Cadence 2023 Environmental Social and Governance Report

SUSTAINABLE
BY DESIGN
2023 Environmental, Social,
and Governance Report
Cadence Design Systems, Inc.
Sustainable by Design | 1
Cadence has a
mission to help
solve technology’s
toughest challenges
to make a lasting,
positive impact on
our world.
Anirudh Devgan, PhD

President and Chief Executive Officer, Cadence
Contents A Message from Environmental Cybersecurity and Responsible
About 2023 Highlights Progress on ESG Innovation Workforce Governance Social Impact Index
our CEO Sustainability Data Privacy Supply Chain
Contents
A Message from our CEO 4
About Cadence 6
4 27 Governance 54 63
About the Report 7 Environmental Responsible
2023 Highlights 8 Sustainability Supply Chain
Progress on our
9 60 69
2023 Environmental,
Social, and Governance
Cybersecurity
Strategies and Data Privacy Social Impact
11 40 GRI Index 79
SASB Index 92
79
TCFD Index 96
Innovation Workforce 70 UN SDG Index 103
A Message from Our CEO
Embracing socially We are living in a period of extraordinary

change in nearly all aspects of life. At
Cadence our focus is on enabling the world’s
responsible business leading companies to innovate technology
that improves the lives of people around
practices is not just the globe. For over 30 years, Cadence

has advanced the electronics revolution,
enabling customers to design products with a
ethical, it’s pivotal for our sustainable mindset and transforming nearly
every aspect of our daily experiences.
industry and our world. The technology industry is rapidly growing

due to an unprecedented combination of
drivers impacting multiple industry segments.
Within this, Cadence is transforming the
world of electronic systems with generative
AI solutions and leading the computational
software convergence through our Intelligent
System Design™ strategy. We enable design
of end-to-end systems from devices to
the cloud and are uniquely positioned to
make a significant impact as a leader in
computational software and hardware
solutions for today’s challenges.
In 2023, we continued to build our generative Climate change is one of the most significant As part of our partnership with the Great I am proud to share our 2023 Environmental,
Cadence.AI portfolio, comprising the industry’s challenges of our time, and we are committed Place to Work Institute, we joined the Great Social, and Governance (ESG) Report with you,
broadest AI offerings spanning chip to board to to our target to reach Net-Zero by 2040. Early Transformation Initiative to work with other top which details our strategies and highlights
system and delivering exceptional optimization on we aligned our carbon reduction targets companies on how we can accelerate diversity, our significant progress in each of these
and productivity benefits. We introduced with the goal of limiting global warming to the equity, and inclusion for all. We’re honored to be areas. I also want to thank our customers,
Virtuoso® Studio and Allegro® X AI to bring AI Paris Agreement’s 1.5ºC pathway, and we are on recognized for our One Team culture, including partners, and employees for inspiring us and
to custom/analog and PCB designs, Voltus™ track to halve greenhouse gas (GHG) emissions #9 on Fortune’s World’s Best Workplaces list, The supporting our commitment to creating a more
InsightAI to automatically address voltage drop by 2030. Wall Street Journal’s Best-Managed Companies, sustainable world.
violations, and most recently, the revolutionary the Human Rights Campaign Equality 100 Award
Millennium M1 platform, the industry’s first In 2023, we submitted our GHG reduction for LGBTQ inclusion, and Global Semiconductor
accelerated multi-physics supercomputing targets to the Science Based Targets Initiative Alliance’s (GSA) Designing the Difference Award.
(SBTi) for validation, procured 97% renewable Sincerely,  
platform, to deliver an unprecedented 20X
energy efficiency and up to a 100X design impact. energy for our global operations, and are a The Cadence Giving Foundation focuses on
Accelerating momentum of our Cadence.AI CarbonNeutral® certified company for the third investments that drive impact and create a more
portfolio has led to an almost tenfold increase in year in a row. In early 2024, we strengthened our just and equitable world for our communities. In
customers adopting our generative AI solutions in transition to long-term renewable energy and 2023, the Cadence Giving Foundation invested
Anirudh Devgan, PhD
2023, as they embrace the technology to develop commitment to purchaser-caused renewable in practices that will mitigate and reduce rising
electricity by signing a virtual power purchase temperatures in communities most impacted President and Chief
optimized products much more efficiently. Executive Officer, Cadence
agreement (VPPA) to help finance a to-be- by climate change. The Foundation partnered
We also made strategic acquisitions which built solar farm in the U.S. Once operational, with the Clinton Health Access Initiative (CHAI)
further increase the impact of our innovation we expect our portion of the project will deliver to provide funding and technology for an effort
on sustainability for system design. These solar power to the grid equivalent to our entire expected to mitigate 60GT of CO2 emissions by
acquisitions expand Cadence’s solutions U.S. electric load and approximately half of our 2050—a year’s worth of current emissions for
further into system design in key high-growth global Scope 2 emissions. While we’re excited the entire planet. The Foundation also launched
verticals, including automotive, aerospace and by our progress, we continue to invest in value its FEM.AI initiative, building an ecosystem
defense, and turbo machinery, extending our chain engagement around decarbonization to support women to access and thrive in
system innovation portfolio for high-fidelity through our full value chain to achieve Net-Zero tech careers. And, our eighth annual Season
CFD simulation. Additionally, with OpenEye by 2040. of Giving included nearly 2,000 employees
Scientific, Cadence Molecular Sciences, we are from 37 cities volunteering 5,700 hours for 50
accelerating drug discovery with the industry’s I’m proud of our One Team culture that drives volunteer projects.
first SaaS-based cloud-native platform. In this our innovation engine and attracts the best
report, we highlight how innovators around the and brightest talent in the industry. This year,
world are using Cadence tools to create products we welcomed over 1,600 new employees and
with a lower carbon footprint. interns and we received over 30 global awards
for our high-performance, inclusive culture.
1988
Year Founded
About Cadence $4.09B

Revenue
(15% increase
over 2022)
~11,200
Employees
full-time (9.5% increase
compared to 2022)
San Jose
Headquarters
California
Transforming the Way People Design Next-Generation Systems 25+

Countries
where our
Cadence is a leading provider of Intelligent With comprehensive “chips-to-systems” Our Cadence® Intelligent System Design™ strategy
employees live
System Design solutions—software, hardware, generative AI technologies, our products are guides everything we do, from our product lineup to
and IP that turn design concepts into reality. used in extraordinary electronic products from the expertise and services we offer our customers
Cadence provides the expertise, tools, IP, and

chips to boards to complete systems for the and the partnerships we develop with other industry Customers
most dynamic market applications, including leaders. We believe that giving our customers a Electronic systems and
hardware required for the entire electronics hyperscale computing, 5G communications, systems-level perspective throughout the design semiconductor companies
design chain, from chip design to chip packaging automotive, mobile, aerospace, consumer, cycle pays off in faster and better design, shorter located worldwide
to boards and systems. We are leading the industrial, healthcare, life sciences, and verification cycles, software that works with the
computational software convergence through
our Cadence® Intelligent System Design™
other market segments. With OpenEye
Scientific, Cadence Molecular Sciences, we are
hardware, and new product leadership.
CDNS
solutions, enabling end-to-end systems from accelerating drug discovery with computational Stock Exchange /
devices to the cloud, for our customers to create software, the industry’s first SaaS-based cloud- Trading Symbol
innovative products that transform the way native platform. Nasdaq Global Select Market
people live, work, and play.
About the Report Aligning with the SDGs

Across each of our material topics, our sustainability programs are aligned with the UN’s Sustainable
Development Goals (SDGs), and we continue our work to harmonize targets and indicators with the SDGs.
We partner with strategic stakeholders to achieve the Goals through our programs.
This report aligns with who Materiality Assessment
we are as a company—
sustainable by design—and Stakeholder input informs our priorities as we Topic SDG Targets and Cadence Indicators Goals
highlights the progress we strive for continuous improvement towards a Innovation 7.3 Energy intensity (GJ/$MM revenue)
made in our environmental, sustainable future. During 2023, we built on 8.1 YOY revenue growth (%)
social, and governance stakeholder engagement and materiality review 9.A Charitable giving ($MM)
9.4 GHG intensity (metric tons CO2e)/$MM revenue)
processes that were initiated in 2019.
(ESG) strategies in 2023. 9.5 R&D spend as a proportion of revenue (%)
The content of this report is 12.2 Energy use (GJ)
Our senior group director of Corporate Social
Environmental 7.2 Renewable electricity (%)
informed by feedback from Responsibility chairs a cross-functional team of Sustainability 8.4 Energy use per employee (GJ/FTE)
key stakeholders: employees, internal leaders in Human Resources, Facilities, 12.2 Water consumption and withdrawals in water stressed areas (%)
Finance, Procurement, Marketing, and Legal. Each 13.2 GHG emissions, Scope 1 and 2 market-based (metric tons CO2e)
investors, customers, 15.A Investments in biodiversity and ecosystems ($US)
and industry partners leader raises ESG priorities for implementation
Workforce 3.7, 3.8 FTEs offered health insurance that includes reproductive health-care services (%)
and reporting based on stakeholder feedback.
and associations. 5.1, 8.5, 10.3 Pay equity
This feedback informs our sustainability and 5.5 Proportion of women board members (%)
reporting strategy. 8.5 YOY FTE growth rate (%)
8.8 Injury rate (%)
8.B Early career hires (%)
To validate our priorities, we conduct gap analysis
10.2 Employees by race (%)
referencing SASB, TCFD, and GRI standards, CDP, 16.B Annual non-discrimination training completion rate for FTEs (%)
ISS, RBA, and Nasdaq questionnaires. Further, Governance 12.6 Annual ESG reporting
we continued to conduct benchmark analyses 16.3 Annual Code of Conduct certification rate for FTEs (%)
considering industry peers. While we address 16.5 Annual anti-corruption training completion rate for FTEs (%)
sustainability issues across the materiality Responsible 8.3, 10.2 Total procurement spend on diverse suppliers (%)
Supply Chain 8.7 Completion rate for UK Modern Slavery Act training (%)
spectrum, our cross-functional team identified the 9.3 Total procurement spend on small business (%)
following topics as particularly significant to our 12.7 New suppliers screened using social and environmental criteria (%)
company in our latest materiality assessment. 13.2 GHG emissions, Scope 3 (metric tons CO2e)
16.3 Suppliers that responded to conflict minerals survey (%)
The terms “material” and “materiality” as used in this report and our Suppliers that have company policies to adhere to local laws and regulations (%)
materiality assessment differ from the concept of materiality under
securities laws and as used in the context of filings with the U.S.
Securities and Exchange Commission (SEC). Matters that are considered The content of this publication has not been approved by the United Nations and does not reflect the views of the United Nations or its officials
material for purposes of this report or our materiality assessment may or Member States. Please visit the United Nations Sustainable Development Goals website.
not be considered material for SEC reporting purposes.
2023 Highlights
Innovation Net-Zero GHG by 2040 Cadence Giving Foundation Diversity, Equity, and Inclusion
Launched several significant innovative For the third year, Cadence received CarbonNeutral® Donated $5 million through the Cadence Giving Hosted Cadence Women Conferences (CWCs)
products, including building out our company certification across our global operations, Foundation in 2023 to impact environmental around the world, giving us the opportunity
generative AI portfolio, and completed key including our Palladium Cloud offering sustainability, STEM workforce equity, and to connect, learn, and celebrate the women
strategic acquisitions that we expect to be Submitted both near-term and Net-Zero GHG additional local and global initiatives of Cadence
key drivers of future growth, enabling the reduction targets to the Science Based Targets We are also proud to receive the Designing
next wave of sustainable innovation The Cadence Giving Foundation focuses on
Initiative (SBTi) for validation the Difference Award from the GSA Women’s
investments that drive impact, activate employee
In early 2024, we strengthened our transition to Leadership Initiative, that recognizes
engagement opportunities, and create a more
long-term renewable energy and our commitment companies who are making a meaningful
just and equitable world for our communities
to purchaser-caused renewable energy by signing a impact on advancing the semiconductor
virtual power purchase agreement to help finance a industry through DEI
to-be-built solar farm in the U.S.
Fast Company Investor’s Business Daily 30+ Best Workplace Recognitions Workplace Leader for LGBTQ+
Most Innovative Companies 2024 Top 100 ESG Companies Across 13 countries, including Fortune’s 100 Best Equality
Cadence was recognized as #6 in the Most Recognized by Investor’s Business Daily as one Companies to Work For, Fortune’s World’s Recognized with the Equality 100 Award by the
Innovative Design Companies of 2024 sector of IBD’s 100 Best ESG Companies of 2023 Best Workplaces, Forbes’ America’s Human Rights Campaign Foundation
for using natural language AI to design AI chips Best Employers, and Wall Street Journal’s
Best-Managed Companies
Progress on Our
2023 ESG Strategies
Innovation Workforce
Cadence is a leading provider of Intelligent System Design solutions—software, People come to Cadence to do meaningful work with a global impact. Each day with Cadence offers
hardware, and IP that turn design concepts into reality. We provide the expertise and exciting opportunities to create a better, more connected world. We are leading the charge to solve
tools, IP, and hardware required for the entire electronics design chain, from chip technology’s toughest challenges. Our High-Performance Culture sets us apart as a community
design to chip packaging to boards and systems. Cadence is leading the computational of passionate, bold, and creative people and outlines the values and behaviors that will enable our
software convergence through our Intelligent System Design solutions, enabling end- employees to succeed at Cadence. These values influence our practices for hiring, goal setting,
to-end systems from devices to the cloud, for our customers to create innovative development, promotion, retention, and recognition. The Great Place to Work Institute recognizes
products that transform the way people live, work, and play. Cadence as an exceptional employer in many regions around the world. Our diverse team of passionate
and talented employees go above and beyond for our customers, our communities, and each other.
With comprehensive “chips-to-systems” generative AI technologies, our products are
used in extraordinary electronic products for the most dynamic market applications
Supporting Diversity, Equity, and Inclusion
including hyperscale computing, 5G communications, automotive, mobile, aerospace,
consumer, industrial, healthcare, molecular sciences, and other market segments. We expanded our efforts to build a more diverse and inclusive team through expanding our recruitment
pipeline, career support, retention, development, and community-building. Based on these efforts, the
Smart and Efficient Growth Drivers proportion of women at Cadence has increased for the tenth year in a row.
We launched several significant innovative products, including building out our We also participated in an innovative three-year research project called The Great Transformation (TGT)
generative AI portfolio, extending our system innovation portfolio targeting high-fidelity in partnership with Great Place to Work® alongside a small cohort of Fortune 100 Best Companies. Based
CFD simulation, and completed key strategic acquisitions. These acquisitions expand on the TGT experience and resulting recommendations, Cadence implemented programs to enhance
Cadence’s computational software core competency in key high-growth verticals, how we listen to, and empower, the voices of employees from underrepresented groups.
including aerospace and defense. Additionally, with OpenEye Scientific, Cadence
Molecular Sciences, we are accelerating drug discovery with Computational Software In addition, for the fifth year in a row, we achieved global salary pay parity based on gender and U.S.
Industry’s first SaaS-based cloud-native platform. salary pay parity based on race and ethnicity.
Environmental Governance Cybersecurity and Supply Chain

Sustainability Our corporate governance is founded Data Privacy Cadence is committed to doing business
on Cadence’s values and is an integral honestly and ethically and we expect the
We are committed to investing our resources to part of our culture. It is aligned with our Cadence supports enhanced privacy and data same from our suppliers. To ensure our
combat climate change and taking steps to reduce stakeholders’ best interests and the cybersecurity initiatives. We are committed relationships with our suppliers meet and
the environmental impact of our facilities and requirements of the law. Our commitment to the protection of our customers, support these expectations, we are members
business operations. Our Environmental Policy and to efficient company management, vendors, partners, and employees’ personal of the Responsible Business Alliance as an
Environmental Management System frames our protection of stockholders’ interests, information. Our Information Security Affiliate Member since 2018.  
commitments around climate change and water. and the transparency of corporate team works to identify and prevent risks
Cadence monitors its performance on energy, communications is vital to gaining and to the protected data we collect. Our Chief
emissions, waste, and water to conserve resources retaining the trust of our stakeholders. The Information Security Officer administers our Focus on Climate and Diversity
and reduce costs. Our culture inspires employees to Board, through its Corporate Governance data privacy and cybersecurity program, with To demonstrate our commitment to climate
participate in environmental initiatives that improve and Nominating Committee, regularly oversight from our Board’s Audit Committee. progress, we completed a full assessment of
the sustainability of communities where we operate. reviews our ESG program. In our annual
engagement with stockholders, we discuss emissions throughout our value chain for all 15
our ESG efforts as well as our Board’s Improved Cyber Resilience and Scope 3 categories—reporting emissions from
Committed to Net-Zero by 2040 composition and diversity of background. Expanded Zero-Trust Security hardware product use and end-of-life for the
first time. Through partnering with suppliers,
We submitted both near-term and Net-Zero GHG Model more than half of our 2023 upstream Scope 3
reduction targets to the Science Based Targets Tone at the Top emissions are now calculated using supplier’s
We focused on improving security operations
Initiative for validation. reported emissions, up from one-third
We reported to our Board of Directors on our and cyber resilience by minimizing the time
ESG efforts and initiatives, including review required to detect and respond to security in 2022.
For the third year, Cadence received CarbonNeutral®
company certification across our global operations, of our decarbonization progress, diversity, incidents while continuously improving our
equity, and inclusion (DEI) initiatives, security intelligence and analytics platform We continued to identify and promote
including our Palladium Cloud offering. diversity in our supply chain as well as to
and the Cadence Foundation signature across hybrid environments. We expanded
programs. We are pleased that in May 2023, our Zero-Trust security model to include extend our rigorous governance standards
In early 2024, we strengthened our transition to long-
Mary Louise (ML) Krakauer assumed the role data protection chambers and we received across our value chain. In 2023, we updated
term renewable energy by signing a virtual power
of Board Chair, reinforcing our commitment external validation of our commitment to our Supplier Code of Conduct (SCOC) to align
purchase agreement (VPPA) to help finance a to-be-
to advancing DEI. providing secure cloud-based products by with RBA Code of Conduct 7.0 and initiated
built solar farm in the U.S. Once operational, we expect
achieving SOC 2 Type 1 attestation. compliance of our top suppliers to the
our portion of the project will deliver solar power to
updated SCOC.
the grid equivalent to our entire U.S. electric load and
approximately half of our global Scope 2 emissions.
Innovation
For Engineers.
By Engineers.
The Impact of EDA on a

Better World
Sustainability has become an increasingly important
expectation in the electronics industry. Electronic
Design Automation (EDA), in combination with
advances in semiconductor technology, optimizes
the power consumption of electronics while
enabling significant performance increases.
Cadence is a pivotal leader in electronic systems

design and applies its underlying Intelligent System
Design strategy to deliver computational software,
hardware, and IP that turn design concepts
into reality.
Our customers, the world’s most innovative We have a great responsibility to

companies, use Cadence technology to optimize create sustainable innovation in
power, space, and energy needs from chips to
intelligent system design, enabling
boards to complete systems to sustainably design
extraordinary products with a lower impact on the next wave of technology
the environment for the most dynamic market advancements across the
applications, including hyperscale computing, 5G tech industry.
communications, automotive, mobile, aerospace, Anirudh Devgan, PhD
consumer, industrial, and healthcare, and President and Chief Executive Officer, Cadence
molecular sciences.
Cadence
High Impact for Sustainability
AI-driven Low Power Chip to System Simulation to Digital Twins to reduce data
Chip, PCB, and System reduce thermal generation center overprovisioning and
Design Tools and cooling energy stranded capacity
Optimize power consumption to reduce carbon footprint
AI is rapidly transforming our world As a leader in electronic system design, Cadence

provides design solutions for innovators building the
by finding new and unique solutions Cadence AI-driven solutions enable exploration of
world’s AI infrastructure. more energy-efficient architectures, realize new
that reduce the power consumption In addition to enabling a more sustainable AI infrastructure, Cadence advances with 3D-IC and chiplet-based designs,
of our electronic systems and is is transforming the solutions we provide with AI. Cadence’s portfolio of
generative AI solutions spans all aspects of chip and system design—
and deliver lower-power GPUs, CPUs, custom
silicon, printed circuit boards (PCB), electronic
critical to bridge the engineering digital implementation, analog/custom design, functional debug
systems and data centers.
and verification, PCB design, and Multiphysics optimization. These
resource gap looming for our AI-enhanced solutions address the productivity and performance
challenges of the leaders delivering the silicon, systems, and data
industry. Cadence is building the centers of the world.
future of sustainable system design As AI unlocks new opportunities in the world, it similarly enhances
the innovations and solutions that Cadence provides. Using AI to help
with generative AI-driven solutions. coordinate, predict, and discover new solutions, we are entering new
market spaces beyond the traditional semiconductor and electronic
Computational software is poised to revolutionize
system space. We can leverage our computational software and
hardware solutions to neural physics, life sciences, and data center the upcoming era. We’re tackling some truly
digital twins. This will enable Cadence and our partners to help address intricate challenges, and our objective is to
society’s most significant challenges. formulate solutions that positively impact a wide
range of areas, from microchips to cancer research.
Nimish Modi
Senior Vice President and General Manager, Strategy and New
Ventures, Cadence
Cadence Impact on Sustainable Design

Innovators around the world are using Cadence tools throughout the electronic system design flow, to create products—chips to
printed circuit board to systems and datacenters with a demonstrated impact on lowering their carbon footprint
Digital Design AI-Driven Chip Design Emulation Efficiency Hybrid Simulation
30% 35% 40% 90%

Digital low-power design flow enables up to Cadence Cerebrus reduces chip leakage Palladium power efficiency improvement in Hybrid Simulation with Palladium and Helium™
30% total power consumption reduction for power by up to 35%, up to 10X increased watts/million gates in Z2 architecture platforms reduces emulation time and therefore
customer SoCs productivity, and reduces compute resources power consumption, up to 90% when booting
Android
Power Improvement High-Level Synthesis Computational Fluid Dynamics Data Centers
50% 17X Less Energy 10%

Stratus™ technology automates the critical process of mapping an algorithm to code, which can be Our CFD technologies, when running on GPUs, Customers using our Digital Twin solution for
physically implemented into an integrated circuit (RTL code). Using Stratus HLS to explore the design complete analysis with 9X more compute data center operations management can reduce
space and experiment with different architectures can yield up to 50% lower power designs for the throughput for the same cost, which also stranded capacity from an estimated 30% to as
same input algorithm consumes 17X less energy low as 10%
Thinking Big: Helping Data Centers Prepare for a Greener Future

Data centers power the digital services that we
have grown to expect as a part of everyday life,
Performance and Sustainability
Thésée DataCenter, a French colocation data center provider, is a prime example of an
and as our lives continue to become increasingly
Many owner/operators, colocation providers, and organization that overcame the current challenges facing the data center industry using
digital in nature, the demand for digital services will
hyperscalers use data center digital twin technology Cadence data center software. It needed to reconcile seemingly contradictory technical
continue to grow. These services—both personal
with Cadence® DataCenter Design Software and objectives, such as:
and professional—come at a price, including to
Insight Platform™ to uncover how changes will impact
our environment. The data center industry is f Attaining Uptime Institute Tier IV high availability certification
design and operations, empowering them to prioritize
estimated to account for 1-1.5% of global electricity
energy efficiency while maximizing performance. f PUE target of 1.2 even at partial load
use and 1% of energy-related greenhouse gas
emissions.* Compliance with environmental Customized reports and dashboards display carbon f Managing higher electrical densities for AI and data analytics use cases
regulations, like the recent Energy Efficiency usage analytics and energy efficiency metrics,
Directive, is also an increasing consideration for data f Prioritizing energy performance and a minimal environmental impact
including a power usage breakdown of the cooling
center professionals. system, power system, and IT equipment. Our data Thésée DataCenter achieved these objectives by using a scalable modular design coupled
center software also calculates the power usage with a complex cooling system, the placement and tuning of which are validated by
effectiveness (PUE), a commonly used ratio of the
The Juggling Act and Increasing energy used by the facility compared to the energy
Cadence’s CFD simulation capabilities. We are proud to support this innovative company,
and others like it, in achieving their ambitious sustainability initiatives through our data
Density used by IT equipment, and the data center’s total IT center software.
carbon footprint.
Data centers are tasked with running their facilities
as efficiently as possible, while ensuring deployment
speed, IT safety, and smart budgeting. Maximizing
data center performance in this way is easier said
than done due to the conflicting demands currently
facing the data center industry.
The proliferation of high-density IT equipment and Cadence Reality DC Digital Twin will allow us to know the real capacities of our
high-performance applications places additional infrastructures, anticipate the arrival of new projects, test and propose the best locations
demands on data center systems. Data centers are for pre-sales projects, and finally maximize the commercial potential of our campus.
tasked with delivering more processing throughput, in
less space, and in a sustainable fashion. Christophe Bouniol
President, Thésée DataCenter
*https://www.iea.org/energy-system/buildings/data-centres-and-
data-transmission-networks
Partnering to Enable
Sustainable Innovation
Innovation in Power
50% Power Reduction Through Low-Power
Optimization with Stratus HLS
Products designed with Stratus HLS technology can be found in your
home, automobile, and pockets. Most widely used for image processing,
wireless, and machine learning (ML) applications, Stratus HLS automates the
critical process of mapping an algorithm, whether in C or MATLAB, to code
that can be physically implemented into an integrated circuit (RTL code).
Traditionally, this is a complex, manual process and designers are only able
to explore a limited number of RTL solutions before they must proceed with
implementation. However, this step has great potential for power and energy
optimization in the design flow. Using Stratus HLS to explore the design
space and experiment with different architectures can yield up to 50% lower
power designs for the same input algorithm. Stratus HLS leverages the same
engines as the Cadence Digital Full Flow for power, timing, and area analysis,
so designers can confidently choose the best RTL architecture.
Stratus HLS has recently implemented a process as a part of the high-level

synthesis flow which creates RTL, resulting in minimal leakage power and
greater design productivity. This can allow design teams to target lower power
more aggressively, without requiring specialized talent or longer schedules.
Ultimately, it helps democratize advanced low-power design techniques
and lowers the power consumption by semiconductors and electronic
systems worldwide.
Creating Battery-free MCUs with Cadence

Full Flow
The team at OniO envisioned an internet of things (IoT) future with zero batteries, ONiO uses a full Cadence flow from analog and digital design capture, Many applications can benefit from ONiO.zero, including:
so they created ONiO.zero—a microcontroller unit (MCU) that operates 100% on layout and simulation, extraction, chip floorplan, and signoff. ONiO chose
energy from its surroundings. ONiO.zero is a RISC-V microcontroller that represents
f Smart Home Devices
Cadence as their single EDA tool vendor for chip development because the
a significant leap in low power consumption and stands at the intersection of tools are fully integrated, which is essential for these complex designs. f Wearable Health Tech
cutting-edge technology and sustainable development. This remarkable piece of
technology marks a significant advancement in ultra-low power consumption and ONiO designs all IPs internally and uses Cadence’s tools, including the f Agriculture
distinguishes itself by operating completely battery-free. Virtuoso platform with Spectre family of simulators for analog and mixed-
f Retail
signal design and simulation, Xcelium for digital verification, Genus for
synthesis, Innovus for digital implementation, Tempus for static timing f Environmental Monitoring
analysis and Conformal, Voltus, and PVS for final sign-off. ONiO performs
f Smart Cities
a lot of simulations in analog and mixed-signal environments, where
Cadence has a forte when it comes to simulation speed. Using Cadence f Industrial IoT
Cadence was our first choice of tools; when we benchmarked available
tools means that ONiO can get results faster with great accuracy.
software packages, Cadence won. Also, having the local support of the f Logistics and Tracking
Cadence team was instrumental. The team is known well in our region ONiO.zero’s sophisticated integration of energy-harvesting capabilities
and trusted. The scalability and flexibility in the Cadence start-up f Energy Sector
eliminates the need for multiple external components typically required
program allowed us to get design work started quickly and scale as the for power management and provides unprecedented cost savings in
company grows. production while fostering an eco-friendly, economical, and efficient
technology standard for IoT applications. Learn more about how OniO
Vemund Bakken
creates sustainable, battery-free solutions with Cadence technology.
CTO, ONiO
Dukosi Revolutionizes Batteries with

Cadence Design Solutions
Dukosi is at the forefront of battery system innovation The Dukosi team used Cadence EDA tools for the design
and enables a step change in safer and more efficient and verification of their wireless battery monitoring solution
batteries to power the electric future. Their unique including Virtuoso Studio for analog design, Genus Synthesis
and Innovus Implementation for the integrated digital flow,
The integrated Cadence flow maximized our
technology is transforming the performance, safety,
efficiency, and sustainability of battery systems for a wide Quantus™ Extraction, Tempus Timing, and Voltus IC Power team’s productivity, helped us meet our PPA
range of applications including electric vehicles, industrial Integrity for the timing and power signoff, as well as Pegasus™ goals, and delivered successful results on our
transportation, and energy storage systems. Physical Verification for DRC and LVS signoff. Their use of
the Cadence Managed Cloud Service allowed Dukosi to get target technology.
Their intelligent chip-on-cell solution with novel contactless every designer up to speed rapidly and enabled them to scale
communication transforms the way batteries are designed quickly to handle changing project requirements and support a Simon Foster
and monitored. By capturing and storing lifetime data for each growing design team. Analog ASIC Team Leader, Dukosi
cell, enabling full traceability throughout the cell’s lifecycle,
battery utilization and safety can be improved also in second- Battery technology is poised for exciting advancements in the
and third-life use—e.g., in energy storage systems—to end of coming years, and Dukosi is proud to be at the forefront of this
use life and recycling. Dukosi’s solution is helping to create a innovation, working to improve efficiency and reduce waste in
sustainable battery value chain and circular economy—reduce, the industry. Learn more about how Dukosi is revolutionizing
reuse, recycle. batteries using Cadence tools.
Dukosi’s chip-on-cell sensing platform with unique contactless

communication is suitable for all battery management system
(BMS) topologies and allows for simpler, safer, and smarter
batteries. Dukosi’s solution uses a bus antenna for contactless
communication with every Cell Monitor IC, eliminating complex
wiring harnesses and other components typically found in
traditional wired architectures. Eliminating the majority of
wiring and connectors in the battery reduces potential failure
points and results in smaller, lighter, safer, and more scalable
battery systems.
Sustainable Innovation in the

Automotive Industry
Cadence CFD solutions use computational fluid Covering modeling, simulation, and analysis for domains
dynamics to predict real-world product and system including aerodynamics and thermal management for
performance, which is key to optimizing and increasing electric vehicles (including batteries), Cadence CFD The automotive industry is witnessing
vehicle efficiency and achieving regulatory compliance. solutions serve to maximize critical performance and transformative changes driven by electrification.
OEMs that historically focused on internal
As a partner to several of the world’s major automotive user experience metrics such as vehicle endurance,
combustion engine (ICE)-based powertrains are
manufacturers, Cadence CFD Solutions ensure driving range, and fuel efficiency.
now transitioning their product lines to offer a blend
engineers can evaluate designs quickly and reliably. of ICE, mild hybrid electric vehicle (mHEV), plug-
in hybrid electric vehicle (PHEV), and fully battery
electric vehicle (BEV) powertrains. The additional
investment needed to facilitate electrification has
required OEMs to optimize cost of development
by replacing physical testing with simulation
technology more aggressively.
Kumar Srinivasan
Senior Technical Director for CFD Solutions, Cadence
Innovation in Healthcare
Cadence Molecular Sciences (OpenEye)—a business unit of
Cadence—will provide OpenEye’s molecular design software to power
the open-science AI-driven Structure-enabled Antiviral Platform
(ASAP) Discovery Consortium in support of an innovative effort
to rapidly develop antivirals to prevent future pandemics. ASAP
Discovery Consortium aims to deliver multiple drug candidates ready
for evaluation in humans in the event of an ongoing or emerging Open-science drug discovery against future pandemics is
pandemic threat. The project will maximize the use of an open an essential public service. We are thrilled to have access to
science model that prioritizes global, equitable and affordable access OpenEye’s industry-leading software in this effort. The OpenEye
to antiviral medicine, generating a wealth of antiviral data shared Toolkits have long been the backbone of our computer-aided drug
rapidly and openly. discovery infrastructure, and access to the Orion NES Free Energy
workflows allows us to run free energy calculations in mere hours.
OpenEye’s Applications, Toolkits and Orion® platform—which include
ROCS®, FastROCS™, BROOD, OMEGA, OEChemTK, Grapheme™, John D. Chodera, PhD
Nonequilibrium Switching (NES) Free Energy Calculations and Lab head, Memorial Sloan Kettering Cancer Center (MSKCC)
other tools—enable computational chemists working with the
ASAP Discovery Consortium to build a robust antiviral drug
discovery pipeline using technology, structural biology, AI, ML, and
computational chemistry.
Neurinnov Is Transforming Tetraplegic

Patient Care with Cadence
Neurinnov is using Cadence tools in their work to create
implantable neurostimulation solutions, restoring hand
movements for patients with complete tetraplegia following
We use Cadence for all our microelectronic research and
high-level spinal cord injury. Neurinnov’s first clinical indication
development. At the core of our implant is an integrated circuit
is focused on restoring hand grasping for these patients, giving
that is key to our technological innovation. This integrated circuit
them back autonomy by enabling them to manipulate objects and
was built from the ground up using Cadence tools. Many of the
perform daily activities.
Neurinnov team had prior experience with Cadence tools, and we
Each patient is unique, so the technology and settings must be knew Cadence would be a critical component for developing the
personalized for each individual. Additionally, the solution must complex circuitry needed for selective stimulation of the nerves.
be easy for surgeons to implant to make the surgery as fast and
Milan Demarcq
efficient as possible. Neurinnov is working hard to address both of
these challenges. R&D Engineer, Cadence Lead User, Neurinnov
Last year, Neurinnov began production of their technology and

is now around 60% complete with industrialization. The key
Throughout the design and development process, Neurinnov is using
component of Neurinnov’s implantable device is an integrated
Cadence tools for RTL coding, digital schematic input, synthesis, and
circuit designed using Cadence tools.
place and route with Virtuoso Design Platform, Virtuoso Digital
To achieve selective stimulation of the nerves, Neurinnov needs Implementation, and full-chip analog/mixed-signal simulation. By
high-level technology and a dedicated circuit that can focus the restoring movement to the hands, Neurinnov hopes to give patients
currents and shape them in 3D with complex waveforms. ASIC some autonomy and reduce their dependence on caregivers for
development is the only way to achieve this, and Cadence is daily activities.
the critical software used to develop the ASIC and surrounding
Learn more about how Neurinnov is transforming tetraplegic patient
components. The result is an efficient, small, and energy-efficient
care with Cadence.
system that meets the high standards of safety and reliability
required for medical devices.
Innovation for a Safer World

Leveraging Computational Fluid Dynamics to Predict,
Model, and Mitigate Tsunamis for a Safer Tomorrow
Predicting and modeling outcomes of climate change using advanced CFD simulation is used in geophysics and ocean wave studies for its scale with wave breaking. Understanding the impacts allows the
simulation tools can be a positive stride in the fight against climate versatility, accuracy, and turnaround time. With climate change at the development of various strategies to reduce casualties:
change. Cadence CFD tools can help predict and model the generation, forefront of discussions, CFD finds its space in landslide and tsunami
f Design of coastal structures
propagation, and mitigation of tsunamis for a safer tomorrow, especially modeling. Cadence Fidelity Fine Marine can generate hydrodynamic
targeting the safety of the inhabitants and building clusters around the flow simulations of tsunami wave height and their corresponding effects f Future tsunami mitigation
coastal regions. on coastal building clusters. These simulations are based on Reynolds-
averaged Navier-Stokes equations using turbulence models at full tsunami f Establishment of standard parameters for coastal building
construction
f Pre-defined evacuation routes
Innovation for Sustainable

Food Supply
Reduce Aquaculture Biological Reduce Stagnation in Fish Cages with
Footprint with Fluid-Structure Fluid-Structure Interaction Studies
Interaction Simulations By using computer analysis and simulation, potential risks
can be identified early in the process when designing a fish
Aquaculture is gaining widespread recognition for its potential
cage, which is more cost-effective than constructing physical
to provide sustainable fish products, and it is considered the
models. For modeling, simulating, and analyzing fluid-structure
go-to method for fish farmers to satisfy the growing demand for
interactions in fish cage nets, CFD and finite element analysis
seafood and freshwater fish. In aquaculture farming, choosing
(FEA) are the most effective tools. These tools can help
the right location is substantial for healthy breeding, such as
decide on the best fish cage material to withstand extreme
having continuous flow and away from high sound pressure—i.e.,
weather conditions and optimize the nets’ arrangement, i.e.,
underwater radiated noises—which can be four times higher
the distance between the cages and the number of cages in a
than in air. Fluid-structure interaction studies can help design
row—to avoid stagnation and enhance fish production.
robust and sustainable fish cage nets that minimize stagnation
and ensure successful fish production while reducing the Cadence CFD solutions offer dedicated, virtual naval
aquaculture biological footprint. architecture and marine design tools for unparalleled free
surface modeling and scalable, highly automated optimization
The adverse effects of pollution, parasitic infections, and
processes. Our tools can be used for fluid-structure interaction
insufficient oxygen levels can contribute to a stressful
studies in fish cages and for optimizing the design of
environment for fish, resulting in poor health and heightened
aquaculture cages with multiple objectives and constraints.
vulnerability to infections. Therefore, it is imperative to
create fish farms designed to dissolve waste and avoid water
stagnation. Control units, such as flow meters, pH meters,
etc., can effectively maintain an environment that supports
healthy breeding.
Advancing the Next Generation Innovators
Investing in Women in STEM From Learners to Innovators with the

Cadence Certified Training Partner Program
Cadence is an official technology partner of the
According to the U.S. Bureau of Labor Statistics, by 2032, employment
McLaren Formula 1 Team. In 2023, McLaren Racing
in STEM occupations is projected to grow by about 1 million, and
created an initiative to encourage and support
several governments and international organizations have realized the
the next generation of women leaders in STEM,
importance of developing their own chip industries to reduce reliance on
empowering 60 aspiring women leaders of tomorrow
a global supply chain. Setting up a chip industry requires a highly trained
and opening pathways to a career in STEM.
workforce, and new engineering graduates become productive faster
STEM has never been so relevant to some of the traditional industries to see how
by quickly bridging the gap between academic knowledge and industry-
they can evolve, such as electrification of vehicles. It’s an exciting time for women
standard state-of-the-art tools, technologies, and design methodologies.
in STEM, and we’re thrilled to have partnered with McLaren Racing, Google, and
The Cadence Certified Training Partner Program is at the heart of bridging
Cisco to create a program for female leaders on a career path in STEM.
Cadence, along with that gap between academia and industry.
Rebecca Dobson
Google and Cisco, Cadence has partnered with Entuple Technologies of Bengaluru, India, to
Corporate Vice President, Worldwide Field Operations, Cadence offer high-quality training solutions to help students become productive
partnered with McLaren faster with industry-standard tools and design methodologies, including
Racing to develop an all five of the technology areas currently offered by Cadence: Digital
exclusive series of Physical Design, Synthesis and Static Timing Analysis, Signoff Timing
and Power Analysis, Simulation, Coverage Debug, and Languages and
masterclasses designed to Methodologies. By leveraging their respective strengths, the companies
inspire and equip women have created a unique training experience that imparts domain knowledge
and fosters a spirit of innovation among the learners.
with the knowledge for a
The McLaren 60 Scholars Programme is a place where women are inspired
future in STEM. to pursue careers in STEM, bringing their unique perspectives, challenging Impact on the Industry
stereotypes, breaking barriers, and being a part of exciting advancements that
make a difference in the world. The Cadence Training Partner program will accelerate the emergence
of a skilled talent pool equipped with knowledge of the latest tools and
Tal Zigman methodologies, which will contribute to accelerating product development
Group Director, Academic Partnerships, Cadence cycles, reducing time to market, and improving overall design quality.
Academic Network Supports

University Design Teams
Penn Electric Racing Cadence Incubator Program for Sustainable
Penn Electric Racing, the University of Pennsylvania’s Formula Electric SAE
Innovation
team, is one of the first electric Formula SAE teams in North America and The Cadence University Incubator program supports university
has broken multiple records, including the North American acceleration incubators and early-stage startup companies through their design-
record at Formula SAE Lincoln. Formula SAE (Society of Automotive to-prototyping journey. By sharing design excellence practices and
Engineers) is a series of international competitions where university teams tapeout know-how and by providing affordable access to industry-
compete to design and manufacture the best-performing racecars. grade Cadence technology, the Cadence University Incubator program
Without [Cadence AWR software], we would have to reduces cost and time in achieving a proof of concept. Cadence offers
The team is focused on validation and making sure that all their circuits
go back into the lab, order a PCB, wait weeks for it to online training, remote development options, design services, and
are optimized to be the best that they can be. To do that, they are using
arrive, solder it, and then test whether a small part of mentorship and networking opportunities to the startups participating
Cadence technology.
in this program.
the circuit works without knowing whether or not it’s
Unlike the other teams who use pre-built modules or battery systems,
going to work. It would be a lot more trial and error.
Penn Electric Racing builds their batteries themselves to get every
performance metric they can. One of the most important factors when But with AWR, we are able to reliably know that our
designing a battery is its thermals. The higher the heat gets, the greater circuit will work before we even test it.
the resistance. High resistance can make the system less efficient
and also more dangerous. That is why keeping the battery cool is Richard Prescott
extremely important, not just for the operation of the battery but also for The Electrical Co-Lead at Penn Electric Racing
ensuring safety.
Cadence’s Celsius Thermal Solver allows Penn Electric Racing to look

at the chips on the PCBs in the battery packs and see how hot they are
getting over an endurance run, and then make the necessary changes to
ensure all the components are getting adequate cooling. They are also
using Cadence AWR software for all of their high-frequency, high-speed RF
designs, which include their data acquisition board.
Environmental
Sustainability
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2023Highlights
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Progresson
onESG
ESG Innovation Workforce
Workforce Governance
Governance Social
SocialImpact
Impact Index
Index
our
ourCEO
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Environmental sustainability is
important to Cadence, our employees,
and our stakeholders. With the
endorsement of our executive
management and Board of Directors,
our senior group director of Corporate
Social Responsibility oversees our
environmental programs, collaborating
with internal and external stakeholders
to produce results. Our cross-
functional ESG team identifies and
manages climate-related risks and
opportunities related to our operations,
data centers, suppliers, and customers.
Advancing the sustainability impact
of our products and services is a key
component of our innovation process.
Environmental EMS
Strategy Cadence’s Environmental Management System (EMS) is designed to set, manage, and achieve our environmental sustainability goals.
Priorities are informed by continuous stakeholder engagement and our climate risk assessments. Our environmental programs are
validated by internal reviews and external verification of GHG data.
Our environmental strategy is
informed by climate-related
Identify, measure, and manage the environmental impacts of our operations and productsagainst
risk assessments, stakeholder goals and targets, continually improving our environmental performance
feedback, and regulations.
Our goals are framed in our
Environmental Management
System (EMS) and summarized in
our TCFD Index. Progress on our
GHG and Energy
goals is tracked, measured, and Management
reported annually. f Global Operations
f Value Chain Progress Reports
Water Management Annual ESG Report
Stakeholder input f
f Global Operations
informs our priorities f CDP Climate and Water
Decarbonization and f TCFD
nvironmental Sustainability
E f 10-K
f Business Strategy f Proxy
f Process
f Design and
Development
Committed to Net-Zero by 2040 Science Based Targets

Our long-term decarbonization strategy is to reach Net-Zero emissions by 2040 for our global operations and full value chain. Since 2019, we aligned In 2023, we submitted our GHG reduction targets to the
our carbon reduction targets with the goal of limiting global warming to 1.5ºC above preindustrial levels, and have decreased combined Scope 1, 2, and 3 Science Based Targets initiative (SBTi) for validation.
emissions by more than one third, and are on track to achieve our 2030 goal to halve emissions.* These Net-Zero and mid-term reduction targets
cover both our own operations and extend across
our full value chain—Scope 1, 2, and 3 Upstream and
Downstream. In 2023, we expanded our emissions
Scope 1 and 2 Market-based Scope 3 Upstream Scope 3 Downstream reduction commitments to capture 100% of our total
base-year Scope 3 emissions.
Progress over 2019 Baseline Targets Our decision to seek validation from the SBTi required
an update to our Scope 3 emissions calculations. We
also took this opportunity to refresh historical Scope 3
emissions, including the 2019 baseline, to incorporate
2019 2023 2030 2040 the new Scope 3 categories included in our targets
as well as improvements in emission factors and
486,755 Metric Tons CO2e 328,184 Metric Tons CO2e calculation methodologies.
Baseline**
7% decrease
over baseline
decrease
over baseline
19%
1%
75% 40%
59%
Committed to setting
science-based targets with
the Science Based Targets
initiative
* Scope 1, Scope 2 (market-based), and Scope 3 Categories 1-8, 11, 12, and 15. Calculated in accordance with the GHG Protocol and 3rd party verified to the ISO 14064-3
Standard. Scope 1 and 2 includes our owned and leased properties, as well as our co-located data centers; estimations applied where actual data was unavailable.
** 2019 emissions updated due to changes in methodology supporting SBTi requirements.
Cadence Net-Zero Plan

Targets Progress Strategy to Reach Net-Zero
Net-Zero full value chain emissions by 2040, 33% reduction in full value chain emissions Track progress against 2030 and 2040 targets
50% reduction in emissions from full value over the 2019 baseline
chain and own operations by 2030 over Target 100% renewable electricity and
2019 baseline 88% reduction in emissions from own continue the transition to long-term,
(Scope 1, 2, and 3) operations over 2019 baseline (Scope 1 and 2) renewable energy procurement contracts
50% reduction in emissions from our own 97% renewable electricity for operations Continue strategic partnerships with suppliers
operations by 2030 over 2019 baseline in 2023 who have committed to Net-Zero emissions
(Scope 1 and 2) Secured long-term renewable energy through Encourage partners that have not yet set GHG
2030 and 2040 targets pending validation a purchaser-caused VPPA to supply renewable reduction targets to do so
from the SBTi electricity expected to cover our entire U.S.
electricity load Continue to track and measure customer
Signed onto the Climate Pledge to partner progress towards Net-Zero emissions
with like-minded companies taking steps to Launched Supplier Engagement Program
Neutralize remaining emissions with high-
achieve Net-Zero by 2040 Investments in biodiversity, forestry quality carbon removals
maintenance, and organic carbon removals
CarbonNeutral® company certified since 2021
Contents
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and Responsible
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2023Highlights
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Progresson
onESG
ESG Innovation
Innovation Workforce
Workforce Governance
Governance Social
SocialImpact
Impact Index
Index
our
ourCEO
CEO Sustainability Data
DataPrivacy
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Decarbonizing Operations and

Data Centers
In 2023, we procured 97% renewable electricity through the combination
of renewable energy tariffs and high-quality renewable energy attribute
97% 100%
certificates (EACs).
We continue to seek opportunities to support the development of new

renewable energy sources in markets where we operate through long- renewable renewable electricity
term contracts with utility providers and high-quality power purchase electricity for for on-premise
agreements (PPAs). In early 2024, we strengthened our transition to operations and co-located
long-term renewable energy and commitment to purchaser-caused datacenters
renewable electricity by signing a virtual power purchase agreement
(VPPA) to help finance a to-be-built solar farm in the U.S. Once
operational, we expect our portion of the project will deliver solar power
to the grid equivalent to our entire U.S. electric load and approximately
half of our global Scope 2 emissions.
Renewable Electricity
Before taking renewable electricity into account, heating, cooling,
and electricity use in our own operations and co-located data centers
accounted for 9% of our full value chain carbon footprint. Through
the goal of 100% renewable electricity procurement, we aim to reduce
emissions from electricity to zero.
Our data center decarbonization strategy revolves around energy-

efficient design features and the procurement of 100% renewable
Palladium Cloud is
electricity for our on-premises, co-located, and cloud-based data
centers. As we continue the process of shifting capacity to efficient co-
CarbonNeutral® certified
located and cloud-based data centers, we are prioritizing partners that
have their own goals to be powered by 100% renewable electricity.
Global Operations Progress

Emissions from our own operations account for only 1% of our full value chain emissions once 97% renewable electricity has been taken In 2023, we had an absolute reduction of 88% over Scope 1 and Scope 2
into account. Further, significant investments in refrigeration systems upgrades have contributed to an overall 88% decrease in GHG combined emissions compared to the 2019 baseline. In addition, significant
emissions from our own operations and co-located data centers over the 2019 baseline. As our Net-Zero plan evolves, we will continue to decreases in emissions per employee and per million dollars of revenue
seek meaningful ways to decarbonize the sources of Scope 1 emissions. demonstrate that we are decarbonizing our business while we grow.
Scope 1 and 2 Emissions Trend CO2e* per

CO2e* per
$MM revenue $MM revenue
Metric Tons CO2e 93% 59%

over 2019 over 2019
35000 32,677
Scope 2
Scope 1 Global Operations Value Chain
Market-based
29,244 Scope 1 and 2 Scope 3
30000 19%
20% CO2e* per CO2e* per
25000 22,353 $MM revenue employee
20000 28% 61% 52%

2030 over 2019 over 2019
15000 81% target

80% Global Operations Global Operations
and Value Chain and Value Chain
10000 72% 7,709 Scope 1, 2, and 3 Scope 1, 2, and 3
3,915
5000 100%
73%
0
27% 2040
2019 2020 2021 2022 2023 target
*Calculated in accordance with the GHG Protocol and 3rd party verified to the ISO 14064-3 Standard. Scope 1 and 2 includes our owned and leased properties,
as well as our co-located data centers; estimations applied where actual data was unavailable.
Decarbonizing our Value Chain Scope 3 Emissions Trend

Our Net-Zero commitment is a compelling
opportunity to partner with our suppliers and
Metric Tons CO2e
customers to reduce emissions associated with the
business we do together. Our value chain plays an Downstream Upstream
increasingly important role in our Net-Zero journey. 500,000
We engage with our customers and suppliers to 454,078
improve the accuracy of our Scope 3 calculations
and reflect the work these companies are doing to
reduce their own carbon footprints. 20%
400,000
324,268
300,000
41%
2030
80% target
200,000
100,000 59%
Net-Zero
0
2019 2023 2030 2040
Baseline
*Scope 3 Categories 1-8, 11, 12, and 15 calculated in accordance with the GHG Protocol and 3rd party verified to the ISO 14064-3 Standard.
We use the US EPA Environmentally-Extended Input-Output Models (EEIO) factors for current and baseline Scope 3 calculations.
We are committed to our target to Supplier Engagement Employee Engagement

reach Net-Zero by 2040. Overall business growth, including demand for
our hardware product family, are drivers for Mission Sustainable – Live the Brand
As part of that journey, in 2023 we submitted near-
term and Net-Zero targets to the SBTi for review
overall supply-chain spend. Since 2019 we have Sustainably
focused on climate engagement with suppliers
and validation. Aligning with SBTi methodology, we Cadence launched a global employee challenge based on our
of goods and services, including capital goods,
expanded our GHG emissions inventory for Scope 2022 Environmental, Social, and Governance (ESG) Report,
and business travel. Through this engagement
3 emissions to include downstream emissions aiming to engage all employees deeply into our ESG programs,
program, we have seen increased data quality
categories calculating for the use phase of our grow awareness, and through participation create a learning
from our supply chain, improving the accuracy
hardware products over the entirety of their experience for all employees.
of supply chain emissions calculations. Supplier
useful life.
response to our engagement program has
With this, Cadence invited all employees to contribute
Customer Engagement been positive, with roughly half of our 2023
innovative ideas to further our sustainability objectives. These
upstream Scope 3 emissions calculated using
In measuring our Scope 3 downstream emissions, we are not just company goals; they are our shared responsibility.
suppliers reported emissions, increasing from
take customers’ existing renewable electricity and Submissions spanned areas of Water Management, Zero Waste,
one third in 2022. We will continue to engage with
Net-Zero targets into consideration in our calculations Energy Efficiency, Product Innovation, and Supply Chain
key suppliers to align on emissions reduction
and will continue to engage with customers on Efficiency. The outcome resulted in a wave of enthusiasm
strategies and encourage them on their Net-
these topics as we work to Net-Zero. Since 2019, across our global team.
Zero journeys.
downstream Scope 3 emissions have decreased
by nearly half (47%), largely due to our customers’
investments in renewable electricity and carbon
reductions in their own operations.
Decarbonizing Compute Through Energy Optimization

Our customers, the world’s most innovative companies delivering extraordinary products from chips to boards to systems, use Cadence technology to
design sustainable innovation that optimizes the power, space, and energy needs of end products.
Through our suite of products and services, we aim to decarbonize compute activities and support our customers to develop energy-optimized products and services for the most dynamic market applications, including
hyperscale computing, 5G communications, automotive, mobile, aerospace, consumer, industrial, healthcare, and molecular sciences. Examples of the sustainability impact of Cadence products include:
Cadence Reality
Cadence Cerebrus Voltus-XFi Cadence OnCloud Fidelity CFD Platform
DC Digital Twin
Cadence Cerebrus Enabling the Cadence OnCloud Cadence’s innovative Fidelity CFD software is Fidelity Automesh’s Future Facilities’
Intelligent Chip Explorer development of contributes to lowering CFD solutions enable used in the automotive Hexpress tool innovative solutions
is one of our generative efficient, low-power the overall carbon customers to optimize industry to push accelerates low- enable customers to
AI solutions that integrated circuits, footprint by enabling the thermal, power, and engines to maximum carbon innovation in optimize thermal, power,
automatically optimizes the Voltus-XFi solution transition of development capacity efficiencies performance with the aviation industry, and capacity efficiencies
tool and chip design is a custom EM-IR tools from enterprise data in the data center minimum battery or fuel including the successful in the data center using
options to deliver better technology that delivers centers to best-in-class using physics-based consumption and CO2 prototype of the world’s physics-based 3D digital
power, performance, improved ease of use carbon-optimized cloud 3D digital twins that emissions first liquid hydrogen- twins, helping reduce
and area (PPA) with with minimal tuning data centers enable the calculation powered aircraft by our customer’s carbon
significantly less of the thermal profile, AeroDelft footprint
engineering effort and including airflow
overall time to tapeout and cooling, thereby
helping to optimize
energy use and carbon
footprint
Carbon Neutral Investing in a Low Carbon and

We achieved CarbonNeutral® company certification again in 2023 through Environmentally Friendly Future
our investments in decarbonization, including energy efficiency measures,
procurement of 97% renewable energy through utility contracts, high- For 2023, we neutralized Scope 1 and a portion of 3 emissions through f Work and Economic Growth: Contributes to the local economy and
quality Energy Attribute Certificates (EACs), onsite solar installations, high-quality carbon offsets that had benefits beyond carbon reductions. livelihood of residents through the creation of jobs.
and high-impact carbon removals. We secured Gold Standard Verified We partner with Climate Impact Partners, leaders in carbon market
f Industry, Innovation, and Infrastructure: Supports the development
Emissions Reduction credits (VERs) to offset Scope 1 and Scope 3 solutions for climate action.
of sustainable and resilient energy infrastructure, helping reduce
emissions in required categories.
Cadence supports Climate Impact Partners’ Clean Energy Portfolio that shortages of electricity during peak hours of demand.
finances clean energy projects across the globe that displace electricity
We also continued work with key partners in India to improve
powered by fossil fuels. Energy generation is one of the biggest emitters of
environmentally friendly practices:
greenhouse gases, and renewable energy investment is a fast and effective
solution to reduce these emissions all while improving energy security. Solid Waste Management We worked with our partner, Saahas, in
Bangalore, India, to implement a source segregation of waste program
In addition to delivering emissions reductions to take climate action (SDG impacting 4,000 households and 200 shops in the Koramangala Village
13), the projects deliver a number of other benefits: 8th Block. The impact of managed waste collection provides cleaner
f Affordable and Clean Energy: Contributes to increasing the share of and healthier communities and better living conditions. This is a three-
renewable energy in the global energy mix. year program, from 2021 through 2024, with carbon avoidance of
1,000 tons.
Give Me Trees – Noida, India

Give Me Trees Trust is one of the largest community-based voluntary tree planting and conservation movements in India, having
facilitated the plantation and preservation of more than 23 million trees all over the country in the last 45 years, with more than
17,000+ volunteers working all across India.
We are so thankful to Cadence in supporting the Give Me Trees Trust

team in creating a permanent green space in sector 47, Noida (district
Gautam Budh Nagar, Uttar Pradesh). This land parcel was reserved for
permanent Green Belt in sector 47, but we did not have any financial
or CSR partner for the same. Cadence has helped us with 12,000
plants to create a very beautiful biodiversity zone in the heart of a
residential area.
Cadence support has brought in 32 species of butterflies, 47 species

of birds (resident and migrant), and mammals such as squirrels,
mongoose, and reptiles such as monitor lizard, garden lizard, rat snake,
and common sand boa. The residents are delighted by the presence of
such a big green cover in their sector, and are using it often for activities,
walks, cultural meet ups, yoga sessions, and group meditations. The
shelter area, pathways, and open grass areas are very popular. Pond and
the greenery around it have been very well appreciated by the residents
and all who visit this Cadence plantation site.
We will continue to maintain it, develop, and beautify this space and
make it even more useful for the community and the biodiversity which
has made it their permanent home.
Swami Prem Parivartan

Founder of Give Me Trees
Managing Water Resources

Although not a primary input to our products, we recognize that At all our offices, fresh water is used for drinking, sanitation, and wash
water is a vital resource. With this in mind, we have updated our services. Conservation measures are implemented across our operations, Water Footprint
EMS statement to include the identification, measurement, and including automated taps and sensor technology. Water is consumed
management of environmental and water-related impacts of through irrigation at our San Jose and Noida campuses, and some of our
our operations and products. We also added a Water Resource on-premises data centers use water cooling and mister technology.
Management section to our EMS where we outline our water
challenges, goals, and management approach. Flooding, drought, and water stress are climate-related issues that our
employees, customers, and investors care about. Our annual water risk
To ensure we are not using more than our fair share of water in assessment shows that the proportion of our use and consumption of 2023
communities where we operate, we are monitoring water usage, water in high or extremely high water stressed areas increased this year
consumption, and recycling closely, with a focus on our owned due to changes in the natural environment. Our efforts to use water 108
campuses. In particular, we focus on areas with current or future efficiently are informed by our annual water risk assessment. Details on our
water stress. analysis and performance can be found in our annual CDP Water Security
Megaliters
questionnaire response.
Contents A Message from Environmental Cybersecurity
Cybersecurityand
and Responsible
Responsible
About 2023 Highlights Progress on ESG Innovation Workforce Governance
Governance Social
SocialImpact
Impact Index
Index
our CEO Sustainability Data
DataPrivacy
Privacy Supply
SupplyChain
Chain
Workforce
Accelerating Innovation
as One Team
Our Strategy
At Cadence, our people are at the center of our success and drive
the innovations that are enabling next-generation technologies. 11,200 EMEA
13%
Cadence technology is highly specialized and deeply technical Total
computational software, and our team represents some of the Employees Americas
best and brightest in their fields. Our inclusive, One Team culture
is central to the employee experience and allows us to attract and APAC/Japan Regions 35%
retain top talent in our industry. 21% Total Employees
Our talent strategy is led by our senior vice president of Global ~11,200
Human Resources, with oversight from the CEO and involvement
from all employees. Our HR department provides reports to the 99% 1%
Compensation Committee of the Board of Directors at every regular Full-time Part-time
meeting of the Compensation Committee. In February 2023, the India
Compensation Committee Charter was amended to add that the 31%
committee is responsible for overseeing Cadence’s human capital
management practices.
Our Team 86% 14%

Our people are our greatest asset and are integral to our company’s Technical Non-technical
growth. The talent we select to join our team defines Cadence’s
culture, innovation, and success—now and in the future. Our
ability to attract and retain high-performing talent has led to 49%
headcount growth over the last five years and a high average
tenure of 6.9 years. We are proud to have built our largest-ever team
of approximately 11,200 employees globally. 6.9 5%
Years Voluntary
Average Tenure Turnover
President and Chief Our Culture The Great Transformation

Executive Officer, Anirudh Our people-first One Team culture drives the employee experience.
We support our workforce throughout the employee lifecycle,
Cadence is participating in an innovative three-year research project
called The Great Transformation (TGT) in partnership with Great Place
Devgan, PhD attributes including talent acquisition, onboarding, career development,

total rewards, and wellness. Our programs foster high trust,
to Work®. Alongside a small cohort of Fortune 100 Best Companies, we
intend to promote diversity, equity, inclusion (DEI), and belonging in
our respective organizations and in the world.
Cadence’s stellar collaboration, inclusiveness, and teamwork. We are dedicated to
creating an environment where employees of all backgrounds can
have meaningful careers and achieve their full potential. We surveyed employees participating in Inclusion Groups, organized
performance to its focus sessions with our Inclusion Groups and Inclusion Group leaders,
and conducted a detailed analysis of representation across the
“One Team” philosophy, A Great Place to Work company in order to:
which aims to cultivate Cadence prides itself on being a great place to work and building
a high-trust culture. A highly engaged workforce is critical to the
employees’ sense of purpose foundation of our business success. We have been recognized as Learn Listen Explore
one of the top places to work by Fortune magazine for the past nine
years and by the Great Place to Work Institute in 13 countries where About the current To employee Ways of
and a genuine belief that we participate. state and best
practices of the
perspectives on addressing
areas of
the state of DEI
their work benefits people To measure engagement and the health of our workforce, Cadence
partners with the Great Place to Work Institute to administer global
Inclusion Groups within Cadence opportunity
and the planet. engagement surveys annually to all employees in all countries
where Cadence has employees. The surveys provide valuable
insight into our employees’ experiences, allow our employees an TGT has compiled its findings and shared recommended approaches
opportunity to share ideas for improvement, and benchmark us that could make a positive impact on DEI at Cadence based on our
against some of the best companies in the world. This feedback employee data. Based on their recommendations, Cadence created
provides us insight into what our employees value and enables us an initiative to listen to and empower the voices of underrepresented
to make appropriate adjustments so that we can continue to be a employees. Through these efforts, we are making strides in our
company where employees thrive. approach to hiring, growing, and retaining talented people, regardless
of their gender, background, beliefs, or unique life experiences.
94% 93%
of employees surveyed say of employees surveyed
they are proud to tell others say Cadence is a great
they work at Cadence. place to work.
Our Employees Say

We’re a Great Place to Work
Based on our employees’ feedback, Cadence received 30+ “best
workplace” recognitions from reputable publications in 2023. This
includes Fortune’s World’s Best Workplaces, Fortune’s 100 Best
Companies to Work For, People’s Companies That Care, the Wall
Street Journal’s Best-Managed Companies List, and
Forbes America’s Best Employers (mid-size).
Life at Cadence College Hire and Intern Program

To be one high-performing team and accelerate the pace of innovation, We believe interns and recent college graduates are the
building a sense of belonging for our employees is essential. Our people-first future of Cadence, and we invest in them to carry out our
culture is rooted in empowering our employees and appreciating the many mission of innovation. In 2023, 48% of all Cadence hires
strengths and talents they bring to the workplace. We look at the entire were early career employees.* We provide mentorship,
employee experience, so employees feel supported to do their best work, scholarships, and access to Cadence technology to many
surrounded by the best team. students, including those from underrepresented groups.
We recruit recent graduates at top universities around
Hiring the world, including those that historically serve a higher
number of Black and Latinx students.
We actively identify candidates with expertise that can contribute to our
high-performance culture and success. It is important to us that we build Cadence employees participate in tech talks, career fairs,
a diverse pipeline of candidates, and we do this through robust recruiting academic sponsorships, and university contests, and we
partnerships and by posting requisitions to sites that are focused on diverse work to facilitate a network between the technology
backgrounds, experiences, and skills. Because our management team is industry and academia. We also partner with schools to
central to the success of our hiring and retention strategies, we invest in build relationships with departments and professors
management training, including unconscious bias workshops and diversity who connect Cadence to the best and brightest
leadership training, to enable thoughtful decision-making. students. In 2023, more than 660 global Cadence
interns, U.S. new college graduates**, and U.S. early
career employees participated in our Career Catalyst
program. Through this initiative, Cadence interns
and employees deepened their understanding of our
technology and expanded their skills through increased
training and networking opportunities.
*”Early Career” employees are under the age of 30 working in entry-level positions
**”New College Graduates” are employees within two years of their last
graduation date
Building Careers
To help employees succeed in their career, we foster an environment that supports their
continued learning and growth—both on the job and through formal training programs.
Employees can utilize learning resources through our High-Performance Culture portal
that provides a comprehensive online Learning Management platform, accessed by 92%
of our employees in 2023, and other training and development tools on a broad range
of topics and skills. This includes LinkedIn Learning, which provides more than 20,000
on-demand professional courses with new courses added monthly, and leadership
development programs with reputable organizations like UC Berkeley. Cadence also
offers up to $5,000 of tuition reimbursement annually to employees continuing their
education in fields relevant to their job.
In support of our company values, and the commitments we have made to our
stakeholders, each year all of our employees, including management, are required to
complete mandatory training on various critical topics, such as our Code of Business
Conduct, anti-corruption, inclusion, and harassment prevention, protection of
confidential information, data security, affirmative action, export compliance, and
human rights. This year, we added unconscious bias training so more employees and
managers receive training on this important topic to support a culture of inclusion.
Compensation
To inspire and recognize our employees, Cadence offers competitive compensation and
benefits programs. Cadence’s compensation programs link employee compensation to
Cadence’s business and individual performance. Employees participate in an annual
performance management process that begins with setting individual goals that align
with company and business goals. Employees and managers are encouraged to check
in quarterly on these goals and have a performance conversation. At the end of the
year, employees complete a self-evaluation, and their manager assigns a performance
rating that supports annual promotion and equity compensation decisions.
We also offer a bonus program, 401(k) match, Employee Stock Purchase Plan, and
equity compensation. In addition, in 2023, 77% of our employees received monetary
awards from their colleagues through our peer-to-peer recognition program for
exploring what’s possible, elevating the team, executing with quality, and exceeding
customer expectations.
Health and Well-Being Safety

We support a hybrid work approach that gives most employees the opportunity to Cadence is committed to providing a safe and healthy work Below is our 2023 OSHA Recordable Injury Rate and our Lost-Time Injury
work both in the office and remotely. We believe being together in person deepens environment for our employees and non-Cadence personnel. We Rate for our employees in the U.S.:
our connections to one another and enhances our ability to ideate, collaborate, have a cross-functional Emergency Response Team trained to
and align. We also value the flexibility that comes with working remotely. quickly respond to emergency or crisis situations at Cadence. The
Emergency Response Team conducts periodic simulation trainings
Our employees’ physical and mental health and well-being remain a top priority that cover various applicable situations, so they are prepared for an
at Cadence. We offer a variety of unique benefits in addition to traditional health
0.1%
emergency or a crisis.
insurance. Globally, we have an Employee Assistance Program that is specifically
designed to promote mental wellness, offering free sessions with a mental health
professional and a bereavement leave policy that allows employees more time to
As provided in our Code of Business Conduct, our employees are
expected to perform their work in compliance with health and Injury Rate per
0
Lost Work Days
grieve should they lose a loved one. This year, all employees had access to a new safety laws, regulations, and policies of their work location. When 100 Employees
wellness program that provides awards for completing health-based activities. working at customer locations, our employees must follow the in the U.S.
Additionally, we provide employees with Global Recharge Days to unplug and customer’s health and safety requirements. Workplace injuries,
focus on themselves and their families. We firmly believe that work-life balance illnesses, or unsafe conditions, including conditions that are likely
and time away from work are key to our employees’ health and wellness, enabling to result in injury or illness, must be immediately reported to a
them to recharge and continue performing at a high level. supervisor or Human Resources partner.
In the U.S., we have a flexible vacation time policy that allows employees to
request time off whenever they deem it appropriate, subject to manager approval,
rather than accruing vacation hours. Our U.S. health and well-being benefits
include fertility benefits, coverage for transgender employees undergoing medical
treatment, expanded new parent leave, adoption and surrogacy benefits, financial
planning and coaching services, and legal services. We also now offer caregiver
leave to allow time away when family members require care.
In addition to structured learning programs and compliance training, we provide

training and tools for stress management, time management, conflict resolution,
and cultural and emotional intelligence.
We provide employees with access to back-up childcare, elder care, and additional
family support, giving employees the flexibility and freedom to better care for
their loved ones.
Employees are provided resources for mindfulness and meditation to help reduce
stress and improve focus in their daily lives. When in the office, our employees
can also enjoy peaceful space to focus on personal wellness in our Wellness or
Quiet rooms.
Diversity, Equity, and Inclusion

It is important to the success of Cadence that we provide the support our We are deeply committed to advancing equality and Fostering an environment that celebrates our diverse workforce
employees need to thrive. This includes fostering an environment based on providing opportunities that impact our company’s is a core element of Cadence’s culture and helps drive our
trust, cooperation, respect, and equitable treatment. We believe a diverse team success. As leaders in innovation, we strive to be innovation. We encourage all employees to be their authentic
can create a competitive advantage by contributing unique perspectives that leaders in diversity, equity, and inclusion and foster a selves, treat everyone with dignity and respect, and see
advance high performance, innovation, and teamwork. connected One-Team culture that supports thriving, diversity, equity, and inclusion as a pillar of strength for our
transformative careers. company. Equal opportunity and diversity of thought continue
Gender and racial disparities remain a challenge in the technology field. As to lift employee contributions to new heights and accelerate
a tech company with a high proportion of technical employees, Cadence is Tina Jones business success. We are proud to build our Cadence community
deeply committed to addressing this issue. A diverse and inclusive culture Senior Vice President, Global Human Resources, Cadence through trust, integrity, and the sharing of our unique and
improves team dynamics and cultivates the innovation needed to develop vibrant backgrounds.
Cadence’s suite of innovative products and services.
K.T. Moore
Vice President, Marketing, Executive Sponsor of DEI, Cadence
Our Approach Pledge for Gender Equity

Cadence believes that leadership is crucial to embedding Cadence Women’s Conference
inclusion and equity within company culture. Cadence has To show our commitment to diversity in the
a compensation incentive for leaders to support a high- In 2023, we launched our first global Cadence Women’s Conference (CWC) semiconductor industry and the broader
performing, inclusive culture: ~20% of 100 senior leaders’ to celebrate achievements, hear from key experts in the field of technology, community, president and CEO
bonuses consider culture, top talent, and sustainability and participate in conversations on topics that matter most to women in
the workplace. Since then, we have hosted CWC events all over the world to
Anirudh Devgan, PhD signed the Global
priorities. Our goal with this compensation strategy is to create
meaningful incentives to drive change. connect, learn, and celebrate the women of Cadence. In total, more than 700 Semiconductor Alliance’s Women’s Leadership
women attended these conferences, and 49 employees received recognition initiative’s CEO Pledge, taking a stand with
Ten years ago, we developed a program to help support gender for their impact on the company. To continue the energy and extend the other industry leaders to make a substantial
diversity at Cadence. Our programs for women and their learnings to more people in our community, we have hosted in-person CWC
allies have created a strong community to better understand impact on the advancement of women in
recap events open for all employees at local sites around the globe.
and address challenges faced by women in technology and the semiconductor industry. By signing this
business. Furthermore, specialized Business Unit groups pledge, Anirudh and Cadence have committed
provide development opportunities to support women in to prioritizing gender diversity through
technical and sales roles. These efforts have contributed to our
recruitment, retention, and development
culture of inclusivity, and the proportion of women at Cadence
has increased in each of the last ten years. and offering support for women to equitably
advance in their careers.
6 Key Focus Areas
Recruitment and
advancement Community
Increase diverse representation Foster trust and belonging
and inclusion across all levels within Cadence
Brand Equity
Bring awareness to Maintain equitable
our One Team culture policies and pay practices
globally
Education Partnership
Bring awareness to Partner to make an impact
barriers, like unconscious inside Cadence and in our
bias, and enable allyship communities
Recruitment and Advancement Awareness and Enabling a Mindful Culture

We regularly monitor the diversity of our current workforce We continue to provide resources to employees to challenge Words Matter
and candidate pool. We partner with national engineering ourselves and our perspectives to improve diversity and inclusiveness
organizations, and colleges with diverse student enrollment, at Cadence. 100% of employees have participated in unconscious At Cadence, we understand words matter. Our “One Cadence—One Team”
to conduct recruiting, outreach, and engagement with diverse bias training. In addition to global employee unconscious bias culture builds and fosters DEI. We embrace and respect all backgrounds,
communities. In addition, Cadence supports a 16-week training, we invested in training for all global managers on supporting experiences, and ideas to help us solve technology’s toughest challenges,
returnship program to help bring talented employees back equity in management decisions. allowing our customers to transform lives worldwide.
into the workforce, especially caregivers who left to support
their families. In addition, we believe that human connection, personal storytelling, In response to changes in the industry and conversations with our
and real-world experiences better connect us to each other’s customers, partners, and employees, we formed the Words Matter Initiative,
In 2023, 25% of all global new hires were women, and 32% of journeys, and we regularly host thought leaders from Cadence, the led by a cross-functional team with members from all business groups and
our early career and intern hires were women. In addition, 6% of industry, and the community to help bring awareness to unconscious inclusion groups. The team focused on the language and terminology in our
all U.S. new hires were Black, Latinx, or from other historically bias. By highlighting their expertise, sharing advice for allies, and materials to ensure our communications are respectful and reflect our DEI
underrepresented ethnic groups in technology, and 13% of all giving examples of inclusive practices, speakers help educate values. The team compiled a respectful language list based on input from
U.S. early career employees were Black, Latinx, or from other employees on the importance of moving the needle in diversity, tech groups, DEI authorities, and feedback from Cadence employees, and
historically underrepresented ethnic groups in technology. equity, and inclusion. we are actively removing terms deemed inappropriate for use in our code
and content. Further, we provide employees with resources to identify bias
Among several programs for all Cadence employees, we in the terms we use every day to ensure we create an environment where
sponsor focused development through inclusive leadership all groups feel included and welcome.
programs for top Black, women, and Latinx talent which
provides specialized coaching and workshops. In addition, our
IMPACT mentorship program provides women and U.S. Latinx
and Black employees with the opportunity to choose a mentor
based on their career goals.
Equity Branding
In July 2023, we performed a detailed review of our We have been named one of the Best Places to Work for LGBTQ+ In 2023, we received the Designing the Difference award
compensation practices in all countries where Cadence has Equality by the Human Rights Campaign Foundation (HRC) for the third from the Global Semiconductor Alliance Women’s Leadership
employees. We are proud to report that Cadence has maintained time. With a perfect score of 100, we received the Equality 100 Award Initiative, which recognizes companies making a measurable and
global salary pay parity based on gender and U.S. salary pay and were included as part of their Corporate Equality Index, which is significant impact on diversity, equity, and inclusion.
parity based on race and ethnicity, again in July 2023. This is the national benchmarking tool on corporate policies and practices
the fifth year in a row we have achieved pay parity. pertinent to lesbian, gay, bisexual, transgender, and queer employees.
This year, we were honored to join HRC’s Business Coalition for the
Our Equal Employment Opportunity Policy governs our conduct Equality Act to further support fairness regarding gender identity and
at Cadence. As stated in our Code of Business Conduct, we sexual orientation in the workplace.
prohibit discrimination, including on the basis of age, race, color,
religion, sex, ancestry, national origin, sexual orientation, or
disability globally.
Partnership
To encourage students and professionals of underrepresented
groups to develop their skills and pursue careers in science,
technology, engineering, and math (STEM), we provide
donations to organizations such as Girls Who Code and Out
in Tech.
We partner with our supply chain to support inclusive practices

in line with our Supplier Code of Conduct.
Community
We currently support global Inclusion Groups for Black, Latinx, Our Inclusion Groups are empowered to host events throughout the employees to learn about our groups’ histories, languages, foods, and
LGBTQ+, Veterans, and Women employees and their allies, in addition year to celebrate and recognize the importance of DEI at Cadence, in other elements of their community.
to supporting U.S. Inclusion Groups for Asian American and Pacific our industry, and in our world. This includes Women’s History Month,
Islander employees, employees who are neurodivergent or have Black History Month, AAPI Heritage Month, LGBTQ+ Pride Month, Here are a few of the activities that were coordinated by our Inclusion
disabilities, and their allies. Each of these forums encourages dialogue Juneteenth, Latinx Heritage Month, Veteran’s Day, and International Groups this year:
for sharing and connecting, promoting belonging in the workplace and Day of Persons with Disabilities. We organize social activities that allow
awareness of experiences and the impact of bias.
Asian American Latinx Inclusion Veteran Inclusion

and Pacific Group: Anna Group: Dr. David
Islander Dapelo-Garcia, Smith, PhD,
Inclusion Group: founder of Lean Associate Professor
Lori Nishiura Mackenzie, Lead In Latinas and at Johns Hopkins Carey Business
Diversity, Equity, and Inclusion DEI leader at Stanford Health School, and former U.S. Navy
strategist for the Stanford Care, presented an inspiring pilot, closed out our Veterans Day
Graduate School of Business, session on how to advocate for celebrations by connecting his
joined us to discuss her yourself and others. military command experience to
experiences and impacts made his research in workplace allyship.
within the AAPI community.
Abilities Inclusion LGBTQ+

Group: Richie Black Inclusion Inclusion Group:
Parker, Chief of Group: Carin Elizabeth Birch,
Staff for the Taylor, Chief former CEO of
University of Diversity Officer the Human Rights Campaign
Virginia’s football program and at Workday, and LGBTQ+ attorney-activist,
former Engineering Manager with delivered an kicked off Cadence Pridefest by
Hendrick Motorsports, was our uplifting keynote on how she and sharing her incredible journey
inaugural speaker in recognition other leaders in the technology as a champion for the LGBTQ+
of International Day of Persons industry are moving the needle community and successes
with Disabilities. He shared his on diversity, equity, and inclusion. ushering in an era of supportive
message of resiliency and the policies for LGBTQ+ employees
importance of a growth mindset. everywhere.
5
Demographics
As of December 31, 2023, the ethnicity of our U.S. population, and gender diversity of our global population
was as follows:
Gender (Global) and Executive

Overall Technical Non-Technical Management
Ethnicity (U.S.) Leaders
Women 24% 21% 45% 18% 20%
Asian & Indian 54% 56% 39% 53% 30%
Black or African American 1% 1% 3% 1% -
Hispanic and Latinx 3% 2% 5% 2% -
Other* 2% 1% 2% 1% -
Undisclosed 6% 7% 5% 3% -
White 34% 31% 43% 37% 70%
Our current EEO-1 Report can be found here. The EEO-1 report requires the use of job categories that do not align
with our internal job categories, and we encourage you to review the information in our 2023 ESG Report to get a
better understanding of our practices and workforce demographics.
*Hawaiian/Pacific Islander, American Indian/Alaskan Native, two or more races

**All figures are rounded to the nearest decimal
Governance
Cadence is committed to conducting Board Governance Board Refreshment

business with the highest standards As of December 31, 2023, our Board of Directors was comprised of ten
Since March 2020, the Board has added five directors, each
of whom enhances the diversity of our Board through their
of ethical conduct and integrity as we individuals, nine of whom are independent as determined pursuant to the
Nasdaq Stock Market’s listing standards. Fully independent committees distinct personal experiences, gender, and ethnicity. The Board
remains committed to seeking diverse leaders who can apply
recognize these are foundational to of the Board oversee audit, remuneration, and nomination.
their unique and valuable experiences to the stewardship of
our culture and critical to our long- our company.
Board Leadership
term success. Corporate Governance Guidelines
In May 2023, Mary Louise (ML) Krakauer assumed the role of Board Chair.
ML, an independent director of the Board who joined in January 2022, The Board’s Corporate Governance Guidelines cover
previously held various executive roles at global technology companies. various topics relating to the Board and its responsibilities.
The Corporate Governance Guidelines reflect the Board’s
commitment to monitor its effectiveness and decision-making
at the Board and management level and outline the authority
and practices in place to review and evaluate Cadence’s
Cadence’s growth has been phenomenal over the past several business operations as needed and make decisions that are
years, and I’m ready to explore new market opportunities and drive independent of Cadence’s management.
strategic initiatives to further advance the company’s position in
the computational software industry. I share Anirudh’s passion for
innovation and customer success, and I look forward to collaborating
with Anirudh and the executive team to build upon Cadence’s strong
foundation and take the company to new heights.
ML Krakauer
Board Chair, Cadence
Commitment to Diversity on the Board

The Board’s Corporate Governance Guidelines reflect Cadence’s commitment to Board of Directors Diversity: Gender Board of Directors Diversity: Ethnicity
having leaders on the Board with diverse backgrounds. In addition, the Corporate
Governance and Nominating Committee’s charter requires consideration of
a director nominee’s integrity, experience, judgment, diversity of background
(including, among other factors, race, ethnicity, and gender), independence,
70% 30% 60% 40%
Male Female White Asian
financial literacy, and ability to commit sufficient time and attention to Board
activities. Skills such as an understanding of electronic design, semiconductor
and electronics systems technologies, international background, and other
relevant characteristics are also considered. GENDER ETHNICITY
The Corporate Governance and Nominating Committee regularly discusses

and annually reviews, both as a committee and with the Board, the appropriate
experience, skills, and characteristics required of directors in the context of *This data is as of January 31, 2024
the current composition of the Board and its committees. In seeking diversity
of background, the Corporate Governance and Nominating Committee seeks a
variety of occupational and personal backgrounds and race, ethnicity, and gender
diversity on the Board in order to obtain a range of viewpoints and perspectives.
This annual assessment enables the Board to update the skills and experience
it seeks in the Board as a whole and in individual directors, as Cadence’s
needs evolve and change over time, and also enables the Board to assess the
effectiveness of its policy to seek a diversity of background on the Board.
Director Nominee Qualifications, Skills, and Experience

The Corporate Governance and Nominating Committee has determined that it is important for an effective Board to have directors with a balance of the qualifications, skills and experience set forth in the table below.
Alberto
Mark W. Ita Lewis Anirudh Mary Louise Julia James D. John B. Young K.
Summary of Qualifications, Skills and Experience Sangiovanni-
Adams Brennan Chew Devgan Krakauer Liuson Plummer Shoven Sohn
Vincentelli
Experience in compensation, organizational management,
Compensation / Human
leadership, talent development and identifying, recruiting, and          
Capital Management
motivating top talent
Experience in corporate governance and compliance at the public
Corporate Governance          
company board level
Cybersecurity Understanding cybersecurity risks in enterprise operations       
Experience in evaluating financial statements and capital structures

Financial Expertise .        
and overseeing financial reporting and internal controls
Government /
Experience in or working with governmental and regulatory
Regulatory / Public   
organizations
Policy .
Experience with global businesses, operations, strategy, and
International.         
customer bases
Experience in marketing and branding of products and services and
Marketing.       
identifying and developing new markets for products and services
Current or former executives with significant operating experience,
Operations . who are able to provide insight into developing, implementing, and       
assessing an enterprise’s operating plan, business, and strategy
Experience in overseeing risk management and understanding risks
Risk Management.          
faced by enterprise operations
Experience in providing insight into developing, implementing, and
Strategic Planning . assessing corporate growth strategy, including through acquisitions          
and other business transactions
Technology / Understanding of electronic design automation, semiconductor
Semiconductor / and electronics systems technologies and related industries; ability      
Electronic Design to understand and oversee the overall business and strategy of
Automation . Cadence as an industry leader
Alberto Sangiovanni-
Mark W. Adams Ita Brennan Lewis Chew Anirudh Devgan Mary Louise Krakauer Julia Liuson James D. Plummer John B. Shoven Young K. Sohn
Vincentelli
Board Oversight of the Ethical Conduct: Code of Business

Corporate Social Responsibility Conduct
Program Our Worldwide Code of Business Conduct provides standards for ethical The Chief Executive Officer and the General Counsel of Cadence, under
conduct in how we work with each other at Cadence and with our the supervision of the Board, actively monitor and audit compliance
Our Board, through its Corporate Governance and Nominating customers, suppliers, government officials, and other stakeholders. Our of the Code of Business Conduct. Our General Counsel periodically
Committee, oversees our corporate social responsibility program and Code of Business Conduct also reflects our values of integrity, innovation, provides reports to the Board or its Audit Committee that include
the progress of our environmental (including climate-related risks agility, and quality, and it applies worldwide to our Board, officers, information on alleged violations of and the actions taken under the
and opportunities), social (including health, wellness, and safety), employees, and certain contractors and consultants. The Human Rights Code of Business Conduct.
and governance efforts, matters, and initiatives. The Corporate Policy within our Code of Business Conduct reflects our commitment to
Governance and Nominating Committee formally reviews our respect all internationally recognized human rights.
environmental, social, and governance efforts and climate-related
issues within the organization at every regular meeting and regularly Compliance with our Code of Business Conduct is the responsibility of
reports to the Board on such programs. In 2023, the Corporate all employees and a condition of continued employment. Our employees Our Code of Business
Governance and Nominating Committee held three meetings and are required to annually certify that they have reviewed and understand Conduct also reflects
in the quarter it did not meet, it received and reviewed materials the Code of Business Conduct and annually complete training that our values of integrity,
relating to ESG. The Compensation Committee formally reviews the covers areas in the Code of Business Conduct, such as accuracy of innovation, agility, and
benefits provided to our employees, including health and wellness, records, conflicts of interest, and raising concerns or reporting possible
misconduct. Our Code of Business Conduct is translated for our
quality, and it applies
once a year.
employees in the following local languages: Chinese, Dutch, French, worldwide to our Board,
German, Hebrew, Japanese, Korean, Malay, Polish, Portuguese, Taiwanese, officers, employees, and
and Vietnamese. certain contractors and
consultants.
Business Ethics: Anti-Corruption Political Contributions Reporting Concerns

Integrity is the foundation of our High-Performance Culture. It is important to Cadence Any contributions or donations on behalf of Cadence to Our employees are required to promptly report possible
that we operate ethically and transparently, avoiding conflicts of interest, competing a political party, candidate, action committees, initiative, misconduct, including illegal activities, unethical
fairly and legally, and complying with the rules and regulations of the regions where campaign, or advocacy on behalf of Cadence must be pre- business practices, violations of the Code of Business
we do business. Our Code of Business Conduct and our Anti-Corruption Policy are the approved by the General Counsel and the Chief Financial Conduct or our other policies, and any other concerns
foundation of our robust corporate governance and compliance programs. Any material Officer of Cadence. about corporate governance, accounting, internal
losses or legal action regarding anti-competitive behavior or violation of anti-trust and accounting controls, or audit matters. As provided
monopoly legislation required to be disclosed pursuant to the regulations of the U.S. Cadence did not contribute to political parties, candidates, in our Code of Business Conduct, our employees
Securities and Exchange Commission (SEC) would be reflected in our filings with the SEC. or political action committees or for the purposes of political can report possible misconduct or raise concerns to
advocacy in 2023. their supervisor, Human Resources partner, office
Cadence has no tolerance for bribery in connection with any of its business dealings. of the General Counsel, or anonymously via our
Our Anti-Corruption Policy provides rules and procedures for providing or accepting whistleblower hotline. All concerns reported through
gifts, entertainment, meals, travel-related expenses or anything of value, and charitable our whistleblower hotline are reviewed by our Board
and political contributions. The General Counsel of Cadence oversees our Anti- through the Chair of the Audit Committee.
100%
Corruption Policy.
Our Anti-Corruption program at Cadence is extensive and

employees completed
all employees, including management, are required to compliance training
complete annual refresher training and certify that they
have reviewed our Anti-Corruption Policy.
Cybersecurity
and Data Privacy:
Relentless Pursuit of Security
Approach 2023 Focus

We have developed and implemented a cybersecurity risk In 2023, we made exciting advancements to our cybersecurity
management program intended to protect the confidentiality, program, including:
integrity, and availability of our critical systems and information.
f Improving security operations and cyber resilience by minimizing
Our products and services involve storage, including cloud-
the time required to detect and respond to security incidents
based storage, and transmission of our proprietary information
while continuously improving our security intelligence and
and that of our customers. Effectively managing cybersecurity analytics platform across hybrid environments
and protecting the sensitive data that Cadence obtains from
its customers, vendors, partners, and employees is vital to our f Expanding our Zero-Trust security model to include data
business continuity. With offices throughout the world, including protection chambers
key research and development locations outside of the United
f Receiving external validation of our commitment to providing
States, our business continuity is also dependent upon the
secure cloud-based products by achieving SOC 2 Type 1
connectivity of our global operations and is subject to a number attestation
of risks outlined in our current Annual Report on Form 10-K filed
with the Securities and Exchange Commission.
We proactively manage cybersecurity and data privacy risks by

leveraging:
f Industry security frameworks and best practices
f Advanced security analytics consisting of artificial

intelligence and machine learning
f Continuous security assessments and vulnerability

management
f Learnings from past or currently known cyber threats
Structure and Compliance

Our data privacy and cybersecurity program is guided by frameworks Our cybersecurity risk management program includes: Cadence’s Privacy Policy explains how and when we collect personal data
promulgated by the EU, National Institute of Standards and Technology and the types of information the policy covers. The policy also outlines our
f A security incident response plan that includes procedures for
(NIST), Cloud Security Alliance (CSA), and International Organization data disclosure policy, opt-out procedures, location and retention policies,
responding to cybersecurity incidents;
for Standardization/International Electrotechnical Commission (ISO/ user rights, and contact information for reporting questions or concerns.
IEC). We maintain formal certification of our compliance with ISO/IEC f Risk assessment processes designed to help identify cybersecurity
27001:2013 and ISO/IEC 27017:2015. Our program includes security risks to our critical systems, information, products, services, and our To ensure all Cadence employees are aware of our policies and procedures
controls to detect and mitigate risks that could compromise data that broader enterprise IT environment; on data privacy and cybersecurity, an annual training for data privacy
Cadence obtains from its customers, partners, and employees. We have and cybersecurity is mandatory. The training covers topics such as data
f Our Information Security team, principally responsible for identifying protection, classification and privacy, cybersecurity, phishing, and other
procedures in place for compliance with the General Data Protection
and mitigating cybersecurity risks, and managing our security pertinent topics.
Regulation and the California Consumer Privacy Act.
controls and our response to cybersecurity incidents;
Our cybersecurity risk management program is integrated into our We have not identified risks from known cybersecurity threats, including
f The use of external service providers, where appropriate, to assess,
overall risk oversight strategy and utilizes common reporting channels as a result of any prior cybersecurity incidents, that have materially
test, or otherwise assist with certain aspects of our security controls
and governance processes that apply across other risk areas. Our and under certain circumstances; affected or are reasonably likely to materially affect us including our
chief information security officer administers our data privacy and business strategy, results of operations, or financial condition. Any data
cybersecurity program, with the assistance of our Information Security f A cybersecurity insurance policy to cover certain losses from a data breaches, law enforcement requests for user information, or other issues
team and with oversight from the Audit Committee of the Board of breach; and associated with data security and user privacy would be disclosed in our
Directors (Audit Committee). We provide regular updates to our Board filings with the U.S. Securities and Exchange Commission (SEC) if such
f A third-party risk management process, including risk assessment
of Directors on our cybersecurity risk profile and on the performance disclosure is required pursuant to SEC regulations.
and risk rating, for service providers, suppliers, and vendors.
of our data privacy and cybersecurity program. Our Board of Directors
is responsible for overseeing our enterprise risk management activities
in general, and our Board committees assist with certain aspects of
risk oversight. With respect to cybersecurity risk, our Board of Directors
shares certain of the oversight responsibilities and processes with the
Audit Committee. The Audit Committee oversees our annual enterprise
business risk assessment, which includes the review of cybersecurity
risks we face and our associated risk mitigation measures, and receives
semi-annual reports from management on cybersecurity matters,
including areas such as threat intelligence, major cybersecurity
risk areas, regulations, and cybersecurity incidents. In addition,
management updates the Audit Committee, as necessary, regarding
any material cybersecurity incidents, as well as any incidents with lesser
impact potential.
About 2023 Highlights Progress on ESG Innovation Workforce Governance
Governance Social Impact Index
Responsible
Supply Chain
We partner with Supply Chain Description

suppliers that share Our supply chain comprises professional services, goods, and contract manufacturing of our hardware
products. For contract manufacturing, we work with a limited number of trusted partners with whom we
our values and aim maintain close, long-term relationships. These partners manage the relationships with second-tier suppliers
to build long-lasting, for parts and raw materials.
mutually beneficial
Partnering with Suppliers Who Support Our Values
relationships—creating
We expect our suppliers to conduct themselves with the same High-Performance Culture values
value for society of integrity, innovation, agility, and quality that we hold ourselves to. The process approach
and principle of continual improvement govern the sustainability of our supply chain.
beyond our respective
organizations. Through partnering with suppliers, more than one- Supplier Code of Conduct
half of our 2023 upstream Scope 3 emissions are In 2020, we launched our Supplier Code of Conduct (SCOC)
now calculated using suppliers’ reported emissions, with the aim of extending our ESG-aligned governance
standards discussed in this report to our supplier partners. In
up from one-third in 2022. 2023 we updated our SCOC to align with RBA Code of Conduct
7.0 and initiated compliance of our top suppliers to the updated
SCOC. Suppliers that do not meet our SCOC will be managed
through an action plan to reach compliance.
100%
of our new suppliers have been notified
of our Supplier Code of Conduct
59% 56% Targeted Engagement

Building on our supplier engagement survey, we map ESG-related risks
and opportunities in our supply chain. We target high-impact areas for
of our spend is with of our spend is direct engagement with key suppliers around issues relating to climate
suppliers that have set with suppliers that change, ethics, and integrity including human rights.
or have committed to set respond to CDP
In 2023, we expanded our climate-related supply chain engagement
science-based targets to activities with key suppliers, prioritizing engagement based on carbon
reduce GHG emissions intensity and spend volume with a supplier. To measure alignment with
our decarbonization strategy, we track which suppliers have set or
committed to set carbon reduction targets and respond to CDP.
Decarbonizing the Supply Chain Climate-Related Supply Chain Contract Manufacturing Partners
In conjunction with our SBTi target validation, we performed a Engagement We are actively engaged with all of our contract manufacturing partners
complete assessment of value chain emissions for all 15 Scope 3 on climate and have engaged in discussions with other suppliers in the
categories, and refreshed historical scope 3 emissions, including the Through our engagement activities with suppliers, we have seen manufacturing supply chain on GHG accounting, including exploring
2019 baseline, to incorporate improvements in emission factors and improved accuracy of supply chain emissions calculations. Overall, collaborations on product-specific GHG emissions calculations.
calculation methodologies. In 2023, upstream, value chain activities roughly one-half of our 2023 upstream Scope 3 emissions are calculated
in our supply chain accounted for 40% of total Scope 1, 2, and using supplier’s reported emissions, up from one-third in 2022. By using
3 emissions. actual data, we are able to reflect the work our valued suppliers are doing Active
to reduce their own carbon footprints in our Scope 3 calculations. For the engagement on
other half, we estimate emissions based on spend and industry average climate
Value Chain Emissions
100%
emissions factors from US EPA Environmentally-Extended Input-Output
Models (EEIO).
Breakdown of contract
We worked with several of our product and service providers to obtain
verifiable product and service specific emissions. This work continues in manufacturing
Overall business growth and increased demand for our hardware
2024. For suppliers who do not yet disclose GHG emissions, we provide partners
product line are drivers for supply-chain spend. Our climate-related
supply-chain engagement focuses on suppliers of goods and suggestions on why and how to get started with carbon accounting.
services, including capital goods, because the majority of supply chain
emissions stem from these categories. We will continue to engage with
key suppliers to align on emissions reduction strategies and encourage Waste generated in operations
Business travel
them on their Net-Zero journeys.
5% <1%
Upstream leased assets T&D losses (electricity)

1% 4% <1%
Operational
Emissions Employee commuting
(Scope 1 and 2 10%
market-based) 40%
2023 Supply Chain Upstream transportation UPSTREAM
VALUE CHAIN Upstream and distribution SCOPE 3
CATEGORIES 1-8 Purchased goods and services
59% EMISSIONS Emissions
1% 65%
Value Chain (Scope 3) 131,337 Metric
328,184 Metric
Downstream Tons CO2e
Capital goods Tons CO2e
Emissions 13%
(Scope 3)
Climate Risk Assessment

We extended our climate-related risk assessment to include
key suppliers to more closely track their GHG data and
Of 2023 global spend was
decarbonization plans. This is vital as a lack of adequate reduction
plans by key suppliers could result in long-term transition risks 8% with diverse suppliers
(certified by an independent third party)
to Cadence.
Supplier Diversity Of active diverse suppliers:
We engage with and empower diverse value chain partners. In line

with our commitment to diversity and inclusion, we are developing
programs to grow our share of diverse suppliers including
taking steps to design programs to help current suppliers 95% 22% 18% 18% 10% 5%
achieve certification.
Small Business Small Disadvantaged Minority-Owned Woman-Owned Women-Owned Veteran-Owned

Business Business Business Small Business Business
*All figures around rounded to the nearest decimal
Human Rights
Committed to responsible sourcing of materials and avoiding the use Detailed information on our programs can be found in:
of conflict minerals that may finance or benefit armed groups that Human Rights Policy
engage in human rights abuses, we survey our suppliers on conflict
minerals compliance annually. Cadence supports industry efforts to Form SD – Specialized Disclosure Report on Conflict Minerals
enable conflict-free mineral sourcing, and we expect the same from Conflict Minerals Policy Statement
our suppliers.
UK Modern Slavery Act Statement
Cadence is committed to upholding the human rights of workers and to

treating them with dignity and respect as understood by the international
98 %
community. This applies to all workers including temporary, migrant,
student, contract, direct employees, and any other type of worker in our
supply chain. Our Supplier Code of Conduct outlines our expectations for
of suppliers responded suppliers on freely chosen employment, young workers, working hours,
to our 2023 conflict wages and benefits, humane treatment, and non-discrimination. We
minerals survey recognize the importance of workplace safety. In addition to minimizing
the incidence of work-related injury and illness, a safe and healthy work
environment enhances the quality of products and services, consistency
of production, and worker retention and morale.
The 2015 UK Modern Slavery Act informs our management of forced
labor, slavery, and human trafficking. To reduce the possibility of any
form of these issues occurring in our supply chain, we require supplier
partners to be bound by obligations to comply with all applicable laws.
Contents A Message from Environmental Cybersecurityand
Cybersecurity and Responsible
our CEO Sustainability DataPrivacy
Data Privacy Supply Chain
Social Impact
2023 Social Impact Highlights

The Cadence Giving Foundation
Cadence understands that the success of our business depends upon The Cadence Giving Foundation focuses on three key pillars—the
the success of our employees and the communities in which we live and environment and sustainability, DEI in science, technology, engineering,
work. To expand the impact, commitments, and legacy of our company and math (STEM) access, and impact in the communities where we live
giving initiatives, in 2021, we formed the Cadence Giving Foundation. and work.
The Cadence Giving Foundation promotes the power of technology
to support critical needs in our global communities like diversity and It is important that we create meaningful opportunities for employees to
inclusion, environmental sustainability, and STEM education. In 2023, connect and contribute to their community. We provide 40 hours of paid
the Cadence Giving Foundation supported $5M in philanthropic gifts, volunteer time off annually, charitable contribution matching, company-
14,000 hours of employee volunteering and $898,462 in matching gifts. wide volunteer campaigns, and international service immersion projects.
Additionally, this year we launched our Dollars for Doers and Impact
The Giving Foundation is managed by the director of social impact, Grants to allow employees to access Cadence Giving Foundation funds for
who is supported by a team of leaders from across the organization. the causes they are passionate about.
By leveraging their knowledge of the environment, STEM education,
Cadence technology, and our partnerships, the Giving Foundation team
brings a wealth of diverse experiences to its decisions to best benefit Pledge 1% Alliance
our communities.
In 2023, we have continued our commitment to the Pledge 1% alliance,
a global movement to inspire, educate, and empower companies to
effectively leverage their financial assets, employee time, and individual
technology for positive social impact. We are proud to be in partnership
with other leading companies that are committed to driving change
and equity.
It has been thrilling to see the impact the
Cadence Giving Foundation has made over
just the past year. Seeing the strategic
partnerships develop in our communities to
drive solutions to issues of climate change
and DEI in STEM careers has been an exciting
development for Cadence and our employees.
Tina Jones
Senior Vice President, Global Human Resources, Cadence
How Cadence’s $50 Million Investment to Support Racial Equity is Making an Impact
Last year, Cadence made a $50 million purpose-driven investment in an impact investment program managed
by RBC Global Asset Management (RBC GAM) to address racial wealth inequities in affordable housing, home
ownership, and small businesses. Additionally, a portion of Cadence’s investment will be focused internationally
10% It has been exciting to see how
on projects aimed at supporting women, people of color, and climate justice initiatives.
our investment with RBC has
$5M for Small Business financing growth and job creation in underserved communities in the U.S. A portion 11% been so quickly put into real
of the businesses invested in are Black, Indigenous, and People of Color (BIPOC), female, or veteran owned.
action in our communities. We
44%
$6M to Global Development supporting: small businesses in Honduras; hospital construction in Turkey; small
businesses in Nigeria that are women-led, women-supporting, or women-employing; mobile/broadband
network expansion in four African nations; solar power generation facility in Zambia.
$50M are also inspired by the other
companies that have joined
our impact investing with RBC
$17M to Affordable Homeownership for low-to-moderate income families in underserved communities in
the U.S. 35% to create real change for those
that need it most.
$22M for Multi-family Affordable Housing to provide safe and affordable rental housing for low-income
families in the U.S. John Wall
Chief Financial Officer, Cadence
HOUSING—Pines of Edgewater, Phase I, Chicago, IL SMALL BUSINESS—Printing Shop, Charlotte, NC CLIMATE JUSTICE INITIATIVE—U.S. international Development
Finance Corporation, Zambia
f Multi-family housing community offering 279 units f Printing shop specializing in premium apparel by using
direct-to-garment (DTG) printing f Financed through the US International Development
f 100% are reserved for those who earn 50% or less of area Finance Corporation (DFC), the Bangweulu Power Company
median income (AMI) f Through their print jobs, they help businesses market their in Zambia will develop, construct and operate a solar
company, mobilize fans, and build culture through the use photovoltaic power project with a generating capacity of
f 65% of renters are BIPOC and 70% are women head of of uniforms
household approximately 55 MW (DC) that will sell electricity to ZESCO,
f Located in a low-income neighborhood where 91% of the the government-owned power utility
f The average income of tenants is $13,312 per year population is BIPOC
f Project will support Zambia’s growing economy and is
expected to create employment throughout its
construction and operation phases
Season of Giving
In 2023, Cadence was excited to expand our
Season of Giving company-wide volunteer
campaign. More than 1,900 employees in 37
Cadence locations came together to volunteer
5,700 hours to causes they were passionate
about. Our sites partnered with over 60 charitable
organizations around the world to participate in
philanthropic activities ranging from packing and
distributing food, improving community facilities,
and sustaining natural habitats. Together,
Cadence employees donated over $275,000 to
their charitable partners.
Immersive Service Volunteering

Team4Tech
For a fifth year, we have partnered with Team4Tech to give our time, talent, and resources to support quality STEM education for global youth, helping develop critical
skills that can enable their career and give them opportunities for a brighter future.
Cadence and Team4Tech Women in Technology Uganda (WITU)

We are pleased to have built upon our collaboration with Women in Technology Uganda
Barefoot College International, India (WITU) this year by bringing together a global group of ten Cadence employees from ten
different offices in four countries for another impactful Team4Tech project, which aimed
Visiting the BCI campuses and Digital Community Schools in the states of Rajasthan
to empower young Ugandan women through technology and entrepreneurship.
and Himachal Pradesh, India, Cadence volunteers supported teachers as they worked
through their goals of integrating technology into the curriculum and improving the This year’s Cadence volunteers collaborated virtually for ten weeks, and then spent
EduBox solution. The EduBox is the BCI in-house assembled Solar Powered Projector. an intensive two weeks on-site at WITU’s office and at a local high school in Kampala,
This is an easy-to-use one-switch solution to transform a community space into Uganda. The project was divided into three sub-teams, each focusing on a specific area.
a digital classroom. Volunteers also supported the integration of virtual reality and The first sub team developed a new website, the WITU Digital Jobs Center, to connect
interactive content into BCI’s Digital Community School curriculum and identified more WITU women with employment opportunities. The second sub-team planned and
efficient ways to create videos and other content using tools that leverage artificial organized a hackathon event at a local high school to get students excited about coding
intelligence. The contributions of the volunteers provided a foundation for BCI to and STEM and has prepared a myriad of materials to help WITU repeat this with other
produce more educational content in a shorter amount of time, enhance learning, and schools and to participate in even bigger global challenges. The third sub-team focused
expand its curriculum. With the integration of new methods and tools, this project has on building out a Makerspace for WITU with hands-on tech learning opportunities
the potential to transform education for learners in rural areas throughout India. including 3D printers, virtual reality, and Micro:Bit electronics.
This experience with Cadence and BCI has reaffirmed my belief in the potential
of technology to revolutionize education and create opportunities for learners
around the world. It has ignited a passion within me to continue exploring
innovative ways to merge technology and education, making a lasting impact
on the lives of individuals and communities.
Renan Moreira
Software Engineer I, Cadence
LinkedIn Post
Concern India Foundation

In India, Cadence has implemented several programs that serve
local children with the greatest needs, including the differently
abled and those without families. In partnership with the Concern
India Foundation, Cadence connects thousands of children to
essential resources that support their health and education,
including enhanced educational support for underprivileged
children, special education for children with disabilities, athletics
programs, technical skills training, healthcare, counseling, and
other essentials like food and clothing. For 8 years, Cadence
has supported scholarships for high school graduates from low
socio-economic backgrounds to encourage them to continue
their education and improve their livelihoods. More than 514
scholars have been supported, and 92 were newly enrolled in
2023. Of those, 58 successfully found employment in 2023.
These students receive regular mentorship from Cadence
employees who motivate them to achieve their career goals.
Supporting Diversity, Equity, Cadence and Peninsula Healthcare

and Inclusion Peninsula Healthcare Connection (PHC) Clinic, has been providing
comprehensive healthcare services for people living unhoused and low-
Cadence made contributions to a number of nonprofits with Our Cadence Women’s Group donated and volunteered with income households in Santa Clara County and southern San Mateo County for
programs that create opportunities for underrepresented groups, Habitat for Humanity, building playhouses for families and family over 17 years, serving up to 500 patients annually. Supported by funding from
including students of color, low-income students, first-generation shelters in Silicon Valley. Cadence, the American Heart Association has collaborated with PHC Clinic
college students, women and girls, veterans, and LGBTQ+ to adopt and implement a Self-Measured Blood Pressure (SMBP) Program
individuals to pursue careers in technology. The efforts of our For the third year in a row, Cadence sponsored Silicon Valley Pride and a Validated Device Procurement Policy to better diagnose and treat their
nonprofit partners will help build a more diverse pipeline in tech. on behalf of the LGBTQ+ Inclusion Group. Our contribution helped patients with hypertension.
support their annual LGBTQ+ Parade and Festival.
The SMBP Program will help to improve the diagnosis and treatment of
Cadence Inclusion Group Donations We also made a special donation to the Matthew Shepard hypertension among Peninsula Healthcare Connection Clinic’s patients
Foundation in honor of National Coming Out Day. The Matthew through its ongoing outreach to community members via its resource center,
This year, our Inclusion Groups also nominated organizations that Shepard Foundation was established after Judy and Dennis pop-up events, and backpack medicine visits. Many of these encounters—up
directly impact their communities as donation recipients. Shepard lost their son, Matthew, to an anti-gay hate crime. to 40 per week—lead to people becoming patients at Peninsula Healthcare
The Foundation is dedicated to working toward social justice, Connection, where all adult clinic patients are screened for hypertension and,
Cadencia, our Latinx Inclusion Group, chose the Cesar Chavez diversity awareness and education, and equality for gay, lesbian, if so, are referred to participate in the SMBP Program.
Foundation, which enriches the lives of low-income families, helps bisexual, and transgender people. Through their appearances
to meet human and cultural needs, and develops future leaders across the country, and around the world, Judy and Dennis Once clinical staff identifies hypertensive patients, they provide a validated
though elementary-age STEM programs. Additionally, we sponsored Shepard are changing hearts and minds by sharing Matt’s story blood pressure monitor during the evaluation period and utilize the AMWELL
the Hispanic Foundation Ball through the Hispanic Foundation of and highlighting the importance of standing up for the LGBTQ+ telehealth platform to provide continuation of care for patients with
Silicon Valley. community and anti-hate action. transportation issues. Patients record and provide the home blood pressure
readings to clinic staff who enter the data into the EMR for follow-up. The
Our Black Inclusion Group supported two important non-profit Through Cadence’s Global Gift Matching program, additional SMBP machines are also made available to individuals who need to check out
partners: United Negro College Fund and Black Women for contributions made by individual employees were matched by and return the BP cuffs as needed; the cuffs are offered in the community
Wellness. Both non-profits help to drive change and impact in the Cadence at 100%. resource area for use on-site as well.
Black community.
In honor of AAPI Heritage Month, our AAPI Inclusion Group donated American Heart Association
to the organizations Stop AAPI Hate, Asian Law Alliance, and APA
Family Support Services. In 2023, Cadence was proud to be a sponsor of the American
Heart Association, the world’s leading non-profit organization
Our Veterans Inclusion Group made donations to the Pat Tillman focused on heart and brain health, to support driving equitable
Foundation and Wings of Hope, organizations that are dedicated to health for all and help at-risk, under-resourced individuals
giving back to the Veteran community through scholarship funding receive education for blood pressure management. Cadence
and medical equipment transportation. President and CEO Anirudh Devgan was chair of the 2023 Heart
Ball, which raised $1.1M to provide access to high-quality health
care for under-resourced members of the community, especially
regarding blood pressure and heart disease.
Brady Campaign Girls Who Code

Cadence has partnered for the second time this year with the Brady For the sixth year in a row, we partnered with Girls Who Code to provide
Campaign to support efforts to reduce all forms of gun violence for an entirely virtual Summer Immersion program. Cadence hosted 51
all communities, especially Black and Brown communities which students in a virtual classroom, conducting workshops where they
are disproportionately affected. Cadence was a sponsor at their San learned comprehensive coding skills such as HTML, CSS, and JavaScript.
Francisco fundraiser in October 2023. Additionally, we provided mentorship opportunities for our employees,
and Cadence employees from across the globe had the chance to speak
with the girls and share their experiences as women in technology.
Investing in Sustainable
Innovation
Catalyst Funding and Technology
Partner for Clinton Health Access CHAI’s origin lies in addressing market failures that kept people living with
HIV from accessing the treatment they needed. We look forward to working
Initiative with Cadence to use this proven approach to bring more affordable, less
We are proud to have announced a multi-year partnership with polluting ACs to emerging markets to reduce one of the largest drivers
Clinton Health Access Initiative (CHAI) to address the impacts of CO2 emissions, save billions in energy costs, and protect millions of
of climate change through the research and design of next- families from the negative health effects of extreme heat.
generation air conditioning units with the goal of reshaping the
global air conditioning market. The partnership supports the Dr. Neil Buddy Shah
proliferation of affordable, clean cooling technology in low- and CHAI CEO
middle-income countries facing the highest burden of heat-
related threats due to climate change.
The global demand for residential air conditioning, like window

units, is expected to skyrocket as the world continues to
warm due to climate change. Of the 2.8 billion people living
in the hottest parts of the world, only 8% currently possess
air conditioners. However, access to cooling is becoming a
matter of life and death in many regions, where more and
more people are subject to acute heat stress. The number of
air conditioners in the hottest parts of the world is expected to The Cadence Giving Foundation is dedicated to providing Cadence’s
reach 5.6 billion by 2050, up from two billion units. innovative technology, talent, and resources to promote positive
change in climate and sustainability globally. Through this collaboration
The Cadence Giving Foundation will act as a catalyst investor
with the Clinton Health Access Initiative, we will be jointly working to
for this initiative, and Cadence will also provide access to the
Cadence Fidelity CFD technology, a powerful fluid simulation
find solutions to alleviate the global climate crisis and make a positive
tool used to aid in the continued research and development of impact. By turning to cutting-edge technologies, such as the Cadence
climate solutions. CFD offerings, we can drive a powerful transformation in at-risk
communities and help lower carbon emissions.
Dr. Anirudh Devgan
President and CEO, Cadence
Extreme Tech Challenge

Cadence was proud to sponsor the Extreme Tech
Challenge on their Deep Tech Climate Challenge
at CES this year. Cadence supported the efforts of
innovative climate technology start-ups through
sponsorship and employee expertise on panels and
as judges. Participants of the challenge are working
to address the critical issue of climate change
through new technologies and applications and are
key innovators in addressing the climate challenge.
This year’s winner, EarthEn, is using carbon dioxide-
based technology to provide flexible energy storage
for 24/7 power, increasing grid resiliency and
enabling a fully renewable grid.
GRI Index
GRI Content Index

Statement of use Cadence Design Systems has reported in accordance with the GRI Standards for the period January 1, 2023 and December 31, 2023
GRI 1 used GRI 1: Foundation 2021
Applicable GRI N/A

Sector Standard(s)
GRI Standard/Other Source Disclosure Title Disclosure Location or Omission
GRI 2: General Disclosures 2021 Disclosure Title

Section 1: Organization & Reporting 2-1 Organizational details Legal name: Cadence Design Systems, Inc. 2023 ESG Report - Cover, p. 1, About Cadence, p. 6
Practice
Traded on NASDAQ: CDNS Cadence 2023 Form 10-K - Exhibit 21.01: Cadence Design Systems, Inc.
Subsidiaries of the Registrant
Headquarters: 2655 Seely Avenue, San Jose, California, 95134
Countries of operation: Belgium, Brazil, Canada, Cayman Islands, China, Cypress, Finland,
France, Germany, Hong Kong, Hungary, India, Ireland, Israel, Italy, Japan, Malaysia, The
Netherlands, Russia*, Singapore, South Korea, Sweden, Switzerland, Taiwan, United
Kingdom, United States, Vietnam
*Russian operations ceased during 2022

2-2 Entities included in the organization’s Cadence Design Systems, Inc. and subsidiaries as per consolidated financial statements. The 2023 ESG Report - About Cadence, p. 6
sustainability reporting consolidated financial statements include the accounts of Cadence and its subsidiaries after
elimination of intercompany accounts and transactions. All consolidated subsidiaries are Cadence 2023 Form 10-K - Note 2. Summary of Significant Accounting
wholly owned by Cadence. Policies
2-3 Reporting period, frequency and Reporting period: 2023 Fiscal Year, January 1, 2023 - December 31, 2023 2023 GRI Index Only
contact point
Reporting cycle: Annual
Publication date: March 2024
Contact point for questions: csr-esg@cadence.com

2-4 Restatements of information 2019 GHG data for Scope 3 Categories 1, 2, 5, 6, 8, 11, 12, and 15 have been updated from 2023 ESG Report - Committed to Net-Zero by 2040, p. 30
previously published data due to changes in methodology supporting SBTi validation
requirements. Updated figures have been 3rd party verified to the ISO 14064-3 Standard.
2-5 External assurance Annual process to assure Scope 1, 2, and 3 GHG emissions by an independent third party to a 2023 ESG Report - EMS, p. 29
limited assurance standard.

Section 2: Activities & Workers 2-6 Activities, value chain and other Cadence is a leading provider of electronic system design software and intellectual property 2023 ESG Report - Transforming the Way People Design Next-Generation
business relationships (“IP”), building upon more than 35 years of computational software expertise. Our Intelligent Systems, p. 6, Innovation, p. 11-26, Supply Chain Description, p. 64
System Design™ strategy allows us to deliver essential computational software, hardware, and
IP that our customers use to turn their design concepts into reality. Cadence 2023 Form 10-K - Item 1. Business
We group our products into categories related to major design activities, and all of our product
categories have generative AI solutions that augment the core product offering:
f Custom IC Design and Simulation;
f Digital IC Design and Signoff;
f Functional Verification;
f IP; and
f System Design and Analysis
Our supply chain is composed of a mix of professional services, goods, and contract
manufacturing of our hardware products. For contract manufacturing we work with a limited
number of trusted partners with which we maintain close, long-term relationships. These
partners manage the relationships with second-tier suppliers for parts and raw materials.
2-7 Employees 99% Percentage Full Time (Global) 2023 ESG Report - Our Team, p. 41
1% Percentage Part Time (Global)
11,262 Full Time (Global)
72 Part Time (Global)
49% Headcount growth over the last five years
2-8 Workers who are not employees 27 Contingent workers (Agency temps and Interns) GRI Index Only

Section 3: Governance 2-9 Governance structure and composition The four current committees of the Board are the Audit Committee, Compensation Committee, 2023 ESG Report - Board Governance, p. 55
Corporate Governance and Nominating Committee, and Finance Committee. Learn more about
our Corporate Governance policies, our Board of Directors and our Board composition on our Cadence Corporate Governance
Corporate Governance website.
2-10 Nomination and selection of the highest The Board’s Corporate Governance Guidelines reflect Cadence’s commitment to having 2023 ESG Report - Commitment to Diversity on the Board, p. 56, Director
governance body leaders on the Board with diverse backgrounds. In addition, the Corporate Governance and Nominee Qualifications, Skills, and Experience, p. 57
Nominating Committee—as required in its charter—regularly discusses and annually reviews
the appropriate skills and characteristics required of directors such as integrity, experience, Cadence Corporate Governance
judgment, diversity of background (including, among other factors, race, ethnicity and
gender), independence, ability to commit sufficient time and attention to Board activities, and Annual Proxy Statement
understanding of Cadence’s products, technologies and strategy.
2-11 Chair of the highest governance body The Board is led by an Executive Chair and a Lead Independent Director. Our Board’s Corporate 2023 ESG Report - Board Governance, p. 55
Governance Guidelines cover various topics relating to the Board and its responsibilities. The
Corporate Governance Guidelines reflect the Board’s commitment to monitor its effectiveness Cadence Corporate Governance
and decision-making at the Board and management level and outline the authority and
practices in place to review and evaluate Cadence’s business operations as needed and make
decisions that are independent of Cadence’s management.
2-12 Role of the highest governance body in Our Board, through its Corporate Governance and Nominating Committee, oversees our 2023 ESG Report - Board Oversight of the Corporate Social Responsibility
overseeing the management of impacts corporate social responsibility program and the progress of our environmental (including Program, p. 58
climate-related risks and opportunities), social (including health, wellness, and safety), and
governance efforts, matters, and initiatives, and the CGN Committee reports to the Board on 2023 TCFD Index
these programs. Our Board oversees risks related to the Company’s corporate governance
including climate-related issues.
Further, the Committee regularly reviews the plans and progress of our environmental
program, including climate-related risks and opportunities, and is informed on Cadence’s
carbon footprint breakdown and the strategy to achieve greenhouse gas emissions reduction
targets by 2030, and 2040. The Committee also approved our net-zero and 2030 carbon
reduction targets.

Section 3: Governance 2-13 Delegation of responsibility for With the endorsement of our executive management and Board of Directors, our senior group 2023 ESG Report - Materiality Assessment, p. 7, Environmental
managing impacts director of Corporate Social Responsibility oversees our ESG programs—collaborating with Sustainability, p. 27-39, Board Oversight of the Corporate Social
internal and external stakeholders to produce results. Our cross-functional ESG team identifies Responsibility Program, p. 58
and manages climate-related risks and opportunities related to our operations, data centers,
suppliers, and customers. Advancing the positive impact of our products and services is a key 2023 TCFD Index
component of our innovation process.
The Senior Group Director of Corporate Social Responsibility reports to the Board of Directors
Corporate Governance and Nominating Committee on ESG priorities at every regular meeting,
and on climate-related issues specifically, three times a year.
2-14 Role of the highest governance body in Our Board, through its Corporate Governance and Nominating Committee, oversees the 2023 ESG Report - Board Oversight of the Corporate Social Responsibility
sustainability reporting Company’s policies and practices regarding corporate social responsibility and sustainability Program, p. 58
programs, including climate-related, environmental, social and governance matters
and initiatives. 2023 TCFD Index
The Corporate Governance and Nominating Committee formally reviews our environmental,
social, and governance efforts and climate-related issues within the organization at every
regular meeting and regularly reports to the Board on such programs.
2-15 Conflicts of interest The Board has adopted the Related Party Transaction Policies and Procedures for the review, Related Party Transaction Policy
approval and ratification of Related Party Transactions.
2-16 Communication of critical concerns As provided in our Code of Business Conduct, our employees can report possible misconduct 2023 ESG Report - Reporting Concerns, p. 59
or raise their concerns to their supervisor, Human Resources partner, office of the General
Counsel, or anonymously via our whistleblower hotline. All concerns reported through our
whistleblower hotline are reviewed by our Board through the Chair of the Audit Committee.
2-17 Collective knowledge of the highest Details on the qualifications, skills and experience of the Board of Directors can be found in our 2023 ESG Report - Director Qualifications, Skills and Experience, p. 57
governance body 2023 ESG report.
We reported to our Board of Directors on our ESG efforts and initiatives, including review of
our decarbonization progress, diversity, equity, and inclusion (DEI) initiatives, and the Cadence
Foundation signature programs.

Section 3: Governance 2-18 Evaluation of the performance of the The Board is committed to reviewing its performance through an annual evaluation process. Annual Proxy Statement
highest governance body Through the evaluations, the Board assesses its processes, meetings, planning and overall
effectiveness. The directors provide feedback on the Board and its committees through
questionnaires and interviews with an independent third party. Any findings that require
additional consideration are addressed at subsequent Board and committee meetings,
as appropriate.
2-19 Remuneration policies An executive officers’ total direct compensation is based on Cadence’s performance and Compensation Committee Charter
on the performance of the individual executive officer, as well as the level of compensation
sufficient to attract, motivate and retain qualified executives. Cadence does not have a pre- Annual Proxy Statement
established policy or target for allocating compensation between fixed and variable pay
elements or for allocating among the different types of variable compensation, although the
allocation is influenced by the Compensation Committee’s assessment of the compensation
practices of the companies in our Peer Group and Cadence’s short-term and long-term
strategic objectives. The executive officers’ compensation is weighted towards at-risk, variable
incentive awards—short-term cash incentives and equity grants—rather than base salaries.
2-20 Process to determine remuneration The Compensation Committee of the Board of Directors, among other things, determines, Compensation Committee Charter
approves, and reports to the Board on all policies of compensation for the executive officers
and directors of Cadence, as per the Cadence Compensation Committee Charter. Annual Proxy Statement
2-21 Annual total compensation ratio 151:1 Ratio Annual Proxy Statement
Section 4: Strategy, policies and 2-22 Statement on sustainable For over 30 years Cadence has advanced the electronics revolution, enabling customers to 2023 ESG Report - A Message From Our CEO, p. 4
practices development strategy design products with a sustainable mindset, and transforming nearly every aspect of our
daily experiences. We enable design of end-to-end systems from devices to the cloud and are
uniquely positioned to make a significant impact as a leader in computational software and
hardware solutions for today’s challenges. Climate change is one of the greatest challenges of
our time and we are committed to our target to reach Net-Zero by 2040. Early on we aligned
our carbon reduction targets with the goal to limit global warming to the Paris Agreement’s
1.5ºC pathway and we are on track to halve greenhouse gas (GHG) emissions by 2030.
2-23 Policy commitments Many of our commitments to responsible business and respect for human rights, as Cadence Corporate Governance
well as oversight mechanisms can be found on the Cadence Design Systems Corporate
Governance page.
Policies include:
Our Code of Business Conduct
Supplier Code of Conduct
Equal Opportunity Policy
Human Rights Policy
UK Modern Slavery Act Statement
Conflict Minerals Policy Statement

Section 4: Strategy, policies 2-24 Embedding policy commitments Our Code of Business Conduct also reflects our values of integrity, innovation, agility, and Code of Business Conduct
and practices quality, and it applies worldwide to our Board, officers, employees, and certain contractors
and consultants.
2-25 Processes to remediate negative Our Worldwide Code of Business Conduct provides standards for ethical conduct in how we Code of Business Conduct
impacts work with each other at Cadence and with our customers, suppliers, government officials, and
other stakeholders.
2-26 Mechanisms for seeking advice and Our employees are required to promptly report possible misconduct, including illegal activities, 2023 ESG Report - Reporting Concerns, p. 59
raising concerns unethical business practices, violations of the Code of Business Conduct or our other policies,
and any other concerns about corporate governance, accounting, internal accounting
controls, or audit matters. As provided in our Code of Business Conduct, our employees can
report possible misconduct or raise their concerns to their supervisor, Human Resources
partner, office of the General Counsel, or anonymously via our whistleblower hotline. All
concerns reported through our whistleblower hotline are reviewed by our Board through the
Chair of the Audit Committee.
2-27 Compliance with laws and regulations Any legal action or material losses required to be disclosed pursuant to the regulations of Cadence 2023 Form 10-K - Item 3. Legal Proceedings
the U.S. Securities and Exchange Commission would be reflected in our filings with the U.S.
Securities and Exchange Commission.
2-28 Membership associations Cadence is an affiliate member of the Responsible Business Alliance (RBA), a member of 2023 ESG Report - Partnership p. 51, Supplier Code of Conduct p. 64,
Responsible Minerals Initiative (RMI), and maintains additional Industry Memberships detailed Human Rights p. 68, Social Impact - p. 70-78; Cadence Industry
on our website. Memberships
Cadence partners with the following Economic, Environmental and Social initiatives: American
Heart Association, Barefoot College International (BCI), Concern India Foundation, Brady
Campaign, Clinton Health Access Initiative (CHAI), Global Semiconductor Alliance’s Women’s
Leadership Initiative’s CEO Pledge, The Great Transformation (TGT), Team4Tech, Great Place
to Work Institute, National Society of Black Engineers, Pledge 1% Alliance, Society of Hispanic
Professional Engineers, Out in Tech, Society of Women Engineers, Extreme Tech Challenge,
Girls Who Code, LEAP Science and Math Schools, the National GEM Consortium, Women in
Technology Uganda (WITU).
Section 5: Stakeholder Engagement 2-29 Approach to stakeholder engagement Stakeholder input informs our priorities as we strive for continuous improvement towards a 2023 ESG Report - About the Report, p. 7, Targeted Engagment, p. 65
sustainable future. Key stakeholders include: employees, investors, customers, and industry
partners and associations. This feedback informs our sustainability and reporting strategy.
2-30 Collective bargaining agreements Employees are generally not covered by collective bargaining agreements, only as required by Omitted - Information unavailable/incomplete - Cadence does
certain local European Country laws (such as France). not track the percentage of total employees covered by collective
bargaining agreements.
GRI 3: Material Topics 2021
3-1 Process to determine material topics The content of this report is informed by feedback from key stakeholders: employees, 2023 ESG Report - About the Report, p. 7, Materiality Assessment, p. 7
investors, customers, and industry partners and associations. During 2023, we built on
stakeholder engagement and materiality review processes that were initiated in 2019.
Our senior group director of Corporate Social Responsibility chairs a cross-functional
team consisting of internal leaders in Human Resources, Facilities, Finance, Procurement,
Marketing, and Legal. Each of these leaders raises ESG priorities for implementation and
reporting based on stakeholder feedback.
To validate our priorities, we conduct gap analysis referencing SASB, TCFD, and GRI Standards,
CDP, ISS, RBA, and Nasdaq questionnaires. Further we continued to conduct benchmark
analysis considering industry peers.
3-2 List of material topics Innovation (GRI: Direct economic value generated and distributed) 2023 ESG Report - Materiality Assessment, p. 7
Environmental Impact (GRI: Energy, Emissions)
Workforce (GRI: Diversity and Equal Opportunity, Employee Engagement, Occupational Health
and Safety, Training and Education)
Cybersecurity and Data Privacy (GRI: Customer Privacy & Data Security)
Governance and Ethical Business Practices (GRI: Anti-corruption, Anti-Competitive Behavior)
Responsible Supply Chain (GRI: Supplier Environmental Assessment, Supplier Social

Assessment)
Economic Performance
GRI 3: Material Topics 2021 3-3 Management of Economic Performance The discussion of our fiscal 2023 consolidated results of operations include year-over-year Cadence 2023 Form 10-K - Item 1. Business and Item 7. MD&A
comparisons to fiscal 2022 for revenue, cost of revenue, operating expenses, operating
margin, other non-operating expenses, income taxes and cash flows.
GRI 201-1 Direct Economic Value Generated and 4,090 Revenue ($MM) Cadence 2023 Form 10-K - Cadence Design Systems, Inc. Consolidated
Distributed Income Statements
3,132 Direct economic value distributed (Operating costs including employee 2023 ESG Report - About Cadence, p. 6
wages and benefits + payments to providers of capital + payments to
government + community investments) ($MM)
958 Economic Value retained (Revenue - Direct economic value distributed)
($MM)
GRI 201-2 Financial implications and other risks and We have not identified any climate-related risks with the potential to have a substantive 2023 TCFD Index
opportunities due to climate change financial or strategic impact on Cadence. We have identified opportunities for development
and/or expansion of low emission goods and services and opportunities for our customers to 2023 CDP Climate Change Investor Response - C2.3b, C2.4a
develop new products or services through R&D and innovation that may increase revenues
resulting from increased demand for products and services.
Anti-Corruption
GRI 3: Material Topics 2021 3-3 Management of Anti-Corruption Our Code of Business Conduct and our Anti-Corruption Policy are the foundation of our robust Cadence Code of Business Conduct
corporate governance and compliance programs. Our Anti-Corruption program at Cadence
is extensive and all employees, including management, are required to complete annual 2023 ESG Report - Business Ethics: Anti-Corruption, p. 59
refresher training and certify that they have reviewed our Anti-Corruption Policy.
GRI 205-2 Communication and training about anti- Cadence enables and requires all employees to receive training regarding ethics and anti- 2023 ESG Report - Business Ethics: Anti-Corruption, p. 59
corruption policies and procedures corruption policies and procedures on an annual basis. These policies and practices are
reviewed annually and agreed upon by signature. We achieved a 100% completion rate for all
our employees globally on this training in 2023.
Anti-Competitive Behavior
GRI 3: Material Topics 2021 3-3 Management of Anti-Competitive Our Code of Business Conduct and our Anti-Corruption Policy are the foundation of our robust Cadence Code of Business Conduct
Behavior corporate governance and compliance programs.
2023 ESG Report - Ethical Conduct: Code of Business Conduct, p. 58,
Business Ethics: Anti-Corruption, p. 59
GRI 206-1 Legal actions for anti-competitive behavior, Any material losses or legal action regarding anti-competitive behavior or violation of anti- Cadence 2023 Form 10-K - Item 1A. Risk Factors
anti-trust, and monopoly activities trust and monopoly legislation required to be disclosed pursuant to the regulations of the U.S.
Securities and Exchange Commission would be reflected in our filings with the U.S. Securities
and Exchange Commission.
Energy
GRI 3: Material Topics 2021 3-3 Management of Energy Cadence’s Environmental Management System (EMS) is designed to set, manage, and achieve 2023 ESG Report - EMS, p. 29, Decarbonizing Operations and Data Centers,
our environmental sustainability goals. p. 32
GRI 302-1 Energy consumption within the organization 279,880 Gigajoules (GJ) 2023 GRI Index Only
97% Percentage Renewable Energy 2023 ESG Report - Decarbonizing Operations and Data Centers, p. 32
3% Percentage Non-renewable Energy 2023 GRI Index Only
GRI 302-3 Energy intensity 25 GJ per employee 2023 GRI Index Only
GRI 302-4 Reduction of energy consumption 5% % change from 2022 to 2023 2023 GRI Index Only
Emissions
GRI 3: Material Topics 2021 3-3 Management of Emissions Cadence’s Environmental Management System (EMS) is designed to set, manage, and achieve 2023 ESG Report - Decarbonizing Operations and Data Centers p. 32
our environmental sustainability goals. We are decarbonizing our business – aiming for Net-
Zero emissions by 2040 for scopes 1, 2, and 3.
305-1 Scope 1 Emissions 2,853 Metric Tons (MT) CO2e 2023 ESG Report - Committed to Net-Zero by 2040, p. 30, Decarbonizing
Operations and Data Centers, p. 32, Decarbonizing our Value Chain, p. 34
305-2 Scope 2 Emissions (market-based) 1,062 Metric Tons (MT) CO2e
305-2 Scope 2 Emissions (location-based) 25,510 Metric Tons (MT) CO2e
305-3 Scope 3 Emissions 324,269 Metric Tons (MT) CO2e
305-4 Emissions Intensity 1 MT CO2e / Million USD Revenue (Scope 1 + Scope 2 market-based)
0.3 MT CO2e per employee (Scope 1 + Scope 2 market-based)
305-5 Reduction of GHG Emissions -88% % reduction in (Scope 1 + Scope 2 market-based) GHG emissions in 2023
from the baseline year (2019)
-33% % reduction in (Scope 1 + Scope 2 market-based + Scope 3) GHG 2023 ESG Report - Committed to Net-Zero by 2040, p. 30, Decarbonizing
emissions in 2023 from the baseline year (2019) Operations and Data Centers, p. 32, Decarbonizing our Value Chain, p. 34
305-6 Emissions of ozone-depleting substances There are no such emissions in our operations. 2023 GRI Index Only
305-7 Nitrogen oxides (NOX), sulfur oxides (SOX), There are no such emissions in our operations. 2023 GRI Index Only
and other significant air emissions
Employment
GRI 3: Material Topics 2021 3-3 Management of Employment Our inclusive, One Team culture is at the center of the employee experience and allows us 2023 ESG Report - Our Strategy, p. 41
to attract and retain top talent in our industry. Our talent strategy is led by our Senior Vice
President of Global Human Resources with oversight from the CEO and involvement from all
employees. Our HR department provides reports to the Compensation Committee of the
Board of Directors at every regular meeting of the Compensation Committee.
401-1 a Total number of new employee hires 1,682 Total hiring 2023 GRI Index Only
Total rate of new employee hires 49% Headcount growth over last 5 years 2023 ESG Report - Our Team, p. 41
Total number new employee hires by gender 427 Female 2023 GRI Index Only
1,255 Male 2023 GRI Index Only
Rate of new employee hires by gender 25% Female 2023 ESG Report - Recruitment and Advancement, p. 50
75% Male 2023 GRI Index Only
Total number of new employee hires by 807 Early Career Talent 2023 GRI Index Only
career stage group
161 Intern Talent 2023 GRI Index Only
48% Rate, Early Career 2023 ESG Report - Hiring, p. 44
52% Rate, More Senior 2023 GRI Index Only
Total number of new employee hires by 239 Female, Early Career 2023 GRI Index Only
gender and career stage group
568 Male, Early Career 2023 GRI Index Only
63 Female, Intern 2023 GRI Index Only
98 Male, Intern 2023 GRI Index Only
31% Rate Female, Early Career and Intern 2023 ESG Report - Recruitment and Advancement, p. 50
69% Rate Male, Early Career and Intern 2023 GRI Index Only
401-1 b Average employee turnover 6.9 Years 2023 ESG Report - Our Team, p. 41
Occupational Health and Safety

GRI 3: Material Topics 2021 3-3 Management of Occupational Health and Cadence is committed to providing a safe and healthy work environment for our employees 2023 ESG Report - Safety, p. 46
Safety and non-Cadence personnel. We have a cross-functional Emergency Response Team trained
to quickly respond to emergency or crisis situations at Cadence.
403-9 Work related injuries 0.10 Injuries/100 workers 2023 ESG Report - Safety, p. 46
Training and Education

GRI 3: Material Topics 2021 3-3 Management of Training and Education As employees advance their careers at Cadence, the core expectations and capabilities 2023 ESG Report - Building Careers, p. 45
increase in scope and purpose. To help employees succeed in their career, we foster an
environment that supports their continued learning and growth–both on the job and through
formal training programs. In support of our company values, and the commitments we have
made to our stakeholders, each year all of our employees, including management, are required
to complete mandatory training on various critical topics, such as our Code of Business
Conduct, anti-corruption, inclusion, and harassment prevention, protection of confidential
information, data security, affirmative action, export compliance, and human rights. This year,
we added unconscious bias training so more employees and managers receive training on this
important topic to support a culture of inclusion.
404-1 Average hours of training per year 20 Hours, All Employees 2023 ESG Report - Building Careers, p. 45
12 Hours, Technical
8 Hours, Non-technical
Percentage of employees to access online 92% Percentage 2023 ESG Report - Building Careers, p. 45
learning management system
Percentage of employees who have 100% Percentage 2023 ESG Report - Building Careers, p. 45
completed unconscious bias training
Diversity and Equal Opportunity

GRI 3: Material Topics 2021 3-3 Management of Diversity and Equal We regularly monitor the diversity of our current workforce and candidate pool. We partner 2023 ESG Report - Recruitment and Advancement, p. 50, Equity, p. 51
Opportunity with national engineering organizations, and colleges with diverse student enrollment, to
conduct recruiting, outreach, and engagement with diverse communities.
405-1. a Diversity of governance bodies 30% Percentage Female Board Members 2023 ESG Report - Demographics, p. 53, Commitment to Diversity on the
Board, p. 56
Diversity of governance bodies 70% Percentage Male Board Members
Diversity of governance bodies 40% Percentage Asian Board Members
Diversity of governance bodies 60% Percentage White Board Members
Diversity of management 18% Percentage Female Managers or More Senior 2023 ESG Report - Demographics, p. 53
Diversity of management 82% Percentage Male Managers or More Senior
2023 GRI Index Only
405-1. b Diversity by employee categories 21% Percentage Female Technical Workforce 2023 ESG Report - Demographics, p. 53
Diversity by employee categories 79% Percentage Male Technical Workforce
Diversity by employee categories 45% Percentage Female Non-Technical Workforce
Diversity by employee categories 55% Percentage Male Non-Technical Workforce
Diversity and Equal Opportunity

405-2 Ratio of basic salary and remuneration of Parity We are proud to report that Cadence maintained global salary pay parity 2023 ESG Report - Equity, p. 51
women to men based on gender and U.S. salary pay parity based on race and ethnicity,
again in August 2023. This is the fifth year in a row we have achieved
pay parity.
Employee Engagement
ISS 306 Quantitative metrics for employee 94% Percentage of employees surveyed say that Cadence is a Great Place 2023 ESG Report - A Great Place to Work, p. 42
engagement including a percentage value to Work
Supply Chain
GRI 3: Material Topics 2021 3-3 Management of Supply Chain We continue to map ESG-related risks and opportunities in our supply chain to target 2023 ESG Report - Targeted Engagement, p. 65, Decarbonizing the Supply
high impact areas for direct engagement with suppliers. We plan to continue to expand Chain, p. 66
on our climate-related supply chain engagement activities with a focus on emission
intensive activities.
308-1 New suppliers that were screened using 100% Percentage 2023 GRI Index Only
environmental criteria
414-1 New suppliers that were screened using 100% Percentage 2023 GRI Index Only
social criteria
Customer Privacy
GRI 3: Material Topics 2021 3-3 Management of Customer Privacy Our data privacy and cybersecurity program is guided by frameworks promulgated by the 2023 ESG Report - Structure and Compliance, p. 62
EU, National Institute of Standards and Technology (NIST), Cloud Security Alliance (CSA), and
International Organization for Standardization/International Electrotechnical Commission
(ISO/IEC). We maintain formal certification of our compliance with ISO/IEC 27001 and ISO/
IEC 27017. Our program includes security controls to detect and mitigate risks that could
compromise data that Cadence obtains from its customers, partners, and employees. We
have procedures in place for compliance with the General Data Protection Regulation and
the California Consumer Privacy Act. We perform regular internal and external security
assessments to identify potential vulnerabilities, and, in the event of a data breach, we have
documented response procedures and trained staff to execute our emergency protocol.
418-1 Substantiated complaints concerning Any data breaches, law enforcement requests for user information, or other issues Cadence 2023 Form 10-K - Item 1C. Cybersecurity, Item 1A. Risk Factors
breaches of customer privacy and losses of associated with data security and user privacy resulting in material monetary losses to
customer data Cadence that would be required to be disclosed pursuant to the regulations of the U.S.
Securities and Exchange Commission would be reflected in our filings with the Securities and
Exchange Commission.
SASB Index
SASB Content Index

Company name: Cadence Design Systems, Inc.
Reporting Period: 2023
SASB Topic SASB Code SASB Accounting Metric Disclosure Details LOCATION
Environmental Footprint of TC-SI-130a.1. (1) Total energy consumed 279,880 Gigajoules (GJ) 2023 SASB Index Only
Hardware Infrastructure
TC-SI-130a.1. (2) Percentage grid electricity 99.0 % 2023 SASB Index Only
TC-SI-130a.1. (3) Percentage renewable 97 % 2023 ESG Report - Decarbonizing Operations and Data Centers, p. 32
TC-SI-130a.2. (1) Total water withdrawn 108 Megaliter (ML) 2023 ESG Report - Managing Water Resources, p. 39
TC-SI-130a.2. (2) % withdrawn in in regions with High or 41 % 2023 SASB Index Only
Extremely High Water Stress
TC-SI-130a.2. (3) Total water consumed 16 Megaliter (ML) 2023 SASB Index Only
TC-SI-130a.2. (4) % consumed in in regions with High or 33 % 2023 SASB Index Only
Extremely High Water Stress
TC-SI-130a.3. Discussion of the integration of environmental Our data center decarbonization strategy revolves around energy 2023 ESG Report - Decarbonizing Operations and Data Centers, p. 32
considerations into strategic planning for data efficient design features and the procurement of 100% renewable
center needs electricity - for our on-premise, co-located, and cloud-based data
centers. As we continue the process of shifting capacity to efficient
co-located and cloud-based data centers, we are prioritizing partners
that have their own goals to be powered by 100% renewable electricity.
Data Privacy & Freedom of TC-SI-220a.1. Description of policies and practices relating to Cadence’s Privacy Policy explains how and when we collect personal 2023 ESG Report - Structure and Compliance, p. 62
Expression behavioral advertising and user privacy data and the types of information the policy covers. The policy also
outlines our data disclosure policy, opt out procedures, location and Cadence Privacy Policy
retention policies, user rights, and contact information for reporting
questions or concerns.
TC-SI-220a.3. Total amount of monetary losses as a result of Any data breaches, law enforcement requests for user information, or 2023 ESG Report - Structure and Compliance, p. 62
legal proceedings associated with user privacy other issues associated with data security and user privacy resulting
in material monetary losses to Cadence that would be required to Cadence 2023 Form 10-K
be disclosed pursuant to the regulations of the U.S. Securities and
Exchange Commission would be reflected in our filings with the
TC-SI-220a.4 (1) Number of law enforcement requests for Any data breaches, law enforcement requests for user information, or 2023 ESG Report - Structure and Compliance, p. 62
user information (2) number of users whose other issues associated with data security and user privacy resulting
information was requested (3) Percentage in material monetary losses to Cadence that would be required to Cadence 2023 Form 10-K
resulting in disclosure be disclosed pursuant to the regulations of the U.S. Securities and
Data Security TC-SI-230a.1. (1) Number of data breaches Any data breaches, law enforcement requests for user information, or 2023 ESG Report - Structure and Compliance, p. 62
(2) percentage involving personally identifiable other issues associated with data security and user privacy resulting
information (PII) in material monetary losses to Cadence that would be required to Cadence 2023 Form 10-K
(3) number of users affected be disclosed pursuant to the regulations of the U.S. Securities and
TC-SI-230a.2. Description of approach to identifying and We structure our data privacy and cybersecurity program to align 2023 ESG Report - Structure and Compliance, p. 62
addressing data security risks, including use of with the EU, National Institute of Standards and Technology (NIST),
third-party cybersecurity standards Cloud Security Alliance (CSA) and ISO 27001 and ISO 27017 standards. Cadence Privacy Policy
We maintain formal certification of our compliance with ISO 27001
and ISO 27017. Our program includes security controls to detect and
mitigate risks that could compromise data that Cadence obtains from
its customers, partners, and employees. We have procedures in place
for compliance with the General Data Protection Regulation and the
California Consumer Privacy Act. We perform regular internal and
external security assessments to identify potential vulnerabilities,
and, in the event of a data breach, we have documented response
procedures and trained staff to execute our emergency protocol.
Recruiting & Managing a Global TC-SI-330a.1. Percentage of employees that are located 68 % 2023 SASB Index Only
Diverse & Skilled Workforce offshore
TC-SI-330a.2. Employee engagement as a percentage 94 % of our employees surveyed say they are proud to tell 2023 ESG Report - Our Culture, A Great Place to Work, p. 42
others they work at Cadence.
TC-SI-330a.3. Board of Directors by gender 30 % Female 2023 ESG Report - Commitment to Diversity on the Board, p. 56
Board of Directors by gender 70 % Male
Board of Directors by racial/ethnic group 40 % Asian
Board of Directors by racial/ethnic group 60 % White
Managers or more senior by gender 18 % Female 2023 ESG Report - Demographics, p. 53
Managers or more senior by gender 82 % Male
Technical staff by gender 21 % Female
Technical staff by gender 79 % Male
US-based Employees by racial/ethnic group 54 % Asian and Indian
US-based Employees by racial/ethnic group 1 % Black and African American
US-based Employees by racial/ethnic group 3 % Hispanic and Latinx
US-based Employees by racial/ethnic group 2 % Other
US-based Employees by racial/ethnic group 6 % Undisclosed
US-based Employees by racial/ethnic group 34 % White
Intellectual Property Protection and TC-SI-520a.1 Total amount of monetary losses as a result Any material losses or legal action regarding anti-competitive 2023 ESG Report - Business Ethics: Anti-Corruption, p. 59
Competitive Behavior of legal proceedings associated with anti- behavior or violation of anti-trust and monopoly legislation required
competitive behavior regulations to be disclosed pursuant to the regulations of the U.S. Securities and Cadence 2023 Form 10-K
Exchange Commission would be reflected in our filings with the U.S.
Managing Systemic Risks for TC-SI-550a2. Description of business continuity risks related Please see our 10-K item 1a for a description of business continuity 2023 ESG Report - Cybersecurity and Data Privacy, p. 60-62
Technology Disruptions to disruptions of operations risks related to disruptions of services.
Cadence 2023 Form 10-K
TCFD Index
TCFD Index
For over 30 years Cadence has advanced the electronics revolution, enabling customers to design products with a sustainable mindset, and transforming nearly every aspect of our daily experiences. Our Intelligent System
Design™ strategy allows us to deliver essential computational software, hardware and IP that our customers use to turn their design concepts into reality. Our software and services enable our customers to produce products
that meet their critical business goals including time-to-market, costs and productivity while responding to growing global environmental concerns including sustainability and carbon emissions—a strategy we believe provides
resilience in the face of climate change. We continue to invest in climate risk assessment, as well as climate change mitigation and adaptation across our operations and value chain. We believe we are well positioned to capture
climate-related opportunities and that our Intelligent System Design Strategy provides resilience. This Index contains summaries of the recommended TCFD disclosures and sources for more detailed information.
Recommendations Disclosure More Details
Governance
Describe the board’s oversight of climate-related risks and Through our Corporate Governance and Nominating (CGN) Committee, Cadence’s Board of Directors oversees the Company’s policies and 2023 ESG Report - Board Oversight
opportunities practices regarding corporate social responsibility and sustainability programs and the CGN Committee reports to the Board on these of the Corporate Social Responsibility
programs at least annually. The CGN Committee is regularly informed on Cadence’s carbon footprint breakdown, strategy to achieve Program, p. 58; 2023 CDP Climate C1.1,
greenhouse gas emissions reduction targets and progress. Climate-related issues are considered when reviewing and guiding company C1.1a, C1.2b
strategy and major plans of action. In 2023, the CGN Committee held three meetings, and in the quarter it did not meet, it received and
reviewed materials relating to ESG.
Describe management’s role in assessing and managing climate- Representatives of our Executive Management Team (EMT) that lead Strategy and Governance functions at Cadence have responsibility 2023 ESG Report - Materiality
related risks and opportunities for climate-related issues. Briefed regularly on our ESG programs by our Senior Group Director of Corporate Social Responsibility, these Assessment, p. 7; 2023 CDP Climate
executives review and accept new proposals and approve major actions. C1.1b, C1.2
Our Senior Group Director of Corporate Social Responsibility chairs a cross-functional team consisting of internal leaders in Human
Resources, Facilities, Finance, Procurement, Marketing, and Legal. These leaders identify and assess climate-related risks and opportunities,
as well as establish ESG priorities within their areas. Our Senior Group Director of Corporate Social Responsibility also briefs the CGN
Committee on ESG priorities at every regular meeting, and on climate-related issues specifically. In 2023, the Corporate Governance and
Nominating Committee held three meetings and in the quarter it did not meet, it received and reviewed materials relating to ESG.
Strategy
Describe the climate-related risks (and opportunities) the We have not identified any climate-related risks with the potential to have a substantive financial or strategic impact on Cadence. 2023 CDP Climate C2.1-C2.3b
organization has identified over the short, medium, and long term Assessments have been conducted to identify acute and chronic physical risks, as well as transitional climate-related risks for Cadence in
the short-term (0-3 years), medium-term (3-5 years), and long-term (5-10 years) timeframes that align with our business strategy. However,
our climate-related risk assessments extend beyond those timeframes, in some cases through 2050 and beyond. We continue to expand our
evaluation processes of climate-related risks.
Potential Risks Assessed
Risk Category Description

Estimated average annual loss of asset value due to wildfire, tropical cyclones,
Physical - Acute
coastal and fluvial flooding
Estimate average annual loss of asset value due to temperature extremes,

Physical - Chronic
drought, water stress
Transitional - Policy Impact of future carbon prices on company financials
Transitional - Market Changes in revenue mix and increased supplier costs on company financials
Challenges regarding talent attraction and retention, long-term customer

Transitional - Reputation relationships, license to operate, and access to capital, due to stakeholder
concern or negative feedback
Substitution of existing products and service with lower emissions options,

Transitional - Technology
and costs to transition to lower emission technologies
Costs associated with climate-related risks relating to current and emerging

Transitional - Regulatory
legislation
Strategy
We have identified opportunities for development and/or expansion of low emission goods and services and opportunities for our customers 2023 ESG Report - Innovation, p. 11-
to develop new products or services through R&D and innovation that may increase revenues resulting from increased demand for products 26, Decarbonizing Operations and Data
and services. Our evaluation processes of climate-related opportunities continues to expand with a focus on: Centers/Renewable Electricity, p. 32
f Decarbonizing compute 2023 CDP Climate C2.4, C2.4a

f Energy optimization through our low-power solution
Potential Opportunities Under Assessment
Opportunity Category Description
Estimated savings from more efficient buildings and reduced water usage and
Resource Efficiency
consumption
Energy Source Estimated savings from use of lower-emission sources of energy
Increased revenues from development and/or expansion of low emission goods

Product and Services and services and development of new products or services through R&D and
innovation
Increased market valuation through participation in renewable energy programs

Resilience
and adoption of energy efficiency measures
Describe the impact of climate-related risks and opportunities on Climate-related risks and opportunities have influenced our financial planning in terms of revenues, direct costs, and capital expenditures. 2023 CDP Climate C2.4a, C3.3, C3.4
the organization’s businesses, strategy, and financial planning Our customers, the world’s most innovative companies delivering extraordinary electronic products from chips to boards to systems, use
Cadence technology to design sustainable innovation that optimizes power, space, and energy needs of end products for the most dynamic
market applications, including automotive, artificial intelligence (“AI”), aerospace and defense, high-performance and mobile computing,
hyperscalers, wireless communication, industrial internet of things (“IIoT”) and life sciences.
Products from across all business groups are used to create products with an impact on the world’s carbon footprint. As global efforts to
achieve the Paris Agreement targets accelerate, decarbonization-related innovations are expected across sectors. This may have a positive
effect on our revenues resulting from increased demand for our products and services that our customers use to develop new products
through research and development. Our short to mid-term strategy including acquisition and research and development investment has
been influenced by this demand. We expect to continue to invest in our own research and development to support our customers, as well as
climate change mitigation and adaptation across our operations and value chain. A dedicated budget for energy efficiency and investments in
emissions reduction activities is in place.
Strategy
Describe the resilience of the organization’s strategy, taking into Cadence’s Intelligent System Design strategy positions us well to capture climate-related opportunities. An evolving transition plan which 2023 CDP Climate C2.2a, C3.1-C3.2b
consideration different climate-related scenarios, including a 2°C or aligns with a 1.5°C world is in place. Based on our current risk assessments and scenario analysis, we believe our strategy provides resilience.
lower scenario
Our climate-related scenario analysis includes transition risks including market risk, policy/regulatory risk, reputation risk, and technology risk,
as well as physical risks including temperature extremes, tropical cyclones, wildfire, water stress, drought, and flooding (coastal and fluvial).
We have analyzed the market risk due to Cadence’s suppliers potentially being subject to increased carbon taxes and passing those increases
to Cadence. Our top 100 suppliers, by GICS industry and based on activity have been screened to determine the potential risk to their EBITDA
for 2025, 2030 and 2050.
Policy/regulatory risk exposure in the form of increased pricing of regulated GHG emissions and increased operating costs was analyzed in
five-year intervals from 2025 through 2050.
Reputation risk exposure was assessed through Cadence’s S&P Global ESG/Climate Strategy score and by comparing Cadence’s carbon
intensity against the S&P Carbon Global Standard, as well as the alignment of our carbon reduction targets with the Paris agreement through
2030 vis-à-vis a peer set.
Technology risk exposure was assessed based on current low carbon service offerings and R&D spend for relevant EU taxonomy activity
areas, as well as evidence of low-carbon CAPEX, OPEX and value chain spend.
The RCP 4.5 and RCP 8.5 climate-related scenarios were used to assess potential physical risks related to our operations by decade from the
2020s through the 2090s using business as usual, optimistic, and pessimistic conditions. High, Moderate and Low Carbon Price Scenarios
based on research by OECD and IEA (2017) were used to analyze market and policy risks, compared to a business as usual scenario. In the
reporting year, water-related risks were refreshed using the updated WRI Aqueduct Tool.

Risk Management
Describe the organization’s processes for identifying and assessing Climate-related risks are identified and assessed by the cross-functional ESG Team at Cadence with a focus on: 2023 ESG Report - Decarbonizing
climate-related risks Operations and Data Centers, p. 32,
f Decarbonizing operations and data centers Decarbonizing the Supply Chain, p.
66, Decarbonizing Compute Through
f Decarbonizing our supply chain
Energy Optimization, p. 36; 2023 CDP
f Decarbonizing compute activities Climate C2.2
In the reporting year, we continued working with consulting partners to expand our climate-related risk identification and assessment
process. The following risk types are considered: acute and chronic physical risk, current and emerging regulations, legal, market, reputation,
and technology.
For physical risks our process consists of mapping asset level data, quantifying climate hazard exposure, applying asset specific impact
functions, and quantifying modeled financial impact. For transitional risks our process consists of mapping macro-level transition risks to
our operations and value chain, quantifying the impact of carbon pricing risk exposure, applying future carbon price scenarios, quantifying
potential financial or strategic impact on Cadence’s business. Relative risk is assessed through industry and peer benchmarking, as well as
against the science-based climate transition pathway.
Describe the organization’s processes for managing climate- Through innovation, aggressive investment and collaboration with value chain partners, we anticipate reaching Net-Zero emissions across 2023 ESG Report - Committed to Net-
related risks our value chain by 2040, as well as a 50% reduction in scope 1, 2 and 3 emissions by 2030. Zero by 2040, p. 30, Cadence Climate
Transition Plan, p. 31; 2023 CDP
While our targets will be primarily measured and achieved through power-consumption efficiency and procuring clean energy, we also invest Climate C2.2
in projects that provide other benefits such as organic carbon storage, ecosystem restoration, safe water, clean air, and wildlife and habitat
protection. We achieved company-wide Carbon Neutral certification in 2023 through our investments in decarbonization including energy
efficiency measures, procurement of 97% renewable energy through utility contracts and high-quality Energy Attribute Certificates (EACs),
onsite solar installations and high-impact carbon avoidance/removal offsets. We have taken steps to shift our electricity supply to long-term
renewable energy virtual power purchase agreements (VPPAs). In early 2024, we strengthened our transition to long-term renewable energy
and commitment to purchaser-caused renewable electricity by signing a virtual power purchase agreement (VPPA) to help finance a to-be-
built solar farm in the U.S. Once operational, we expect our portion of the project will deliver solar power to the grid equivalent to our entire
U.S. electric load and approximately half of our global Scope 2 emissions.
Robust business continuity programs are in place to mitigate risk factors for various uncertainties that could adversely affect our business,
financial condition, or results of operations, including acute, physical, and transitional climate-related risks.
Describe how processes for identifying, assessing, and managing Process(es) for identifying, assessing, and responding to climate-related risks and opportunities in our direct operations are integrated into 2023 CDP Climate C2.2
climate-related risks are integrated into overall risk management our multi-disciplinary company-wide risk management process. When potential climate-related risk factors are identified, we assess the
potential impact they may have on our operations and whether the identified risk may have the potential to impede our ability to develop new
or improved existing products, deliver on our commitments to clients, or harm our reputation.

Targets and Metrics

Disclose the metrics used by the organization to assess climate- Metrics used to manage risks and opportunities include: 2023 ESG Report - Committed to Net-
related risks and opportunities in line with its strategy and risk Zero by 2040/Science Based Targets, p.
management process f Scope 1, 2, 3 GHG emissions 30, Decarbonizing Operations and Data
Centers/Renewable Electricity, p. 32,
f Progress towards GHG reduction targets
Decarbonizing Our Business, p. 33
f Carbon intensity relative to revenue and full-time employees
f Percentage of renewable energy/electricity used
f Proportion of executive management remuneration linked to climate considerations
Disclose Scope 1, Scope 2, and if appropriate, Scope 3 greenhouse Details of our Scope 1, 2, and 3 GHG emissions are reported in our 2023 Sustainability Report and our annual CDP Response. We have not 2023 ESG Report - Global Operations,
gas (GHG) emissions, and the related risks identified climate-related risks with the potential to have a substantive financial or strategic impact on the business. We continue to assess p. 33, Decarbonizing Our Value Chain, p.
and refine our evaluation processes of climate-related risks that may impact Cadence. 34; 2023 CDP Climate C2.3b
Describe the targets used by the organization to manage climate- We use the following targets to manage climate-related risks and opportunities: 2023 ESG Report - Committed to Net-
related risks and opportunities and performance against targets Zero by 2040, p. 30, Global Operations, p.
SBT 2030: 1.5°C, Scope 1 and 2 (market-based)
33, Decarbonizing Our Value Chain, p. 34
50% GHG reduction by 2030 over the 2019 baseline
2023 Performance: 88% reduction
SBT 2030: 1.5°C, Scope 1, 2 and 3

50% GHG reduction by 2030 over the 2019 baseline
2023 Performance: 33% reduction over the 2019 baseline
Net-Zero 2040: 1.5°C, Scope 1, 2 and 3

Net-Zero GHG by 2040
2023 Performance: 33% reduction over the 2019 baseline

SDG Index

SDG Index
Topic SDG SDG Target Cadence KPI SDG Indicator Cadence KPI Metric Unit
Innovation 7.3 Cadence aligns with SDG Target 7.3 to double the global
rate of improvement in energy efficiency by 2030 through
7.3.1 Energy Intensity 68 Gigajoule/$MM
Revenue
decreasing energy use per $ revenue.
Affordable and
Clean Energy
8.1 Cadence aligns with SDG Target 8.1 to increase sustainable 8.1.1 Annual revenue growth rate 15 %
economic growth by measuring year-on-year increases
in revenue.
Decent Work and

Economic Growth
9.A Cadence aligns with SDG Target 9.A to facilitate sustainable 9.A.1 Charitable giving 16 $MM
and resilient infrastructure through charitable giving.
9.4 Cadence aligns with SDG Target 9.4 to decrease 9.4.1 GHG Emissions, Scope 1 & 2 1 Metric tons
GHG intensity through sustainable infrastructure market-based per million $ of CO2e/$MM
upgrades, increased efficiency, and environmentally revenue Revenue
Industry, Innovation sound technologies.
and Infrastructure 9.5 Cadence aligns with SDG Target 9.5 to enhance scientific 9.5.1 R&D spend as a proportion of 35 %
research and innovation through increased R&D spend as a revenue
proportion of revenue.
12.2 Cadence aligns with SDG Target 12.2 to achieve the 12.2.1 Energy use 279,880 Gigajoule, GJ
sustainable management and efficient use of natural
resources through decreasing energy use while
increasing revenues.
Responsible Consumption
and Production

Environmental 7.2 Cadence aligns with SDG Target 7.2 to increase the
proportion of renewables in the global energy mix through
7.2.1 Renewable electricity 97 %
Sustainability the use of 97% renewable electricity.
Affordable and
Clean Energy
8.4 Cadence aligns with SDG Target 8.4 to increase resource 8.4.1 Energy use per employee 25 Gigajoule/FTE
efficiency through reductions in energy use and emissions
per employee.
Decent Work and

GHG emissions per employee 0.3 Metric tons
Economic Growth
(Scope 1, 2 market-based) CO2e/FTE
12.2 Cadence aligns with SDG Target 12.2 to achieve the 12.2.1 Percentage of water 41 %
sustainable management of natural resources through withdrawals in extremely-high
active management of water usage in water-stressed areas. and high water stressed areas
Responsible Consumption Percentage of water consumed 33 %

and Production in extremely-high and high
water stressed areas
13.2 Cadence aligns with SDG Target 13.2 to implement climate 13.2.2 GHG Emissions 3,915 Metric tons CO2e
change mitigation strategies through our EMS, GHG
reduction targets, and decreases in GHG emissions. (Scope 1, 2 market-based)
Climate Action
15.A Cadence aligns with SDG Target 15.A to mobilize financial 15.a.1 Capital invested in biodiversity $120,000 $US
resources to conserve ecosystems through investments in and ecosystems
biodiversity, reforestation, and low carbon projects.
Life on Land

Workforce 3.7 Cadence aligns with SDG Targets 3.7 and 3.8 to achieve
universal health coverage and reproductive health-care
3.7.1 FTEs offered health insurance
that covers reproductive health
100 %
services through offering benefits to all FTEs. services
3.8 3.8.1 Proportion of employees 100 %

covered by health insurance
Good Health
and Wellbeing
5.1 Cadence aligns with SDG Target 5.1 to end discrimination 5.1.1 Gender pay equity ratio Parity Ratio
against women through programs that advance women in
tech, and maintaining gender pay parity.
5.5 Cadence aligns with SDG Target 5.5 to ensure equal 5.5.2 Proportion of women board 30 %
opportunities for leadership through increased percentage members
of board members and in management positions advancing
Gender Equality Proportion of female managers 18 %
women in management and board positions.
and above
8.5 Cadence aligns with SDG Target 8.5 to provide decent work 8.5.2 Year-over-year (YOY) change in 10 %
for women and men through a growing workforce and FTE
maintaining global gender pay parity since 2018. 5 Year growth in FTE 49 %
8.8 Cadence aligns with SDG Target 8.8 to promote safe and 8.8.1 Injury rate per 100 workers 0.1 %
secure working environments for all workers through safety
Decent Work and
programs that minimize workplace accidents.
Economic Growth
8.B Cadence aligns with SDG Target 8.B to improve youth 8.B.1 Percent of early career hired 48 %
employment through programs, partnerships, and activities
that promote early career hires.
10.2 Cadence aligns with SDG Target 10.2 to increase inclusion 10.2.1 Percentage Asian and Indian 54 %
in the workplace through regularly reviewing workforce Percentage Black and African 1 %
demographics and investing in programs that foster an American
ethnically diverse workforce.
Percentage Hispanic and Latinx 3 %
Percentage Other 2 %
Reduced Percentage Undisclosed 6 %
Inequalities
Percentage White 34 %
16.B Cadence aligns with SDG Target 16.B to promote the 16.B.1 Annual non-discrimination 100 %
principles of equality and fairness through mandatory, training completion rate for
annual non-discrimination training for all employees. all FTEs
Peace, justice and

strong institutions

Governance 12.6 Cadence aligns with SDG Target 12.6 to adopt sustainable
practices and to integrate sustainability information into the
12.6.1 Annual ESG reporting 2023 ESG Report
2023 GRI Index
reporting cycle through annual ESG reporting.
2023 SASB Index
2023 CDP Climate Climate
Responsible Consumption Change Investor Response
and Production
2023 CDP Water Security
Investor Responses
2023 TCFD Index
16.3 Cadence aligns with SDG Targets 16.3 and 16.5 to respect 16.3.3 Completion rate for annual 100 %
the rule of law through our Codes of Conduct and anti- ethics, anti-corruption, and
corruption and bribery trainings. anti-bribery training for all FTEs
16.5 16.5.2 Completion rate for annual 100 %
ethics, anti-corruption, and
Peace, justice and anti-bribery training for all FTEs
strong institutions

Responsible 8.3 Cadence aligns with SDG Target 8.3 to work with diverse
suppliers by monitoring spend with small to medium
8.3.1 Procurement spend on diverse
suppliers
8 %
Supply Chain enterprises and diverse suppliers.
8.7 Cadence aligns with SDG Target 8.7 to prevent forced labor, 8.7.1 Completion rate for UK Modern 100 %
Decent Work and modern slavery, and human trafficking through our Codes of Slavery Act training
Economic Growth Conduct and training programs.
9.3 Cadence aligns with SDG Target 9.3 to increase the access 9.3.1 Procurement spend on small 8 %
of small-scale enterprises by monitoring procurement spend businesses
on small businesses.
Industry, Innovation
and Infrastructure
10.2 Cadence aligns with SDG Target 10.2 to empower and 10.2.1 Procurement spend on diverse 8 %
promote economic inclusion by monitoring spend with suppliers
diverse suppliers.
Reduced Inequalities
12.7 Cadence aligns with SDG Target 12.7 to promote sustainable 12.7.1 New suppliers screened 100 %
procurement practices through our Supplier Code of using social and
Conduct and ESG screenings for suppliers. environmental criteria
Responsible Consumption
and Production
13.2 Cadence aligns with SDG Target 13.2 to implement climate 13.2.2 GHG emissions 324,269 Metric Tons CO2e
mitigation strategy by monitoring GHG emissions in the
value chain (Scope 3). (Scope 3)
Climate Action
16.3 Cadence aligns with SDG Target 16.3 to promote the rule of 16.3.3 Relevant suppliers that 98 %
law through tracking suppliers’ company policies to adhere responded to conflict
to local laws and regulations and responses to conflict minerals survey
minerals survey.
Key suppliers that have 100 %

Peace, justice and company policies to adhere to
strong institutions local laws and regulations

This report contains forward-looking statements, including statements regarding expectations for the implementation and impact of Cadence’s environmental, social and governance programs, the achievement of Cadence’s emissions reduction
and other sustainability-related goals, technological advancements, and other statements using words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “will,” and words of similar import and the negatives thereof. Forward-looking
statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control, and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking
statements, including, among others: (i) Cadence’s ability to successfully meet corporate governance, environmental and social targets and strategies; (ii) economic, geopolitical and industry conditions, including that of the semiconductor and
electronics industries; (iii) changes in environmental or other regulatory landscape; (iv) the continued acquisition of other companies, businesses or technologies or the failure to successfully integrate and operate them; (v) potential harm caused by
compromises in cybersecurity and cybersecurity attacks; and (vi) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties
are subject. For a detailed discussion of these and other cautionary statements that may cause actual results to differ materially from expectations, please refer to Cadence’s filings with the U.S. Securities and Exchange Commission, including its
most recent report on Form 10-K, subsequent reports on Form 10-Q and other future filings. All forward-looking statements in this report are based on management’s expectations as of the date of this report and, except as required by law, Cadence
disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.
© 2024 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo, and the other Cadence marks found at www.cadence.com/go/trademarks are trademarks or registered trademarks of Cadence Design Systems, Inc.
All other trademarks are the property of their respective owners.

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SUSTAINABLE

Cadence Design Systems, Inc.

Anirudh Devgan, PhD

Innovation Workforce 70 UN SDG Index 103

A Message from Our CEO

Embracing socially We are living in a period of extraordinary

practices is not just the globe. For over 30 years, Cadence

industry and our world. The technology industry is rapidly growing

About Cadence $4.09B

Transforming the Way People Design Next-Generation Systems 25+

Cadence provides the expertise, tools, IP, and

About the Report Aligning with the SDGs

Environmental Governance Cybersecurity and Supply Chain

The Impact of EDA on a

Cadence is a pivotal leader in electronic systems

Our customers, the world’s most innovative We have a great responsibility to

Optimize power consumption to reduce carbon footprint

AI is rapidly transforming our world As a leader in electronic system design, Cadence

Cadence Impact on Sustainable Design

Digital Design AI-Driven Chip Design Emulation Efficiency Hybrid Simulation

30% 35% 40% 90%

Power Improvement High-Level Synthesis Computational Fluid Dynamics Data Centers

50% 17X Less Energy 10%

Thinking Big: Helping Data Centers Prepare for a Greener Future

Stratus HLS has recently implemented a process as a part of the high-level

Creating Battery-free MCUs with Cadence

Dukosi Revolutionizes Batteries with

Dukosi’s chip-on-cell sensing platform with unique contactless

Sustainable Innovation in the

Neurinnov Is Transforming Tetraplegic

Last year, Neurinnov began production of their technology and

Innovation for a Safer World

f Pre-defined evacuation routes

Innovation for Sustainable

Advancing the Next Generation Innovators

Investing in Women in STEM From Learners to Innovators with the

Academic Network Supports

Cadence’s Celsius Thermal Solver allows Penn Electric Racing to look

Committed to Net-Zero by 2040 Science Based Targets

Cadence Net-Zero Plan

CarbonNeutral® company certified since 2021

Decarbonizing Operations and

We continue to seek opportunities to support the development of new

Our data center decarbonization strategy revolves around energy-

Global Operations Progress

Scope 1 and 2 Emissions Trend CO2e* per

Metric Tons CO2e 93% 59%

20000 28% 61% 52%

15000 81% target

Decarbonizing our Value Chain Scope 3 Emissions Trend

We are committed to our target to Supplier Engagement Employee Engagement

Decarbonizing Compute Through Energy Optimization

Carbon Neutral Investing in a Low Carbon and

Give Me Trees – Noida, India

We are so thankful to Cadence in supporting the Give Me Trees Trust

Cadence support has brought in 32 species of butterflies, 47 species

Swami Prem Parivartan

Managing Water Resources

Our Team 86% 14%

President and Chief Our Culture The Great Transformation