Issue link: https://iconnect007.uberflip.com/i/1433652
74 SMT007 MAGAZINE I DECEMBER 2021 corporate governance (ESG) movement that's happening globally among corporations. In the U.S., as we work to catch up with Europe and other regions that have been more progressive, we'll be seeing a lot of companies report more precise measures of their ESG impact. You've seen the Securities and Exchange Commis- sion (SEC) come out and say, "A lot of compa- nies are talking about ESG. We think that there needs to be some standardization in how this information is communicated." In SEC Chair Gary Gensler's speech a few months ago 1 , he laid out what he saw as his outline for ESG dis- closure, and he suggested it should be manda- tory instead of voluntary. If the SEC has mandatory ESG disclosure requirements, how does that all factor back to us? Well, a piece of that is not only your own carbon footprint, but it's your supply chain and measuring your whole supply chain. Elec- tronics manufacturers may not be as far down this path as others are who tend to be more consumer-facing, but they're going to have to be there because their buyers are going to re- quire it. Over the next decade, I think ESG will have a major impact on the industry. If a major OEM is required by the SEC to disclose certain things and to measure things in certain ways, then so will their supply chain. I think you'll see oth- er requirements on the social and government piece for public companies, but the environ- mental piece is something that feeds into the supply chain. Matties: Is there supply chain reshoring? How dramatic is it? Is it something we need to be aware of ? And if so, what's the long-term effect? DuBravac: Yes, my sense is that it's happening to some extent on the margin. ere were already forces at work pre-pandemic, tariffs and other things which were causing companies to re-ex- amine their supply chains. We had lengthened supply chains over numerous years, primar- ily to reduce cost within those supply chains and to avoid tariffs. e tariffs that were put in place under President Trump change those equations. Companies were thinking about it already, but the tariffs caused them to start looking at alternatives. Initially they looked throughout Asia. We started to see Vietnam, Cambodia, Malaysia, Indonesia, and other places all become areas of exploration. e pandemic hit and that caused a lot of companies to look closer to home, in Mexico, and other places like that. It's happen- ing on the margin. But this is a slow process. You build a factory, and it has multiple decades of usability. It takes some time for a major tran- sition to take place. Matties: Do you think the inflation is slowing the reshoring drive? DuBravac: When companies are looking at re- shoring decisions, I don't know that they're necessarily looking at it as, "Should we reshore or not?" I think they're looking at it in a holis- tic sense, asking, "Where should we manufac- ture?" ey're looking much longer than near term inflation pressures; the next three, five or 10 years. I think the jury is still out whether inflation pressures could be as severe in three years, five years. ere's an argument that they won't In the U.S., as we work to catch up with Europe and other regions that have been more progressive, we'll be seeing a lot of companies report more precise measures of their ESG impact.