23%

Renewable Sources

23% of Diodes’ energy consumption came from renewable sources in 2020

25000

Products

are in Diodes’ product line

1.2

Billion Dollars

in 2020 sales


The Path to Drawdown: LEDs

First invented in the 1990s, Light-emitting diodes (LEDs) designed as high-brightness, highly efficient light bulbs. LEDs work like solar panels in reverse, converting electrons to photons rather than the other way around. They use 90% less energy than incandescent bulbs, and half as much as compact fluorescents, for the same amount of light. While other lighting technologies convert energy into heat (and most of it wasted), LEDs convert 80% of their energy use into emitting light. 

LEDs have many environmental benefits. Their efficiency in converting energy into light rather than heat helps reduce electricity consumption and air-conditioning loads. For people without ready access to ample energy, LEDs can be powered with small solar cells and can replace expensive kerosene lamps and their noxious fumes and emissions. When LEDs are used in streetlights, they can save up to 70% of energy and significantly reduce maintenance costs.

Project Drawdown predicts that if LED lighting becomes widespread in both the residential and commercial lighting market, it can help avoid between 10.2 - 10.8 gigatons of CO2 emissions in residences, and between 5.9 - 6.7 gigatons in commercial buildings. To get there, the global market share of LEDs needs to scale rapidly:

  • In 2018, LED lights comprised 3% of the overall commercial lighting market and 2% of the residential lighting market
  • By 2050, LEDs should account for 95% and 90% of the residential and commercial markets, respectively
  • That’s 12.82% CAGR for residential LED, and 11.21% CAGR for commercial LED lighting between 2018 and 2050.

About

Diodes Incorporated (stock ticker: DIOD) manufactures and supplies a broad range of discrete, logic, analog, and mixed-signal semiconductor products. These products include diodes, rectifiers, transistors, MOSFETs, protection devices, etc., and serve the consumer electronics, computing, communications, industrial, and automotive markets. Headquartered in Plano, Texas, they sell their products worldwide.

DIOD's Role in Drawdown

Diodes’ product line consists of over 25,000 products that are designed for use in high-volume consumer electronic devices like liquid crystal display (LCD) and LED televisions and LCD panels, set-top boxes and consumer portables like smartphones, tablets and notebooks. In particular, these include LED lighting drivers, and their end-product application for industrial lighting, power supplies, LED lighting accounted for between 20% and 30% of Diodes’ total sales since 2018 (p. 4).

DIOD: What We Like

We commend Diodes for taking several initiatives to enhance their environmental sustainability. For example:


In the area of supplier management, Diodes demonstrates boldness that’s rare among public companies. Their detailed supplier code of conduct (p. 5) sets out their expectation for suppliers to improve energy efficiency and minimize energy consumption and GHG emissions.

DIOD: What We Want to See Improve

Disclose GHG Emissions


Diodes professes (p. 17) to be prioritizing the reduction of emissions and establishing goals and objectives to reduce their overall carbon footprint. Yet they don’t list any specific commitments or targets, not to mention quantitative metrics of their GHG emissions. Setting targets requires precise and accurate tracking of emissions, and we urge Diodes to begin disclosing their direct and indirect emissions in their sustainability report.

Completely Transition to Renewables


We commend Diodes for steadily increasing the share of renewable energy in their total energy consumption. But we want them to go further faster. Diodes’s electricity use still comes overwhelmingly from natural gas and diesel fuel (p. 18), and their use of renewables is growing too slowly. We urge Diodes to transition completely to renewable and/or clean energy by the end of this decade.

Shift to Clean Banks


Diodes and their subsidiaries have entered into credit agreements with several banks (Exhibit 10.95) that are still the largest funders of fossil fuel companies, including Bank of America, Citibank, and HSBC. Diodes should carefully select financial institutions that, as a matter of principle, don’t fund fossil fuels for their credit needs.

Other LEDs Stocks in the Climate Index

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