Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability
• Health
• Energy Efficiency
• Circular Economy
• Employee Engagement
• Supplier Sustainability
• Diversity & Inclusion

Environmental Achievements

• Reduced operational carbon footprint by 5% compared to 2013, resulting in a total of 1,375 kilotonnes CO2e.
• Increased Green Product sales to EUR 11.1 billion (52% of sales).
• Achieved EUR 2 billion Green Innovation target a year ahead of schedule.
• Increased recycled content in products to 13,000 tonnes.
• Recycled 80% of industrial waste.

Social Achievements

• Improved lives of 1.9 billion people.
• Increased share of female executives to 18%.
• Reduced Lost Workday Injury Cases (LWIC) rate to 0.23 per 100 FTEs.
• Launched Philips Foundation, a registered charity.
• Conducted 203 full-scope supplier audits and 35 audits of potential suppliers.

Governance Achievements

• Revised General Business Principles (GBP) to enhance integrity and reflect changing business landscape.
• Launched mandatory e-learning on GBP for employees.
• Completed 41% of EUR 1.5 billion share buy-back program.
• Increased brand value by 5% to over USD 10.3 billion.

Climate Goals & Targets

Environmental Challenges

• Market slowdown in China and Russia.
• Voluntary temporary suspension of production at Cleveland facility due to manufacturing process control issues.
• Adverse jury verdict in Masimo litigation (USD 467 million).
• Ongoing volatility in some end-markets.
• Further restructuring and separation costs anticipated in 2015 and 2016.

Mitigation Strategies

• Appealed the Masimo jury verdict.
• Remediated quality management system at Cleveland facility and resumed production.
• Implemented Accelerate! transformation program to improve operational performance.
• Continued to improve the efficiency of the balance sheet.
• Took decisive action to address underperformance in Healthcare (US) and Professional Lighting Solutions (North America).

Supply Chain Management

Supplier Audits: 203 full-scope audits/year

Responsible Procurement

• Compliance with Regulated Substances List and Philips Supplier Sustainability Declaration.
• Focus on capacity-building programs to improve supplier practices.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Transition from traditional lighting to LED lighting.

Opportunities

• Development of energy-efficient products and connected lighting systems.

Reporting Standards

Frameworks Used: GRI

Certifications: Null

Third-party Assurance: KPMG

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• SlimStyle LED bulb
• SENSEO® Up coffee machine
• VISIQ ultra-mobile ultrasound system
• Smart Air Purifier
• Affinity platform

Awards & Recognition

• Best in KLAS award for 2014
• #14 ranking in Interbrand’s top 50 Best Global Green Brands
• Champion for Change Award by Practice Greenhealth

Environmental Metrics

ESG Focus Areas

• Financially Sustainable Care
• Access to Care for Underserved Communities
• Green Innovation
• Circular Products and Solutions
• Sustainable Operations

Environmental Achievements

• Avoided an estimated 20 kilotonnes of CO2 emissions through various on-site renewables projects, energy efficiency measures, and Smart Meeting Rooms.
• 1,711 tonnes of goods as trade-in and return for resale as refurbished products and for spare parts harvesting.
• Closed the loop on more than 3,000 systems

Social Achievements

• Improved access to care for underserved communities through mobile ICUs in India (1,160,000 lives improved)
• Launched several new monitoring solutions for the ICU, general ward, and home that feature remote monitoring capabilities and advanced analytics.
• Introduced Rapid Equipment Deployment Kits for ICU ramp-ups

Governance Achievements

• Issued Green and Sustainability Innovation Bonds aligned with ICMA Green Bond Principles 2018, Social Bond Principles 2018, and Sustainability Bond Guidelines 2018.
• Independent auditor (Ernst & Young) performed a reasonable assurance engagement on the Green and Sustainability Innovation Bond Reports.

Climate Goals & Targets

Environmental Challenges

• Difficulty in quantifying the direct impacts of R&D related activities.
• Uncertainty regarding future sales volumes of new products and solutions.

Mitigation Strategies

• Presenting examples of recent developments and product launches in eligible project categories.
• Focusing on energy efficiency, material reduction, and closing the loop activities.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ICMA Green Bond Principles 2018, ICMA Social Bond Principles 2018, ICMA Sustainability Bond Guidelines 2018

Third-party Assurance: Ernst & Young Accountants LLP

UN Sustainable Development Goals

• 3
• 12
• 13

Philips aims to improve the lives of 2 billion people a year by 2025, including 300 million in underserved communities, rising to 2.5 billion and 400 million respectively by 2030. Initiatives contribute to UN Sustainable Development Goals 3 (Ensure healthy lives and promote well-being for all at all ages), 12 (Ensure sustainable consumption and production patterns) and 13 (Take urgent action to combat climate change and its impacts).

Sustainable Products & Innovation

• Azurion image-guided therapy platform
• SmartCT 3D imaging solution
• Affiniti CVx cardiovascular ultrasound system
• CT Incisive
• Mobile X-Ray system Zenition 50 and 70
• IntelliVue Patient Monitors MX750/MX850
• Biosensor BX100
• BioSticker medical device
• EV300 and EVO ventilators
• Lumify portable ultrasound solution

Environmental Metrics

ESG Focus Areas

• Patient safety and quality
• Climate change
• Resource use and circular economy
• Employee well-being, health & safety
• Access to (quality & affordable) care
• Big data, AI & Cybersecurity
• Competition & market access

Environmental Achievements

• 100% electricity from renewable sources in operations
• Net operational carbon footprint down to zero kilotonnes CO2-equivalent
• All 23 industrial sites achieved 'Zero Waste to Landfill' status
• Circular revenues at 20% of sales
• Reclaimed more than 11,500 systems or pieces of equipment

Social Achievements

• Improved 1.88 billion lives, including 221 million in underserved communities
• Employee Engagement Index Score of 73%
• 31.4% gender diversity in senior management positions
• US Nationwide Pay Equity project completed
• All employees paid at least a living wage
• Supplier development program impacted 723,000 employees

Governance Achievements

• Taskforce on Climate-related Financial Disclosures (TCFD) implementation
• Double Materiality Analysis performed
• 60,000 employees completed General Business Principles training
• New Chief Patient Safety & Quality Officer appointed

Climate Goals & Targets

Environmental Challenges

• Respironics recall and related remediation efforts
• Supply chain disruptions
• Geopolitical events and macroeconomic uncertainty
• Cybersecurity threats
• Competition in health informatics
• Attracting and retaining personnel
• ESG-related regulatory changes

Mitigation Strategies

• Improved supply delivery performance
• Regionalization of supply base and manufacturing
• Simplified operating model
• Workforce reduction
• Enhanced cybersecurity measures
• Consolidation of informatics businesses into Enterprise Informatics
• Comprehensive ESG framework and initiatives

Supply Chain Management

Responsible Procurement

• Supplier Sustainability Declaration
• Supplier Sustainability Performance program
• Assessment of suppliers for ESG factors

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, TCFD, UNGC

UN Sustainable Development Goals

• SDG 3
• SDG 12
• SDG 13

Philips' initiatives contribute to these goals through meaningful innovation to improve health and well-being, sustainable consumption and production patterns, and climate action.

Sustainable Products & Innovation

• EcoDesigned patient monitors
• Energy-efficient hairdryers
• Brush heads with bio-based materials
• Baby monitor with recycled plastic

Awards & Recognition

• CDP ‘A List’ rating for climate action (11th year)
• Top 3 ranking in Dow Jones Sustainability Index 2023
• Forbes Best Employers for Women
• Forbes Best Employers for Diversity
• Forbes Best Employers in Texas

Environmental Metrics

ESG Focus Areas

• Sustainability

Environmental Achievements

• Reduced or eliminated hazardous substances in healthcare settings
• Invested in green buildings and infrastructure
• Selected suppliers with sustainable targets/initiatives

Social Achievements

• Implementation of remote patient monitoring for mental healthcare, improving outcomes and easing staff shortages
• Use of AI for clinical decision support in treatment planning, in-hospital patient monitoring, and preventive care
• Investment in community health to lower costs and investing in preventive care to reduce long-term healthcare costs

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Widespread staffing shortages impacting patient care and healthcare professionals
• Data integration challenges hindering timely, high-quality care
• Financial challenges limiting investment in new technologies and impacting care quality
• Lack of data on social determinants of health hindering efforts to reduce health disparities

Mitigation Strategies

• Adoption of virtual care and remote patient monitoring to alleviate staff pressures and improve access to care
• Implementation of AI for clinical decision support to improve efficiency and insights
• Pursuing better reimbursement rates, investing in community health and preventive care to address financial challenges
• Collaboration with various partners (industry trade organizations, health technology companies, governments, educational institutions, community organizations) to improve care and address challenges

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Selecting suppliers with sustainable targets/initiatives

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed