Evaluating a company's impact (the case of ASML)

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You are reading Green Digest Impact, a weekly newsletter that provides in-depth analyses of companies’ environmental and social impact.

OUR APPROACH

Central to our narrative is the principle of double-materiality, which recognizes that a company's impact is twofold: it affects both the environment and society at large, and in turn, these external factors influence the company's financial and operational performance.

While traditional ESG assessments focus on the latter, we aim to examine companies' direct impacts on these factors. In pursuit of this, we introduce a unique scoring system that quantifies a company's impact.

The insights and analyses presented in Green Digest Impact are brought to you by a partnership between Green Digest and Impaakt, a Swiss-based impact data provider. Contact Impaakt here to explore how they can assist you.

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THIS WEEK’S COMPANY

ASML

This week we dive deep into ASML’s environmental and social impact.

ASML (often referred to as the most important company you’ve never heard of) is a leading supplier to the semiconductor industry, specializing in photolithography systems essential for manufacturing microchips. It is the world’s only manufacturer of extreme ultraviolet lithography (EUV), the most advanced technology for producing powerful and precise microchips.

Some interesting facts:

• The cost of an EUV lithography machine is about $200 million. The machine consists of 100,000 parts and modules and requires 20 trucks and three fully loaded Boeing 747s to transport it.

• To produce EUV light, ASML’s machines fire tin droplets with lasers to generate a temperature of around 220,000°C, which is 40 times hotter than the surface of the sun.

COMPANY’S IMPACT

ASML’s overall impact score

ASML has a general impact score of +0.80 (on a scale from -5 to +5). Its impact is spread across 7 UN Sustainable Development Goals (SDGs) and 8 topics, split between positive and negative analyses.

In the socio-economic sphere,

ASML is the world's largest supplier of photolithography machines for semiconductors with around 90% market share. These machines make possible the production of chips used in smartphones, computers, AI, and automotive systems—making ASML a key player in the tech industry. With a near-monopoly in EUV technology, ASML’s systems are used by major companies like TSMC, Samsung, Intel, and others. Chips produced using EUV lithography offer much better performance, including 40% higher surface efficiency and 50% lower energy demand compared to previous generations. ASML invests 15-20% of its revenue annually into R&D to drive innovation and maintain its leadership in semiconductor equipment.

ASML operates in 60 countries and employs approximately 42,000 people across Europe, Asia, and the US, offering competitive salaries that surpass industry and country averages. However, the company faces challenges in achieving gender parity, as the proportion of women in both the overall workforce and most managerial levels is below the standards set by the International Labour Organization (ILO). Additionally, ASML scored 17.2/100 in the 2022 Corporate Human Rights Benchmark, indicating gaps in addressing human rights risks and aligning with international standards.

Environmentally,

ASML emits around 15 million tonnes of CO₂ equivalent annually, which is roughly comparable to the annual electricity usage of over 3 million homes. It consumes around 1.2 million m³ of water annually, 47% in medium-high, high, or extremely high water-stressed areas. Additionally, ASML generates 8,900 tonnes of waste annually, with 86% sustainably managed through recycling, and waste-to-energy initiatives. However, 14% of the waste is sent to landfills or incinerated without recovery.

_{*The impact score is current as of November 2024 and may be subject to changes as it is continuously updated.
**You can find details about the scoring methodology here and the information sources here.}

ESG VS IMPACT SCORE

What is ASML’s ESG rating?

For comparison, ASML has an AAA rating in MSCI's ESG evaluation.

However, ESG Ratings from MSCI ESG Research are designed to measure a company’s resilience to financially material ESG risks and they provide a window into one facet of risk to financial performance. They measure how effectively companies manage ESG risks, not their impact on these factors.

SCORES BY SDG

ASML’s impact scores by SDG

Positively (and by weight), the company scores the highest in the Industry, Innovation, and Infrastructure (+3.36), followed by Partnership for the Goals (+2.19).

Negatively, the company scores the worst in the Responsible Consumption and Production SDG (-2.04), followed by Climate Action (-3.09), and Decent Work and Economic Growth (-1.12).

*the analysis takes into account the weight of the SDGs

CONCLUSION

Materiality Map & Final Words

So, ASML’s key social and environmental impact lies in …

its key role in advancing semiconductor technology. Being the only provider of EUV lithography, the company empowers innovations in AI, consumer electronics, and automotive systems, contributing to energy-efficient and high-performance chips. Its substantial investments in R&D reflect a commitment in innovation and in maintaining leadership in the semiconductor sector, while its global workforce benefits from competitive compensation, fostering economic resilience in multiple regions.

However, ASML faces challenges in gender equality and human rights practices, revealing areas for improvement in its social responsibility initiatives. Environmentally, the company demonstrates commendable efforts in waste management but contends with significant carbon emissions and water consumption, including operations in water-stressed regions.

With a score of +0.80, ASML stands out as a high-impact company leveraging technological innovation to drive global progress while leaving room for growth in social and environmental dimensions.

If you’d like to delve deeper into ASML’s impact, you can explore it here.

If you'd like to learn more about the scoring methodology, you can do so here.

Do you have a specific company you'd like us to cover? Send your suggestions to [email protected]

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