Trends Facing Environmental Health & Safety Functions of Business

1. Trends Facing Environmental Health & Safety Functions of Business Texas Instruments IncorporatedSensors & Controls Francis J. Veale, Jr., Esq. Manager, Environmental, Safety & Health Department

2. Agenda • Introduction to Texas Instruments, Sensors & Controls • EHS Department Today • Trends facing EHS Departments • Final Thoughts

3. Introduction: Texas Instruments Incorporated • TI comprised of four business divisions. • Semiconductor (85%), Sensors & Controls (10%), Educational Technology & Calculations (4%), DLP TV (1%). • S&C comprised of three business units: • Sensors, Controls, Radio Frequency Identification • S&C has more than 7,000 employees around the globe • Technology Development and Manufacturing in nine locations in the Americas, Asia and Europe

4. Introduction: Sensors &Controls Environmental Recognition: • Selected Charter Member of EPA Performance Track Program. • 2001 Governor’s Award for Excellence in Toxics Use Reduction. • ISO 14001 Registered (November 2002)

5. Introduction: Sensors & Controls • S&C manufactures sensors that are used in various automotive systems. • Supplies all the major automakers directly as a tier one supplier or through others as a sub-tier supplier. • Subject to the EU End-of- Life Vehicle (ELV) directive restricting material content and disposal of vehicles. Automotive Sensors AirConditioning Coolant Level Low GAccel. Trans- mission OccupantWeight TirePressure OilPressure ABS PowerSteering AngularRateSensor

6. Introduction: Sensors & Controls • S&C manufactures controls that are used in various electrical systems. • Supplies all the HVAC, telecommunications, and appliance markets. • Entire Control Products business product lines subject to globalization pressures. • Cost and location of key customers driving the shift of manufacturing to Asia. Control Products

7. EHS Functions – Future Trends • What are the roles of ESH function? • Compliance with regulatory, customer, and all other applicable requirements to which the organization is subject. • Prevention of ESH liabilities – existing, related to the growth, and new – from negatively impacting the organization’s bottom-line. • Improvement of the organization by supplying value added ESH services. • The basic role of the ESH function remains as it is currently constituted, but the distribution of resources applied to each of the functional area changes.

8. EHS Functions – Future Trends • Compliance: • Operational Compliance: With outsourcing of operations to best cost manufacturing locations, domestic compliance requirements not as great a focus as international compliance. • Recent Chinese government guidance of enforcement against “non-compliant companies thereby generating more market share for the remaining companies who follow the regulations.” • Product Compliance: international material content and waste disposal directives, such as WEEE/RoHS and ELV, have become significant compliance requirements. • These directives have created a new breed of EHS staffer – Product Environmental Engineer (the “E” equivalent of Product Safety)

9. EHS Functions – Future Trends • EU Directives restricting Material Content (WEEE-RoHS, ELV) have caused OEMs and their entire supply chains to address, sometimes for the first time: • the material content of their products, • processes for communicating this data to customers, • the re-design of their products. • While these requirements originate in Europe, they are quickly becoming de-facto international standards. Failure to comply will severely restrict the sale of nonconforming product. • These requirements are becoming the source of major market discontinuities that will likely result in significant shifts in market share.

10. EHS Functions – Future Trends • Liability Prevention: • Liability Remediation: Domestic remediation placing a premium on and managing liabilities according to regulatory requirements. but at lowest cost to owner, and redeveloping contaminated facilities. • Stronger linkage between the real estate developers and the environmental firms that specialize in subsurface remediation. • International Liability: In addition to property liability, EHS function must learn to define the potential of acquisitions, new products and technology partnerships to increase company liability. • Diminution of value due to inaccurate or incomplete assessment of liabilities related to international commerce.

11. EHS Functions – Future Trends • Improvement: • Product Improvement: Trends show an increase in the quantity and complexity of EHS requirements worldwide. The EHS Function provides the expertise within the company to address these EHS requirements effectively. • Advanced preparation (i.e., addressing the EHS concern before it becomes a requirement) is more cost effective than addressing the EHS concern after it becomes a requirement. • Additionally, by addressing the requirement early, the company has the opportunity to turn the requirement into a competitive advantage. • Management System Improvement: International emphasis on management systems including registration to ISO 14001 and OSHAS 18001.

12. Final Thoughts • The EHS Function is undergoing a dramatic change internationally. • Domestic EHS Function dividing into three general categories: • Compliance Management with emphasis on management systems (ISO14001) and international compliance. • Liability Management with emphasis on Brownfields. • Product Environmental Engineering – the environmental equivalent of Product Safety. • Domestic EHS functions with responsibility for international locations must find an effective method for defining and managing international liability. • Internationally, EHS Function typically emphasizes compliance with local requirements.