Introduction – Governance Practices
SolarEdge is committed to mitigating climate change through the acceleration of smart, clean renewable energy technologies that will power the world for generations to come. In 2023, we hired a global Government Affairs team in 2023 in order to engage with governments and policy makers around the world and support that vision. The Head of Global Government Affairs reports directly to our Vice President, General Counsel and Corporate Secretary. For this, SolarEdge is registered under the U.S. Lobbying Disclosure Act and the EU Transparency Register, and the Government Affairs Team follows all regulatory and legal requirements.
We believe that business is powered by trust, and trust is built through operating with integrity, decency, and transparency. Our Global Government Affairs engagements with key stakeholders, elected officials, and policymakers at the local, state, federal and international levels are based on these same values. As a global leader, we focus our proactive advocacy on core policies that directly impact the business and our ability to realize the company vision, and/or impact our customers and shareholders. These issues include topics such as climate policies- particularly those that accelerate the deployment of solar and clean energy, cybersecurity, tax, and trade.
We engage directly with government entities to advance our policy priorities and collaborate with a broad range of industry groups and solar industry trade associations in our key markets. SolarEdge and our partners support shared industry business goals, while advocating to enhance the global transition to a low-carbon economy, based on renewable energy. This aligns with the goals of the Paris Agreement.
SolarEdge is an active member of the Solar Energy Industry Association (SEIA) in the U.S., and our Global Head of Government Affairs serves on the SEIA Board of Directors. SolarEdge employees are active in several SEIA committees and workstreams, contributing their expertise and bringing our company’s voice to these important discussions. The Company is also an active member of SolarPower Europe (SPE), the foremost European solar industry association. The SolarEdge Cybersecurity Program Director serves as the Vice Chair of the Digitalization Workstream, which is currently tackling cybersecurity issues among others. Furthermore, the SolarEdge Head of EU Government Affairs serves as the Vice Chair of the Buildings & Prosumers workstream. SolarEdge employees are significant participants across additional committees that address policies important to the Company, our customers, and shareholders. In addition, our UK Country Manager serves as Vice-Chair and Board Member of the Solar Energy U.K Association. SolarEdge is a member of and engages in over a dozen additional country-specific and U.S. state specific solar industry associations.
Political contributions: SolarEdge respects its employees and the diversity of their views and beliefs. While the Company encourages employees to participate in the civic life of their communities, it does not contribute to political candidates or political organizations.
2023 Focus Area Example - Advocacy related to the Inflation Reduction Act of 2022: The Inflation Reduction Act of 2022 (IRA) represents the United States’ largest investment to date in clean energy deployment and associated climate change emissions reduction. While the IRA has already significantly encouraged increased U.S. manufacturing capabilities, the successful implementation of that law is expected to significantly accelerate the adoption of solar energy and solidify its related U.S. supply chain. Our policy team directly engaged with the U.S. Administration and Congress in collaboration with key associations and coalitions during 2023. The SolarEdge team, together with SEIA and other industry leaders, successfully advocated to include DC Optimized Inverter Systems for eligibility in the advanced manufacturing tax credit under the 45X microinverter credit, as part of the Notice of Proposed Rule, published in December 2023. We continue to work with the Administration as they finalize the rule.
Powering the World through Positive Policy
The 3X Renewables Initiative: During 2023, SolarEdge joined the Global Renewable Alliance, IRENA and more than 300 global organizations and businesses in a shared call to world leaders to agree to triple renewable electricity capacity to at least 11,000 GW by 2030. The shared initiative calls for a rapid acceleration of renewable energy deployment during this decade, reflecting the belief that renewable energy deployment is the fastest and most cost-efficient way to decarbonize the global economy and mitigate climate change. Further details on this initiative can be found here.
Powering the World through Positive Policy
Risk Management
Sustainability Governance
Sustainability Report 2023 /
Governance Practices
Join the SolarEdge Conversation
Contact our sustainability / ESG team
Contact us
How can we help you?
Our Board of Directors oversees the company’s risk management process. We maintain a robust risk management program with the aim of ensuring that key risks, including strategic, operational, compliance, ethical, environmental and social risks are properly monitored and mitigated. Risks are prioritized on an annual basis using our risk analysis process that is led by the Company’s VP Risk Management and Internal Audit (who reports to the Company’s CFO). The executive management and the Audit Committee of the Board of Directors review the risk assessment and decide on priorities for internal auditing of risks for the coming year. We conduct several internal audits throughout the year and report the results and corrective action plans to management and to the Audit Committee of the Board of Directors at least four times a year.
In recent years, cybersecurity risks have been and continue to be addressed as an area of increasing focus for our Technology Committee of the Board of Directors, particularly as more of our operations rely on digital technologies. In addition, as noted above, the Board established a Technology Committee to support the integrity of our operations and provide oversight of technology related matters, including cybersecurity. Our management team provides regular updates to both the Technology Committee and the entire Board regarding our cybersecurity risks and activities relating to digital security. For progress in information security, see section: Cybersecurity and Data Privacy.
Internal audit: In 2023, our internal audit department reported on 12 different audits commissioned by the Audit Committee. The audits focused on contract manufacturers, product quality assurance, information technologies, purchasing and employee safety processes, and other topics. In addition, 6 investigations were held in response to various reports to our whistleblower hotline or issues raised directly by employees to their managers. The audit committee and the internal auditor also track the implementation of corrective recommendations.
Risk Management
Due to our advanced corporate governance practices, SolarEdge was awarded an ISS Governance QualityScore of ‘1’, the best possible score in this ranking[1].
The overall leadership of sustainability at SolarEdge rests with our Chief Marketing Officer (CMO), a member of our executive management team. The SolarEdge Head of ESG (who leads the company’s ESG team) reports directly to the CMO and leads the global management of our ESG activities, including performance development, monitoring, and public disclosures. The Head of ESG also regularly reports to the CFO, to the VP General Counsel and Corporate Secretary and to the overall company’s executive management forum, regarding ESG targets and related progress, stakeholder interest, ESG risks, existing and upcoming ESG regulations, and additional related topics. Throughout the company, various business leads and heads of department support the delivery of our sustainability strategy and compliance with responsible business practices in their respective organizations. Members of our executive management team serve as sponsors for the delivery of our sustainability targets. These members include our CFO, COO, CHRO, VP General Counsel and Corporate Secretary, VP Q&R, and CMO.
ESG policies and positions: In addition to our annual Sustainability Report, we enhance our disclosure of ESG matters with the publication of policies and position documents. These policies and positions cover topics such as Ethics, Compliance, Human Rights, Supplier Management and Supplier Code of Conduct and QEHS (Quality, Environment, Health, Safety).
Incorporating ESG targets into management objectives: In recent years, the Company has integrated ESG-related performance targets into our corporate performance goals which are relevant for our senior executives, including our Non-Executive Officers and Chief Executive Officer, under our annual incentive compensation plans. In 2023 specifically, these goals addressed topics such as the enhancement of gender equality in our workforce, reduction of GHG emissions, assuring the safety of our employees, waste recycling rates, ethics training, corporate governance practices and expanded ESG reporting.
We aim to continue this process moving forward and have already defined ESG-related performance goals for senior executives for 2024 as well.
Sustainability Governance
Reviewing actions and risks associated with any current shortfalls in product performance, quality, or reliability and manufacturing methods including any product security
Reviewing benefits, risks and potential risk mitigation measures associated with proposed technology advancement programs.
Oversight of strategies and policies related to human capital, diversity and inclusion, workplace environment and culture, employee health and safety and talent development and retention.
Oversight of information systems design and performance
Oversight of cyber security, including incident analysis and risk identification and mitigation
Oversight of technology related strategies, processes, and programs
Oversight of overall executive compensation philosophy, policies, and programs
Responsibilities include, among others:
Responsibilities include, among others:
Technology Committee
Compensation Committee
Oversight of and making recommendations to the Board regarding corporate governance and sustainability matters
Identifying individuals qualified to become Directors, consistent with criteria approved by our Board of Directors
Oversight of the adequacy of our internal controls
Developing and recommending criteria for identifying and evaluating Director candidates
Oversight of SolarEdge’s financial reporting, risk assessment and risk management
Responsibilities include, among others:
Responsibilities include, among others:
Nominating and Corporate Governance Committee
Audit Committee
SolarEdge Board of Directors
(87.5%) (as per listing requirements and Nasdaq rules)
(37.5%)
(including the Chair)
7
3
8
Independent
directors
Women directors
Directors
The SolarEdge Board benefits from members with a diverse range of skills and experience. We welcome individuals who can support our business objectives with appreciation of the context in which we operate, both from the standpoint of markets and technology, and also with a Sustainability and Human Capital expertise lens. Through our Board refreshment process, we have added a new Board member each year for the past 5 years (2019-2023), each bringing valuable new perspectives. For example, in 2023, Ms. Dana Gross joined our Board of Directors, bringing valuable financial, strategic and business experience to our Board through her years of experience in both executive financial and strategic roles in public companies.
Commitment to Best Governance Practices: In response to stockholder feedback and as part of our ongoing commitment to best governance practices, our stockholders approved amendments to our certificate of incorporation during the 2023 Annual Meeting. These amendments included declassifying the Board, starting from the 2024 Annual Meeting, and removing supermajority voting provisions related to stockholder approval of bylaw amendments, as well as certain provisions of our certificate of incorporation. This change brings our governance practices in line with those of companies of our size and stature and was responsive to stockholder input.
In 2023, the Nominating and Corporate Governance Committee received quarterly updates from SolarEdge management on ESG matters and engaged to support decisions across a range of issues. These included (among others) prominent ESG regulations that have recently been enacted in several regions where we operate and our ESG-related compensation metrics and goals (see description below).
Specifically, our Nominating and Corporate Governance Committee holds responsibility for oversight of sustainability matters. Since 2021, Ms. Betsy Atkins has been serving as Chair of the Nominating and Corporate Governance Committee. Ms. Atkins is a seasoned businesswoman and entrepreneur and a renowned thought leader in the area of corporate governance and ESG, frequently publishing articles on these topics.
Our Board maintains four standing committees whose members are independent directors. The Committees and their main responsibilities are detailed below.
As a publicly traded company (Nasdaq: SEDG), SolarEdge maintains a robust corporate governance structure. Our governance aims to ensure due process for executing our responsibility to our shareholders and to all those we serve through our business, upholding ethical conduct, effective risk management, strategy execution and integrity of corporate infrastructure. The Board is elected by SolarEdge stockholders.
The Board met nine times during 2023. Each director attended at least 88% of the Board meetings held during the period in which they were board members and at least 75% of the committee meetings for committees of which they were members
As of April 26, 2024, our Board of Directors consists of eight members, led by Nadav Zafrir, who joined the Board in 2019 as an independent Chair and Director.
The 3X Renewables Initiative: During 2023, SolarEdge joined the Global Renewable Alliance, IRENA and more than 300 global organizations and businesses in a shared call to world leaders to agree to triple renewable electricity capacity to at least 11,000 GW by 2030. The shared initiative calls for a rapid acceleration of renewable energy deployment during this decade, reflecting the belief that renewable energy deployment is the fastest and most cost-efficient way to decarbonize the global economy and mitigate climate change. Further details on this initiative can be found here.
Join the SolarEdge Conversation
Contact our sustainability / ESG team
Contact us
How can we help you?
SolarEdge is committed to mitigating climate change through the acceleration of smart, clean renewable energy technologies that will power the world for generations to come. In 2023, we hired a global Government Affairs team in 2023 in order to engage with governments and policy makers around the world and support that vision. The Head of Global Government Affairs reports directly to our Vice President, General Counsel and Corporate Secretary. For this, SolarEdge is registered under the U.S. Lobbying Disclosure Act and the EU Transparency Register, and the Government Affairs Team follows all regulatory and legal requirements.
We believe that business is powered by trust, and trust is built through operating with integrity, decency, and transparency. Our Global Government Affairs engagements with key stakeholders, elected officials, and policymakers at the local, state, federal and international levels are based on these same values. As a global leader, we focus our proactive advocacy on core policies that directly impact the business and our ability to realize the company vision, and/or impact our customers and shareholders. These issues include topics such as climate policies- particularly those that accelerate the deployment of solar and clean energy, cybersecurity, tax, and trade.
We engage directly with government entities to advance our policy priorities and collaborate with a broad range of industry groups and solar industry trade associations in our key markets. SolarEdge and our partners support shared industry business goals, while advocating to enhance the global transition to a low-carbon economy, based on renewable energy. This aligns with the goals of the Paris Agreement.
SolarEdge is an active member of the Solar Energy Industry Association (SEIA) in the U.S., and our Global Head of Government Affairs serves on the SEIA Board of Directors. SolarEdge employees are active in several SEIA committees and workstreams, contributing their expertise and bringing our company’s voice to these important discussions. The Company is also an active member of SolarPower Europe (SPE), the foremost European solar industry association. The SolarEdge Cybersecurity Program Director serves as the Vice Chair of the Digitalization Workstream, which is currently tackling cybersecurity issues among others. SolarEdge employees are significant participants across committees that address policies important to the Company, our customers, and shareholders. In addition, our UK Country Manager serves as Vice-Chair and Board Member of the Solar Energy U.K Association. SolarEdge is a member of and engages in over a dozen additional country-specific and U.S. state specific solar industry associations.
Political contributions: SolarEdge respects its employees and the diversity of their views and beliefs. While the Company encourages employees to participate in the civic life of their communities, it does not contribute to political candidates or political organizations.
2023 Focus Area Example - Advocacy related to the Inflation Reduction Act of 2022: The Inflation Reduction Act of 2022 (IRA) represents the United States’ largest investment to date in clean energy deployment and associated climate change emissions reduction. While the IRA has already significantly encouraged increased U.S. manufacturing capabilities, the successful implementation of that law is expected to significantly accelerate the adoption of solar energy and solidify its related U.S. supply chain. Our policy team directly engaged with the U.S. Administration and Congress in collaboration with key associations and coalitions during 2023. The SolarEdge team, together with SEIA and other industry leaders, successfully advocated to include DC Optimized Inverter Systems for eligibility in the advanced manufacturing tax credit under the 45X microinverter credit, as part of the Notice of Proposed Rule, published in December 2023. We continue to work with the Administration as they finalize the rule.
Powering the World through Positive Policy
Our Board of Directors oversees the company’s risk management process. We maintain a robust risk management program with the aim of ensuring that key risks, including strategic, operational, compliance, ethical, environmental and social risks are properly monitored and mitigated. Risks are prioritized on an annual basis using our risk analysis process that is led by the Company’s VP Risk Management and Internal Audit (who reports to the Company’s CFO). The executive management and the Audit Committee of the Board of Directors review the risk assessment and decide on priorities for internal auditing of risks for the coming year. We conduct several internal audits throughout the year and report the results and corrective action plans to management and to the Audit Committee of the Board of Directors at least four times a year.
In recent years, cybersecurity risks have been and continue to be addressed as an area of increasing focus for our Technology Committee of the Board of Directors, particularly as more of our operations rely on digital technologies. In addition, as noted above, the Board established a Technology Committee to support the integrity of our operations and provide oversight of technology related matters, including cybersecurity. Our management team provides regular updates to both the Technology Committee and the entire Board regarding our cybersecurity risks and activities relating to digital security. For progress in information security, see section: Cybersecurity and Data Privacy.
Internal audit: In 2023, our internal audit department reported on 12 different audits commissioned by the Audit Committee. The audits focused on contract manufacturers, product quality assurance, information technologies, purchasing and employee safety processes, and other topics. In addition, 6 investigations were held in response to various reports to our whistleblower hotline or issues raised directly by employees to their managers. The audit committee and the internal auditor also track the implementation of corrective recommendations.
Risk Management
In 2023, the Nominating and Corporate Governance Committee received quarterly updates from SolarEdge management on ESG matters and engaged to support decisions across a range of issues. These included (among others) prominent ESG regulations that have recently been enacted in several regions where we operate and our ESG-related compensation metrics and goals (see description below).
Specifically, our Nominating and Corporate Governance Committee holds responsibility for oversight of sustainability matters. Since 2021, Ms. Betsy Atkins has been serving as Chair of the Nominating and Corporate Governance Committee. Ms. Atkins is a seasoned businesswoman and entrepreneur and a renowned thought leader in the area of corporate governance and ESG, frequently publishing articles on these topics.
The overall leadership of sustainability at SolarEdge rests with our Chief Marketing Officer (CMO), a member of our executive management team. The SolarEdge Head of ESG (who leads the company’s ESG team) reports directly to the CMO and leads the global management of our ESG activities, including performance development, monitoring, and public disclosures. The Head of ESG also regularly reports to the CFO, to the VP General Counsel and Corporate Secretary and to the overall company’s executive management forum, regarding ESG targets and related progress, stakeholder interest, ESG risks, existing and upcoming ESG regulations, and additional related topics. Throughout the company, various business leads and heads of department support the delivery of our sustainability strategy and compliance with responsible business practices in their respective organizations. Members of our executive management team serve as sponsors for the delivery of our sustainability targets. These members include our CFO, COO, CHRO, VP General Counsel and Corporate Secretary, VP Q&R, and CMO.
ESG policies and positions: In addition to our annual Sustainability Report, we enhance our disclosure of ESG matters with the publication of policies and position documents. These policies and positions cover topics such as Ethics, Compliance, Human Rights, Supplier Management and Supplier Code of Conduct and QEHS (Quality, Environment, Health, Safety).
Incorporating ESG targets into management objectives: In recent years, the Company has integrated ESG-related performance targets into our corporate performance goals which are relevant for our senior executives, including our Non-Executive Officers and Chief Executive Officer, under our annual incentive compensation plans. In 2023 specifically, these goals addressed topics such as the enhancement of gender equality in our workforce, reduction of GHG emissions, assuring the safety of our employees, waste recycling rates, ethics training, corporate governance practices and expanded ESG reporting.
We aim to continue this process moving forward and have already defined ESG-related performance goals for senior executives for 2024 as well.
Sustainability Governance
*Slide to the left to see entire table'
*Slide to the left to see entire table'
Our Board maintains four standing committees whose members are independent directors. The Committees and their main responsibilities are detailed below.
SolarEdge Board of Directors
(87.5%) (as per listing requirements and Nasdaq rules)
(37.5%)
(including the Chair)
7
3
8
Independent
directors
Women directors
Directors
The SolarEdge Board benefits from members with a diverse range of skills and experience. We welcome individuals who can support our business objectives with appreciation of the context in which we operate, both from the standpoint of markets and technology, and also with a Sustainability and Human Capital expertise lens. Through our Board refreshment process, we have added a new Board member each year for the past 5 years (2019-2023), each bringing valuable new perspectives. For example, in 2023, Ms. Dana Gross joined our Board of Directors, bringing valuable financial, strategic and business experience to our Board through her years of experience in both executive financial and strategic roles in public companies.
As a publicly traded company (Nasdaq: SEDG), SolarEdge maintains a robust corporate governance structure. Our governance aims to ensure due process for executing our responsibility to our shareholders and to all those we serve through our business, upholding ethical conduct, effective risk management, strategy execution and integrity of corporate infrastructure. The Board is elected by SolarEdge stockholders.
The Board met nine times during 2023. Each director attended at least 88% of the Board meetings held during the period in which they were board members and at least 75% of the committee meetings for committees of which they were members
As of April 26, 2024, our Board of Directors consists of eight members, led by Nadav Zafrir, who joined the Board in 2019 as an independent Chair and Director.
Introduction – Governance Practices
Governance Practices
Sustainability Report 2023 /