Sustainability Report 2021 58 Scope 3 Emissions In early 2022, we completed our 2019 Scope 3 emissions inventory baseline. Among the 15 categories defined by the Greenhouse Gas Protocol, Category 11, Use of Sold Products, represents by far our largest share of Scope 3 emissions. This category denotes the combined total emissions from all Applied semiconductor products sold during a reporting year (including emissions from both the technology’s energy draw in customer fabs and the chemicals and gases used in operational processes), estimated over the average lifetime of those products. Category 1, Purchased Goods and Services, represents a large portion of Applied’s estimated supply chain emissions and is the second largest contributor to our Scope 3 footprint. There is no semiconductor industry standard for measuring Category 11 emissions, but we have chosen to build on the SEMI S23 standard (related to energy, utilities, and material use efficiency) to model our tools’ energy consumption and estimate Category 11 emissions. For the purposes of our assessment, we include emissions not only from sold products but also from certain non-Applied ancillary and sub-fab equipment required for the tools’ operation, such as pumps, cooling systems, and point- of-use abatement systems. Our calculation assumes an average 10-year product lifespan across all Applied tools and technologies. However, because customers and third parties frequently extend the life of Applied products through refurbishment (a plus for circularity and reuse, but a complication for GHG accounting), we will continue to review and refine our estimates and assumptions. Semiconductor products represent the vast majority of Applied’s annual product sales. In next year’s report we will expand our Category 11 calculations to include our sale of Display products’ emissions. Calculating our 2019 Scope 3 baseline inventory was just the beginning. Applied will continue to review our Scope 3 methodology each year to continuously refine the calculations, emissions factors, data, estimates and underlying assumptions aiming to replace Environmentally Extended Input–Output (EEIO) with primary data wherever possible, and we will report any resulting changes and implications. A complete overview of our Scope 3 methodology can be found here . Though strategies adopted in pursuit of our 3x30 and SuCCESS30 goals are already driving reductions across our largest Scope 3 categories, we are currently evaluating science-based targets (SBTs) across Scope 1, 2, and 3 emissions to align our goals with the latest climate science. To achieve the greatest impact in reducing emissions from the use of sold products, we will pursue collaboration across the semiconductor industry to (a) align on standards for measuring semiconductor product emissions and (b) collectively implement initiatives to drive down emissions in line with SBTs. INTRODUCTION PURPOSE PEOPLE PLANET Climate and Energy Environmental Health and Safety PROGRESS