Philips continues to strengthen its responsible business strategy through ESG commitments

Royal Philips, a global leader in medical technology, has made significant progress in achieving its key environmental, social engagement and corporate governance (ESG) ambitions. By 2022, Philips has improved the lives of 1.81 billion people through its technologies and solutions, further reducing operational emissions as well as indirect emissions across the value chain with its suppliers.

“We continue to move closer to our goal of improving 2 billion lives per year by 2025, while stepping up our sustainability efforts across our operations and supply chain,” said Marnix van Ginneken, Chief ESG & Legal Officer at Royal Philips. “The growing momentum to reduce our collective environmental footprint, shown in the healthcare industry and among customers, encourages us daily to continue our efforts to reduce emissions throughout the supply chain and accelerate the transition to a circular economy.”

The updated environmental, social impact and corporate governance targets are an integral part of the Philips 2022 Annual Report.

Environment:

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• Circular revenue accounted for 18% of the company’s sales in 2022, compared to 16% in 2021. In 2022, Philips registered 10% more medical equipment returns compared to the previous year and more than 3,500 systems were returned for recycling. EcoDesigned products and solutions accounted for 71.7% revenue, supported by care and beauty products containing more than 25% recycled plastic and Oral Healthcare, which introduced the first toothbrush heads made from 75% bio-based materials. Demand for sustainable healthcare systems is supported by the MR 5300 with its industry-leading BlueSeal magnet, which helps radiology departments massively reduce the need for gas and helium;

• Philips has reached a renewable energy use level of 77%, exceeding the target of 75% for 2025. The company reduced CO₂ emissions related to transport and distribution by 22% through a stricter air transport policy and optimized warehouse locations. The company improved the circularity of its waste stream to 91% by increasingly recycling, reusing or reducing waste. One example is replacing single-use plastic in supplier packaging with boxes that can be used repeatedly.

• CDP, a global NGO that assesses the performance and CO₂ emissions management of reporting companies, has ranked Philips on the CDP Climate Change “A” list for the tenth consecutive time due to the company’s continued climate performance and transparency;

• In 2022, Philips became the first medical technology company to receive approval from the Science Based Targets (SBTi) initiative for CO₂ reduction targets across the value chain. In addition, 41% of suppliers (based on spend) have now committed to science-based targets – Philips’ target is 50% by 2025;

Social engagement:

• Philips reached 1.81 billion people with its technologies and solutions by 2022, including 202 million in disadvantaged communities (with the help of the Philips Foundation). This brings the company closer to its goal of improving 2 billion lives per year by 2025, 300 million of them in disadvantaged communities.

• In 2022, improving access to care in vulnerable communities has been underpinned by sustainable partnerships, the development of innovative digital solutions and the implementation of new business and financing models that are both sustainable and scalable.

• Philips has advanced its commitment to gender diversity in leadership roles, including a 30% representation of women in leadership roles, an increased focus on employee health and well-being (both physical and mental health), and a continued focus on providing a safe and healthy workplace.

Corporate governance:

• Philips’ commitment to accountable and transparent governance is illustrated by the publication of the Philips Human Rights Report 2022, in which Philips has informed stakeholders of key progress made in addressing human rights over the past year, along with plans for continuous improvement.

• -Philips continues to take an active role in working with global institutions such as the International Financial Reporting Standards Foundation (IFRS), the World Economic Forum (WEF) and the European Union to contribute to the development of a standard global ESG reporting framework.

Philips continues to pursue the directions in its sustainability-based strategy to support a more sustainable healthcare industry, mitigate climate change and leave a healthier planet for future generations. In 2023, the company is included for the tenth consecutive year in the Claritive 100 Global Innovator, a top ranking that measures excellence based on consistency and innovation. Philips invests more than €1.7 billion annually in research and development to deliver patient- and people-centric innovations. With its global presence, powerful informatics platforms, ambulatory monitoring and imaging data, personal health offerings, and strong capabilities to support care in different environments, Philips contributes to people’s well-being to make medicine more accessible and sustainable, both in hospital and at home.