Cadence 2021 Sustainability Report

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SUSTAINABILITY REPORT

Sustainable by Design

Letter from Our CEO

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CONTENTS
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About Cadence About the Report 2021 Highlights Progress on our 2021 Environmental, Social, and Governance Strategies Innovation Environmental Stewardship Workforce: Accelerating Innovation as One Team Governance Privacy and Cybersecurity: Managing Risks of Secure Data Responsible Supply Chain Community Outreach Awards and Recognition GRI Index SASB Index

LETTER FROM OUR CEO

Our products enable the world’s leading electronics providers to optimize power, space, and energy needs for the most dynamic market applications, including consumer, hyperscale computing, 5G communications, automotive, mobile, aerospace, industrial, and healthcare. It is our culture of innovation that drives our socially responsible business practices and supports the long-term success of our company, employees, and communities.

In 2021, Cadence showcased the strength of our team and innovation with the launch of 13 significant new products that enable the next wave of technology advancements and sustainable innovation in intelligent system design. In this report, we highlight several of our customers and how they use Cadence technology to create products with a lower carbon footprint.

The power of this innovation engine is our people. I am amazed by our employees’ dedication to their work, customers, and communities, and their resilience to deliver impactful results in the face of the ongoing challenges presented by the COVID-19 pandemic. Their passion is what drives our One Cadence – One Team spirit and delivers impactful business results. Cadence is committed to fostering an environment where all employees have an equal opportunity to excel and thrive in their careers. This includes extending workforce diversity through inclusive business practices for recruiting, training, career advancement support, supply chain, pay equity, and enabling inclusive communities. Our One Cadence – One Team culture means coming together to uplift and support each other, creating an environment where all employees can feel valued and respected.

Climate change continues to be one of the greatest challenges of our time and we are committed to doing our part to invest in the health of the planet.

We have made strong progress to date and exceeded our 2025 target in 2021. We want to accelerate our efforts by setting more aggressive targets to reduce our carbon footprint. In line with the ambitious science-based global warming goals of the Paris Agreement, we are targeting to reduce Scope 1 and Scope 2 greenhouse gas emissions 50% by 2030 over our 2019 baseline. Additionally, through innovation and targeted investment, we anticipate reaching Net-Zero emissions across our operations by 2040. Further, we expect to secure carbon neutral certification for 2021.

I encourage you to read more about these initiatives in our 2021 Sustainability

Cadence has a mission to help solve technologies’ toughest challenges in order to make a lasting, positive impact on our world.
4 ABOUT CADENCE Employees Revenue Headquarters Countries Year Founded 1988 full time (6% increase compared to 2020) California $2.988B ~9,300 San Jose 23+ where our employees live FY 2021 (11% increase compared to 2020)

Customers

Electronic systems and semiconductor companies located worldwide live

CDNS

Stock Exchange

Nasdaq Global Select Market

Transforming the Way People Design Next-Generation Systems

Cadence provides the expertise and tools, IP, and hardware required for the entire electronics design chain, from chip design to chip packaging to boards and to systems. We are a pivotal leader in computational software and enable electronic systems and semiconductor companies to create innovative products that transform the way people live, work, and play. Our products are used in extraordinary electronic products from chips to boards to systems for the most dynamic market applications, including consumer, hyperscale computing, 5G communications, automotive, mobile, aerospace, industrial, healthcare, and other market segments.

Our Cadence® Intelligent System Design™ strategy guides everything we do, from our product lineup to the expertise and services we offer our customers and the partnerships we develop with other industry leaders. It enables us to deliver software, hardware, and IP that turn design concepts into reality. We believe that giving our customers a systems-level perspective throughout the design cycle pays off in faster and better design, shorter verification cycles, software that works with the hardware, and new product leadership.

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ABOUT THE REPORT

The purpose of this report is to share with our stakeholders the progress we made in our environmental, social, and governance (ESG) strategies in 2021. The content of this report is informed by feedback from our key stakeholders: employees, investors, customers, and industry partners and associations.

During 2021, 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. This feedback informs our sustainability and reporting strategy. To validate our priorities, we conduct gap analyses referencing Sustainability Accounting Standards Board (SASB] and Global Reporting Index (GRI) standards, Carbon Disclosure Project (CDP) Climate, Institutional Shareholder Services (ISS), Responsible Business Alliance (RBA), and Nasdaq questionnaires. Further, we conducted a benchmark analysis of industry peers. While we address sustainability issues across the materiality spectrum, our cross-functional team identified the following topics as particularly significant to our company in our latest materiality assessment.

ENVIRONMENTAL

Material Topics

SOCIAL

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f
f
f
f
f
f
Talent recruitment, development, retention
Employee engagement
Employee wellbeing, safety, and health
Diversity, equity, and inclusion
Responsible supply chain
Community outreach
f Greenhouse
f
f
gas emissions
Emissions reduction targets
Energy use and efficiency
Environmental
Governance
Data Privacy & Cybersecurity Innovation
Impact
& Ethical Business Practices

GOVERNANCE

Environmental Stewardship section includes metrics for the 2020 and 2019 calendar years.

To provide feedback or obtain additional information about this report and Cadence’s corporate social responsibility program, please contact csr-esg@cadence.com.

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f Ethics and integrity f Corporate governance f ESG governance and structure f Data privacy and cybersecurity
Responsible Supply Chain Workforce

Innovation

Launched 13 significant, innovative products in 2021 across all business groups enabling the next wave of sustainable innovation

2021 HIGHLIGHTS

Net-Zero GHG

Reduced Scope 1 and 2 emissions by 32% in 2021 over 2019 baseline achieving our 2025 target early

Set a target to reduce Scope 1 and 2 emissions 50% by 2030

Set a target to be Net-Zero across all operations by 2040

Cadence Giving Foundation

Launched the Cadence Giving Foundation to promote the power of technology to support critical needs in our global communities like diversity and inclusion, environmental sustainability, and education

Diversity, Equity, and Inclusion

Our U.S. Black, Latinx, Veteran, LGBTQ+, and Women employee inclusion groups built new communities within Cadence through cultural celebrations and initiatives throughout the year

25+ Best Workplace Recognitions

Across 13 countries, including Fortune’s 100 Best Companies to Work For, Fortune’s World’s Best Workplaces, and Newsweek’s Most Loved Workplaces

Newsweek’s

Most Responsible Companies

Recognized as #115 on Newsweek’s 500 Most Responsible Companies and #6 in our industry

Best Workplace for LGBTQ+ Equality

Named one of the Best Places to Work for LGBTQ+ Equality by the Human Rights Campaign Foundation

Investor’s Business Daily Top 100 ESG Companies

Recognized by Investor’s Business Daily as one of IBD’s 100 Best ESG Companies of 2021

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PROGRESS ON OUR 2021 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE STRATEGIES

Innovation

Cadence is a pivotal leader in electronic design, building upon more than 30 years of computational software expertise. Our advancements in computational software provide the foundation for the next-generation electronic design of chips, boards, and systems enabling smarter, smaller, and more power efficient products. Cadence applies its underlying Intelligent System Design strategy to deliver software, hardware, and IP that enables our customers to turn design concepts into reality. Our products and services enable our customers to design products for tomorrow—today and help drive advancements in sustainability across industries including Consumer, Hyperscale, Mobile, Communications, Automotive, Aerospace/Defense, Industrial, and Healthcare.

Smart and Efficient Growth Drivers

We introduced 13 significant new products across all our business groups, which we believe will be key drivers of our future growth. Our Intelligent System Design strategy drives our technology innovation and enables design teams to develop products of the future that are smarter, smaller form factors, and much more power efficient—advancing sustainability in end-product systems.

Environmental Sustainability

We are committed to enhancing our actions to combat climate change and taking steps to lessen the environmental impact of our facilities and business operations. Cadence monitors its performance on energy, emissions, waste, and water to conserve resources and reduce costs. Our culture of giving back inspires employees to participate in environmental initiatives that improve the sustainability of communities where we operate.

More Aggressive Emission Reduction Targets

With emissions reduction actions taken in 2020 and 2021, we realized our 2025 target for Scope 1 and Scope 2 ahead of schedule – exceeding our 15% goal by more than double. In recognition of the urgency to stabilize the climate, we are working to combat climate change on all fronts. In line with limiting the rise in global warming to 1.5˚C above preindustrial levels, we set a target to reach Net-Zero across our operations by 2040, supported by a midpoint target to halve our Scope 1 and 2 emissions by 2030. Further, we expect to secure Carbon Neutral Certification for 2021.

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Workforce

People come to Cadence to do meaningful work with a global impact. Each day with Cadence offers exciting opportunities to create a better, more connected world. We are leading the charge to solve technology’s toughest challenges. Our High-Performance Culture sets us apart as a community of passionate, bold, and creative people and outlines the values and behaviors that will enable our employees to succeed at Cadence. These values influence our practices for hiring, goal setting, development, promotion, retention, and recognition. The Great Place to Work Institute recognizes 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.

Efforts to Increase Diversity

We expanded our efforts to build a more diverse and inclusive team through recruitment, career support, retention, development, and community-building for underrepresented groups. For the third year in a row, Cadence achieved global salary pay parity based on gender and U.S. salary pay parity based on race and ethnicity. We implemented critical measures in response to the COVID-19 pandemic to promote the continued safety, health, and well-being of our employees, customers, and extended communities.

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Governance

Our corporate governance is founded on Cadence’s values and is an integral part of our culture. It is aligned with our stakeholders’ best interests and the requirements of the law. Our commitment to efficient company management, protection of stockholders’ interests, and the transparency of corporate communications is vital to gaining and retaining the trust of our stakeholders. The Board, through its Corporate Governance and Nominating Committee, regularly reviews our corporate social responsibility program. In our annual engagement with stockholders in 2021, we discussed our ESG efforts as well as our Board’s composition and diversity of background.

Tone at the Top

We reported to our Board of Directors on our ESG efforts and initiatives, including our revised carbon reduction targets and breakout of gender and ethnicity included in this report. We added two new directors to our Board in 2021, and one new director in January 2022, bringing the Board to 11 members.

Data Privacy and Cybersecurity

Cadence supports enhanced privacy and data cybersecurity initiatives. We are committed to the protection of our customers, vendors, partners, and employees’ personal information. Our Information Security team works to identify and prevent risks to the protected data we collect. Our Chief Information Security Officer administers our data privacy and cybersecurity program, with oversight from our Board’s Audit Committee.

Enhanced Network Security

With a vast majority of employees continuing to work from home during the COVID-19 pandemic, we maintained our focus on providing secure remote access with endpoint security controls and infrastructure resiliency. We enhanced our verification controls to further protect our network from unauthorized access and we utilized cybersecurity incident response procedures to address risks specific to remote working conditions.

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Supply Chain

Cadence is committed to doing business honestly and ethically and we expect the same from our suppliers. To ensure our relationships with our suppliers meet and support these expectations, we are members of the Responsible Business Alliance as an Affiliate Member since 2018.

Alignment of ESG targets to Supplier Management

We extended our rigorous governance standards across our value chain with our inaugural Supplier Code of Business Conduct, which we shared with all new suppliers in 2021. To better understand our upstream ESG risks and opportunities, over 100 of our key suppliers were asked to participate in our supplier sustainability questionnaire that covers issues including governance of climate change, natural resources, labor, data security, ethics, and integrity. We also focused on identifying diversity in our supply chain.

For Engineers. By Engineers.

INNOVATION

The Impact of Electronic Design Automation on a Better World

Electronic Design Automation (EDA), in combination with advances in semiconductor technology, holds the power consumption of electronics within acceptable levels while enabling significant performance increases. Cadence is a pivotal leader in electronic design and applies its underlying Intelligent System Design strategy to deliver software, hardware, and IP that turn design concepts into reality. 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 consumer, hyperscale computing, 5G communications, automotive, mobile, aerospace, industrial, and healthcare.

Innovation at Cadence

Cadence introduced 13 significant, innovative products in 2021, across all of our business groups. These new innovations will be key drivers of our future growth as our customers use these tools to create products with an impact on the world’s carbon footprint.

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Cadence Product Highlight

In 2021, we announced the Cadence® Tensilica® HiFi 1 digital signal processor (DSP), the smallest and lowest power member of the HiFi DSP family, developed for batteryconstrained applications, such as mobile, hearables, wearables, laptop, automotive, and the internet of things (IOT).

The Tensilica HiFi 1 DSP has pushed the boundaries of the ultra-low-energy DSP segment, presenting a compact footprint while retaining significant performance for traditional DSP workloads, and adding NN facilitations for wake word and person-detect class of always-on workloads. The HiFi 1 DSP’s ultra-low energy consumption extends the duration of voice communication and music playback, allowing always listening to voice commands with minimal impact to battery life. This enables small form-factor, low-cost consumer and mobile devices, as well as automotive and industrial devices, to offer increased functionality with low energy consumption.

Compared to the Tensilica HiFi 3 DSP, the most popular audio DSP in the industry for the target applications, the HiFi 1 DSP offers 60 to 73% greater cycle and energy efficiency for ML-based “OK Google” keyword spotting and person detect applications.

The Tensilica HiFi 1 DSP is a processor for a greener world, to serve a wide variety of energy-saving applications in markets ranging from consumer to automotive, industrial, and medical.

The HiFi 1 DSP from Cadence significantly lowers the energy required to run the always-on class of AI applications, such as the TensorFlow Lite Micro (TFLM) networks, speech wake word and person detect, enabling battery-constrained devices to run for longer lengths of time,” said Pete Warden, technical lead of TFLM at Google. “Cadence and Google have long collaborated on TFLM, and we are excited to continue the collaboration as Cadence pushes the boundaries of energy and performance further.

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EDA Sustainability Impact on Data Centers

Hyperscale compute, using high-performance connected processors, continually transforms our lives as more and more applications rely on this type of compute, and at the heart of this hyperscale revolution are data centers.

Between 2010 and 2018, data-center workloads increased 5.5x, internet traffic increased 10-fold, and storage capacity rose by 25x. The EDA industry has responded with an incredible focus on power and energy efficiency throughout the design process. The 5.5x growth in workloads has only resulted in a 6% rise in data center electricity consumption.

Cadence works with the leading processor providers to deliver the next generation of power and energy efficiency throughout the design flow. By leveraging technology from Genus™ Synthesis Solution and Innovus™ Implementation System used in physical implementation, they are able to accurately predict power early in the design process using Joules RTL Power Solution and Stratus™ High-Level Synthesis (HLS). Cadence’s offerings can accurately predict power at several levels of abstraction. Using deep analysis of the function of a design, Joules RTL Power Solution can help identify activity which can be eliminated, producing designs with the bare minimum of power required to perform a given function.

EDA’s Impact on System on Chip

The design cost of a system on chip (SoC) consumer portable chip in 2011 was about $40M. Without EDA technology advances from 1993 to 2009, the same chip would have cost $7.7B to design.

Just like keeping the design cost in check by providing increased development productivity to development teams, EDA, in combination with advances in semiconductor technology, also holds the power consumption of electronics within acceptable levels while enabling significant performance increases.

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Cadence and EDA’s Impact on Personal Safety in Automotive

Safety is critically important across automotive, industrial, and aerospace and defense industries. EDA and advances in semiconductor technology are essential components for increasing safety capabilities, including automated driving assistance systems (ADAS) and the trend towards autonomous vehicles. Safety ratings like the EURO NCAP are great examples of how consumers demand safety and make it part of their priorities in adopting new technologies. In supporting the verification of standards compliance like ISO 26262 for automotive and IEC 61508 for industrial applications and providing certified building blocks for SoCs, EDA is a key enabler to achieve safe and secure electronics.

Consumer Devices

The global electricity demand of consumer devices is predicted to decrease to 670 TWh in 2030. Research suggests the global electricity consumption of fixed wired and fixed Wi-Fi networks to grow to 2,641TWh and 889TWh by 2030, respectively, wireless access networks – 2G, 3G, 4G, and 5G combined – to 204TWh, and data centers to 1,137TWh. The global energy demand to produce all these is predicted to grow to 903TWh. Overall, communication technology is expected to become 21% of global electricity usage. As we move forward with technological innovations, global electricity usage of electronics would be unmanageable without advances in EDA and semiconductor technology from companies like Cadence and our customers.

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PARTNERING TO ENABLE SUSTAINABLE INNOVATION IN POWER SOLUTIONS

Xenergic

Xenergic addresses the power needs of the IC design community by delivering cutting-edge, low-power SRAM that can be tailored to customers’ memory specifications. Xenergic’s novel memory solutions can be used in a variety of applications where size, power, and performance matter, including wearables, hearables, smart devices, sensors, and high-end devices such as server processors. Their single rail memory architecture offers optimized power consumption and performance with a competitive area in nominal or scaled supply voltage for any given application. These memory solutions feature a technology-independent power reduction of 70% to 90% for the entire SoC, which contributes to improved battery life and enables the designers to fit more functionality in the power budget. Additionally, Xenergic offers the fastest memories on the market in the GlobalFoundries 22FDX platform, with frequencies above 3.6GHz, while still providing significant power reductions.

CEO and co-founder Babak Mohammadi began using Cadence tools as a student at Lund University through the Cadence University Program. Later when he conducted his ground-

breaking research at the university, the tools were vital for his work. Through the Cadence University Program, the Xenergic team had access to all of the Cadence tools which gave them opportunity to explore which tools best fit their needs.

The Cadence incubator program allowed us to rapidly grow and develop best-in-class low power memory solutions. The convenience and flexibility of Cadence cloud-based environment and access to key design tools, such as Virtuoso, Spectre, Innovus, PVS, and Quantus have been critical for our development. Furthermore, the possibility of benchmarking our IP in Tensilica Fusion F1 DSP gave us great insight to the gains our solution can bring to the market.

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Xenergic's Extreme Low-Power SRAM

Pipistrel

Pipistrel is a world-leading designer and manufacturer of small aircraft specializing in energy-efficient and affordable high-performance aircraft. With involvement in various standardization committees and research projects, the company is helping to enable the future market of hybridelectric aviation.

The team at Pipistrel designed nine different experimental and serially produced electric aircrafts, including the first type certified electric airplane, the Velis Electro. They have also developed several propulsion systems, including batteries, power controllers and electric motors, for small and general aviation class of aircraft for NASA and Siemens, among others. Pipistrel is participating in a research project for the Aircraft noise Reduction Technologies and related Environmental iMpact (ARTEM) project, developing novel technologies to reduce aviation noise emissions from the engines and airframes of future aircrafts. Pipistrel designed and manufactured a distributed electric propulsion (DEP) mockup with Cadence’s computational fluid dynamics (CFD) tools: the Omnis™ Open solvers and grid generator Omnis Hexpress. Pipistrel is leading the investigation and mitigation of noise emissions of Distributed Electric Propulsion (DEP) systems.

The main benefits include shorter takeoff and landing, reduced energy consumption for increased flight ranges, and noise reduction.

Omnis Open’s NLH method proved to be the most cost-effective approach for acoustic optimization analysis of the DEP set-up. The method offered a speed-up between one to two orders of magnitude in comparison to the TD analysis, while providing very similar accuracy.

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Cadence University Incubator Program for Sustainable Innovation

The Cadence University Incubator program supports university incubators and early-stage startup companies through their design-to-prototyping journey. By sharing design excellence practices and tapeout know-how, and by providing affordable access to industry-grade Cadence technology, the Cadence University Incubator program reduces cost and time in achieving a proof of concept. Cadence provides online training, remote development options, design services, and mentorship and networking opportunities to the startups participating in this program. Many companies, like Xenergic, start in the Cadence University Incubator program, and then move to become full Cadence customers.

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Skycore Semiconductors

Skycore Semiconductors, an early-stage company in Denmark, has developed a high-voltage switched-capacitor microchip technology that can significantly reduce the size, price, and energy loss of power converters.

Using switched-capacitor technology, which has been widely used in low-voltage domains, Skycore is innovating in the high-voltage domain by expanding the applications and impact of the technology. To ensure the reliability and robustness of its high-voltage microchips requires the usage of the most advanced tools available. The technology replaces expensive electronic components and chips with a single Skycore microchip and less expensive capacitors.

The Cadence Cloud Portfolio provides an easily adoptable, secure, and industry-grade professional quality solution which has enabled Skycore to focus on the innovation and development of its microchips. The cloud-based setup includes the Virtuoso® design platform and Spectre® X Simulator for analog design and simulations, Genus Synthesis Solution and Innovus Implementation System for the digital design flow, and Xcelium™ Logic Simulation for digital and mixed-mode verification.

Skycore Semiconductors’ vision is for its microchips to be used in power converters for a wide variety of applications, making power conversion more efficient and compact, thereby strengthening the transition towards a sustainable world powered by electricity.

At Skycore, we innovate and develop high-voltage switched-capacitor microchips which are the core element of the next generation high-voltage power converters. Our technology brings efficient, compact and affordable power conversion into power modules, data centers, automotive and consumer products, where efficiency, size and price are of key importance. The Cadence Cloud Portfolio has provided us with a high quality, secure and effective packaged EDA tools solution that enables us to focus on the development of our microchips and ensure their quality and reliability.

Skycore Semiconductors

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Pere

Lotus Microsystems

Lotus Microsystems, founded by a team of researchers from the Technical University of Denmark, is working to create the world’s smallest power converters to bring higher thermal stability and efficiency and contribute to greater sustainability of everyday electronics.

Lotus Microsystems’ engineers are using the Cadence IC design tools, for the development of the integrated circuits in their power converters. The tool set includes Cadence Virtuoso Suite, Spectre, and the Physical Verification Systems (PVS). Using Cadence technology in the design process, the team at Lotus Microsystems’ has designed a power converter with 70% less size and 50% less weight than the state-of-the-art miniature power converters, thanks to its patented technology that offers superior integration capabilities. The smaller converter allows room to incorporate a larger battery and the higher efficiency results in longer battery life. In addition, Lotus Microsystems’ process for building power converters leverages the use of eco-friendly materials that drive the product development in the direction of a more sustainable future, in conjunction with the UN sustainability goals. The patented silicon-based integration technology enables the team to build a substrate for a 3-dimensional structure that hosts power circuits, control circuits, and passive components like inductors and capacitors in single miniaturized units. The silicon material is found naturally in large quantities and is both inexpensive and sustainable to use.

The advantage of using the Cadence design tools is that they are the standard EDA solution used in many industries and academic institutions, which boosts the readiness of our new hires in the technical team and shortens the development time.

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ENVIRONMENTAL STEWARDSHIP

Doing our part to combat climate change is important to Cadence, our employees, and our external 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.

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Combatting Climate-Change

In recognition of the urgency to stabilize the climate, we are working to combat climate change on all fronts.

This year’s greenhouse gas (GHG) inventory—our fourth—shows strong progress towards reducing our carbon footprint. With an overall 32% decrease in Scope 1 and 2 emissions over the 2019 baseline, we exceeded our 2025 target well ahead of plan.

Energy is used to run our offices and data centers. Emissions from electricity use (Scope 2 emissions) accounted for 72% of our Scope 1 and 2 total in 2021, while natural gas, diesel fuel, and refrigerant emissions (Scope 1 emissions) accounted for 28%. Increased use of renewable energy is the primary driver for our 24% year-over-year decrease in combined Scope 1 and 2 emissions. Overall energy use decreased 7% compared to 2020.

GHG Footprint and Reduction Trajectory

* Scope 1 and 2

30,000

Scopes 1 and 2 CO2e (metric tons) 32,677 29,244 16,339

35,000 25,000 20,000 15,000 10,000 5,0002019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

22,353

Target 50% reduction over 2019 by 2030

*Calculated in accordance with the GHG Protocol, Corporate Standard **2020 and 2021 GHG footprints 3rd party verified to the ISO14064-3 Standard ***Includes our owned and leased properties, as well as our co-located data centers; estimations applied where actual data was unavailable.

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28%
32% over 2020 CO2e* per $M
31%
CO2e* per employee over 2020
reduction over 2019 baseline*
revenue

*Over 2019 baseline Scope 1 and 2

**Net-Zero across Scopes 1, 2 and 3

We have revised our carbon-reduction targets in line with the Paris Agreement’s goal to limit the rise in global warming to 1.5˚C above pre-industrial levels. Our new science-based target is to reduce Scope 1 and Scope 2 greenhouse gas emissions 50% by 2030. Through innovation, aggressive investment, and collaboration with value chain partners, we anticipate reaching Net-Zero emissions across our value chain by 2040. We are currently working towards gaining validation for our science-based targets including Net-Zero from the Science Based Targets Initiative (SBTi).

In addition, we expect to secure Carbon Neutral Certification for 2021.

For all actions under consideration to achieve our 2030 and 2040 targets, strong preference will be given to those providing additionality. We are pursuing and evaluating:

f 100% renewable electricity

f Energy optimization projects

f High-quality impactful carbon offsets and removals to counterbalance emissions that remain unabated as needed

While our targets will be primarily measured and achieved through power-consumption efficiency and procuring clean energy, we also invest in projects that provide other benefits such as organic carbon storage, ecosystem restoration, safe water, clean air, and wildlife and habitat protection. An example of this type of investment is our purchase of 12,000 carbon credits from the Rainier Gateway Project which provides forestry management and preservation of wildlife habitat which will offset 100% of our global Scope 1 emissions for 2021 and our estimated Scope 1 emissions for 2022.

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Emissions in the Supply Chain

Like most companies, the majority of our emissions are in the supply chain. Our Scope 3 emissions account for approximately 87% of our total market-based Scope 1, 2, and 3 carbon footprint. Combined emissions from Purchased Goods & Services and Capital Goods categories account for the vast majority of our total Scope 3 emissions.

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Scope 2 9% Scope 1 4% Scope 3 87% 2021 SCOPE 1,2,3 EMISSIONS (metric tons) Scope Location-Based CO2e Emissions* (metric tons) Market-Based CO2e Emissions* (metric tons) % Scope 1 6,281 6,281 4% Scope 2 23,750 16,072 9% Scope 3 145,618 145,618 87% *Market-based emissions reflect clean energy purchases
clean energy purchases reflect the average emissions
grids
energy consumption
that Cadence has purposefully chosen. Location-based
intensity of
on which
occurs.

Overall, Scope 3 emissions decreased by 65% compared to 2020. In 2021 we used the GHG Protocol Hybrid Method to improve the accuracy of our Scope 3 calculations for Purchased Goods and Services and Capital Goods. This new methodology highlights the work that our valued suppliers are doing to reduce their own carbon footprints, as well as our efforts to partner with suppliers that share our values. We also saw a year-over-year decrease in emissions from Capital Goods primarily due to a decrease in construction and IT equipment. Emissions from outsourced hardware manufacturing remained similar year-over-year.

The COVID-19 Pandemic had an impact on our employees’ travel patterns. Emissions from Employee Commuting were down 12% year-over-year. Business Travel decreased 78% compared to 2020.

For our 2021 footprint we report on 10 of the 15 Scope 3 categories. To establish a comprehensive Scope 3 baseline and submit our Net-Zero target for validation to the Sciencebased Targets Initiative (SBTi), we are working through the evaluation of the remaining categories – Processing of Sold Products, Use of Sold Products, End-of-life Treatment of Sold Products, Investments, and Upstream Transportation and Distribution.

Waste generated in operations Less than 0.01%

Fuel-and-energy-related activities 2021

Upstream leased assets 1% Employee commuting 2% Business travel 1% 0.5%

Capital goods 31%

SCOPE 3 EMISSIONS (metric tons)

Downstream transportation and distribution 7%

Downstream leased assets 0%

Franchises 0%

Purchased goods and services 58%

*All figures around rounded to the nearest decimal

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Carbon Accounting Improvements

This year we introduced several improvements to the calculation methodologies for Scope 3 emissions. For 41% of 2021 spend, we employed the hybrid method using actual data from our key suppliers to calculate our emissions for the related goods and services. For the remaining 59% of spend, we employed an input/output calculator to calculate related emissions.

Additional improvements to our calculation methodology included separately reporting emissions from Downstream Transportation and Distribution, and Upstream Leased Assets, which account for 7% and 1% of our 2021 Scope 3 emissions, respectively. Previously, emissions from these categories were reported as part of Purchased Goods and Services. We also added emissions from Waste Generated in our Operations which account for less than 0.1% of Scope 3 emissions.

In addition to the progress we’re making in reducing our carbon footprint, our processes are improving as well. During 2021 we obtained third-party verification on the accuracy of our reported 2020 emissions. The 2021 footprint was also verified to the ISO14064-3 standard.

Data Centers

Cadence products that involve data storage are powered by an increasing percentage of renewable electricity whether on-premise, or at co-located or cloud-based data centers. We continue the process of shifting to colocated and cloud-based data centers.

One of our two U.S. colocated data centers runs on 100% renewable energy, as does our colocated data center in Germany, which also maintains ISO14001 and ISO50001 certification. Our colocated data center partners have set goals to be 100% renewable energy powered by 2025.

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Our on-premise data centers in San Jose utilize outside air to naturally cool the servers. We recently upgraded our servers to increase our computing power while implementing energy-efficient design features, such as automated mister controls for extreme hot weather, a building management system (BMS) digital control network, and free cooling economizers to temper the increase in electricity consumption as our business continues to grow. Our Uninterruptible Power Sources (UPSs) are Energy Star Certified, and when selecting back-up generators, we aim to reduce environmental impacts and noise pollution and follow Bay Area Air Quality Management District (BAAQMD) norms.

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Rebuilding Better

When we remodel, we look to improve energy efficiency and overall environmental impact reduction. In our recent projects at our headquarters in San Jose we are creating healthier, more environmentally friendly facilities by implementing the following:

f HVAC equipment which improves indoor air quality and reduces energy usage by using air side economizers

f Ceiling tile and other finishes with high recycled content, low volatile organic compound (VOC) levels, and the ability to be recycled at the end of lifecycle

f Energy efficient equipment and lighting sensors which maximize natural light and save energy

Recycling & Reusing

To ensure minimum environmental impact and maximize social impact in our recent remodel, we partnered with Green Standards to divert 100% of waste from this project from landfill. To date, 120.3 tons of building materials and office furniture have been diverted, of which 91.9% was recycled and 8.1% was donated. Donations included desks, chairs, bookcases, cabinets, sofas, whiteboards, artwork, refrigerators, and other appliances. Nine local Bay Area schools and nonprofits were the recipients of these donations. Recipient Organizations include AnewAmerica, Habitat for Humanity East Bay Silicon Valley, RAFT, Washington Elementary School, One Life Counseling Center, Kainos, San Jose Peace and Justice Center (Collins Foundation), and Tessellations School.

We work with responsible e-waste experts to ensure that electronics that have reached end of life are recycled properly. e-waste recycled in 2021

56 tons

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Investing in Organic Carbon Capture, Biodiversity and Access to Nature

Preserving old-growth forests and ensuring their proper management contributes to reducing the risk of forest fires, maintaining habitats for wildlife, and storing carbon dioxide. In 2021, we invested in the Rainier Gateway Project to support the protection of the forests surrounding Mount Rainier in Washington State, home to many species, including nine that are listed as threatened or of concern to state and federal agencies. Managed by the Nisqually tribe (Nisqually Land Trust), sustainable forest management techniques are applied throughout the area to support watershed conservation, salmon recovery efforts, as well as to provide local employment opportunities. The project also helps maintain consolidated ownership of the land by those native to it. Our investment in the Rainier Gateway Project offsets our Scope 1 emissions for 2021 and our estimated Scope 1 emissions for 2022.

Creating new forests and biodiversity havens near urban areas helps local wildlife survive while creating planet-cooling shade. Together with our nonprofit partner “Give Me Trees”, we planted 12,500 native tree saplings in Noida, India this year. To ensure that the trees reach their full potential, we’ve committed to nurturing and maintaining them for the next three years including watering, fertilizing, and replacing saplings if needed.

Community Garden

The newly installed Community Garden at our San Jose Headquarters serves as a biodiversity corridor for birds, butterflies, and insects, as well as a place for employees to meet, relax and interact with nature. Opportunities to cultivate and harvest vegetables, as well as workshops and events will be planned for our employees when we return to office. Features include:

f Sensory garden consisting of colorful plants and flowers that attract pollinators and appeal to the senses—smell, touch, and sight—such as lavender, lambs’ ears, salvia varieties, and roses

f Employee-run vegetable garden with seasonal vegetables and herbs

f Orchard consisting of apple, apricot, avocado, citrus, fig, nectarine, pear, persimmon, and plum trees

f Water efficient drip irrigation throughout

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM

Innovation starts with our people. Our employees are solving some of the technology industry’s most complex challenges. Cadence is dedicated to fostering an environment where employees of all backgrounds can have a meaningful career and achieve their full potential. We enable a high-performance culture throughout the employee lifecycle, including talent acquisition, career development, total rewards, talent management, retention, and performance management. Cadence supports a number of employee practices that foster our One Team values of innovation, agility, quality, and integrity.

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Cadence Team

Our employees represent the best and brightest in the industry. 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 31% headcount growth over the last five years and high average tenure of 6.8 years. We have built our largest-ever team of approximately 9300 employees globally, even with increased attrition in the company and across the industry.

Employee Engagement

Cadence prides itself on being a great place to work and building a high-trust culture. A highly engaged workforce is critical to the foundation of our business success. We have been recognized as one of the top places to work by Fortune magazine for the past seven years and by the Great Place to Work Institute in 13 countries where we participate.

To measure engagement and the health of our workforce, Cadence partners with the Great Place to Work Institute to annually administer global engagement surveys to all employees in all countries where Cadence has employees. The surveys provide valuable insight into our employees’ experiences, give the employees an opportunity to share ideas for improvement, and benchmark us against some of the best companies in the world.

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36 12 21 31 Americas 36% India 31% APAC/Japan 21% EMEA 12%
14% Non-technical 12% Voluntary turnover 6.8 Average years 86% Technical
99% Full-time 1% Part-time
Total Employees ~9,300

Employee feedback is an important source of input, informing us on what is important to our employees and enabling us to make appropriate adjustments so that we can continue to be a company that allows our employees to thrive.

93%

of employees surveyed say they are proud to tell others they work at Cadence

91%

of employees surveyed say Cadence is a great place to work

Hiring

We actively identify candidates with expertise and valuesbased attributes that can contribute to our success. It is important to us that we build a diverse pipeline of candidates, and we do this through robust recruiting partnerships and by posting requisitions to sites that are focused on diverse backgrounds, experiences, and skills. Because our management team is central to the success of our hiring and retention strategies, we have invested in management training, including unconscious bias workshops and diversity leadership training, to enable thoughtful decision making.

49%

Early Career

*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

College Hire and Intern Program

We believe that interns and recent college graduates are the future of Cadence, and we invest in them to carry out our mission of innovation. In 2021, 49% of all Cadence hires were early career employees.* We provide mentorship, scholarships, and access to Cadence technology to many students, including those from underrepresented groups. We recruit recent graduates at top universities around the world, including those that historically serve a higher number of Black and Latinx students.

Cadence employees participate in tech talks, career fairs, academic sponsorships, and university contests, and we work to facilitate a network between the technology industry and academia. We also partner with schools to build relationships with departments and professors who connect Cadence to the best and brightest students. In 2021, more than 600 global Cadence interns and new college graduates** participated in our virtual College Hires and Internship (CHIPs) program.

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At Cadence, we’re committed to fostering an inclusive environment where employees feel empowered. Inclusion means creating a culture where differences are valued, where everyone has the opportunity to develop skills and talents consistent with our mission, vision, and values. Our One-Team culture encourages the exchange of diverse experiences and ideas, leading to greater innovation and collaboration.

Diversity, Equity, and Inclusion

It is important to the success of Cadence that we provide the support our employees need to thrive, and we foster an environment based on trust, cooperation, respect, and equitable treatment. We believe a diverse team can create a competitive advantage by contributing unique perspectives that advance high performance, innovation, and teamwork.

Gender and racial disparities remain a challenge in the technology field, and as a tech company with a high proportion of technical employees, Cadence is deeply committed to addressing this issue. We regularly monitor the diversity of our current workforce and candidate pool. A diverse and inclusive culture improves team dynamics and cultivates the innovation needed to develop Cadence’s suite of innovative products and services.

Eight years ago, we developed a program to help support gender diversity at Cadence. Based on these efforts, the proportion of women at Cadence has increased in each of the last eight years. In 2021, 25% of all new hires were women and 28% of our early career and intern hires were women. More recently, we have expanded our focus to include other underrepresented groups.

We are excited to build a culture where everyone has an equal opportunity to contribute and bring their full selves to work. Our strength as a company comes from our innovative ideas, collaborative spirit, and, most importantly, our connections with one another.

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Key Focus Areas 6

Recruitment & advancement

Increase diverse representation and inclusion across all levels

Community

Foster trust and belonging within Cadence

Brand

Bring awareness to our team culture globally

Equity

Maintain equitable policies and pay practices

Education

Bring awareness to barriers, like unconscious bias, and enable allyship

Partnership

Partner to make an impact inside Cadence and in our communities

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Diversity, Equity, and Inclusion Highlights

Recruitment

We partner with the National GEM Consortium (GEM), National Society of Black Engineers (NSBE), Society of Hispanic Professional Engineers (SHPE), and Society of Women Engineers (SWE) to advance our inclusion efforts. These partnerships allow us to do more targeted recruiting, outreach, and engagement with these communities. In 2021, we supported two GEM Fellows with internships and provided an additional scholarship to support their pursuit of higher education. In 2022, we are supporting an additional four fellowships.

Returnship Program

In this highly competitive market, we want to help bring talented employees back into the workforce, especially women and caregivers who left to support their families. We started a 16-week returnship program for electrical engineering professionals with a mix of technical training, hands-on projects, and customer interaction. Returnees have an opportunity to work with the best-in-class EDA tools and to collaborate with R&D and sales teams in a dynamic and supportive environment.

Equal Employment

Our Equal Employment Opportunity Policy governs our conduct at Cadence. As stated in our Code of Business Conduct, we prohibit discrimination on the basis of age, race, color, religion, sex, ancestry, national origin, sexual orientation, or disability globally.

Career Development

We have sponsored focused development through an Advanced Leadership Program for top women talent, and for top Black and Latinx talent in 2021, which provides specialized coaching, workshops and career opportunities. In addition, our IMPACT mentorship program gave women and U.S. Latinx and Black employees in 2021, an opportunity to choose a more senior employee as a mentor based on their career goals.

Pay Equity

In August 2021, we performed a detailed review of our compensation practices in all countries where Cadence has employees. We are proud to report that Cadence maintained global salary pay parity based on gender and U.S. salary pay parity based on race and ethnicity, again in August 2021. This is the third year in a row we have achieved pay parity.

Inclusive Leadership Training

We continue to provide unconscious bias resources to managers to challenge ourselves and improve diversity and inclusiveness at Cadence. 96% of current U.S. managers have undergone Unconscious Bias training. In 2021, 33% of managers attended our new diversity leadership training to elevate inclusiveness and promote equality in the workplace.

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Diversity in Technology Scholarships

To support advancing diversity in the technical talent pool, we offer scholarships for Women in Technology, Black Students in Technology and Latinx Students in Technology to bachelor’s, master’s, and PhD students at accredited universities in the United States. In 2021, we awarded scholarships to 38 incredibly talented students to support their careers in technology.

Community Outreach

To encourage students and professionals of underrepresented groups to develop their skills and pursue careers in STEM and develop their skills, we provide donations to Girls Who Code, Technovation, SMASH, Black Girls Code, Latinas in Tech, Out in Tech, and Vets in Tech.

Respectful Language Guidelines

Cadence has joined a cohort of technology companies to create Respectful Code Guidelines that examines commonly used language that can invoke negative connotations and can speak to unintended feelings of bias or racial interpretations. This includes words related to engineering protocols, sales terms, branding as well as other areas. It is important that we work with our partners across the industry on the terms we use every day to ensure we create an environment where all groups feel included and welcome.

Human Rights Campaign Foundation

To demonstrate our commitment to equality, we applied, and were named one of the Best Places to Work for LGBTQ Equality by the Human Rights Campaign Foundation for the second year in a row. With a perfect score of 100, we were included as part of their Corporate Equality Index, which is the national benchmarking tool on corporate policies and practices pertinent to lesbian, gay, bisexual, transgender and queer employees. This index lists companies that support the LGBTQ+ community through non-discrimination policies, specific LGBTQ+-inclusive benefits, and outreach efforts.

The Great Transformation

We are excited to be invited by the Great Place to Work Institute, among a select group of Fortune 100 Best Companies, to join a 3-year cohort focused on closing gaps in diversity, equity, and inclusion. Cadence will collaborate with other leading companies, and our employees will provide regular feedback, to help inform a campaign to foster inclusivity across a number of industries.

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Women@Cadence

It is important to the long-term success of Cadence that we give women at Cadence opportunities to succeed in their careers. We have the following additional programs to support women in building their careers at Cadence in both technical and non-technical roles.

Our Women@Cadence program hosts networking opportunities with keynote speakers and social events to build a strong community environment and to better understand and address challenges faced by women in technology and business. Our Women in Technology and Women of Worldwide Field Operations provide specialized development opportunities for women in technical and sales roles.

Women’s History Month

Our Women@Cadence, Women of WFO, Women in Technology, and Women’s Inclusion Group planned more than 20 different activities at Cadence sites around the world to celebrate International Women’s Day and Women’s History Month. Events included guest speakers, skills workshops, socials, health challenges, and a fireside chat with Cadence women executives.

Watermark’s Changemakers Conference

Cadence sponsored 125 women to attend Watermark’s Changemakers Conference. Women@Cadence was able to hear from powerful and inspirational women who have challenged the status quo, followed their dreams, and disrupted norms in extraordinary ways. This included a keynote talk from activist, designer, and author, Rosario Dawson.

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Global Semiconductor Alliance’s Pledge for Women’s Advancement

To show our commitment to diversity in the semiconductor industry and the broader community, President and CEO Anirudh Devgan signed the Global Semiconductor Alliance’s Women’s Leadership Initiative’s CEO Pledge, taking a stand with other industry leaders to make a substantial impact on the advancement of women in the semiconductor industry.

By signing this pledge, Anirudh Devgan and Cadence have committed to prioritizing gender diversity through recruitment, retention, and development, and offering dedicated opportunities for women to advance in their careers.

Cadence also became a “Champion of Women” sponsor to support their leadership events and university programs and to promote the impact Cadence women have in the semiconductor industry. This includes supporting their first Women in Semiconductor Hardware conference which featured two Cadence speakers. Cadence also has a seat on GSA’s Women’s Leadership Council.

Cadence Inclusion Groups

We currently support five Inclusion Groups at Cadence for Black, Latinx, LGBTQ+, Veterans, and Women employees and allies in the United States. These forums open dialogue for sharing and connecting, promoting awareness of experiences and the impact of bias.

Our Inclusion Groups are empowered to host events throughout the year to celebrate and recognize the importance of diversity, equity and inclusion at Cadence, in our industry, and in our world. We regularly host thought leaders from Cadence, the industry, and the community, to help bring awareness to these important topics. We believe that the human connection, personal storytelling, and real experiences better connect us to each other’s journeys. Here are a few of the activities that were organized this year:

Black Inclusion Group

In celebration of Black History Month, our Black Inclusion Group organized a fireside conversation with Shellye Archambeau, one of the first Black women to become a CEO in Silicon Valley. Her talk, titled, “Unapologetically Ambitious,” touched on themes from her critically acclaimed book, Unapologetically Ambitious: Take Risks, Break Barriers, and Create Success on Your Own Terms, named one of the top 10 business books of 2020 by FORTUNE.

During the week of Juneteenth, we hosted Dr. Keisha Blain, one of the leading US scholars of African American history, African Diaspora Studies, and Women’s and Gender History, to discuss the importance of Juneteenth and how it relates to the recent movement by companies and legislature to make it a formally designated holiday.

Latinx Inclusion Group

Our Latinx Inclusion Group organized two speaker events and a total of four activities for Latinx Heritage Month, including a fireside conversation with Anthony Chavez, grandson of civil rights icon and American labor leader, Cesar Chavez. Mr. Chavez spoke about his grandfather’s legacy in the farmworker movement and how we can all make a difference in our communities.

The group also held a virtual salsa dance class and a class to learn common work phrases in Spanish.

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LGBTQ+ Inclusion Group

In honor of Pride Month, employees shared what Pride Month means to them and how we can all recognize and celebrate the LGBTQ+ community. We also raised Pride Flags at our campuses in San Jose, California; Burlington, Massachusetts; Columbia, Maryland; and Pittsburgh, Pennsylvania.

Our LGBTQ+ inclusion group hosted an event with Ken Yeager and Wiggsy Sivertsen, two icons of the Silicon Valley LGBTQ+ movement. Ken and Wiggsy shared their experiences working alongside influential leaders in the fight to achieve progress for the LGBTQ+ community.

With the support of our LGBTQ+ employees, Cadence also sponsored Silicon Valley Pride and Queer Silicon Valley this year. We also introduced a new way for all employees to share their preferred pronouns in their email signature as a sign of inclusion and allyship.

Veteran Inclusion Group

The Veterans Inclusion Group hosted a virtual cookout in honor of Independence Day where employees could meet each other, share their favorite barbeque recipes, play trivia games, and win prizes. During our Veterans Day celebration, we hosted CAPT Benjamin Van Buskirk, Director at Naval X, who spoke to employees about the importance of Veterans in the workplace and how they are shaping the world of technology.

Women’s Inclusion Group

Our Women’s Inclusion Group organized workshops for personal branding, professional presence, negotiation, and leadership. The group hosted a virtual social to make Brazilian brigadeiros and created clubs for those passionate about book reading and wellness.

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As of December 31, 2021, the ethnicity of our U.S. population, and gender diversity of our global population were as follows: Gender (Global) Overall Technical Non-Technical Management Women 23% 20% 46% 17% Ethnicity (US) Overall Technical Non-Technical Management Asian & Indian 54% 58% 39% 53% Black or African American 1% 1% 2% 1% Hispanic and Latinx 3% 2% 5% 2% Other* 1% 1% 2% 1% Undisclosed 6% 6% 5% 7% White 35% 33% 45% 38% *Hawaiian/Pacific Islander, American Indian/Alaskan Native, two or more races **All figures around rounded to the nearest decimal
Demographics

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. We also offer a semi-annual bonus program, 401(k) match, Employee Stock Purchase Plan, and equity compensation. In addition, 78% of our employees received monetary awards from their colleagues through our peer-to-peer recognition program in 2021 for exploring what’s possible, elevating the team, executing with quality, and exceeding customer expectations.

Training and Career Development

As employees advance their careers at Cadence, the core expectations and capabilities increase in scope and purpose.

To help employees succeed, we foster an environment and culture of learning–both on the job and through formal training programs. On average, our employees complete 28 hours of training annually.

Employees can utilize learning resources through our HighPerformance Culture portal that includes Harvard University’s ManageMentor, a mini-MBA program, and a comprehensive online Learning Management program, accessed by 77% of our employees, with training and development tools on a broad range of topics and skills. This year we added LinkedIn

Learning to our online Learning Management program, which provides more than 11,000 on-demand professional courses with new courses added monthly. Cadence also offers up to $5,000 of tuition reimbursement annually to employees continuing 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, diversity and inclusion, harassment prevention, protection of confidential information, data security, affirmative action, export compliance, and human rights.

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28 hours of training completed per employee in 2021 9 hours Non-technical 19 hours Technical

Health and Well-Being

Our employees’ physical and mental health and well-being is a top priority at Cadence. We offer a variety of unique benefits in addition to traditional health insurance. We have a global bereavement leave policy that allows employees more time to grieve should they lose a loved one. 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, legal services, and onsite dental care at our corporate headquarters in San Jose, California.

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 offices are open, our employees can also enjoy peaceful space to focus on personal wellness in our Wellness or Quiet rooms.

Safety

Cadence is committed to providing a safe and healthy work environment for our employees and non-Cadence personnel. We have a cross-functional Emergency Response Team trained to quickly respond to emergency or crisis situations at Cadence. The Emergency Response Team conducts periodic simulation trainings that cover various applicable situations, so they are prepared for an emergency or a crisis.

As provided in our Code of Business Conduct, our employees are expected to perform their work in compliance with health and safety laws, regulations, and policies of their work location. When working at customer locations, our employees must follow the customer’s health and safety requirements. Workplace injuries, illnesses, or unsafe conditions, including conditions that are likely to result in injury or illness, must be immediately reported to a supervisor or Human Resources partner.

Below is our 2021 OSHA Recordable Injury Rate and our LostTime Injury Rate for our employees in the U.S.:

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0 Lost Work Days 0.1% Injury Rate per 100 Employees in the
U.S.

Covid-19 Response and Action

For more than two years, Cadence has successfully enabled our workforce in a new remote environment. Our One Team values have guided our approach to navigating the challenges presented to our business and our employees by the COVID-19 pandemic. By prioritizing our employees’ health and well-being, we enabled their success and the success of our business.

Our people-first approach will continue to influence how we sustain high levels of productivity while we transition back to the office. We have learned a lot over the course of the pandemic—including how resilient and agile the Cadence team is and how important both in-person and remote work experiences are for each individual and for our culture. Our goal is to continue to focus on employee safety while balancing the benefits of workplace flexibility with the importance of face-to-face collaboration to give our employees the optimal environment to succeed.

Mahatma Awards

Awards for COVID 19 Humanitarian Efforts and excellence in Corporate Social Responsibility in India for 2021

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Governance

Our CEO has tasked a team of executives to dedicate a substantial portion of their time to our COVID-19 response. This leadership team formed a cross-functional employee taskforce to work alongside our executives to manage the company’s approach to the fast-evolving pandemic.

On a consistent basis, the taskforce works together to identify and implement solutions to support our employees through the ever-changing challenges they face. The taskforce regularly monitors health trends, government regulations, and employee feedback to inform our approach to important topics that support our employees’ safety and wellness. This includes resources for working remotely, wellness programs, office safety procedures, and communications.

We also developed a dedicated COVID-19 internal communication hub to keep employees, especially managers of international teams, updated on the pandemic at each of our sites across 23+ countries. The hub includes video messages from executives, business updates, wellness newsletters, and health and safety education. The hub also connects employees to resources and programs at their site to promote health, wellness, and human connection while working from home.

India Emergency Relief

Cadence supported additional emergency relief efforts during the second wave of COVID-19 in India, which affected many of our employees, their families, and our communities. Our local leadership in India organized volunteers who were eager to help to form COVID-19 taskforces at all four of our sites in Noida, Bangalore, Pune and Ahmedabad. With many hospitals filled and medical resources limited, Cadence and employee volunteers helped provide a number of emergency services to employees in need. This included connecting employees with medical resources, like oxygen concentrators, at-home

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Health and Wellness

To promote health and well-being during this time, we provided employees with additional time off to focus on themselves and their families. Because of the pandemic’s impact to school schedules, travel, and work, many employees were not able to take much-needed personal time off. We believe time away from work is key to our employees’ health and wellness and enables them to recharge and continue to perform at a high level.

We also provide our employees with a number of tools to relieve stress—from meditation guidance to yoga classes to our global employee assistance program that connects employees and their families with resources, information, and counseling to address the challenges caused by the pandemic, such as increased anxiety or stress. Employees also had expanded access to various forms of preventative care for their family, including virtual doctor’s visits, COVID-19 testing, and drive-through flu shots. In the U.S., we also provided employees with expanded access to childcare and eldercare.

People-first Approach

We are taking a careful and measured approach to returning to the office. This involves a comprehensive phased return process that evaluates multiple factors, such as level of virus spread in the community, local government regulations, benchmarking of leading companies, and employee readiness to return. Reopening plans will incorporate safety and distancing measures, including group rotation and schedule flexibility, as well as documented acknowledgment of safety protocols.

To protect the small number of business-critical employees who are working on-site during this pandemic, we’ve implemented a detailed list of safety protocols and guidelines. These employees have access to a mobile application that ensures they acknowledge our safety protocols, each day, in order to come on site.

In 2021, we expanded our safety procedures to incorporate vaccinations at our global locations, where possible, to promote safety for limited in-person work in the office and with customers. This allowed us to open select offices to voluntary groups who were having personal challenges working from home.

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GOVERNANCE

Cadence is committed to conducting business with the highest standards of ethical conduct and integrity as we recognize these are foundational to our culture and critical to our long-term success.

Board Governance

As of December 31, 2021, our Board of Directors was comprised of ten individuals, eight of whom are independent as determined pursuant to the Nasdaq Stock Market’s listing standards. We added an additional independent director in January 2022, bringing the board to eleven members, with nine independent directors. Also, in December 2021, our Board appointed a Lead Independent Director in connection with the transition of our former CEO to the role of Executive Chair of the Board, as required by Cadence’s Corporate Governance Guidelines. Fully independent committees of the Board oversee audit, remuneration and nomination. Our Board’s Corporate 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 and decision-making at the Board and management level, 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.

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Board Membership

The Board’s Corporate Governance Guidelines reaffirm Cadence’s commitment to having leaders on the Board with diverse backgrounds. The Corporate Governance and Nominating Committee’s charter requires consideration of a director nominee’s integrity, experience, judgment, diversity of background, independence, financial literacy, and ability to commit sufficient time and attention to Board activities. In addition, skills such as an understanding of electronic design, semiconductor and electronics systems technologies, international background, and other relevant characteristics are considered. The Corporate Governance and Nominating Committee regularly discusses and annually reviews as a committee and with the Board the appropriate experience, skills and characteristics required of directors in the context of the current composition of the Board and its committees. We added two new directors to our Board in 2021, and one new director in January 2022, bringing the Board to 11 members.

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*This data is as of January 31, 2022 73% Male 27% Female GENDER 55% White 45% Asian ETHNICITY Board of Directors Diversity: Gender Board of Directors Diversity: Ethnicity

Board Oversight of the Corporate Social Responsibility Program

Our Board, through its Corporate Governance and Nominating Committee, oversees our corporate social responsibility program and the progress of our environmental (including climate-related risks and opportunities), social (including health, wellness and safety), and governance efforts, matters and initiatives. 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. In 2021, the Corporate Governance and Nominating Committee held four meetings. The Board and its Compensation Committee formally review the benefits provided to our employees, including health and wellness, once a year.

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of employees completed compliance training
100%

Director Qualifications, Skills, and Experience

Summary of Qualifications, Skills and Experience

Compensation / Talent Management

Corporate Governance

Experience in compensation, organizational management, leadership, talent development, and identifying, recruiting and motivating top talent 

Experience in providing oversight and support of the goals of the Board and management and experience in protection of stockholder interests 

Cybersecurity Understanding cybersecurity risks in enterprise operations

Financial Expertise .

Experience in evaluating financial statements and capital structures and overseeing financial reporting and internal controls 

Government / Regulatory / Public Policy . Experience in or working with governmental and regulatory organizations

International. Experience with global businesses, operations, strategy, and customer bases 

Marketing.

Operations .

Risk Management.

Experience in marketing and branding of products and services and identifying and developing new markets for products and services 

Current or former executives with significant operating experience, 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 faced by enterprise operations 

Strategic Planning . Experience in providing insight into developing, implementing, and assessing businesses and strategy 

Technology / Semiconductor / Electronic Design Automation

.

In-depth understanding of electronic design automation, semiconductor and electronics systems technologies; ability to understand and oversee the overall business and strategy, including product development and the acquisition of businesses that offer complementary products, technologies or services 

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W. Adams
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Ita Brennan Lewis Chew Anirudh Devgan Mary Louise Krakauer Julia Liuson James D. Plummer Alberto SangiovanniVincentelli John B. Shoven Young K. Sohn Lip-Bu Tan

Ethical Conduct: Code of Business Conduct

Our Worldwide Code of Business Conduct provides standards for ethical conduct in how we work with each other at Cadence and with our customers, suppliers, government officials, and other stakeholders. Our Code of Business Conduct also reflects our values of integrity, innozvation, agility, and quality, and it applies worldwide to our Board, officers, employees, and certain contractors and consultants.

Compliance with our Code of Business Conduct is the responsibility of all employees and a condition of continued employment. Our employees are required to annually certify that they have reviewed and understand the Code of Business Conduct and annually complete training that covers areas in the Code of Business Conduct, such as accuracy of records, conflicts of interest, and raising concerns or reporting possible misconduct. Our Code of Business Conduct is translated for our employees in the following local languages: Chinese, French, German, Hebrew, Japanese, Korean, Polish, Portuguese, Russian, and Taiwanese.

The Chief Executive Officer and the Chief Legal Officer of Cadence, under the supervision of the Board, actively monitor and audit compliance of the Code of Business Conduct. Our Chief Legal Officer periodically provides reports to the Board or its Audit Committee that include information on alleged violations of and the actions taken under the Code of Business Conduct.

Business Ethics: Anti-Corruption

Integrity is the foundation of our High-Performance Culture. It is important to Cadence that we operate ethically and transparently, avoiding conflicts of interest, competing fairly and legally, and complying with the rules and regulations of the regions where we do business. Our Code of Business Conduct and our Anti-Corruption Policy are the foundation of our robust corporate governance and compliance programs. Any material losses or legal action regarding anti-competitive behavior or violation of anti-trust and monopoly legislation required to be disclosed pursuant to the regulations of the U.S. Securities and Exchange Commission (SEC) would be reflected in our filings with the SEC.

Cadence has no tolerance for bribery in connection with any of its business dealings. Our Anti-Corruption Policy, which is summarized in our Code of Business Conduct, provides rules and procedures for providing or accepting gifts, entertainment, meals, travel-related expenses or anything of value, and charitable and political contributions. The Chief Legal Officer of Cadence oversees our Anti-Corruption Policy. Our Anti-Corruption program at Cadence is extensive and all employees, including management, are required to complete annual refresher training and certify that they have reviewed our Anti-Corruption Policy.

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Political Contributions

Any contributions or donations on behalf of Cadence to a political party, candidate, action committees, initiative, campaign, or advocacy on behalf of Cadence must receive pre-approval from the Chief Legal Officer and the Chief Financial Officer of Cadence.

Cadence did not contribute to political parties, candidates or political action committees or for the purposes of political advocacy in 2021.

Reporting Concerns

Our employees are required to promptly report possible misconduct, including illegal activities, 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 Chief Legal Officer, or anonymously via our whistleblower hotline.

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PRIVACY AND CYBERSECURITY: MANAGING RISKS OF SECURE DATA

Our products and services involve storage, including cloud-based storage, and transmission of our proprietary information and that of our customers.

With offices throughout the world, including key research and development locations outside of the United States, our business continuity is dependent upon the connectivity of our global operations and is subject to a number of risks summarized in our periodic reports filed with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K.

Our Information Security team works to identify and prevent risks to the security of protected data we collect. Our Chief Information Security Officer administers our data privacy and cybersecurity program, with oversight from the Audit Committee of the Board of Directors. We regularly update our Board of Directors on our performance and risk profile.

In 2021, with a vast majority of employees continuing to work from home during the COVID-19 pandemic, we maintained our focus on providing secure remote access with endpoint security controls and infrastructure resiliency. We enhanced our verification controls to further protect our network from unauthorized access and we utilized cybersecurity incident response procedures to address risks specific to remote working conditions.

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efforts and to protecting the sensitive data that Cadence We proactively manage cybersecurity by leveraging industry security frameworks and best practices, using advanced machine learning, and by actively monitoring cyber threats.

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We structure our data privacy and cybersecurity program to align with the EU, National Institute of Standards and Technology (NIST), and ISO 27001 standards. We are pleased to report that we received formal certification of our compliance with ISO 27001 in 2021. 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 tests to identify potential vulnerabilities. In the event of a data breach, we have documented response procedures and trained staff to execute our emergency protocol.

Cadence’s Privacy Policy explains how and when we collect personal data and the types of information the policy covers. The policy also outlines our data disclosure policy, opt out procedures, location and retention policies, user rights, and contact information for reporting questions or concerns.

To ensure all Cadence employees are aware of our policies and procedures on data privacy and cybersecurity, an annual training for data privacy and cybersecurity is mandatory. The training covers topics such as data protection, classification and privacy, cybersecurity, phishing, and other pertinent topics.

Any data breaches, law enforcement requests for user information, or other issues associated with data security and user privacy would be disclosed in our filings with the U.S. Securities and Exchange Commission (SEC) if such disclosure is required pursuant to SEC regulations.

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RESPONSIBLE SUPPLY CHAIN

We partner with suppliers that share our values and aim to build long-lasting relationships that are mutually beneficial and create value for society beyond our respective organizations. To support our operations, we

Computer, Electrical, Optical, and Office Equipment

Telecommunications, Shipping, and Postal Services

Financial Intermediation, Professional Services, Real Estate Activities, and Data Centers

We rely on trusted manufacturing partners for the majority of our technology production. These partners manage the relationships with second tier suppliers for parts and raw materials. In 2022, we plan to explore extending our supply chain engagement to include manufacturing partners as well as second tier suppliers.

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Supplier Code of Conduct

Through our Supplier Code of Business Conduct, we aim to extend the rigorous ESG-aligned governance standards discussed in this report to our supplier partners. Globally, all of our new suppliers have been notified of the Supplier Code of Business Conduct, and more than half have acknowledged it to date. We’re working to notify our existing suppliers of the Code of Conduct and request acknowledgement.

Supplier Diversity

In 2021, four percent of our total spend was with suppliers that met a certified diversity criterion characterizing their business. In line with our commitment to diversity and inclusion, we are developing programs to engage with and empower these value chain partners, and to grow our share of diverse suppliers. We are also taking steps to design programs to help current suppliers achieve certification.

Of diverse suppliers who responded to our supplier sustainability survey:

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93% 24% 21% Small Business Minority-Owned Business Small Disadvantaged Business Enterprise Women-Owned Small Business
4% Of our global spend is with diverse suppliers (certified by an independent third party) 32%

Supplier Quality Management

The process approach and principle of continual improvement of ISO 9001 govern the sustainability of our supply chain. Several of our operations maintain ISO 9001

Certification for quality management and assurance: our Hardware System Verification (HSV) operations, including oversight and management of manufacture and services of enterprise emulation platforms; our IPG-DIP Group that provides Integrated Circuit Design, Intellectual Property, Prototyping and Testing Services; our IPG-TIP (Tensilica) Group; as well as our Belgian subsidiary for software development, sales, support, and consultancy. Cadence also currently holds ISO 26262 certificates for six design tool flows, and two independent tool qualifications for Functional Safety in Automotive.

Of suppliers that responded to our supplier sustainability survey:

Risk Management

Robust business continuity programs are in place to identify and mitigate risk factors in the supply chain for various uncertainties that could adversely affect our business, financial condition, or results of operations. Our risk factors are discussed in detail in the Annual Report on Form 10-K.

To identify and assess potential risks and opportunities within our value chain, we asked over 100 of our key suppliers, representing roughly 80% of our overall spend, to participate in our supplier sustainability questionnaire that covers issues including governance of climate change, natural resources, labor, data security, ethics and integrity.

21% of those surveyed provided responses, which represents 47% of our overall 2021 spend. We will continue to engage with suppliers to increase response rates.

Hold one or more ISO certifications—ISO 9001, 13485, 14001, 27001, 28000, 37001, 45001, 50001

Have ISO 14001 Environmental Management Certification

Have ISO 27001 Information Security Management Certification

Have ISO 45001 Occupational Health and Safety Certification

67
62% 35% 23% 15%

Human Rights

No individual should be subjected to any form of forced labor, slavery or human trafficking. To reduce the possibility of these violations occurring in our supply chain, we require supplier partners to be bound by obligations to comply with all applicable laws. The 2015 UK Modern Slavery Act informs our management of these issues. Our UK Modern Slavery Act Statement outlines our position.

Of suppliers that responded to our supplier sustainability survey that have a manufacturing workforce:

Conflict Minerals

Cadence is also committed to responsible sourcing of materials and seeks to avoid the use of conflict minerals (tin, tungsten, tantalum, and gold) sourced from the Democratic Republic of the Congo and adjoining countries that may directly or indirectly finance or benefit armed groups that engage in human rights abuses. We are members of Responsible Minerals Initiative (RMI) and support industry efforts—such as the Conflict Free Sourcing Initiative—to enable conflict-free mineral sourcing and expect the same from our suppliers. We survey our suppliers on conflict minerals compliance annually, and in 2021 91% of suppliers responded to our conflict minerals survey. Detailed information on our Conflict Minerals program can be found in our Form SD – Specialized Disclosure Report on Conflict Minerals

Conflict Minerals Policy Statement

Track conditions for manufacturing workers against ILO standards including that the workweek is limited to 60 hours

100% 100%

Have company policies to protect workers from exposure to safety hazards while on the job

91%

Of our suppliers responded to our conflict mineral survey in 2021

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Partnering with suppliers that support our values

Cadence is committed to doing business honestly and ethically everywhere we operate. We expect our suppliers to conduct themselves with the same high standards as our own employees. To ensure our relationships with our suppliers meet and support these expectations, we have been an Affiliate Member of the Responsible Business Alliance (RBA) since 2018. 27% of our key suppliers are also members of RBA. Through our supplier sustainability questionnaire, we track which of our suppliers disclose information to the CDP; publish GRI, SASB, TCFD reports; have programs that align with the Sustainable Development Goals (SDGs); and are members of organizations such as RBA, the UN Global Compact, and Pledge 1%. We require all of our direct suppliers to be Restriction of Hazardous Substances (RoHS) compliant.

Of suppliers that responded to our supplier sustainability survey that handle hazardous substances or require environmental permits:

100%

Confirmed that company policies adhere to local laws and regulations including proper disposal of hazardous substances and solid waste in a responsible manner

The majority of our greenhouse gases – 87% – occur in our supply chain. In 2021 we used the GHG Protocol Hybrid Method to improve the accuracy of our Scope 3 calculations for Purchased Goods and Services and Capital Goods. This new methodology highlights the work that our valued suppliers are doing to reduce their own carbon footprints, as well as our efforts to partner with suppliers that share our values.

100%

Confirmed that they adhere to regulatory requirements for environmental permits (where relevant)

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COMMUNITY OUTREACH

2021 Community Outreach Highlights

Cadence understands that the success of our business depends upon the success of our employees and the communities in which we live and work. This year, to expand the impact, commitments, and legacy of our company giving initiatives, we launched the Cadence Giving Foundation. The Cadence Giving Foundation promotes the power of technology to support critical needs in our global communities like diversity and inclusion, environmental sustainability, and education. Our programs promote science, technology, engineering, and math (STEM) among youth, with a special focus on underrepresented groups, including veterans, Black, Latinx, LGBTQ+, and women communities, to create a future pipeline of diverse talent.

We also believe it is important that we create meaningful opportunities for employees to connect and contribute to their community. We provide 40 hours of paid volunteer time off annually, charitable contribution matching, company-wide volunteer campaigns and international service immersion projects.

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Enabling Education for Disadvantaged Students

Team4Tech

The pandemic has affected many facets of our societies, including access to education in vulnerable communities. We once again partnered with Team4Tech to give our time, talent, and resources to support quality STEM education for those impacted by school closures due to COVID-19. Our efforts help disadvantaged youth develop critical skills that can enable their career and give them opportunities for a brighter future.

We engaged two teams of employees to help educators integrate technology lessons into their classrooms. The first team of employees supported our third project with Kidspire, a nonprofit organization in Vietnam whose mission is to help children living in orphanages build skills for productive employment.

A second team of employees virtually volunteered with LEAP Science and Math Schools, a nonprofit organization whose mission is to provide high quality, low-fee education to underserved youth living in the townships of South Africa. On these two projects alone, our volunteers provided over 1,300 hours of pro-bono service, reached 1,850 students, and supported 70 teachers.

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 important resources that support their health and education, including enhanced educational support to underprivileged children, special education for children with disability, athletics programs, technical skills training, healthcare, counseling, and other essentials like food and clothing.

For five 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 200 scholars were supported, and 45 successfully found employment in 2021. These students receive regular mentorship from Cadence employees who motivate them to achieve their career goals.

1300 hours of pro-bono service

1850 students reached

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Supporting Diversity in Tech

Cadence made contributions to a number of nonprofits with programs that create opportunities for underrepresented groups, including students of color, low-income students, first-generation college students, women and girls, veterans, and LGBTQ+ to pursue careers in technology. The efforts of our nonprofit partners will help build a more diverse pipeline in tech.

Girls Who Code

For the fourth year in a row, we partnered with Girls Who Code to provide a fully virtual Summer Immersion program. Cadence hosted 45 students in a virtual classroom, conducting workshops and mentorship opportunities with Cadence employees. We also sponsored Girls Who Code’s Hiring Summit to assist thousands of women seeking technical roles in computer science.

Technovation

Cadence funded two Technovation chapters under the STEM Next Opportunity Fund initiative. This program helped 150 educators and mentors develop skills to better support girls in solving problems using technology. In turn, 490 girls will increase their interest in STEM and ability to solve real-world problems.

SMASH

As a sponsor for the SMASH Academic Year Program (AYP), Cadence helped provide more than 200 underrepresented students with access to free STEM curriculum three hours a day, two Saturdays a month during the academic school year. In the summer, Cadence also provided laptops to 32 students with limited financial resources which allowed them to succeed in the program and their other academic pursuits. Workshops focus on college success and computer science, with time scheduled to help with financial aid, virtual college visits, and understanding college fit.

Latinas in Tech

Our Latinas in Tech partnership supports career opportunities for over 16,000 Latina professionals in their network. We also hosted a Latinas in Tech summit where Cadence employees shared their career advice with members of the Latinas in Tech community. Women in attendance also had the opportunity to participate in breakout sessions for more indepth discussions.

Out in Tech

Cadence joined Out in Tech’s corporate council to join a network of companies dedicated to fostering inclusion for the LGBTQ+ community. Our contributions also help fund their 16 chapters and programming for 40,000+ members, giving our employees opportunities to participate in learning and development events and mentor LGBTQ+ youth.

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Black Girls Code

We support Black Girls CODE and their network of girls interested in pursuing careers in STEM. Black Girls Code provides their students with crucial opportunities to engage in STEM programs and workshops through their local schools.

Vets in Tech

We support Vets in Tech in their mission to provide transitioning military, veterans, and spouses with reintegration services, and connecting them to the national technology ecosystem.

Cristo Rey

Due to the pandemic, many families of Cristo Rey students were surviving on just one income due to job losses. Cristo Rey, a private high school in San Jose that provides a workstudy program for low-income families, has been a partner of Cadence for the past 3 years. The school held a food distribution initiative in response to COVID-19 to support families in need. With Cadence’s $20,000 donation, Cristo Rey was able to provide nutritious meals and hygiene products for over 80 families weekly.

The Cadence Cork Center of Excellence

As a world-class engineering operation, our international headquarters in Ireland, the Cadence Cork Center of Excellence allows for impactful innovation with a focus on technical excellence. The local community is extremely important to Cadence Cork, and in 2021 we focused on donating to local charities that support hunger, homelessness and personal development, suicide awareness and prevention, and medical helicopter emergency services.

Innovating for Sustainability

Cadence is devoted to introducing and promoting technology to the global community for the good of future generations. We sponsored the Extreme Tech Challenge (XTC), which funds new ventures whose missions align with the United Nation’s Sustainable Development Goals. Several Cadence employees participated as judges this year, reviewing over 60 pitches. XTC’s ongoing global effort will help pave the way for technology leaders and entrepreneurs of the future to deliver the breakthroughs necessary to help address the world’s biggest problems and realize a sustainable future.

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Team4Tech & WITU

In 2019, Nick Heaton, a distinguished engineer at Cadence, joined other Cadence employees to volunteer with Women in Tech Uganda (WITU), a nonprofit that provides women and girls with the skills they need to gain employment and lift themselves from poverty. Nick was so inspired by this immersive experience that he joined the Board of Directors at WITU. In 2021, in partnership with WITU, Nick piloted a one-year internship program for young women engineers at Cadence. Through this program, five women in Uganda will go through technical training and hands-on projects using Cadence software and gain skills that can help jumpstart their careers.

Technovation, Kidspire Vietnam and Team4Tech

In 2021, Cadence had our third project with Team4Tech and Kidspire Vietnam, two nonprofits that are dedicated to improving the quality of education for underserved students. A team of 12 Cadence employees from China, England, France, India, and United States volunteered virtually to mentor young girls living in orphanages in Vietnam. For six weeks, they worked together through the Technovation Challenge and learned how to build a mobile app to solve an issue they were facing using the MIT App Inventor. One group of girls, Tomato Team, yearned for more books to read so they created an app that allowed users to exchange books with people who live in the same area. With the help and support of Cadence employees, Tomato Team became the first group from Vietnam to place as a finalist in the Technovation Challenge.

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AWARDS AND RECOGNITION

World’s Best Workplaces

Fortune ranked Cadence #17 on their top 25 World’s Best Multinational Workplaces 2021, our sixth time appearing

Best Place to Work for LGBTQ+ Equality

Recognized by the Human Rights Campaign Foundation with a perfect score of 100 on their 2022 Corporate Equality Index

100 Best Companies to Work For

Named for the seventh year in a row by Fortune magazine and appearing as #65 in 2021

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25+ Best Workplace Recognitions

Best workplace honors from the Great Place to Work Institute in multiple categories across 13 different countries during 2021

America’s Best-InState Employers

Forbes named Cadence #35 out of 101 best employers in California for 2021

Most Responsible Companies

#115 on Newsweek’s list of the top 500 Most Responsible Companies 2022, and #6 in our industry

Gold Stevie Awards

2021 Gold Stevie Awards for Technical Innovation of the Year and Best Hardware Product in Semiconductor for Dynamic Duo at their International Business Awards

OIP Partner of the Year

Cadence received four Open Innovation Platform Partner of the Year awards from TSMC core EDA, IP and systems solutions in 2021

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Most Loved Workplaces

#7 on Newsweek’s inaugural top 100 list based on employee happiness and satisfaction at work

Mahatma Awards

Awards for COVID 19

Humanitarian Efforts and excellence in Corporate Social Responsibility in India for 2021

World Electronics Achievement Awards

Cadence® Palladium® Z2 Enterprise Emulation Platform was selected by ASPENCORE analysts and their user community worldwide in EDA/IP/Software in 2021

China IC Design Award Outstanding

EDA Company

The award recognizes leading IC design companies in 2021 whose contributions assist engineers in developing electronic system products in China

100 Best ESG Companies

Recognized by Investor’s Business Daily in 2021 for our profitability along with ethical and socially responsible business practices

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GRI INDEX

80

GRI Content Index

Company name: Cadence Design Systems, Inc.

Reporting Period: 2021

Reporting

Standard Disclosure Disclosure Details

GRI Standards

Page number or URL

GRI 102: General Disclosures 102-1 Name of the organization Cadence Design Systems, Inc. Cover, Index ABOUT CADENCE - Stock Exchange (NASDAQ: CDNS) 4-5, Index 102-2 Activities, brands, products, and services ABOUT CADENCE - Transforming the Way People Design NextGeneration Systems

INNOVATION - The Impact of Electronic Design Automation on a Better World, Innovation at Cadence

4-5, 15 Cadence - Our Story 102-3 Location of headquarters ABOUT CADENCE - Headquarters 2655 Seely Avenue, San Jose, California 95134 4-5, Index 102-4 Location of operations ABOUT CADENCE - Countries Global presence across 23 countries 5, Index Cadence - Our Story 102-5 Ownership and legal form See our Annual Report 4-5, Index Cadence 2021 Form 10-K 102-6 Markets served See our Annual Report 5, Index Cadence 2021 Form 10-K

102-7 Scale of the organization ABOUT CADENCE - Revenue, Employees WORKFORCE: ACCELLERATING INNOVATION AS ONE TEAMCadence Team

As of December 31st, 2021, Cadence has approximately 9,359 employees in our offices worldwide. We reported $2.988B in Fiscal Year 2021 total revenue

4, 36, Index Cadence 2021 Form 10-K

81

Reporting Standard Disclosure Disclosure Details

GRI Standards

GRI 102: General Disclosures

Page number or URL

102-8 Information on employees and other workers

WORKFORCE: ACCELLERATING INNOVATION AS ONE TEAMCadence Team

Global Full Time – over 99% of employees

Global Part Time – less than 1% of employees

Global Full Time – 9,280

Global Part Time – 79

RESPONSIBLE SUPPLY CHAIN 65

36 102-9 Supply chain

102-10 Significant changes to the organization and its supply

No significant changes

Index Only 102-11 Precautionary Principle or approach

Our Corporate Governance incorporates risk management approaches to reduce and avoid negative impacts in operations

See our Corporate Governance website for more details

Index Only Cadence Corporate Governance 102-12 External initiatives

Cadence is an affiliate member of the Responsible Business Alliance (RBA) as well as takes part in the following Economic, Environmental and Social initiatives: Team4Tech; Great Place to Work Institute; National Society of Black Engineers; 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, and Kidspire

13, 71-74, Index

Responsible Business AllianceMembers

102-13 Membership of associations

102-14 Statement from senior decisionmaker

Please visit our website for our Industry Partnerships

Index Only

Cadence Industry

LETTER FROM OUR CEO 3

82

Reporting Standard Disclosure Disclosure Details

GRI Standards

GRI 102: General Disclosures

102-16 Values, principles, standards and norms of behavior GOVERNANCE

Our Code of Business Conduct outlines our policy, which applies to the company’s employees, officers, and nonemployee directors, including the Company’s CEO, CFO and principal accounting officer or controller

Page number or URL

53-59, Index

Cadence Code of Business Conduct

102-17 Mechanisms for advice and concerns about ethics

GOVERNANCE- Ethical Conduct: Code of Business Conduct, Reporting Concerns

Our Code of Business Conduct outlines the internal and external mechanisms for employees to seek advice about ethical and lawful behavior, and organizational integrity, and to report concerns about unethical or unlawful behavior, and organizational integrity

102-18 Governance structure GOVERNANCE - Board Governance

Learn more about our Corporate Governance policies , our Board of Directors and our Board composition on our Corporate Governance website

58-59, Index

Cadence Code of Business Conduct

53-57, Index

Cadence Corporate Governance

102-20 Executive-level responsibility for economic, environmental, and social topics

102-22 Composition of the highest governance body and its committees

GOVERNANCE - Board Oversight of the Corporate Social Responsibility Program

Please see our 2021 CDP Climate Change Investor Response, questions 1.1a and 1.1b, for more details

3, 55, Index

Cadence 2021 CDP Climate Change Investor Response

GOVERNANCE - Board Governance, Board Membership 53, 54

Cadence Corporate Governance

102-40 List of stakeholder groups ABOUT THE REPORT

Our key stakeholder groups include but are not limited to: current and former Cadence employees; customers; suppliers and vendors; societies and communities in which we operate; trade associations; government and regulatory agencies; and investors

6, Index

83

Reporting Standard Disclosure

GRI Standards

GRI - 102 General Disclosures

Disclosure Details

102-41 Collective bargaining agreements Employees are generally not covered by collective bargaining agreements, only as required by certain local European Country laws (such as France)

Page number or URL

Index Only

102-42 Identifying and selecting stakeholders ABOUT THE REPORT 6

102-43 Approach to stakeholder engagement ABOUT THE REPORT 6

102-44 Key topics and concerns raised Cadence stakeholders have raised several key issues that include but are not limited to: Climate Action, Diversity and Equal Opportunity; Non-Discrimination; Energy; Emissions; AntiCorruption; Anti-Competitive Behavior; Data Privacy and Security; and Supply Chain management

Index Only

102-45 Entities included in consolidated financial statements ABOUT THE REPORT Cadence Design Systems, Inc. and subsidiaries 7, Index Cadence 2021 Form 10-K 102-46 Process for defining report content and boundaries ABOUT THE REPORT 7 102-47 List of material topics ABOUT THE REPORT Innovation (GRI: Direct economic value generated and distributed)

Environmental Impact (GRI: Energy, Emissions) Workforce (GRI: Diversity and Equal Opportunity, Employee Engagement, Occupational Health and Safety, Training and Education)

Data Privacy & Cybersecurity (GRI: Customer Privacy & Data Security)

Governance and Ethical Business Practices (GRI: Anticorruption, Anti-Competitive Behavior)

Responsible Supply Chain (GRI: Supplier Environmental Assessment, Supplier Social Assessment)

6-7, Index

84

Reporting Standard Disclosure

GRI Standards

GRI 102: General Disclosures

Disclosure Details

Page number or URL

Economic Performance

GRI 103: Management approach

102-48 Restatements of information

Scope 2 market-based figures for 2019 and 2020 were updated in our 2020 Sustainability Report Index Only 102-49 Changes in reporting No changes in reporting Index Only 102-50 Reporting period ABOUT THE REPORT 2021 Calendar Year 6, Index 102-51 Date of most recent previous report (if any) March, 2021 Index Only 102-52 Reporting cycle Annual Index Only 102-53 Contact point for questions regarding the report ABOUT THE REPORT csr-esg@cadence.com 7, Index 102-54 Claims of reporting in accordance with the GRI Standards

103-1 Explanation of the material topic and its boundaries

ABOUT THE REPORT

This report has been prepared in accordance with the GRI Standards: Core Option

30, Index

7, Index 102-55 GRI Content Index The GRI Content Index Table Index Only 102-56 External Assurance ENVIRONMENTAL STEWARDSHIP - Carbon Accounting Improvements

Reported Scope 1, 2, and 3 GHG emissions have achieved limited assurance by an independent, third party

ENVIRONMENTAL STEWARDSHIP

25-33

Please see our 2021 CDP Climate Change Investor Response, question 2.4a, for details on climate-related opportunities

ENVIRONMENTAL STEWARDSHIP

Please see our 2021 CDP Climate Change Investor Response, question 2.4a, for details on climate-related opportunities

25-33

Cadence 2021 CDP Climate Change Investor Response 103-2 The management approach and its components

Cadence 2021 CDP Climate Change Investor Response

85

Reporting Standard Disclosure Disclosure Details

Material Topics

GRI 103: Management Approach 103-3 Evaluation of the management approach ENVIRONMENTAL STEWARDSHIP

Please see our 2021 CDP Climate Change Investor Response, question 2.4a, for details on climate-related opportunities

Page number or URL

25-33

Cadence 2021 CDP Climate Change Investor Response

GRI 201: Economic Performance 201-1 Direct economic value generated and distributed ABOUT CADENCE - Revenue 4

Anti-Corruption

GRI 103: Management Approach 103-1 Explanation of the material topic and its boundaries

Please see our 2021 CDP Climate Change Investor Response, question 2.4a

Index Only

Cadence 2021 Form 10-K 201-2 Financial implications and other risks and opportunities due to climate change

Cadence 2021 CDP Climate Change Investor Response

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAMTraining and Career Development GOVERNANCE - Ethical Conduct: Code of Business Conduct

47, 58 103-2 The management approach and its components WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM - Training and Career Development GOVERNANCE - Ethical Conduct: Code of Business conduct

47, 58 103-3 Evaluation of the management approach We achieved a 100% completion rate for all our employees globally on this training in 2021 58, Index

GRI 205: Anti-Corruption 205-2 Communication and training about anti-corruption policies and procedures

WORKFORCE - Training and Career Development

GOVERNANCE - Business Ethics: Code of Business Conduct, Anti-Corruption

Cadence enables and requires all employees to receive training regarding ethics and anti-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 2021

47, 58, Index

86

Reporting Standard Disclosure Disclosure Details

Material Topics

Anti-Competitive Behavior

GRI 103: Management Approach 103-1 Explanation of the material topic and its boundaries

GOVERNANCE - Business Ethics: Anti-Corruption 58 103-2 The management approach and its components GOVERNANCE - Business Ethics: Anti-Corruption 58 103-3 Evaluation of the management approach GOVERNANCE - Business Ethics: Anti-Corruption 58

GRI 206: Anti-Competitive Behavior Legal actions for anti-competitive behavior, anti-trust, and monopoly practices

Energy

GRI 103: Management Approach 103-1 Explanation of the material topic and its boundaries

Any material losses or legal action regarding anti-competitive behavior or violation of anti-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.

58, Index

Cadence 2021 Form 10-K

ENVIRONMENTAL STEWARDSHIP 26-30 103-2 The management approach and its components ENVIRONMENTAL STEWARDSHIP 26-30 103-3 Evaluation of the management approach ENVIRONMENTAL STEWARDSHIP 26-30

GRI 302: Energy 302-1 Energy consumption within the organization 257,827 Gigajoules (GJ)  93% non-renewable energy 7% renewable energy

Index Only 302-3 Energy intensity 26,111 kBTU per employee Index Only 302-4 Reduction of energy consumption 7% from 2020 to 2021 Index Only

87
Page
number or URL

Reporting Standard Disclosure Disclosure Details Page number or URL

Material Topics

Emissions

GRI 103: Management Approach 103-1 Explanation of the material topic and its boundaries ENVIRONMENTAL STEWARDSHIP 26-30 103-2 The management approach and its components ENVIRONMENTAL STEWARDSHIP 26-30 103-3 Evaluation of the management approach ENVIRONMENTAL STEWARDSHIP 26-30

GRI 305: Emissions 305-1 Scope 1 Emissions 6,281 MT CO2e 26-28, Index 305-2 Scope 2 Emissions (marketbased) 16,072 MT CO2e 26-28, Index 305-2 Scope 2 Emissions (locationbased) 23,750 MT CO2e 26-28, Index

305-3 Scope 3 Emissions 145,618 MT CO2e 28-29, Index

305-4 Emissions Intensity 10 MT CO2e/Million USD Revenue 2.4 MT CO2e per employee (Scope 1 + Scope 2 market-based)

26, Index

305-5 Reduction of GHG Emissions 32% reduction in (Scope 1 + Scope 2 market-based) GHG emissions in 2021 from the baseline year (2019) 26, Index

305-6 Emissions of ozone-depleting substances There are no such emissions in our operations Index Only

305-7 Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions There are no such emissions in our operations Index Only

88

Material Topics

Employment

GRI 103: Management Approach

GRI 401: Employment

103-1 Explanation of the material topic and its boundaries

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM Boundary: Global 35-51, Index 103-2 The management approach and its components WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM 35-51

103-3 Evaluation of the management approach

401-1 Total number and rate of new employee hires

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAMEmployee Engagement

91% of employees surveyed say that Cadence is a Great Place to Work

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAMCadence Team

Total hiring: 1,886

Headcount growth over last 5 years: 31%

37, Index,

36, Index

401-1 Total number and rate of new employee hires by gender

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAMDiversity, Equity, and Inclusion

464 female, 1,422 male

Rate of female hiring: 25%

Rate of male hiring: 75%

401-1 Total number and rate of new employee hires by career stage group

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAMCollege Hire and Intern Program

926 early career talent

403 intern talent

Rate of early career talent hiring: 49%

Rate of more senior hiring: 51%

38, Index

37, Index

89
Reporting Standard Disclosure Disclosure Details Page number or URL

Material Topics

GRI 401: Employment 401-1 Total number of new employee hires by gender and career stage group

Occupational Health & Safety

Page number or URL

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM - College Hire and Intern Program, Diversity, Equity and Inclusion

257 female early career talent, 669 male early career talent 114 female intern talent, 289 male intern talent

Rate of early career and intern female talent hiring: 28%

Rate of early career and intern male talent hiring: 72%

36, Index

37, 38, Index 401-1 Employee turnover WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM - Cadence Team 12%

GRI 103: Management Approach 103-1 Explanation of the material topic and its boundaries WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM

Our injury rate is calculated for workers based in the United States 48-51, Index 103-2 The management approach and its components WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM 48-51 103-3 Evaluation of the management approach

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM 48-51

GRI 403: Occupational Health and Safety 403-9 Work related injuries WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM - Safety

Injury rate: 0.1% calculated per 100 workers

Lost work days: 0

48, Index

90
Reporting Standard Disclosure Disclosure Details

Reporting

Material Topics

Training and Education

GRI 103: Management Approach 103-1 Explanation of the material topic and its boundaries

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM - Training and Career Development

Our injury rate is calculated for workers based in the United States

47 103-2 The management approach and its components WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM - Training and Career Development 47 103-3 Evaluation of the management approach 91% of employees surveyed say Cadence is a Great Place to Work 37, Index

GRI 404: Training and Education 404-1 Average hours of training per year per employee

Percentage of employees to access online learning management system

Percentage of US Managers who have completed Unconscious Bias training

Diversity and Equal Opportunity

GRI 103: Management approach 103-1 Explanation of the material topic and its boundaries

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAMTraining and Career Development

Average of 28 hours of training per employee 19 hours Technical 9 hours Non-technical

47, Index

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM -Training and Career Development 47

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM - Diversity, Equity, and Inclusion Highlights

96% of US managers have completed unconcious bias training

40, Index

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM GOVERNANCE - Board Membership 36-38, 54 103-2 The management approach and its components WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM GOVERNANCE - Board Membership 36-38, 54 103-3 Evaluation of the management approach

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM GOVERNANCE - Board Membership 36-38, 54

91
Standard Disclosure Disclosure Details Page number or URL

Material Topics

GRI 405: Diversity and Equal Opportunity

405-1. a) Diversity of governance bodies and management positions WORKFORCE: ACCELERATING INNOVATION AS ONE TEAMDemographics

GOVERNANCE - Board Membership

Diversity of governance bodies and management by gender

Board of Directors: 27% female, 73% male Managers or more senior: 17% female, 83% male

Diversity of governance bodies by ethnicity

Board of Directors: 55% White 45% Asian

405-1. b) Diversity by employee categories WORKFORCE: ACCELERATING INNOVATION AS ONE TEAMDemographics

Diversity by employee category

Technical Workforce: 20% Female 80% Male Non-technical Workforce: 46% Female 54% Male

405-2 Ratio of basic salary and remuneration of women to men

PROGRESS ON OUR 2021 ENVIRONMENTAL, SOCIAL AND GOVERNANCE STRATEGIES - Workforce

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAMEqual Pay

Cadence maintained global salary pay parity for gender, and U.S. salary pay parity based on race and ethnicity again in August 2021

46, 54, Index

46, Index

11, 40, Index

92
Reporting Standard Disclosure Disclosure Details Page number or URL

Material Topics

Employee Engagement

ISS 306 - quantitative metrics for employee engagement including a percentage value

Supply Chain

GRI 103: Management Approach 103-1 Explanation of the material topic and its boundaries

GRI 308: Supplier Environmental Assessment

Customer Privacy

WORKFORCE:

ACCELERATING INNOVATION AS ONE TEAMEmployee Engagement

91% of employees surveyed say that Cadence is a Great Place to Work

37, Index

RESPONSIBLE SUPPLY CHAIN 65-69 103-2 The management approach and its components RESPONSIBLE SUPPLY CHAIN 65-69 103-3 Evaluation of the management approach RESPONSIBLE SUPPLY CHAIN 65-69

308-1 New suppliers that were screened using environmental criteria 100% Index Only

GRI 414: Supplier Social Assessment 414-1 New suppliers that were screened using social criteria 100% Index Only

GRI 103: Management Approach 103-1 Explanation of the material topic and its boundaries

PRIVACY AND CYBERSECURITY: MANAGING RISKS OF SECURE DATA 61-63 103-2 The management approach and its components PRIVACY AND CYBERSECURITY: MANAGING RISKS OF SECURE DATA 61-63 103-3 Evaluation of the management approach PRIVACY AND CYBERSECURITY: MANAGING RISKS OF SECURE DATA 61-63

GRI 418: Customer Privacy 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

Any data breaches, law enforcement requests for user information, or other issues associated with data security and user privacy resulting in material monetary losses to 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

63, Index

Cadence 2021 Form 10-K

93
Reporting Standard Disclosure Disclosure Details Page number or URL

SASB INDEX

94

SASB Content Index

Company name: Cadence Design Systems, Inc.

Reporting Period: 2021

Disclosure Details

Environmental Footprint of Hardware Infrastructure

Data Privacy & Freedom of Expression

Page number or URL

TC-SI-130a.1.   (1) Total energy consumed 257,827 Gigajoules (GJ) Index Only

TC-SI-130a.1.   (2) Percentage grid electricity 99% grid electricity Index Only

TC-SI-130a.1.   (3) Percentage renewable

TC-SI-130a.3.  Discussion of the integration of environmental considerations into strategic planning for data center needs

TC-SI-220a.1.  Description of policies and practices relating to behavioral advertising and user privacy

ENVIRONMENTAL STEWARDSHIP - Combatting Climate Change

7% renewable energy

TC-SI-220a.3. Total amount of monetary losses as a result of legal proceedings associated with user privacy

TC-SI-220a.4. (1) Number of law enforcement requests for user information (2) number of users whose information was requested (3) percentage resulting in disclosure

27, Index

ENVIRONMENTAL STEWARDSHIP - Data Centers 30-31

PRIVACY AND CYBERSECURITY

Cadence’s Privacy Policy explains how and when we collect personal data and the types of information the policy covers. The policy also outlines our data disclosure policy, opt out procedures, location and retention policies, user rights, and contact information for reporting questions or concerns

PRIVACY AND CYBERSECURITY

Any data breaches, law enforcement requests for user information, or other issues associated with data security and user privacy resulting in material monetary losses to 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

PRIVACY AND CYBERSECURITY

Any data breaches, law enforcement requests for user information, or other issues associated with data security and user privacy resulting in material monetary losses to 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

63, Index

Cadence Privacy Policy

63, Index

Cadence 2021 Form 10-K

63, Index

Cadence 2021 Form 10-K

95
SASB Topic SASB Code SASB Accounting Metric

SASB Topic SASB Code SASB Accounting Metric Disclosure Details

Data Security

TC-SI-230a.1. (1) Number of data breaches, (2) percentage involving personally identifiable information (PII), (3) number of users affected

PRIVACY AND CYBERSECURITY

Any data breaches, law enforcement requests for user information, or other issues associated with data security and user privacy resulting in material monetary losses to 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

Page number or URL

63, Index Cadence 2021 Form 10-K

Recruiting & Managing a Global Diverse & Skilled Workforce

TC-SI-230a.2. Description of approach to identifying and addressing data security risks, including use of third-party cybersecurity standards

PRIVACY AND CYBERSECURITY

61-63 Cadence Privacy Policy

TC-SI-330a.1.  Percentage of employees that are (2) located offshore 67%

TC-SI-330a.2.  Employee engagement as a percentage

TC-SI-330a.3.  Percentage of gender and racial/ ethnic group representation for (1) management

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM - Employee Engagement

93% of our employees surveyed say they are proud to tell others they work at Cadence

GOVERNANCE - Board Membership

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM - Demographics

Percentage of gender group representation for management Board of Directors: 27% female, 73% male Managers or more senior: 17% female, 83% male

Percentage of ethnic group representation for management Board of Directors: 56% White 44% Asian

Index Only

37, Index

46, 54, Index

TC-SI-330a.3.  Percentage of gender and racial/ ethnic group representation for (2) technical staff

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM - Demographics

Percentage of gender group representation for technical staff: 20% Female 80% Male

46, Index

96

SASB Topic SASB Code SASB Accounting Metric Disclosure Details

TC-SI-330a.3.  Percentage of gender and racial/ ethnic group representation for (3) all other employees

WORKFORCE: ACCELERATING INNOVATION AS ONE TEAM - Demographics

54% Asian and Indian

1% Black and African American

3% Hispanic and Latix

1% Other

6% Undisclosed 35% White (Based on US Employees only)

Intellectual Property Protection and Competitive Behavior

TC-SI-520a.1 Total amount of monetary losses as a result of legal proceedings associated with anti-competitive behavior regulations

PRIVACY AND CYBERSECURITY

Any material losses or legal action regarding anti-competitive behavior or violation of anti-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

Page number or URL

46, Index

Managing Systemic Risks for Technology Disruptions

TC-SI-550a2. Description of business continuity risks related to disruptions of operations

PRIVACY AND CYBERSECURITY

Please see our 10-K item 1a for a description of business continuity risks related to disruptions of services

63, Index Cadence 2021 Form 10-K

61, Index Cadence 2021 Form 10-K

97

This document includes forward-looking statements, and actual results could differ materially. Risk factors that could cause actual results to differ are set forth in the “Risk Factors” section in Cadence’s most recent reports on Form 10-K and Form 10-Q, including Cadence’s future filings.

Cadence is a pivotal leader in electronic systems design and computational expertise, using its Intelligent System Design strategy to turn design concepts into reality. Cadence customers are the world’s most creative and innovative companies, delivering extraordinary electronic products from chips to boards to complete systems for the most dynamic applications. www.cadence.com

© 2022 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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