Priority Issues

Over the past year we conducted an analysis to determine our priorities in an effort to increase our understanding of the issues that mean the most to NVIDIA’s stakeholders and to NVIDIA itself. This analysis entailed an examination of a variety of external stakeholder materials, including the following:

• investor queries
• ratings and rankings questionnaires
• competitors’ reports
• disclosure standards such as the GRI G3 Sustainability Reporting Guidelines
• customer requirements
• community surveys
• regulatory requirements, and
• industry and trade association publications

In addition, we analyzed a variety of company sources such as risk factors identified in our annual report on form 10-K, employee surveys, and management discussions. We mapped the results of our analysis on a matrix for a visual representation of our most important issues from the perspective of both external stakeholders and company management.

Based on our analysis, we determined our priorities as follows (company responses can be found below the matrix):

• Supply chain: Issues related to how we manage our supply chain. These include consideration of human rights in the supply chain—issues such as fair labor, fair working conditions, health and safety, the use of child or forced labor, and security practices.
• Transparency: Issues related to the public disclosure of information regarding our policies, systems, performance and progress on environmental, social and governance issues.
• Ethics and compliance: Issues related to systems, processes, and performance relating to ethical operation and compliance with applicable policies, laws, and regulation.
• Employee satisfaction: Issues related to employee satisfaction, including wages, quality of work environment, culture and work-life balance.
• Environmental management systems: Systems and processes associated with managing environmental issues and tracking environmental performance across company operations.

We plan to regularly review trends in the marketplace around the issues presented on the matrix. In addition, we will continue to assess, track, and communicate our performance on those issues that are the highest priority from both internal and external perspectives.

NVIDIA Response to Priority Issues Analysis

For this exercise we addressed below issues that were deemed the highest priorities to both NVIDIA and its stakeholders, as indicated on the top and right quadrants in the above matrix.

Supply Chain – NVIDIA drives several of its supply chain initiatives through its participation in the Electronics Industry Citizenship Coalition. We cover in detail in the supply chain section of this report several areas that are of importance to us, including: safe working practices, auditing, water, carbon foot printing, and conflict minerals.

Ethics and Compliance –Our Worldwide Code of Conduct applies to all of our executive officers, directors and employees, including our principal executive officer and principal financial and accounting officer. In addition, we have established a Financial Team Code of Conduct that applies to our executive officers, directors and members of our finance, accounting and treasury departments. We also employ an anonymous tip line.

Transparency – Our annual global citizenship report is used to provide more detailed information about the steps our company is taking to be more sustainable and transparent in our business operations. To take even further steps towards transparency, we have integrated a Priority Issues analysis into our 2011 report, and have also engaged PricewaterhouseCoopers to assure our global greenhouse gas data.

Environmental Management Systems (EMS) – NVIDIA is ISO14001 compliant at its Santa Clara, Calif. headquarters, and also requests that all critical suppliers meet the same standards. Since our first audit in 2006, we have consistently provided ‘zero findings’ to the auditors during our review each year.

Climate Change – Since 2007 NVIDIA has submitted its greenhouse gas emissions data through the Carbon Disclosure Project. We have engaged PricewaterhouseCoopers to assure our global greenhouse gas data for 2011, and are working with WSP environmental consultants to improve the data we provide relative to risks and opportunities of climate change.

Employee Satisfaction – Information regarding employee satisfaction can be found in the Workforce section of our global citizenship report. We conduct surveys with our global employees every 18 months and their feedback underscores a high level of engagement and pride (recent data demonstrates that 86% of employees are proud to work for NVIDIA). More than 80% are fully engaged and 92% of employees feel motivated to help NVIDIA succeed.