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PDF 2017-CR-Report-Final

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SECURE CONNECTIONS FOR A SMARTER WORLD
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Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

TABLE OF CONTENTS

Message from our CEO

OVERVIEW

NXP at a Glance

Sustainable Development Goals (SDG's)

Sustainability at NXP

Scope of the Corporate Responsibility Report 11

Our Commitment

Sustainability Policy

Material Aspects and Boundaries

Sustainability Organization

ECONOMY

Corporate Governance

Investor Relations

Business Continuity Management

ETHICAL STANDARDS

SOCIAL RESPONSIBILITY

Labor and Human Rights

Human Trafficking

Social Responsibility Auditable Standards 33

STAKEHOLDER ENGAGEMENT

Employees

Customers

Other Groups

Industry Associations

Who we work with

SUPPLIER ENGAGEMENT NXP Supplier Code of Conduct Supply Chain Management Risk Assessments & Audits Training Validation Remediation
EMPLOYEE ENGAGEMENT Community Engagement Career Path Diversity and Inclusion Employee Profile
HEALTH AND SAFETY Health and Safety Program Goals Certification Training Chemical Safety Reporting Standards Validation

ENVIRONMENT

Environment Program

Goals

Certification

Training

Reporting Standards

Validation

Reducing our Carbon Footprint

Phasing Out Ozone-Depleting Substances 71

Substances of Concern

Energy Consumption

Water Consumption

Waste

PRODUCT STEWARDSHIP

Environmental Product Compliance

Conflict Minerals

APPENDIX

UN Global Compact

Communication on Progress 2016 89

GRI Tables

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

MESSAGE FROM OUR
CEO
NXP is a leader in the innovation and manufacture of devices that help shape the future of communications networks and the Internet of Things, as well as industries from mobile to automotive, NFC and RF. Our aim is to be the best semiconductor company in the world, supporting and empowering our employees to make a difference for our customers, shareholders, society and the world at large. Sustainability is a key pillar of our work at NXP, because we believe that a smarter world begins on a sustainable planet. That's why we constantly look for opportunities to preserve and promote smarter, more energy-efficient and safer ways of living. Which brought us to work with the U.S Department of Transport, supplying the winner of its Smart Cities Challenge with the technology to support a smarter transport infrastructure. Self-driving cars, connected vehicles and smart sensors are all part of the plan, and each of these innovations is supported or enabled by NXP technology.
There are many more examples of how, in a world of finite resources and increasing consumer demand, NXP strikes a balance that serves our

customers, employees and shareholders. Our IoT innovations for example, are part of a radical shift in the way people connect and interact with the objects and devices around them. And our technologies for smart cars and smart cities will help make our world safer, greener and more energy efficient. In fact, today's consumer can benefit from NXP innovations in every sphere of life, as they are increasingly incorporated into devices at home, in schools and offices, cars and medical products, mobile and wearables. As a world-leading company, we embrace our responsibility to act according to the highest standards, to know right, and do right. Sustainability means maintaining a safe working environment, promoting good health, minimizing the environmental impact of our activities and promoting dignity and respect for all employees. It is a broad subject that we have focused into three guiding principles: · ENGAGE: this encourages us to connect and communicate with those around us in a
way that fosters a positive relationship, both at work and within our communities. · PROTECT: living up to our responsibility as a global company, protecting the local
environment and wider world. This also involves ensuring the health and safety of every employee, and protecting their human rights. · RESPECT: this is applied everywhere, in how we act with each other, without bias or prejudice. Respect also covers our relationship with the wider world and our place in it.
Setting new benchmarks for sustainability The principles set out above also guide NXP towards our goals of reducing carbon emissions, decreasing consumption of water and energy, increasing recycling, phasing out chemicals of concern and reducing our workplace injury rate. Many of our benchmarks have already been adopted in the wider industry, and also by customers, who work closely with us to raise global standards in sustainability. That is why NXP is proud to be a signatory of the United Nations Global Compact and work towards meeting the goals of the 10 principles on human rights, labor, environment and anticorruption. We remain committed to reporting on our progress and invite stakeholders to partner with us to make a positive impact going forward.
NXP will continue to engage with the world to deliver on our commitments to protect and respect. We will continue to do this in a sustainable way, with our partners, suppliers, customers and shareholders. And we will continue to find new and better ways to make a difference, and to earn the position of the world's best semiconductor company.

Rick Clemmer CEO, NXP Semiconductors
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OVERVIEW
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Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

NXP AT A GLANCE

NXP Semiconductors is the leader in innovative high-performance mixed-signal solutions which, combined with deep application insight, enable the secure connections needed for a smarter world.

WORLDWIDE #1 POSITIONS · #1 in the Identification Industry
- Bank cards (#2) - E-Government (#1) - Mobile NFC (#1) - Transportation and access management
cards (#1)
· #1 in Automotive Industry - Global automotive semiconductors (#1) - Auto non-power analog (#1) - Auto microcontrollers (#2) - Car entertainment (#1) - In-vehicle networking (#1) - Secure car access (#1) - Automotive safety* (#1)
· #1 in RF power transistors

RESEARCH & DEVELOPMENT · Approx. 11,000 engineers in 25 countries · More than 9,000 issued and pending
patent families · Active in more than 120 standardization
bodies and consortia
SITES Research and development activities and manufacturing facilities in Asia, Europe and the United States · 5 wafer fabs in Austin, Texas (2), U.S.;
Chandler, Arizona, U.S.; Nijmegen, The Netherlands; and the country of Singapore · 4 assembly and test facilities in Bangkok, Thailand; Kaohsiung, Taiwan; Kuala Lumpur, Malaysia; and Tianjin,China

· #2 in communications processors
*Airbag/ Braking/ Radar/ TPMS

BUSINESSES · Secure connected devices · Secure interface and infrastructure · Secure identification solutions · Automotive

KEY FACTS AND FIGURES

>100 facilities
33
countries of operations

±31.000
employees
60+
years of experience in semiconductors

HEADQUARTERS Eindhoven, The Netherlands
POSTED REVENUE $9.26 B in 2017

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Our core IP and technology in processing, connectivity and security enables secure connections for a smarter world

SECURE, CONNECTED VEHICLE
· A DAS: Radar, V2X, Vision, Fusion, Network processors
· Car entertainment · In-vehicle networking · Secure car access

END-TO-END SECURITY AND PRIVACY
· Mobile transactions · E-Government · Smart bank cards · User authentication · Embedded security · Cloud and infrastructure
security

SMART, CONNECTED SOLUTIONS

Consumer · Mobile audio · High-speed interfaces · Smartphone RF · Personal health and fitness · Healthcare

Industrial · Smart home and buildings · Smart cities, smart grid · M2M, Industry 4.0 · Intelligent logistics · 4.5G/5G networks

JOINT VENTURES AND OTHER MAJOR PARTICIPATIONS · Systems on Silicon Manufacturing
Company (SSMC) Pte. Ltd. (61%) · Datang NXP Semiconductors Co., Ltd.
(49%) · Suzhou ASEN Semiconductors Co., Ltd.
(40%)* · Advanced Semiconductor Manufacturing
Co. Ltd. (27%) · Cohda Wireless® Pty Ltd. (26%) · WeEn Semiconductors Co., Ltd. (49%)
*NXP signed an agreement to sell 40% of Suzhou ASEN Semiconductors Co., Ltd

LARGEST OEM CUSTOMERS (IN ALPHABETICAL ORDER) · A pple®, Bosch®, ContinentalTM, Ericsson®,
Gemalto®, Giesecke & Devrient®,
Huawei®, Hyundai®, Kona®, Nokia®
Networks, Panasonic®, Samsung®
and ZTE®

ABOUT NXP SEMICONDUCTORS NXP Semiconductors N.V. (NASDAQ: NXPI) enables secure connections and infrastructure for a smarter world, advancing solutions that make lives easier, better and safer. As the world leader in secure connectivity solutions for embedded applications, NXP is driving innovation in the secure connected vehicle, end-to-end security and privacy, and smart connected solutions markets. Built on more than 60 years of combined experience and expertise, the company has over 30,000 employees in more than 30 countries and posted revenue of $9.26 billion in 2017.
Find out more at www.nxp.com.

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SUSTAINABLE DEVELOPMENT GOALS (SDG'S)
The 17 UN Sustainable Development Goals (SDGs) promote sustained and inclusive economic growth, social development and environmental protection in the interest of creating a world that is just, equitable and inclusive.
NXP supports the UN SDG's with our existing programs and technology that contribute to progress against 13 of the 17 SDG goals. Our programs and products focus on ensuring healthy lives, achieving dignity, prosperity and justice for all people and protecting our planet for future generations.
The sections below regarding our smart technology, environmental responsibility, supplier engagement and social impact demonstrates NXP's commitment to the SDG's.

SMART TECHNOLOGY
NXP IoT technology advances agricultural production by contributing to the European Internet of Farming 2020 (IoF2020). Our technology will connect sensing and monitoring technologies along the entire agricultural production chain and enable the analysis of an impressive amount of data, in a secure and user-friendly manner.
NXP's RF technology is used to create cooking appliances that

deliver high-quality cooking and retain nutritional elements by not overcooking.
NXP's RFID is used to improve efficiencies across the entire food supply chain, from farm to fork translating directly into less food waste. The use of temperature sensors with integrated NXP RFID tags providing in transit data on the temperature level in real-time improving visibility into the conditions to which perishable products are exposed during transport. This technology helps avoid food and medical waste during transit.

provider, which can eliminate the need for a healthcare visit and reduce costs.

NXP technology advances medical and wearables to help connect the devices that improve people's lives.
NXP technology assists in monitoring and diagnosing immunological pathologies onsite and rapidly acquire data to provide fast and trustworthy results.
NXP products help make portable medical devices easier to use, interoperable and able to remotely relay patient data from home to healthcare

NXP technology solutions support sustainable energy management for green cities and homes. These applications range from appliances, smart building designs, smart homes making them more connected, convenient and secure.
NXP is committed to its leadership role for the next generation of industrial IoT and Industry 4.0 applications
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enabling greater Machine Safety, Connectivity and productivity.
NXP technology helps reduce CO2 emissions by improving the flow of traffic, enabling electrical driving and making electronics energy efficient.
NXP solutions support the U.S. Department of Transportation's Smart City Challenge which includes real-time vehicleto-vehicle infrastructure communication systems and secure public transportation smart cars for a more intelligent urban transportation system.
Leading cities worldwide will employ Intelligent Roadside Units powered by NXP technologies to help smooth traffic flow, improve safety and emergency response, and provide additional services.

NXP uses microprocessor based smartcard technology to store and protect personal information in an eID format. This makes citizen data more secure, and as a result helps combat identity theft and reduce fraud. That, in turn, makes government programs more effective and more efficient, and lowers the cost of providing services. Increased security benefits a number of government-funded activities, such as healthcare services, social-welfare programs, and tax collection.
NXP's microcontrollers used in electronic passports deliver major advancements in terms of security. The use of ePassports makes it harder to present illegally issued travel documents and helps reduce black-market trade.

ENVIRONMENTAL RESPONSIBILITY
NXP 2020 goal is to reduce water consumption by 30% from a 2010 baseline globally. At NXP we promote environmental management with the goal to help

resolve social issues such as maintaining clean water supply for our communities.
Our projects focus on the reduction of water consumption in manufacturing and increased onsite water reuse/recycling.
We monitor and manage the quality of wastewater discharged into the communities in which we operate by utilizing onsite water treatment facilities and continuous monitoring/testing as required by local authorities.

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

NXP products are designed to be compliant with EU and China chemical content regulations.

NXP 2020 goal is to reduce electricity & water consumption by 30% from a 2010 baseline.
NXP's goal is to phase out chemicals of concern from our manufacturing and recycle the chemicals in a responsible manner.
NXP 2020 goal for recycling is recycle 90% of generated waste from a 2010 baseline.

NXP 2020 goals is to reduce our carbon footprint by 30% from a 2010 baseline.
NXP's goal is optimize site conservation, abatement projects and substitute chemicals to reduce emissions from our equipment.

SUPPLY CHAIN RESPONSIBILITY
NXP collaborates, trains, audits and re-audits our supply chain to verify that the health and safety of workers are compliant to the NXP social responsibility auditable standards.
These standards address living conditions and safe and healthy working conditions. NXP invests in assessments, audits and capacity building of our supply chain.
NXP's Supplier Code of Conduct requires that suppliers shall not harass or discriminate based on race, color, age, gender, sexual orientation, gender identity in hiring and employment practices such as hiring, wages, promotions, rewards, and access to training.

NXP's Social Responsibility Auditable standards requires agents or search companies engaged in recruitment services for NXP to have a statement that commits to the respect and diversity in providing recruitment services to NXP and encourage equal opportunity, fairness and respect for diversity
The NXP's Supplier Code of Conduct requires suppliers to provide decent and safe working conditions, decent living quarters, wage and benefits that comply with applicable wage laws and legally mandated benefits.
Working hours shall not be more than 60 hours per week, except in emergency or unusual situations. Workers shall have at least one day off after six consecutive work days.
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The NXP's Supplier Code of Conduct requires suppliers to promote inclusion of all irrespective of age, sex, disability, race, ethnicity, origin, religion, economic or other status.
NXP's Social Responsibility Auditable standards requires agents or search companies engaged in recruitment services for NXP to have a statement that commits to the respect and diversity in providing recruitment services to NXP and encourage equal opportunity, fairness and respect for diversity.

not directly or indirectly finance or benefit armed groups.
SOCIAL IMPACT
NXP collaborates with schools and institutions to bring quality education to our younger generation.
Through our community engagement and our sponsorships, employee volunteerism and employee giving we are committed to promote educational endeavors that encourage students to learn about science, technology, engineering and math to help inspire future innovators.

make any other employment related decision based on a person's age, color, gender, gender identity, mental or physical disability, national origin, pregnancy, race, religion, sexual orientation, veteran status or any other characteristic protected by applicable law.
NXP promotes diversity and inclusion by sponsoring employee resource groups. These groups enable and empower a diverse work environment throughout our organization. The teams are: Women Leadership Team; Asian Cultural Team; Gay, Lesbian, Bisexual, Transgender Team; Hispanic Education Awareness Team and Black Achievement Leadership Team.

NXP globally collaborates with environmental groups and programs to clean natural habitats in the places in which we live and work.
NXP takes action to reduce the degradation of natural habitats, halt the loss of biodiversity and provide financial resources to conserve the ecosystems.
Through corporate sponsorships, employee volunteerism and employee giving we are committed to fostering the sustainable use of the earth's resources and promoting a clean healthy environment.

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to our policy, to reasonably

assure that tin, tantalum,

NXP's Code of Conduct

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Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

SUSTAINABILITY AT NXP

NXP believes a company's corporate responsibility is to continuously improve through our actions to make a positive impact on society. As a technology company, we want our stakeholders and employees motivated and excited to work for a responsible company and design products that can change the world.
NXP believes that, by building on innovation and providing technologies that directly address societal demands, some of the most exciting times for NXP lie ahead. NXP will continue to carry out corporate responsibility and do our best to be good corporate citizens for now and for the future. We believe the semiconductor industry is poised to take on new challenges. Using the latest semiconductor technologies, which produce tiny circuits that can perform advanced functions with relatively low power consumption. Our industry can help address some of the most compelling challenges we face as a society. Issues relating to energy efficiency, mobile populations, national and personal security, and caring for the health of a growing and rapidly aging world population. Additional information on NXP technologies advancing the compelling challenges can be found in our Sustainable Development Goals section under the Smart Technology.

In particular, our industry has the potential to directly address our dependence on fossil fuels and minimize carbon emissions. Semiconductors are already reducing the power consumption of server farms and making consumer appliances operate more efficiently. They're also accelerating the deployment of:
· Energy efficiency · National and personal security · Dependence on fossil fuels and minimize carbon emissions · Caring for the health of a growing and rapidly aging
world population · Reduce the power consumption of server farms · Enabling the shift to hybrid and electric vehicles · Making consumer appliances operate more efficiently · Accelerating the deployment of energy-saving
lighting technologies
It is our collective responsibility, as an industry, to continue this trend of being proactive as we create value for consumers, the environment, and society as a whole.

SCOPE OF THE CORPORATE RESPONSIBILITY REPORT

This corporate responsibility report which was previously published on the NXP website as an interactive report, provides an overview of the economic, environmental and social aspects of NXP's business activities and products. In December of 2015, NXP merged with Freescale Semiconductor.
This report follows the Global Reporting Initiative (GRI) standards as the main reference for its content. The report includes all NXP operations and joint ventures in which we have a majority share. Reporting of employment information is for year end of 2017.

Environment, health and safety (EHS) performance indicators measure the EHS performance of our manufacturing facilities from 2010 through 2017.
Significant changes have influenced our reporting: · 2015 Sold the bipolar business which includes
the Jilin China factory · 2015 Divested the NXP RF division · 2015 NXP merged with Freescale Semiconductor · 2017 Divested the NXP Standard Products Business
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OUR COMMITMENT
Our commitment to corporate responsibility is at the heart of our ethical standards, policies and business practices. To help guide a global team of approximately 31,000 employees, we developed programs around these key elements: Business Ethics and Transparency, Environment Health and Safety, Human Rights, and integration of corporate responsibility into our supply chain.
For NXP, Secure Connections for a Smarter World involves working practices that are both responsible and sustainable. We provide a safe working environment, promote good health and minimize the environmental impact of our activities. And we work hard to do more than comply with existing standards. We actively strive to establish a global benchmark for sustainability in our industry. NXP fosters ethical principles and respect for the environment, employees, and the communities in which we work. Quality is our number one driver, and as a business our goal is economic success. We go to great lengths to ensure that sustainability is ingrained in our business conduct at all levels. This policy affects the way we manage our company, and the way we interact with society at large.

SUSTAINABILITY POLICY

Ethics The NXP Code of Conduct defines the principles and high standards which are applied to its business practices and those of its global supply chain. This Code is enshrined in the contracts of all employees, and encourages respectful, dignified and professional standards of behavior across our global network of sites.
Employees NXP has a global workforce that is highly diverse, both geographically and culturally. We are committed to providing a workplace that is safe and secure, where every employee is empowered to achieve a healthy work-life balance, and everyone is treated with respect and dignity.
Products NXP is committed to creating the highest quality products and packages. These Secure Connections for a Smarter World are developed to provide a positive contribution to society. We aim for continuous reduction of environmental impact with each new product generation, conserving natural resources and establishing plans to phase out non-critical hazardous substances.

Values NXP has five core Values: raising the bar, engaging curiosity, taking initiative, working together and developing deep core competence. These values form the basis of our customer-focused passion to win.
Compliance NXP complies with applicable legislation, regulations, codes of practice, often going beyond specified standards. Where laws and regulations do not provide adequate controls, NXP adopts its own standards which are vigorously implemented. Local initiatives NXP works closely with partners and individuals to support and strengthen the communities in which we operate.
Transparency NXP publishes sustainability results both internally and externally, showing our targets and measurements on a range of metrics.
Dialog NXP engages in open, ongoing dialogs with employees, customers, investors, the public, and other key stakeholders to continuously improve its sustainability performance.

This policy and its resulting actions are regularly reviewed and updated to meet our stakeholders' needs.

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

MATERIAL ASPECTS AND BOUNDARIES

NXP conducts assessments that aim to align corporate responsibility goals with NXP's business objectives. We incorporate feedback to inform us of the key corporate responsibility issues and their impact on our business. In defining these focus areas, we interviewed our stakeholders, researched best practices in the industry, studied the legislative landscape and reviewed the results from our participation in various industry associations.
As a result, each category that we report on meets three criteria: · Is greatly significant · Has a current or potential impact on the company · A matter over which we, as a company, have a reasonable
degree of control

Some of the issues that we have determined to be of most material value are Social, Environmental, and Supply Chain Responsibility. Such topics that we believe are of greatest interest to our stakeholders, who want to make informed decisions about NXP's environmental and social performance are (in alphabetical order):
· Carbon footprint reduction · Chemical management (processes and products) · Conflict minerals · Energy and water reduction · Human rights · Supply chain responsibility · Worker health and safety

SUSTAINABILITY ORGANIZATION

Sustainability is the responsibility of the CEO and the NXP management team. NXP has a Social Responsibility board and an EHS Board, responsible for setting the Sustainability and EHS related vision, policies, standards and improvement plans. It is supported by our Insurance and Risk Management Department, our Business Continuity Management Office, our Facilities and Environment, Health and Safety (EHS) Councils, which consist of senior EHS managers from our worldwide sites and the Sustainability Office.

The Social Responsibility and EHS Boards have executive level members representing operations and business groups. The Social Responsibility and EHS Boards establishes the strategy and sets targets, while the sustainability and EHS office performs operational functions. These targets include managing environmental, health, and safety conditions, overseeing the management of chemicals, monitoring and controlling sustainability related data, supporting customers and contracts, coordinating social investment, liaising with industry associations, and delivering internal and external communications on sustainability.
The sustainability office meets regularly with the boards to discuss and review NXP's and our supplier's performance. Any issues of nonconformance are handled in the sustainability office and if needed, issues are escalated to the board.

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ECONOMY
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As part of our commitment to keeping our stakeholders informed about our achievements, our sustainability strategies, and our economic health, the following provides our company's financial facts and figures and summarize our approach to corporate governance and business continuity.
We are a safety-and security-conscious business, and take all reasonable precautions to avoid situations that may threaten the safety or welfare of our employees, their families, our suppliers, our customers, other members of the community, our business or our stakeholders. If a situation threatens the safety and security of people or property, NXP will make every reasonable effort to minimize damage and protect employees, assets, and corporate reputation, and will endeavor to provide affected audiences with timely and accurate information about the situation.
CORPORATE GOVERNANCE

BOARD OF DIRECTORS Under our articles of association and Dutch corporate law, the members of the board of directors are collectively responsible for the management, general and financial affairs and policy and strategy of our company. Our executive director will be responsible for the day-to-day management of the company and for the preparation and execution of board resolutions, to the extent these tasks are not delegated to a committee of the board of directors. Our chief executive officer or all directors acting jointly may represent our company with third parties. A conflict of interest between the company and one or more of our directors is not expected to have any impact on the authority of directors to represent the company. Under our board regulation, a conflict needs to be reported to the board of directors and the board of directors shall resolve on the consequences, if any. Under current Dutch law, in case of a conflict, the general meeting of stockholders may at any time resolve to designate a person to represent the company. Although current Dutch law allows our directors to participate in deliberations and to vote on matters on which the respective director is conflicted,

the Dutch corporate governance code and our board regulations do not allow directors to participate or vote on such matters. Our non-executive directors will supervise the executive director and our general affairs and to provide general advice to the executive director. Furthermore, the non-executive directors will perform such acts that are delegated to them pursuant to our articles of association or by our board regulations. One of the non-executive directors is expected to be appointed as chairman of the board and another non-executive director is expected to be appointed as vice-chairman of the board of directors.
Each director will owe a duty to us to properly perform the duties assigned to him and to act in the corporate interest of our company. Under Dutch law, the corporate interest extends to the interests of all corporate stakeholders, such as stockholders, creditors, employees, customers and suppliers.
Our directors will be appointed for one year and will be re-electable each year at the general meeting of stockholders. The

members of our board of directors may be suspended or dismissed at any time by the general meeting of stockholders. A resolution to suspend or dismiss a director will have to be adopted by at least a two thirds majority of the votes cast, provided such majority represents more than half of our issued share capital and unless the proposal to suspend or dismiss a member of the board of directors is made by the board of directors itself, in which case resolutions shall be adopted by a simple majority of votes cast.
The board of directors has adopted board regulations governing its performance, its decision making, its composition, the tasks and working procedure of the committees and other matters relating to the board of directors, the chief executive officer, the non-executive directors and the committees established by the board of directors. In accordance with our board regulations, resolutions of our board of directors will be adopted by a simple majority of votes cast in a meeting at which at least the majority of its members is present or represented. Each member of the board of directors has the right to cast one vote. In a tie vote,
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the proposal will be rejected. The above principles are laid down in Dutch law, the above-mentioned board regulations and in our Articles of Association.
BOARD COMMITTEES While retaining overall responsibility, we expect that our board of directors will be able to assign certain of its tasks to permanent committees. Members of the permanent committees will be appointed by the board of directors. The board of directors will also determine the tasks of each committee. The board of directors has established an audit committee and a nominating and compensation committee, each of which having the responsibilities and composition described below and in the attached charters:
Audit Committee Our audit committee consists of five

independent non-executive directors who are appointed as chairman of the audit committee, qualifies as an "audit committee financial expert" as such term is defined in Item 407(d)(5) of Regulation S-K and as determined by our board of directors. Our audit committee assists the board of directors in supervising, monitoring and advising the board of directors on financial reporting, risk management, compliance with relevant legislation and regulations and our code of conduct. It oversees the preparation of our financial statements, our financial reporting process, our system of internal business controls and risk management, our internal and external audit process and our internal and external auditor's qualifications, independence and performance. Our audit committee also reviews our annual and interim financial statements and other public disclosures,

prior to publication. At least once per year, the non-executive directors who are part of the audit committee report their findings to the plenary board of directors. Our audit committee also recommends to our stockholders the appointment of external auditors. The external auditor attends most meetings of the audit committee. The findings of the external auditor, the audit approach and the risk analysis are also discussed at these meetings.
Nominating and Compensation Committee Our nominating and compensation committee consists of four non-executive directors. All four members are independent directors under the Dutch corporate governance rules and under the NASDAQ and SEC compensation committee structure and membership requirements. The nominating & compensation committee determines selection criteria and appointment procedures for members of our board of directors, periodically assesses the scope and composition of our board of directors and evaluates the performance of its individual members. It is responsible for recommending to the board of directors the compensation package for our executive directors, with due observance of the remuneration policy adopted by the general meeting of stockholders. It reviews employment contracts entered into with our executive directors, makes recommendations to our board of directors with respect to major employment-related policies and oversees compliance with our employment and compensation-related disclosure obligations under applicable laws.
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INVESTOR RELATIONS

Our financial statements are records of our financial activity. They include a balance sheet, income statement, statement of cash flow and statement of retained earnings. As a public company, NXP publicly discloses

quarterly and annual financial statements. More information about NXP's financial disclosures, including links to our financial statements, can be accessed at http://investors.nxp.com.

BUSINESS CONTINUITY MANAGEMENT
NXP is committed to preparing and planning for serious incidents or disasters so that we can resume delivery of products and services as soon as possible in the event of a disruptive event.
To achieve our Business Continuity objectives, we have created a Business Continuity System under the guidelines of ISO 22301 and IATF 16949 Section 6.1.2.3. The NXP Business Continuity Management includes all NXP businesses, activities and sites under NXP control. NXP deploys a multi-tier approach to business continuity and crisis management. Each tier focuses on a specific risk area and corporate guidelines are established for each tier and are integrated within each business group.

Product Stewardship

Appendix
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OBJECTIVES The NXP business continuity plan has defined the following objectives:
· Prevent or reduce injury to staff · Minimize loss or damage to property, the
environment and the extent of disruption · Ensure immediate and appropriate
emergency actions are taken · Provide an effective, fit-for-purpose
structure for responding to an incident, with pre-determined roles and responsibilities · Identify other key business activities required for our NXP organizational survival in the short-term · Identify other business activities that will need to be recovered · Set up suitable alternative means of operation · Identify alternative sources for supplies, resources and locations to safeguard and retrieve vital records · Train personnel and familiarize them with emergency and recovery procedures · Communicate effectively with key stakeholders such as employees, customers, suppliers, investors, media and regulators
ORGANIZATION The Business Continuity Management Office is the global coordinator for the Business Continuity Plan. The Business Continuity Management Office is responsible for providing guidance and standardization for business continuity plan development, maintenance, testing and maintaining a solution for a centralized plan retention. The BCM office will provide periodic status reports to senior

management on the progression of business continuity plan development, maintenance and testing for all locations within the scope of the BCM Program.
Corporate Business Continuity Team (CBCT) The NXP Corporate Business Continuity and Crisis Management programs are managed and focused via the Corporate Business Continuity Team (CBCT). The CBCT is a cross functional team of senior leaders. This team has been established to enable the company to develop and implement the BCM Program, to manage incidents and to continue its business-critical activities in crisis situations. The CBCT is comprised of several teams that deal with the various aspects of risk prevention, mitigation and incident management.
The current membership of the CBCT is comprised of members from technology and operations, supply chain, procurement, human resources, finance, legal, communication & public affairs, IT, site services, security, quality, sustainability, and environment, health and safety.
Site Business Continuity Team (SBCT) The Site Business Continuity Teams located at each factory, focuses on the risks associated at that site. The purpose of this team is to identify potential risks in our factory that can have a major impact on product supply to end customer.
This may include physical factory asset risks such as factory tool set availability, facilities systems, utility infrastructure, regional risks or other supply risks. The team will

define, execute and measure results of risk mitigation actions to reduce likelihood and/ or impact of the identified risks.
APPROACH Business Continuity strategies are focused on the risks associated with each site. Each site has identified the potential risks that can have an impact on product supply to the end customer. Risks may include physical factory assets risk, utility infrastructure, regional risks or supply risks. Each site periodically reviews and updates the site business continuity plan. The plans are documented and maintained at the sites and are audited periodically.
CLASSIFICATION OF SITES NXP conducts its business and operations in approximately 100 sites and in over 30 countries worldwide. While NXP provides utmost care at all our sites, we categorize our sites based on assessed risk, as well as size and magnitude of operations. · Tier 1 Significant impact if operations are
interrupted. Includes manufacturing sites, large design centers or sites with critical operations e.g. IT data centers. · Tier 2 Moderate impact if operations interrupted, including design or software centers and major regional office centers. Typically, tier 2 sites will be nonmanufacturing sites with >150 employees. Some sites may be classified as Tier 1 based on management discretion. · Tier 3 All remaining low-risk sites, including sales sites or remote locations with <150 employees.
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BUSINESS IMPACT ASSESSMENT The business impact assessments include a focus to three primary areas of likelihood of an event, the impact of an event and the recovery time from an incident. Each of these attributes will be given a numerical score and the team will facilitate sharing of learnings and calibration of scores. The review and the update of these plans shall be reviewed at least once a year. A standard document will be created and utilized across all the factories.
PRODUCT SUPPLY CONTINUITY The product supply business continuity plan assures product delivery to our customers. It covers the response documentation for internal and external use. Key elements for the product supply continuity plan are as follows:
· Response process documentation for internal and external use
· Assessment and response team initiation for product supply
· Decision making hub related to product supply
· Product allocation · Communication protocols for
external customers · Repository for communication and
event responses

IT BUSINESS CONTINUITY Information technology business continuity plan addresses the recovery of businesscritical data systems. Key elements for the IT business continuity are as follows:
· Communication procedures for incident management available
· Information on executing restoration procedures
· Process to initiate service restoration teams into action
· Outline coordination process for restoration of operations
PROCUREMENT BUSINESS CONTINUITY The procurement business continuity plan will assure the delivery of raw materials to the NXP sites. Key elements of the procurement continuity plan are as follows:
· Conduct pro-active risk analysis to determine key suppliers and determine alternate options
· Work with key suppliers to ensure an assurance of supply to NXP
· Evaluate dual sourcing options as deemed needed from risk analysis

ALERTS Alerts are in place to notify us in events of earthquakes, typhoons, floods, explosions, or the like. We also have a geographic information system that includes the latitudes and longitudes of the manufacturing locations of our various material suppliers. Teams receive emails whenever events happen, and this immediately triggers a due-diligence assessment and an action-planning process. We reach out to factories and vendors in the proximity of the crisis, and if there might be an impact to our supply continuity, we take mitigation actions. Proactive communication with our customers is also part of this process.
The NXP Business Continuity team evaluates risks and potential threats periodically and will provide timely communication to our customers should an incident occur which impacts our operations. These communications could vary from an update to an initial assessment survey or more detailed and incremental follow-up information as an incident is managed.

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ETHICAL STANDARDS
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NXP's commitment to the highest standards of ethics and integrity helps us earn the continued confidence of our employees, investors, customers, vendors, and communities.
NXP CODE OF CONDUCT

Our Code of Conduct (the "Code") translates our commitment into principles, standards, and responsibilities that help guide our behavior and our decisionmaking. The Code prohibits unethical behaviors, such as conflicts of interest, kickbacks, bribery, fraud, improper accounting, and improper use of company assets or funds. The Code mandates compliance with the laws of the countries in which we do business, and conformance with international standards for labor and human rights. It also requires the protection of confidential information and intellectual property and strict adherence to all publicreporting requirements. Through the Code, our commitment to ethics and integrity is ingrained in our daily operations.
The Code sets out the values that guide us as we work to fulfill our ambitions in the company. It guides us, not only in achieving compliance with legal requirements and fundamental global standards, but also in raising the bar in our behavior. The Code is an expression of the best that we are: ethical individuals who demonstrate benchmark behavior in our everyday interactions, and a company that operates as a socially responsible corporate citizen of the world. The code discusses behaviors expected of all of us and advises on ethical and legal situations we may face in the course of our work. It guides us through

ethical situations such as intellectual property protection, conflicts of interest, anticorruption practices, harassment, discrimination and more. Every employee is required to acknowledge that they have read and will comply with the Code and is encouraged to raise concerns when they arise.
The Code applies equally to all our activities on behalf of NXP worldwide and governs all our business decisions, including finance, purchasing, supply management and specifies policies covering labor and human rights, business ethics, environmental compliance, and workplace safety and health.
The Code is not an all-encompassing document, but formulates the minimum requirements for our behavior on behalf of NXP. Additional local rules of business conduct or ethical behavior may be made by BU, Operations, Corporate, and Country Management wherever necessary, as long as such rules are consistent with our values, our reputation, and the contents of the Code.
POLICIES AND PROCEDURES The highest standards of integrity are to be upheld in all business interactions. All NXP sites and our suppliers shall have a "zero tolerance" policy with respect to

all forms of bribery, including promising, offering, giving, or accepting any bribes, corruption, extortion, or embezzlement, and all business dealings shall be transparently performed and accurately reflected in business books and records. Monitoring controls are implemented throughout the organization to prevent and detect possible violations of anticorruption laws.
Information regarding business activities, financial situation, or performance is to be disclosed in accordance with applicable regulations and prevailing industry practices. Falsification of records or misrepresentation of conditions or practices is unacceptable. Intellectual property rights are to be respected, and the transfer of technology and know-how is to be done in a manner that protects intellectual property rights. Standards of fair business, advertising, and competition are to be upheld. Appropriate means to safeguard customer information must be available.
ORGANIZATION The Ethics Committee consists of the NXP's SVP & Chief Corporate Counsel, an executive representative from Human Resources, the Director of Sustainability and Environment Health & Safety and the NXP Chief Audit Executive. The Ethics Committee advises the Management Team in defining and
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deploying the Code of Conduct, assure the completeness of recording of the allegation of misconduct and assure appropriate action has been taken for the allegation of misconducts. The assurance part of the role is managed by a subcommittee of the Ethics Committee consisting of the SVP & Chief Corporate Counsel and the Chief Audit Executive. The Ethics Committee is supported by a secretary. The Ethics Committee reports to, and provides assurance to the Management Team and the audit committee to the NXP Board of Directors about the completeness and adequacy of the actions taken on allegations of misconduct.
MANAGEMENT SYSTEMS At all sites, there are processes in place for communicating clear and accurate information about policies, practices, expectations and performance to workers, suppliers and customers.
EMPLOYEE ENGAGEMENT All employees worldwide receive training on NXP's Code of Conduct. Training typically takes about one hour per employee and must be completed every two years. A targeted population, depending on their roles and geographic locations are assigned more in-depth ethics and compliance training based on topics such as anticorruption, import-export compliance, insider trading and antitrust.
In 2016 an ethics survey was sent to our indirect labor employees to understand NXP's ethical culture and conduct. Participation rate was at 75% with overall positive results across businesses, functions

and countries. The groups and areas that had lower ratings will be followed up to explore and provide support.
INVESTIGATIONS We monitor and assess compliance and investigate each allegation of noncompliance. When a problem is detected, we analyze the root cause and modify the relevant internal control system to prevent a possible recurrence. We track the company's compliance performance and report progress on a quarterly basis to the Chief Financial Officer, General Counsel, Human Resources and the Audit Committee of our Board of Directors.
In 2017, allegations were reported to the ethics committee in which every report was investigated in order to establish whether the allegations constituted violations. In which, 44% of the allegations were substantiated, and disciplinary measures were taken according to the severity of the breach: an official warning, suspension or dismissal. In addition, some cases revealed the need for changes within the organization, which have now been implemented. All reports are taken seriously and are investigated. Good faith suspicion is sufficient, as you do not need conclusive evidence to report a potential issue.

GRIEVANCES AND WHISTLEBLOWERS Employees may submit complaints, either anonymously or not, regarding violations of the NXP Code of Conduct. The privacy of both the whistleblower and the subject of the complaint will be protected to the fullest extent possible within the legitimate needs of the law and any ensuing investigation. Retaliation against workers who participate in such programs in good faith or refuse an order that is in violation of the NXP Code of Conduct is prohibited.
Information about the various complaint channels are clearly communicated, free, easily accessible, and visible (grievance box, whistleblower service - such as our SpeakUp line, ability to report anonymously, posters, etc.). Workers are trained, upon hire in a language they understand. At our sites, we make use of communication programs to ensure that every employee is fully informed and understands the policy of non-retaliation.
When a complaint or grievance is received, there is an effective procedure for documenting, investigating, and addressing the complaint or grievance, including appropriate disciplinary actions. The NXP Ethics Committee reviews complaints and grievances, and oversees their investigation. The NXP Ethics Committee informs senior members of management and the Audit Committee on the reported cases. When necessary, corrective actions to prevent the reoccurrence of similar complaints are implemented.
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SOCIAL RESPONSIBILITY
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SOCIAL RESPONSIBILITY

NXP believes that social responsibility is important for our employees, the global population, our planet and vital for our business success. Because of our commitment, we strive to be a leader in social responsibility. NXP has developed and established a comprehensive set of sustainable business initiatives that are incorporated into our core business practices.
Our motto is Engage. Protect. Respect. This motto engages with our employees, coworkers, managers, suppliers, customers, our community and other relevant stakeholders. We protect and respect each life, everyone's human rights, the environment, and the health and safety of all.

The NXP Social Responsibility office is tasked to:
1. Oversee the strategic direction and implementation of the NXP Social Responsibility program by establishing and maintaining the Social Responsibility policies and standards.
2. Ensure compliance of all NXP manufacturing facilities to our Social Responsibility policies and standards by conducting regular capacity building, site assessments and audits.
3. Conduct supply chain risk assessment in collaboration with the NXP purchasing group to determine high priority suppliers that will be required to

undergo the NXP Social Responsibility audits. 4. Conduct audits of suppliers and provide consultation to suppliers that require support in establishing Social Responsibility programs that are aligned to NXP standards. 5. Manage and track corrective and preventive actions progress of suppliers to ensure that gaps found in supplier audits are fully addressed. 6. Work and collaborate with external stakeholders, i.e., industry associations, customers, NGOs, government agencies, etc., to work on progressing important social responsibility issues.

SOCIAL RESPONSIBILITY OFFICE Social responsibility is the responsibility of the CEO and the NXP management team. The Social Responsibility board is chaired by the Chief Human Resource Officer and has executive members representing operations and business groups. The Social Responsibility board provides strategic directions and sets targets, while the Social Responsibility office, under the direction of Senior Director of Sustainability and EHS, performs operational functions. The Social Responsibility office meets regularly with the board to discuss and review NXP's and our suppliers' performance. Any issues of nonconformance's or potential risks are handled in the Social Responsibility office and if needed, issues are escalated to the Social Responsibility board.
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GOALS Our goal is to have no core violations or priority findings within our company from our own internal audits or from our customer audits. NXP's RBA (Responsible Business Alliance) self-assessment scores are to be above 90% for all manufacturing sites. Audit scores for our manufacturing sites are to achieve >95%. If a site fails to meet the threshold, then an audit will occur every 6 months until the 95% threshold is met.
RISK ASSESSMENTS AND AUDITS Regardless of location, whether in the Americas, Europe or Asia-Pacific, all NXP facilities conduct annual risk assessments for social responsibility. As a member of the Responsible Business Alliance (RBA) each NXP factory completes an RBA SelfAssessment questionnaire that addresses topics such as labor, ethics, environment, health and safety as well as management systems. In addition to the RBA selfassessment, each facility must also complete the NXP self-assessment, that is based on the NXP social responsibility requirements.
Each NXP manufacturing facility has a Social Responsibility audit conducted by a NXP-approved third party audit firm. NXP facilities are required to achieve a score of 95% and above to demonstrate success in the deployment of the program and initiatives. All facilities should not have any core violation findings as specified by the NXP standards on Social Responsibility.
Audits include many different components, such as document reviews, employee and management interviews as well as facility

inspections. Audits also include interviews with labor agents, onsite service providers and inspection of the employees living conditions.
TRAINING AND CAPACITY BUILDING NXP continuously trains our employees and supply chain. Since 2013 over 1,000 key employees have received training on social responsibility with 120 of these key employees certified as RBA lead auditors. The Black belt training, is the RBA lead auditor course conducted by Verité in which participants are enrolled in a five-day workshop that covers social systems auditing, investigative skills and management systems to successfully conduct Labor and Ethics components or a social responsibility program. At the end of the training course, each student takes a 2-hour written exam, scored by Verité and is sent for final verification to IRCA (International Register of Certificated Auditors). Successful completion of this course fulfills the training requirement of IRCA for labor and ethics auditors to the RBA auditing program.
Our focus is to maintain a pool of sufficiently qualified social responsibility champions and subject matter experts for each manufacturing facility. Each year we increase internal communications within our manufacturing facilities on social responsibility topics.
NXP internal training is targeted at the following audience: 1. Executive Management Teamthis is a
high-level training that covers the NXP social responsibility requirements and the expectations of the management team.

2. Manufacturing facility management teamthis is a 2-hour training called the White-belt training. This training is focused on the high-level requirements of the NXP standards on social responsibility and what role the facility management team plays in facilitating the success in the implementation of the standards.
3. Manufacturing Facility Social Responsibility Steering and Working Committeethis is a 2-day training, or Green-belt training, providing in-depth analysis into the specifics of interpreting the NXP Social Responsibility standards and the requirements to successfully implement the program at the facility.
4. Manufacturing Facility Social Responsibility subject matter experts this is an intensive 5-day Responsible Business Alliance (RBA) Labor and Ethics Lead Auditor training, or Black-belt training. The main goal is to train a selected group of subject matter experts at the sites who will be responsible for program implementation, conduct training for the facility's general population, and support the facility in both internal, external and supplier social responsibility audits.
The training program content is updated and revised whenever there is a change or revision in the NXP Standards on Social Responsibility. The NXP standards are reviewed on an annual basis to determine the need for a revision based on changing regulatory landscape, industry best practices or in customer requirements and expectations. In 2015 the audit program and the standards were revised to include
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a new section in the NXP standards on the definition of recruitment fees. This revision provided more clarity on the NXP Employer Pays policy in the recruitment of foreign workers. In 2017, the auditable standards were revised to include information regarding clarification of fees and expenses, employment contract substitution, the total percentage of apprentices, wages for foreign workers, and the worker grievance system. The changes were communicated to all NXP sites and to our supply chain through a series of webinars.
Re-training is provided when: · A new revision to the NXP Social
Responsibility standards is published · A significant personnel change occurs
in a facility · New facilities are added to the company
The effectiveness or success of the training can be measured from the NXP Social Responsibility audit performance.
VALIDATION Each month, key performance indicators are reported to the Sustainability Office and the management team on topics such as NXP internal audits, NXP internal self-assessment scores, signed conformance letters from our supply chain, risk indicators within our supply chain and core violations from our supplier audits.
The Social Responsibility office meets with the purchasing organization monthly and sometimes weekly, to discuss audit results, the approved corrective action plan and

progress towards completing the corrective action plan.
NXP monitors improvement by measuring the number of core violations, repeat audits, frequency of findings, and the closure rates of the corrective actions. NXP measures the correlation between the self-assessment questionnaire scores and the audit scores for each manufacturing facility and the results are within target.
REMEDIATION NXP has clear and widely communicated procedure in place for reporting concerns within our operations. We conduct training and post the grievance SpeakUp line at our sites, on the internet and our internal intranet. All employees within NXP and any outside stakeholder, whether it is a supplier or NGO for example can report incidents to NXP.
The Ethics Committee monitors and initiates investigations. The Sustainability Office supports the Ethics Committee when requested. The Ethics Committee along with the Sustainability Office then considers the approach to the allegation. These discussions focus on the grievance, the remediation plan when violations are substantiated and a corrective action plan is established.
The Ethics Committee consists of the NXP's SVP and Chief Corporate Counsel, an executive representative from Human Resources, the Director Environment Health and Safety and the NXP Chief Audit Executive. The Ethics Committee advises the Management Team in defining and

deploying the Code of Conduct, assure the completeness of recording of the allegation of misconduct and assure appropriate action has been taken for the allegation of misconduct. The Ethics Committee reports to, and provides assurance to the Management Team and the audit committee to the NXP Board of Directors about the completeness and adequacy of the actions taken on allegations of misconduct.
At our sites, we make use of communication programs to ensure that every employee is fully informed. Information about the whistleblower and complaint channels are clearly communicated, free, easily accessible, and visible (grievance box, SpeakUp service, posters, etc.) Workers are trained, upon hire and in a language they understand, on the whistleblower policy.
Worker-management engagement is openly practiced at all sites, such as regular worker-management coffee talks or dialog sessions to programs where workers can raise concerns directly to the site general manager. In NXP, workers are free to raise concerns and suggestions to management. NXP continues to explore new innovative methods to enhance the worker-management engagement process to ensure that workers' voices are effectively addressed.
In addition, when worker interviews are conducted during an audit, the worker receives a business card that has the grievance local phone number and the email address if they have additional information, concerns or they endure retaliation for speaking with the auditor.
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AWARD, INNOVATION AND LEADERSHIP
Award In November 2016, the Thomson Reuters Foundation, the philanthropic arm of the world's biggest news and information provider, awarded NXP with the Stop Slavery Award in the "Policy and Implementation" category. The award is the first global recognition for businesses that have excelled in efforts to eradicate forced labor from their supply chains.
NXP was chosen because of its deep commitment to the fight to end modern slavery. Since 2012, the company has made this a key corporate initiative through its own operations and across the supply chain. The company was first in its industry to adopt an "Employer Pays" policy and the first to require its foreign migrant workers not to release their government-issued documents to labor agents.
Today, NXP pays for all related recruitment fees, including transportation costs, and provides lockers to keep its workers' government-issued documents safe. The company also carefully selects its recruitment agencies, auditing them to verify they are not involved in any forms of bonded or forced labor.
In addition, NXP has a dedicated team in place to ensure compliance to these policies, going well beyond the first-tier supply chain. This team diligently conducts annual risk assessments and audits of its factories and suppliers, managing corrective

and preventative actions while working closely with external stakeholders.
"Modern slavery and debt bondage are serious violations of rights and NXP is determined to do what we can to end this," said Richard Clemmer, CEO of NXP Semiconductors.
"As a technology provider working with hundreds of suppliers globally, we dug deeply into our supply chain to ensure our workers are not held hostage by labor suppliers, making sure that kickbacks and payment demands from employment agencies are eradicated. Working with our suppliers to do the right thing train, audit, institute corrective action plans, re-audit and motivate we've focused on cooperative improvement as a corporate strategy and I am very proud of what we have accomplished to date. We thank the Thomson Reuters Foundation for their work and for the opportunity to highlight the continuing efforts NXP is making to bring this abhorrent practice to an end once and for all."

Companies from ten global industries were assessed by independent reviewers according to their policies and practices with regard to anti-modern slavery. The assessment criteria were developed using a combination of existing standards, including the UK Modern Slavery Act and the California Transparency in Supply Chains Act, as well as other global best practice standards. Based on overall scores, NXP demonstrated leading practices with evidence of implementation.
Monique Villa, CEO of the Thomson Reuters Foundation and founder of TrustLaw and Trust Women, said: "NXP is a prime example of a large global company who is taking action, going above and beyond the current legal requirement to ensure their business is not tainted by slavery. Their commitment to transparency and the courage they have shown to speak openly of this issue sets the standard for others to ensure that the fight against slavery is perceived both as a rights priority and a business imperative."
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Innovation NXP's goal is to go deeper into the supply chain. In 2016, we went to Indonesia to audit the third-tier labor agents and their sub-agents, who support in the recruitment of workers in the rural villages of Indonesia. The audit covered two main sub-agents in Indonesia that directly work with the labor agents in Malaysia, eleven sub-agents that recruit from the rural villages, and three schools in Medan and Yogjakarta. The school visits provided training on labor practices and their human rights to potential candidates once they complete

their mandatory education before joining the workforce. These actions were done to ensure that our investigation and audit covers the entire worker supply chain in Indonesia and meets the rigorous NXP standards. During this time, we also conducted several educational sessions to the labor brokers and the workers on NXP standards.
Leadership The Social Responsibility team has been recognized by NXP management. Management regularly recognize and

emphasize at quarterly town halls the activities and leadership the team is taking to work with our supply chain. In addition to recognition within NXP, the Social Responsibility team has been invited to numerous speaking engagements by our peers, authorities and industry association to talk about our activities, best practices and lessons learned.

NXP is setting standards within the semiconductor and electronics industry by being one of the first to set the No Recruitment Fee Policy, to not withhold passports, require working hours be no more than 60 hours per work week, have at a minimum one rest day per every seven days worked and not hire child labor.
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LABOR AND HUMAN RIGHTS

The importance we place on maintaining high ethical and corporate social responsibility is reflected in our commitment to the labor and human rights of our employees. Our codes, standards, programs, and audit procedures are built around the recognition that everything we do in connection with our work must reflect the highest possible standards of ethical business conduct and our employees are treated with respect and dignity.
NXP is responsible for providing a work environment in which ethics, integrity, and trustworthiness are accepted and shared, not just among ourselves but with all our stakeholders, including the communities in which we operate and work. We support the aim of the International Labor Organization (ILO) to arrive at universally accepted labor standards and have therefore adopted internal policies, standards, procedures, and guidelines with respect to the topics discussed below.
NXP became a member of the Responsible Business Alliance (RBA), previously known as the Electronic Industry Citizenship Coalition (EICC), in April 2014. In 2017, NXP maintained its full member status to the new RBA criteria, demonstrating our full support of the vision and goals of the RBA. The requirements from the RBA Code of Conduct are either part of NXP's own Code of Conduct or have been included in NXP policies, standards, and procedures. NXP also commits to apply similar requirements to its suppliers, through the NXP Supplier Code of

Conduct, and to monitor the application of the Supplier Code of Conduct to the best of its ability.
We have specific standards in place regarding labor and human rights. These standards are to be strictly followed by NXP and all NXP suppliers, such as external manufacturing partners, direct material suppliers, tools and machines suppliers as well as suppliers of logistics and packaging services, and onsite service providers and are thoroughly tested during our audits.
LABOR AND HUMAN RIGHTS FOCUS AREAS NXP's auditable standards on labor and human rights consist of the following categories:
Freely Chosen Employment We shall under no circumstance make use of any form of slaved, forced, bonded, indentured, or prison labor. All work must be voluntary and there will not be a restriction on movement of workers and their access to basic liberties. Depending on local law requirements, everybody is free to terminate their employment with NXP upon reasonable notice without penalty. We will only employ, directly or through others, such as labor agents, people who are working of their own free will. Workers shall not be required to participate in any form of forced savings or loan program where repayment terms are indicative of debt bondage or forced labor. Paying fees, deposits or debt repayment for their recruitments or employment is never required and no one shall be deprived of

his or her identity papers upon starting work for NXP. NXP has taken the extra step of setting a new standard regarding repaying fees if found and document retention.
In Action
Due to the scarcity of local workers in Malaysia and the complexities for obtaining working permits and visas for migrant workers, it's quite common for companies to use the services of labor brokers in Malaysia to hire workers from countries such as Indonesia, India, or the Philippines. NXP's Social Responsibility Audit's scope includes the recruitment practices of labor brokers. It was soon detected that labor brokers in Malaysia would routinely retain migrant workers' passports. Upon learning about the common practice of withholding migrant workers' passports, NXP immediately summoned all its labor brokers to assess the situation and take action. In 2015, NXP required all labor brokers to return passports to the migrant workers. One labor broker rejected the new policies and NXP terminated the relationship as a result. NXP continues to audit the issue of passport retention in all its facilities and suppliers. Document retention continues to be a substantial problem; however, actions by companies like NXP represent a significant positive step.
NXP pays for all fees in the recruitment of workers. Such fees and expenses include · Application · Recruitment · Hiring · Placement
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· Processing fees of any kind, and at any stage, including agent, sub-agent, or employer operating, administrative, or overhead costs associated with the recruitment, selection, hiring, and placement of direct and contract workers
· Travel fees
To address concerns at all stages of the recruitment process, NXP started a comprehensive training and audit program of all labor agents and sub-agents in the sending and receiving countries to ensure compliance with the NXP standards and to mitigate the risk of modern day slavery. While in the sending countries of the labor agents and sub-agents, we educate them of NXP requirements, such as: Employment contracts written in native language of the worker, contract shall have accurate written details in regarding working conditions, nature of work, wages, benefits, working hours, and duration of contract. Contract shall be the same at the time of recruitment and at the receiving country. NXP's "No Fee Policy" and no withholding government issued documentation is thoroughly discussed in the training sessions. NXP goes through each Labor and Human Rights topics listed. In addition to training our suppliers, we also educate students that are potential employees of NXP within the villages of the sending country to educate them on their human rights and what it is like to be a foreign migrant worker. After training and collaboration, NXP audits the labor agents and sub-agents to help them identify areas of strength and weakness.
Our efforts to eradicate modern day slavery,

educate our supply chain and students earned us the 2016 Thomson Reuters Foundation's Stop Slavery Award for policy and implementation.
Child Labor and Young Workers We will always adhere to the legal minimum age requirements in all countries in which we operate. We will never employ children under the age of 16, under the age for completing compulsory education, or under the minimum age for employment in the country, whichever is stricter. To make sure all our employees are age-qualified, NXP has a strong age-verification process during the recruitment and selection process. If workers between the ages of 16 and 18 are employed, we will ensure that this work does not affect or preclude their educational opportunities or obligations, nor jeopardize their health and safety, including restrictions on overtime and night work.
NXP has a comprehensive policy that clearly states the minimum age for workers and an age-verification process during the recruitment and selection process. This includes at a minimum, inspection and verification of at least two forms of identification and visual identification. In China for example, the national issued identification can be cross referenced at a Chinese government website to determine if the identification presented is the real id issued to that person.
If an underage worker is found, NXP immediately implements a remediation program which includes protecting the

young worker from reprisal and provides the completion of the young worker's compulsory education. NXP has yet to discover child labor in our factories or in our supply chain. Audit findings related to child labor in our factories and our supply chains are because there is a lack of policies and procedures on how to manage the situation if child labor is discovered. These findings are placed in the corrective action plan and is monitored closely until acceptable closure is approved.
Working Hours and Rest Day Our work weeks shall not exceed the maximum set by local law and shall, in any event, not be more than 60 hours, including overtime, except during emergencies or unusual situations. Workers will be entitled to have at least one day off per sevenday period. Overtime work is voluntary, unless agreed upon by a collective labor agreement or union contract, or during emergencies or unusual situations. Worker can refuse to work overtime hours without penalty. Workers will have legally mandated breaks, holidays and vacation days. Adequate and effective policy and systems/ procedures are established to determine, record, manage, and control working hours, including overtime.
Wages and Benefits Our remuneration shall be consistent with the provisions of all applicable wage laws, including those relating to minimum wage, overtime hours, and legally mandated benefits. In compliance with local laws, workers shall be compensated for overtime at pay rates greater than
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regular hourly rates. Deductions from wages as a disciplinary measure are not permitted. Vacation time, leave periods, and holidays are consistent with applicable laws and regulations. Workers shall be paid in a timely manner. Workers shall always be aware of the composition of pay and benefits, in a detailed and clear manner, prior to employment. Workers shall receive clear statements in detail, in a language understood by workers. All employees, whether they are direct or foreign migrant workers are treated the same way at NXP.
Humane Treatment There shall not be harsh or inhumane treatment of workers, including any sexual harassment, sexual abuse, corporal punishment, mental or physical coercion, or verbal abuse; nor is there to be the threat of any such treatment. Employees shall be able to communicate openly with management regarding working conditions without having to fear reprisal, intimidation, or harassment. Disciplinary policies and procedures in support of these requirements shall be clearly defined and communicated to workers. There will be no restriction of workers' access to basic physical comforts such as toilets, bathrooms, drinking water or medical facilities. There will be free exit and entry of facility or dormitories and will not limit access to specific times of the day.
Non-discrimination and Diversity NXP is committed to diversity in its workforce and encourages equality of opportunity and fairness. Therefore, we do not tolerate any kind of harassment or discrimination based on, among other things, race, color,

age, gender, sexual orientation, ethnicity, disability, pregnancy, religion, political affiliation, veteran status, union membership, or marital status in hiring or employment practices such as promotions, rewards, or access to training.
NXP is committed to providing an attractive working environment for employees and we will recruit, hire, and promote employees solely on the basis of suitability for the job. We will recruit, select, provide opportunities for development and training, and promote on the basis of objective and nondiscriminatory criteria.
Freedom of Association and Collective Bargaining NXP recognizes the freedom of employees to establish or join an organization of their choice and will respect this right. We will not make employment subject to the condition

that a person must not join a union or must terminate membership in a trade union.
NXP respects the right to be represented by trade unions and other employee organizations. NXP will, whenever applicable, engage in the negotiation process either on its own behalf or through employers' associations. Local rights and co-determination will be fully respected with a view to reaching agreement on the terms and conditions presented by employees.
Workers shall be able to openly communicate and share grievances with management regarding working conditions and management practices without fear of reprisal, intimidation, or harassment. More information about grievance and whistleblower policies can be found in NXP's Code of Conduct.
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HUMAN TRAFFICKING

NXP is committed to respecting rights and upholding the values and high standards of ethics as expressed in our NXP Code of Conduct. NXP has a zero-tolerance policy for slavery and trafficking.
In 2015, the International Labour Organization reports that almost 21 million people are victims of forced labor. NXP is aware that slavery and trafficking is an issue within the semiconductor industry. It is NXP's policy that we and our suppliers shall not traffic in persons or use any form of slave, forced, bonded, indentured, or prison labor. This includes the transportation, harboring, recruitment,

transfer, or receipt of persons by means of threat, force, coercion, abduction, fraud, or payments to any person having control over another person for the purpose of exploitation. NXP allows all employees the freedom of association, the right to collective bargaining, the abolition of child labor and the elimination of discrimination. NXP forbids suppliers and recruiters from charging fees to employees during recruitment processes, or withholding government issued documents.
NXP expects our suppliers to respect rights, including maintaining policies and procedures to prevent the use of forced

labor. Our suppliers are obliged to comply with NXP's Supplier Code of Conduct and all applicable laws, rules and regulations. The NXP Supplier Code of Conduct uses the structure and contains language from the Responsible Business Alliance (RBA) Code of Conduct, and includes additional NXP specific requirements on slavery and trafficking.
NXP continues to update its policies, procedures and training as needed to seek appropriate safeguards in its operations and supply chain.

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

SOCIAL RESPONSIBILITY AUDITABLE STANDARDS

NXP's Auditable Standards on Social Responsibility is widely regarded as one of the most stringent sets of auditable standards in the industry. It begins with a rigorous deployment of the standards to all NXP facilities, through capacity building and regular audits of our global manufacturing sites, we ensure that the standards are implementable. Then we deploy the standards to our supply chain and external manufacturers.

Audits help us accomplish our objectives by bringing a systematic, disciplined approach to evaluating and improving the effectiveness of risk management, control, and governance processes. At present, we have in place different but complementary internal audit types: system audits that assess the continued and sustained compliance to the NXP and Certification standards, local and execution audits, and audits to improve NXP's Environment, Health & Safety (EHS) performance. Additionally, our customers and 3rd party certification auditors regularly conduct audits of our facilities. We work to address any issues identified in the audits.
The Auditable Standards on Social Responsibility consist of the following categories:
Labor and Human Rights NXP has auditable standards in place for freely chosen employment, childlabor avoidance, working hours, wages and benefits, humane treatment, nondiscrimination, freedom of association and collective bargaining, and diversity. More information about NXP's policy towards labor and human rights can be found in the Labor and Human Rights chapter.

Health and Safety NXP has auditable standards in place for occupational safety, emergency preparedness, occupational injury and illness, industrial hygiene, physically demanding work, machine safeguarding, sanitation, food, housing, health & safety communication, worker health, and safety committees. More information about NXP's policy towards health and safety can be found in the Health and Safety chapter.
Environment NXP has auditable standards in place for adequate and effective programs to reduce or control pollution and conserve resources, ensure safe handling of hazardous materials, and provide workers with adequate training and personal protection equipment. More information about NXP's policy towards the environment can be found in the Environment chapter.
Ethics NXP has auditable standards in place for business integrity, appropriate disclosure of information, fair business/ advertising/competition, data privacy, and whistleblower protection/anonymous complaints. Information about NXP's policy, organization and implementation towards ethics can be found in the Ethics chapter.

Management Systems NXP requires our internal and external sites to have policy statements, endorsed by executive management, that cover corporate social and environmental responsibility and affirm their commitment to compliance and continual improvement. There also are clearly identified company representatives in place who are responsible for implementation of the management systems and associated programs. Senior management reviews the status of the management system on a regular basis.
Additionally, programs shall be in place to identify the labor practices and ethics risks associated with the operations performed. There shall be determination of the relative significance for each risk, and implementation of appropriate procedural and physical controls, to control the identified risks and ensure regulatory compliance. At all our sites, we there shall be a process in place for communicating clear and accurate information about policies, practices, expectations, and performance to workers, suppliers, and customers.
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STAKEHOLDER ENGAGEMENT
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Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement

We operate in many different countries and ship to most countries in the world and have close relationships with customers, other multinational electronics companies, and industry associations.
Our business brings us into contact with a very wide range of stakeholders and requires that we be sensitive to those interactions. We believe that dialogue leads to mutual understanding, and with it a mutual commitment to sustainable development. We made stakeholder dialogue a part of our management processes and our Sustainability Policy.
We address the interests of each group through various methods and make regular assessments of our effectiveness. We continue to strengthen our approach, creating an additional structure where needed and improving the overall quality of each interaction. Some examples of our stakeholder interactions are given here.

Stakeholder Customers
Employees
Suppliers, Subcontractors Communities Local, national and international regulatory bodies

Interaction
Customer loyalty program Customer meetings Customer management support Customer supply chain report Joint research and development Joint strategy development Exhibitions and trade shows
Town hall meetings Print and web-based media Employee surveys People Performance Management (PPM) Employee councils, union meetings
Supplier Code of Conduct Supplier meetings Supplier audits
Information meetings Newsletters Community projects Local networking
Industry associations Advisory bodies (Local) networking/lobby activities Funded/non-funded lighthouse projects

Health and Safety

Investors Bondholders

Supervisory board meetings Ad hoc involvement
Quarterly results call Financial presentations, meetings

Environment

Media

Interviews Products and competence presentations Financial presentations, conference calls

Product Stewardship

Electronics/semiconductor industry Non-governmental Organizations (NGOs)

Industry associations Standards committees
Ad hoc involvement

Appendix

Academia

University programs Joint research and development Local networking
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EMPLOYEES We communicate with our employees in several ways, using print and web-based media along with face-to-face events. For instance, we have a company-wide circulation of a weekly email news bulletin (NXP Now), and we share recent external and internal news items on NXP's intranet home page. Many of our operations have their own news bulletins and intranet sites, populated with local and global NXP news. We deliver regular communications from our Management Team under the banner of MT Update. Employees are invited to send comments or questions to the Management Team. The Management Team's feedback and answers are then posted online where they can be read by all employees.
Our Quarterly Town Hall Meetings are a particularly effective way for us to deliver information to everyone in the company. Feedback shows that employees appreciate these meetings, which give them the opportunity to interact with colleagues, hear about the company's plans, and pose questions or express concerns directly to senior management. Alongside this form of open discussion, we conduct regular employee engagement surveys that measure the clarity and effectiveness of our communication and capture feedback for direct application within the organization.
CUSTOMERS To ensure we develop products that meet or exceed customer expectations, our Marketing and Sales teams work closely with our key accounts to align our development roadmaps.

NXP has been soliciting input from customers about the overall relationship since 2010 through an annual formalized feedback system. This direct feedback continues to be instrumental with prioritizing improvement efforts, resource allocation, and additional investments required to best support our customers. This feedback is detailed enough to identify the specific interactions deemed most critical in supporting our customers' business requirements as well as to how we are currently performing with each of them. This allows us to take action in the most customer-focused manner.
Our Customer Loyalty program uses vendorrating surveys and dedicated customer meetings to verify that we are delivering with excellence and satisfying our customers. The vendor-rating surveys include questions on environmental and social responsibility, so we can identify areas of concern and implement corrective actions. Customers rank us on various aspects of our operations, including product quality, business fulfillment, and business creation.
We use face-to-face meetings to create close relationships with our customers, and extend those relationships to our website and with appearances at industry tradeshows and other events. These events are an effective way to show our latest product developments to existing and potential customers, and give us the opportunity to exchange ideas with our colleagues, track industry trends, and discover new ideas. Members of our management team often deliver keynotes and presentations at these

events, highlighting how we address key issues associated with energy, mobility, security, and health.
OTHER GROUPS To address other stakeholder groups, such as public authorities, industry analysts, and the media, we use a global in-house team that cooperates closely with a few strategic partners, such as a PR agency. In external relations, we use a worldwide "huband-spoke" network of people, including experienced public affairs specialists, who actively engage with elected representatives of our stakeholder groups.
INDUSTRY ASSOCIATIONS We are a member of many industry organizations, participate in more than 65 standardization bodies and consortia, and are active in several other initiatives around the world. Where relevant, we help define specifications, establish new markets, promote fair trade, protect the environment, and ensure health and safety in the workplace. Our participation in industry organizations lets us interact with governments and regulatory bodies on a number of key issues. We often advocate stringent regulations but occasionally lobby to prevent bans on substances that are essential to our processes and currently have no alternatives. In such cases, we typically recommend seeking commitments to strictly minimize use until viable alternatives are found.
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As a member of the European Semiconductor Industry Association (ESIA), we are also a member of the World Semiconductor Council (WSC), an organization that participates in several outreach activities.
We chair the ESIA committee for Environment, Safety & Health (ESH). The committee is involved in several cooperative technical projects and addresses such issues as chemical management and preparation for the EU's REACH program, energy savings, use of PFCs, health and safety, quantitative targets, and EU legislation.
NXP is a member of the Global Business Coalition against Human Trafficking (GBCAT). GBCAT is a global coalition of corporations committed to eradicating trafficking in supply chains, including forced labor and all sex trafficking, notably child prostitution. GBCAT is a thought leaders' forum for developing and sharing best practices in addressing the vulnerability of businesses to human trafficking in their operations. GBCAT companies work together across different sectors and regions, each playing their own part, suited to their sector and comparative competencies.

NXP became a member of the Electronic Industry Citizenship Coalition (EICC) in 2014, now named the Responsible Business Alliance (RBA). In 2018, NXP was elected to the RBA Board of Directors. We believe that the collaborative efforts and shared tools and practices that membership in the RBA provides will be the most efficient way for NXP to make progress towards social responsibility within the electronics industry.
NXP is a member of the Responsible Labor Initiative (RLI) in which NXP is on the steering committee and actively engaged in all work groups. NXP will work diligently across the steering committee and the work groups to align our due diligence practices across multiple industries to better address the root causes of forced labor.
NXP is a member of the Responsible Mineral Initiative (RMI) where we regularly collaborate with other complementary programs and initiatives in the conflict mineral area. The RMI provides tools and resources to make sourcing decisions that improve our due diligence for responsible sourcing. NXP is also a member of the RBA's Responsible Raw Materials Initiative (RRMI). Our efforts

with RRMI help promote the common goal of understanding and mitigating the impacts of extraction and processing of raw materials in the supply chain.
In 2016, NXP joined the European Partnership for Responsible Minerals (EPRM) as a strategic partner. The EPRM is a multi-stakeholder partnership in which governments, NGOs, and private sector work together, aiming to increase the demand for responsibly sourced minerals from conflict-affected and high-risk areas. The EPRM serves as a knowledge platform where organizations can share knowledge on due diligence and support activities to improve the conditions in the mining areas.
In 2017, NXP became a signatory to the United Nations Global Compact. The UN Global Compact is an initiative that encourages businesses worldwide to adopt sustainable and socially responsible policies and to report on their implementation. The UN Global Compact is a principlebased framework for businesses, stating ten principles in the areas of human rights, labor, the environment, and anti-corruption. NXP is now part of a global network from which we can learn and to whom we can offer ideas and scalable solutions to society's challenges.
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WHO WE WORK WITH
Verité is an international NGO that conducts assessments, training, consulting, and research to ensure safe, fair, and legal working conditions in over 70 countries. Verité takes aim at serious problems: child labor, slavery, systemic discrimination against women, dangerous working conditions, and unpaid work. Verité is recognized as a leader in the field of corporate social responsibility, and NXP engages with Verité to ensure our program is best-in-class, and to establish a benchmark within the electronics industry.
ELEVATE is a global services firm specializing in supply chain social, environmental and business performance. ELEVATE is conducting the Workplace of Choice program, sponsored by the RBA, on foreign migrant worker protection. The Workplace of Choice is a pilot program focused in Malaysia. NXP is participating in this program which helps assess our Malaysian facility, conduct independent worker surveys, increase communication, provide education and additional helpline resources to our workers. Working with ELEVATE helps NXP understand workers' needs, wishes, and perceptions, and allows us to address and improve internal management systems and processes.
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SUPPLIER ENGAGEMENT
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NXP has a strong commitment to sustainability and social responsibility. NXP pursues mutually beneficial relationships with its suppliers and contractors and seeks to award business to those suppliers that are committed to observe the applicable rules of law and to support and respect human rights. NXP is committed to ensuring that working conditions in our supply chain are safe, that workers are treated with respect and dignity, and that our products and processes are environmentally responsible.
NXP depends on more than 10,000 suppliers from countries around the world. Regardless of region, NXP recognizes that innovative thinking, collaboration, and transparency creates long term sustainability. We proactively work with our suppliers to:
· Reduce environmental and social impacts · Mitigate sustainability risks · Improve operational efficiency · Mitigate employee safety hazards · Respect human rights
Our suppliers range from external manufacturing partners, direct materials suppliers, tools and machines manufacturers as well as logistics, packaging services and onsite service providers. We hold our suppliers accountable for responsible conduct and performance by requiring them to comply with applicable laws and regulations as well as the NXP Supplier Code of Conduct.

NXP SUPPLIER CODE OF CONDUCT

NXP's suppliers commit in all their activities on behalf of NXP to operate in full compliance with the laws, rules, and regulations of the countries in which they operate. Beyond this, NXP's suppliers are expected to comply with the NXP Supplier Code of Conduct. The NXP Supplier Code of Conduct is based on the NXP Code of Conduct and the NXP Auditable Standards on Social Responsibility, and draws on internationally recognized standards to advance social and environmental responsibility. The NXP Supplier Code of Conduct uses the structure and contains language from the Responsible Business Alliance (RBA) Code of Conduct, version 6.1. Other recognized standards used as references for the Code are the Universal Declaration of Human Rights, the International Labour Organization, Social Accountability International, and the Ethical Trading Initiative. Using the listed references, the NXP Supplier Code of Conduct also includes elements, modifications and clarifications from our audits conducted internally and externally according to best practices found.
The NXP Supplier Code of Conduct is owned by the Sustainability Office and is approved by the Social Responsibility board, consisting of executive NXP leaders. The Supplier Code of Conduct is reviewed annually to determine the need for a revision based on changings social and regulatory landscape, industry changes or customer requirements and expectations.

The NXP Supplier Code of Conduct consists of standards relating to labor and human rights, health and safety, environment, business ethics, and elements of an acceptable system for managing code conformity. Suppliers must adopt or establish a management system that is related to the content of the NXP Supplier Code of Conduct. The management system must be designed to ensure (a) compliance with applicable laws, regulations, and customer requirements related to the supplier's operations and products; (b) conform to the NXP Supplier Code of Conduct and (c) identify and mitigate operational risks related to the NXP Supplier Code of Conduct. It must also facilitate continuous improvement.
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SUPPLY CHAIN MANAGEMENT

NXP's purchasing policies require our suppliers to certify that they comply with NXP standards and with the laws of the country or countries where such suppliers do business. In 2015, NXP inserted language into our supplier contracts that require suppliers to abide by the NXP Supplier Code of Conduct. Suppliers submit a signed conformance letter stating that they abide by the NXP Supplier Code of Conduct.
Key suppliers are required to go through an annual Supplier Risk Assessment and complete an NXP Self-Assessment.
NXP works with suppliers to meet our requirements. We provide suppliers with opportunities to rectify problems and implement a corrective action plan. It is our goal to improve worker conditions and make an impact on the supply chain, not just pass or fail. In the rare instance that a supplier is unable or unwilling to meet our requirements and work on a corrective action plan, NXP will terminate the business relationship.
RECRUITMENT PRACTICES NXP suppliers must have adequate and effective written employment policies and procedures. Suppliers must take measures to ensure compliance with laws on recruitment of workers in sending and receiving countries. Suppliers must ensure workers are not required to pay fees, deposits, or debt repayments for their recruitment or employment. Suppliers must provide the worker, prior to departure or hiring, with accurate written details of

working conditions in the host country, including nature of work, wages, benefits, and duration of contract at the time of recruitment in the workers' native language. Suppliers must not require workers to surrender original identification documents. Suppliers must also ensure the same with its employment agencies. Suppliers must ensure that workers are free to leave their employment upon giving reasonable notice, with no penalty. Suppliers must not place unreasonable restrictions on movement of workers and their access to basic liberties. Suppliers cannot require workers to participate in any form of forced savings or loan program where repayment terms are indicative of debt bondage or forced labor. Suppliers must clearly communicate the NXP's Supplier Code of Conduct and requirements pertaining

to recruitment of workers. Suppliers must regularly evaluate these contractors' performance and conformance against these requirements.
NXP has adopted an Employer Pays policy in the recruitment of workers. This policy is a clear contractual agreement with partners in our supply chain. The NXP Employer Pays policy requires that the supplier shall be responsible for payment of all fees and expenses. Such fees and expenses include, but are not limited to expenses associated with recruitment, processing, or placement of workers.
Additional details on NXP's efforts to investigate ethical recruitment practices is available in our ethical recruitment documentary.
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PRODUCT CONTENT RESTRICTIONS NXP is required to provide information and evidence to its customers of compliance to the European Union`s Directive on the Restriction of Hazardous Substances (RoHS), and other product regulations such as Registration, Evaluation, Authorization and Restriction of Chemicals (REACH). Suppliers must, therefore, meet the

requirements of the NXP "ECO-Products Substance Control for Products and Packaging". The supplier must provide NXP with full material content declarations and provide annual analytical test reports performed by a third-party laboratory certified to ISO/IEC 17025. For all material groups, specific substances are analyzed annually on a homogeneous material

level to verify compliance with the NXP requirements. NXP's "Dark Green" Policy specifically targets materials that should not contain RoHS Substances, Halogens and Antimony Oxides above the established limits. Suppliers must certify that they have gathered and verified information about substances present in raw materials, parts, or products it supplies to NXP using appropriate methods (i.e. internal design controls, declarations and analytical testing) to ensure its accuracy and completeness, and attest that such information is true and correct to the best of their knowledge.

RESPONSIBLE SOURCING OF MATERIALS Suppliers must have a policy to reasonably assure that the minerals in the products they manufacture do not directly or indirectly finance or benefit armed groups that are perpetrators of serious human rights abuses around the world. Key areas of concern include the Democratic Republic of Congo and adjoining countries and other high-risk regions for the extraction or transit of raw materials.
Tantalum, tin, tungsten, and gold smelters and refiners must be certified by an approved third-party audit program. Suppliers must exercise due diligence on the source and chain of custody of these minerals and make their policies and due diligence measures available to NXP upon NXP's request. In addition, suppliers must submit a valid Conflict Mineral Reporting Template (CMRT) to NXP.
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RISK ASSESSMENTS AND AUDITS

ASSESSMENTS NXP conducts an annual risk assessment on our suppliers to determine the high-risk suppliers that are identified to participate in the NXP Social Responsibility Audit program. This risk assessment is conducted on existing suppliers and all new suppliers. In addition, all NXP suppliers are required to sign a statement of conformity with NXP's Supplier Code of Conduct.
NXP subscribes to a third-party monitoring service, which uses a multi-level process to identify and evaluate the potential risks to the NXP Supplier Code of Conduct. This robust risk assessment methodology enables NXP to pinpoint and prioritize hotspots across our supply chain. The monitors' evaluation of risks is based on a variety of factors, such as a business's geographic location, manufacturing processes, and a workforce profile.

facility and dormitories. We require that self-assessments, policies, processes, and procedures are sent to NXP before the audit.
In 2013, NXP began auditing suppliers and has since audited over 100 suppliers, with 23 of them occurring in 2017. We monitor the progress of the supplier until the issues are satisfactorily resolved. This may involve repeat audits to close out the findings. In 2017, 8 of our suppliers received verification audits. Should a supplier continue to not meet our standards, NXP will limit new business and or seek to eliminate the

supplier from our supply chain.
Supplier audits are accompanied by a NXP Lead Auditor and a qualified audit team from a NXP approved 3rd party audit firm. Audits include many different components, such as document reviews, employee and management interviews and facility inspections. Audits also include interviews with labor agents and inspection of the employees living conditions. The NXP Social Responsibility Audit program is conducted in accordance with the following process flow:

AUDITS NXP's Social Responsibility Audit is a collaborative and consultative process aimed at guiding suppliers and ensuring they can meet the NXP Supplier Code of Conduct and the associated requirements of the auditable standards.
While NXP reserves the right to conduct unannounced audits on our supply chain, we have rarely found that an unannounced audit is required. NXP conducts announced audits on our supply chain which analyzes three main aspects 1) Documentation 2) Management Interviews 3) Worker Interviews and 4) Physical inspection of
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1. Supplier risk assessment The process starts with a Supplier Risk Assessment to evaluate which suppliers have a high priority to be audited by NXP.
2. Training Once a supplier is selected for an audit, NXP analyzes whether additional training is needed.
3. Self-assessments The supplier then completes the NXP Supplier Self-Assessment and sends back to NXP, including any applicable policies and documentation.
4. Onsite audit The onsite audit is led by a team of auditors from a third-party audit firm qualified by NXP and supported by a NXP lead auditor. Depending on the size and complexity of the supplier's operations, a typical audit requires two or three full days. The scope of the audit covers labor and human rights, environment, safety and health, business ethics, management systems and compliance to the NXP Supplier Code of Conduct. These audits are conducted so suppliers can improve their business processes and procedures. The audits are not intended to pass or fail a supplier, but rather to guide the suppliers in a cooperative approach.
5. Supplier corrective action plan The audit can result in one of three classifications for findings that require

corrective and preventive action plans to be submitted by a supplier within a set period of time. The three classifications are core violation, major non-conformance and minor nonconformance.
If a core violation is discovered, the supplier is given the opportunity to improve performance, but the supplier's response to, and adequate resolution of, a core violation is non-negotiable. In the case of immediate risk of life, the supplier is given 24 hours to complete corrective actions. In other cases, the supplier is allowed seven days for submission of the corrective action plan and 30 days for completion of plans. Sanctions for unresolved core violations can result in the withdrawal or termination of business.
Other findings can be registered as major or minor non-conformance. A corrective action plan report for these findings is issued to the supplier within two weeks after the closing meeting. All corrective actions for major and minor actions must be approved by NXP. In this case, the supplier must send NXP corrective action plan updates every 30, 60, 90 days. All corrective actions must be closed within 90 days.
6. Follow-up NXP may conduct verification audits to assess whether a supplier has fully addressed all corrective and preventative actions. These audits are

scheduled after corrective actions are submitted by a supplier and approved by NXP. 7. Annual review Upon completion of the annual audit cycle, NXP conducts a review to determine if any suppliers that were audited in the preceding year will be required to be re-audited in the next year. A re-audit is required based on the severity of audit results. The audit findings and the resulting corrective action plans help us to identify trends and create an opportunity to help suppliers enhance their sustainability capabilities. The top ten findings for each year is summarized in the chart below for our supplier audits:
If you'd like more information regarding our audit program, please watch our video about the Social Responsibility Audit.
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TRAINING
Training is focused on our suppliers and onsite service providers. The mode of training is either a 2-hour classroom training or through a webinar session, conducted by the NXP Social Responsibility Office with support from the site subject matter experts. The training is the full requirement of the NXP Supplier Code of Conduct. Supplier training is done: ·During the on-boarding of new
suppliers; and ·Before a supplier's upcoming NXP Social
Responsibility Audit
Training is also conducted when the supplier requests training. Coaching the supplier of best practices and providing RBA's eLearning academy are also a part of our supplier trainings.
In addition to the traditional face-to-face and webinar training, NXP is also in the process of developing eLearning tools that will enable continuous learning on social responsibility topics. An eLearning module is in development in collaboration with an institution of higher learning. This module will be an innovative game-based program with specific focus on Human Trafficking and Forced/Bonded Labor.

VALIDATION

Each year we report publicly on our annual top ten supplier audit findings. Each month key performance indicators are reported to the Sustainability Office on topics such as core violations from our supplier audits, signed conformance letters from our supply chain, and quarter over quarter risk indicators within our supply chain.
Reports are reviewed by the Social Responsibility Board, composed of NXP executive leadership, at least twice per year. Midyear review discusses the progress that has been made, areas for improvement and what has gone well. The end of year review discusses targets and the overall improvement the team has made.
The Social Responsibility office meets with the purchasing managers monthly and sometimes weekly to discuss key supplier audit results, the corrective action plan and their progress towards closing out their findings.

NXP monitors improvement by measuring the number of core violations, repeat audits, frequency of findings, and the number of months required to eradicate the core violations.
NXP measures our supplier's improvement by monitoring and approving the Corrective Action Plan (CAP). The CAP acts as a tool for communication to NXP on how issues will be remediated. NXP is committed to collaborating with suppliers to design management systems that address the issues. An effective CAP includes remediation plans that fix the immediate issue and create a management system to prevent the issue from reoccurring.
NXP has seen improvement with the results and the closure of findings and the attention to detail to close out such findings. The supplier self-assessment scores are also a measure that we review year over year to see how their scores are improving as they begin to strengthen their program.

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

REMEDIATION

NXP has clear and widely communicated procedures in place for reporting concerns or potential violations to the Supplier Code of Conduct within our supply chain. NXP suppliers shall have a grievance mechanism in place for their employees.
Any stakeholder can report incidents to NXP. Even workers of our suppliers are given NXP's anonymous, confidential NXP complaint email and the local phone number.
WORKER VOICE When worker interviews are conducted during a supplier audit, the worker receives a NXP business card that has the NXP complaint local phone number and email address if they have additional information,

concerns or they experience retaliation. Workers may submit concerns anonymously, if they so desire.
RESOLVING ISSUES The Ethics Committee in coordination with the Sustainability Office appoints a team that has the correct experience to investigate the allegation. The Ethics Committee along with the Sustainability Office then considers the approach to the allegation. These discussions focus on the grievance, the remediation plan when violations are substantiated and a corrective action plan is established.
The Ethics Committee consists of NXP's Senior Vice President & Chief Corporate Counsel, an executive from Human

Resources, the Sr. Director Sustainability, Environment, Health & Safety and the NXP Chief Audit Executive. The Ethics Committee advises the Management Team in defining and deploying the Code of Conduct, assuring the completeness of recording of the allegation of misconduct and assuring appropriate action has been taken for the allegation of misconduct. The Ethics Committee reports to, and provides assurance to the Management Team and the Audit Committee of the NXP Board of Directors about the completeness and adequacy of the actions taken on allegations of misconduct.
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EMPLOYEE ENGAGEMENT
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COMMUNITY ENGAGEMENT

We believe in making a positive difference in the communities where we live and work. Through corporate sponsorships, employee volunteerism and employee giving, we are committed to supporting our communities in the following three focus areas:
· Education: Promoting educational endeavors that encourage students to learn about science, technology, engineering and math to help inspire future innovators.
· Health and Wellness: Supporting employee and community health and wellness programs focused on increasing physical activity and promoting a healthy lifestyle.
· The Environment: Fostering the sustainable use of the earth's resources and promoting a clean, healthy environment.
Our employees share our vision. Volunteerism and community service are encouraged, and there is widespread participation in company-organized initiatives, aimed at serving our communities and the world. Most major NXP sites have their own volunteer programs, covering such areas as education, wellness, charity fundraisers, events for the disadvantaged, park clean-ups, and more.
Our employees are the ones who put our corporate values into daily practice. The dedication, ingenuity, and creativity they bring to their work enable us to be insightful, engaging, inventive, and committed to excellence. We work hard to create an environment that enables

our employees to learn new things, grow in their careers, and reach their full potential. We believe development is a mutually beneficial partnership, between the company, our employees, and their managers, that results in higher levels of employee engagement, contribution, and satisfaction. NXP's culture is based on the values of being fair and treating each other with respect. These values are based on common ethical standards and included in NXP's Code of Conduct.
The importance we place on maintaining

high ethical and social standards is also reflected in our engagement with our employees and the communities in which we live and work. We demonstrate this commitment in the workplace by placing a high value on diversity and inclusion, by taking action against all forms of harassment or improper labor practices, and by keeping our health and safety standards high. In the community, we support quality of life and provide educational opportunities through various voluntary activities undertaken by our employees.
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CAREER PATH

NXP fosters a culture that appreciates employees who take initiative. We offer various avenues for career progression. Our Career Ladder helps employees progress equally within their specialty--following the path to Technology Expert, becoming a master in Project Management, or taking the more traditional Line Management route to lead people, functions, and businesses.
SUPPORTING PERSONAL GROWTH Gaining experience is the bedrock for personal growth. We also believe that everyone should take responsibility for their own development, so you will not find a rigid structure with lists of courses that must be attended. Instead, we favor a much more flexible approach to career development.
· Technical/Functional Development is grounded in on-the-job learning. Applied know-how is important and we rely heavily on our internal experts for knowledge sharing and transfer, along with product, tools and systems training. We also encourage and support memberships in relevant technical and professional organizations.
· Skill & Knowledge Acquisition comes from tapping into the vast network of technical experts and subject matter professionals within NXP today. Employees at our major hub sites throughout the globe can leverage the NXP Connect Lunch program to identify and network with colleagues from across the business over lunch for the purpose of knowledge exchange and career-centered dialogue. Employees can also leverage

a vast array of online learning resources delivered at NXP by tapping into NXP Skillport. Available to all employees, the NXP Skillport site includes books, videos, skill briefs e-learning courses spanning a wide range of professional development subjects important to individual and team success at NXP. · Talent Development Programs includes everything from job rotations, stretch assignments and special project roles to peer networking, job shadowing and mentoring opportunities that are available on both a formal and informal basis throughout NXP today. We also run a range of internal leadership programs covering everything from manager fundamentals to executive level leadership. · Leadership Development Programs occurs through pivotal experiences, formal

assessment with feedback, coaching, mentoring and extends even further into the classroom setting via our portfolio of Management & Leadership Development Program offerings, such as the Technical Leadership Program, Influence & Accountability, Collaborative Leadership in the 21st Century (known as CLiC), and the NXP Leadership Development Program, our most exclusive program offering for our high potential leaders who are developing toward top level leadership roles. For those who prefer to self-study on topics of Management & Leadership Effectiveness, we offer a curriculum bundle in NXP Skillport called the Leadership Advantage that can be used in whole or in part to prepare for leadership roles and key challenges that leaders face within NXP today.
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DIVERSITY AND INCLUSION

NXP recognizes that each employee brings something unique to the company. We are comprised of thousands of unique individuals, each with their own viewpoints, histories, experiences and paths of discovery.
We welcome and embrace our employees' diversity by fostering respect for everyone's differences and promoting a collaborative inclusive work environment. We invite every NXP employee to bring their whole self to work, without exception. Our mission is to continue championing an inclusive work environment to attract the best talent and to ensure diversity of thought in everything we do.
The NXP approach to Diversity and Inclusion will be centered on the following: · Create an inclusive work environment to attract the best talent and
to ensure diversity of thought · Cultivate an environment where employees feel welcomed, valued
and are comfortable being themselves · Engage employees and leverage the diversity of thought and life
experiences

RESPECT FOR OUR FELLOW EMPLOYEESOUR ANTIDISCRIMINATION POLICY At NXP, we treat each other with respect and fairness at all timesjust as we wish to be treated ourselves. We value diversity and inclusion, and respect the culture and customs of our fellow employees, business partners and customers around the world.
We never allow unlawful discrimination or harassment into our workplace. (Unlawful discrimination means treating others differently or making employment-related decisions on the basis of a legally protected trait).
NXP never hires, fires, demotes, transfers, or makes any other employment-related decision based on a person's:
· Age · Color · Gender · Gender identity · Mental or physical disability · National origin · Pregnancy · Race · Religion · Sexual orientation · Veteran status · Any other characteristic protected by applicable law

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

EMPLOYEE PROFILE
The employee profile information is as of December 31, 2017. The data below does not include employee information from the Standard Products divestment that occurred in 2017.

NXP Employee Category

Indirect Labor by Region

Gender of Workforce

Direct Labor by Region

Voluntary Employee Attrition

Indirect Labor New Hires by Region Direct Labor New Hires by Region
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HEALTH AND SAFETY
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NXP is committed to providing a workplace that is safe and secure, where every employee is empowered to achieve a healthy work-life balance. Our goal is to create a workplace that is healthy, safe, and free of occupational injury and illness for all employees. NXP employees are aware of their role and responsibility to fulfill and sustain NXP health and safety policies, management systems and standards, and are actively involved in promoting a safety culture.

NXP has one of the lowest injury rates in the semiconductor industry. While this accomplishment is something we are very proud of, there is still more that can be done. Each site has their own challenges, although with challenges comes opportunities.
In 2017, we addressed some of these opportunities with more formal engagements with employees through safety committees, setting strategies as well as investigating incidents. In addition, more awareness through safety posters can now be seen at each factory providing guidance on what is right vs. wrong. Blogs and newsletters were communicated across NXP to raise awareness of many safety topics. An ergonomics task force was established to collaborate and share best practices across all factories. A new risk assessment tool was created to help those employees performing a new task assess the job in a safe manner. We designed and installed equipment to rigid specifications to ensure employee safety. We implemented stretching programs, oversaw physical therapy consultations, and provided alternate health therapy options. Additional projects such as optimizing the shelf heights at the factories is another example of how NXP is always searching for the best way to protect our employees.

We strive to create a workplace that is healthy, safe and free of occupational injury for all employees. NXP has not received any fines or sanctions in connection with noncompliance with Health and Safety laws and regulations.
HEALTH AND SAFETY PROGRAM The key Health & Safety principles are embedded in our Corporate Sustainability Policy as signed by the CEO. The Sustainability policy is developed and deployed by the Sustainability Management team. Within the Sustainability Management Teams, the Corporate Environment Health and Safety (EHS) Manager and the EHS Councils have several responsibilities. They establish EHS-related risk mitigation strategies, develop and deploy standards, programs, and procedures to benchmark and reduce EHS-related risks, use NXP EHS expertise to share resources with and appoint people to programs and projects worldwide, develop EHS requirements for manufacturing sites, and define EHS targets.
The EHS Council has defined an employee focused EHS program. The program covers employee-related issues, such as how to prevent and reduce occupational injuries, and involves staff training sessions on topics such as emergency and recovery procedures.

GOALS We are working towards our long-term goal of having zero work-related injuries, using the OSHA standard for measuring and reporting. The severity rate at NXP represents the numbers of days away from work.
NXP's recordable case rate and severity rate have steadily decreased in recent years and are lower than the recorded international benchmark.
CERTIFICATION The Occupation Health and Safety Assessment Series (OHSAS) 18001 certification program specifies the requirements for an occupational health-and-safety management system. The specifications help organizations control their EHS risks and improve their performance. All NXP manufacturing sites are OHSAS18001 certified. The certificates can be viewed here. Earlier in 2018, ISO created ISO 45001 which is a new standard that replaces OHSAS18001. NXP plans to be fully compliant and certified to ISO 45001 by 2020.

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

RISK ASSESSMENTS, SELFASSESSMENTS AND AUDITS All NXP manufacturing facilities conduct annual risk assessments for Environment, Health & Safety covering all EHS related ISO Standards. The Risk Assessments allow the sites to evaluate potential Environmental Risks or Safety Hazards, weigh them against the likeliness of occurrence, and proactively mitigate those risks and hazards through programs, procedures and engineering controls.
EHS MS Self-Assessments are done annually via a checklist that each site completes, evaluating the Management System elements of the EHS ISO standards. Each site follows up with their findings of their corrective actions. As a member of the Responsible Business Alliance (RBA) each NXP factory completes an RBA SelfAssessment questionnaire that addresses topics of environment, health and safety as well as management systems.
NXP Corporate EHS conducts internal EHS audits at each manufacturing site, in conjunction with a consultant and senior EHS management from other sites. These internal audits are conducted every two years and audit findings are categorized according to severity. The corrective actions for these findings are formally reported and tracked via an audit management system.
Third party audits are conducted by our registrar (LRQA). Each year, on average, they evaluate two sites plus the Corporate EHS function. LRQA determines which sites

are audited each year. A sampling of EHS compliance and management systems are audited and a formal report is issued and corrective actions taken and tracked until we demonstrate to LRQA that they were effectively closed.
Each NXP manufacturing facility has a Social Responsibility audit supported by a NXP-approved third party audit firm.

NXP facilities are required to demonstrate success in the deployment of EHS as part of the social responsibility audit. All facilities should not have any core violation findings as specified by the NXP standards on Social Responsibility. The Social Responsibility Audits include many different components, such as document reviews, employee and management interviews as well as facility inspections.
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TRAINING To ensure that everyone at our sites has the right skills and disciplines to minimize the risks of illness and injury, we provide many hours of employee training worldwide each year. A range of educational programs provide on-the-job training as well as specialized training in environmental matters, quality controls, ergonomics and chemical health and safety. Thanks to these training, the number of illnesses and injuries have decreased.
In Action
Analysis of the types of injuries and which employees are most affected, we determined that ergonomics in our factory was a risk for our employees. That is why in 2017, an ergonomics global task force was created. Now each manufacturing facility has an ergonomics trained task force member. These task force members went through extensive workshops and training to address the ergonomic challenges at all manufacturing sites. Task force members are continuously learning best practices as they conduct risk assessments and then communicate across the global task force to implement best practices. At NXP we are always finding new ways to keep our employees safe.

Injuries
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CHEMICAL SAFETY Chemicals are essential to our manufacturing processes, our R&D activities, and our laboratories. For this reason, we have in place strict mechanisms, based on risk assessment and riskmanagement measures, including technical safety measures, clear procedures, and thorough education and training. We also give special attention to emergencyresponse skills related to chemical management and working with chemicals. We conduct regular evacuation exercises and routinely practice for emergency situations. Many of our employees are volunteer members of Emergency Response Teams and receive dedicated training. We require that all our manufacturing sites have employees with professional emergency skills, and, at our larger office locations, we have employees trained for emergency response.

REPORTING STANDARDS Our Health & Safety Database is part of our Sustainability Reporting System and connects all our manufacturing and non-manufacturing sites worldwide, providing consistent, reliable Health & Safety performance data for the company as a whole. Our reporting manuals contain instructions for these systems, including definitions, procedures, and calculation methods.
Health & Safety data is reported monthly and validated by the Sustainability Office. In 2017, data reported covered 98% of our employees. We aim for 100% coverage.
VALIDATION The Sustainability Office validates data and information entered in the Sustainability Reporting System and Health & Safety databases according to the frequency given in the reporting standards. Validation consists of the following steps:
· Check for completeness of data (locations and parameters)
· Compare data from the reporting period with data from previous periods
· Determine whether changes in data are significant
· Seek explanations for significant data movements
· Compare linked data (e.g. number of illnesses and injuries versus lost work days)
· Investigate notable events
The EHS Operations Team performs monthly reviews with the manufacturing sites. During these reviews, we examine the

results from our Sustainability Reporting System and Health & Safety databases, discuss the progress of improvement projects, and set expectations for the next period. To ensure reliable, accurate, and complete reporting, internal data audits of the manufacturing sites and the larger office and R&D sites are conducted. The audits check for proper reporting procedures and data trails.
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GOAL NXP has been committed to its goal of achieving zero accidents in the workplace.
STRATEGY Our global management approach is to strengthen NXP's safety culture through training, audits, publications, communication, and sharing best practices. Above all, we continue to urge managers to take ownership of safety matters and adopt a proactive attitude, demonstrating leadership on the ground through their visible involvement.
PERFORMANCE Our recordable case rate was 0.15 for 2017, which continues to be better than the semiconductor industry. In 2017, we deployed our ergonomics program, through which we aim to control, measure, and decrease the levels of risk within our operations, optimizing working conditions for our employees and removing unnecessary tasks or those that add no value. As an example, our manufacturing sites evaluate workstations and activities, and then define, implement, and monitor corrective measures and improvements.

In 2017, our severity rate saw a slight increase to 2.87. The severity rate is a calculation that gives a company an average of the number of lost days per recordable incident, which indicates how severe the injury was. Issues and root causes are shared and communicated across all sites. Practices and behaviors are checked during audits, and we are continuing to raise awareness and promote vigilance. Our goal is to drive further improvements in employee behavior and working conditions. We continue to encourage our employees and managers to be proactive, by providing training and awareness on the early detection of hazards, and unsafe behavior and conditions.

Occupational illness and injuries are decreasing. We attribute this to our efforts to making our work places safer.
In Action
Our Oak Hill site has been recognized by United States OSHA as a "Voluntary Protection Program (VPP) Star Site", which recognizes NXP as a top tier performer with excellent programs and great results. This recognition is given by OSHA only to top performing industrial sites within the United States.
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ENVIRONMENT
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NXP is committed to the prevention of pollution and conservation of the earth's natural resources, both locally and globally. NXP does this through the development of sustainable products, materials, and manufacturing processes. We drive continual improvement of our processes to protect the environment by designing, implementing and maintaining a management system and programs to achieve our objectives. We also require that our contractors and suppliers adopt prudent environmental principles and practices. We are working to be an industry leader in reducing, reusing, and recycling waste. NXP has not recorded any significant spills, fines or sanctions in connection with non-compliance with environmental laws and regulations since 2007.

In 2017, our Environment and Facilities team collaborated and made significant improvements to our products, materials and manufacturing processes. These projects are strongly supported by the management team and in result won NXP awards across the globe. NXP Kaohsiung won the silver award for energy savings and our Austin facilities was the winner of the Austin Water's Excellence in Pretreatment Award.
ENVIRONMENT PROGRAM Key environment principles are embedded in our Corporate Sustainability Policy as signed by the CEO. The Sustainability policy is developed and deployed by the Sustainability Management team. Within the Sustainability Management Teams, the Corporate Environment Health and Safety (EHS) Manager and the EHS Councils have several responsibilities. They establish EHSrelated risk mitigation strategies, develop and deploy standards, programs, and procedures to benchmark and reduce EHSrelated risks, uses NXP EHS expertise to share resources with and appoint people to programs and projects worldwide, develops EHS requirements for manufacturing sites, and defines EHS targets.

NXP complies with applicable legislation and regulation. Where laws and regulations do not meet our standards, NXP adopts its own, leading and vigorously implementing standards to protect the environment. NXP drives continual improvement in its performance by designing, implementing and maintaining a management system and the programs to achieve its objectives.
Our environmental program focuses on environmental issues including:
· Minimizing greenhouse gases · Reducing our energy use, water
consumption, and waste production · Managing hazardous materials
GOALS

NXP's 2020 environmental goals are based on a 2010 baseline. By 2020, NXP wants to reduce electricity usage by 30%, reduce water usage by 30% and reduce our carbon footprint by 30%. In addition, NXP has an objective to recycle 90% of all waste generated and phase out chemicals of concern.

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CERTIFICATION The ISO 14001 certification program specifies the requirements for an Environmental management system. The specifications help organizations control their risks and improve their performance. Manufacturing and some non-manufacturing sites (Eindhoven) are ISO14001 certified.

manufacturing facility that a) we own, rent, or lease and manage, b) has 50 or more people working in production, and c) is consolidated for our financial reporting.
VALIDATION The Sustainability Office validates data and information entered in the Sustainability Management System according to the frequency given in the reporting standards. Validation consists of the following steps:

Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety

TRAINING To ensure that everyone at our sites has the right skills and disciplines to minimize environmental risks, employee training is conducted worldwide each year. A range of educational programs provide on-the-job training. In addition, specialized trainings in environmental matters, quality controls, and chemical management are conducted.
In 2017, EHS started working on implementing across all sites, a process for workers of all levels to participate and consult in EHS incident investigations and management systems planning.

· Check for completeness of data (locations and parameters)
· Compare data from the reporting period with data from previous periods
· Determine whether changes in data are significant
· Seek explanations for significant data movements
· Investigate notable events
The Sustainability Office performs monthly reviews with all front/backend manufacturing sites. During these reviews, we examine the results from our Sustainability Management System, discuss the progress of improvement projects, and set expectations for the next period.

Environment

REPORTING STANDARDS

To ensure reliable, accurate, and complete

We use a Sustainability Management

reporting, the Sustainability Office also

System to gauge our performance. Our

conducts internal data audits of the

Product Stewardship

reporting manuals contain reporting instructions for these systems, including definitions, procedures, and calculation

manufacturing sites and the larger office and R&D sites. The audits check for proper reporting procedures and data trails.

methods. Environmental data is reported

Appendix

and validated by the Sustainability Office monthly. Data is reported on every

Overview

REDUCING OUR CARBON FOOTPRINT

Economy

Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement

Greenhouse gases are gases in the atmosphere that act like a blanket or glass roof around the earth, trapping in heat that would otherwise escape to space. This is commonly referred to as the "greenhouse effect." Carbon dioxide (CO2) is the most significant greenhouse gas released by human activities and is emitted mostly from the burning of fossil fuels like coal, oil, and natural gas. Other greenhouse gases include methane and nitrous oxide.
Semiconductor manufacturing is not considered a major contributor to global warming, but our operations do directly and indirectly emit greenhouse gases. We measure, manage and report our Scope 1 & 2 emissions. Emissions are reported in terms of tons of CO2 equivalents.

Employee Engagement

GOAL NXP's 2020 goal is to reduce our emissions by 30% from a baseline
year of 2010 (normalized to our wafer output).

STRATEGY

Health and Safety

NXP's strategy to reduce greenhouse gas emissions is to first directly reduce our greenhouse gas emissions through process optimization, site conservation, and abatement projects. As part of this effort,

our combined sites had multiple greenhouse gas (GHG) reduction

Environment

projects such as:

· Optimizing building operations and product

testing processes

Product Stewardship

· Using more efficient lighting technologies and schedules · Powering down equipment when not utilized · Installing new abatement equipment to reduce Perfluorinated

Compounds (PFC) emissions

Appendix

· Using substitute chemicals to reduce heat transfer fluid emissions from our equipment

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PERFORMANCE Between 2010 and 2017, our normalized total emissions for Scope 1 and 2, (direct and indirect) decreased by approximately 16%. Our production normalizer is based on the square centimeter of silicon wafers produced.

NXP's reduction target is an "absolute" emissions reduction, meaning a commitment to reduce regardless of the expended growth of production. Our Scope 1 Emissions include fossil fuel to heat buildings, the use of PFCs and N2O in our manufacturing of integrated circuits, and the use of HTFs, such as HydroFluoroCarbons
(HFCs) and Perfluoro Ethers for device testing and cooling purposes. Our Scope 2 Emissions include electricity purchased. Our Scope 3 Emissions include business travel and product transport.
Below is the percentage of each category.

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SCOPE 1 EMISSIONS In 2017 our normalized Scope 1 emissions decreased
by 16% from a 2010 baseline.

FOSSIL FUELS Fossil fuels are hydrocarbons, primarily coal, fuel, oil, or natural gas. The burning of fossil fuels by humans is the largest source of CO2 emissions. Fossil fuels are still the main source of energy in the global economy. At NXP, the most commonly used fossil fuel is natural gas, used for heating and humidity control in our clean rooms. NXP's use of natural gas depends strongly on both the external temperature and internal production activity within the manufacturing facilities. Diesel is also used at NXP for back-up generators. From 2010 to 2017, our normalized fossil fuel emissions decreased by more than 35%.
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PERFLUOROCARBONS (PFCS) PFCs are essential chemicals in today's semiconductor manufacturing processes. When it comes to etching integrated circuitry onto silicon wafers, or cleaning the internal chambers of deposition equipment, there are no alternatives for PFCs. Without them, semiconductor companies would not be able to produce the complex, high performance ICs that have become so essential to our daily lives. Nevertheless, PFCs pose a serious dilemma for every semiconductor company. We have essentially exhausted the two most cost-effective options for PFC reductionprocess optimization and switching to alternative gases.
We recognize the undesirable impact PFCs have on the environment and have joined with others in the semiconductor industry to seek ways to minimize their use. For example, NXP signed the Memorandum of Understanding in the US, and the Memorandum of Agreement in Europe, to voluntarily reduce the emissions of PFCs. The industry, as a whole, achieved this target before the 2010 deadline. The European Union has recognized the semiconductor industry's proactive approach by granting an exemption to the socalled F-gases regulation. It is a voluntary agreement. No ban on the use of PFCs for critical applications has been imposed on the semiconductor industry in Europe. We are, however, committed to looking for alternatives.
Like the rest of the semiconductor industry, NXP Semiconductors remains strongly devoted to its proactive management of PFC emissions. We support the New 2010-2020 Global Semiconductor Industry Voluntary Agreement, including the Best Practice Guidance which addresses worldwide emissions from semiconductor manufacturing for the present decade. The agreement is supported by all members of the World Semiconductor Council, and covers the optimization of production processes (so they consume less greenhouse gases), the replacement of greenhouse gases with global warming potential (GWP)-free or lower-GWP alternatives, and use of the most up-to-date abatement technology.
NXP also has its own goals for the reduction of PFC emissions. We proactively review Point-Of-Use (POU) abatement when we maintain, replace or relocate existing fab tools. As we upgrade existing

process tools, we add POU abatement, when feasible. If such POU abatement is not feasible, we look for measures elsewhere in our factories to compensate for the emissions. Recently, the Oak Hill and Nijmegen fab installed abatement equipment to further reduce the emissions of PFCs (NF3, CF4, C2F6). From 2010 to 2017, our normalized total PFC emissions decreased by over 33%, even though many of our products have become more complex, requiring additional manufacturing steps and hence more PFCs.
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In Action
Perfluorocarbons (PFC's) emissions contribute to 29% of NXP's total carbon footprint, so in 2017 at Oak Hill, Austin, Texas, a team of EHS and fab engineers began collaborating to focus on reducing PFC consumption and optimizing PFC abatement units.
Reducing PFC consumption optimizes the equipment and methodology by cutting the cleaning time across multiple steps thus reducing our consumption and reducing the amount of PFC's emitted to the atmosphere permanently by 4% from a 2016 baseline. Optimizing the abatement units reduces our carbon footprint permanently by 24% from a 2016 baseline.

In Action
Nijmegen facility uses Perfluorinated compounds such as C2F6 and CF4, and are used by NXP for chamber cleaning of dielectrics deposition tools and for dry etch. In 2017, the facility took two major steps to reduce PFC emissions. The reduction of the PFC emissions was to first implement NF3 remote plasma chamber cleans. Secondly, abatement systems (Centrotherms) were installed reducing the PFC emissions. These two initiatives had an emission reduction of approximately 45% for our Nijmegen facility.

Employee Engagement

Health and Safety

Environment

Product Stewardship

Appendix
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HEAT-TRANSFER FLUIDS (HTF'S) NXP uses HTFs for device testing, for cooling purposes (manufacturing tools, facilities, and air-conditioning), and in a few cases as a fire suppressant.
During the manufacture of semiconductor devices, HTFs serve as coolants in chillers, removing excess heat during many manufacturing processes. During semiconductor device testing, devices are immersed in containers of HTFs, cooled or heated to a desired temperature to verify their integrity, and exposed to HTFs to prevent overheating during certain tests. HTFs are also used to attach semiconductor devices to circuit boards via solder, which may be melted by the vapor of an HTF heated to its boiling point.
Some of the HTFs we use are ozone-depleting substances and, as such, are strictly controlled. For instance, the European Union has adopted regulation EC No 1005/2009 on substances that deplete the ozone layer. By order of this regulation, the so-called "controlled

substances" are to be phased out. The phase-out date differs from country to country. NXP has strict rules in place, regarding all ozone-depleting substances, calling for their phase-out well before legislation comes into effect. More information on the use of ozonedepleting substances is in Phasing out Ozone-Depleting Substances below.
From 2013 to 2017 our normalized HTF emissions decreased by more than 7%.

In Action
Aligning with the 2020 goal, the Kuala Lumpur site committed to reduce Heat Transfer Fluid (HTF) emissions which is used for testing hermetically sealed RF products.
HTF's are used to detect pin hole leaks on RF power amplifiers. However, during the testing there are two steps within the testing procedure that releases HTF's into the atmosphere which are due to vapor diffusive loss and fluid drag out. HTF's contribute to one of the highest emission of GHG from the Kuala Lumpur site.
A team of 9, from various organizations, came together to redesign the test apparatus to reduce the HTF emissions into the environment. They redesigned the chip carrier so there is less drag out of HTF. Another project found a chemical substitute is more environmentally friendly with reduction of 10% Global Warming Potential (GWP). From January to September 2017 we have reduced a total of 24,169 metric tons of CO2 emissions or 25.6% reduction! There is ongoing work to make even more reductions such as capturing the vaporized solvent through the cooling process and recycle it in a closed loop system by distillation.
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N2O Nitrous oxide is a colorless, non-flammable, non-CO2, global-warming gas. It is naturally present in the atmosphere, as part of the earth's nitrogen cycle, and comes from a variety of natural sources. However, human activities, such as agriculture, fossil-fuel combustion, wastewater management, and industrial processes, are increasing the amount of N2O in the atmosphere. N2O is used in semiconductor processes, such as the chemical vapor deposition of silicon dioxide, doped or undoped silicon oxynitride, diffusion, rapid thermal processing and chamber seasoning. Emissions from N2O are minor compared to other emissions such as those from PFCs. From 2010 to 2017 the normalized N2O emission decreased by almost 10%. However, the absolute N2O emissions have increased due to very specific process related requirements.
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NOX, SOX AND VOC Additional emissions are nitrogen oxides (NOx), sulphur oxides (SOx) and volatile organic compounds (VOC). NOx and SOx are air pollutants that arise from a wide variety of sources but mainly as a result of combustion. NOx is a term used to refer to nitric oxide (NO) and nitrogen dioxide (NO2). SOx refers to sulphur dioxide (SO2). At NXP, predominate NOx and SOx emissions are from the manufacturing processes of integrated circuits. Minimal NOx and SOx emissions come from our boilers. VOC emissions result from use of chemicals such as solvents used in the photolithography manufacturing process. VOCs include isopropyl alcohol (IPA) and other solvents. From 2010 to 2017, the following normalized emission percentages for NOx, SOx and VOC are as follows: NOx decreased by 12%, SOx decreased by 73% and VOC decreased by 35%. However, our absolute VOC has increased slightly due to specific process requirements.
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SCOPE 2 EMISSIONS NXP's Scope 2 emissions are reported for electricity purchased. From
2010 to 2017, the normalized Scope 2 emissions decreased
by almost 16%. Absolute Scope 2 emissions are remaining stable.

Electricity (Manufacturing and Non-Manufacturing) Emissions The indirect CO2 emission for electricity results from the combustion of fossil fuel in third-party power plants.
The CO2 conversion factor is defined as the standardized figure used within NXP to calculate the average amount of CO2 emissions, resulting from the use of energy sources. These conversion factors are country-specific and are based on information made available by the International Energy Agency.
From 2010 to 2017 our normalized total electricity emissions (which includes manufacturing and non-manufacturing) decreased more than 18%, even though many of our products became more complex, requiring additional manufacturing steps and hence more electricity to manufacture.

The use of electricity and our approach to saving energy is reported in the "Energy" section.
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SCOPE 3 EMISSIONS NXP's Scope 3 emissions are reported for product transportation and business travel. From 2010 to 2017, the absolute Scope 3 emissions decreased by over 19%.
Product Transportation In 2017, our CO2 emissions from transporting semi-finished products between factories, and from transporting fully finished products to warehouses and customers, was estimated at 18,709 tons CO2 for legacy NXP only (based on kilograms per km).
From 2010 to 2017 our product transportation emissions decreased by 21%. We are consolidating our central distribution centers and optimizing our shipping routes in which we contribute to the reduction of product transportation emissions. The standard value of reference for calculating airfreight CO2 is 0.567 kg per km. This is a value set by the Intergovernmental Panel on Climate Change (IPCC).

Business Travel Business travel makes up a very small part of our CO2 emissions. Medium-and long-haul flights emit less CO2 per passenger km than short-haul flights, and rail travel is approximately 50% less CO2intensive per passenger mile than air travel. Emissions from flights are calculated by using flight-distance categories (short, medium, or long haul), along with the distance and average flight emission factors provided by the U.K. Department of Environment, Food, and Rural Affairs (DEFRA) as of 2013.
Total CO2 emissions from business travel in 2017 was 22,446 tons of CO2 compared to the 2010 baseline of 27, 508 tons of CO2. We attribute this reduction to efficient business travel.

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PHASING OUT OZONE-DEPLETING SUBSTANCES

Some fluorinated gases, such as hydrochlorofluorocarbons (HCFCs), are ozone-depleting substances, since these cause degradation of the ozone layer that protects the earth and its inhabitants against excessive UV radiation. In response to the Vienna Convention for the Protection of the Ozone Layer and the Montreal Protocol on Substances that Deplete the Ozone Layer, many countries have adopted regulations on substances that deplete the ozone layer. Under these regulations, so-called "controlled substances" are to be phased out in the coming decade.

As of 2007, we phased out use of all ozone depleting substances (ODS) in our manufacturing processes, and their use for manufacturing is now prohibited in all our manufacturing sites. When an air-conditioning system that uses ODS refrigerants are scheduled for replacement, we replace it with a new system that doesn't use them. The great majority of ODS refrigerants have been replaced or are in the process of being replaced with non-ODS alternatives wherever possible and practical. In 2017, we continued to install new chillers at some sites to remove Class 2 ODS refrigerants such as CFC-22 and CFC-134.

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SUBSTANCES OF CONCERN

The production of semiconductor devices uses various chemicals and materials, both in frontend manufacture (wafer fabs) and in back-end operation (assembly). Some of these are highly specific and vital to NXP's process technologies and products. Compared to other industry sectors, the semiconductor industry uses more chemicals and materials, but typically in lower volume and in a highly controlled way. We have several programs in place that regulate our use of hazardous chemicalsin fact, we follow some of the toughest practical standards in the industry for protecting our customers, our employees, and the environment.
NXP has the ambition to be ahead of new chemical legislation and customer requirements. NXP also complies with all relevant national and international legislation in force. Chemical management is therefore one of the cornerstones of NXP's sustainability program. There are two primary goals of our chemical management programs. We must control the risks posed by chemicals in NXP production processes, with respect to the safety and health of workers and to the environment (pollution, global warming, ozone depletion, etc.).
We maintain centralized databases that register and classify the more than 400 substances we use in roughly 2,500 process chemicals and preparations, along with the more than 2,000 product-related materials and sub-parts used by our manufacturing operations. We update these databases frequently to be sure they reflect the latest information. All NXP employees who deal with these items can access the databases to view helpful information, including material-safety data sheets, workplace instructions cards, warning labels, baseline occupational health and environment information, and instructions for exporting, transporting, handling, and storing a given substance. We aim to discontinue the use of all these substances

except those that are indispensable to the manufacture of our devices and don't yet have a proven alternative. We are searching for alternatives as quickly as possible. Substances of Concern: Emissions Some substances of concern are emitted during production. These and other emissions are thoroughly monitored using programs in place to minimize our emissions overall. For example, we have several emission-reducing measures already in place, covering such manufacturing items as scrubbers and washers (which use ammonia, fluorides, bromides, nitric acid, NOx, and SOx), VOC burners, collection systems for liquid waste (which use fluorides, phosphates, sulfuric acid, and solvents), a local treatment plant for fluoride, calcination, bio-filters, and more.
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Overview

The table below lists the substances of concerns emissions, to air and to wastewater. The figures are based on measurements and calculations.

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Beyond Baseline Requirements In a number of areas, we go beyond baseline laws and regulations to support voluntary agreements that promote industry-wide sustainability. For example, we comply with the World Semiconductor Council's (WSC's) Voluntary Agreement for PFOS (PerFluoroOctyl Sulfonates). In early 2009, after three years of deliberation, the Stockholm Convention COP4 discussions on PFOS finished by listing PFOS in Annex B, which means it can still be used for a few critical applications, including semiconductor photolithography. As of 2017, we eliminated all manufacturing use of PFOS. As a result, the emissions from this non-critical use were discontinued, as specified in the WSC Voluntary Agreement.
In Action
In 2017, NXP became PFOS Free. Teams of process and equipment engineers worked together on this challenging project. They had to assess the replaced materials in terms of risk and quality. Hundreds of tests and thousands of engineering hours were spent on development, re-integrations and new designs.
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ENERGY CONSUMPTION
Semiconductor manufacturing is an energy-intensive process, and, as a result, our sustainability programs place a high priority on reducing our energy consumption. The majority of our energy is consumed within our manufacturing facilities. A very minor portion of the electricity is generated onsite with diesel generators. A small portion of energy consumption we purchase comes from renewable resources such as wind energy.

PERFORMANCE From 2010 to 2017 the normalized electricity consumption decreased by 18.9%.
The graph below is for our manufacturing facilities normalized to our wafer output of cm2.

GOAL To reduce normalized electricity consumption by 30% in 2020 from a 2010 baseline.
STRATEGY NXP's strategy to reduce the normalized electricity consumption is to find opportunities within sites for conservation projects and operational efficiency improvements. In 2017, individual sites had several electricity conservation projects and initiatives such as optimizing building operations, installing energy efficient equipment, using more efficient lighting technologies and powering down equipment when not utilized.

Renewable energy is an initiative that some of our locations have taken on as they work towards our 2020 electricity reduction goals. Electricity consumed at the Austin manufacturing sites include renewable wind energy. We have projects dedicated to electricity reduction and identifying new opportunities to purchase renewable energy.
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The NXP sites continue to work towards reducing energy consumption. Optimizing processes and replacing or upgrading equipment are key means of improving energy efficiency. Some examples are: reduce the air flow velocity in the clean room, reduce and optimize exhaust and air extraction systems, upgrade air dryers, reduce cooling tower outlet temperature, and purchase energy efficient equipment such as new chillers, compressors and vacuum pumps. Our Nijmegen site alone replaced 69 vacuum pumps for more energy

efficient equipment. There are other projects that are optimizing the energy consumption by replacing all bulbs with LED bulbs and turning off equipment when not in use.
In Action
In 2017, every manufacturing site embarked on projects to reduce energy consumption. While there were hundreds of projects related to energy, these are some of the highlights with the biggest contribution to reducing energy consumption. The Kuala Lumpur site reduced the condenser water temperature, adjusted the chillers configurations and reduced excess lighting levels to save energy. The Bangkok site completely overhauled old equipment and optimized chillers and handlers for some of their energy reduction projects. The Oak Hill site reduced the exhaust flow back to manufacturers specifications. The Kaohsiung site optimized the variable frequency drive on air handlers to cycle airflow at a variable rate as well as optimize the variable frequency drive on the pumps in the chillers.

Overview

WATER CONSUMPTION

Economy

Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship

NXP recognizes that water is a critical natural resource that is of strategic importance to our business and the communities in which we operate. We are committed to continuously improve our water efficiency and minimize our water use and ensuring high standards of effluent and wastewater treatment. Semiconductor manufacturing is a water-intensive process, and, as a result, our sustainability programs place a high priority on water conservation. The processes involved in manufacturing semiconductors require large volume of pure water. They also produce wastewater that can impact the environment. NXP identified its impacts on water resources and developed a strategy.
For most of our manufacturing sites, our primary water supply is local municipal water. Our activities then affect local communities as well as the environment.
GOAL To reduce our normalized water usage by 30% by 2020 from a 2010 baseline.
STRATEGY NXP's strategy to reduce our normalized water consumption is through conservation and recycling opportunities for our office and manufacturing sites. Our sites conducted several water conservation initiatives, such as reusing water and improving processes.
PERFORMANCE From 2010 to 2017, NXP's normalized water consumption decreased by more than 23%. This includes water that is extracted and purchased.

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NXP GLOBAL WATER STRESS SCORES The Water Stress Index (WSI) quantifies baseline water stress at the catchment level, while also identifying localized variations within the catchment boundaries. A risk category is assigned to each catchment based on the ratio of water use to renewable supply, enabling users to visualize the inherent water stress in that area. Within catchments, the map reflects different levels of combined domestic, industrial and agricultural water demand.

Index values are divided into four risk categories to aid interpretation: extreme (0.0-2.5), high (>2.5-5.0), medium (>5.07.5) and low (>7.5-10.0). Each of these categories are shown on the map in a different shade. Countries are also assigned a rank, based on their relative position in each index, where the country ranked 1 is the highest risk. The index is based on mean annual water stress, and therefore the seasonality of water stress is not captured. In some areas, well-defined wet and dry seasons produce marked variations in water

supply through the year, and subsequently levels of water stress exhibit distinct seasonal fluctuations.
Many of our operations are located in semiarid regions that may become increasingly vulnerable to prolonged droughts. As the impacts of water use greatly vary by location, we rely on water experts at our sites to research and manage ways to reduce consumption. Our efforts include incorporating water conservation elements into the design of our facilities and establish

water use goals for new technologies. A significant amount of water use is related to produce silicon wafers during fabrication. We work with semiconductor equipment manufacturers to optimize and reduce water consumption within our tools and processes. In addition, another strategy is to reuse the water after the manufacturing process for other industrial purposes and continue to increase efficiency of how water is used throughout the process. For example, some sites will treat industrial water from manufacturing operations and recycle it to replace incoming water that is used for cooling towers, scrubbers and abatement equipment. Additional projects are underway and under consideration and will be selected based on the input from local stakeholders and environment groups and prioritized based on the impact on direct, long-term improvements to the local water supply.
Although our ultimate vision is to continuously reuse water in semiconductor manufacturing, we currently discharge water from our operations in compliance with local permits. We focus on the quality we return to municipal water treatment operations, where it can be reused for other purposes within the community or returned to the environment. We monitor and manage the quality of wastewater discharged into the communities in which we operate by utilizing onsite water treatment facilities and continuous monitoring/testing as required by local authorities. Our water discharge methods vary by site, based on the needs of individual communities.
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We pay attention on the local communities where we operate by avoiding pollution from the discharge of water from our manufacturing operations. Wastewater is treated in dedicated treatment plants, which are either located on-site or established in collaboration with local authorities. To remove any risk, pollution substances are eliminated first. Once a sufficient level of purity is obtained that is compliant with local regulation, water is discharged into the natural environment.

In Action
In Nijmegen, an intensive reduction program expands the reuse of reclaim water saving up to 20% of the normal usage of water per year. Bangkok switched from a Deionization (DI) system to an Electro-Deionization (EDI) system, which uses no chemicals, eliminates the need to send water to a wastewater treatment plant, and makes it so the water can be reused in other processes. The new EDI system has saved water and led to a dramatic reduction in the use of chemicals. Other projects across the company include taking our process waste water and re-running it through our water purification plant for reuse. In some facilities, we reuse our recycled water within our tools such as abatement units. In addition, we have processes in place to reuse test/sample water through our deionized water plant for subsequent reuse in other areas.

In Action
In response to a severe drought, the Kaohsiung site began several water-saving initiatives and recycles and reuses more than 80% of their water. A new procedure for wastewater has yielded considerable savings. Wastewater from wafer sawing is recycled in soft-water tanks, through the use of Ultra Filter (UF) and active-carbon systems. A new Reverse Osmosis (RO) system will provide additional recycling of waste water from sawing, in RO water tanks. As an added step, wastewater from wafer grinding will soon be recycled in cooling towers, via Dissolved Air Flotation (DAF), fiber-filter, and active-carbon systems. These new water-processing systems are already generating significant savings. Within just six months, the system reduced water consumption by 35%, going from 1,700 to 1,100 tons per day. Also, because the plant is generating less wastewater, the site has less of an impact on the surrounding environment.

In Action
In 2017 there were 8 projects across four sites that focused on water reclaim. Examples listed are the biggest contributors to reduction of water consumption. At ATMC, the flow rate was optimized on the reverse osmosis system to reduce water consumption. The Oak Hill site optimized the filers to enable additional reclaim of water and standardized water usage on similar tool sets. At Kuala Lumpur, water recycling was increased in various systems. The Chandler site hooked up process tools to their reclaimed water system to offset water consumption.
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WASTE

Overview Economy Ethical Standards Social Responsibility

Semiconductor manufacturing generates hazardous and nonhazardous waste, office and other types of waste. Most of the waste generated from our operations is tied to the manufacturing of our products. We have waste reduction programs in place at our sites to handle and manage hazardous and non-hazardous waste in an environmentally responsible manner. All manufacturing sites have ongoing programs to reduce the amount of waste generated and increase the percentage of waste recycled. To continue progress toward our goal to increase our recycling rate of both hazardous and non-hazardous waste, multiple groups across NXP are working to identify innovative ways to recycle or recover waste streams for reuse, or even convert them into sources of revenue.

Stakeholder Engagement

For waste that requires specialized handling, we only ship to vendors equipped with the knowledge and expertise to properly reclaim, recycle, or destroy it. All handling of our waste is done according to global and local rules and regulations.

Supplier Engagement

GOAL Increase the recycle rate of both hazardous and non-hazardous waste
to 90% by 2020.

Employee Engagement

STRATEGY NXP's strategy is to prevent waste and increase our recycling
initiatives by improving our recycle programs and expand material
reclamation efforts. The plan is:

Health and Safety Environment Product Stewardship Appendix

· Continue to recycle/reuse spent materials ·Continue to identify new opportunities to recycle · Establish more recycling vendor possibilities in local regions ·Continue to compost food waste at most of our facilities
PERFORMANCE Our total waste is calculated for our fabs and assembly operations. In 2010 our recycling rate was 65% and in 2017 the recycling rate increased to 76%. Of total waste, 64.5% of waste comes from wafer fabs and 35.5% from assembly operations. Of our total waste, 76.2% is recycled, 17% goes to landfill, and 6.8% is incinerated.

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E-SCRAP RECLAIM NXP has a very proactive "reclaim" program and uses the best available technology to manage e-scrap. E-scrap is collected from factories, test centers and subcontractors around the world. The materials collected include process metallic scrap pieces, parts and fixtures, failed test devices and ICs, engineering materials, test architecture boards, chemicals, silicon in all forms and manufacturing process byproducts containing metallic components. NXP processes these materials not only to recover the value of metals and silicon, but to do so in the most environmentally sound method available with minimal waste going to the landfill. The smelter captures nearly 100% of the material available for recovery.

While our products are not typically subject to recycling or e-waste laws, we work with others to identify shared solutions for our used products. We also take steps to integrate environmental considerations into the design phase of our products to minimize environmental impacts of our products at their end of life.
PACKAGING To make sure our products reach our customers undamaged, we use special packaging materials to protect them during shipment. Since we only deliver to other businesses, none of our packaging materials are received by consumers. We are committed to using sustainable pack-and-ship methods, and use specially designed packaging tubes and shipping trays that are easy to recycle.
We advise our customers on the possibilities for recycling, and know that most of our larger customers already have recycling programs in place, but we don't have accurate figures on how much of the packaging is actually recycled.
We work with our packaging suppliers to drive changes in the materials that we use to ship products between our sites and our customers. Our long-term vision is to have a sustainable packaging program for all inbound, outbound and return shipments. Our packaging uses mainly paper and cardboard (2,764 kilotons) and plastic (1,566 kilotons) in 2017. The 2017 packaging data does not include all legacy Freescale data. We intend to include all legacy Freescale data in future reports.
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PRODUCT STEWARDSHIP
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ENVIRONMENTAL PRODUCT COMPLIANCE

At NXP, our goal is to provide environmentally preferred products that meet both regulatory requirements and specific restrictions on hazardous substances and minerals.
Our global Environmental Compliance Organization for Products (ECO-Products) manages our corporate product compliance procedures for:
· End of Life Vehicle Directive in the European Union (ELV)
· Restriction of Hazardous Substances in the European Union and China (RoHS)
· Regulation on Registration, Evaluation, Authorization and Restriction of Chemicals (REACH)
We work closely with our supply chain to document our product compliance. Documentation includes full material composition declarations using the IPC1752 template; certificates of analysis for RoHS substances using an IEC 62321 recommended analytical technique; and reasonable country of origin inquiries for conflict minerals using the Conflict Minerals Reporting Template (CMRT).
NXP only qualifies new semiconductor packages with environmentally preferred materials in which the use of hazardous materials is kept to a technically necessary minimum. For this purpose, we created the ECO-Products Substance Control for Products and Packaging.
It specifies substances that are not permitted in materials, parts, (semi-)

finished goods, subassemblies, and packaging materials delivered and used at levels above our established threshold, to ensure that no NXP products put on the market contain any substances that are restricted by law or other regulations. While most substances on this list are not permitted by law, a number of them are not permitted by NXP in view of upcoming legislation, or their impact on the environment, health and safety.
The ECO-Products Substance Control for Products and Packaging also contains a number of restricted substances. Use of these substances is allowed, but any intentional use of these substances above the declaration threshold must be reported as specified in this list. Most substances are placed on the list because of health risks in their use and or processing. Others are placed on the list because they limit recycling, are scarce, or have a high environmental impact in mining. In this way, NXP encourages suppliers to look for and start using alternatives.
To provide our clients with more information about product content, as well as detailed information of Lead-Free and Halogen-Free products, we offer the Product Content Search Tool. NXP also provides information to IMDS (International Material Data System). In IMDS, all chemicals present in finished automobile manufacturing are collected, maintained, analyzed, and archived. IMDS facilitates meeting the obligations placed by automobile manufacturers, and thus on their suppliers, by national and international standards,

laws, and regulations.
HAZARDOUS SUBSTANCES Formal guidelines have been introduced gradually over several years by various bodies substantiating NXP's own drive to eliminate hazardous substances from our products. Directives such as RoHS (Restriction on Hazardous Substances in Electrical and Electronic Equipment), REACH (Registration, Evaluation, and Authorization of CHemical substances), WEEE (Waste from Electrical and Electronic Equipment) and ELV (End of Life Vehicle) impose better control over waste management of electronic devices.
RoHS NXP declares that its semiconductor products (including homogeneous subcomponents) are designed to be RoHS compliant and meet the requirements defined under Directive 2011/65/EU of the European Parliament and of the Council of June 2, 2011 on the restriction of the use of certain hazardous substances in electrical and electronic equipment. NXP RoHS compliant semiconductor devices contain no more than 0.1% lead (Pb) by weight per homogeneous material, or else the devices may contain lead (Pb) for uses allowed by the RoHS Directive as amended.
Lead (Pb) The potential health hazard posed by lead (Pb) contamination is a major concern to everyone. In 2010, together with four other leading companies (BoschDivision Automotive Electronics, NXP Semiconductors, Infineon Technologies,
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and STMicroelectronics) NXP formed a consortium, known as the DA5 (Die-Attach 5), to jointly investigate and standardize the acceptance of alternatives for high-lead solder for attaching die to semiconductor packages during manufacturing. For environmental reasons, the semiconductor industry is making every effort to eliminate high-lead solder wherever feasible. Any solution will require substitute material development and evaluation, internal semiconductor process and product qualification, and semiconductor production conversion to guarantee product reliability. By jointly developing and qualifying an alternative, the DA5 consortium aims to identify and provide lead-free and environmentally friendly solutions as quickly as possible. The consortium also aims to understand the risks of current and future legislation and provide a common message to legislating bodies (by, for example, supporting requests for exemption extensions).
NXP's Pb-free initiative, which supports our commitment to sustainability, ensures the complete removal of lead from our entire device portfolio without adversely affecting technical specifications or our customer's manufacturing processes.
Recycling and careful disposal is one approach to address the health hazard of lead. But at NXP, we believe prevention is better than a cure so we've made the manufacturing process Pb-free. We are actively engaged in researching new soldering materials, processes, and packageterminal plating, with the aim of making our broad product portfolio completely Pb-free

in the near future. Some products, such as the majority of our DIP, SIL, and QFN packages, have been Pb-free for many years.
Halogens We make a distinction between Green and Dark Green Products. Green Products are RoHS-compliant products, while Dark Green products are fully RoHS-compliant products that comply with the European Union directive 2011/65/EU and are free of Halogen and Antimony. Our specification for these products has been set at 900 ppm, which is significantly better than the industry standard. Our specification for Dark Green Products also applies to all chlorinated and brominated compounds. It is one of our key focus areas to restrict all chlorines and bromines, not just those that are flame retardants, in our Dark Green products. The shift to halogen-free formats does not change any product parameters or affect existing qualification, such as the automotive standards as defined by the AEC (Automotive Electronics Council). NXP customers benefit from this transfer to Dark Green, since environmental safety is becoming more important for manufacturing processes, and end customers view it as a value in its own right.
Formal legislation restricting halogen and antimony oxide is now under discussion and NXP, as a leader in the field, is providing technical expertise that will help legislators make informed decisions. NXP's Dark Green Policy concerning IC packages aims to do several things:
1. Qualify cost-effective Dark Green compounds for existing packages.

2. Discourage too many non-preferred Dark Green solutions and encourage standardization.
3. Convert existing products. 4. Combine Dark Green's introduction with
thin-wire and Cu-wire changes to control cost and quality. These activities reflect NXP's deep commitment to developing eco-friendly products and to integrate environmental safety aspects in all manufacturing processes. "Dark Green" products can be recognized by the "Halogen Free" logo on the box label.
In Action
The Dark Green product line started with a request from some of our leading customers in the mobile-phone segment. Concerned about the disposability of their products, they were looking to replace two of the flame retardants used in IC packaging, that contained halogen and antimony oxide. Since NXP works very closely with our customers, our suppliers, and our manufacturing sites to find better alternatives, we took on the challenge. The reality is that changing the chemical formula in a semiconductor product is no easy task. The manufacturing process is extremely delicate and complex, so making even a minor change can have a serious impact. In the end, we developed a new kind of packaging, called Dark Green, that doesn't use halogen or antimony oxide and, as an added bonus, is more resistant to moisture. It doesn't require dry-pack processing, which involves drying the package and sealing it in plastic, and that delivers an added saving on energy and resources.
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REACH We have procedures in place to ensure we follow all the relevant local, regional, and global laws that govern our business, including the regulations that require producers and importers of chemicals to register their substances along with the information needed to use them safely.
REACH (Registration, Evaluation, and Authorization of CHemical substances), which is the European legal framework for chemicals in force since June 1, 2007. As of December 2017, the REACH Substance of Very High Concern (SVHC) list includes 174 candidates and 43 authorized substances. Substances found in the REACH Annex XIV, and in Annex XVII (with applicable restrictions) are on the prohibited or restricted substances list. Substances in the Candidate List (REACH SVHCs) may be categorized as Prohibited, Restricted or Declarable. NXP products and packaging do not contain substances found in Annex XIV and Annex XVII. NXP has identified materials within its products and packaging materials that may contain EU REACH SVHC candidate substances in excess of 0.1% by weight.

WEEE The European Union (EU) Directive regarding Waste Electrical and Electronic Equipment (WEEE, Directive 2012/19/EU) requires "producers" of certain electrical and electronic equipment to develop recycling programs to allow the end user to return WEEE for recycling. The definition of "producer" is broad and can potentially include various entities in a products life cycle (e.g. manufacturer, distributor).
Each EU Member State has implemented national legislation detailing specific requirements for WEEE implementation in that Member State. Some other non-EU countries have laws similar to the WEEE Directive; however, the scope and producer responsibility requirements vary from those of the WEEE Directive.
NXP Semiconductors is primarily a component manufacturer. Therefore, NXP's current products are generally not considered within the scope of the WEEE Directive until they are incorporated into a final product.
Some of NXP Semiconductor products contain brominated flame retardants in the plastic encapsulation. Plastics containing brominated flame retardants are considered a WEEE relevant substance. NXP semiconductor products that do not contain brominated flame retardants are easily identifiable by the Halogen-Free logo on the packaging label.

ELV In determining the ELV status of its products, NXP relies upon its suppliers' material content data certification for each homogeneous material in the product(s) that they or their subcontractors provide. Therefore, NXP declares that its semiconductor products are designed to be ELV compliant and meet the requirements of the EU-Directive 2000/53/EC (End of Life Vehicles, ELV) and its amendments. NXP semiconductor devices do not contain cadmium, mercury or hexavalent chromium above the allowable limits as defined in the End-of-Life Directive dated 18 September 2000.
NXP ELV compliant semiconductor devices contain no more than 0.1% lead (Pb) by weight per homogeneous material, or else the devices may contain lead (Pb) for uses allowed by the ELV Directive. Any lead currently contained in these products meets the criteria for exemptions as found in Annex II of Commission Directive 2013/28/ EU dated 17 May 2013.

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CONFLICT MINERALS

All of the smelters and/or refiners (SORs) reported on the NXP CMRT are Certified according to RMI and/or LBMA. We provide updates when new data is received. NXP is participating in several engagements to address the conditions related to the minerals in the supply chain. We are also participating in initiatives to add cobalt and other minerals to the scope and are committed to continuous improvement of the entire conflict minerals due diligence infrastructure.
Regulation The Conflict Minerals regulation in the United States (Section 1502 of the Dodd-Frank Wall Street Reform and the Consumer Protection Act) applies to companies who must report to the Security and Exchange Commission (SEC). These companies are required to review their products and determine whether tin, tungsten, tantalum and gold (3TG) are necessary for production. If necessary for production, companies are required to evaluate their supply chain and declare whether 3TG originate in and around the Democratic Republic of the Congo from sources that finance civil rights abuses.
NXP is dedicated to ensuring conflict-free sourcing. To comply with the Conflict

Minerals regulation, NXP developed and implemented a policy and due diligence process to reasonably assure that the tin, tungsten, tantalum and gold in the products we manufacture do not directly or indirectly finance or benefit armed groups.
NXP Conflict Minerals Policy NXP is a company with a strong commitment to social responsibility. We believe that as a sustainable company, we need our suppliers and contractors to join us in this commitment based on a shared set of values and principles.
There has been increased awareness of violence and human rights violations in the mining of certain minerals from the Democratic Republic of the Congo (DRC) and surrounding countries. NXP shares the deep concern about sources of minerals from these conflict zones and is therefore committed to make its products DRC conflict-free and obtain full transparency throughout its supply chain.
NXP supports the goals and objectives of Section 1502 of the Dodd-Frank Act, which aims to prevent the use of conflict minerals that directly or indirectly finance or benefit armed groups in The Democratic Republic of the Congo (DRC) or an adjoining country as defined in the Act (Conflict Region). Conflict minerals include: columbite-tantalite (coltan) (i.e., tantalum), cassiterite (i.e., tin), gold, wolframite (i.e., tungsten) or their derivatives and could expand to include any other mineral or their derivative determined by the U.S. Secretary of State to be financing the DRC conflict. The Act requires companies to

perform due diligence with respect to the sourcing of conflict minerals and to file annual reports relating to use of conflict minerals. NXP will comply with the conflict minerals diligence and reporting obligations required under the Act. To meet the obligations, NXP has implemented a comprehensive duediligence process.
NXP suppliers, including contractors and external manufacturers, are required to comply with NXP's Supplier Code of Conduct, which includes requirements relating to conflict minerals and responsible sourcing. NXP suppliers shall have a policy to reasonably commit that the tantalum, tin, tungsten and gold in the products they manufacture do not directly or indirectly finance or benefit armed groups that are perpetrators of serious human rights abuses in the Democratic Republic of Congo or an adjoining country. NXP suppliers shall exercise due diligence on the source and chain of custody of these minerals and shall make their due diligence measures available to NXP upon NXP's request.
NXP has obtained information from suppliers concerning the origin of the metals that are used in the manufacture of NXP's products. Based upon information provided by our suppliers, NXP does not knowingly use metals derived from the Conflict Region that directly or indirectly benefit armed groups that are perpetrators of serious human rights abuses.
If such sources are identified, NXP will take actions to remove them from its supply chain.
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APPENDIX
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Overview Economy

United Nations Global Compact Commitment Letter Communication on Progress

Ethical Standards

Social Responsibility

Stakeholder Engagement

Supplier Engagement

Employee Engagement

Health and Safety

Environment

Product Stewardship

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GRI CONTENT INDEX

Disclosure Number

GRI Standard

GENERAL DISCLOSURES

GRI 102

General Disclosures

GRI 102

General Disclosures

GRI 102

General Disclosures

GRI 102

General Disclosures

GRI 102

General Disclosures

GRI 102

General Disclosures

GRI 102

General Disclosures

GRI 102

General Disclosures

GRI 102 GRI 102

General Disclosures General Disclosures

GRI 102 GRI 102 GRI 102 GRI 102 GRI 102

General Disclosures General Disclosures General Disclosures General Disclosures General Disclosures

Disclosure Number
102-1 102-2 102-3 102-4 102-5 102-6 102-7 102-8
102-9 102-10
102-12 102-13 102-14 102-15 102-16

Disclosure Title

Response

Name of the organization Activities, brands, products, and services Location of headquarters Location of operations Ownership and legal form Markets served Scale of the organization Information on employees and other workers Supply chain Significant changes to the organization and its supply chain External initiatives Membership of associations Statement from senior decision-maker Key impacts, risks, and opportunities Values, principles, standards, and norms of behavior

About NXP About NXP About NXP About NXP Investor Relations About NXP About NXP Employee Profile
Supplier Engagement Scope of the Corporate Responsibility Report Stakeholder Engagement Stakeholder Engagement Message from our CEO Corporate Responsibility NXP Code of Conduct

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Disclosure Number

GRI Standard

Disclosure Number

Disclosure Title

Response

GRI 102

General Disclosures

102-17

Mechanisms for advice and concerns about ethics

Ethical Standards

GRI 102

General Disclosures

102-18

Governance structure

Corporate Governance

GRI 102

General Disclosures

102-19

Delegating authority

Corporate Governance

GRI 102

General Disclosures

102-20

Executive-level responsibility for economic, environmental, and social topics

Corporate Responsibility

GRI 102

General Disclosures

102-21

Consulting stakeholders on economic, environmental, and social topics

Stakeholder Engagement

GRI 102

General Disclosures

102-22

Composition of the highest governance body and its committees

Corporate Governance

GRI 102

General Disclosures

102-23

Chair of the highest governance body

Corporate Governance

GRI 102

General Disclosures

102-24

Nominating and selecting the highest governance body

Corporate Governance

GRI 102

General Disclosures

102-26

Role of highest governance body in setting purpose, values, and strategy

Corporate Governance

GRI 102

General Disclosures

102-27

Collective knowledge of highest governance body

Corporate Governance

GRI 102

General Disclosures

102-28

Evaluating the highest governance body's Corporate Governance performance

GRI 102

General Disclosures

102-29

Identifying and managing economic, environmental, and social impacts

Corporate Responsibility

GRI 102

General Disclosures

102-31

Review of economic, environmental, and Corporate Responsibility social topics

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

Disclosure Number
GRI 102

GRI Standard General Disclosures

GRI 102 GRI 102

General Disclosures General Disclosures

GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102

General Disclosures General Disclosures General Disclosures General Disclosures General Disclosures General Disclosures General Disclosures

GRI 102

General Disclosures

GRI 102 GRI 102

General Disclosures General Disclosures

GRI 102

General Disclosures

Disclosure Number 102-32
102-33 102-34
102-35 102-36 102-40 102-42 102-43 102-44 102-45
102-46
102-47 102-48
102-49

Disclosure Title
Highest governance body's role in sustainability reporting Communicating critical concerns Nature and total number of critical concerns Remuneration policies Process for determining remuneration List of stakeholder groups Identifying and selecting stakeholders Approach to stakeholder engagement Key topics and concerns raised Entities included in the consolidated financial statements Defining report content and topic boundaries List of material topics Restatements of information
Changes in reporting

Response
Corporate Responsibility
Corporate Responsibility Ethical Standards
Investor Relations Investor Relations Stakeholder Engagement Stakeholder Engagement Stakeholder Engagement Stakeholder Engagement Investor Relations
Corporate Responsibility
Corporate Responsibility Scope of the Corporate Responsibility Report Scope of the Corporate Responsibility Report

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

Disclosure Number
GRI 102

GRI Standard General Disclosures

GRI 102 GRI 102

General Disclosures General Disclosures

GRI 102

General Disclosures

GRI 102

General Disclosures

Disclosure Number 102-50
102-52 102-53
102-54
102-55

Disclosure Title

Response

Reporting period

The reporting period covers calendar year 2017.

Reporting cycle

Annually

Contact point for questions regarding the CSR@nxp.com report

Claims of reporting in accordance with the Scope of the Corporate

GRI Standards

Responsibility Report

GRI content index

As shown.

ECONOMIC PERFORMANCE

GRI 103

Management Approach 103-1 - 103-3

GRI 201

Economic Performance 201-2

Disclosure of management approach

Investor Relations

Financial implications and other risks and Investor Relations opportunities due to climate change

PROCUREMENT PRACTICES

GRI 103

Management Approach 103-1 - 103-3

Disclosure of management approach

Supplier Engagement

ANTI-CORRUPTION

GRI 103

Management Approach 103-1 - 103-3

GRI 205

Anti-corruption

205-2

Disclosure of management approach
Communication and training about anticorruption policies and procedures

NXP Code of Conduct

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

Disclosure Number
ENERGY
GRI 103
GRI 302

GRI Standard

Disclosure Number

Management Approach 103-1 - 103-3

Energy

302-1

GRI 302 GRI 302 GRI 302

Energy Energy Energy

302-3 302-4 302-5

Disclosure Title
Disclosure of management approach Energy consumption within the organization Energy intensity Reduction of energy consumption Reductions in energy requirements of products and services

Response
Environment Energy , Water and Waste Energy , Water and Waste Energy , Water and Waste Energy , Water and Waste

WATER
GRI 103 GRI 303 GRI 303

Management Approach 103-1 - 103-3

Water

303-1

Water

303-2

GRI 303

Water

303-3

EMISSIONS

GRI 103

Management Approach 103-1 - 103-3

GRI 305

Emissions

305-1

GRI 305

Emissions

305-2

Disclosure of management approach
Water withdrawal by source
Water sources significantly affected by withdrawal of water
Water recycled and reused

Environment Energy , Water and Waste Energy , Water and Waste
Energy , Water and Waste

Disclosure of management approach

Environment

Direct (Scope 1) GHG emissions

Reducing our Carbon Footprint

Energy indirect (Scope 2) GHG emissions Reducing our Carbon Footprint

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

Disclosure Number GRI 305 GRI 305 GRI 305 GRI 305

GRI Standard
Emissions Emissions Emissions Emissions

GRI 305

Emissions

Disclosure Number 305-3 305-4 305-5 305-6
305-7

Disclosure Title

Response

Other indirect (Scope 3) GHG emissions Reducing our Carbon Footprint

GHG emissions intensity

Reducing our Carbon Footprint

Reduction of GHG emissions

Reducing our Carbon Footprint

Emissions of ozone-depleting substances Reducing our Carbon Footprint (ODS)

Nitrogen oxides (NOX), sulfur oxides

Reducing our Carbon Footprint

(SOX), and other significant air emissions

EFFLUENTS AND WASTE

GRI 103

Management Approach 103-1 - 103-3

GRI 306

Effluents and Waste

306-2

GRI 306

Effluents and Waste

306-3

GRI 306

Effluents and Waste

306-4

Disclosure of management approach Waste by type and disposal method Significant spills Transport of hazardous waste

Environment Energy , Water and Waste Environment Energy , Water and Waste

ENVIRONMENTAL COMPLIANCE

GRI 103

Management Approach 103-1 - 103-3

GRI 307

Environmental Compliance

307-1

Disclosure of management approach

Environment

Non-compliance with environmental laws Environment and regulations

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

Disclosure Number

GRI Standard

Disclosure Number

SUPPLIER ENVIRONMENTAL ASSESSMENT

GRI 103

Management Approach 103-1 - 103-3

GRI 308

Supplier Environmental 308-2 Assessment

Disclosure Title
Disclosure of management approach Negative environmental impacts in the supply chain and actions taken

EMPLOYMENT

GRI 103

Management Approach 103-1 - 103-3

GRI 401

Employment

401-1

Disclosure of management approach
New employee hires and employee turnover

LABOR/MANAGEMENT RELATIONS

GRI 103

Management Approach 103-1 - 103-3

Disclosure of management approach

GRI 402

Labor/Management Relations

402-1

OCCUPATIONAL HEALTH AND SAFETY

GRI 103

Management Approach 103-1 - 103-3

Minimum notice periods regarding operational changes
Disclosure of management approach

Response
Supplier Engagement Supplier Engagement
Employee Profile Employee Profile
Social Responsibility Auditable Standards Social Responsibility Auditable Standards
Health and Safety

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

Disclosure Number
GRI 403

GRI Standard
Occupational Health and Safety

Disclosure Number
403-1

GRI 403

Occupational Health and Safety

403-2

GRI 403

Occupational Health and Safety

403-3

Disclosure Title

Response

Workers representation in formal joint managementworker health and safety committees

Each manufacturing site provides various opportunities for employee representation and feedback. These may include committees, incident investigation, safety meetings, etc. NXP is certified to OHSAS 18001, and plans to be fully compliant to ISO 45001 by 2020.

Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities

Health and Safety

Workers with high incidence or high risk of diseases related to their occupation

NXP has monitoring programs that ensure exposures in the workplace is minimized and does not adversely affect worker health.

TRAINING AND EDUCATION

GRI 103

Management Approach 103-1 - 103-3

GRI 404

Training and Education 404-2

Disclosure of management approach
Programs for upgrading employee skills and transition assistance programs

Career Path Career Path

DIVERSITY AND EQUAL OPPORTUNITY

GRI 103

Management Approach 103-1 - 103-3

Disclosure of management approach

Diversity and Inclusion

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

Disclosure Number

GRI Standard

Disclosure Number

NON-DISCRIMINATION

GRI 103

Management Approach 103-1 - 103-3

Disclosure Title Disclosure of management approach

Response Ethical Standards

FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING

GRI 103

Management Approach 103-1 - 103-3

Disclosure of management approach

GRI 407

Freedom of Association and Collective Bargaining

407-1

Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk

Labor and Human Rights Labor and Human Rights

CHILD LABOR

GRI 103

Management Approach 103-1 - 103-3

GRI 408

Child Labor

408-1

FORCED OR COMPULSORY LABOR

GRI 103

Management Approach 103-1 - 103-3

GRI 409

Forced or Compulsory Labor

409-1

SECURITY PRACTICES

GRI 103

Management Approach 103-1 - 103-3

GRI 410

Security Practices

410-1

Disclosure of management approach

Labor and Human Rights

Operations and suppliers at significant risk Labor and Human Rights for incidents of child labor

Disclosure of management approach
Operations and suppliers at significant risk for incidents of forced or compulsory labor

Labor and Human Rights Labor and Human Rights

Disclosure of management approach

Supplier Engagement

Security personnel trained in human rights Supplier Engagement policies or procedures

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement Supplier Engagement Employee Engagement Health and Safety Environment Product Stewardship Appendix

Disclosure Number

GRI Standard

Disclosure Number

HUMAN RIGHTS ASSESSMENT

GRI 103

Management Approach 103-1 - 103-3

GRI 412

Human Rights Assessment

412-1

GRI 412 GRI 412

Human Rights Assessment
Human Rights Assessment

412-2 412-3

LOCAL COMMUNITIES

GRI 103

Management Approach 103-1 - 103-3

GRI 413

Local Communities

413-1

SUPPLIER SOCIAL ASSESSMENT

GRI 103

Management Approach 103-1 - 103-3

GRI 414

Supplier Social Assessment

414-1

GRI 414

Supplier Social Assessment

414-2

Disclosure Title

Response

Disclosure of management approach
Operations that have been subject to human rights reviews or impact assessments
Employee training on human rights policies or procedures
Significant investment agreements and contracts that include human rights clauses or that underwent human rights screening

Social Responsibility Social Responsibility
Social Responsibility Supplier Engagement

Disclosure of management approach
Operations with local community engagement, impact assessments, and development programs

Community Engagement Community Engagement

Disclosure of management approach
New suppliers that were screened using social criteria
Negative social impacts in the supply chain and actions taken

Supplier Engagement Supplier Engagement
Supplier Engagement

Overview Economy Ethical Standards Social Responsibility Stakeholder Engagement

Disclosure Number

GRI Standard

Disclosure Number

MARKETING AND LABELING

GRI 103

Management Approach 103-1 - 103-3

GRI 417

Marketing and Labeling 417-1

Disclosure Title
Disclosure of management approach Requirements for product and service information and labeling

SOCIOECONOMIC COMPLIANCE

GRI 103

Management Approach 103-1 - 103-3

Disclosure of management approach

Response Product Stewardship Product Stewardship
Investor Relations

Supplier Engagement

Employee Engagement

Health and Safety

Environment

Product Stewardship

Appendix
100

SECURE CONNECTIONS FOR A SMARTER WORLD
101