 1 includes direct CO2 emissions and scope 2
    includes indirect CO2 emissions
    5. LBG - London Benchmarking Group, is a methodology used by
    companies worldwide to better assess the real value and
    impact of corporate community investment to business and
    society

    4
    COMPANY
    Materiality & Sustainability Strategy
    Sustainability principles have been integrated into our core
    business practices and products for more than 20 years. Our
    company ethos is not only about placing our people and the
    environment at the heart of the way we operate, but is also
    about constantly finding ways to innovate and create
    products that improve the quality of life for the people who
    use them. Interview with Tjerk Hooghiemstra, Executive Vice
    President, Chief Administrative Officer How did ST's
    engagement on Sustainability evolve in 2012? Sustainability
    is deep-rooted in the values of our Company and in our way
    of conducting business. Even though 2012 has been another
    challenging year for the semiconductor industry as a whole
    and also for ST, we have been able to maintain our
    commitment to Sustainability and, as detailed in this
    report, we have yet again made some significant progress.
    What would you like to highlight in particular?
    Our progress on Product Stewardship in 2012 is certainly a
    highlight for me. This program puts a focus on products that
    have a clear contribution to a more sustainable world. We go
    beyond the mere reduction of the impact of our products on
    the environment. The goal is to bring products on the market
    that have as their very purpose to save energy when used in
    e.g. cars, infrastructure and consumer devices. These new
    products demonstrate the enormous potential the
    semiconductor industry has to protect the environment. They
    also provide proof that ST's ability to develop, manufacture
    and market these products offers us a strong competitive
    edge that will contribute to the profitable future growth of
    our business. In 2012, as a key step in ST's Global
    Diversity and Equal Opportunities goal, I personally
    sponsored the preparation of the ST's Women's Network (to be
    officially launched in 2013) that aims to advance the career
    development of female employees as part of a wider goal of
    creating a genuinely diverse and inclusive working
    environment. ST also sponsors the Global Enterprise Project,
    an initiative of the European Roundtable of Industrialists
    (ERT), in which our CEO himself is involved, aimed at
    raising awareness of global business amongst secondary
    school students, helping them to develop an entrepreneurial
    mind-set. Within this program, the ERT hopes to contribute
    to reducing youth unemployment. In this same context, ST is
    also very much involved in raising young people's awareness
    and interest in science, technology, engineering and
    mathematics (STEM). How do you think ST should keep moving
    forward?
    It is important to ensure the effective deployment of the
    Sustainability Strategy that consolidates our top priorities
    and defines our targets. This report highlights these core
    elements of the strategy in detail. Our deep conviction that
    sustainability is a cornerstone of our competitiveness
    ensures that we move on whatever the business environment
    and that we will keep seizing opportunities to offer to the
    market those products that help us protect the environment
    and save energy. Interview with Alain Denielle, Corporate
    Sustainable Development, Group Vice President One year after
    the launch of ST's new Sustainability Strategy, I am pleased
    to report some very concrete achievements and improvements
    across all of our sustainability pillars. The comprehensive
    materiality exercise we conducted less than two years ago
    has helped us focus clearly on our most significant
    challenges and opportunities. We track our performance
    across all areas of our Sustainability Strategy using a set
    of robust indicators. In this report, you will be able to
    read about the key achievements and the progress we have
    made against our targets but also the initiatives we had to
    put on hold and the areas in which we have not made the
    level of improvement we were targeting. We publish our
    achievements or challenges in a clear and transparent way in
    each section. Two strategic stakeholder reviews have played
    an important role in helping us prioritize our
    sustainability activities in 2012; an ISO 26000 evaluation
    was carried out at three of our major sites Rousset
    (France), Muar (Malaysia) and Ang Mo Kio (Singapore), and
    our first official stakeholder survey was undertaken, which
    included a number of interviews with stakeholders. The very
    valuable feedback gathered from these initiatives has helped
    to confirm our existing approach across all areas of our
    strategy and also provided us with some

    5
    food for thought for future sustainability developments.
    As reported by our CEO in his statement, we unfortunately
    experienced a fatality at one of our Chinese sites. We are
    committed at the highest level in ST to further
    strengthening our management of safety to ensure this will
    never happen again, taking all necessary measures we can to
    reinforce ST's safety culture across all of our sites in
    2013. Working safely must remain employees' number one
    priority. We have been working now for more than 20 years
    with our Environment, Health and Safety Decalogue as our
    guide to enhance environmental protection and reduce our
    manufacturing environmental impacts. We are currently in the
    process of reviewing our Decalogue targets to ensure they
    remain challenging, realistic and in line with industry
    practices and norms. For 2012, GHG emissions from all ST
    manufacturing sites have been certified under ISO 14064
    (scope 1 and 2) standard and three of our Frontend
    manufacturing sites, Agrate and Catania (Italy) and Rousset
    (France), have achieved ISO 50001 (energy management system
    certification). Looking forward, we have chosen to focus
    more of our resources on reducing the environmental impact
    of our products. This is why we have launched our Product
    Stewardship Program, including a target for 100% of ST's new
    products to be eco-designed by 2015. We will also be
    validating our methodology for product life-cycle
    assessments. Our journey to find more sustainable ways to
    operate as a business will continue, as constant advances in
    technology and thinking inspire us and assist us in our
    drive for constant improvement.
    Materiality
    Our top-level approach to Sustainability is set out in our
    Code of Conduct and, at a more operational level, in our
    Sustainability Strategy. We conducted a comprehensive
    materiality exercise to help define ST's new Sustainability
    Strategy, launched at the end of 2011. Under the guidance of
    BSR (Business for Social Responsibility), we sought insight
    from relevant internal and external stakeholders to identify
    our most material issues and ensure alignment with our
    business priorities and stakeholder expectations. Embedding
    this new Sustainability Strategy was one of our six
    corporate priorities in 2012. One year on, we are now in a
    better position to evaluate progress and describe our
    performance against the objectives we set ourselves under
    each of our Sustainability pillars. When compiling data for
    this year's report we recognized that some of our objectives
    required further definition. We made the decision to
    continue to report on our existing indicators this year
    while developing a more expansive and clearer account of
    performance data for next year's Report.
    Quote
    BSR
    Farid Baddache EMEA Director, BSR (Business for Social
    Responsibility) "Conducting a Materiality exercise is a
    great way to guide strategy, focus dialogue and progress on
    the most meaningful areas of impact for ST. When I discuss
    with ST customers within the electronic sector, I can see
    how they value working with trustful company combining
    future targets with KPIs showing how the group is making
    progresses on its most important areas of impact. This is to
    me a good way to build trust and constructive discussion
    with stakeholders."
    Materiality Matrix
    50 Importance to stakeholders 100
    50 Influence on business success 100
    Energy Management
    GHG Emissions from Operations
    Chemicals Management
    Labor & Human rights
    Public affairs & Industry Networking
    Partnerships in R&D and Education
    Management of Sustainability in Supply
       Chain
    Waste Management
    Eco-design
    Responsible Products
    Conflict-free Minerals
    Employee Engagement
    Innovation Management
    Global Diversity & Equal Opportunities
    Business Ethics & Compliance
    Customer Satisfaction
    Local Sustainability Impacts
    Transport & Logistics
    Recruitment, Learning & Development
    Water Management
    Employee Safety
    Employee Health & Well-Being

    6
    ISO 26000 evaluation
    We undertook an ISO 26000 review in 2012 to help validate
    our refreshed Sustainability Strategy and priorities. We
    selected Det Norske Veritas for this piece of work. Their
    methodology evaluates employees' perceptions of a company's
    Sustainability approach. Fifty employees and managers were
    interviewed from three of our major manufacturing sites:
    Rousset (France), Ang Mo Kio (Singapore) and Muar
    (Malaysia). Although located in different regions, the
    employees all shared very similar views, indicating that
    ST's Sustainability program is consistently implemented
    across our sites. Responding to DNV's recommendations, we
    have:
    o Organized ISO 26000 training sessions for Sustainable
    Excellence coordinators o Held Sustainability Strategy
    implementation workshops with site managers
    o Developed new 2013 training plans for specific internal
    audiences such as newcomers, Human Resources and Purchasing
    experts External stakeholder survey We see stakeholder
    engagement as an integral element of our Sustainability
    Strategy review process. In 2012, we conducted our first
    formal external stakeholder survey to obtain inputs that
    would help develop our Sustainability Strategy and future
    reporting. Almost 170 stakeholders with an understanding of
    ST's operations, including customers, employees, suppliers,
    investors, SRI analysts, government representatives,
    academic and R&D organizations and NGOs were invited to
    participate. Approximately one third responded. Through the
    survey, we also identified a small number of stakeholders
    who wished to participate in one-to-one interviews to
    provide more in-depth feedback.
    Employee engagement survey
    Employees have the opportunity to share their thoughts,
    opinions and suggestions through the Company's annual
    employee engagement survey. For more information, see pages
    16-17. Local stakeholder engagement
    The stakeholders we engage with vary for each site,
    department and region. ST has developed general guidelines,
    based on feedback from our global network of Sustainable
    Excellence coordinators and best practice principles in our
    Code of Conduct and Sustainability Strategy. These help
    sites and departments identify their most important
    stakeholders and guide them through the process of
    engagement.
    Sustainability Strategy feedback
    62% of respondents were familiar or very familiar with ST's
    Sustainability program
    47% of respondents received information about ST's Sustainability
    program through our Sustainability Report, 38% through emails
    42% of respondents rated ST as a Sustainability leader compared
    with its competitors
    Sustainability Report feedback
    57% of respondents read the Report in part or in full
    50% of respondents found the Report very useful and informative
    15% of respondents read the Report to identify examples of best
    practice
    Quote
    THE REASSURANCE NETWORK LIMITED
    Malcolm Guy Director, The Reassurance
       Network (UK)
    "The Reassurance Network was employed by ST to independently
    research the views of their key stakeholders on a range of topics
    relating to Sustainability.  We were interested in how people
    gained information on this topic, how useful they found the
    Sustainability Report and which areas they felt ST ought to focus
    on in terms of future management input.  65% of respondents
    indicated that they were either very interested in, or experts in,
    Sustainability and so we felt this feedback was particularly
    valuable.  The survey showed that ST's Sustainability Report was
    the main method through which respondents reviewed ST's
    Sustainability performance with 97% finding the Report useful and
    informative.  Over 75% of stakeholders rated ST as "above average"
    or "a leader" in this area.  More than 40 recommendations were made
    as a result of stakeholder responses."
    In this year's Report we have undertaken a number of actions
    as a direct result of stakeholder feedback, including: o
    Prioritizing and developing content that stakeholders viewed
    as the most important; o Including a dedicated section that
    presents overall performance against our objectives; o
    Better-explaining our approach to ISO 26000; o Discussing
    additional topics identified as being of interest to
    stakeholders.

    7
    COMPANY
    Governance
    Our Corporate Governance Structure
    STMicroelectronics is a global leader in the semiconductor
    market serving customers across the spectrum of Sense &
    Power and Automotive products and Embedded Processing
    Solutions. From energy management and savings to trust and
    data security, from healthcare and wellness to smart
    consumer devices, in the home, car and office, at work and
    at play, ST is found everywhere microelectronics make a
    positive and innovative contribution to people's lives.
    STMicroelectronics was formed and incorporated in 1987 and
    resulted from the combination of the semiconductor business
    of SGS Microelettronica (then owned by Societa Finanziaria
    Telefonica, STET, an Italian corporation) and the
    non-military business of Thomson Semiconducteurs (then owned
    by the former Thomson-CSF, now Thales, a French
    corporation). We are organized under the laws of The
    Netherlands and have our corporate legal seat in Amsterdam.
    Our headquarters and operational offices are managed through
    our wholly-owned subsidiary, STMicroelectronics
    International N.V., and are located at 39, chemin du Champ
    des Filles, 1228 Plan-Les-Ouates, Geneva, Switzerland. Our
    operations are also conducted through our various
    subsidiaries, which are organized and operated according to
    the laws of their country of incorporation, and consolidated
    by STMicroelectronics NV. We are listed on the New York
    Stock Exchange (NYSE), Euronext Paris and the Borsa Italiana
    in Milan. Our corporate governance policies and practices
    are outlined in our Corporate Governance Charter. This is
    available on our website, along with our Supervisory Board
    Charter, in the Corporate Governance section at
    http://investors.st.com. Managing Board In accordance with
    Dutch law, our management is entrusted to the Managing Board
    under the supervision of our Supervisory Board. Mr. Carlo
    Bozotti, President and Chief Executive Officer, is currently
    the sole member of our Managing Board. The member of our
    Managing Board is appointed for a threeyear term, as
    described in our Articles of Association, which may be
    renewed one or more times in accordance with our Articles of
    Association upon a nonbinding proposal by the Supervisory
    Board at a shareholders' meeting and adoption by a simple
    majority of the votes cast at a shareholders' meeting where
    at least 15% of the issued and outstanding share capital is
    present or represented. I 4.1 I 4.2 I Supervisory Board Our
    Supervisory Board advises our Managing Board and supervises
    the policies pursued by our Managing Board and the general
    course of our affairs and business. Our Supervisory Board
    currently consists of nine members appointed for a
    three-year term, as resolved by our annual shareholders'
    meeting by a simple majority of the votes cast at a meeting
    where at least 15% of the issued and outstanding share
    capital is present or represented. Mr. Didier Lombard has
    been the Chairman of our Supervisory Board since May 2011.
    Our Supervisory Board has implemented criteria to assess the
    independence of its members, in accordance with the
    corporate governance listing standards of the New York Stock
    Exchange. It is also responsible for managing potential or
    reported conflicts of interest between the Company and its
    Board members. I 4.6 I In accordance with criteria as
    reflected in the Supervisory Board Charter (available on our
    website), members of our Supervisory Board are carefully
    selected on the basis of their specific business, financial,
    technical and/or legal expertise, prior professional
    experience, soundness of judgment, ability to make
    analytical enquiries and willingness to devote the time
    required to adequately perform their activities as
    Supervisory Board members. Our Supervisory Board is assisted
    by a Secretariat whose responsibilities include ensuring the
    continuing education and training of Supervisory Board
    members. I 4.4 I 4.10 I The Supervisory Board has determined
    the following independence criteria for its members, based
    on the evaluations by an ad-hoc committee: Supervisory Board
    members must not have a material relationship with
    STMicroelectronics N.V., or any of our consolidated
    subsidiaries, or our management. A material relationship can
    include commercial, industrial, banking, consulting, legal,
    accounting, charitable or familial relationships, among
    others, but does not include a relationship with direct or
    indirect shareholders. Information on the composition of the
    Audit Committee, Compensation Committee, Strategic Committee
    and Nominating and Corporate Governance Committee of our
    Supervisory Board, as well as the compensation of the
    members of the Supervisory Board and the attendance at the
    meetings of our Supervisory Board are set out in our Dutch
    Annual Report or SEC Form "20-F", which are available on our
    website and can be downloaded at http://investors.st.com New
    Nominations at Supervisory Board Level Ms. Martine Verluyten
    was appointed as a member of the Supervisory Board at our
    annual shareholders' meeting on 30 May 2012 and has also
    served on its Audit Committee since then.

    8
    Ms. Verluyten succeeded Mr. Tom de Waard as Chair of the
    Audit Committee on 22 April 2013. Ms. Janet G. Davidson was
    appointed as a member of the Supervisory Board at our annual
    meeting of shareholders on 21 June 2013. Ms. Davidson also
    serves on the Audit Committee and the Strategic Committee of
    the Supervisory Board. Independence of the statutory
    auditors and of the Corporate Internal Audit Organization
    The statutory auditor's independence is monitored at the
    highest level of the Company: Our Audit Committee is
    responsible for selecting the independent registered public
    accounting firm employed to audit our financial statements,
    subject to ratification by the Supervisory Board and
    approval by our shareholders. Our Audit Committee also
    assumes responsibility (in accordance with Dutch law) for
    the retention, compensation, oversight and termination of
    the independent auditor. We adopted a policy (the Policy),
    agreed by our Audit Committee, for the pre-approval of audit
    and permissible non-audit services provided by our
    independent auditors. All engagements with the external
    auditors, regardless of size, must be authorized in advance
    by our Audit Committee, pursuant to the Policy and its
    pre-approval authorization or otherwise. In 2012, non-audit
    services amounted for only 0.5% of the total audit fees paid
    to our statutory audit firm (and pertained to tax compliance
    services). The Internal Audit function is strictly
    independent from Corporate and Local Management: The mission
    of Corporate Internal Audit, as defined in the ST Internal
    Audit Charter, which is consistent with the Institute of
    Internal Auditors (IIA) Standards and approved by the
    Chairman of the Audit Committee and the CEO, is as follows:
    Corporate Internal Audit is an independent function designed
    to provide objective assurance and consulting activity,
    which adds value, improves the ST's operations at all
    levels, and evaluates and promotes compliance with ST's
    Standard Operating Procedures and Policies. Corporate
    Internal Audit helps ST accomplish its objectives by
    bringing a systematic, disciplined approach to evaluate and
    improve the effectiveness of risk management, control, and
    governance processes. Corporate Internal Audit is a key
    component of ST's governance framework and assists the Audit
    Committee of the Supervisory Board and the Company's
    certifying officers in their fiduciary duties (Corporate
    Internal Audit promotes a sound management control structure
    at a cost justified by the risk and exposure involved). Our
    Chief Audit & Risk Executive, Franck Freymond, is the head
    of Corporate Internal Audit. He reports directly to the
    Audit Committee of the Supervisory Board, attends all Audit
    Committee meetings, has direct interactions with the
    Chairman of the Audit Committee throughout the year and
    attends executive management quarterly meetings. The current
    functional reporting line and the practices now in place
    ensure the head of Corporate Internal Audit the appropriate
    level of organizational independence and unrestricted access
    to executive management and the Supervisory Board. This
    reporting approach is in line with standards defined by
    leading international organizations such as The Institute of
    Internal Auditors. The audit results and the follow-up of
    the audit recommendations made by the internal audit team
    are regularly presented to both executive management and the
    Audit Committee of the Supervisory Board. Our Sustainability
    Governance ST manages sustainability in line with the
    following international guidelines and standards: -
    International Labor Organization Conventions, United Nations
    Global Compact Principles, United Nations Guiding Principles
    on Business and Human Rights, OECD Guidelines for
    Multinational Enterprises, Electronic Industry Citizenship
    Coalition Code of Conduct, ISO 26000, OHSAS 18001, ISO
    14001, EMAS, ISO 50001, ISO 14064, QC 080000. Our commitment
    to align with these standards is outlined in our Code of
    Conduct which provide guidelines for informing our behavior
    and decisionmaking. Policies and procedures are then defined
    at corporate level, and endorsed by our CEO, Carlo Bozotti,
    to ensure effective deployment throughout the Company. Other
    significant standards in terms of sustainability are our
    Business Conduct and Ethics, Human Resources, Health and
    Safety and Environmental Policies.

    9
    Sustainability is one of
    ST's six corporate annual priorities. Executive Vice
    President, Chief Administrative Officer, Tjerk Hooghiemstra,
    has overall responsibility for sustainability. Part of his
    remit is to provide sustainability updates to the CEO and
    Executives Officers at quarterly Corporate Staff Meetings.
    Every three to five years, a group of ST's Vice Presidents
    conducts a materiality exercise, taking into account both
    ST's business priorities and our main stakeholders'
    expectations, in order to review and update the
    Sustainability Strategy. The ST Sustainability Governance
    Framework is shown below: Sustainability Governance External
    stakeholders Supervisory Board > Supervises the policies
    adopted by our Managing Board and the general course of ST
    affairs and business Corporate Ethics Committee > Provides
    guidance and recommendations to ST's executives and
    employees to help them comply with ethics related policies
    Managing Board > Ensures STMicroelectronics general
    management and the representation of the company External
    stakeholders Corporate Strategic Committee > Defines ST
    business strategy and key annual priorities, and supervises
    ST's ERM process Corporate Sustainable Development Group
    External stakeholders > Defines, deploys and monitors ST's
    Sustainability Strategy and programs ST Organizations Sales
    & Marketing, Manufacturing and R&D, Products and Corporate
    Staff Functions ST Sites All activities at all locations
    Sustainability issues experts network > Defines objectives,
    KPIs and relevant actors for deployment, ensures monitoring
    Sustainable Excellence Coordinators community > Defines
    priorities at organization and site level, facilitates
    deployment and awareness External stakeholders Our risk
    management approach Enterprise Risk Management's purpose is
    to systematically, consistently and effectively identify,
    evaluate and manage risks across the Company, including the
    set-up of effective risk mitigation action plans for
    identified key risks and top priority risk areas. ST ERM
    applies a holistic approach and has been developed /
    designed to comply with the ISO 31000 standard. The ERM
    governance and process at ST are defined as follows:
    The ST ERM process combines topdown and bottom-up
    approaches:
    o Top-down: in 2012, a risk assessment was conducted with
    executive management. The output from this exercise was a
    top-down risk map and identification of top priority risk
    areas. Risk owners were appointed for each of these risk
    areas in order to develop risk mitigation action plans,
    which will be reviewed by executive management on a periodic
    basis. o Bottom-up: in 2012, the ERM bottomup process has
    been launched with four pilot organizations (representative
    of each of ST's macro organizational areas). The objective
    of this pilot process is to start to embed risk
    identification, evaluation and management activities within
    each individual department's functions and business units at
    the most effective level.
    Going forward, the objectives are to further embed ERM in
    the organizations and key processes, and to bolster risk
    awareness and ultimately innovation through informed
    risk-taking anticipation versus reaction. More performance
    indicators are available on pages 67 to 70

    10
    Company
    Financial & Extra-Financial Performance
    Financial performance
    In 2012 overall, ST has been able to improve its net
    financial position compared to 2011 despite the significant
    cash used by ST-Ericsson as well as the impact of weak
    business conditions. We were able to end the year with
    significant financial flexibility and strong cash balances
    while providing shareholders with the same level of dividend
    compared to 2011. Net revenues for 2012 decreased 12.8% to
    US$8.49 billion mainly due to lower unit volumes which were
    driven by a significant drop in sales at our former largest
    customer and weaker market conditions. Gross profit and
    gross margin decreased 22% to US$2.78 billion and 390 basis
    points to 32.8% respectively. The principal components of
    the gross margin decrease were negative price effect and
    unused capacity charges of US$172 million compared to US$149
    million in 2011, as well as a one-time US$53 million charge
    to ST's cost of sales due to an arbitration award recorded
    in the first quarter 2012, partially offset by positive
    currency effects. We have sought to develop a competitive
    advantage by building an integrated presence in each of the
    world's economic zones that we target: Europe, Asia, China
    and America. An integrated presence means having product
    development, sales and marketing capabilities in each
    region, in order to ensure that we are well-positioned to
    anticipate and respond to our customers' business
    requirements. Important decisions were made in 2012 that are
    shaping a new, more focused, higher-performing ST. In
    December 2012, our CEO announced a new strategic plan to
    target leadership in two product segments: Sense & Power and
    Automotive Products and Embedded Processing Solutions. This
    strategy includes a sharper focus on five growth drivers:
    MEMS and sensors, Smart Power, automotive products,
    microcontrollers, and application processors including
    digital consumer products. Importantly, from a financial
    model perspective, we are targeting an operating margin of
    10% or more. A key component to achieving this objective is
    bringing our net operating expenses to an average quarterly
    rate in the range of US$600 million to US$650 million by the
    beginning of 2014. ST key figures / EC1 2008 2009 2010 2011
    2012
    Net Revenues (US$m) 9,842 8,510 10,346 9,735 8,493
    Gross profit (US$m) 3,560 2,626 4,015 3,574 2,783
    Gross profit
    as a percentage
    of sales (%) 36.20 30.90 38.80 36.70 32.80
    Net earnings (US$m) (786) (1,131) 830 650 (1,158)
    Earnings per share
    (diluted) (US$) (0,88) (1,29) 0,92 0,72 (1,31)
    Market share versus
    TAM (%)
    (Total Available Market) 3.96 3.76 3.47 3.21 2.87

    11
    Operating income
    and cash flow (US$m) / EC1 2008 2009 2010 2011 2012
    Operating income (198) (1,023) 476 46 (2,081)
    Net operating cash flow 648* 227** 972 (278) 34
    (*) Excluding payments for mergers & acquisitions (Genesis
    and NXP) which totalled US$1,694m (**) Excluding net
    proceeds received in business combination (Ericsson Mobile
    Platform) which totalled US$1,137m
    ST sales by market channel*
    (%) / EC1 / 2.7 2008 2009 2010 2011 2012
    OEM 81.7 84.2 79.1 77.3 77.6
    Distribution 18.3 15.8 20.9 22.7 22.4
    (*) Original Equipment Manufacturers ("OEM") are the
    end-customers which are directly followed by us in terms of
    marketing application engineering support, while
    Distribution customers refers to the distributors and
    representatives that we engage to distribute our products
    around the world. Net revenues by location of order
    shipment* (%) / EC1 / 2.7 2008 2009 2010 2011 2012
    EMEA 30.7 28.4 25.0 23.9 24.7
    Americas 13.6 11.9 12.9 13.8 14.7
    Greater China-South Asia 39.9 40.6 44.1 44.8 41.9
    Japan-Korea 15.8 19.1 18.0 17.5 18.7
    (*) Regions have been redefined to better take into account
    our activity. We have reconstructed the data since 2008 to
    give an idea of the trend. Extra-financial performance
    Recognition of extra-financial performance through rating
    agencies' evaluations, investor ranking and inclusion in
    sustainability indexes is an important element of ST's
    overall objectives. It helps us better understand our
    performance and identify the focus for further improvement.
    Throughout the year we receive numerous requests and
    questionnaires from rating agencies, extra-financial
    analysts and investors on a wide range of topics e.g.
    governance, risk management, business ethics, social, labor
    and human rights, health and safety, environment, community
    involvement.
    The annual Sustainability Report is designed to address the
    majority of information requests as we report already many
    indicators but also detail our management system or
    approach, and document many projects and initiatives. We
    have also reworked our sustainability webpages to provide
    more comprehensive descriptions of our policies and actions.
    In 2012, we maintained a strong position in most major
    sustainability indices and were recognized by some newly
    created indices as shown below. Unfortunately we were not
    included in Dow Jones Sustainability Index in 2012. We keep
    on actively work on all sections of this evaluation to
    ensure a better description of our approach and relevant
    evidences to demonstrate our robustness. ST inclusion in the
    main sustainability indices ASPI (UE) Ethibel Sustainability
    Index (Belgium) ECPI (Italy) FTSE ECPI Index series (Italy)
    FTSE4GOOD (United-Kingdom) Euronext Vigeo (France) TOTAL ESI
    Excellence Europe Ethical Index Emu Ethical Index Euro
    Ethical Index Global FTSE ECPI Italia SRI Benchmark Index
    FTSE ECPI Italia SRI Leaders Index FTSE- 4GOOD Europe index
    FTSE- 4GOOD Global index Euronext Vigeo World 120 Euronext
    Vigeo Europe 120 2012 x x x x x x x x x x x 11 All taxes of
    the year (US$m) / EC1 200
    150
    100
    50
    0
    -50
    2008 49
    2009 (34)
    2010 183
    2011 205
    2012 79
    Tax expense for the year
    Dividends paid (US$m) / EC1
    350
    300
    250
    200
    150
    100
    50
    0
    2008 240
    2009 158
    2010 212
    2011 327
    2012 355
    Dividends

    Our People
    Key figures for 2012
    98% workforce with regular contract
    22%Increase of disabled people in total workforce
    72,34% employees covered by collective bargaining
    Total medical services provided 71,287
    medical examinations, screening tests, immunizations

    14
    OUR PEOPLE
    Recruitment, Learning & Development
    ST is a high-technology company where engaging people is
    strategic to constantly stay on the edge of the business.
    This is why our Human Resources strategy aims at ensuring
    the right level of hiring and development of our people to
    match the company's evolving requirements in terms of
    profiles and competencies. This strategy plays a key role in
    reinforcing employees' ability to perform better and
    contributes to their evolution within the Company.
    Individual career paths
    The cornerstone of career management is to provide employees
    with a clear understanding of their job positioning within
    the Company and to support their vertical and transversal
    progression. This is performed through the deployment of
    three career paths: managerial, crossfunctional/ program
    management and individual (Technical and Specialist
    functions). Starting in 2010, one of our key objectives has
    been to promote and develop the individual career path (for
    technical functions), through the deployment of the process
    individual path technical and specialists functions, within
    our core business job functions (product design,
    technological development ... ), reaching key milestones by
    2012. After being sponsored by management, candidates are
    evaluated; validation is granted according to technical
    expertise level of knowledge, influence and business impact.
    By the end of 2012, the process has been deployed covering
    84% of the eligible sites and employee population, reaching
    almost 400 employees in ST's Technical Staff community.
    After nomination, Technical Staff members have a set of
    rights and duties e.g. the right to be recognized with a job
    title linked to position level (intranet profile and
    business card), to participate in dedicated in training
    curriculum and conferences; and a set of duties e.g. to
    create publications articles, patents ... ), networking
    (inside and outside ST) and to undertake knowledge transfer
    such as tutoring, teaching ... Developing our Technical
    Staff community aims at creating value through solving
    technical problems, innovation, new business development and
    at recognizing our core business expertise and our people.
    In 2013, the objective is to complete the deployment by
    covering all eligible employees and strengthening the
    development of this community through assessments,
    networking, knowledge sharing and the deployment of a
    specific training curriculum. Review of our learning offer
    Another key objective in 2012 was the complete review of
    ST's learning offer that focused on business needs and used
    a blend of locally and globally deployable solutions. A
    network of internal business stakeholders and training
    professionals worked to define the training offered across
    ST's job categories, ensuring alignment with the Company
    priorities whilst maintaining the practicality of known
    deployment channels. Courses were mapped, either to the
    professional job function competencies, behavioral
    competencies or to the leadership model providing employees
    with easily accessible solutions that meet their development
    needs. We reviewed existing courses and existing vendors,
    compared internal and external solutions and defined global
    volume solutions whilst maintaining local offers when the
    cultural needs required. By the end of 2012, the networked
    taskforce delivered a learning catalogue of over 2,500
    courses addressing 81 job functions, now constituting our
    unique worldwide reference. The offer was integrated into HR
    tools, enabling managers and employees to build development
    plans during their annual assessments to be conducted early
    2013, by selecting competencies to develop and then
    selecting from the list of relevant courses. Performance
    against objectives
    o Increase the percentage of open positions for exempts
    filled by internal candidates by 5% per year (compared with
    a 2010 baseline), with a long term-target of 60% o Ensure
    that more than 50% of employees have a development plan,
    linked to their annual performance
    o Increase employee retention - percentage of employees with
    more than two years service o Further align ST's learning
    with its business strategy to contribute to company
    transformation, employee productivity and being an 'employer
    of choice'

    15
    Talent management
    Talent management is key in our company. The ST's
    company-wide Development Booster programs target our
    high-potential exempt employees and aim at accelerating
    their development, retaining and engaging them. Identified
    through the people review process, the selected candidates
    are enrolled in a two-year program including a 360(degree)
    assessment, mentoring and a collaborative project in order
    to prepare ST's future leaders. Initiated in 2010 at
    corporate level for top managers, and then expanded to
    regional high-level managers in 2011, the program was
    extended to middle managers in 2012. At the end of the year,
    there were 135 participants world-wide in the three
    deployment levels. This is a promising start for this highly
    visible program. The target for 2013 is to have 250
    participants enrolled. Quote life. augmented Christian
    Bertin "When I received the certification, I felt honored,
    and also proud to join the ST Technical staff community. ST
    was recognizing a software expert at this level for the
    first time, a strong sign that things are changing, and
    going in the right direction. I'd like to share with all my
    colleagues what I find very useful and interesting in being
    part of this community:
     - First, whether they admit it or not, technicians appreciate to
    be recognized, that others understand who they are and that their
    expertise be known and visible.
     - Then, ST has put in place very useful training cycles for the
    technical community.  I attended several of them which I really
    appreciated.  It is a fact that technicians are "not always"
    experts in how to present or communicate, how to sell their ideas,
    manage innovation and practice lobbying.  Such training has taught
    me a lot.
     - Finally, I have found it very enriching to meet other experts
    from domains completely different from mine, to confront our ideas
    and methods and to see that we share the same values, motivations
    and problems."
    Employees with a formal individual
    development plan (%) / LA12 2009 2010 2011 2012
    Exempts 51.5 69.4 44.5 26.5
    Others  - - 19.0 17.3
    Internal mobility (%) 2008 2009 2010 2011 2012
    Job for exempts filled internally 84 48 41 42 35
    (*) Number of job requests for exempt positions (JG11-18)
    posted internally divided by total number of job request for
    exempt positions From left to right: Delphine Segura (PLD),
    Frederic Artuphel, Christian Bertin, Jean-Marc Chery (EVP,
    General Manager, Embedded Processing Solutions (EPS)) More
    performance indicators are available on pages 67 to 70

    16
    OUR PEOPLE
    Employee Engagement
    Employee engagement is a critical driver of organizational
    performance to achieve superior business results. The
    feedback provided is a unique opportunity for ST to respond
    by making continuous improvements to the working environment
    and for managers to improve their effectiveness (defined by
    their relative strength across key underlying competencies),
    identifying where and how they can act to improve business
    results with their team. Follow up on actions in place and
    2012 survey results In our 2011 report we described our new
    "leadership model" program. We continued to roll this out in
    2012 throughout Asia Pacific, to our manufacturing
    organizations thanks to "train the trainers" sessions and
    workshops for managers. They were taught how to build
    efficient and effective teams by creating a work culture of
    self-confidence. For operators' integration, we launched the
    "integration buddy program", based on mentoring and
    coaching, which after implementation rapidly reduced the
    turnover rate in our Longgang (China) Back-end facility. The
    Executive steering committee set up at corporate level
    analyzes results at various levels in ST groups, launches
    workgroups based on focus points and tracks action items
    initiated at ST level. We also introduced several
    initiatives developed as a consequence of employees'
    feedback from the previous survey or to celebrate our 25th
    anniversary: o We launched the "Buy ST" program which helps
    connect employees with their contribution to ST tangible
    results through the publication on our intranet of ID cards
    of end products using ST products o The "ST pioneers" and
    "What ST means to me" initiatives were also featured on our
    intranet with the aim of gathering employees' ST stories o A
    special 25th anniversary STAR award was created as part of
    the annual company recognition awards o CVP's leadership
    sessions were rooted in providing opportunities for their
    teams to question them on the company's strategy and
    results. 36,000 employees took part in either town hall
    meetings or round tables (10,000 more than in 2011).
    o Managers' accountability for engagement survey results was
    clearly defined. They are required to analyze the detailed
    results of their organization and site, build quantitative
    and qualitative interpretation with key stakeholders and
    communicate regularly the status and strategy to their
    teams, and to act on the key opportunities for improvements.
    86.75% of employees participated in the 2012 survey, an
    increase of 0.75% on last year. Performance against
    benchmark, discretionary effort, and learning and
    development remained the same as last year. Overall employee
    engagement (0.32 vs. 0.33 in 2011) shows a small decrease,
    but we achieved a 59% favorable score despite the survey
    being run during a period of organizational uncertainty.
    This stemmed from the fact that we had announced we would
    unveil a new company strategy, but it was not known during
    the survey period. The new strategy, as anticipated, was
    announced by our CEO after the survey had closed. The
    positive progress in some areas of direct management can be
    attributed to the success of the various programs launched
    last year. Employees would like to see more proximity to the
    senior executive team and in the area of reward and
    recognition. During 2013, we build on these results and
    while we continue our efforts on the programs in place, we
    also work towards achieving the priorities we set during the
    year to improve managers' skills, including giving
    performance feedback. Celebrating ST's 25th anniversary ST
    reached its 25th anniversary in 2012. We could not have
    achieved this milestone without the dedication of thousands
    of ST employees around the world. We held several
    celebratory events throughout the year: o We captured the
    richness and diversity of our company in a single montage
    displayed at more than 70 ST sites, representing great
    moments in our company (see photo). o Sites organized their
    own events such as musical performances, special editions of
    site newsletters and exhibitions.

    17
    life.augmented
    25 years
    Quote
    Here are just a few of the quotes from the many "What ST
    means to me" employee testimonies we received.
    Orio Bellezza
    FMT - Front-end Manufacturing & Technology
    "It is a company that allows me to develop a lot of skills in
    terms of interpersonal relationships, dealing with people, managing
    people..."
    Bob Krysiak
    Sales & Marketing - Region Americas
    "The people, the technology and the passion of the organization"
    Manu Khullar
    CIS - Company Infrastructure & Services
    "ST allows any individual, without discrimination, to excel and
    find their own path of growth and excellence"
    Francesco Giannetto
    FMT - Front-end Manufacturing & Technology
    "ST always on the crest of the wave"
    Ela Mia Cadag
    PTM - Packaging & Test Manufacturing
    "ST is not just a company, but the home of excellent people"
    Giuseppe Castania
    IMS - Industrial and Multisegment Sector
    "I can touch the future with ST"
    Otto Kosgalwies
    CIS - Company Infrastructure & Services
    "Continuous learning, continuous challenges, continuous contacts
    with many colleagues around the globe, and for sure last but not
    least, ST means for me a lot of friends"
    Maria Bonaffini
    IMS - Industrial and Multisegment Sector
    "ST is a big company having as goal to augment the life looking
    always at multicultural needs"
    David Uhlar
    FMT - Front-end Manufacturing & Technology
    "The technology, innovation, success!"
    Pascale Joulaud
    PQE - Product Quality Excellence
    "ST has new energy around challenges and programs and new direction
    where we can do our best"
    Marco Cassis
    Sales & Marketing - Region Japan & Korea
    "Very rich in important emotions and very good memories, and a lot
    of challenges of course"
    Nikhil Kulshrestha
    IBP - Imaging Bi-CMOS ASIC & Silicon
       Phototonics
    "Great set of people working together to make things happen... a
    company with values I am proud to be a part of"
    Performance against objectives
    o Annually increase the percentage of employees who
    demonstrate the highest level of discretionary effort o
    Increase ST employee engagement relative to the benchmark
    o Following engagement surveys, action plans to address key
    expectations should be defined and communicated in 100% of
    organizations o Implementation of action plans should be
    done at 50% on an annual basis
    Employee Engagement 2012 - Rating by
       pillar (%)
     (P) (G) (B)
    Customer focus 11 20 69
    Day to day work 12 19 69
    Organizational culture 12 22 66
    Direct manager 15 22 63
    Engagement Index (all) 16 25 59
    Learning and development 17 25 58
    Senior executive team 17 32 51
    Rewards & recognition 40 23 37
    KEY: (P) PINK= UNFAVORABLE, (G) GREEN= NEUTRAL (B) BLUE=
    FAVORABLE More performance indicators are available on pages
    67 to 70

    18
    OUR PEOPLE
    Employee Safety
    ST is committed to ensuring the health, safety and
    well-being of its employees, including achievement of
    work-life balance, safe working conditions and the
    mitigation of risk and danger to employees and
    subcontractors. Overview of 2012
    Governments and corporations continue to strengthen their
    commitment to ensuring employee safety. New laws have been
    passed in many countries, EHS information and training
    campaigns are becoming more accessible, helping to improve
    both employees and supply chain workers practices and
    awareness. ST has a long history in this field, and began
    certifying sites to the OHSAS 18001 safety management
    standard in 2002. By 2003, all manufacturing sites had been
    awarded the standard and, with the certification of Loyang,
    Singapore in 2012, we now have twenty three sites that have
    achieved OHSAS 18001. A key element of our safety approach
    is our dedicated 'loss prevention' program which ensures
    that major sites have an appropriate level of protection
    against fire and associated hazards. A well-established
    safety record places ST amongst the best-in-class in our
    industry, showing several years' continual decrease of our
    Recordable Cases rate (see "Recordable cases rate
    benchmarks" graph). However, unfortunately in 2012, we
    experienced one employee fatality at one of our Chinese
    plants. This fatality, the first ever recorded in ST,
    occurred whilst heavy equipment was being moved. A thorough
    root cause analysis was immediately carried out, resulting
    in the implementation of preventive and corrective actions
    on all similar sites. We also immediately re-boosted our
    governance and programs built to strengthen our Safety
    culture and efficiency. They contain a new matrix of 38 Key
    Performance Indicators, more field audits, more learning
    modules fitted to site type or level of management and more
    communication. It will be fully deployed in 2013.
    Integrating safety culture at all levels Over the years,
    safety has become an integral part of our company culture.
    Our sites continuously innovate to make safety a way of life
    for everyone, including external contractors working on our
    sites. While we continually strengthen our safety management
    robustness, we also promote employee empowerment through
    regular communication, awareness and raining. Indeed in
    2012, we totalled an average of 4.8 hours of EHS
    Training/Awareness per employee. In 2012, after previously
    achieving 0.29 for two years running, we were able to reduce
    our recordable cases rate further to 0.27, beating our
    target of 0.28. This equated to a 10% decrease in our
    on-site "domestic" Recordable Cases rate and 8% in our
    "industrial" Recordable Cases rate. We are pleased to
    announce that we maintained all our EHS Management Systems
    certifications. Within our internal Loss Prevention program,
    2 more sites were rated Adequately Protected Risk. While
    most of ST's safety results are better than targets and
    improving (Recordable Cases rate, EHS training hours,
    evacuation practice drill coverage, contractor injury rate,
    loss prevention achievements ... ), we know that in the
    matter of safety relentless attention must be exerted in all
    situations and roles, at all times. ST is therefore working
    to further embed its safety culture overall, strengthening
    management leadership and deploying company-wide training. A
    program addressing major risks management and emergency
    preparedness, and engaging site management and teams, has
    been strengthened with all scheduled procedures issued.
    Additional KPIs have been developed to track the efficacy of
    our approach to improving employee safety. These will be
    monitored quarterly across all major sites from 2013. To
    validate our approach and confirm our efficiency, we carry
    out corporate audits and follow-up visits on the ground.
    More than 12 audits were conducted in 2012, bringing the
    total to 20 in the past two years. This method increases
    transparency, providing a clearer view of issues and
    requirements, faster implementation of solutions and the
    sharing of good practices between sites.
    Severity rate (%) / LA7 / Dec. 9.3
    8
    6
    4
    2
    0
     (B) (G)
    2008 5.5 8.34
    2009 4.5 7.51
    2010 2.6 6.76
    2011 3.1 6.42
    2012 3.9 6.10
    KEY:  (B) BLUE= Severity rate, (G) GREEN= EHS Decalogue Target:
    -10% per year 2002-2010 and -5% from 2011
    Injuries / illness cost and savings (US$m) / LA7
    10
    8
    6
    4
    2
    0
     (P) (B) (G)
    2008 3.4 8.3 4.9
    2009 2.9 8.9 6.0
    2010 1.66 8.43 6.77
    2011 1.8 8.9 7.14
    2012 2.7 8.5 5.8
    KEY: (P) PINK= Injuries/illness cost, (B) BLUE= Results
    without action, (G) GREEN= Savings: around 49.5 US$m in 20
    years

    19
    Our sites take safety in their hands
    In last year's report a Calamba employee highlighted that
    EHS practices now radiate from the company to people's
    homes. In 2012, ST received six sustainability awards in the
    Philippines, clearly demonstrating the maturity level
    reached by our sites and individuals in this area (see our
    Awards page). We now turn to ST Kirkop (Malta), another
    major ST site, which can pride itself of no accident in the
    last five years thanks to the significant involvement of
    Site management, line managers and all teams on site. ST
    Kirkop received 1st prize for Health and Safety Best
    Practices from the national Occupational Health and Safety
    Authority and the European Agency for Safety and Health at
    Work. ST Kirkop's range of safety initiatives includes
    Emergency Response Team, Health & Safety Champions, EHS
    Steering Committee, Employee suggestion scheme, Health &
    Safety training and Health Plan and Health & Counseling
    clinic. The site has now been selected to represent Malta in
    the European H&S competition. "EHS weeks" are one of ST good
    practices. They include safety-related visuals,
    presentations and animations for all employees on site, as
    well as dedicated training sessions. Five manufacturing
    sites, including ST Kirkop together with four sites in Asia
    (see photo from EHS week in Longgang) demonstrated their
    commitment to safety by organizing this week in 2012. All
    sites showed clear success in terms of attendance and
    impact.
    Quote
    Ali Dincmen
    Director - Business Development International - BVC - Lead
    Auditor ISO9001 / ISO20000 / ISO 27001 "The
    STMicroelectronics facilities audited by Bureau Veritas
    Certification (BVC) Lead Auditors in 10 countries, namely
    China, France, India, Italy, Malta, Malaysia, Morocco, the
    Philippines, Singapore and the United Kingdom, were found to
    be extremely well controlled sites internally and externally
    - very impressive all with a clear desire to exceed
    standards. This is also reflected in the common level of
    commitment seen on all sites and from all those involved,
    especially taking into consideration the diverse workforce
    across the different countries. Furthermore, there is a
    clear effort on all sites to demonstrate commitment in
    relation to OHSAS 18001: 2007 systems compliance. We
    observed excellent Safety Record Systems on each site during
    the BVC Audits. The challenge is to maintain this record. As
    a result, STMicroelectronics is on the right path in
    becoming a world class company on Operational Health and
    Safety." Performance against objectives
    o Continuously reduce work-related injuries and illnesses
    rate (recordable case rate) and severity rate by 5% per year
    o Ensure that, by 2012, ST employees have an average of four
    hours of training and awareness per year on Environment,
    Health and Safety (EHS)
    Recordable Cases rate (%) / LA7 / Dec.
       9.1
    0.5
    0.4
    0.3
    0.2
    0.1
    0
     (B) (G)
    2008 0.39 0.49
    2009 0.35 0.44
    2010 0.29 0.40
    2011 0.29 0.38
    2012 0.27 0.36
    KEY: (B) BLUE= Recordable Cases rate, (G) GREEN= EHS
    Decalogue target: -10% per year 2002-2010 and -5% from 2011
    More performance indicators are available on pages 67 to 70

    20
    OUR PEOPLE
    Labor & Human Rights
    ST strives to be an employer of choice by fostering a
    workplace environment that encourages people to reach their
    potential. Ensuring that our employees are treated with
    respect and dignity is a fundamental principle of how we
    operate and we closely support and monitor our sites and
    departments to ensure we meet our responsibilities in this
    area. From rules and guidelines to concrete improvements
    International standards covering labor and human rights
    guide companies to comply with sustainability legislation,
    set internal standards and promote improvement. Besides, the
    attention of media on employees' work and living conditions
    in high technology companies and their supply chains has
    increased progressively during recent years and has been
    prominent in 2012. Amongst our stakeholders, customers are
    particularly attentive to our practices and performance.
    Indeed several key customers are now deploying large scale
    audit programs with specific requirements that extend beyond
    regulation or legislation. ST, as a signatory of the UN
    Global Compact and a full member of the EICC, is committed
    to respect its workers' rights and continuously improve
    labor conditions in its operations. To drive continuous
    improvement and to detect and correct gaps versus our
    commitments, we progressively integrate guidelines such as
    the UN Guiding Principles on Business and Human Rights, the
    OECD Guidelines for Multinational Enterprises and ISO 26000
    into our management systems. We also strongly believe that
    training and awareness are key elements of effective and
    sustainable implementation, which is why we participate in
    several collaborative networks (Entreprises pour les Doritos
    de l'Homme (Companies for Human Rights) and Euromed
    Management. Through these collaborations, we develop
    learning tools and encourage the sharing of good practice.
    Labor and Human Rights are addressed in our Code of Conduct,
    which define our values and how we conduct business. Our
    continuous efforts on this subject of high concern led us to
    major breakthroughs in 2012 which enabled us to better
    evaluate our policies and practices and to share our results
    more transparently with customers and other external
    stakeholders:
    o Significant progress was made on the deployment of EICC
    risk assessment and audit of our facilities. At the end of
    2012, 71.4% of our Back-end sites in Asia had been audited,
    showing a satisfying level of conformity. We set up an
    efficient corrective action plan process enabling ST to
    reduce risks and improve performance. o A Human Resource
    Policy was adopted and deployed by all sites, mainly to
    describe management responsibilities and provide further
    detail of corporate standards. It newly addresses subjects
    such as forced labor, working hours and housing conditions.
    Controlling working hours to improve employees' working
    conditions The audits enabled us to identify weaknesses in
    the management of working hours. Thus we reinforced our
    monitoring and control by raising awareness to top
    management and developing tools to ease sites' overtime
    control. Most of our sites now closely monitor their
    compliance to a maximum of 60 hours worked per week, as
    required by the EICC Code. Some of our sites, ST Muar
    (Malaysia) and ST Calamba (the Philippines) for example,
    where effective action plans have been deployed, are now
    demonstrating a level of compliance close to 100%. Ensuring
    employee well-being through dormitories management In 2012,
    we formalized and deployed a corporate procedure defining
    the housing standards for the building, maintenance and
    management of ST workers' dormitory facilities. The
    specification is based on stringent requirements from our
    customers, on the EICC standard and on best practice within
    ST sites. Performance against objectives
    o Ensure 100% of ST manufacturing sites update their EICC
    Self-Assessment Questionnaire (SAQ) on an annual basis o
    Ensure 100% of ST Asian and Back-end sites are audited every
    two years versus the EICC Code of Conduct and that the other
    sites are proactively engaged in the EICC approach
    o Ensure that all ST organizations have a continuous
    improvement plan versus ST's Human Resources Policy to
    reinforce their management of social issues

    21
    It covers all aspects related to dormitory location,
    structure and ownership, and sets requirements on living
    conditions and facilities; health, safety, security and
    maintenance. It includes the management of dormitory
    suppliers and providers and enables us to raise the minimum
    standards for dormitories and also provide pleasant living
    places for our employees. Four of our manufacturing sites
    provide accommodation for ST workers: Ang Mo Kio
    (Singapore), Muar (Malaysia), Longgang (China) and Shenzhen
    (China). To assess the conformity of each site versus
    specification requirements, a detailed gap analysis was
    performed. Some non-conformances were identified and
    thorough corrective action plans deployed through strong
    collaboration between sites and corporate organizations.
    Several best practices have been identified and reinforced.
    By the end of 2012 we had closed more than 50% of our major
    gaps. Management reviews are now conducted regularly with
    the dormitory and service providers to ensure that
    contractual management responsibilities, monitoring and
    reporting requirements are met. Communication has also been
    improved to raise employees' awareness of their rights.
    Quote
    JABIL
    Erich Hoch
    Senior Vice President, Chief Supply
       Chain Officer - Jabil
    "Our commitment to ethical principles and EICC standards are
    embedded (factored) into every single sourcing decision we make at
    Jabil.  And, we drive our supply chain to the same standards we
    expect of ourselves.  Like ST, Jabil believes in providing all
    employees a safe and respectful working environment.  We are
    continually working to improve our employee experience, from
    creating dormitory standards and instituting new safety controls
    to providing educational and training opportunities.
    Building a sustainable supply chain, like all social
    responsibility challenges, is an on-going process that
    requires trusted partners like ST who demonstrate their
    leadership in Social and Environmental Responsibility."
    Focus on dormitories for two sites In deploying and
    implementing the new specification, our objective was to
    raise the minimum standards of living conditions in
    dormitories. Concrete improvements were triggered in
    addition to the gap assessments and related corrective
    action plans. Main focus points for two sites:
    o ST Ang Mo Kio: Cleanliness and equipment; more robust
    integrated alarm system and fire-extinguishers; fire drills;
    short transportation time to work (20-30 min); quarterly
    meetings with service providers. The conditions are included
    in work contracts and documentation is widely posted in each
    unit in English or bi-lingual version (Chinese). o ST
    Shenzhen: the newly built dormitory enabled to group several
    previous dormitories into one location, simplifying the
    monitoring of quality and services, and related quarterly
    reporting; potable water tests are implemented on a regular
    basis; communication has been improved.
    While ST raised the bar for living conditions in
    dormitories, the challenge now is to ensure that
    improvements are durable. This is key to ensuring high level
    living conditions. Respecting local specificities is one of
    ST's commitments in terms of employee labor and human
    rights. EICC Audit Program results scope: 5 sites over
    2011-2012 Major findings Working hours 6
    Occupational Injury and illness 4
    Wages and benefits 2
    Emergency preparedness 2
    Freely chosen employment 1
    Supplier responsibility 1
    Child Labor Avoidance 1
    Non-discrimination 1
    Hazardous substances 1
    Machine safeguarding 1
    Occupational safety 1
    Protection of Identity 1
    Fair Business, Advertising and
       Competition 0
    Food, sanitation and housing 0
    Corrective action process 0
    Responsibility and accountability 0
    Legal and customer requirements 0
    Air Emissions 0
    Business Integrity 0
    Freedom of Association 0
    Total 22
    More performance indicators are available on pages 67 to 70

    22
    OUR PEOPLE
    Global Diversity & Equal Opportunities
    ST remains committed to ensuring equal opportunities and
    appropriate representation of gender, age, race, disability
    and nationality at all levels of the organization. Our main
    improvement axes ST's strategy for equal opportunities, with
    a specific focus on gender equality, was defined in 2006,
    taking a soft approach. Nowadays, we run formal equal
    opportunities programs. Ensuring equal opportunities for
    disabled employees is another important aspect of our
    strategy, as well as ensuring continuous development of our
    senior employees. ST has made steady progress in these areas
    but we know there is still room for improvement. Preparing
    the ST women's network Women in business is a hot topic
    within the corporate world. During Q4 2012, an enthusiastic
    steering committee of 37 women from ST locations around the
    world, participated to a series of working groups to prepare
    the launch of the "ST women's network". The initiative came
    about as a result of the commitment made by ST's top
    management to increase the number of women leaders in the
    company. The key steps of the project involved:
    o Sending an email to all women in the company asking them
    for their opinion and advice on the initiative, for example
    on what they would like, what the network should do and
    their expectations. We were delighted to learn that 90% of
    women were interested in a women's network creation. o
    Establishing a steering committee of 37 women who addressed
    5 work streams (benchmark, governance, structure,
    communications and career), meeting once a month from
    September, increasing to once every two weeks from December.
    o Choosing Woman's Day 2013 to launch the network and
    preparing a series of associated events such as internal
    conferences on several sites and news items on intranet. o
    Providing a team workspace for the network to publish and
    share information, and start forum discussions, opened to
    all intranet visitors.
    We believe we are building strong foundations for gender
    equal opportunities at ST by creating and promoting a
    favorable working environment and culture for women in the
    company. Supporting female students
    Looking ahead, we are aiming to promote more technical jobs
    to female students to ensure more employment equality. In
    France, a national initiative, "Capital filles", was
    launched in 2010 between the educational institutions and
    corporations. It is an innovative program that aims to
    encourage girls in sensitive urban and rural areas to
    continue their studies through apprenticeship. ST promoted
    this tutorship project with volunteer "godmothers" from
    several ST French sites. Each ST godmother coaches and
    supports a girl in her last school year to help her map out
    her career, fight against family's stereotypes and support
    her motivation for higher studies.
    Promoting diversity in France
    In France, our efforts to promote diversity have been
    consistent over the years, providing employees with
    opportunities to access employment and maintain their roles
    within the company by adapting working conditions where
    necessary. By remaining open minded and regularly raising
    employee awareness through newsletters and other forms of
    communication we enable to scale up innovative initiatives
    to achieve progress and results at a faster pace. People
    with disabilities often do not have the same access to
    education as the rest of the population. To increase their
    employability, we provide them with additional training
    prior to them joining ST to ensure their knowledge and the
    competencies match the job requirements. As part of the
    integration of people with disabilities, we also give
    subcontracting activities to sheltered workshops. A company
    providing administrative services has been identified whose
    employees will be trained to note taking for punctual formal
    meetings, such as assemblies. This is an innovative
    initiative. The 'disability agreement' has resulted in the
    recruitment of more than 130 disabled employees between 2010
    and 2012 through specific training Women in management (%) /
    LA13 2008 2009 2010 2011* 2012
    Women in experienced management (JG15 and above) - - - 13.77 13.77
    Women in senior management (JG17 and above) 8.02 8.9 9.91 9.56 9.79
    Women in executive management (JG19 and above)
    6.78 7.6 9.71 9.80 8.78
    Women in the Supervisory Board - - - - 1
    (*) figures changed following data review

    23
    programs, professional insertion contracts, internships and
    recruitment with standard contract.  In 2006, 1.2% of people in
    our French workforce had a disability, this figure increased to 3%
    before the signature of the national agreement and has now reached
    3.78%.  The renewal of the agreement in March 2013 will enable us
    to maintain our dynamic approach.
    Quote
    life.augmented
    Virgina Melba
    A.Cuyahon
    General Manager - ST Calamba,
    The Philippines
    "Equal gender career opportunities in big corporations have given
    women increased flexibility and broader perspective when it comes
    to decision and policy making.  I pursued a career in engineering
    and worked my way up in manufacturing.  The companies I have worked
    for in the past and today, ST Calamba, are open to talents and
    capabilities regardless of gender.  More and more HR programs are
    focused on talent and potential development and are offered to
    deserving employees.  ST wants to increase the percentage of women
    at executive level.  Women should take this opportunity to
    experience diverse and interesting careers."
    Achievements of the "Equal Opportunities
       committee" in Italy
    In Italy global diversity and equal opportunities are
    managed through the Equal Opportunities committee, which has
    implemented some very practical and concrete initiatives,
    some of which are described below:
    o "Fiocco in Azienda" is a project set up to provide
    coaching to mothers and help them peacefully face all
    changes related to motherhood as well as recognize the
    symptoms of post natal depression. o Specific agreements
    have been signed with Provinces to ensure the recruitment of
    disabled employees, involving several temporary agencies. At
    the end of 2012 the total number of disabled employees
    working in ST Italy reached 120. In Agrate, 7 disabled
    employees were hired in Staff functions and Manufacturing
    areas, in line with the Province's agreement. Their needs
    were assessed and they were provided with any necessary
    equipment to help make their working lives more comfortable.
    o An agreement was signed with an external nursery, to
    reduce the high cost of child care by offering 10-15%
    discount on fees. o Other positive actions put in place
    through labor unions included offering part-time roles for
    production employees and improving paternity leave.
    Employees can request to go part time by completing a simple
    form, then submitted to HR and management; ST's paternity
    benefits go beyond legal requirements. Indeed Italian
    paternity law pays 30% of salary whilst ST offers 50%, if
    the father asks for a 3 months or more leave.
    Performance against objectives
    o Ensure gender equality at higher level of job grade by
    increasing the women to men ratio by 4% for Job Grades 15
    and 16 o Ensure that all sites have a seniority plan to
    maintain employability in the second part of people's
    careers
    o Ensure that all ST sites have disability plans to keep
    increasing the percentage of disabled employees in ST o
    Ensure that hiring ratio of women to men is equivalent to
    the gender ratio of graduated students in partner schools
    and universities
    o Increase the proportion of women in leadership positions
    worldwide from 9.8% to 15% by 2015 Disabled employees / LA13
    2008 2009 2010 2011 2012 Disabled people employed as % of
    total workforce 0.89 0.95 1.01 1.05 1.28
    Budget spent on disability programs (US$k) - 3,489 2,321 3,567 3,597
    Gender split by category (%) / LA13
    70
    60
    50
    40
    30
    20
    10
    0
     (Gender ?) (Gender ?)
     (B) (P) (G) (?) (B) (P) (G) (?)
    2009 7.81 4.53 26.11 38.45 29.45 15.49 16.62 61.56
    2010 7.82 4.45 25.90 38.17 28.83 15.49 17.51 61.83
    2011 8.66 4.73 23.00 36.38 31.44 16.51 15.67 63.62
    2012 8.75 4.65 21.90 35.30 32.56 15.95 16.39 64.70
    KEY:  (G) GREEN= Operators, (P) PINK= Non exempts, (B) BLUE= Exempts
    More performance indicators are available on pages 67 to 70

    24
    OUR PEOPLE
    Employee Health & Well-being
    We are committed to ensuring the well-being of our employees
    both during, and outside of work, through promoting a
    work-life balance, high quality working conditions and
    access to healthcare. ST's approach is continuous
    improvement and we also propose a range of personal services
    at ST locations. Combining corporate programs and local
    initiatives We develop health and well-being programs
    centrally to ensure all of our employees are provided with
    the same level of care and benefits. However, we recognize
    local programs are often better equipped to identify local
    health care requirements. We therefore continue to promote
    local initiatives and have begun to share best practices
    through ST's Sustainable Excellence Coordinators network,
    encouraging global deployment. At corporate level
    The Health Plan launched by our CEO, Carlo Bozotti, to
    ensure all employees receive the same level of medical care
    wherever they are based in the world, has again reached its
    target. We offer a wide range of medical services to
    employees from general medical examinations to tests
    relevant to specific roles, such as blood analyses, bio
    monitoring, X rays, screening, immunization, etc. After two
    peak years, the total number of services we offer our
    employees remains high: our employees have made 71,000
    visits to our medical services. In parallel, we launched a
    campaign to equip all ST sites with a defibrillator. Now,
    98% of our population is covered. At site level
    We believe that tackling health and well-being issues on
    many different fronts is also the best way to increase
    performance. Our sites offer multiple services and support
    to employees on all kinds of health, hygiene, comfort at
    work and home life related issues. Here are some examples:
    In Italy: "Work-related stress", a project in collaboration
    with Universita di Milano involving interviews with a
    significant sample of more than 500 employees to conduct in
    depth analyzes of stress at work.
    o Healthy diet campaign involving the support of canteen
    suppliers. o Specific counseling to help managers deal with
    employees with emotional difficulties. o Various campaigns
    in collaboration with external health authorities about
    smoking, osteoporosis risk; physical exercise, prevention of
    breast cancer and large-scale flu vaccinations. o Medical
    fund for all employees (a labor union agreement).
    o Subsidized company and public transportation for
    employees. o Facilities for cyclists, such as changing rooms
    and showers.
    In France: in addition to medical visits, the "Stresslab", a
    tool mentioned in our 2011 report, that measures the
    employees' exposure to psychological risks, has enabled us
    to go one step further in reducing stress related issues.
    When cases of stress are identified, the doctor immediately
    prescribes corrective measures to support the employee. Now,
    in addition to stress management, we are also focusing on
    prevention. Our approach consolidates and maps individual
    results and risks associated with specific categories
    including socioprofessional, seniority or work area, so that
    we can identify and implement preventive actions. In India:
    World Health & Safety Day: We dedicated a full day in April
    to common health concerns. Talks were given on spine,
    headaches, ergonomics and physiotherapists then assessed
    employees at their workstations, advising them on correct
    seating postures and exercises. Performance against
    objectives
    o Ensure 100% of employees have benefited from the health
    plan by the end of 2013 o Expand and promote the well-being
    services offered to employees at ST sites to facilitate
    day-to-day life
    o Promote employees' health and well-being through local
    initiatives and campaigns on the following aspects: sport
    practices, tobacco, overweight & obesity, blood pressure,
    cholesterol

    25
    o Start for your Heart: We organized a run to mark World
    Heart Day, with the aim of bringing everybody together,
    promoting fitness, having fun and recognizing the importance
    of having a healthy heart. 200+ employees participated.
    Awareness was built around "Matters of the Heart" through
    banners, posters and bookmarks. Discounted health coupons
    were also given out. o Quit smoking: We held a one-day
    session for 23 employees addicted to smoking. Following the
    event four employees completely quit and seven significantly
    reduced their intake.
    o Well Woman Program: We organized for a health specialist
    to give a talk on breast cancer and provided handouts about
    symptoms and preventive measures. o Sports: We regularly run
    a wide range of sporting tournaments such as volleyball,
    soccer, cricket and bowling.
    o Employee Assistance Program: The '1to1help.net' agency has
    been set up to give free counseling services to employees
    via email, telephone or face to face on any professional or
    personal issues. o Art: TULIKA, ST India's art group was
    launched to show case the creativity of our employees.
    Artwork is displayed in a gallery at our Greater Noida site.
    Additional benefits of improving employee well-being
    In Italy, an initiative to increase wellbeing, started in
    2011 as a trial and has now been deployed across all our
    Italian sites, resulting in very positive feedback from
    employees and managers. 150 people participating in the
    "Mobile Work" project have been given the necessary
    equipment to enable them to work from home via a remote
    connection, saving them travels and commuting time. We have
    also found that work and management quality has improved as
    a result of having better defined tasks and thus better
    focused employees. Many ST initiatives are also
    interconnected with other sustainability priorities such as
    Employee Safety, Labor & Human Rights or Local
    Sustainability & Impacts. Whilst safety is our highest
    priority, next comes well-being, and in our approach on
    better conditions of living for our employees, better
    management and quality of dormitories is a clear step
    forward for our employees concerned. And also, even if not
    yet measurable, we have first signs that favoring a healthy
    way of life for our employees also starts to positively
    impact on their families whose awareness is increased.
    Health Plan - Medical examinations
    Exam type 2008 2009 2010* 2011 2012
    Medical Examinations 36,022 50,295 69,180 70,480 60,216
    Check up with a physician 14,057 20,687 32,472 35,689 34,604
    Blood analyses (including biomonitoring tests**)
    9,287 12,287 17,344 15,954 11,986
    Chest X rays 3,788 7,205 9,763 8,881 5,624
    Colorectal cancer immuocult test 754 851 523 966 310
    Electrocardiograms 5,019 5,257 5,728 5,497 4,682
    Mammography 1,160 1,138 1,080 1,094 1,026
    Pap smear tests 1,487 2,084 1,691 1,586 1,572
    Prostate cancer screening 470 786 579 813 412
    Screening test 9,028 11,923 10,958 13,097 8,837
    Immunization 3,121 4,347 3,505 3,019 2,234
    Total services provided 48,171 66,565 83,643 86,596 71,287
    (*) 2010 results slightly modified in 2011 after adjustments
    communicated by some sites. (**) These tests are dedicated
    to employees working in manufacturing areas (and especially
    on some specific maintenance operations).
    Quote
    life.augmented
    Amit Rathee
    Manager, Software Competence Center - ICT group - Greater
    Noida(India) "As an employee working at Greater Noida
    (India), I really appreciate the employee health and
    well-being programs being run by the Human Resources
    department on our site. In my opinion a healthy employee is
    always more productive and efficient. Having personally
    attended programs like 'Complete health checkup', 'Employee
    Assistance Program', 'sports' and many other such programs,
    I sincerely want to thank and congratulate ST as an
    organization. Our HR team has really proved time and time
    again, that people are assets and that at ST life is really
    'AUGMENTED.' More performance indicators are available on
    pages 67 to 70

    27
    Our Products
    Key figures for 2012
    82% of products in kunits are ECOPACK(r)2
    100% of ST Tantalum suppliers use conflict-free smelters
    ST has reached the objective of on-time delivery to
    committed date 100% of involved suppliers and subcontractors
    have completed the EICC-GeSI Due Diligence Survey on
    Conflict-free Minerals

    28
    OUR PRODUCTS
    Customer Satisfaction
    ST is committed to ensuring its products meet customer
    expectations in all respects, all along the product life
    cycle, from conception to delivery and post-sales, including
    service and appropriate management of quality. ST's approach
    to customer satisfaction Since its inception commitment to
    customer satisfaction has been one of ST's core company
    values. This culture evolved from our early Total Quality
    and Environment Management programs and now forms a
    foundational pillar of our Sustainable Excellence strategy.
    Listening to our customers, fulfilling their needs and
    expectations and building strong partnership with them helps
    both ST and our clients maintain competitiveness and jointly
    explore new business opportunities. We define our approach
    to customer satisfaction using the following five areas of
    excellence: o Innovation and R&D
    o Business Excellence
    o Supply Chain
    o Quality
    o Sustainability
    ST quality strategy & roadmap
    Our quality strategy sets the directions for reaching our
    goal and is elaborated around seven fundamental pillars:
    customers, change management, product and technology
    development, manufacturing and supply chain, people,
    business processes, tools and indicators and economical
    value. Our approach also includes the development of state
    of- the-art programs and processes for improving quality,
    combining innovative approaches and continuous improvement.
    It is supported by a detailed roadmap for strategy execution
    with clear ownership, timelines and resources for achieving
    targets. The certification of an Automotive microcontroller
    to the ISO 26262 Functional Safety standard by the EXIDA
    certification body is one example of our commitment to
    provide our customers with high quality products. Lives
    depend on microcontrollers when they are used in automotive
    and other safety applications. Where safety measures like
    software countermeasures or failure alerts exist, both in
    automobiles and at systems level, product analysis and
    validation are necessary to ensure functional safety. The
    ISO 26262 Functional Safety standard guarantees to our
    customers that safety features will work reliably throughout
    the product's entire life time. By achieving this
    certification ST demonstrates its ability to create safe and
    reliable products as measured against the most rigorous of
    safety standards. It is vital for the future of our company
    that we are able to produce technology that both meets
    safety standards and contributes towards making lives safer.
    Customers' sustainability demands
    We are continually providing our customers with information
    regarding our Sustainability management systems, activities
    and performance. In 2012 we received more than 700
    Sustainability customers' demands at corporate level. 72%
    were concerning our approach to Environment Health and
    Safety aspects and 28% concerning Social and Ethics. These
    customer demands can be very diverse, from questions linked
    to our practices and products, general sustainability
    surveys, signature of Code of Conduct to specifications and
    letters to review and approve or audit requests.
    Supply Chain governance
    2012 has been a year of focus on Supply Chain governance.  In May
    2012, Alberto Della Chiesa was appointed Group Vice President of
    the Company Supply Chain Management reporting to Otto Kosgalwies,
    Executive Vice President, Member of the Corporate Strategic
    Committee, Company Infrastructures and Services (CIS).
    In the same year we reinforced the Supply Chain Governance
    where all organizations pertaining to the supply chain are
    represented. The following priorities were agreed:
    o Forecasting & Demand Management: optimizing forecasts,
    processes, KPIs and tools o Fragmentation: reinforcing links
    between all organizations along production flows and
    capacity and assets management
    o Inventory Model & Asset utilization: reviewing and
    aligning inventory policy to customers' portfolios and
    market needs o Planning processes: continuing to shorten and
    simplify processes to increase their effectiveness
    o Organization & People: optimizing the organization and
    flow to become agile and fast We also implemented common key
    performance indicators (KPI) throughout the entire supply
    chain covering: o Customer satisfaction with Just In Time
    Requested Date and Committed Date

    29
    Demand Management with Forecast accuracy
       measurements
    o Asset utilization and responsiveness trough cycle time and
    manufacturing flexibility KPI's We focus on simplifying
    processes through our Speed and Agility Initiative with the
    aim of maintaining our supply chain competitiveness and
    responding to the Time To Volumes requirement of the
    semiconductor industry. Quote life.augmented Fabio
    Gualandris Executive Vice President for Product Quality
    Excellence - ST Geneva (Switzerland) "Quality is a priority
    throughout ST. We work hard every day to meet and exceed
    customer expectations. Our goal is to provide our customers
    competitive solutions that are the best, safest and most
    reliable in the industry." How does ST evaluate its customer
    performance?
    ST has formalized a process to manage external and internal
    feedbacks in order to continuously improve its performance
    and consequently customer satisfaction and loyalty. Every ST
    employee is involved in this process:
    Internal feedback: Satisfaction index
    ST has defined and monitors a set of internal indicators which
    provide an accurate and factual measurement of customer
    satisfaction.  These indicators represent our customers' major
    areas of interest, for example, number of customer complaints,
    failure analysis cycle time, percentage of customer returns and
    just-in-time figures.
    External customer feedback:
    Customer scorecard
    It is the duty of each ST account manager to: o Collect the
    feedback of his customers following the rating system in
    place at the customer if any (Customer score card,
    frequency, form, ... ) or ST system otherwise o Identify
    positive points and major area of improvements o Cascade
    feedback to the relevant stakeholders in the Company o
    Determine and agree with the customer milestones to reach
    scores, targets and relevant improvement actions o Monitor
    improvement action plans until targets are reached.
    All score cards are normalized according to the five areas
    of excellence and periodically reported to ST's executive
    management of the Company.
    External market feedback: Customer
       Perception Survey
    In addition to the feedback methods mentioned above, every
    two years ST also performs a "Customer Perception Survey" to
    assess and benchmark its overall performance as perceived by
    geographical markets and industry domains as well as to
    identify the new market trends. The survey is also
    structured around our five areas of excellence. We analyze
    the survey results in detail and implement appropriate
    improvement actions. Performance against objectives
    o Just in Time on Committed Date at 90%
    o Just in Time on Requested Date at 65%
    o Reduce customer complaints per million units by 5% by Q4
    2012 compared with a 2011 baseline On time delivery to
    customer request Baseline 100 in December 31, 2007 Delivery
    date in line with customer request
    140
    130
    120
    110
    100
    90
    80
    70
    2007 2008 2009 2010 2011 2012
    On time delivery to ST commitment Baseline 100 in December 31, 2007
    Delivery date in line with ST commitment
    110
    105
    100
    95
    90
    85
    2007 2008 2009 2010 2011 2012
    More performance indicators are available on pages 67 to 70

    30
    OUR PRODUCTS
    Innovation Management
    Innovation Management at ST is a three-part process which
    involves; creating an environment that fosters the
    generation of ideas; ensuring company-wide implementation of
    our technology and product development processes, sanctioned
    by formal maturity steps, rigorously managing the various
    phases of product development. In 2012, despite a
    challenging business environment, we have continued with our
    implementation plans and have undergone major internal
    restructuring within certain businesses. Below are some
    examples that illustrate our journey towards excellence in
    Innovation Management. New Ventures entity will invest in
    innovation ST has created its own investment fund to promote
    innovation in selected startup companies that are working in
    new technologies that are relevant to ST's business while
    not necessarily at its core today e.g. health, cleantech and
    smart infrastructures. In addition to financial returns,
    this initiative also provides ST with valuable insight into
    emerging technologies, products and services. Partnerships
    are critical to innovation In July 2012, ST and the Harbin
    Institute of Technology (HIT), one of China's most renowned
    national universities, announced the opening of a joint
    laboratory to encourage innovation in electronics. Its aim
    is to support the study, research and development of
    innovative and emerging electronics applications e.g.
    medical, power management and multimedia convergence. ST
    contributes various products, including samples and
    technical documentation, as well as training to educate
    students in the design and development of innovative
    electronics projects. HIT provides general-purpose
    facilities and management of the joint laboratory. During
    the early stages of this partnership, the joint lab will
    focus on smart-sensor applications. ST has donated its
    advanced iNEMO(r)1 development tools supported by a software
    platform. The integration of multiple sensors with
    processing capabilities and dedicated software in a single
    device is a significant leap forward in functionality and
    performance for a wide variety of applications, including
    Gaming, Human Machine Interface, Robotics, Portable
    Navigation Devices, and Patient Monitoring. For more
    information on Partnerships in R&D and Education, see pages
    60-61 Standardizing electronics: a key ingredient to open
    innovation ST was awarded the Corporate Award 2012 by the
    Institute of Electrical and Electronics Engineers Standards
    Association for its contribution to the development and
    progress of electronic and electric standards. ST takes an
    active role in many standardization initiatives at several
    electronics industry associations as part of ST's active
    participation in technology/IP ecosystems. Participating in
    these initiatives is a fundamental pre-requisite to being
    able to leverage open innovation and collaborative R&D in
    our industry. ST patents filed 2008 2009 2010 2011 2012
    Total 485 589 739 602 516 Innovati on activity (incl.
    ST-Ericsson)*** 2010 2011**** 2012 Median age of immature
    projects (months) 17 15 17 % of immature projects* younger
    than 1 year (value) 29 42 29 % of projects* maturing within
    year (value) 29 35 29 % of Open Innovation** in R&D (value)
    20 21 18 (*) immature project: product development project,
    defined in accordance with IFRS criteria, measured in asset
    value, not yet at Maturity 30 at the end of the year (**)
    open innovation: aggregate spending towards external R&D
    technology licensing partners, in % of total R&D + licensing
    spending (***) In July 2012, part of the development
    activities of ST-Ericsson was transferred to ST. In December
    2012, ST announced its intention to exit from ST-Ericsson.
    As a consequence, some R&D projects were terminated, or
    substantially modified in scope. Multiple write-offs and
    write-downs were recorded in our books, materially impacting
    the performance metrics for 2012 for the aggregate ST
    consolidated perimeter (****) 2011 figures changed following
    data review.

    31
    Focus on technological innovation breakthroughs in 2012
    FD-SOI: shaking up the industry with innovative
    semiconductor technology Moore's Law-the observation that
    the number of transistors on a chip doubles about every two
    years-has driven the semiconductor industry over the past 50
    years to shrink the size of the transistors, which are
    essentially miniature on/off switches. The increase in the
    number of transistors in a product as a result of their size
    reductions have given consumers a plethora of new and more
    exciting features at a lower-cost. In parallel, these new
    features are able to operate at speed allowing phones for
    example to respond to commands, by keypad, touchpad, and now
    voice. As transistors shrink to nano-scale dimensions, where
    approximately 450 transistors can fit within the diameter of
    a human hair, physics is challenging the traditional
    highspeed and low-power advantages of planar CMOS
    (Complementary Metal Oxide Semiconductor) technology,
    manufactured on bulk silicon wafers. FD-SOI (Fully Depleted
    Silicon on Insulator) technology is a major breakthrough in
    the pursuit of electronic circuit miniaturization. It
    enables production of highly energy-efficient devices with
    the dynamic body-bias allowing instant switch to high
    performance mode when needed and a return to a
    very-low-leakage state for the rest of the time. FD-SOI can
    operate well at low voltage with superior energy efficiency
    versus traditional CMOS (on bulk substrate). In 2012, ST
    successfully prototyped commercial products designed in 28nm
    FD-SOI technology, finally demonstrating to the market the
    full potential of this technology, which was conceived over
    a decade ago by ST research fellows. New technology and
    product on Galvanic Isolation As a result of a successful
    Companywide program involving teams from business units and
    central departments, ST has been able to develop and launch
    cutting-edge Industrial Drives and Automotive IGBT
    (Insulated-Gate Bipolar Transistor) Drivers. The
    manufacturing technology and the level of feature
    integration achieved by the IGBT Drivers are unique in the
    market. The breakthrough comes from a high voltage galvanic
    isolation which, thanks to the embedded digital interface,
    allows the microcontroller to directly control the power
    stage of the application while monitoring any faults with
    the digital diagnosis. The integration of important safety,
    protection and diagnosis features makes the system more
    compact, more reliable, and less costly than other
    solutions. Once fully tested in December 2013, this
    technology should benefit multiple markets such as
    Industrial, Power conversion, Automotive and Home / Consumer
    segments. Performance against objectives
    o Increase creativity: Number of patents for fundamental
    innovations filed per year o Increase efficiency of product
    o Increase R&D partnerships: % of R&D spending incurred via
    partnerships or external IP sourcing Quote life.augumented
    Philippe Magarshack
    Executive Vice-President and head of Design Enablement and
    Services - ST Crolles (France) "IP Sourcing: a key stepping
    stone towards open innovation. Until recently, most
    semiconductor companies were vertically
    integrated-designing, fabricating, packaging and testing
    their own chips using internally developed software design
    tools, manufacturing processes and equipment. This is no
    longer the case: as the cost and skills required for
    designing and manufacturing complex semiconductors
    increased, the semiconductor industry diversified and
    specialized along its value chain. The ultimate phase in
    this trend relates to so-called "design IPs", or blocks of
    circuitry implementing well-defined functions e.g.
    connectivity, processing, graphics rendering or video
    compression. A modern chip contains hundreds of such blocks,
    making their design no longer practical for a single company
    at reasonable cost and risk. Sourcing those blocks via
    collaboration therefore becomes a basic necessity for
    successful chip design. It is an ongoing process that relies
    on an increasingly open innovation model with our partners
    and suppliers: ST benefits from the dedicated skill set and
    the larger R&D investments that a broad market reach allows;
    they benefit in return from early debug and performance
    tuning provided to our selected partners by ST. In December
    2012, ST organized a very successful "Happy IP Days" event
    where hundreds of ST engineers were exposed to, and could
    interact with, the latest innovations from our partners on
    site." More performance indicators are available on pages 67
    to 70

    32
    OUR PRODUCTS
    Product Stewardship
    ST is committed to reducing the impact of its products on
    the environment, continually improving their performance to
    enhance the quality of life of end-users. We developed our
    Product Stewardship framework to gain a deeper understanding
    of the societal and environmental impact of our products in
    order to continuously enrich our product portfolio,
    exploring new and innovative sustainable solutions. ST
    product stewardship approach
    Since the development of its environmental strategy in the
    early 1990s, ST has been fully committed to reducing any
    negative effects of its activities and its products on
    people and the planet as a whole. ST's Product Stewardship
    program brings our approaches under a single framework to
    reduce the impact of our products on the environment and
    improve the quality of life of the end-user. The materiality
    exercise we conducted in 2010, identified the key topics
    relating to product stewardship, including eco-design,
    responsible products and communication. Further on, we
    refined our approach and developed an integrated product
    stewardship program comprising three main components:
    Product Compliance Complying with applicable legislation and
    our customers' requirements regarding EHS and the social and
    ethical impacts of our products is the cornerstone of our
    program. ST endeavors to anticipate regulation by working
    with customers and other stakeholders to find common
    solutions to sustainability challenges. Eco-design ST
    launched its eco-design program in 2009 with the objective
    of eco-designing 100% of new products by 2015. Our approach
    takes into account the life-cycle of our devices by
    evaluating the results of environmental impacts assessments,
    seeking greener options during product design. STAR
    responsible products In 2011, ST launched a taskforce to
    enable the tracking and effective communication of products
    that have a contribution to sustainability. Expected
    benefits Our product stewardship program provides
    quantitative and qualitative data about the sustainable
    value and benefits of our products. We expect to continue to
    grow revenue and market share on the back of innovation. In
    2012 ST's responsible products generated around US$ 408m. ST
    provides detailed product information relating to compliance
    with legislation, reduction of environmental footprint,
    energy-saving and social characteristics. Quote
    life.augmented Arnel Villaroman Package development senior
    manager, Corporate Packaging & Automation, ST Calamba (The
    Philippines) "The rules of the game to be successful in
    business slowly emerge in favor of resource and energy
    efficient products and services. At ST Calamba, we want to
    be a leader in creating sustainable products that address
    the needs of our customers, by proposing eco-friendly
    semiconductor solutions. In 2012, we achieved to manufacture
    only ECOPACK(r) products without the use of any RoHS
    exemptions. The constant challenges to overcome are to
    always anticipate markets requirements, and to find the
    right solutions to meet the business needs with our product
    stewardship principles." STAR Responsible Products Rating of
    the level of innovation of ST devices in key social and
    environmental categories: e.g. health & fitness, safety &
    security, energy-saving. Eco-design Internal project to
    measure and reduce the environmental footprint of new
    products across the life cycle: e.g. CO2 emisssions, water.
    Product Compliance Baseline set to ensure compliance with
    legislation and align with requirements of our stakeholders.
    It includes a number of individual programs (ECOPACK(r),
    Material Declaration, Conflict-free Minerals, HSPM).

    33
    Product Stewardship
    Product Compliance
    Complying with applicable legislation and our customers'
    requirements regarding EHS and the social and ethical
    impacts of our products is a fundamental component of our
    sustainability program. ST annually reviews its banned,
    exempted and declarable substances against applicable
    regulations and agreed customer requirements, and deploys it
    along our supply-chain. Internally, ST has developed
    strategic programs to ensure we remain compliant: ECOPACK(r)
    The voluntary ECOPACK(r) program started in 2000 to remove
    polluting and hazardous substances from our products. We
    meet all applicable requirements such as REACH and RoHS,
    developing solutions that eliminate RoHS chemical compounds
    from our manufacturing lines and products. In 2012, we went
    a step further to remove halogens, enabling us to reach the
    ECOPACK(r)3 level.
    o ECOPACK(r)1: Compliant with the Restriction of Hazardous
    Substances (RoHS) directive and 'lead free'1 o ECOPACK(r)2:
    ECOPACK(r)1 + free of brominated, chlorinated and
    antimonyoxide flame retardants
    o ECOPACK(r)3: ECOPACK(r)2 + free of halogens with no RoHS
    exemptions In 2012, ST began a packing materials review
    against ECOPACK(r) levels, setting a future target to ensure
    packing compatibility with ST ECOPACK(r)2 grade definition.
    Material Declarations
    To provide our customers with the detailed material
    composition of our devices, ST has a material declarations
    program in place to disclose the full chemical identity of
    any product launched since 2006. We use the IPC 1752
    standard to report declarable substances and material
    groups. As a member of the IPC2 working group, ST is at the
    forefront of standards deployment. In 2012, ST adopted the
    newer and stricter version of the IPC 1752- A standard.
    Anticipating an evolution, ST started to disclose the full
    product material chemical composition of its devices in
    20083. To achieve this, a new Material Declaration format
    definition was adopted, in-house IT tools developed, and our
    quality management system database was upgraded. ST has
    aligned its quality and marketing systems with the demands
    of the new standard and customers can access our latest
    product information on the ST website4.
    Hazardous Substances Process Management
       (HSPM)
    To strengthen our hazardous substances management with a
    focus on product, ST has decided to align its processes with
    the IECQ5 QC 080000 Hazardous Substances Process Management
    System Requirements (HSPM) standard. A working group,
    co-sponsored by our Corporate Sustainable Development and
    Corporate Product Quality departments, is currently defining
    the steps and actions necessary to progressively align ST's
    management systems to the HSPM requirements. We aim to
    ensure that our processes and management systems, from
    product design and development through to engineering,
    purchasing, manufacturing, warehousing and dispatch, will be
    compliant, robust and effective with regard to hazardous
    substances in products. Conflict-free minerals
    Since 2007, ST has been complying with legislation and
    customer requirements to prevent the use of illegal and
    unethically sourced minerals from conflict areas. This topic
    is discussed in more detail in the Conflict-free minerals
    section on pages 36-37. Performance against objectives
    o ECOPACK(r)2:
    - 90% of new packages implemented in ECOPACK(r)2 by the end of 2012
    - 80% of products in ECOPACK(r)2 by the end of 2012
    o Start tracking products eligible for ECOPACK(r)3
    (halogen-free and no RoHS exemption) in 2012 o Start
    alignment of ST packing materials to ECOPACK(r) levels 2 and
    3 in 2012
    1. With adapted reliability for soldering at higher
    temperature, as some exemptions are necessary mainly for the
    automotive market with regard to RoHS regulation 2. IPC is
    an Association Connecting Electronics Industries. Visit
    www.ipc.org
    3. ST adopted the IPC 1752-2 Class 6 standard in 2008 4.
    Visit ST Materials Declaration webpage
    http://www.st.com/web/en/support/materials_declaration.html?
    s_searchtype=keyword
    5. IECQ = International Electro-technical Commission Quality
    Assessment System for Electronic Components ECOPACK(r)
    program % of ECOPACK(r) products in k units*
     2009 2010 2011 2012
    Non ECOPACK(r) 2.4 1.8 1.3 0.8
    ECOPACK(r)1 Compliant with the Restriction of Hazardous Substances
    (RoHS) directive and 'lead free** 58.1 43.6 28.7 16.8
    ECOPACK(r)2 ECOPACK(r)1 + free of brominated and chlorinated flame
    retardants 39.5 54.7 70.0 82.4
    (*) Our ECOPACK(r) values since 2009 were reviewed in 2011
    after a revision of our methodology used to estimate the
    annual percentage of ECOPACK(r) products both in value and
    in volume. (**) With adapted reliability for soldering at
    higher temperature, as some exemptions are necessary mainly
    for the automotive market with regard to RoHS regulation.
    More performance indicators are available on pages 67 to 70

    34
    OUR PRODUCTS
    Product Stewardship
    Eco-Design
    Energy-efficiency and eco-design are now key consumer
    requirements for products. ST has included the target in its
    EHS Decalogue to eco-design 100% of new products by 2015. ST
    is committed to design its products by systematically taking
    into consideration the environmental impacts of the device
    during its whole life-cycle (raw materials, transportation,
    manufacturing, usage, end of life). ST's approach to
    eco-design
    To successfully integrate eco-design, ST has adopted a
    dynamic and systemic approach based on innovation,
    performance and awareness. We are working to integrate this
    methodology into our product design and development. To help
    us reach this objective, our experts have developed a
    decisionguiding tool that enables designers to evaluate the
    environmental footprint of products in the design phase. It
    relies on a complete database of environmental impacts for
    each stage, based on the Life Cycle Analyses we have
    conducted over recent years. This cross-departmental tool: o
    Covers all Front-end sites manufacturing technologies;
    o Takes into account for the calculation the most
    representative packages of Back-end manufacturing phase; o
    Will be implemented on selected products across all ST
    Products Groups by the end of 2013.
    Life-Cycle Assessment (LCA) methodology
    ST has been undertaking complete Life-Cycle Assessments
    since 2009 covering some cutting-edge products. These
    assessments have resulted in the development of a bespoke
    methodology to perform LCAs on assembled devices at the
    first stage of eco-design, in accordance with ISO 14040 and
    ISO 14044 standards. Due to ST's huge portfolio of products,
    it is not feasible to carry out complete LCAs on them all,
    so ST has developed a screening LCA methodology that enables
    us to provide a quick calculation of products' carbon (in kg
    of CO2 equivalent) and water footprint (in m3) of our
    products within a shorter time frame1. In order to verify
    and review our internal methodology, ST will undergo third
    party validation with Quantis in 2013.
    1. For more information and products test, visit our website
    on www.st.com 2. For more information, see
    http://ec.europa.eu/environment/eussd/smgp/
    Quote
    Michele Galatola
    Product team leader, Directorate General Environment,
    European Commission, Brussels (Belgium) "Since 2003, the
    European Commission has supported the consistent and
    coherent use of Life Cycle Assessment in European policies;
    the most reliable and comprehensive method for calculating
    the environmental performance of products, services and
    organizations. Life Cycle Assessments help provide clear,
    reliable and comparable environmental performance data to
    all stakeholders, including supply chain participants. The
    Commission's recent adoption of the package "Building the
    Single Market for Green Products2" represents a key step
    towards improving the way the environmental performance of
    products and organizations is measured and communicated."
    Life cycle stages
    Raw materials
    Transport
    Use
    ST production site
    End of line
    Environmental indicators
    Climate change
    Water demand
    Freshwater eutrophication
    Photochemical oxidant formation
    Performance against objectives
    o Ensure 100% of ST new products are eco-designed by 2015
    through deployment of: o eco-design strategy
    o new eco-design tools
    o product eco-labeling

    35
    Product Stewardship
    STAR Responsible Products
    Advances in semiconductor technology offer exciting
    opportunities to address global sustainability issues
    through innovative products that address a diverse range of
    social and environmental challenges e.g. ageing population,
    more affordable and accessible healthcare. What are
    'responsible products'? For ST, the term 'responsible
    products' refers to the design, development, sale and
    marketing of devices that:
    o Reduce energy consumption and/or provide new environmental
    solutions e.g. smart grid, start/stop systems, converters to
    manage solar cells and wind turbines; o Provide new social
    solutions to key societal challenges and improve enduser
    quality of life e.g. all health-related and fitness
    products, safety and security applications, environmental
    and social solutions for developing countries.
    ST's STAR Responsible Products
    In 2011 we developed the STAR Responsible Products program
    which aims to identify, track and communicate new ST
    products that make a contribution to sustainability.
    Specifically, this program aims to provide detailed
    information about products that feature in the target growth
    areas of ST's strategy. Investors are increasingly asking us
    to communicate the percentage of and associated revenues
    from our products with energy-saving characteristics. The
    STAR Responsible Products program enables us to do this and
    also demonstrate the wider societal value of our portfolio
    by applying an innovation rating. Split into two main
    macrocategories; "Social" and "Environmental / Energy
    saving", ST Responsible Products are awarded 1, 2, or 3
    STARS according to their level of innovation. Ratings have a
    two-year validity and capture the degree of innovation on
    specific sustainability characteristics. The three levels of
    innovation are defined as incremental, significant and
    breakthrough. For social products the rating is applied
    based on qualitative evaluation, and for
    environmental/energy savings products it is based on
    quantitative assessment. In 2012, we carried out a data
    collection exercise to develop a dashboard of all new
    products launched during the last two years. The dashboard
    indicates that 196 individual products with 250 STAR ratings
    have generated approximately 30% of all new product revenue,
    corresponding to approximately 7% of all ST products. To
    ensure we can catalogue ST's Responsible Products portfolio,
    we are updating our internal STAR rating system and should
    be soon able to automatically classify our products. We are
    also focusing on making responsible products an integral
    part of product development and communication.
    Quote
    life.augumented
    Serge Palmieri
    Quality management system and Sustainable Excellence
    coordinator of Analog, MEMS and Sensors Product Group, ST
    Grenoble (France) "To accurately identify responsible
    product characteristics, all ST Product Groups actively
    participate in the product stewardship program, providing ST
    with full visibility on specific market segments, products
    and application fields. This knowledge drives innovation and
    is continually being fed back into ST's product
    development." Performance against objectives
    o In 2012, track the percentage of 'STAR responsible
    products' in ST's overall product portfolio and associated
    revenues (following STAR environmental and social criteria)
    for the year o Prepare a complete communications plan for
    responsible products in 2012
    RESPONSIBLE PRODUCTS CATEGORY AND STAR CLASSIFICATION
    CRITERIA / EN6 EN26
    Social Products
    o Health/Medical/Fitness
    Embedded in applications dedicated to physical well-being
    o Safety/Security:
    Contributes to transportation/ car safety or safety in
    general; or to personal security o Social (general):
    Products supporting ageing population, disabilities; to
    improve quality of life in developing countries etc.
    Associated STAR rating
    1 STAR: incremental changes to a solution already on the
    market 2 STARS: not just improve an existing solution, add
    to it in new ways
    3 STARS: solves a problem for which there is not yet a
    solution on the market Number of products in 2012
    43
    24
    16
    Environmental / Energy Saving Products
    o Energy saving of the ST chip itself
    o Energy saving of the application thanks to the ST chip
    Environmental (not related to energy saving) Contributes to
    resources saving and environmental preservation (water,
    chemicals, emissions etc.) Associated STAR rating
    1 STAR: incremental improvement versus previous generation
    (at least in line with standard market offering) 2 STARS:
    significant improvement versus previous generation (above
    standard market offering)
    3 STARS: dramatic improvement vs previous generation OR
    providing a solution for energy saving that does not yet
    exist on the market Number of products in 2012 95
    63
    9
    More performance indicators are available on pages 67 to 70

    36
    OUR PRODUCTS
    Conflict-free
    Minerals
    ST is committed to complying with legislation and aligning
    with customer requirements relating to conflict minerals. We
    take careful measures to avoid procuring 3TG metals that are
    directly or indirectly associated with human rights
    violations or environmental damage in the Democratic
    Republic of Congo and its neighboring countries. ST began to
    address the conflict minerals issue in 2007 by requiring our
    tantalum suppliers to confirm they were not sourcing metals
    from conflict areas. We now participate in the Electronic
    Industry Citizenship Coalition (EICC) and Global
    e-Sustainability Initiative (GeSI) programs and require all
    our suppliers and subcontractors to provide evidence that
    they are not sourcing 3TG metals (Tantalum, Tungsten, Tin
    and Gold) through any channels that fund armed groups in the
    eastern provinces of Democratic Republic of the Congo (DRC)
    and surrounding regions. Assurance of conflict-free minerals
    ST manages conflict minerals in accordance with the
    following legislation and best practices: o Section 1502 of
    the US Dodd-Frank Act and its application rules from the US
    Securities and Exchange Commission (SEC) o OECD Due
    Diligence Guidance for Responsible Supply Chains of Minerals
    from conflict-affected and high-risk areas, for more
    information, see www.oecd.org/daf/inv/mne/mining.htm o
    Working groups within the EICC and GeSI supporting documents
    and audit trails o ITRI's Tin Supply Chain Initiative
    supporting documents and audit trails We have developed a
    comprehensive process to provide our customers with evidence
    to demonstrate that our products only contain conflict-free
    minerals: o ST requires suppliers to:
    o sign a written commitment annually stating that no metals
    used in ST products originate from the identified conflict
    zones o have a DRC Conflict-Free Minerals Policy
    o conduct a thorough supply chain analysis to identify and
    provide ST with the names of smelters and refiners involved
    in mineral processing o disclose the country of origin and
    the mining location of procured minerals
    o implement due diligence to verify suppliers' compliance
    with its Conflict Free Mineral Policy o source 3TG metals
    from smelters who themselves have been validated as using
    DRC Conflict-Free minerals by a third party certified
    organization
    o A supplier's ability to meet these requirements is then
    reviewed, and if any of them are not met we ask the supplier
    to provide us with evidence that corrective action plans
    have been implemented. o Collected information is aggregated
    and shared with customers when requested.
    o Any identified smelters are contacted by both ST and the
    supplier to invite them to join the Conflict Free Smelter
    (CFS) program. In fact smelters' engagement rate with the
    CFS engagement is one of our internal key performance
    indicators. If suppliers provide other evidence of being
    conflict-free, we conduct a risk assessment to evaluate
    whether the information received is sufficient to meet our
    requirements. In 2010 the US Congress passed legislation,
    the Dodd-Frank Act, which requires manufacturers of
    electronics devices to undertake due diligence on their 3TG
    supply chains, to publicly disclose their conflict minerals
    policy and to enforce conflict-free measures in their
    procurement processes. This ruling was adopted by the US
    Securities and Exchange Commission in August 2012. Under the
    ruling, companies are required to disclose their use of
    conflict minerals; Tantalum, Tin, Tungsten or Gold, if those
    minerals are necessary to the functionality or production of
    a product manufactured by those companies. Companies are
    required to provide this disclosure annually to the SEC.
    Performance against objectives Define and deploy systems and
    processes to provide trustworthy evidence that our products
    are conflict-free. In 2012, we will:
    o Maintain EICC-GeSI Due Diligence Tool update for 100% of
    our material suppliers, Front-end and Back-end
    subcontractors o Engage all the smelters identified in our
    supply chain to join the EICC-GeSI Conflict-Free Smelter
    Program incurred via partnerships or external IP sourcing

    37
    ST has been working on conflict minerals mapping and
    disclosure since 2007. In 2012, we concentrated our efforts
    on mapping smelters within our supply chain. This exercise
    was undertaken using the Due Diligence tool developed by the
    EICC GeSI Extractive Working Group. Smelters were also
    invited to join the EICC's Conflict Smelter Program.
    Starting in 2014, ST will publish an annual conflict
    minerals report, in line with SEC requirements. We review
    each mineral (Tantalum, Tin, Tungsten or Gold) individually
    due to the varying levels of complexity found within each
    mineral supply chain. For Tantalum, for example, we have
    been able to certify 100% of smelters through the Conflict-
    Free Smelters' Protocol. We are still in the process of
    identifying smelters for the other minerals with significant
    progress made for sources of Gold (around 30% of declared
    smelters are now certified). In parallel, the EICC revised
    its Due Diligence tool at the end of 2012 to include a
    pre-defined list of smelters. We found this to be an
    extremely valuable addition that will help us to accelerate
    the process of identification. In order to engage all
    relevant departments within ST, we worked on defining
    internal roles and responsibilities with; global purchasing,
    wafer foundry, compliance, finance, corporate sustainable
    development, product quality excellence and group external
    communication. These will be formalized in 2013.
    Quote
    life.augmented
    Jerome Roux
    Corporate Vice President, Global Procurement and Outsourcing
    ST Ang Mo Kio BHQ (Singapore) "This is a challenging
    activity since our Procurement supply chain is wide and
    complex with various and numerous materials suppliers and
    subcontractors involved. Awareness and responsibility are
    the drivers we are diffusing and engaging with all the
    actors of that chain, relying on a collaborative approach
    and continuous monitoring. We in ST are well engaged in the
    deployment of the Conflict Free Minerals Program and have
    established robust company management systems by adopting a
    conflict minerals policy, defining systems of controls and
    suppliers risk assessment." Conflict-free minerals 2012
    Number of materials suppliers and subcontractors involved in
    the EICC-GeSI Due Diligence survey 168 Number of suppliers
    and subcontractors that are associated with at least one 3TG
    metal (involved suppliers) 88 % (number) of involved
    suppliers and subcontractors that have completed the
    EICC-GeSI Due Diligence survey 100 (88)
    Number of smelters identified in ST's raw materials supply
    chain 74 Number of smelters identified in ST subcontractors'
    supply chain 102 % of ST Tantalum suppliers that use
    conflict-free smelters 100 More performance indicators are
    available on pages 67 to 70

    39
    The Environment
    ST Environment involvement
    12 Manufacturing sites ISO 14064 certified
    US$ 2M invested on PFC abatement devices
    85% increase in our purchase of green energy
    Water recycling in 2012 vs 2011 +6%

    40
    THE ENVIRONMENT
    GHG Emissions from Operations
    ST is committed to managing and reducing its direct and
    indirect greenhouse gas (GHG) emissions, including
    perfluorinated compounds (PFCs), from its manufacturing and
    other business operations, in accordance with scopes 1 to 3
    of the GHG Protocol. Since the early 1990s, reducing and
    adapting to climate change have been core elements of our
    environmental strategy. We have implemented a multifaceted
    approach that takes all aspects of the value chain into
    consideration, working with stakeholders, wherever possible,
    to bring about emission reductions. Mitigation of global
    warming effects Since 1995 and its first EHS Decalogue, ST
    has consistently delivered annual decreases in the level of
    greenhouse gases emitted from its manufacturing activities.
    Emissions
    More than 90% of our direct emissions result from the use of
    PFCs in our manufacturing processes1. ST has a carbon
    roadmap to help us achieve direct emissions neutrality by
    2015. We have faced difficult economic times over recent
    years and acknowledge that our strategy needs to be
    reviewed. We are committed to the World Semiconductor
    Council's 2020 climate change targets to decrease our
    normalized emissions by 30% from a 2010 baseline. We require
    all new processes and tools adopted by our sites to be
    equipped with abatement systems. ST also has an investment
    strategy to upgrade existing equipment, providing US$
    2million for abatement devices in 2012 for ST Ang Mo Kio
    (Singapore) and ST Crolles (France) factories. PFC reduction
    is also achieved through the development of greener
    manufacturing techniques, the optimization of process
    recipes and the replacement of high Global Warming Potential
    (GWP) gases with lower or GWP-free alternatives. ST gained
    ISO 140642 certification of its scope 1 and scope 2
    emissions based on 2012 results. ST's programs on scope 2
    and scope 3 of the GHG Protocol are further detailed in the
    Energy Management, and Transport and Logistics pages of this
    Report. Compensation and reforestation
    To offset the remaining emissions, ST has developed at
    company level reforestation programs in Australia, Morocco,
    Texas and Italy. Our internal methodology to calculate the
    CO2 sequestrated by these programs was verified in 2010 by a
    third party, MWH. In 2012, the 9,000 hectares of trees
    planted in 2002/03 have sequestrated 298 ktons of CO2,
    compensating around 53% of our direct annual emissions. At
    local level, our sites are very active in regional
    reforestation programs. ST Calamba (The Philippines) has set
    a target to plant 20,200 trees by 2020. Partnering with
    local associations, ST volunteers planted 5,000 native and
    medicinal trees in 2012. In Singapore, ST sponsored the
    Singing Forest project to reintroduce 38 indigenous tree
    species to attract more native birds back to the region.
    Adaptation to climate change As well as reducing our impact
    we must also adapt to increase our resilience to climate
    change. Risk management programs
    ST has two key programs to mitigate risks associated with
    climate change and to ensure it is able to respond. Our
    Enterprise Risk Management (ERM) program plays a key role in
    identifying and assessing climate-related risks. We have
    also developed robust Business Continuity Plans (BCPs) which
    are implemented by each site to prevent and protect against
    climate change and natural disasters. Carbon risk assessment
    In 2012, a climate change exposure risk assessment was
    conducted at corporate level across all of our manufacturing
    sites. The scope of this assessment covered our entire value
    chain, enabling ST to assess, map and test assumptions for
    direct and indirect emissions in order to evaluate our
    overall carbon footprint.
    CDP
    ST annually participates in the Carbon Disclosure Project.
    On the CDP Investor, we achieved a score of 92/100 which
    ranked us 2nd in Italy and 2nd in the IT sector in France.
    Moreover, for the first time ST was included in the CDP's
    Climate Disclosure Leadership Index (CDLI).
    1. Normalized value 2. See focus page 41 3. For more
    information, see Governance pages 7-9 Performance against
    objectives o Reduce absolute PFC emissions by 30% in 2020
    from 1995 baseline
    o Offset the remaining direct CO2 emissions through
    reforestation or other sequestration methods, to reach
    carbon-neutrality of direct CO2 emissions by 2015

    41
    Quote
    CDP
    Paul Simpson
    Chief Executive Officer, Carbon Disclosure Project (CDP),
    London (UK) "Companies that make the CDP's Climate
    Disclosure Leadership Index have demonstrated strong
    internal data management practices for the measurement of
    greenhouse gas emissions and energy use. They are also
    giving clear consideration to the business issues related to
    climate change and their exposure to climate-related risks
    and opportunities. This is vital to realising greater
    efficiencies, protecting the business from risk and
    capitalizing on opportunities." Achieving ISO 14064
    certification of GHG emissions for all our manufacturing
    sites ST has a carbon neutrality roadmap that includes
    several pieces of work. Prompted in part by increasing
    investor scrutiny of company GHG emissions we commissioned
    third party verification of the direct and indirect GHG
    emissions of our 12 manufacturing sites. Scope 1 and 2 as
    defined by the GHG Protocol, were assessed according to ISO
    14064-1:2006 principles. Comprehensive audits assessing a
    broad range of criteria including organizational and
    operational boundaries, infrastructure, activities,
    technologies, processes, GHG sources and types of GHGs, were
    conducted. All of our sites achieved certification. ISO
    14064 certification enables us to further demonstrate to our
    stakeholders in a transparent and consistent way ST's robust
    approach to measuring and managing its GHG emissions.
    CO2 emissions:  normalized values
    (kTons CO2 / production unit) / EN16 / Dec. 3.0
    Baseline 100 in 1994
    50
    40
    30
    20
    10
    0
    2008 33
    2009 33
    2010 42
    2011 35
    2012 37
    Summary of net CO2 emissions (kTons) / EN16 / EN17 / EN18 / EN29 /
    Dec. 3.1 / Dec. 3.2 / Dec. 3.4 2008 2009 2010 2011 2012
    Direct emissions (scope1) 536 393 551 626 561
    Direct emissions due to PFCs (FE+BE) 493 352 519 595 527
    Direct emissions due to boilers 43 41 32 31 31
    Direct emissions due to direct transportation - - - - 3
    Indirect emissions (purchased electricity) (scope2)
    882 876 907 903 828
    Other indirect emissions (transportation*) 89 104 126 116 107
    Total emissions** 1,507 1,373 1,584 1,645 1,497
    Sequestration due to the implementation of reforestation projects
    176 215 249 277 298
    Total direct net emissions 360 178 302 349 263
    (*) The transportation emissions value is a global estimate
    of employees' transportation and transportation of goods.
    (**)Transportation emissions are integrated in the total
    emissions. More performance indicators are available on
    pages 67 to 70

    42
    THE ENVIRONMENT
    Water Management
    ST is committed to reducing water use and ensuring high
    standards of effluent and waste water treatment, together
    with identifying and managing water-related risks and
    opportunities, including impacts on local communities. ST
    and its stakeholders view water management as a critical
    component of any sustainable growth strategy. Identified as
    a key issue in the first release of ST Environment Health
    and Safety Decalogue, we implemented a water strategy
    covering all operations, and have reduced our water
    footprint by 72% since 1994. Water strategy and programs
    3R approach: Reduce, Recycle, Reuse
    To maximize the use of each drop of water, ST's conservation
    strategy is based on the 3R approach. We include water
    conservation features in the design of our facilities, and
    our manufacturing processes are constantly upgraded to meet
    more stringent water reduction targets. Each site regularly
    monitors its patterns of water usage and we constantly
    develop innovative measures to save water by aligning the
    operating procedures with the best equipment and processes.
    Treatment of water discharge Waste water is treated in
    dedicated treatment plants, either located on-site or
    developed in collaboration with local authorities to remove
    polluting substances such as fluoride, which cannot be
    treated by municipal plants. Once it has obtained a
    sufficient level of purity, and any risk of pollution is
    eliminated, it is discharged into the natural environment.
    Water risk mitigation
    Water scarcity assessment
    ST operates a worldwide network of Front-end and Back-end
    plants. In 2011, to assess and map the water risks related
    to our operations, we conducted a preliminary evaluation
    using the World Business Council for Sustainable Development
    Global Water Tool. In 2012, we complemented this approach
    and conducted a water risk assessment at corporate level for
    all our manufacturing sites in order to further analyze and
    test assumptions for direct and indirect water use in order
    to evaluate ST's overall water footprint. Partnering with
    Quantis, this exercise reviewed the entire value chain, from
    raw material production to product use and end-of-life. The
    assessment, using the Pfister water stress index and the
    Global Water Tool, identified that 42% of ST's sites are
    located in water stressed areas. Based on this study, we
    weighted the sites' water use by the local water stress
    level to prioritize our potential risks, evaluating also
    quantitative impacts related to human health and ecosystem
    quality. ST also mitigates risk through internal Business
    Continuity Plans that involve mapping risks, taking into
    account local factors, and linking them to our measured
    KPIs. Supply chain water management Mapping water-related
    risks in the supply chain is a complex process due to the
    large number and diverse locations of suppliers and
    subcontractors. To overcome these challenges, ST deploys
    several initiatives:
    o ST has been a full member of the Electronics Industry
    Citizenship Coalition (EICC) since 2005 and assesses the
    performance of key suppliers and subcontractors via an
    annual Self-Assessment Questionnaire1 that includes
    questions on water management; o Internal knowledge-sharing
    to reinforce our overall risk assessment process;
    o Regular engagement with stakeholders including industrial
    associations and sustainability initiatives. Collaborating
    with local communities ST has a long-standing reputation for
    engaging with communities in areas where our operations are
    based. Our sites work closely with local stakeholders to
    reduce water extraction and consumption, and to ensure
    sustainable community development.
    1. For more information, see Management of sustainability in
    supply-chain, pages 54-55 Performance against objectives o
    Reduce water draw-down (cubic meters per production unit) by
    5% per year
    o Achieve an overall Company recycling rate of 45% by 2015 o
    Conduct a water risk and opportunity assessment for each
    manufacturing site by 2012

    43
    Recycled and reused total water  / EN10 / Dec. 2.2
    2008 2009 2010 2011 2012
    Total water used (1,000m3) 27,791 25,622 27,736 29,113 28,315
    Water recycled and reused rate (%) 34.53 36.20 37.29 40.53 42.96
    Total water discharge / EN21 2008 2009 2010 2011 2012
    Water discharge (1,000m3) 14,931 12,867 14,000 13,650 12,444
    Treated in ST waste water treatment plant (%) 76 75 73 74 76
    Treated in external waste water treatment plant* (%) 51 43 57 55 54
    (*) Part of this water has already been treated in ST waste
    water treatment plant, meaning that 100% of water discharge
    is treated whether internally, externally or both of them.
    Quote Quantis
    Yves Loerincik
    Chief Executive Officer, Quantis,
       Lausanne (Switzerland)
    "Responsible water management within a business's direct operations
    and supply chain has become a mandatory pillar of any
    sustainability strategy.  Water risks, closely linked to climate
    change, together with reputational and regulatory risks are on the
    increase.  ST, in collaboration with Quantis, performed a water
    risk assessment using lifecycle analysis in 2012, to prioritize the
    actions required to manage and mitigate these risks.  This work
    needs to be updated to reflect the ever-changing landscape of our
    world.  In particular ST should focus on water-related risks within
    its supply chain."
    Consumption of water
    (m3 per production unit):  normalized values
    / EN8 / Dec. 2.2
    Baseline 100 in 1994
    50
    40
    30
    20
    10
    0
     (B) (G)
    2008 48.8 37.3
    2009 46.3 39.0
    2010 44.0 26.7
    2011 41.8 27.3
    2012 39.7 27.8
    Key: (B) BLUE= Target; (G) GREEN=
       Consumption of water
    Recycling 45% of our water at Back-end sites
    Water is a crucial concern for both communities and
    businesses. ST ensures that every site deploys a series of
    measures that contribute to a sustainable management of
    water. In 2012, the company-wide EHS Decalogue objective to
    reach 45% water recycling rate was almost attained, due to
    the strong progresses recorded at Backend sites. ST Kirkop
    (Malta) has exceeded the 45% target and both ST Muar
    (Malaysia) and ST Shenzhen (China) reached this target
    during 2012. ST Muar established a water balance to evaluate
    the water consumption for each area of the site and minimize
    wastage. Existing installations were optimized with daily
    controls on operation and maintenance. ST Shenzhen installed
    additional infrastructure to modify water recycling
    processes, adapting to changes in manufacturing process and
    associated waste water steams. Other ST Back-end sites are
    currently undergoing similar reviews of their water
    management systems with a view to meeting the 45% recycling
    objective. More performance indicators are available on
    pages 67 to 70

    44
    THE ENVIRONMENT
    Energy Management
    ST is committed to reducing its energy consumption and
    carbon footprint from its operations through energy
    efficiency and conservation programs, along with the
    purchase of CO2-free and renewable energies. To mitigate its
    business exposure to climate change, ST carefully monitors
    and anticipates changes in the energy market. Energy
    strategy
    Responsible energy management has been a key pillar of ST's
    environmental strategy since our first Environment, Health &
    Safety Decalogue was launched in 1995. Our multi-faceted
    strategy is supported by a culture of Sustainable
    Excellence, and covers: Energy sourcing
    ST's strategy incorporates both the generation and purchase
    of green energy. Our energy sourcing department monitors and
    anticipates regulation, along with energy needs and prices
    for each of our sites. When purchasing energy, we take into
    account both financial and environmental considerations. In
    2012, for economic reasons ST's wind farm, located in the
    south of France, was taken over by a major energy supplier.
    We are committed to increasing the amount of green energy
    purchased worldwide. In 2012, 7.4% of the energy purchased
    by ST came from renewable sources compared to 4% in 2011. ST
    also encourages sites to install greener energy
    technologies, such as solar panels, which generated 2.1 GWh
    in Catania (Sicily) and 50,000 kWh for both our Grenoble
    (France) and Geneva (Switzerland) sites in 2012. Energy
    consumption
    Production fluctuations greatly impact energy use, and have
    affected our energy performance in 2012. We acknowledge that
    whilst ST continues to reduce its energy consumption, it is
    becoming increasingly difficult for us to make significant
    improvements and achieve our EHS Decalogue targets which we
    set more than 15 years ago. Before any new major facilities
    equipment is purchased it is assessed under the TCOO (Total
    Cost of Ownership) framework which evaluates the total cost
    of the equipment acquisition, maintenance and energy
    consumption over a ten year period. ST Crolles (France) used
    the TCOO process to select a new supplier for
    Uninterruptible Power Supply1 (UPS) equipment (higher
    purchasing cost). We predict this will reduce our energy
    consumption by 48% over a ten year period. Energy efficiency
    and conservation For nearly 20 years, ST has been reducing
    its energy usage and gaining efficiency through regular
    upgrades of its existing equipment and manufacturing
    processes. In 2012, Front-end sites consumed 70.4% of ST's
    total energy consumption. Conservation efforts at these
    sites during the same year reduced electricity consumption
    by 1.4%, equivalent to 20 GWh and US$ 2.6m. Efficiencies
    were achieved for example, by improving the water cooling
    process optimizing chiller performance; and also by finding
    the optimum balance between humidity, temperature and
    laminar flow velocity in our clean rooms. ST sites also
    raise employee awareness through regular energy conservation
    campaigns and by participating in environmental events. For
    example, in 2012 our Singapore offices took part in Earth
    Day. ISO 50001 certification of Front-end sites Beyond the
    ST Decalogue targets, we have set ourselves the challenging
    goal of achieving ISO 500012 certification of all Front-end
    sites to increase energy efficiency, reduce costs and
    improve overall energy performance. We plan to certify six
    Front-end sites by July 2013. Sites in Agrate, Catania (both
    in Italy) and Rousset (France) have been ISO 50001 certified
    since 2011. All sites achieved zero non-conformities. The
    certification process involved developing tools to
    systematically measure the energy consumption of each piece
    of equipment (e.g.: buildings, chiller and compressed dry
    air equipment), and analyze the site's overall energy usage.
    A common platform, which, includes a documentation database,
    reporting tools and processes has been developed and shared
    internally to promote best practice. From an initial US$
    300k investment, ST estimates that the certification process
    will contribute to 14 GWh of energy and US$ 2m in savings.
    1. UPS provides emergency power to electrical equipment when
    the main power source fails. Even in off mode, they still
    consume energy. 2. ISO 50001 requirements include
    establishing, implementing, maintaining and improving energy
    management systems Performance against objectives o Reduce
    energy consumption by 5% (per unit of production/year
    compared to the 1994 baseline)
    o Increase our green energy purchase up to 7% by 2012 o
    Formally include criteria on energy efficiency and use of
    CO2 emission-free and/or renewable energy as part of the
    evaluation/ selection process in all tenders for energy and
    facilities contracts in 2012

    45
    Quote
    Eco21 STG
    Wilfried Atge
    Energy Efficiency project manager, Industrial Services of
    Geneva (SIG), (Switzerland) "In 2012, ST enrolled in
    AMBITION NEGAWATT, an energy efficiency program developed by
    the SIG - the Geneva public utility - which committed the
    Company to the sustainable management of energy at its
    Geneva office. By setting a target to reduce its electricity
    consumption and greenhouse gases emissions by 6% by 2015
    (2011 baseline), ST joined 60 other engaged companies in the
    Geneva Canton who are helping to reduce carbon emissions.
    Since 2011, it is estimated that ST Geneva has saved 12 GWh
    in electricity and 700 tons of CO2 equivalent." Consumption
    of energy (kWh per production unit): normalized values
    /EN4/Dec.2.1
    80
    70
    60
    50
    40
    30
    20
    10
    0
     (B) (G)
    2008 49.7 48.5
    2009 47.2 65.4
    2010 44.0 45.8
    2011 41.8 47.9
    2012 39.7 51.7
    Key: (B) BLUE= Target; (G) GREEN=
       Consumption of energy
    Green offices at ST Munich
    Examples of energy-efficiency technology, practices and
    strong environmental performance can be found across all of
    our sites, not just those manufacturing our products. At the
    end of 2011, 250 of our Munich (Germany) sales and marketing
    employees moved into a new premises, fully equipped with the
    latest environmental features. As well as installing
    geothermal energy technology, cooling via ground water pumps
    and low-water consumption sanitary facilities, the offices
    were also completely refurbished to improve employee
    comfort. The new office has helped ST realize a more than
    50% decrease in energy consumption, and generate cost
    savings of nearly US$ 100k in 2012 alone. The building owner
    is currently undergoing the necessary steps to obtain
    Leadership in Energy and Environmental Design (LEED)
    certification by 2013. Direct and indirect energy
    consumption by primary sources / EN3 / EN4 / 3.3 2008 2009
    2010 2011 2012
    Breakdown of energy consumption (GWh)
    Electricity consumption 2127 1986 2018 2058 2041
    Natural gas consumption 234 214 171 166 153
    Others sources 0.00 0.00 0.00 0.00 3.77
    Total energy consumption 2,361 2,200 2,189 2,224 2,197
    Percentage of energy consumption due to electricity
    90.09 90.27 92.19 92.54 92.87
    Breakdown of energy sources (%)
    Green electricity purchased 2.04 2.63 5.79 8.56 7.38
    Electricity produced by ST's windfarm 0.92 1.03 1.09 1.13 0.00
    Photovoltaic and thermal solar electricity produced by ST
    0.01 0.01 0.01 0.09 0.10
    Electricity purchased from nuclear (CO2 free)
    28.78 22.15 23.72 23.23 22.13
    Electricity purchased from fossil fuel sources
    58.34 64.48 61.57 59.53 63.27
    Natural gas 9.91 9.70 7.81 7.46 6.96
    Other fuels 0.00 0.00 0.00 0.00 0.17
    Total 100 100 100 100 100
    More performance indicators are available on pages 67 to 70

    46
    THE ENVIRONMENT
    Chemicals Management
    ST is committed to reducing and managing its environmental,
    health and safety risks, achieving legislative compliance
    and alignment with customer requirements. We base the
    selection, use and substitution of materials on the
    precautionary principle and our relevant specifications and
    procedures. We also aim for suppliers and subcontractors to
    be compliant with ST's specifications and procedures.
    Legislation on hazardous substance management is becoming
    increasingly stringent. Semiconductor manufacturing
    processes require several hazardous chemicals. ST considers
    this a key issue and has worked successfully to anticipate
    legislation, reduce consumption, find greener alternatives
    and to ensure that employee health and company assets are
    protected. Whilst we have recorded continuous progress over
    the last 15 years, it is becoming increasingly difficult for
    us to find additional ways to continually improve our
    performance and meet our Decalogue targets. Materials of
    concern management process ST has an integrated and
    proactive strategy to manage chemicals throughout its
    manufacturing activities and supply-chain within the ISO
    14001 and OHSAS 18001 certification schemes, ensuring
    compliance with applicable regulation on chemical use and
    product chemical content. We have been working on
    integrating the precautionary principle into the early
    stages of the selection of new chemicals. Before being
    introduced, chemical products are assessed against our
    banned, exempted and declarable substances specification. ST
    requires chemical risk assessments to be performed at all
    sites before introducing any new substance. Chemicals
    (liquid, gases and solids) are screened and evaluated based
    on hazard identification, engineering aspects and personal
    protective equipment in order to reduce the risk to the
    environment and employees' health and safety. ST procedures
    require the site's Chemical Committee to ensure: o Full
    compliance with legal requirements applicable to the
    chemical's use; o Facilities and equipment modification
    according to stringent technical standards; o Availability
    verification of possible alternative materials and/or
    processes; o Performance of medical checks on employees who
    may be exposed; o Collection of industrial hygiene data.
    To further enhance our approach, ST management systems will
    be progressively aligned with the IECQ QC 080000 Hazardous
    Substances Process Management System Requirements (HSPM)
    standard. Substances reduction, replacement and elimination
    ST has been reducing its chemical usage since the late 90's
    by developing corporate and local reduction plans which
    included waste treatment and recycling across all ST sites.
    Since 2000, this focus on chemicals usage reduction has been
    maintained with an overall percentage decrease of more than
    5% per year. To comply with REACH legislation, ST has
    developed a substance substitution strategy and detailed
    roadmap for Frontend and Back-end sites. To date, we have
    replaced 6 regulated substances. Chemicals and our employees
    People safety is our first concern. ST has strict rules
    regarding chemical handling to protect employees' health and
    create a safe manufacturing environment. In 2012, ST
    prepared a training course to heighten the understanding and
    awareness of ST chemicals management and chemical risk
    assessment processes amongst manufacturing, operational and
    product group managers. It will be deployed to approximately
    2,000 employees in 2013. Management of chemicals in ST's
    supply chain ST's banned, exempted and declarable substances
    list includes more than 1,600 substances. ST assesses the
    alignment of key material suppliers and subcontractors with
    this list by requesting a legal statement and evidence to
    support compliance. Management of chemicals is also
    integrated in the Supplier Performance Evaluation (SPE)
    conducted twice a year. Under SPE, we request improvement
    plans if a supplier's score is below the target or does not
    meet ST standards.
    1. For more information on HSPM, see article on Product
    Stewardship - Compliance, page 33 Deployment of ST
    substances specification to key suppliers and subcontrators
    (%) 2008 2009 2010 2011 2012
    Response rate from key partners 100 100 100 100 100
    Full commitment from key partners to ST substances specification
    92.5 93.0 91.0 98.5 99.0

    47
    Quote
    ATMI
    Steve Bishop
    Director, Implant Technologies Materials Solutions, ATMI,
    Suwon (Korea) "In 2012, ATMI worked together with teams at
    ST Crolles (France) to change from Carbon Dioxide to Carbon
    Monoxide gas on the silicon wafer carbon implantation
    process. ATMI designed a Vacuum Actuated Cylinder to deliver
    carbon monoxide without the risk of gas leakage. The new
    process decreased contamination, maintenance frequency and
    employee exposure. This implementation has significantly
    improved carbon implantation productivity (increase of 7% in
    manufacturing capacity plus savings of US$ 50,000 per year)
    and gas safety at Crolles." Consumption of chemicals
    (kg per production unit):  normalized values
    / EN1 / Dec. 2.3 / Baseline 100 in 2000
    80
    70
    60
    50
    40
    30
    20
    10
    0
    (B) (G)
    2008 66.3 55.6
    2009 63.0 56.1
    2010 59.9 54.3
    2011 56.9 55.7
    2012 54.1 63.4
    KEY: (B) BLUE= Target; (G) GREEN=
       Consumption of chemicals
    2009/2010 figures changed from previous publications following
    data review.
    Substance replacement at ST Calamba (The
       Philippines)
    In 2010, Potassium Chromate was classified as a candidate
    Substance of Very High Concern (SVHC) by the European
    Chemical Agency (ECHA) for future inclusion in Annex XIV of
    EU REACH regulation. Anticipating legislation, that will
    restrict the usage of this substance in the next years, ST
    had already phased out this substance across all ST sites by
    2008, with the exception of ST Calamba site that joined ST
    in 2008 and which still used the chemical for an essential
    quality process on copper analysis. Aligning with ST
    standards, the site prepared a detailed substitution plan in
    2010, identifying the possible technical solutions for
    replacement. As the use was very specific, ST Calamba could
    not benefit from other ST site experiences. Close
    cooperation with the supplier was undertaken to substitute
    and completely phase out Potassium Chromate from Calamba's
    manufacturing lines. After extensive testing, to ensure that
    process reliability was not affected, a suitable alternative
    substance has now been approved for this particular process.
    The replacement was finalized in February 2012. Today, no ST
    site uses Potassium Chromate. ST moved beyond compliance
    with REACH in completely phasing out this substance.
    1. Registration Evaluation and Restriction of Chemicals (EC
    1907/2006) Elimination of substances of Very High Concern
    (SVHC) 2012
    Action plans completed on time for the elimination and
    reduction of Substances of Very High Concern (SVHC) 100%
    Performance against objectives
    o Reduce total consumption of chemicals by 5% per year
    (weight per production unit) o Strive towards continuous
    reduction and elimination of Substances of Very High Concern
    in our processes
    o Ensure 100% of key suppliers and subcontractors fully
    commit to ST specifications and procedures (through ST
    Banned and Exempted Substances specification). o Strengthen
    our management of materials of concern in our manufacturing
    processes through Chemical Risk Assessments
    More performance indicators are available on pages 67 to 70

    48
    THE ENVIRONMENT
    Waste Management
    ST is committed to continuously reducing, re-using,
    recycling and managing waste streams from manufacturing
    sites including hazardous substances, metals, packing,
    plastics and other non-biodegradable materials. Waste
    management, including the treatment, transportation and
    elimination of hazardous waste from manufacturing, is a
    strategic environmental focus for every ST site. Waste
    performance
    Since 1995, we have set ambitious targets in ST
    Environmental Health and Safety (EHS) Decalogue to increase
    the re-use and recycling of materials, dispose of waste
    safely and to minimize waste to landfill. In 2012, 91% of
    waste generated was recycled and re-used, while 4.6% was
    sent to landfill. Whilst these figures indicate the
    continuous progress we have made in our waste management
    performance over the last 15 years, it is becoming
    increasingly difficult for us to find additional ways to
    continually improve our performance and meet our Decalogue
    targets. In 2012, our performance has been impacted by the
    difficulty to find a viable recycling partner to revalorize
    a concentrated sulfuric acid waste (due to production
    increases and manufacturing changes) at our Crolles site
    (France). The EHS team appointed a partner, and the site
    managed to reach ST's Decalogue target in December. To
    secure the process, the site is looking for a second
    partner. Waste strategy
    ST's EHS Decalogue requires that all sites meet stringent
    national or local regulations or ST's internal standards,
    whichever is the more stringent. We established an
    integrated process for the environmental management of waste
    covering compliance, monitoring of the quantity of waste
    produced each year, data collection and reporting, and
    strict controls over the whole process. We also evaluate
    waste storage, recycling, treatment and disposal of
    subcontracting and waste transport companies. ST's waste
    strategy covers all waste streams, from operations (metals;
    plastics, chemicals, etc.), surrounding activities (offices,
    canteen, etc.), and products1. In 1999, ST introduced a
    seven-step ladder to ensure the appropriate end-of-life
    treatment for each waste stream, based on its economic value
    and ecological impacts. Most hazardous waste is recycled or
    re-used and the remaining waste is safely disposed of by
    authorized companies. As in previous years, none of our
    sites exported hazardous waste in 2012, in accordance with
    the Basel Convention. ST goes beyond EHS Decalogue targets
    through initiatives to revalorize office and canteen waste
    in partnering with local subcontractors to increase organic
    waste composting and recycling of cardboard, bottles and
    cans. In 2012, ST Grenoble (France) installed a
    biotechnological solution to treat liquid canteen waste, and
    reached an abatement ratio of nearly 100%. A cocktail of
    organic bacteria is added to the waste on a daily basis to
    break down and treat the effluent, saving ST the equivalent
    of 2,000 litres of water, 20 tonnes of CO2 and US$ 15k per
    year.
    1. Product-related waste is detailed in the product
    stewardship pages 32-35 Ladder Concept Synthesis of European
    Union
    Strategy for Waste Management Apendix 3
    END OF LIFE TREATMENT ECONOMIC IMPACT
    Prevention
    avoid waste Saving at source
    Reuse
    use again for original purpose Replacement reduction
    Recycle
    recover for alternative use Material recovery
    Recycle
    organic conversion (aerobic or anaerobic) Possible compost or
    methane
    Combustion
    with recovery of energy Energy recovery
    Incineration
    no recovery of energy Consumes energy
    Landfill Land consumption and contamination
    LEVEL OF PREFERABILITY
    Performance against objectives
    o Reduce the generation of waste by at least 5% per year (kg
    per production unit) o Reduce the generation of hazardous
    waste by at least 5% per year (kg per production unit)
    o Re-use and recycle at least 95% of waste
    o Reduce landfill waste to less than 2%

    49
    Waste is profitable at ST Kirkop (Malta)
    Implementing a comprehensive waste treatment process on the
    Island of Malta is a challenge due to strict European
    regulations, restricted market availabilities and a range of
    waste types. ST Kirkop experts have overcome these
    challenges and developed innovative solutions to manage
    waste streams. Since 2003, 100% of the site waste has been
    recycled or reused. Waste management is even turned into a
    profitable activity, contributing to nearly US$ 4m in 2012.
    To achieve this, they implemented a thorough waste
    segregation and collection process storage in secure depots
    and recording waste data using an online waste management
    database. All waste streams are video monitored and
    performance is automatically inputted in to the database,
    enabling real-time management. Where possible, ST Malta
    recycles glass, paper, resin, plastics, biodegradable waste,
    etc. locally. It then sells other manufacturing and
    treatment waste (scrap metals, frames, sludge, etc) to
    specialized contractors in mainland Europe to ensure waste
    receives the best reclamation treatment possible. ST Malta's
    waste management system is regularly monitored by the
    Maltese Environment and Planning Authority. Recycled waste
    (%) / EN22 / Dec. 6.1 2008 2009 2010 2011 2012
    Waste recycling & reuse 89 87 89 92 91
    WASTE (TONS) / EN22 2008 2009 2010 2011 2012
    Total hazardous waste 12,756 9,391 11,365 10,415 12,624
    Total waste 46,314 33,439 40,775 38,593 37,511
    2008/2011 figures changed from previous publications following
    data review.
    Landfill waste / EN22 / Baseline 71 in
       1994
    5
    4
    3
    2
    1
    0
    (B) (G)
    2008 5.0 3.6
    2009 5.0 3.3
    2010 5.0 2.8
    2011 2.0 2.8
    2012 2.0 4.6
    KEY: (B) BLUE= Target; (G) GREEN= % of total waste Our
    fourth Decalogue launched in 2010 contains a tightened waste
    target
    Quote
    Iron Mountain
    Shane Belvin
    Product management Director, Iron
       Mountain, Boston (USA)
    "US businesses use about 21 million tons of paper every year.  Iron
    Mountain's secure shredding program meets ST's request to address
    its paper-based information destruction challenge in an
    environmentally-friendly manner.  After we securely shred
    information, the processed materials are transported to paper and
    tissue mills for pulping.  This destruction process provides both
    security and environmental benefits by reducing pollution,
    preserving landfill space and saving trees, water and oil
    resources."
    Total environmental benefits generated by the material
    recycling of the ST's thirteen sites located in the America
    region2 in 20123: 01/2012 - 12/2012
    1,335 Pounds (of air) Air Pollution
       Prevented
    378 Trees Trees Saved
    67 Cubic Yards Landfill Reduction
    155,796 Gallons Water Saved
    91,252 KW-hours Electricity Saved
    44,513 Pounds Recycled Paper (office
       grade paper)
    10,238 Gallons Oil Saved
    22 Tons Paper Material Weight
    2. US (Coppell, Santa Clara, La Jolla, Longmont, Scottsdale,
    Burlington, Livonia, Kokomo, Redmond and Piscataway) and
    Canada (Mississauga, Ottawa and Thornhill) 3. Full
    certificate available on www.st.com
    More performance indicators are available on pages 67 to 70

    50
    THE ENVIRONMENT
    Transport & Logistics
    ST is committed to managing the social, safety and
    environmental impacts resulting from transportation and
    logistics for products, materials and employees, considering
    overall efficiency and reduction of CO2 emissions. Product
    transportation and logistics At ST, transport represents
    7.2% of total CO2 emissions and we have a range of
    initiatives and programs to minimize both our direct and
    indirect CO2 emissions, as covered by Scope 3 of the Kyoto
    Protocol. Product transportation includes the transportation
    of semi-finished and finished goods between ST sites and its
    customers, and the transfer of equipment during
    manufacturing processes. We optimize and regularly update
    routes to align with business strategy, economic
    fluctuations and customer demand. Transportation network
    ST's strategy is to explore all opportunities to make direct
    deliveries of finished goods from manufacturing plant to the
    customers, while optimizing internal routings to minimize
    transportation. To reach our 2014 target, ST is implementing
    several options: o Review long haul flight (>2,000km) to
    short haul flight (<2,000km) or truck, as they account for
    almost 90% of ST transport emissions; o Adopt direct
    shipment where manufacturing origin and delivery point are
    in the same region e.g. direct shipment from Back-end plants
    to our Hong Kong distribution hub (3,000km average reduction
    in flight distance); o Review all short haul airfreight for
    opportunities to use alternative modes of transport, either
    switching to road or using the Europe multi-modal network
    model. Short haul airfreight has the highest level of
    transportation CO2 emissions. The flight traffic for ST in
    Asia represents 10% of our total transportation emissions
    and so, in 2012, to reduce flight dependency from Singapore
    to our Shanghai hub, a re-routing plan has been agreed with
    the logistics provider that reduced transport emissions by
    2.4%. Packing optimization ST's lean packing program
    commenced in 2010, aims to optimize package design and
    transportation at all manufacturing sites to decrease
    logistics costs, air-freight space and CO2 emissions. ST
    classifies four packing levels: o 1st level: Product (reel
    or tray); o 2nd level: Inner box (bulk), in which the
    product is packed; o 3rd level: Outer box (carton), in which
    the bulk is packed; o 4th level: Container (skid or pallet),
    in which the outer box is packed.
    Global Logistics & Warehousing Organization (GLWO) teams
    continued optimizing the third level packing, with a
    particular focus on Asian Back-end sites. In 2012, two new
    outer cartons have been designed to fit the 13" tape and
    reel bulks, which accounted for 86% of the total
    non-optimized weight at the third level packing. ST also
    started to align its packing material with the ECOPACK(r)
    levels, to ensure a minimized environmental impact of ST's
    overall product chain1. Employee commuting At local level,
    many of our sites deploy employee mobility programs,
    offering alternative solutions to the use of individual
    cars. Incentives are provided to encourage employees to use
    the greener networks. Many transport initiatives are
    conceived and developed at local level, for example ST Paris
    (France) shares in a transport community with other
    companies to create common transportation plans. 1. For more
    information, see Product Stewardship/ Compliance page 33.

    51
    Quote
    life.augmented
    Prem Sharma
    Transport Services Deputy Manager, ST,
       Greater Noida (India)
    "To commute from home to work, more than 80% of ST Greater Noida's
    1,350 employees use company transport every day which is heavily
    subsidized.  To lower pollution emissions, all ST's coaches run
    with compressed natural gas, covering 46 routes that offer a
    balance of convenience, timing, cost and environmental impact.  As
    certain roads in the outskirts of Indian main cities can be
    uncomfortable, we have also equipped coaches with air suspension to
    improve employees' comfort and wellbeing of women on the
    familyway.  Our goal is for 100% of our employees to commute in
    this way, but changing people's habits takes time.  We must be
    patient and continue our efforts in this area."
    Optimization of road haulage in Shenzhen (China)
    ST Shenzhen (China) exports an average of 1,000 tons of
    finished goods per quarter, filling approximately 180
    freight containers. To meet ST's business and sustainability
    objectives, the local Shenzhen team has optimized its
    practices to ensure that manufacturing operations are
    supported by an efficient transportation and logistics
    network. There were three mains areas of focus:
    o Optimization of the inbound dice shipment traffic with
    road freight frequency being lowered from a daily service to
    a three times per week. This single initiative eliminated
    the need for 208 trucks and 8,320 kilometers of road
    transportation; o Deployment of smaller trucks to increase
    the efficiency and utilization of movements between Shenzhen
    and ST's regional distribution center for local delivery and
    Chinese customers in Hong Kong, decreasing road freight CO2
    emissions by 21 tons;
    o Removal of the return load capacity from Hong Kong to
    Shenzhen, reducing road transportation by 3,400 km. In 2012,
    ST Shenzhen achieved a CO2 road freight footprint decrease
    of nearly 3% while maintaining a high level of service.
    Driven by a continuous improvement mindset, the team is
    exploring further efficiency opportunities. Performance
    against objectives o Reduce the carbon footprint of ST
    product transportation by 15% by 2014
    o Ensure that all sites have a formalized mobility plan to
    promote alternative and greener modes of transportation and
    evaluate the benefits Carbon footprint of ST product
    transportation* 2010 2011 2012 Transport component of ST's
    total C02 emissions (%) 8.1 7.4 6.9
    CO2 emissions due to product transportation per year (ktCO(2))
    110.00 99.42 82.87
    *Values reviewed in 2010 after a revision of methodology to
    estimate the annual carbon sequestration
    Carbon footprint of ST products per mode of transportation
    2012
    Air <2000km 0.11
    Air >2000km 0.89
    Road 0.16
    Ocean 0.00
    Packing density reduction 2010 2011 2012
    Packing volume reduction (compared with a baseline of 100 in 2010)
    100.0 96.7 93.9
    Employee Mobility Plan 2012
    ST sites with an employee mobility plan (%) 56
    Employees covered by a mobility plan (%) 48.09
    Modes of transportation proposed to employees Private and
    public buses, trains, bikes and electrical bikes,
    car-pooling networks, shuttles, taxi service for employees
    working late More performance indicators are available on
    pages 67 to 70

    53
    The Community
    ST Community involvement
    400 initiatives worldwide
    Involvement of 42 sites in 22 countries
    100,972 hours have been donated during company time
    Total contribution US$ 8,5 million

    54
    THE COMMUNITY
    Management of Sustainability in the
       Supply Chain
    ST suppliers and subcontractors are required to commit to ST
    and EICC policies and standards, comply with legislation and
    meet customer requirements. This includes managing health,
    safety and the environment, along with social and ethical
    aspects. These partnerships contribute to raising the
    overall levels of corporate responsibility across the
    electronic industry's supply chains. International pressure
    on suppliers The United Nations Guiding Principles on Human
    Rights and ISO 26000 are driving companies to extend their
    corporate responsibility programs to cover their whole
    supply chain. In 2012, the international context, as well as
    laws such as the Dodd-Frank Act, also caused the
    intensification of requirements by customers onto ST as a
    supplier. Similarly, this triggered ST to increase controls
    on its own suppliers and to drive and support them on their
    improvement path for greater compliance, rigor and
    transparency, thus spreading our commitment to
    environmental, health, safety, social and ethical standards.
    Our approach to Conflict-Free Minerals and Chemical
    Management within the supply chain is described in dedicated
    sections of this Report. Supply chain sustainability
    management program While we have continued to deploy
    sustainability management programs to our supply chain
    partners, we have globally reinforced our process. We have
    implemented new policies and specifications and increased
    their scope, for example by requesting suppliers to provide
    KPIs and more visibility on their own sustainability
    programs. Migrating to the EICC-ON platform has also enabled
    us to track our suppliers' environmental, health safety and
    social performance more easily. Supplier Performance
    Evaluation the backbone of our management process has been
    rolled out to all our key suppliers. It aims to identify and
    resolve supplier issues through close monitoring and regular
    supplier interactions. It consists of a global evaluation
    which incorporates EICC-ON results and a follow-up plan: We
    provide extensive feedback and work with our suppliers to
    define and implement effective improvement plans; All the
    sections at risk and the critical questions are studied,
    then a follow up plan is put in place to look for solutions,
    leveraging on various tools including a Pareto; Progress
    against the follow-up plan is monitored and any weakness
    found with one supplier will trigger a review of all other
    similar suppliers. We also extended the EICC-ON Self-
    Assessment Questionnaire to include some key equipment
    suppliers and we Performance against objectives
    o Ensure 80% of suppliers (by purchasing volume) are
    involved in the EICC compliance program (annually) o Ensure
    none of these suppliers are classified "high risk" based on
    Self-Assessment Questionnaires (SAQs)
    o Continuously reduce the number of non-conformances arising
    from SAQs and audits o Ensure 100% of ST major sites deploy
    the EICC approach to local suppliers
    o Progressively deploy our Sustainable Procurement program
    to all our sites o In 2012, deploy the Green Procurement
    guidelines in Italy
    o In 2012, deploy the "Charter for Sustainable Purchasing"
    to French suppliers o Promote fair access to business
    opportunities for Small and Medium-sized Enterprises (SMEs)
    by encouraging purchasing departments at French sites to
    include SMEs in tenders
    o By the end of 2012, define and deploy internal tools to
    track ST part of business with these actors

    55
    engage with all of our suppliers to encourage them to adopt ESH
    management systems and to report on safety, water, energy, waste
    and climate change performance.
    Our improvement path
    In 2012, while we continued our improvement path, focused on
    expanding the volume of business, the areas covered and the
    number of suppliers involved in our sustainability
    management program, lower priority was given to 3
    activities: green purchases, water management and
    sustainability audits. Supplier Self Assessment
    Questionnaires results in 2012 highlighted a need for
    improvements to be made to our purchasing program, which we
    plan to achieve by reworking our guidelines and extending
    our requirements. Our strategy for supplier audits is to
    involve low performing suppliers, prioritized using the
    following internal criteria: purchase volume; plant
    location; type of activity; SAQ results. Concentrating on
    our Back-end subcontractors, we have been able to verify the
    performance of our subcontractors for 53% of our purchasing
    volume through third party audits. Audits are a load we
    cannot easily absorb, so we engage our suppliers on the path
    of certifications such as the ISO14001, the OSHAS 18001,
    etc. Total number of suppliers and subcontractors' SAQ's by
    level of risk Low Risk Medium Risk High Risk Average Score
    Back-end Materials Suppliers 79 18 0 88.90
    Front-end Materials Suppliers 61 22 0 83.30
    Subcontractors Back-end 36 6 0 89.40
    Equipments 8 5 0 87.90
    Subcontractors Front-end 8 0 0 89.00
    Total 192 51 0
     79% 21% 0% 88.90%
    Suppliers SAQ's average scores by EICC Code of Conduct
    section Facilities SAQ's scoring by main sections* (%) 2012
    Health & Safety section 90.2
    Environment section 86.8
    Labor & Ethics section 87.9
    (*) Electrical energy consumption, Waste, Water use,
    GreenHouse Gases emissions, Safety Recordable Rate &
    Severity Rate, employee attrition, employee satisfaction -
    Engagement based on priorities and business case EHS &
    social KPI's deployed for suppliers* 2012 Number of FE
    Materials suppliers engaged in reporting 18
    Number of BE Materials suppliers engaged in reporting 45
    Number of Key BE Subcontractors plants engaged in reporting
    24
    Quote
    life.augumented
    Otto Kosgalwies
    Executive Vice President - Company Infrastructure and
    Services ST Geneva (Switzerland) "Sustainability has become
    a new challenge to supply chain competitiveness.
    Relationship with Customers and Suppliers as well as focus
    on new business opportunities are the foundation of
    sustainability activities. In this respect, the recent
    creation of a structured Business Continuity Plan at Company
    level will reinforce sustainability and strengthen our
    supply chain." Sharing our data on a new platform The
    evolution of the Labour Rights model with the release of the
    EICC Code of Conduct Version 4 was an important development
    deployed throughout our supply chain in Q3 2012. Deploying
    the revision required extra bandwidth and efforts, but we
    consider that integrating updated requirements and practices
    to all our supply chain is absolutely necessary, and it has
    been a satisfaction for us to successfully manage this
    evolution. We managed the migration of our supplier database
    to the new EICC-ON platform, with subsequent good
    participation rate from our suppliers on the new tool. We
    sent the new code and engagement letters to our suppliers in
    August, triggered the return of more than 240 SAQs
    representing an important percentage of the business by
    market, and more than 150 facilities. This corresponds to
    more than 90% of our Front-end / Back-end materials and of
    90% of our BE subcontractors, well above our target, with
    the extra achievement of involving more than 90% of our
    foundries. Feedback was sent to suppliers through specific
    reports for each plant and remediation plans were requested
    for any identified issues. Focus was placed on higher risks,
    suppliers being supported to provide efficient mitigation
    plans. At the end of 2012, 79% of SAQs were rated low risk,
    21% medium risk. The average scoring across the three main
    SAQ areas (Labor & Ethics, Environment and Health & Safety)
    was 88.90%, exceeding the low risk target of 85%. More
    performance indicators are available on pages 67 to 70

    56
    THE COMMUNITY
    Business Ethics & Compliance
    At ST, we are committed to conducting our business with the
    highest standards of ethics and integrity, as outlined in
    our company Code of Conduct.
    Business Ethics and Compliance Standards
    Our company Code of Conduct sets out the Company's
    principles in the area of business conduct and ethics around
    Integrity, People and Excellence. These principles are the
    top-level reference for guiding our behavior and
    decision-making and apply to all people working in ST
    without exception. Business ethics, the respect of human
    rights, environmental responsibility and a sense of
    responsibility to all our stakeholders are a matter of
    personal integrity for each of us, and compliance is
    mandatory.
    Some extracts from ST's Code of Conduct:
    Integrity: we will conduct our business with the highest
    ethical standards, honor our commitments, deliver on our
    promises, be loyal and fair and stand up for what is right.
    People: we will behave with openness, trust and simplicity;
    we will be ready to share our knowledge, encourage
    everyone's contribution, develop our people through
    empowerment, teamwork and training; each one of us will be
    committed and personally involved in continuous improvement.
    Excellence: we will strive for quality and customer
    satisfaction, creating value for all our partners; we will
    be flexible, encourage innovation, develop our competences,
    seek responsibility and be accountable for our actions; we
    will act with discipline, base our decisions on facts and
    focus on priorities. All managers also sign our Business
    Conduct and Ethics Policy annually to confirm on going
    awareness and compliance. At STMicroelectronics, we are
    dedicated to conducting business with integrity, treating
    our employees with respect, and pursuing excellence to
    create sustainable economic value for all our stakeholders.
    We believe that how we carry out our business is as
    important as what we do. Therefore, raising the awareness of
    all our employees through training on subjects linked to our
    company's Code of Conduct is critical to us. Business Ethics
    and Compliance Training In 2012, we focused on developing
    and delivering three main training programs focusing on: o
    Foreign Corrupt Practices Act: in this course, participants
    were faced with situations involving possible instances of
    bribery or corruption; they learned to identify, recognize
    and deal with them. This training was created for senior ST
    managers. o Conflicts of Interest: in this course,
    participants learned how to identify and manage potential
    situation of conflicts of interest. This training was
    developed for senior ST managers. o Company Code of Conduct:
    dedicated training on the compliance to Company's Code of
    Conduct and its application was created and deployed to
    emphasize that in our daily activities it is vital to
    safeguard the Company against legal and ethical risks. This
    training targeted various profiles and levels of ST
    employees. The above training modules were delivered through
    e-learning. In total, more than 7,200 people achieved a
    score of 70% or greater, exceeding our management target of
    7,000. Corporate Ethics Committee and Misconduct Reporting
    Framework ST's Corporate Ethics Committee (CEC) The CEC was
    formed in 2007 and comprises ST Executives, nominated by the
    CEO.
    In 2012, we re-defined our CEC's mission statement,
    authority and scope which were included in a revised version
    of the Committee's Charter, formally approved by the CEO.
    Under this revised Charter, the CEC provides guidance and
    recommendations to ST management and employees to help them
    comply with ethics-related policies, procedures and
    principles applicable throughout the Company. The CEC's
    roles and responsibilities include:
    o Review and update of ST's policy on Business Conduct and
    Ethics o Assessment of the implementation of ethics and
    compliance programs o Follow-up on ethical breaches and
    allegations o Issuing guidance on ethical dilemmas In its
    capacity described above, the CEC has responsibility for all
    ST business units along with majority-owned subsidiaries,
    branches and affiliates. The CEC has the authority to
    address questions, inquiries and documentation requests to
    any ST employee or executive under its jurisdiction.
    Confidentiality concerns cannot be used to deny the CEC
    access to information, except in situations involving a CEC
    member or a member of the executive management.

    57
    Non-compliance / Ethical breaches reporting / SO4 / HR4
    Number of incidents under review as of
       2011 year end 5
    Incidents closed in 2012 by a formal investigation report 4
    Incidents closed in 2012 after preliminary assessment 1
    Number of incidents reported or identified in 2012 5
    Incidents closed in 2012 by a formal investigation report 3
    Incidents closed in 2012 after preliminary assessment 1
    incidents still open as of 2012 year end 1 In case a
    situation would involve a member of the Corporate Staff, it
    would be communicated to the Chair of the CEC who ensures
    that they are properly handled and monitored by the CEO and/
    or the Audit Committee of the Supervisory Board. Due to its
    composition and authority, the CEC fulfills a crucial role
    in providing an independent evaluation of sensitive
    situations and in advising ST's top management accordingly.
    ST Country and Regional Ethics Committees have been formed
    during recent years. Their roles are overseen by the CEC.
    ST's Misconduct Reporting Framework
    ST's Misconduct Reporting Framework is defined in our Code
    of Conduct and disseminated throughout the Company. "Every
    employee plays his or her part in how well we adhere to our
    Principles. If you think that our Principles are being
    violated, or if you have a problem applying them, please
    discuss with your Manager, your site Human Resources
    Manager, or your Site Manager." In this context, we engender
    a management culture that enables employees to discuss
    concerns relating to adherence to our Principles in an open
    manner without fear of recrimination. In addition, ST
    employees have two whistle-blowing reporting channels at
    their disposal:
    o The Company Ombudsman's hotline, managed by a third party
    (KPMG) allows all ST employees worldwide to submit their
    allegations and complaints regarding accounting, internal
    control and auditing matters. The contact details necessary
    to communicate with the Ombudsman (toll free phone numbers,
    emails and postal addresses) are available in ST's Business
    Conduct and Ethics Policy. o An internal hotline which ST
    employees are encouraged to use if they require more support
    to have their issue properly addressed, or if they have a
    suggestion about our Principles. All emails sent to the
    hotline are received directly by both the Chairman of the
    Corporate Ethics Committee and by the Corporate Vice
    President Human Resources. They are treated in confidence.
    ST's response framework to misconduct allegations was
    significantly revised in 2012 and will continue to be
    improved over the coming years. Misconduct allegations are
    now centralized by the Chief Audit & Risk Executive.
    Information is provided at least quarterly to the Audit
    Committee of the Supervisory Board, the Corporate Ethics
    Committee and the Certifying Officers, which enables its
    recipients to follow up on the progress and conclusion of
    investigations conducted by the relevant functions depending
    on the nature of the allegation. All ethical breaches
    reported through the Misconduct Reporting Framework, or
    identified through the internal control and monitoring
    frameworks (including but not limited to reviews by our
    Corporate Internal Audit Organization), are duly assessed.
    The relevance, criticality and potential impact of each
    alleged or suspected breach are thoroughly examined to
    determine the appropriate level of remedial actions. Fraud
    prevention
    Fraud and corruption prevention are also priorities for ST,
    assessed through a risk assessment conducted in 2012 by
    Corporate Compliance, in conjunction with Corporate Internal
    Audit. Performance against objectives
    o Train 7,000 ST employees to increase awareness on key
    bribery and corruption topics (e.g. FCPA, Insider Trading,
    Code of Conduct, Conflicts of Interest) and reinforce
    internal controls. o Communicate updated whistle-blowing
    channels to 1,000 employees in EMEA region in 2012 and
    employees from remaining regions in 2013
    e-signature of Business conduct and ethics policy* (%)
    2008 2009 2010 2011 2012
    92.00 94.50 93.90 90.30 93.40
    (*) eligible population = approximately 20% of total ST population
    More performance indicators are available on pages 67 to 70

    58
    THE COMMUNITY
    Local Sustainability
    Impacts
    In today's world, engagement between companies and their
    local communities is multifaceted, taking into account many
    diverse views and interests. Effective engagement has the
    potential to benefit many stakeholders, including local
    communities, government and other areas of civil society.
    Within ST, community involvement forms a central pillar of
    our culture with many site-based initiatives and activities
    providing social and environmental support.
    Community Involvement
    In 2012, our company level focus was to identify the
    initiatives being undertaken across the Company and the ST
    sites that are involved; and also to evaluate our inputs to
    such initiatives. In order to do so, we have decided to
    become a member of the London Benchmarking Group and adopt
    its methodology. We organized two classroom training
    sessions for our Sustainable Excellence community, one in
    Paris for our coordinators in Europe and the US, and one in
    Singapore for our Asian contributors. We also organized an
    additional training session by conference call to employees.
    This was a key step as the methodology was new to us and we
    needed to ensure a good understanding and appropriation of
    the concept. All ST sites contributed to list their
    community initiatives, we conducted the same exercise at
    corporate level and then validated a final list of eligible
    initiatives according to the LBG methodology before
    undertaking evaluation. This considered cash contributions,
    the volunteering time spent by employees, in-kind donations
    and the management costs associated with the various
    community projects. Some key figures from this evaluation
    are shown below:
    o Total contribution US$ 8.5 million
    o 400 initiatives worldwide
    o Involvement of 42 sites in 22 countries
    o Community investment represents 0,1% of 2012 turnover
    o 4,515 ST employees volunteered their time
    o 100,972 hours have been donated during company time o
    Average contribution per employee is equal to US$ 191
    We will continue the consolidation of community initiatives
    each year. In 2013 we will start to evaluate the outputs and
    impacts generated by these projects. ST Foundation
    Since 2003, the ST Foundation has helped to reduce the
    digital divide (the gap between those who have access to
    modern digital technologies, and those who do not) in both
    developed and developing countries through a worldwide
    computer literacy program, Digital Unify. As of the year to
    date, more than 176,443 persons have benefited from the
    program with the support of 3,112 trainers. In 2012, ST did
    not contribute financially to the Foundation but contributed
    in other ways, by donating computers and associated hardware
    that were used to equip laboratories set up under the
    Digital Unify program. A network of ST volunteers at our
    sites also provided training in prison and with the
    collaboration of local associations for people in need.
    Quote
    LBG
    Jon Lloyd
    Head of LBG
    "LBG is used worldwide, by companies that are serious about their
    corporate community investment, helping them assess the real value
    and impact of corporate community investment to both business and
    society.  STMicroelectronics is to be commended on joining LBG to
    better understand its overall contribution, establish where it is
    making a difference and assess its impact.  Since joining in
    October 2012, STMicroelectronics has taken significant steps to
    apply the inputs side of the LBG model and so measure and report
    its contribution; the next challenge is to begin to assess what
    this contribution achieves for both the community and the business."

    59
    ST's involvement
    Working with our sites, we have identified the main
    community involvement themes and topics, representing the
    five main areas where we seek to make a difference. Young
    generation and education is the main area of involvement we
    identified across all ST sites. Support in this area may
    take many forms: internships/apprenticeships, student visits
    to ST sites, student sponsorship, supplementary teaching
    programs, computer summer schools, partnerships etc.
    Innovation and high technology are key areas of involvement
    and include aspects such as design contests, robotics' cups,
    awards, training development, R&D clusters etc. Social
    welfare and charity donations are organized at our sites and
    include: charitable event sponsorship, match funding of
    employee donations, support for natural disasters etc.
    Environmental involvement includes: events to raise energy
    awareness, recycling and other environmental aspects, fund
    raising for reforestation or tree-planting days,
    participation in environmental conferences, sharing of good
    practices across communities etc. Economic development
    includes: management networks and committees, coaching of
    Small and Medium Enterprises, support to start-ups etc. Why
    does ST contribute?
    Commercial Initiative 8%
    Charitable gift 5%
    Community Investment 87%
    At which level does ST contribute?
    National 19%
    International 1%
    Local 80%
    What does ST support?
    Innovation and high technology 8%
    Economic development 3%
    Other 1%
    Social welfare and charity 6%
    Environment 3%
    Young generation and education 79%
    How does ST contribute?
    In-kind 4%
    Management costs 8%
    Cash 31%
    Time 57%
    Performance against objectives
    o Support ST Foundation's initiatives
    o Formalize a company community engagement strategy and
    evaluate its impacts More performance indicators are
    available on pages 67 to 70

    60
    THE COMMUNITY
    Partnerships in R&D & Education
    We are continually looking for opportunities to strengthen
    our existing relationships and develop new partnerships in
    R&D and education. While we collaborate with our customers
    and competitors to advance application and product
    development, for advanced research, the cluster organization
    (refer to our 2011 report for details) with poles in France,
    Italy and Asia continues to work closely with R&D and
    educational organizations, reinforcing links, expanding
    scope and number of ST partnerships. In doing so, we also
    increase young people's employability by providing them with
    access to PhDs, apprenticeships and internship experience.
    The success of our R&D clusters
    France
    In 2012 our efforts to engage with young people and offer
    educational or career opportunities, benefited 459 interns,
    303 apprentices, 74 theses (PhD) and 25-30 VIE (Volontariat
    International en Entreprises) recruits. We also partnered
    with 105 laboratories. For example, we are involved in a
    long standing partnership with CMP, a service organization
    working in ICs and MEMS, which are used for prototyping and
    low volume production. Through CMP, we provide Universities,
    Research Laboratories or industrial companies with access to
    silicon fabrication, at preferential prices, in quantities
    compatible with research and teaching needs. Occasionally we
    also offer free fabrication. In 2012, 266 circuits were made
    for 83 stakeholders from 23 countries. ST introduced the 28
    nm FD SOI, and now offers packages in 6 different
    technologies. 42 new Institutions received ST design kits.
    In 2012, CMP organised the European Workshop on
    Microelectronics Education and celebrated its 30 year
    anniversary. ST delivered several presentations. Our
    involvement with CMP is also visible in Announcements and
    Press articles throughout the year (http://cmp.imag.fr).
    Italy The Italian cluster is active around three poles
    Milano, Naples and Catania. Contribution to R&D programs
    helps ST create value for its customers and remain among the
    industry's most innovative companies. It also improves ST's
    ability to attract the younger generation through its
    successful involvement with local R&D and academic
    organizations. The various programs conducted enable ST to
    receive funding or grants from European institutions,
    governments or local authorities and to anchor the positive
    impact we have at national, regional and local levels. Our
    key 2012 figures include: o ~ 98 cooperative R&D funded
    projects, carried-out at national and international level,
    where ST coordinated 31 R&D funded projects and partnered on
    67. o 40 research contracts with external laboratories
    (Universities and Research Centres) o 53 partnerships with
    universities o 173 student internships at ST sites o ~ 20
    future PhD students working part time for their theses at ST
    sites In the Naples area, the "NeaPolis Innovation"
    initiative brings ST together with 5 universities and the
    regional industry association, to build new models of
    collaboration which balance theoretical knowledge with
    experience to create more efficiency and value. This
    cooperation offers reciprocal advantages to students and
    companies. Resources available to participants include labs,
    a campus and seminars as well as research contracts,
    internships, theses and training delivered by university
    professors and tutors. Investment in, and partnerships with,
    local universities and other institutions help value
    creation at local level, on the territory of our sites,
    which is a clear sustainability model. Asia China, Taiwan
    and Singapore: ST continued to demonstrate its leadership in
    sensor technology, sharing its newest fusion sensor with
    more than 700 students and young engineers from over 60
    universities across these countries Quote Professor Antonio
    Strollo Dept. of Electrical Engineering and Information
    Technology, University of Napoli. Universities Coordinator
    in NeaPolis Innovation "NeaPolis Innovation has proved to be
    a very effective and functional collaboration mechanism. It
    has contributed to multiply the opportunities for
    interaction and collaboration between universities and ST.
    Several "seed contracts" have been signed and some of them
    have resulted in the launch of a more challenging research
    project, called "Laboratorio di Microelettronica della
    Campania". Students appreciated the opportunity to carry out
    theses and internships on topics of great interest, enabling
    them to experience what it is like to be part of a team in a
    global company. Possible improvements include strengthening
    of cooperation with SMEs, which represent an important part
    of the productive ecosystem of Campania."

    61
    Partnerships with the academic community / S01 / EC1
    700
    600
    500
    400
    300
    200
    100
    437
    470
    374
    659
    478
    2008
    2009
    2010
    2011
    2012
    Partnerships with universities, colleges, schools: teaching
    programs, internship programs and recruitment* (*) In 2010,
    our data for partnerships with the academic community was
    split between partnerships for R&D purposes (research labs,
    long term research contracts, any R&D programs ... ) and
    those dedicated to teaching or internship programs and
    recruitment. Students were given the opportunity to design
    innovative applications using ST's latest iNEMO evaluation
    board and work with the same advanced technology that is
    powering the latest smart devices. We also further
    strengthened our network of university partnerships,
    creating our latest Joint Laboratory for Innovation in
    Electronics with the Harbin Institute of Technology, one of
    China's most renowned universities. This Joint Laboratory's
    initial focus will be on smart-sensor applications. The
    collaboration is expected to expand to power management,
    medical and multimedia areas. In India, ST also shared its
    expertise and reinforced its partnerships with the academic
    community. To help drive engineering curriculum development
    at universities and bring them up to speed with industry
    standards and practices, ST conducted free training programs
    on the STM32 microcontroller family for faculty members from
    partner universities or engineering institutes. In parallel,
    interns are managed through the RISE (Real-Time Interning
    with ST Expert) program, which includes engagement surveys
    during the internship and on its conclusion. In 2012, ST
    hired 19 of the 219 interns. In association with the IEEE
    Solid State Circuits Society, Delhi Chapter, ST also held
    workshops at our Greater Noida campus. Eminent professors
    and industry veterans presented lectures on topics of
    contemporary interest, providing a unique platform for the
    semiconductor fraternity in the national capital region of
    India to participate in extensive technical discourse. the
    community Focus on local initiatives
    Italy
    Our program, "One day in ST, one day at school", launched in
    2010 to increase students' interest in science, reached
    maturity in 2012. It aims to educate students on the vast
    array of scientific jobs available. There are two elements
    to the program: "One day in ST" takes groups of students
    aged 17 to 19 to one of ST's sites and fully immerses them,
    taking them on tours of the labs and manufacturing areas, as
    well as giving them technical presentations. "One day at
    school" involves ST employees visiting schools to talk about
    the company and its activities in a very interactive way,
    usually to very enthusiastic groups of 60-70 students aged
    11 to 19. Twenty dedicated ST employees give their time to
    the project. In 2012, 8 schools visited the Agrate site and
    ST employees addressed over 500 middle school students.
    Several ST sites have put in place similar initiatives. They
    provide students with an insight into the realities of work
    and enlarge their inspiration for future careers.
    Europe
    The 'Innovation Cup' is a contest created by ST to leverage
    students' ideas and creativity. The 2012 edition proposed to
    create an innovative electronic product (excluding mobile
    phone applications) using ST technology that could be used
    in one of the 31 indoor or outdoor sports selected. ST
    technologies available to use included a wide range of
    sensors, cameras, geolocalization, RFID, wireless
    transmissions and Ultra low Power devices. In 2011 ST
    invited selected Universities in France, Switzerland and
    Italy to enter. ST then provided support to the teams to
    help them develop their ideas. In 2012 two finalists were
    selected and ST worked with them to prepare their projects
    for submission to a sponsor. The top 10 ideas were
    financially rewarded, with further contributions awarded to
    the finalists. The winners received full support from ST
    until prototype realization, as well as international ST
    internships on our French or Italian partner sites, or
    grants for the sport students. In 2012, 4 students who
    participated in the Innovation Cup, including the 2 winners,
    were hired by ST. The program has been re-launched in 2013
    to 9 universities. (www.st-innovationcup.com)
    China
    ST signed a new partnership with ECPK, 'Ecole Centrale de
    Pekin'. Students are offered opportunities to participate in
    a large range of activities, from research in labs to
    industrial applications and marketing. Two teams of students
    in their 5th year have already chosen projects proposed by
    ST and will be able to explore various whether scientific,
    technological, economical or human as if in real situation,
    and will learn to manage their complexity. ST is offering
    financial support to the school over a three year period.
    This partnership could be extended to the whole group of
    Ecoles Centrales. Performance against objectives
    o For the short/mid term: Ensure ongoing growth of ST's
    technical and specialist populations recognized through the
    technical ladder (individual paths) o For the mid- to
    long-term: raise young populations' employability by
    providing access to PhD, apprenticeships and internship
    experience
    More performance indicators are available on pages 67 to 70

    62
    THE COMMUNITY
    Public Affairs & Industry Networking
    ST proactively engages at a global, national and local level
    with a range of stakeholders such as trade associations,
    industry groups and standard-setting bodies. This engagement
    contributes to ST's enhanced competitiveness. One of ST's
    key objectives is to promote the electronic industry's
    potential in all countries where ST operates. Whilst our
    overall company strategy remains the same across all of our
    locations our approach is tailored to take into account
    country specifics such as local culture and existing
    infrastructure. R&D has become increasingly critical for
    companies to ensure they remain competitive in the
    semiconductor sector. Our R&D efforts require substantial
    resources and are also dependent on alliances in order to
    develop new processes, technologies and products. As we
    supply a broad range of products, we are required to make
    significant investments in R&D across our product portfolio.
    Many of the products that we market have short life cycles,
    with some being one year or less. We believe that we can
    only maintain proprietary R&D for derivative technology
    investments and share R&D business models if we are
    supported with adequate state funding. In Europe, the
    microelectronics industry must constantly adapt and innovate
    to remain competitive. It rests with companies to find
    innovative ways to enhance their competitiveness and ensure
    their long-term sustainability. We focus our R&D efforts in
    France and Italy where we can maximize existing and new
    funding opportunities at European, national, and local
    level. We develop research and investment country strategies
    in collaboration with divisional and site management. Our
    main objectives are to:
    o develop the competitiveness of R&D and advanced activities
    o strengthen ST's position as a key player in R&D at
    European and worldwide level
    o obtain direct contributions to R&D programs to help ST
    create value for its customers and remain among the
    industry's most innovative companies o reinforce ST's
    ability to attract and involve the younger generation in
    local R&D and academic activities
    According to Cosimo Musca, Italy R&D and Public Programs
    Director, R&D and Public Affairs, we undertake significant
    R&D activity in Italy at both National and European level.
    In 2012, in Italy, ST coordinated 31 R&D funded projects and
    partnered on another 67. In Asia, Francois Guibert,
    Executive VP, President, Greater China & South Asia Region,
    believes that the best way ST can contribute to the
    communities where it operates and strengthen stakeholder
    relationships, is to provide leadership across all our areas
    of expertise. For this reason, ST has forged partnerships
    and provided expert knowledge to healthcare, power, sensor,
    multimedia and embedded technologies initiatives. Through
    its Singapore-based subsidiary, Veredus Laboratories, ST has
    leveraged its Lab-on-Chip technology as a strategic weapon
    in the global fight against tuberculosis. Working with the
    Chinese Center for Disease Control and Prevention in
    Beijing, its new VereMTB platform was used in clinical
    trials to accurately and quickly identify multi-drug
    resistant strains of tuberculosis for correct treatment. In
    Asia, China and India have high incidences of tuberculosis
    and multidrug resistant TB (tubercle bacillus) is a growing
    threat. ST sites also contribute to and lead some local
    initiatives which help develop local partnerships within the
    semiconductor or electronics industries, maximize employee
    potential and create more accessible resources and services.
    One such example involves Melba Cuyahon, General Manager of
    ST's Calamba site in the Philippines a board member of the
    SEIPI (Semiconductor and Electronics Industries of the
    Philippines, Inc). One of its projects pursued in
    partnership with DOST (Department of Science and Technology)
    is ADMATEL (Advanced Device and Materials Testing
    Laboratory). The project benefits the local community as
    well as ST by: o reinforcing and upgrading local industry
    failure analysis (FA) and materials testing facilities; o
    providing shorter turn-around times especially for companies
    who cannot afford to construct their own FA and
    characterization laboratories; o providing less expensive
    analysis (as this can be done locally instead of overseas);
    o attracting more potential investors seeking a competitive
    business environment.

    63
    Focus on two concrete contributions...
    Energy@home
    Energy@home is a not for profit organization founded in July
    2012 by Electrolux, Enel, Indesit Company and Telecom
    Italia, following a three year collaboration. ST Italy
    joined the association in 2012 which now has more than 15
    members. This association's mission is to develop and
    promote technologies and services delivering energy
    efficiency in smart homes, based on the interaction between
    user devices and energy infrastructure. One of Energy@home's
    key achievements was the release of a set of technical
    specifications and an interoperable fully-integrated system
    comprising smart broadband gateway, smart meter, smart
    plugs, smart domestic appliances and a user interface
    application. In 2012, Energy@home started a field trial,
    involving the installation of its integrated system in 50
    homes ST provided the HAN (Home Arena Network) wireless
    interface for the smart meter. The trial is still ongoing.
    ST is also involved in the steering committee, as well as in
    the technical working groups (Standardization, Internet
    Protocol) where we use our expertise and wide ranging
    product portfolio including RF-RadioFrequency /PLCPower Line
    Communication connectivity, microcontrollers and power
    management technology to help develop the Energy@ home
    roadmap and future programs. See more on:
    http://www.energy-home.it/SitePages/Home.aspx Performance
    against objectives o Strengthen our network of public and
    industrial affairs activities worldwide, create and observe
    good sustainability practices as well as efficiently manage
    sustainability-related risks and opportunities ST's
    Environment, Health and Safety contribution to the SITELESC
    in France Our EHS departments in Rousset, Tours and Crolles
    in France are involved in the Health & Safety and
    Environmental commissions of SITELESC, the micro and nano
    electronics French professional union representing research
    laboratories, component software design centers equipment
    fitters and suppliers as well as semiconductor
    manufacturers. The commissions facilitate sharing of
    knowledge and best practice and provide a platform through
    which companies can give legislative feedback and lobby
    French and European public authorities. Some of the
    commissions' 2012 achievements, to which ST actively
    participated, include: o Penibility: setting up an exposure
    traceability datasheet to comply with law 2010-1330 (9th
    November 2010) on French pension reform which requires to
    define appropriate methods to measure exposure level and
    organize databases. o Running a conference on Psychosocial
    Risks organized in conjunction with the Social Affairs
    commission. Quote Eniac ______ Andreas Wild ENIAC joint
    undertaking Executive Director "The European nanoelectronics
    industry faces fierce global competition and must step up
    its efforts to raise to the challenge. The European response
    is centered on breakthrough innovations, like Fully Depleted
    SOI or advanced MEMS technologies from STMicroelectronics,
    supported, among others, by public-private partnerships such
    as the ENIAC Joint Undertaking. STMicroelectronics, a
    European and global leader, brings an extraordinary
    contribution to our program, participating in 26 of the 50
    projects, providing almost 20% of the total eligible costs,
    engaging the whole ecosystem of SMEs, research organizations
    and academic labs. This is a strong basis to secure the
    future European competitiveness, growth and jobs." o
    Nanoparticles:
    o Benchmarking all nanoparticle importers who have completed
    the new public declaration of substances in a nanoparticle
    state. o Evaluating quantities of nanoparticles and data
    available in order to quantify emissions from material
    consumed and to highlight treatment systems currently in
    place.
    o PFC emissions: We provided evidence to protect the
    semiconductor industry from perfluorocarbon production and
    importation shortage quotas in Europe, which was based on
    the findings from a voluntary project we had undertaken to
    reduce PFC emissions far below the objective of ESIA
    (European Semiconductor Industry Association) Memorandum of
    Agreement in 2000. o REACH and Chemical Labelling and
    Packaging (CLP) regulation implementation: The two
    commissions worked closely on evaluating the impact of REACH
    on the semiconductor industry's activities and on
    authorization and restriction procedures.
    o A specific group was created to analyze the impact of the
    inclusion of AsGa III-V (Arsenide of gallium) material in
    the SVHC (Substances of Very High Concern) list and report
    findings to the French Labor Ministry and Ecology and
    Sustainable Development Ministry. More performance
    indicators are available on pages 67 to 70

    64
    Company
    Awards
    Each year our sites receive external recognition for their
    sustainability practices. Here is an overview for 2012.
    Our People
    April
    Italy
    ST Italy sites were awarded the National Prize on Health and
    Safety in the workplace from INAIL & CONFINDUSTRIA, an
    organization under the patronage of the President of the
    Italian Republic, in recognition of good methodologies
    implemented.
    Our Products
    July
    Automotive Product Group, Germany We received the Supplier
    Quality Excellence Award from General Motors, for ST APG's
    Asics products (used in safety applications such as airbags)
    which were delivered free from defects to GM Worldwide in a
    one year period between July 2011 and July 2012. The award
    is granted only to suppliers who reach this one year
    milestone.
    October
    United Kingdom
    ST was awarded the 2012 NMI Low Power "Green" team award by
    NMI. The award recognizes continued commitment to
    sustainability and "green" design. Teams from Bristol (UK),
    Grenoble (France) and Greater Noida (India) were honored.
    October
    Malta
    ST Malta received first prize in the Health and Safety Best
    Practices Award organized by the National Occupational
    Health and Safety Authority and the European Agency for
    Safety and Health at Work. The award was presented by the
    Minister for Health, the Elderly and Community Care, Hon Dr
    J. Cassar and by Ms. Bogiarka Bola, Network Manager for the
    European Agency.
    December
    Crolles (France)
    Considered as the most prestigious R&D award in electronics
    in France, the General Ferrie award honors an engineer or
    team whose work brought significant contribution to the
    progress of electronics and its applications. In 2012 this
    award was granted to a team of ST (Stephane Monfray and
    Frederic Boeuf) and CEALeti researchers, for its work on
    Fully Depleted Silicon-On-Insulator technology, a major
    technological breakthrough in the pursuit of miniaturization
    of electronic circuits. Geneva (HQ)
    We received a 2012 Top 100 Global Innovator award from
    Reuters, honoring corporations and institutions around the
    world that are at the heart of innovation. Selection is
    based on overall patent volume, patent grant success rate,
    global reach of the portfolio and patent influence as
    demonstrated by citations.
    Rousset (France)
    The site received the Disability Policy award from
    IMS-Entreprendre pour la Cite, a French organization
    promoting Corporate Social Responsibility, and more
    specifically diversity in companies. A signatory of the
    French Diversity Charter since 2006, the site was recognized
    for its practices in recruitment and integration of disabled
    people and for the innovative training program FAM
    (Formation d'Adaptation aux Metiers). The program, launched
    in 2008, is dedicated to equipping people with disabilities
    with essential competences required for the electronics
    industry.
    Muar (Malaysia)
    ST Muar received the Implementation of Fire Prevention
    Program certification awarded by the Fire Prevention Centre
    Malaysia (NGO) in recognition of its commitment to promoting
    fire safety awareness amongst over 900 ST employees and
    contractors.
    The Environment
    March
    Shenzhen (China)
    ST Shenzhen received the 2010-2011 Energy Conservation Award
    granted by Shenzhen Futian District Government.
    June & December
    Calamba (The Philippines)
    In June, Makiling Center for Mountain Ecosystems Recognition
    for Mt Makiling Tree Planting & Nurturing Project, was
    awarded to the site by the MCME Director Dr. Nathaniel C.
    Bantayan & UP Chancellor Dr. Rex Victor Cruz, University of
    the Philippines-Los Banos.

    65
    Edinburgh (UK)
    NMI, a trade association of the UK Electronic Systems,
    Microelectronics and Semiconductor Communities, granted the
    NMI Young Engineer of the Year Award to Kevin Moore, a
    Senior Analogue Designer at our Edinburgh site.
    November
    Ang Mo Kio (Singapore)
    Ang Mo Kio BHQ received a Gold Health Award at the Singapore
    Health Awards 2012. This biennial national award is
    presented by the Health Promotion Board (HPB), to recognize
    organizations with commendable Workplace Health Promotion
    programs.
    In December, during the Don Emilio Abello Energy Efficiency
    Awards: o The 2012 Outstanding award was conferred to ST
    Calamba by the National Steering Committee for our
    contribution to the energy efficiency and conservation goals
    of the country, and substantial effort to mitigate climate
    change. o The Outstanding Energy Manager award was granted
    to Ronnie G. Mandigma, whose involvement and engagement were
    instrumental in helping to achieve energy savings at our
    Calamba site. o At the same event, we were given the Hall of
    Fame award, granted to companies which have received three
    Outstanding awards. December Calamba (The Philippines)
    During the 8th GKK - Gawad Kaligtasan at Kalusugan awards we
    received:
    o The 2012 DOLE Secretary's Award of Distinction for ST
    sites Calamba/Manila, for demonstrating global commitment to
    sustainability, through the deployment of Occupational
    Safety and Health Programs, comprising risks assessments,
    training, audits and overall quality management. o The 2012
    DOLE Award of Honor, was awarded to Ms. Elizabeth Beronio,
    ST Calamba Environment, Safety and Security Manager, by Hon.
    Rosalinda Dimapilis-Baldoz, Secretary of Labor and
    Employment of the Philippines. Her long standing experience
    and expertise in implementing site environmental, safety and
    health management systems, with the support of the EHS
    Committee, site management and employees, has resulted in
    numerous certifications and awards for the site.
    Muar (Malaysia)
    ST Muar's Civil Defense Emergency Response Team was trained
    and accredited by Civil Defense Department Malaysia and was
    praised for their commitment and skill in handling emergency
    situations. The team of 35 undertook a number of training
    sessions with Civil Defense dedicated to fire-fighting and
    rescue skills.
    The Community
    February
    Singapore
    ST Asia Pacific Pte Ltd and ST Pte Ltd were certified
    TradeFIRST (Trade Facilitation & Integrated Risk-based
    SysTem) "Premium" band by Singapore Customs, the highest
    level of certification in an integrated assessment
    framework, supporting the Customs' trade facilitation and
    compliance efforts. The certifications affirm ST's firm
    commitment to trade compliance and export control.
    May
    Agrate (Italy)
    EHS Award was granted by Confindustria Monza and Brianza to
    ST Agrate for its commitment and performance in the EHS
    field, particularly in relation to the good policies we
    developed and implemented that have had a positive impact on
    the local industrial area.
    November
    Singapore
    National SSWG - Safety and Security Watch Group - Award was
    given out by the Singapore Police Force and Singapore Civil
    Defence Force in recognition of the business community's
    efforts to the site to adopt robust measures and be prepared
    for the threat of crime and terrorism.

    66
    company
    New 2013 Objectives
    On a yearly basis, we review with the owners of each
    Sustainability priority the objectives to be reached within
    the year or a few years. Some 2012 objectives have been
    achieved, some will be discontinued because they are not
    meaningful to ST anymore and some have been revised. Please
    find below the new objectives set for 2013 and beyond.
    Our People
    Recruitment, Learning & Development
    Labor & Human Rights
    Our Products
    Innovation Management
    Product Stewardship
    The Environment
    Energy Management
    The Community
    Management of Sustainability in the
       Supply Chain
    Business Ethics & Compliance
    Local Sustainability Impacts
    Learning: Ensure that more than 60% of employees follow at
    least 8-hrs training yearly Development: Ensure that more
    than 95% of ST exempts have their potential assessed every 2
    years through 'People Review' process Ensure that ST
    manufacturing sites and corporate departments continuously
    improve the global scoring of ST's EICC SAQs Ensure that our
    audited sites have 0 Major Non-Conformance on the Labour and
    Health & Safety section Ensure all our sites deploy
    communication and training programs on the EICC Code of
    Conduct for all their managers and employees Increase
    efficiency of product development: Reduce average age of
    development projects to 15 months Increase efficiency of
    product development: Increase proportion of projects less
    than 1 year old to 33% Ecopack(r)3 (no RoHS exemption and
    Halogen free): 25% of new packages implemented in
    Ecopack(r)2 by the end of 2015 Ensure 100% of new ST
    products are eco-designed by 2015 STAR-rated Responsible
    Products impact on New Products (24 Months window) Silicon
    line > = 30% Integrate line item for
    Environmentally/Socially responsible characteristics in
    product Brochures/Flyers across 12 products By 2015, ensure
    that 100% of call for tenders from US$ 200k include criteria
    on energy efficiency and use of CO2 emission-free and/or
    renewable energy regarding facilities and site services As
    an active member of "Charte des Relations Fournisseurs
    Responsables" (Charter for Responsible suppliers
    relationships), participate in the steering committee Ensure
    fair treatment of ST suppliers: 100% of our payment terms to
    be in line with Law on the Modernization of the Economy
    (LME) Ensure Business ethics: 100% of Global Procurement and
    Outsourcing buyers to sign the Business Ethics letter To
    ensure continuous improvement, implement a supplier survey
    and define an action plan Improve the integration process
    between allegation reporting and investigation management
    Strengthen the Ethics Committee network by formalizing the
    links and reporting lines between the Corporate Ethics
    Committee and regional ethics committees and by
    communicating towards ST employees on this updated framework
    In 2013, update ST anti-corruption and bribery policy, as
    well as our insider trading policy Ensure evaluation of ST
    community involvement initiatives with a 85% confidence rate
    Launch a process to identify ST community involvement
    outputs and impacts

    67
    Additional indicators & GRI statement
    Company
    Enterprise Risk Management Governance
    Quarterly or annual ERM process assurance reviews (requests
    for information/corrective actions) Request to investigate
    specific risk management topics
    Independent Audits reviews
    Top priorities / risk mitigation objectives
    ERM implementation objectives
    Supervisory Board
    Audit Committee
    Corporate Strategic Committee
    + Chief Audit & Risk Executive + ad hoc
       members
    Annual top-down / corporate-level risk map Quarterly
    follow-up on mitigation action plans Ad-hoc analyses &
    meetings as required Bottom-up risk maps / mitigation action
    plans
    Marketing & Sales
    Embedded processing solutions, PTM, PQE
    Sense & Power & Automotive
    Corporate Functions
    Annual ERM review
    Quarterly updates (priority risks / mitigation action plans)
    Specific analyses addressing Audit
       Committee requests
    Corporate ERM function support
    Annual consolidation
    Quarterly reporting (priority risks & action plans)
    Alerts
    Our People
    Indicator 2008 2009 2010 2011 2012
    Headcount evolution by region / LA1
    Americas 3,210 1,802 1,701 1,176 1,158
    Asia Pacific 21,409 20,847 22,565 19,965 19,860
    Europe 21,271 18,338 19,022 18,724 19,346
    Mediterranean 5,848 4,533 4,677 4,348 4,349
    Total 51,738 45,520 47,965 44,213 44,713
    Hires by job type / LA1
    Exempt 5,224 538 3,573 2,563 2,721
    Operators 5,502 5,984 8,193 5,154 6,833
    Non Exempt 1,163 639 1,884 1,728 1,716
    Total 11,889 7,161 13,650 9,445 11,270
    Worforce by employment type / LA1
    (% of employees by employment contract)
    Full time contract 98.04 97.88 97.85 97.74 97.43
    Part time contract 1.95 2.12 2.15 2.26 2.57
    Workforce by employment contract / LA1
    (% of employees by employment contract)
    Regular contract 97.77 97.41 96.56 97.48 98.21
    Temporary contract 2.23 2.59 3.44 2.52 1.79
    External hires in manufacturing (%)
    Percentage of jobs filled externally versus overall jobs filled
    92 96 90 95
    Newcomers induction program (%)
    Newcomers who participated in a formal induction session
    during their first year of employment* 92.72 72.35 97.23
    97.29 97.75
    *e.g. Newcomers Seminar
    EPA - Performance assessment (yearly) / LA12
    Employees (%) N/A 78,4 78 89 93
    Exempts (%) N/A N/A 89 96 98
    Non exempts (%) - - - - 90
    Indicator 2008 2009 2010 2011 2012
    Employees survey - Engagement rate
    Participation rate (%) 80 N/A 86 86 87
    Rational Commitment 0,16 N/A 0,20 0,20 0,18
    Emotional Commitment 0,35 N/A 0,40 0,39 0,38
    Discretionary Effort 0,43 N/A 0,44 0,45 0,45
    Intent to Stay 0,34 N/A 0,32 0,30 0,25
    Career length and voluntary turnover rate / LA2
    % of voluntary turnover of new hires (below 2 yrs)
    44.87 45.54 52.67 52.08
    % of voluntary turnover of employees from 2 to < 5 yrs
    13.12 18.07 27.83 24.02
    % of voluntary turnover of employees from 5 to < 10 yrs
    3.40 5.31 7.82 8.03
    % of voluntary turnover of employees from 10 to < 20 yrs
    1.86 2.02 1.79 1.72
    % of voluntary turnover of employees from above 20 yrs
    1.21 1.06 0.72 0.68
    Average turnover rate / LA2 (%)
    Average turnover rate 10.12 11.65 15.16 18.49 15.61
    Average employee age (years)
    Average employee age 34 34 33 36 36
    Number of nationalities in corporate staff / LA13
    Different nationalities represented in the corporate staff 9 7 7 7 6
    Number of nationalities in the headcount by region*
    Europe 68 74 78
    Americas 29 26 25
    Mediterranean 18 16 17
    Asia Pacific 36 36 36
    *Expatriates and assignees are counted in host country.

    68
    Indicator 2008 2009 2010 2011 2012
    Gender breakdown by region (%)
    Europe Male 73 74 74 75 75
    Female 27 26 26 25 25
    Americas Male 76 79 79 79 78
    Female 24 21 21 21 22
    Mediterranean Male 42 43 42 43 44
    Female 58 56 58 57 56
    Asia Pacific Male 53 53 55 57 58
    Female 47 47 45 43 42
    Employees working part-time by gender (%)
    Men 15,23 15,04 15,75 18,36
    Women 84,77 84,96 84,25 81,64
    Unplanned absenteeism (%)
    Unplanned absenteeism 3.00 2.47 2.67 2.77 2.82
    Formal recognition
    Overall recognition budget of all sites (USk$)
    2,161 1,644 3,305 3,101 2,782
    Number of people recognized* 38,805 38,373 36,697 48,606 33,823
    % of accepted suggestions which were implemented
    61.00 53.00 54.75 65.20 59.56
    *Can include more than one recognition for one employee over the
    year.
    Remuneration (%)
    Employees above the ST minimum salary scale in their job grade
    87.00 82.44 87.19 84.62
    Employees below the ST minimum salary
    scale in their job grade 12.00 16.62 12.79 13.90
    Employees covered by annual individual salary increase
    0.00 95.24 96.93 98.49
    Benefits, bonus & USA
    Unvested Stock Awards (USA) % of elligible (exempt > JG 12)
    employees receiving unvested stock awards 33 23 24 21 22
    Unvested Stock Awards (USA) Number of employees rewarded
    5,700 3,670 3,790 3,390 3,570
    USA - % of referential population by category - - 24 21 22
    Average training hours / LA10
    Exempts 27 26 32 31 29
    Operators 72 94 91 78 70
    Others (non-exempt) 43 41 43 38 36
    Total* 43 51 49 50 46
    *Includes training on equipment and outside training.
    Internal mobility (%)
    Internal job request posting rate (exempt)* 90.2 17.9 40.5 36.8 34.9
    Exempt open positions filled in by internal candidates - - -
    23.0 25.9
    *Number of job requests for exempt positions (JG11-18) posted
    internally divided by total number of job requests for exempt
    positions
    Collective bargaining / LA4
    Number of collective agreements signed in the year 59 38 33 45
    Number of people covered by representatives 21,363 24,021 - 31,962
    % of people covered by representatives - 50.08 - 72.34
    Working time and overtime hours
    Employees with regular worktime less than 48 hours per weeks (%)
    100 100 100 100 96.3
    Average weekly overtime (hours per employee)
    2.22 1.97 3.14 3.10 3.61
    Communication meetings / LA5
    People attending Communication meetings 28,343 36,474
    Career development (%)
    Employees with a promotion in the year 8.50 15.00 15.87 16.37
    Employees with a job function change in the year
    27.37 32.95 25.02 15.47
    Indicator 2008 2009 2010 2011 2012
    Average weekly working time in selected countries in 2010 (hours)
    China ST standard working time 40.00 40.00 40.00 40.00
    Overtime 3.59 5.00 5.03 11.37
    France ST standard working time 38.50 38.50 35.00 35.00
    Overtime 0.23 0.31 0.26 0.20
    Italy ST standard working time 40.00 40.00 40.00 40.00
    Overtime 0.82 1.15 0.95 0.72
    Malaysia ST standard working time 48.00 48.00 48.00 48.00
    Overtime 5.11 10.32 9.39 8.50
    Malta ST standard working time 40.00 40.00 40.00 40.00
    Overtime 2.78 6.00 4.50 5.00
    Morocco ST standard working time 44.00 44.00 44.00 44.00
    Overtime 1.15 2.62 1.46 1.10
    North America ST standard working time 40.00 40.00 40.00 40.00
    Overtime 1.62 1.51 0.60 0.85
    Singapore ST standard working time 44.00 44.00 44.00 44.00
    Overtime 4.02 5.88 1.53 3.84
    The Philippines ST standard working time - - - 48.00
    Overtime - - - 6.00
    Fair wages
    Percentage of employees paid up to 105% of the legal or
    conventional minimum wage* 21.44 13.36 16.65 12.20 11.95
    *Employees paid above 105% are not part
       of this scope.
    Recordable Cases rate - breakdown:  industrial/domestic / LA7
    Recordable Cases Industrial rate 0.23 0.23 0.17 0.18 0.17
    Recordable Cases Domestic rate 0.17 0.12 0.12 0.11 0.10
    Recordable Cases rate by region
    Asia Pacific 0.2 0.2 0.2 0.2 0.14
    Europe & Mediterranean 0.6 0.6 0.5 0.5 0.43
    Americas 0.4 0.2 0.1 0.0 0.0
    Severity rate by region
    Asia Pacific 2.2 1.3 0.8 0.5 0.8
    Europe & Mediterranean 9.0 7.6 4.9 6.5 7.8
    Americas 0.1 0.6 0.0 0.0 0.0
    Breakdown of Recordable cases by type of event, accident or
    exposure / LA7
    Fall or slip 31
    Struck by or against 26
    Overexertion 7
    Others 3
    Caught in, under or between 10
    Contact with chemicals 13
    Bodily reaction from slip or motion 10
    Recordable cases rate benchmarks*
    US Manufacturing (Source BLS**) 5.00 4.30 4.40 4.40 -
    All US semiconductor (Source BLS**) 1.30
       1.00 1,20 1.10 -
    SIA*** OHS 0.71 0.80 0.98 Not available -
    ST 0.39 0.35 0.29 0.29 0.27
    *Latest data available.
    **Bureau of Labor Statistics.
    ***Semiconductor Industry Association.
    Average turnover rate by gender, category and region in 2012
    / LA2 (%)
    Exempts Others Operators
    Female Male Female Male Female Male
    Europe 1.35 1.46 0.79 0.72 0.64 0.67
    Americas 0.99 3.72 1.97 0.00 0.00 0.00
    Mediterranean 6.50 6.50 1.39 4.09 2.99 4.67
    Asia Pacific 11.32 10,79 11.50 31.21 37.69 67.21

    69
    Promotion ratio female/male by category and region / LA13 (%)
    2009 2010 2011 2012
    Female Male Female Male Female Male Female Male
    Americas Exempt 6 4 15 12 20 15 25 21
    Non Exempt 1 2 10 10 6 13 8 7
    Operators N/A* N/A* 10 19 0 0 0 0
    Asia-Pacific Exempt 10 9 22 26 21 21 34 36
    Non Exempt 39 13 7 5 10 16 8 6
    Operators 12 5 6 6 14 15 8 11
    Europe Exempt 6 6 19 19 20 18 29 26
    Non Exempt 4 5 20 17 19 16 5 5
    Operators 1 0 23 16 25 16 2 2
    Japan Exempt 6 7 12 16 30 27 12 33
    Non Exempt N/A* N/A* N/A* N/A* N/A* N/A* N/A* N/A*
    Operators N/A* N/A* N/A* N/A* N/A* N/A* N/A* N/A*
    Mediterranean Exempt 12 17 34 24 10 11 26 34
    Non Exempt 17 16 19 12 6 4 18 10
    Operators 0 2 7 8 0 0 9 2
    *The company has no manufacturing sites in these regions
    Indicator 2008 2009 2010 2011 2012
    Schooling programs* / LA11
    Exempts 2.76 4.39 5.26 1.74
    Operators 2.75 1.02 7.96 2.31
    Others (non-exempts) 4.69 6.01 7.58 0.95
    *% of employees following ST supported external schooling programs
    vs total number of employees.
    Our Products
    Indicator 2008 2009 2010 2011 2012
    Sustainability Customer Requirements
    Number of EHS* and Social & Ethics customer requirements received**
    277 252 267 376 422
    *EHS : Environment, Health and Safety.
    **This data includes all Sustainability requirements from our
    customers, received at corporate level for support and validation.
    Many more are dealt with directly at local and regional level.
    Quality1 / PR5 (baseline 100 in 2004) Q4' 04 Q4' 09 Q4' 10 Q4' 11
    Q4' 12
    Customer complaints 100 61.5 55 70.6 67*
    Cycle time to process failures analysis 100 65.4 71.1 59.8 65.6**
    Customer returns 100 30.8 20 58.9 21.7***
    1Quality indicators include ST-Ericsson from Q3 2008.
    *Q4 low shipments strongly impacted our customer complaints by
    volume, even if the number of complaints received was stable.
    **In 2011, our failures analysis cycle time significantly improved
    as a result of an efficient task force on cycle time reduction.
    ***The customer returns results have been mainly impacted by
    negotiated returns from distributors.
    WEEE / EN27
    As a supplier of components to the electronics industry (and
    not manufacturers of electronic equipment), we are not
    directly affected by the European Directive 2002/96/ EC
    Waste of Electrical and Electronic Equipment (WEEE). The
    environment
    Indicator 2008 2009 2010 2011 2012
    Environmental burden:  net values / EN16 / EN17 / EN19 / EN20 /
    EN26 / Dec. 4.1 / Dec. 4.3 / Dec. 4.4
    Emissions to air
    Global warming* (MTCE) 404,319 358,167 413,974 429,187 408,202
    Ozone depletion (Kg R11 Eq) 62 8 7 0 0
    VOCs (Tons) 244 170 178 192 147
    Atmospheric acidification (Kg SO2 Eq)
    63,142 55,370 36,581 41,525 34,456
    Photochemical oxidant creation (Kg ethylene Eq)
    48,969 35,044 25,292 38,125 27,165
    Air emission toxicity** (Kg PH3 Eq) 4,720 4,101 4,484 3,075 4,337
    Indicator 2008 2009 2010 2011 2012
    Emissions to water***
    Eutrophication (Kg P+N) 414,730 305,502 396,271 378,339 330,993
    Aquatic oxygen demand (COD****)
    834,032 626,835 709,202 667,146 529,623
    Heavy metals to water (Kg heavy metals)
    10,354 8,934 9,579 9,796 6,458
    Aquatic ecotoxicity (Kg Cu Eq) 7,598 6,698 5,774 4,032 4,109
    *Includes direct greenhouse gas (GHG) emissions from our
    manufacturing plants and indirect emissions from energy consumption
    and transport, reported in Metrics Tons of Carbon Equivalence
    (MTCE).  Does not include GHG emissions from controlled
    manufacturing sites, subcontractors and foundries.
    **Emissions of substances are considered only if they exceed the
    minimum threshold of 3ppm, expressed in phosphine equivalent.  For
    Volatile Organic Compounds, Atmospheric Acidification,
    Photochemical Oxidant Creation and Air Emission Toxicity the
    Particulate Matter is not covered.
    ***Domestic waste water is included.
    ****Total Chemical Oxygen Demand (COD).
    Environmental costs versus savings / EN30 (US$m)
    Total costs 41 48 53 52 47
    Energy savings 192 87 219 203 169
    Water savings 25 15 25 24 22
    Chemical savings 86 58 87 69 62
    Total saving 303 160 331 296 253
    Balance (cost savings) 262 112 278 244 206
    The method used to calculate the savings shown in this table
    is the following:
    1) we set a baseline using the 1994 model with the
    assumption that there are no installation enhancements,
    except for chemicals for which the baseline is 2000; 2) this
    baseline is projected each year (in relation to the
    quantities produced);
    3) each year, the actual value is compared to this
    projection; 4) the result shows the theoretical benefits due
    to the installation improvements concerning the savings for
    energy, water and the use of chemicals. Total costs cover
    expenditure of environmental management areas (including
    waste and remediation) and yearly net investment and
    equipment depreciation.
    Environmental investments
    % of total company investments 0,48 0,40 0,06 0,50 0,85
    Consumption:  absolute values / EN1 / EN3 / EN4 / EN8 / Dec. 2.1 /
    Dec. 2.2 / Dec. 2.3
    Electricity (GWh) 2,127 1,986 2,018 2,058 2,041
    Water (1,000m3) 18,194 16,346 17,393 17,314 16,151
    Chemicals (tons) 17,883 12,451 17,138 17,076 17,792
    Natural gas (GWh) 234 214 171 166 153
    Waste split / EN22 (Tons)
    Total Waste 46,314 33,439 40,775 38,593 37,511
    Reuse & recycled 41,143 29,164 36,113 35,387 34,032
    Incinerated 3,487 3,170 3,522 2,134 1,758
    Landfill 1,684 1,105 1,140 1,072 1,721
    Water Risk Assessment by location* / EN8
       / EN9 (%)
    Water withdrawal per site** Water stress assessment per
    site***
    Ang Mo Kio (Singapore) 100 100
    Crolles (France) 76 2
    Catania (Italy) 74 74
    Rousset (France) 42 32
    Agrate (Italy) 36 2
    Tours (France) 19 19
    Muar (Malaysia) 100 3
    Shenzhen (China) 74 6
    Calamba (the Philippines) 72 100
    Longgang (China) 51 4
    Bouskoura (Morocco) 48 79
    Kirkop (Malta) 7 12
    *ST water risk assessment has been conducted in 2012 with Quantis.
    The calculation is done for Front-end and Back-end sites, as there
    are important differences in the water consumption.
    **Water withdrawal:  anthopogenic removal of water from any water
    body, either permanently or temporarily.
    ***Water stress assessment:  consumed water multiplied by the Water
    Stress Index related to water availability.
    Initiatives and changes resulting in a reduction in GHG /
    EN18 / Dec. 3.3 (Saved kTons CO2) Related to PFC direct
    emissions reduction per IPPC guidelines 50 - 155 0 21
    Saving electricity 295 - 195 0 0
    Used green electricity 17 - 41 61 13
    Produced electricity by windfarm 8 - 8 7 0
    Total GHG gas emissions reduction 370 - 398 68 34

    70
    EHS Fines / EN28
    Fine of RMB130k (USD20.6k) for Nov 1st fatal incident.
    EHS Incidents / EN23
    ST Ang Mo Kio (Singapore): On 8th February 2012, an acid
    scrubber's pH fell from 7 to 3.6 for a duration of about 4
    hours. Fine amount: S$5,000. All actions necessary to avoid
    recurrence have been put in place. ST Calamba (the
    Philippines): The site was recognized to be at the origin of
    a fine received by the industrial park waste water treatment
    plant (WWTP). In fact, ST Calamba overpassed the contractual
    limit of copper defined between ST and the WWTP. Fine
    amount: US$3,642.28 Indicator 2008 2009 2010 2011 2012
    Consumption of electricity
    (kWh/production unit):  normalized values / EN4 / Dec. 2.1
    Target 48,8 46,3* 44 41,8 39,7
    Consumption of electricity 49,7 71* 48 50,4 54,6
    *2009:  The figures show the global consumption per unit of
    production for the whole year affected by a decrease of production
    due to the economic crisis.
    Consumption of natural gas (GWh/production unit):  normalized
    values / Dec. 2.1 (Baseline 100 in 1994)
    Consumption of natural gas 39,9 51,6 29,4 29,7 29,8
    Energy saved*:  absolute values / EN5 / Dec. 2.1 (GWh)
    Energy saved 130 0 129 0 0
    *Includes electricity and natural gas
    The Community
    Indicator 2012
    Technical ladder (%)
    WW Asia Pacific Europe*
    ST population recognized through the technical ladder 0,8 0,3 1,7
    *The specified path starts from job grade 14 and above which is the
    reference population.
    This internal program started in Europe and its deployment
    is currently on going. Indicator 2008 2009 2010 2011 2012*
    *Suppliers and subcontractors change from one year to another.  The
    list is updated regularly which changes the reference perimeter.
    Suppliers' and subcontractors' environmental and health & safety
    performance / 8.3
    Number of suppliers / subcontractors
    Suppliers of materials 107 108 104 102 94
    Suppliers of equipment 40 40 40 40 40
    Suppliers of spare-parts NA NA 35 38 39
    Total 147 148 179 180 173
    Subcontractors Back-end 59 65 62 59 51
    Subcontractors Front-end 11 10 19 22 19
    ISO 14001 certified / EMAS validated (%)
    Suppliers of materials 83 81 81 81 76
    Suppliers of equipment 85 82,5 83 80 83
    Suppliers of spare-parts NA NA 54 47 59
    Total 84.1 81.5 76.2 73.8 81.9
    Subcontractors Back-end 97 97 97 98 98
    Subcontractors Front-end 100 100 100 95 100
    OHSAS validated (%)
    Suppliers of materials 37 41 44 49 48
    Suppliers of equipment 6 10 8 21 18
    Suppliers of spare-parts N/A N/A 20 15 18
    Total 28.6 32.6 31.3 36.2 34
    Subcontractors Back-end 92 91 87 62 67
    Subcontractors Front-end 82 80 84 77 77
    Suppliers' compliance with EICC - Target number
    Suppliers of materials 108 108 104 102 102
    Suppliers of equipment/ facilities/IT 104 104 104 87 87
    Suppliers of spare-parts NA NA 35 35 35
    Subcontractors Back-end 40 39 32 32 32
    Subcontractors Front-end 11 10 19 22 22
    Indicator 2008 2009 2010 2011 2012*
    Phase 1 - Introduction: Agreement to
       comply with EICC (%)
    Suppliers of materials 81 82 89 95 82
    Suppliers of equipment/ facilities/IT 34 41 50 99 93
    Suppliers of spare-parts NA NA 71 94 87
    Subcontractors Back-end 97 98 98 97 100
    Subcontractors Front-end 86 90 95 95 ***
    Phase 2 - Assessment:
    EICC Self-assessment questionnaire completed**
    Suppliers of materials 18 42 76 97 183
    Suppliers of equipment/ facilities/IT 0 0 0 0 13
    Suppliers of spare-parts N/A N/A N/A N/A N/A
    Subcontractors Back-end 11 17 20 23 42
    Subcontractors Front-end 0 1 3 4 8
    Indicator 2012*
    ST Foundation's contribution to the Community according to the LBG*
    methodology
    Total value of contribution (US$m) 765,935
    Type of involvement 100% Community investment
    Means of involvement (%)
    Cash contribution 66
    Staff time volunteering 17
    Management cost contribution 17
    *London Benchmarking Group
    Global Reporting Initiative
    Statement
    GRI Application Level Check

    71
    COMPANY
    Indicators
    Index
    The following table shows the correlation between the
    STMicroelectronics Sustainability Report and the ten
    Principles of the Global Compact, the Global Reporting
    Initiative (GRI) elements and the ISO 26000 standard. GRI
    Indicators Global Compact Principles ISO 26000 core subjects
    and issues Readers' Guide 2.1; 2.3; 2.4; 2.9; 3.1-3.8; 3.10;
    3.11; 3.13; 4.9; 4.14-4.16
    Company 1.1; 1.2; 2.3; 2.4; 2.5; 2.6; 2.7; 2.8; 2.10; 3.5; 3.6;
    3.13; 4.1-4.3; 4.7; 4.8; 4.9; 4.11; 4.12; 4.14-4.17 EC1 6.2
    Our People 6.3; 6.4
    Recruitment, Learning & Development LA2; LA10; LA11; LA12 GC6 6.4.7
    Employee Engagement 4.16; 4.17 6.2.3
    Employee Safety LA7; LA8 6.3.7
    Labor & Human Rights 4.8; 4.12 EC8; HR5; HR6; HR7; SO5 GC1; GC3;
    GC4; GC5 6.3.10; 6.4.5
    Global Diversity & Equal Opportunities
       LA13 GC1; GC6 6.3.7
    Employee Health & Well-being LA8 GC1
       6.4.4; 6.4.6
    Our Products 6.7
    Customer Satisfaction 4.16; 4.17; PR5
       6.7.3; 6.7.6
    Innovation Management 6.6.7
    Product Stewardship EN2; EN5; EN6; EN26; EN27; PR1; PR3 GC1; GC7;
    GC8; GC9 6.5.3; 6.7.4; 6.7.5
    Conflict-free Minerals 4.17 HR2; HR7; PR3 GC1; GC2 6.3.5; 6.6.4
    The Environment 4.8; 4.13; EN1; EN2;
       EN18; EN26 6.5
    GHG Emissions from Operations EC2; EN16; EN17; EN18; SO1 GC7; GC8;
    GC9 6.5.3; 6.5.5
    Water Management EC2; EN8, EN10, EN21; EN25; SO1 GC7; GC8; GC9 6.5.4
    Energy Management EC2; EC6; EN3; EN4; EN5; EN7 GC7; GC8; GC9 6.5.4
    Chemicals Management EN1; PR3 GC7; GC8;
       GC9 6.5.3
    Waste Management EN2; EN22; EN24 GC7;
       GC8; GC9 6.5.3
    Transports & Logistics EC2; EN4; EN5; EN7; EN16; EN17; EN29 GC7;
    GC8; GC9 6.5.3; 6.5.5
    The Community 4.16; 4.17 6.6; 6.8
    Management of Sustainability in the Supply Chain 4.8; 4.9; 4.12
    EC6; HR1; HR2; PR3 GC1; GC3; GC4; GC5; GC6; GC9 6.6.6
    Business Ethics & Compliance 4.6; 4.9 HR3; HR4; SO2; SO3;
    SO4 GC10 6.6.3
    Local Sustainability Impacts EC1; EC8; EC9; SO1 6.8.3; 6.8.5;
    6.8.6; 6.8.7; 6.8.9
    Partnerships in R&D and Education SO1
       6.8.4
    Public Affairs and Industry Networking
       4.13 EC9; SO5 6.6.6
    Awards 2.10 6.2
    Additional Indicators 2.8; 3.9; 3.12 EC1; EC5; EC7; LA1; LA2; LA4;
    LA5; LA7; LA10; LA11; LA13; EN1; EN3; EN4; EN16; EN17; EN19; EN20;
    EN22; EN23; EN26; EN28; EN30; PR5

    72
    COMPANY
    Data Reporting
    Verification Statement
    Det Norske Veritas Business Assurance France S.A.R.L. ('DNV
    Business Assurance') has been commissioned by the management
    of STMicroelectronics NV ('the Company') to carry out a
    moderate assurance engagement on the "2012 Sustainability
    Report" ('the Report') in its draft electronic format.
    STMicroelectronics NV is responsible for the collection,
    analysis, aggregation and presentation of information
    contained in the Report. Our responsibility in performing
    the work commissioned is solely towards the Management of
    STMicroelectronics NV and in accordance with the terms of
    reference agreed on with the Company. The assurance
    engagement is based on the assumption that the data and
    information provided are complete, sufficient and authentic.
    STMicroelectronics NV's stakeholders are the intended
    recipients of the assurance statement The scope of work
    agreed upon with STMicroelectronics NV to provide a moderate
    level of assurance includes the following information and
    entities: o Key Performance Indicators for People, Products,
    The Environment and The Community related to the period
    between January 2012 and December 2012, as contained in the
    2012 Report. o Our verification was carried out in May and
    June 2013. As part of this engagement we visited selected
    sites on the basis of their contribution which represents
    more than 20% of the Group's consolidated environmental and
    social indicators (a higher level of Assurance would have
    required a more detailed review): Geneva (Headquarters),
    Catania (Italy), Muar (Malaysia), Calamba (the Philippines).
    Our assurance engagement was planned and carried out in
    accordance with the DNV 'Protocol for Verification of
    Sustainability Reporting'. The available parts of Report
    were evaluated against the following criteria in accordance
    with the Protocol: Materiality, Completeness, Reliability,
    Comparability and Stakeholders inclusiveness. As part of the
    verification we have:
    - Challenged the People, Products, The Environment and The
    Community statements and claims made in the Report and assessed
    the robustness of the data management systems, information flow
    and controls;
    - Examined and reviewed documents, data and other information made
    available to DNV Business Assurance France by the Company ;
    - We interviewed the Corporate Sustainable Development Team and
    conducted interviews with an excess of 40 company's representatives
    we visited in three sites and the company's headquarter (including
    data owners and decision-makers from different divisions and
    functions) to assess compliance by the sites visited with Group
    procedures, processes and guidance.  Interviews with external
    stakeholders were not included;
    - Performed sample-based audits of the mechanisms for implementing
    the Company's own policies, as described in the available parts of
    Report;
    - Performed sample-based audits of the processes to review the
    methods, practices and tools used in the collection, aggregation/
    calculation, analysis, internal quality control and reporting of
    qualitative and quantitative data and information, as it is
    transferred, managed and stored within the Company.
    It is the opinion of DNV Business Assurance that the 2012
    Sustainable Report is an accurate and impartial
    representation of the company's sustainability related
    strategies, management systems and performance. Based on the
    assurance work we performed on both the Key Performance
    Indicators as well as parts of the narratives in the
    Company's "2012 Sustainability Report", it is our opinion
    that sufficient evidences have been obtained to achieve a
    moderate level of Assurance, as information and data
    communicated and subjected to our verification were found to
    be reliable. Since the organization has carried out a review
    of its material sustainability issues, we believe
    STMicroelectronics NV efforts to strengthen the strategy and
    the linked action plan have been significantly addressed, to
    an advanced level, for all material issues among processes
    and business development. We recognize that strong efforts
    have been made to reinforce organisation and resources in
    order to better manage sustainability coordination across
    the Company and reliability of data. Moreover the
    achievements versus the objectives are reported in a
    balanced and transparent way allowing the stakeholders to
    have an unbiased view of the company's sustainability
    performance. Based on our review, we evaluated adherence of
    the Report to the following principles, on a scale of
    'Good', 'Acceptable', 'Need for improvement': Materiality:
    we consider that the Report includes the major material
    aspects concerning the Company's performance and
    stakeholders' concerns. In our opinion, the level at which
    the Report adheres to the principle of materiality is
    'Good'. Completeness: we believe that, overall, the topics
    and indicators contained in the Report cover
    STMicroelectronics NV material impacts sufficiently to
    enable stakeholders' assessment of the Company's
    sustainability performance in 2012. In our opinion, the
    level at which the Report adheres to the principle of
    completeness is 'Good'. Reliability: we found that the
    information and processes are sufficiently collated,
    recorded, compiled, analysed and disclosed in a manner that
    allowed us to examine and assess the accuracy of the
    information. In our opinion, the level at which the Report
    adheres to the principle of reliability is 'Good'.
    Comparability: we consider that stakeholders have sufficient
    information that is adequately selected and compiled in
    order to analyse the changes in the Company's performance
    over time. In our opinion, the level at which the Report
    adheres to the principle of comparability is 'Good'.
    Stakeholders inclusiveness: we consider that the views and
    concerns of stakeholders have been taken into consideration
    and that dialogue was effective. In our opinion, the level
    at which the Report adheres to the principle of stakeholders
    inclusiveness is 'Good'. Our verification report includes
    observations, findings and opportunities for improvement
    which have been reported back to the Management of the
    STMicroelectronics NV. These do not, however, affect our
    conclusions on the Sustainability Report 2012. DNV was not
    involved in the preparation of any statements or data
    included in the Sustainable Report. DNV maintains complete
    impartiality in the work carried out and expressly disclaims
    any liability or co responsibility for any decision a person
    or an entity may make based on this Assurance Statement. DNV
    is a leading provider of sustainability services, including
    the verification of sustainability reports. For more
    information, please visit our web site (www.dnvba.fr.) or
    www.st.com.
    For DNV Business Assurance France,
    Federica PAGNUZZATO Marc-Antoine HORENFELD
    Reviewer Project Manager
    Paris, April 10, 2013
    DNV Business Assurance

    73
    Glossary
    APG Automotive Products Group
    BCP Business Continuity Plans
    CDP Carbon Disclosure Project
    CEA Commissariat a l'Energie Atomique
    CEC Corporate Ethics Committee
    CEO Chief Executive Officer
    CFS Conflict-Free Smelter
    CIS Company Infrastructure and Services
    CLP Chemical Labelling and Packaging
    CTO Chief Technology Officer
    DNV Det Norske Veritas
    DRC Democratic Republic of the Congo
    DU Digital Unify
    ECHA European Chemical Agency
    ECOPACK(r) Lead-free labelling for RoHScompliance (the EU
    Directive on Restriction on Use of Hazardous Substances)
    EHS Environment, Health & Safety
    EICC Electronics Industry Citizenship
       Coalition
    EMAS Community Eco-Management and Audit
       Scheme
    EMEA Europe, Middle East & Africa
    ENIAC European Nanoelectronics
       Initiative Advisory Council
    e-PA electronic Performance Appraisal
    ERM Enterprise Risk Management
    ERT European Round Table of
       Industrialists
    ESG Environment, Social and Corporate
       Governance
    ESIA Electronic Semiconductor Industry
       Association
    FA Failure Analysis
    FCPA Foreign Corrupt Practices Act
    FD SOI Fully Depleted
       Silicon-on-Insulator
    FMT Front-end Manufacturing and
       Technology
    FTSE Financial Times Stock Exchange
    GeSI Global e-Sustainability Initiative
    GHG Greenhouse Gases
    GLWO Global Logistics & Warehousing
       Organization
    GM General Motors
    GRI Global Reporting Initiative
    GWP Global Warming Potential
    HAN Home Arena Network
    HIT Harbin Institute of Technology
    HPB Health Promotion Board
    HSPM Hazardous Substances Process
       Management
    IBP Imaging Bi-CMOS ASIC & Silicon
       Phototonics
    IC Integrated Circuit
    ICT Information and Communication
       Technologies
    IMS Industrial & Multisegment Sector
    IP Intellectual Property
    ISO International Organization for
       Standardization
    ITRI Industrial Technology Research
       Institute
    iTSCi ITRI's Tin Suppy Chain initiative
    KPI Key Performance Indicator
    LBG London Benchmarking Group
    LCA Life Cycle Assessment
    MEMS Micro-Electro-Mechanical Systems
    MMS Microcontrollers, Memories &
       Smartcards
    MTCE Metric Tons of Carbon Equivalent
    NGO Non-Governmental Organization
    NYSE New York Stock Exchange
    ODS Ozone Depleting Substances
    OECD Organization for Economic
       Cooperation and Development
    OHSAS Occupational Health & Safety Assessment Series (OHSAS
    18001)
    PFCs Perfluorinated Compounds
    PLC Power Line Communication
    PQE Product Quality Excellence
    PTM Package Test Manufacturing
    RC Recordable Cases
    R&D Research & Development
    REACH Registration, Evaluation and Authorization of
    Chemicals
    RoHS Restriction of Hazardous Substances
    SAQ Self-Assessment Questionnaire
    SE Sustainable Excellence
    SEC Securities and Exchange Commission
    SITELESC Micro and Nanotechnology
       Industry Association
    SMEs Small and Medium Enterprises
    SOC System-on-Chip
    SPE Supplier Performance Evaluation
    SRI Socially Responsible Investment
    STEM Science,Technology, Engineering and
       Mathematics
    SVHC Substances of Very High Concern
    TAM Total Available Market
    TB Tubercle Bacillus
    TCOO Total Cost of Ownership
    TR&D Technology Research & Development
    UN United Nations
    UNGC United Nations Global Compact
    VAP Validated Audit Process
    VOCs Volatile Organic Compounds
    WEEE Waste of Electrical and Electronic
       Equipment
    20-F Annual report filed with the Securities and Exchange Commission
    GRI indicator prefixes
    EC Economic
    EN Environment
    HR Human Rights
    LA Employment
    PR Product Responsibility
    SO Society
    The ST Sustainability Report 2012 is printed on paper
    produced by a manufacturer that is certified to ISO 9001 and
    ISO 14001. Printing uses chlorinefree pulp which enables
    both recyclability and renewability, and a chemical free,
    pre-press system. Furthermore the paper used is certified by
    the Forest Stewardship Council and the Chain of Custody.
    These confirm that the paper used comes from controlled
    forests that are well managed according to strict
    environmental, social and economic standards, and links the
    production chain from source of timber through to paper
    manufacture and the final printing process.

    life.augmented
    (c) STMicroelectronics - July 2013- Printed in France - All
    rights reserved. The STMicroelectronics corporate logo is a
    registered of the STMicroelectronics group of companies. All
    other names are the property of their respective owners
    For more information on ST products and
    solutions, visit www.st.com

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, STMicroelectronics N.V. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|  |  | STMicroelectronics N.V. |
Date: | July 30, 2013 | By: | /s/ Mario Arlati |
|  | Name: | Mario Arlati |
|  | Title: | Executive Vice President and Chief Financial Officer |