Corporate social responsibility
We have long believed conducting business in a responsible and sustainable manner is critical to our own sustained success and that of all our stakeholders: our employees, customers, supply chain partners, and the communities in which we operate. We believe the definition of success in our rapidly changing world goes far beyond our financial performance and the price of a share of our common stock. Primary elements of success that define Vicor Corporation’s corporate social responsibility (“CSR”) include: the health, safety, and wellbeing of our employees; productive engagement with the communities in which we operate; and effective stewardship of natural resources and the environment.
Our Code of Business Conduct describes our corporate values as accountability, commitment, respect, reward, and safety. These values inform all of our policies and procedures and are the foundation upon which all business decisions should be made.
In 2016, Vicor Corporation established a Corporate Social Responsibility Committee, comprised of corporate officers across relevant functions and disciplines. This committee, overseen by an independent member of our Board of Directors, is tasked with development, implementation, and oversight of initiatives intended to sustain the three primary elements of our CSR stated above.
Vicor Corporation is committed to the ethical sourcing of materials and the fair treatment of workers in its supply chain. Therefore, Vicor has published positions regarding the use of conflict minerals as well as the use of slave labor and human trafficking:
- Vicor Corporation has filed a Conflict Minerals Report with the U.S. Securities and Exchange Commission, as required under Rule 13p-1 of the Securities Exchange Act. Vicor is committed to ensuring its products utilizing tantalum, tin, tungsten and gold (or their ores) are “conflict-free” and sourced from compliant smelters and refiners.
- Vicor also affirms its compliance with The California Transparency in Supply Chains Act (“CTSCA”) and United Kingdom Modern Slavery Act (“UKMSA”), which are laws enacted to increase the amount of information made available by manufacturers and retailers regarding their efforts to address slavery and human trafficking in their supply chains. For more information on efforts to combat modern slavery please review Vicor’s Anti-Modern Slavery and Human Trafficking Statement.
The following highlight our activities in each of our three CSR focus areas:
Health, safety and wellbeing of our employees
Vicor Corporation is committed to provide the services necessary to recruit, develop, reward, and retain employees to enable the company to sustain its competitive advantages and leadership position in the markets we serve. Recognizing achievement of our business goals requires dedicated and capable employees, we are committed to providing safe workplaces and the appropriate resources to allow employees to perform to their full potential, while expanding their skills, knowledge, and experience.
We provide equal employment opportunities for all applicants and employees without regard to prohibited considerations of race, color, religion, gender, gender identity, gender expression, sexual orientation, age, physical disability, mental disability, marital status, or any other classification protected by applicable local, state or federal laws.
Employee benefits and engagement initiatives
Based on our assessment of peer group data, we believe we enjoy an employee turnover rate far lower than our domestic industry peers and manufacturers of similar size. We attribute this low turnover to the quality of the employment opportunities we offer.
- Vicor Corporation offers generous employee benefits including medical, dental, and vision insurance for employees and their dependents, the cost of which we share with employees. To further contribute to funding the cost of health care for our employees, we offer flexible spending accounts for health care and dependent care. Our benefits package includes a range of subsidized life and disability policies in which employees may elect to participate.
- We offer eligibility for four weeks of paid time off to all full-time employees upon hire.
- We sponsor a traditional 401(k) plan for employees, to which we make matching contributions, subject to limitations.
- We subsidize our dining facilities at our two Andover facilities, enabling employee access to diverse menus of healthy foods at low costs. We periodically host on-site health programs to encourage healthy lifestyles among employees.
- We regularly provide on-site education and vendor fairs covering financial planning, elder care, stress management, and other personal-development topics. We also offer employees reimbursement of their qualifying gym or health club memberships. Among similar activities to promote wellbeing, we sponsor departmental competitions for healthy behaviors (such as walking).
- To encourage continuous learning by employees, we offer tuition reimbursement for job-related education. We are active participants in university co-op programs, giving undergraduate engineers enriching opportunities to “learn on the job”.
- Our online Rewards & Recognition System allows for high profile acknowledgment of employee contributions throughout the organization.
- Employees are encouraged to engage with our executives, asking questions and raising concerns in person, at periodic employee communications meetings conducted by members of senior management, or via e-mail or telephone hotline. We internally publish our policies and procedures, including specific instructions for submitting, anonymously and without fear of retaliation, comments, complaints, or reports of inappropriate behavior. Our Chief Compliance Officer serves as ombudsman for all matters involving potential violations of our policies and procedures.
We are committed to providing a safe and healthy working environment for our employees. Vicor Corporation is subject to a broad range of employee health and safety laws and regulations in each of the jurisdictions in which we operate.
All of our Vicor and VI Chip modules, as well as all of our configurable products, are manufactured by us in our 240,000 sq. ft. facility in Andover, MA. Our other Andover facility is a 90,000 sq. ft. office building, housing Executive/Administrative, Research & Development, and Sales & Marketing personnel. Our Picor subsidiary occupies a 19,000 sq. ft. mixed use facility in Lincoln, RI, housing Executive/Administrative, Engineering, Sales & Marketing, and Warehousing personnel. Approximately 80% of our employees work in these three facilities. All remaining personnel worldwide occupy commercial office space in which no industrial processes occur.
We maintain a range of policies and defined procedures associated with minimizing the risk of exposing employees to toxic materials or hazardous processes. The use of toxic materials, albeit limited, and the generation of meaningful waste streams are concentrated at our Andover manufacturing facility. Disposal and recycling of hazardous and non-hazardous materials is done under contract with licensed third parties. The manufacturing facility operates several processes with closed-loop, recirculating water-based systems and, therefore, generates no industrial effluent discharges. Under Massachusetts regulations, we maintain licensed processes and procedures associated with the potential emission of air contaminants (e.g., volatile organic compounds) well below permitted levels. Our only direct greenhouse gas emissions are associated with onsite fossil fuel fired stand-by generators at our two Andover facilities, a small quantity of equipment used in production, certain kitchen/cafeteria equipment, and facility space heaters. Any direct greenhouse gas emission volume falls well below applicable regulatory thresholds.
We maintain a strong record of compliance with federal, state, and local laws and regulations associated with occupational safety and sustainable workplace practices to address the overall welfare of the workforce, minimize risk, and maximize consistent performance, thereby contributing to our strategic objectives.
We maintain systems and processes for testing our safety and related standards, evaluating our current and future regulatory compliance, and, importantly, driving continuous improvement of our practices. These processes include periodic reviews of our policies, ongoing training for employees, and periodic internal audits and preparedness drills. Personnel from various departments are responsible for the varied components of occupational safety.
- An important element of providing a safe and healthy working environment is a carefully developed understanding of how to maintain business continuity in the event of an interruption, most notably a catastrophic interruption caused by a natural or human-induced disaster. Accordingly, Vicor Corporation maintains a comprehensive business continuity and disaster recovery plan, overseen by a multi-disciplinary “Business Continuity Management” team made up of key employees from across our organization. These plans address contingencies associated with emergency management, as well as response, resiliency, and recovery procedures for manufacturing operations, business processes, and information systems. Supply chain continuity, from suppliers to customers, also is addressed. We regularly test portions of the plan, assuring that our processes function as intended, allowing a rapid, appropriate response to circumstances.
- An important, complementary initiative involves sustained information assurance, representing the policies, procedures, and infrastructure necessary to ensure the confidentiality, possession or control, integrity, authenticity, availability and utility of computer data and information systems. This initiative is overseen by our “Technology Council,” which is made up of key executives and senior personnel from our Information Systems & Technology, Finance, and Sales & Marketing departments. To date, Vicor Corporation has met all legal (federal and state), regulatory (agency), and customer requirements for cyber security. Because we are a vendor to prime contractors serving the U.S. Department of Defense, the particularly stringent cyber security requirements of the federal government flow down to us. As such, we are committed to meeting evolving federal requirements for Federal Acquisition Requirements and Defense Federal Acquisition Requirements, as defined by the National Institute of Standards and Technology.
Community Presence, Support, and Involvement
Vicor Corporation seeks to have a positive impact on the communities in which we operate. We consider community involvement and support to be a meaningful part of our corporate social responsibility.
As our facilities are located typically in suburban office parks, we operationally seek to be an unobtrusive neighbor, blending into the physical landscape and causing as little disturbance as possible.
In support of the interest of our employees and their families, we support numerous regional charities and their service initiatives. During 2016, we participated in and provided financial support to numerous organizations, many of which are focused on caring for our less fortunate neighbors, including: Boston Children’s Hospital (Boston, MA); Lazarus House Ministries (Lawrence, MA); Merrimack Valley Food Bank (Lowell, MA); and The Professional Center for Child Development (Andover, MA).
For over 25 years, Vicor Corporation has been a major participant in VISIONS (Methuen, MA), a regional initiative facilitating placement of disabled individuals in community-based employment opportunities. VISIONS, which stands for Vocational, Instructional, and Supported Industrial Opportunities with Natural Supports, provides vocational counseling, vocational interest surveys, vocational training, and social experiences through a recreation program. Participants are provided with the opportunity for real-life transitional plans, paid vocational opportunities, and skills development. As a long-term business partner of the program, we have employed many dozens of VISIONS participants, some of whom have been with us for many years.
Stewardship of the Environment and Natural Resources
Since our founding in 1981, Vicor Corporation has been a leading innovator in the development of technologies and products that improve power conversion efficiency, thereby contributing to reduced electricity consumption and, in turn, reduced production of greenhouse gasses. In a very real sense, we are in the business of helping other businesses reduce their carbon footprints.
We recognize our obligation to our environment and the management and conservation of natural resources. We also recognize the overlap of this obligation with our commitments to employee wellbeing and supporting the communities in which we operate. We consider fostering environmental consciousness and responsibility among employees, suppliers, and customers to be a priority of our CSR initiatives.
Energy Efficiency and Consumption Initiatives
Since 2000, Vicor Corporation has undertaken numerous initiatives to reduce our direct consumption of electricity, which we source under long-term contracts from local utilities. Vicor Corporation has actively implemented various energy conservation projects that have resulted in annual cost savings of millions of dollars and avoidance.
We have evaluated significant capital projects involving renewable sources of electricity generation (e.g., solar panels) that would have the potential to reduce our reliance on the grid and non-sustainable generation, but such projects have not yet proven to be feasible for our specific application requirements. As technologies and our needs evolve, and as costs and benefits inevitably shift, we will consider capital projects for renewable sources of generation.
Similarly, we regularly seek to identify and evaluate opportunities for reducing or avoiding energy usage. We conduct an annual review of energy consumption in order to establish realistic goals for further improvements in efficiency or overall reduced consumption. We also have raised the level of dialog with our suppliers and production partners regarding energy usage and sustainability.
Vicor Corporation seeks to maintain a modest environmental “footprint,” in terms of the direct impact of our operations on the environment.
This modest footprint is evidenced by our early experience with Massachusetts’s Toxics Use Reduction Act (“TURA”), which was the first comprehensive pollution prevention bill enacted in the US. Considered a model for regulation nationally and internationally, TURA required facilities using toxic chemicals to pay an annual fee to do so, report on usage of toxic chemicals, conduct ongoing reduction initiatives, and submit updated reduction plans every two years. Vicor Corporation fully embraced the TURA program, reducing our use of toxic chemicals to minimum thresholds, eliminating gaseous or effluent release of such chemicals, and “graduating” from the program in 2013. Vicor Corporation and its professional staff have been recognized for leadership in supporting the TURA program. The results of our participation reflected our understanding of the business benefits of innovating solutions to emerging environmental and natural resource challenges. By redesigning manufacturing steps to address toxic processes, we eliminated or reduced several harmful substances and practices, while reducing cycle time, materials costs, and containment and recycling costs. Because of our commitment to manufacturing efficiency, we were able to make great strides in sustainability, and this work continues.
As stated above in the discussion of our initiatives for sustaining a healthy workplace, Vicor Corporation is not a significant generator of greenhouse gases. We do not operate an on-site fossil fuel fired furnace or boiler, nor do we use other combustion processes that would generate greenhouse gases. As defined by the Greenhouse Gas Protocol, greenhouse gas emissions are categorized as: Scope 1 (emissions we directly generate and control); Scope 2 (emissions we indirectly generate but directly influence, such as those generated by the utilities from which we purchase electricity); and Scope 3 (emissions generated by participants in our supply chain over which we might have influence). As indicated, we do not believe Vicor Corporation generates significant quantities of Scope 1 greenhouse gases. The primary source of our Scope 1 emissions is two stationary fossil fuel fired stand-by generators, used infrequently during rare power outages. Minor sources include a small quantity of equipment used in production, certain kitchen/cafeteria equipment, and facility space heaters.
Starting with 2015 data, Vicor Corporation reported its Scope 1 and 2 greenhouse gas emissions to CDP (formerly the "Carbon Disclosure Project"), which is London-based organization working with shareholders and the companies in which they invest to disclose greenhouse gas emissions, using the categories defined by the Greenhouse Gas Protocol. For estimating Scope 2 emissions, we used published emission factors to estimate emissions based on the amount and cost off electricity we purchased. We have not reported Scope 3 greenhouse gas emissions to the CDP, as we do not believe an accurate estimate of volume can be made, given the fragmentation and diversity of our supply chain.
We endorse the objectives of CDP and the participating institutional investors, but emphasize the figures we report are our estimates based largely on information from third parties. We do not believe we generate significant quantities of Scope 1 emissions, so our reported emissions consist primarily of Scope 2 emissions. As such, our commitment to reducing greenhouse gas generation has been, and will continue to be, based on (a) reduction of the amount of electricity we purchase from utilities and (b) fostering environmental consciousness and responsibility among employees, suppliers, and customers.
Waste Management and Recycling
Vicor Corporation has a comprehensive waste management and recycling program that has been in place for several years. This program is seen and exercised throughout our organization, from the floor of our manufacturing facility to our individual offices.
Each year, Vicor Corporation recycles many hundreds of thousands of pounds of material, ranging from industrial waste (e.g., scrap metals and materials, non-functioning parts and equipment, and hazardous and non-hazardous production waste) to commercial waste (e.g., paper, cardboard, and plastic) representing approximately half of our total waste generation.
We actively seek to identify all opportunities to reduce the volume of waste we generate, increase the volume of waste material we recycle or otherwise divert from landfills and incinerators, and increase the usage of recycled material in our production and operations.
Our Commitment Going Forward
Throughout each year, our Corporate Social Responsibility Committee assesses our CSR policy, working with the Board of Directors to design the metrics and parameters necessary to establish realistic, achievable long-term goals for the three primary elements of our CSR. We also will evaluate appropriate forms of disclosure to our stakeholders associated with these goals.
- We will continue to identify and assess how Vicor Corporation might foster environmental consciousness and responsibility among employees, suppliers, and customers.
- Similarly, we will identify and consider opportunities to engage with third parties for validation, certification, or confirming audits of our CSR policy.
- We will continue to bring together numerous processes and initiatives, using a sustainability data management system, driving collaboration, idea generation, goal setting, and reporting.