Nex Generation CSR:
              xt
Business Value, Integration, and Leadership


                               Suzanne Fallender
                    Corporate Responsibility Office
                                 Intel Corporation

                                      Mills College
                                      April 9 2010
                                            9,
Changing L
                                                        Landscape

     Increase in “socially respo
                  socially     onsible
     investors” and integration of ESG
     into financial analysis
                        y
     Changing expectations am
                            mong
     consumers & public
     Increased sophistication o NGO
                              of
     campaigns and partnerships
     Employees and new talent
                            t
     recruitment
     Changing C-Suite views
Sources: “State of Corporate Citizenship” BCCCC, http://www.bcccc.net/index.cfm?pageId=2043
Social Investment Forum.


             Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                             o
             Corporation or its subsidiaries in the United States and other countries.
             *Other names and brands may be claimed as the property of others.
People, Pla
                              p      anet, Profit

                                                                                                                 People

• Changing
   p
expectations
• Low hanging fruit
harder to find
h d t fi d
• Increasing focus on
connection to value Planet                                                                                                             Profit

• Next phase more
challenging
  Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                  o
  Corporation or its subsidiaries in the United States and other countries.
  *Other names and brands may be claimed as the property of others.
Building Corpora Responsibility
               ate

Business                                                                            Integration                              Leadership
 Value

25.0                                                        Laggards (bottom 10%)

                                                            Average

                                                    19.5%   Leaders (top 10%)
20.0


                                            15.5%
15.0
                          13.6%


                  10.6%
10.0
                                                                            7.5
           7.2%                      7.0%

                                                                      4.1
 5.0


                                                             0.8

 0.0
       Return on Invested Capital   Shareholder Return      Sharpe ratio (x 10)




   Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                   o
   Corporation or its subsidiaries in the United States and other countries.
   *Other names and brands may be claimed as the property of others.
CSR Cultu Drivers
                                          ure




Engineering culture
E i     i     lt                                              Global m
                                                                     manufacturer                                                   Innovation leader



  •   Data driven and focused on continu   uous improvement
  •   Proactive community engagement a environmental management
                                           and
  •   Global scale and impact of program  ms
  •   Priority on education and ability of t
                                           technology to help solve global
      challenges
       h ll
      Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                      o
      Corporation or its subsidiaries in the United States and other countries.
      *Other names and brands may be claimed as the property of others.
Environmental
                                                                                           Sustainability

                                                                        Laargest corporate purchaser of
                                                                       gre p
                                                                       g een power in the U.S. accordingg
                                                                                   to the EPA

                                                                           Recycle over 70% of our waste
                                                                           R

                                                                      Inve
                                                                         ested over $100 million in water
                                                                         conservation in past decade




Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                o
Corporation or its subsidiaries in the United States and other countries.
*Other names and brands may be claimed as the property of others.
Innovation & Growth Opportunities

                                           $1B Investe in Education Programs
                                                     ed
                                                   7+ Million Teachers
                                                     50+ Countries




Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                o
Corporation or its subsidiaries in the United States and other countries.
*Other names and brands may be claimed as the property of others.
Be an Asset to Our
                                                                                              Communities

                                                                                      Close to 1 million volunteer
                                                                                      Cl    t     illi     l t
                                                                                             hours in 2009




Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                o
Corporation or its subsidiaries in the United States and other countries.
*Other names and brands may be claimed as the property of others.
Business Value
       s
CSR and Business Value


                                                                                                      “Continuing our
                                                                                                      commitment to the
                                                                                                      highest
                                                                                                      hi h
                                                                                                      performance in all
                                                                                                      we do—from
                                                                                                      product innovation
                                                                                                      to corporate
                                                                                                      responsibility—is
                                                                                                         p         y
                                                                                                      good business.”

                                                                                                      Paul Otellini, President
                                                                                                      and CEO


Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                o
Corporation or its subsidiaries in the United States and other countries.
*Other names and brands may be claimed as the property of others.
Long history of
                                                                       g
                                                                   trans
                                                                       sparency and
                                                                   reporting
                                                                     p     g
                                                                                                               Localization
                                                                                                                    p
                                                                                                               of report
First
Fi t EHS                                                                                                       globally
report and                                                       Carbon
public goals                                                              e
                                                                 Disclosure
                                                                 Project
                               ‘SRI’ road
                                                                                                                                               GRI G3
                               shows                                                                               Move to
                               begin                                                                               “online
                                                                                                                      y
                                                                                                                   only”
                                                                                   GRI G2                          report
                                                                  First
                                     GRI                          CSR
                                                                  report

  1994            1996                 1998                 2000                  200
                                                                                    02               2004                 2006                2008   2010



         Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                         o
         Corporation or its subsidiaries in the United States and other countries.
         *Other names and brands may be claimed as the property of others.
Applying learnings from external measures
                      m




 We received over 80 recognitions for our corporate responsibility
                                   s
       efforts at the local, nationa and global level in 2009
                                   al


  Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                  o
  Corporation or its subsidiaries in the United States and other countries.
  *Other names and brands may be claimed as the property of others.
Integrated Valu F
                I t    t d V lue Framework
                                         k

                                                                                             RISK
REVENUE                                OPERATIONS                                         MANAGEMENT                                      BRAND

Growth and                            Cost Savings and                                        License to                                Reputation and
Innovation                              Continuous                                           Operate and                                  Goodwill
                                       Improvement                                           Governance




               Sources: Intel information based on multiple fram
                                                               meworks, including McKinsey and Boston College
               Center for Corporate Citizenship, “How Virtue Cre
                                                               eates Value for Business and Society”, April 2009




   Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                   o
   Corporation or its subsidiaries in the United States and other countries.
   *Other names and brands may be claimed as the property of others.
Integrated Valu Framework
                            ue

                                      • Market expans
                                                    sion
REVENUE                               • Product innovation
                                      • New customer needs
                                                   r
Growth and
Innovation
                                                                                                                                      OPERATIONS

                                                     • Operatio
                                                              onal efficiency
                                                                                                                                 Cost Savings and
                                                     • Managem
                                                             ment quality                                                          Continuous
                                                                                                                                  Improvement
                                                                                                                                     p
                                                     • Employe engagement
                                                             ee


 Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                 o
 Corporation or its subsidiaries in the United States and other countries.
 *Other names and brands may be claimed as the property of others.
Integrated Valu F
              I t    t d V lue Framework
                                       k

                                          • Regulatory risk
   RISK
MANAGEMENT                                • Community e
                                                      engagement
                                          • Supply chain responsibility
                                                       n
 License to
Operate and
Governance                                                                                                                               BRAND

                                                                         •D
                                                                          Differentiation                                             Reputation and
                                                                                                                                        Goodwill
                                                                         •T
                                                                          Trusted partner
                                                                                  p
                                                                         •G
                                                                          Goodwill


 Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                 o
 Corporation or its subsidiaries in the United States and other countries.
 *Other names and brands may be claimed as the property of others.
Integration
Strategic alignment


 • Aligned with Intel’s
                Intel s
 Global Strategy on a
    g
 Page
 • Board-level oversight
 • Integration of CSR
 information into Annual
 Report and 10-K
              10 K
 • Linked compensation
 with environmental and
 CSR factors

     Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                     o
     Corporation or its subsidiaries in the United States and other countries.
     *Other names and brands may be claimed as the property of others.
Employee engageme
                ent

• Culture shift – integrating into
                                 o
their decision-making
• Provide education and ways
to participate
• Programs to encourage
innovation or generate project
                             t
ideas
• Awards and recognition
•L
 Leverage video and social
           id     d    i l
media

    Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                    o
    Corporation or its subsidiaries in the United States and other countries.
    *Other names and brands may be claimed as the property of others.
Business group ownership


Intel IT




                                                                                       Supply Chain/
                                                                                         pp y
                                                                                       Materials

  Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                  o
  Corporation or its subsidiaries in the United States and other countries.
  *Other names and brands may be claimed as the property of others.
Leadership
    e
What does leade
                             ership look like?

• Collaboration – problems too complex to solve alone
                             o
• Industry initiatives – efficienc consistency and impact
                                 cy,
• Investment – risk, change ag
                             gent, differentiation




    Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                    o
    Corporation or its subsidiaries in the United States and other countries.
    *Other names and brands may be claimed as the property of others.
Ne leaders required
                                                                        ew

                                                                           • CSR is not just for CROs
                                                                           anymore….
                                                                           a
                                                                           • Influencing and analytical
                                                                           skills
                                                                           • M ki th value connection
                                                                             Making the l        ti
                                                                           • Improving decision-making
                                                                                     g               g
                                                                           and
                                                                           a quality of organization




Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel
                                                                                o
Corporation or its subsidiaries in the United States and other countries.
*Other names and brands may be claimed as the property of others.
Intel's Triple Bottom Line

Intel's Triple Bottom Line

  • 1.
    Nex Generation CSR: xt Business Value, Integration, and Leadership Suzanne Fallender Corporate Responsibility Office Intel Corporation Mills College April 9 2010 9,
  • 2.
    Changing L Landscape Increase in “socially respo socially onsible investors” and integration of ESG into financial analysis y Changing expectations am mong consumers & public Increased sophistication o NGO of campaigns and partnerships Employees and new talent t recruitment Changing C-Suite views Sources: “State of Corporate Citizenship” BCCCC, http://www.bcccc.net/index.cfm?pageId=2043 Social Investment Forum. Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 3.
    People, Pla p anet, Profit People • Changing p expectations • Low hanging fruit harder to find h d t fi d • Increasing focus on connection to value Planet Profit • Next phase more challenging Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 4.
    Building Corpora Responsibility ate Business Integration Leadership Value 25.0 Laggards (bottom 10%) Average 19.5% Leaders (top 10%) 20.0 15.5% 15.0 13.6% 10.6% 10.0 7.5 7.2% 7.0% 4.1 5.0 0.8 0.0 Return on Invested Capital Shareholder Return Sharpe ratio (x 10) Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 5.
    CSR Cultu Drivers ure Engineering culture E i i lt Global m manufacturer Innovation leader • Data driven and focused on continu uous improvement • Proactive community engagement a environmental management and • Global scale and impact of program ms • Priority on education and ability of t technology to help solve global challenges h ll Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 6.
    Environmental Sustainability Laargest corporate purchaser of gre p g een power in the U.S. accordingg to the EPA Recycle over 70% of our waste R Inve ested over $100 million in water conservation in past decade Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 7.
    Innovation & GrowthOpportunities $1B Investe in Education Programs ed 7+ Million Teachers 50+ Countries Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 8.
    Be an Assetto Our Communities Close to 1 million volunteer Cl t illi l t hours in 2009 Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 9.
  • 10.
    CSR and BusinessValue “Continuing our commitment to the highest hi h performance in all we do—from product innovation to corporate responsibility—is p y good business.” Paul Otellini, President and CEO Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 11.
    Long history of g trans sparency and reporting p g Localization p of report First Fi t EHS globally report and Carbon public goals e Disclosure Project ‘SRI’ road GRI G3 shows Move to begin “online y only” GRI G2 report First GRI CSR report 1994 1996 1998 2000 200 02 2004 2006 2008 2010 Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 12.
    Applying learnings fromexternal measures m We received over 80 recognitions for our corporate responsibility s efforts at the local, nationa and global level in 2009 al Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 13.
    Integrated Valu F I t t d V lue Framework k RISK REVENUE OPERATIONS MANAGEMENT BRAND Growth and Cost Savings and License to Reputation and Innovation Continuous Operate and Goodwill Improvement Governance Sources: Intel information based on multiple fram meworks, including McKinsey and Boston College Center for Corporate Citizenship, “How Virtue Cre eates Value for Business and Society”, April 2009 Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 14.
    Integrated Valu Framework ue • Market expans sion REVENUE • Product innovation • New customer needs r Growth and Innovation OPERATIONS • Operatio onal efficiency Cost Savings and • Managem ment quality Continuous Improvement p • Employe engagement ee Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 15.
    Integrated Valu F I t t d V lue Framework k • Regulatory risk RISK MANAGEMENT • Community e engagement • Supply chain responsibility n License to Operate and Governance BRAND •D Differentiation Reputation and Goodwill •T Trusted partner p •G Goodwill Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 16.
  • 17.
    Strategic alignment •Aligned with Intel’s Intel s Global Strategy on a g Page • Board-level oversight • Integration of CSR information into Annual Report and 10-K 10 K • Linked compensation with environmental and CSR factors Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 18.
    Employee engageme ent • Culture shift – integrating into o their decision-making • Provide education and ways to participate • Programs to encourage innovation or generate project t ideas • Awards and recognition •L Leverage video and social id d i l media Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 19.
    Business group ownership IntelIT Supply Chain/ pp y Materials Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 20.
  • 21.
    What does leade ership look like? • Collaboration – problems too complex to solve alone o • Industry initiatives – efficienc consistency and impact cy, • Investment – risk, change ag gent, differentiation Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.
  • 22.
    Ne leaders required ew • CSR is not just for CROs anymore…. a • Influencing and analytical skills • M ki th value connection Making the l ti • Improving decision-making g g and a quality of organization Copyright © 2010 Intel Corporation. All rights reserved. Intel and the Intel logo are trademarks or registered trademarks of Intel o Corporation or its subsidiaries in the United States and other countries. *Other names and brands may be claimed as the property of others.