Corporate Environmental Report

Message from the President

In the history of ST's journey towards sustainable development and environmental protection, 1993 was a major milestone. This was the year of a true paradigm shift when we challenged our attitude from compliance with international and local regulations, to a proactive mode which, over the years, brought the Company to make a very strong commitment to take a leading role in the protection of our planet's environment.

Three main reasons were at the origin of that new attitude, and today remain behind our increasing commitment:

	the first and most important is an ethical one that stems from our responsibilities as a corporation towards the society around us as a whole, and not just towards our shareholders;
	secondly, we know that a vital element in our ability to compete and grow will increasingly depend on our ability to attract young, committed talents and the best human resources. They will, no doubt, want to know they are working for a reliable and responsible company;
	thirdly, we are strongly convinced that environmental responsibility is not only compatible with the ability for a company to compete on the marketplace, but it actually significantly enhances the competitiveness of a corporation. We do believe that "ecology is free", because prevention is much cheaper than correction, and because corporations which apply environmentally-friendly processes - which consume less in terms of energy and materials - are, as a consequence, more profitable.

Based on these three pillars, in 1993 we launched a very aggressive, long range, company-wide initiative, with the declared goal of establishing STMicroelectronics as the world leader in environmental protection for the industry by the year 2000.

Two years later, in 1995, we summarized our main environmental policies and objectives in one document, which we called our Environmental Decalogue which we distributed to all our employees, as well as to customers, suppliers and partners around the world. This concise document, unlike most corporate environmental statements, defines a very precise set of quantified targets, which the Company is striving to achieve within a given time frame.

Today, our third Corporate Environmental Report, based on our 1999 results, gives us an opportunity to look back and make a status of our achievements. We have had excellent results in several areas, as shown in the pages that follow. For instance, our electricity and water consumption have been reduced by 27% and 40% respectively from 1994 to 1999, at constant production value.

All our sites were both ISO 14001 certified and EMAS validated by 1997 and recertification and revalidation is an ongoing process. We have also received some important recognition : the Climate Protection Award was awarded to ST in 1999 by the US Environmental Protection Agency, and Dow Jones selected ST as one of the 200 corporations in the Dow Jones Sustainability Group Indexes which include the leading sustainability companies and industries worldwide. Actually in this context ST was defined as the world leading performer in the semiconductor industry in terms of integration of sustainability. Most of all, environmental care is now a well embedded culture at ST and we are building the momentum to improve our performance.

We strongly believe that the world is confronted with dramatic environmental challenges, which could threaten future economic development and even social life on the planet. With this in mind, we are renewing our corporate engagement for sustainable growth with even stronger determination than ever before.

In 1999 we published a new edition of our Environmental Decalogue which sets even more ambitious targets, particularly in the area of minimizing the impact of our activities on the earth's atmosphere.

Actually, we believe that the major threats to the life of the human community is represented by climate change, and there is now a growing and generalized consensus on the decisive role of human activity played by the emission of greenhouse effect pollutants.

This is why we have set for ourselves the very aggressive goal of making ST a zero CO2 equivalent emission company by the year 2010.

And, of course, we aim to achieve this in spite of the extremely ambitious economic growth that we foresee for our future. Our past track record in combining growth with environmental achievements encourages us to believe in this goal, which, although difficult, can be achieved. We are engaging to do so by three means:

	by continuing to aggressively reduce energy consumption per unit of added value, through traditional methodologies as well as by increasing the efficiency of energy conversion through the adoption of new processes, such as cogeneration (combined heat and power);
	by progressively implementing renewable sources, such as wind turbines;
	by launching an important carbon sequestration program which, through extensive reforestation, aims at totally compensating the residual greenhouse gas emission through carbon sinks.

While the zero CO2 emission goal is, no doubt, the most ambitious one in the new Environmental Decalogue, we are actively working also on other major issues, such as water recycling, air pollution and waste treatment, aiming at excellence in environmental care.

We, at STMicroelectronics, are firm believers that shareholders' value is not threatened by corporate social and environmental responsibility. On the contrary, we believe that by being good citizens we can amplify shareholders' value and return to investors. This we will do, with our people and at all our plants, as we have done over the years, in all countries throughout the world where we operate.