Valens' ESG Report Reveals Deep Emission Cuts Amid Industry Challenges

HOD HASHARON, Israel – December 29, 2025 – Valens Semiconductor (NYSE: VLN), a key player in high-performance connectivity, has released its fourth annual Environmental, Social, and Governance (ESG) report, showcasing significant progress in reducing its environmental footprint. The 2024 report details substantial cuts in greenhouse gas emissions and electricity usage, signaling a deepening commitment to sustainability as the broader semiconductor industry faces mounting pressure to clean up its resource-intensive operations.

Wiring a Greener Future: Tangible Environmental Gains

The report's headline figures point to a concerted effort to improve operational efficiency. Valens announced a 22% year-over-year reduction in its combined Scope 1 and Scope 2 greenhouse gas (GHG) emissions. More impressively, this represents a 57% decrease compared to its 2021 baseline, indicating a sustained and accelerating commitment to decarbonization. This progress is largely tied to a 9% drop in total electricity consumption in 2024 compared to the previous year, and a 27.5% reduction since 2021. The company also reported an 11% decrease in fuel consumption for employee vehicles.

Beyond energy and emissions, the report highlights a dramatic improvement in waste management. Valens responsibly recycled 490 kilograms of electronic waste in 2024, a more than three-fold increase from the 140 kilograms recycled in 2023, a success the company attributes to a targeted internal recycling campaign.

Looking ahead, Valens has set clear, near-term environmental targets. It plans to implement further energy-saving measures, such as installing LED lighting and motion sensors in its offices, aiming for an additional 10% reduction in energy consumption by the end of 2025. Furthermore, the company has committed to sourcing at least 30% of its office electricity from renewable sources by the end of 2027, a crucial step in further lowering its Scope 2 emissions.

Beyond the Chip: Governance and Social Commitments

In his statement accompanying the report, CEO Yoram Salinger emphasized the company's dedication to its ESG initiatives. "We are pleased to share Valens Semiconductor's fourth annual ESG Report, which provides an update on our ongoing commitment to our key ESG initiatives and the progress we achieved in 2024," Salinger said. "We are dedicated to advancing core ESG principles that guide our operations and support stakeholder expectations."

This commitment extends beyond environmental metrics to the social and governance pillars of ESG. On the governance front, Valens achieved the ISO/IEC 27001:2022 certification for its Information Security Management Systems in 2024, a key credential that demonstrates robust data security practices and risk management—a critical factor for investors and partners in the tech sector.

Igal Rotem, Chairman of the company's Nominating, Governance, and Sustainability Committee, noted the link between these principles and business performance. "Our 2024 ESG Report highlights our commitment to ethical and transparent governance while supporting continued business growth," he stated.

The report also sheds light on the company's investment in its workforce. Valens reported that its employee well-being program saw over 80% participation in corporate events, and a "Culture Club" launched in 2023 doubled its activities in 2024. The company's average employee tenure has increased to 6.9 years, and 100% of its 228 employees received formal performance and career development reviews, metrics that point to a focus on retaining and developing human capital. Community engagement efforts included continuing a partnership with the Reim association to aid families in need and providing support to soldiers at a rehabilitation hospital in Israel.

Benchmarking Sustainability in a High-Stakes Industry

While Valens' progress is notable, it's essential to view it within the context of the global semiconductor industry, a sector notorious for its massive environmental footprint. As a "fabless" company, Valens designs its chips but outsources the hyper-intensive manufacturing process. This model means its direct environmental impact (Scope 1 and 2 emissions) is inherently much lower than that of integrated device manufacturers (IDMs) like NXP or foundries like TSMC, which operate water- and energy-guzzling fabrication plants.

For comparison, major industry players with manufacturing facilities have set aggressive, large-scale targets. NXP Semiconductors aims to be carbon neutral by 2035, while Analog Devices is targeting 100% renewable energy for its global manufacturing facilities by the end of 2025. Valens' goals are scaled to its operational scope, but the industry-wide challenge remains immense.

According to MSCI ESG Research, the semiconductor industry as a whole has been slower than other sectors to adopt comprehensive climate targets covering their entire carbon footprint. Research indicates the industry's average Implied Temperature Rise (ITR) is 2.89 degrees Celsius, well above the Paris Agreement's 1.5-degree goal. The manufacturing process is the primary culprit, with advanced chip fabrication consuming vast quantities of energy and ultrapure water, and generating hazardous chemical waste. For instance, the semiconductor industry in Taiwan is estimated to consume about 10% of the island's water supply, and experts note that nearly 75% of a smartphone's lifetime carbon footprint is generated before it is even turned on, with chip manufacturing being a primary contributor.

Investor Scrutiny and the Future of Green Connectivity

The detailed reporting from Valens comes as investors and analysts sharpen their focus on ESG performance in the tech sector. While broad climate-focused fundraising has seen a downturn, there is a growing preference for companies that can demonstrate tangible sustainability impacts alongside commercial value. For a fabless company like Valens, this means showcasing strong governance, responsible supply chain oversight, and a commitment to human capital, in addition to managing its direct operational footprint.

The explosion in Artificial Intelligence (AI) has added another layer of complexity. The voracious demand for high-performance chips to power AI models is a boon for companies like Valens, but it also intensifies scrutiny on the embodied carbon of those chips and the massive energy consumption of the data centers where they are deployed.

Therefore, Valens' reported progress on Scope 1 and 2 emissions, coupled with its transparent governance and employee-focused initiatives, positions it favorably among peers in the fabless category. However, like all fabless firms, the next frontier of ESG reporting will involve greater transparency and reduction targets for Scope 3 emissions—the indirect emissions embedded in its supply chain and the use of its products. As the industry grapples with its environmental legacy, the ability to innovate not just in performance but also in sustainability will increasingly define the leaders in high-performance connectivity.