Analysis of Nvidia's ESG Compliance
Updated: Oct 7, 2022
Nvidia is one of the largest fabless chip designers in the world, best known for their GPUs (Graphic Processing Units) that have been leading the industry for the past decade. Recently the company has been making large strides in datacenter hardware and metaverse related technologies, getting further ahead of their competition(AMD, Intel) in the space. The company has also shown amazing growth with YoY revenue growth from 2014 to 2019 and 2021-2022 and their stock price has grown similarly in that period of time.
Beyond those exceptional numbers, Nvidia has extremely sound corporate practices. Notably, a board-level nominating and governance committee oversees ESG investing issues. The company also does especially well on human capital development, according to MSCI (MSCI). Its staff-focused initiatives include professional development courses, tuition reimbursement, a career services program, an employee stock purchase plan and partnerships with organizations to build a talent pipeline. Lastly, Nvidia seeks to ensure that the minerals, including gold, tantalum, tungsten and tin, used in its chips are responsibly sourced and not from conflict zones.
The company has done more than simply improve their internal practices, they have also decided to lend their processing capability to researchers and governments for important projects. One of these projects being the mapping of COVID-19 for the development of a vaccine and to predict the spread of the virus worldwide.
Nvidia has similar ESG compliance when compared to other companies in its industry like Intel, Apple, and AMD. This is primarily because of how similar the resource demands are for all of these companies and the significant overlap they have in suppliers(with a majority of them using TSMC for their chip production). Because of this, when one of these companies decides to pressure their supplier to change their practices it ends up having an effect on the supply chains of the other companies as well. Despite these similarities Nvidia comes out ahead when it comes to pay equity, internal company diversity, and large scale positive impact on society.
Finally, while Nvidia may seem to already be extremely ahead compared to their industry in terms of ESG compliance, they continue to push to make a more positive impact overall. The chip designer has plans to move 65% of its global energy use to renewables by 2025. Not only that but they plan on creating a full scale model of Earth in their E2 supercomputer to predict climate disasters ahead of time. Nvidia hopes to significantly reduce casualties and economic loss through the use of this innovative new model they are developing.
Ultimately, Nvidia is a leader in the field of ESG and their plans for the future put them on track to stay on top for years to come.