Philips delivers strong ESG performance in 2023
- Philips aims to improve 2 billion lives by 2025 through innovative products and services.
- The company increased circular revenues to 20% of sales and reduced carbon emissions.
- Partnerships drive sustainable healthcare solutions, like AI-powered ultrasound for underserved communities.
- Philips excels in diversity and inclusion, with 31% representation of women in senior management.
- The company maintains low-carbon operations, achieving 78% renewable energy usage.
- Philips ranks highly in global sustainability indices, showcasing strong governance standards.
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Insights
Philips' commitment to sustainability is evident through its expansion of circular revenues to 20% of sales and maintenance of carbon neutrality in its operations. The company's use of renewable energy sources, such as the Mutkalampi windfarm and the Pontinia solar power generation farm, not only aligns with global efforts to reduce carbon emissions but also presents a competitive advantage in the health technology industry where environmental impact is increasingly scrutinized by consumers and investors alike. Achieving 78% renewable energy usage and maintaining a high circularity of waste stream at 91% are significant milestones that reflect Philips' operational efficiency and dedication to environmental stewardship. These initiatives could potentially lead to reduced operational costs and improved brand reputation, which may contribute to long-term shareholder value.
The development of AI-powered ultrasound solutions and mobile CT trucks by Philips represents a strategic move to address the global shortage of healthcare workers and improve access to healthcare in underserved communities. By leveraging technology to decentralize and enhance healthcare delivery, Philips is not only contributing to social value but also tapping into new market segments. This approach could result in increased market share and revenue streams for Philips, particularly in emerging markets where healthcare infrastructure is still developing. Furthermore, the focus on technology-driven business models and partnerships with institutions like the Champalimaud Foundation and Vanderbilt University Medical Center to reduce the carbon footprint of healthcare operations highlights a growing trend of integrating sustainability into core business strategies. This could resonate with increasingly health- and eco-conscious consumers, potentially leading to greater customer loyalty and brand differentiation.
Philips' efforts in enhancing its corporate governance practices, such as the publication of its Human Rights Report and Country Activity and Tax Report, demonstrate a commitment to transparency and accountability that is critical for investor confidence. The alignment with the upcoming European Union's Corporate Sustainability Reporting Directive (CSRD) showcases Philips' proactive stance on compliance and governance standards. This not only prepares Philips for future regulatory requirements but also positions the company as a leader in corporate responsibility. Such governance practices are crucial for maintaining investor trust and can have a positive impact on the company's stock valuation, as ethical corporate behavior is an important criterion for investment decisions in today's market.
February 20, 2024
- 1.88 billion lives improved by Philips’ health technology products and services; on track to improve 2 billion lives by 2025
- Through its industry leading innovations and partnerships, Philips helps increase access to healthcare globally and create sustainable and resilient healthcare models
- Philips expanded its circular revenues to
20% of sales; remained carbon-neutral in its operations, and further reduced its value chain carbon emissions with46% of its purchases (in spend) made at suppliers that have committed to science-based targets - Third year of country-by-country activity and tax reporting; enhanced scope 1-3 emissions reporting in preparation for new EU Corporate Sustainability Reporting Directive
Amsterdam, the Netherlands – Royal Philips (NYSE: PHG, AEX: PHIA), a global leader in health technology, has relentlessly focused on further improving its Environmental, Social, and Governance (ESG) performance in 2023. For example, Philips improved the health and well-being of 1.88 billion people with its innovative products and services, of which 221 million in underserved communities, bringing the company close to its goal of improving 2 billion lives per year by 2025. Philips innovated with partners to increase access to sustainable healthcare globally, and further increased its circular revenues, while reducing its operational and value chain carbon emissions.
Marnix van Ginneken, Chief ESG & Legal Officer at Royal Philips, said: “Building on our strong heritage in environmental and social responsibility, we have a fully integrated approach to doing business responsibly and sustainably, in line with our company purpose. I am convinced that our ESG commitments are the best way for Philips to drive priorities for global impact and create long-term value for our stakeholders.”
“We are proud of the progress we have made towards our goal of improving 2 billion lives per year by 2025, on delivering on our low-carbon commitments, and in expanding our portfolio of EcoDesign products and systems. We remain focused on driving further improvements in line with our 2025 commitments.”
Towards better care for more people in a sustainable way
Today, millions of people around the world have little or no access to basic healthcare, and climate change is impacting both environmental and human health. Together with partners, Philips is developing an AI-powered ultrasound solution that aims to address the shortage of healthcare workers by putting a diagnostic tool previously reserved for expert technicians in the hands of midwives, expanding access to maternal care in rural underserved communities in Kenya. Philips is also developing new, technology-driven business models to enhance access to care. An example is the mobile CT trucks Philips has rolled out in medically underserved Australian and North American communities. This innovation offers a global blueprint to ensure timely lung screening that saves lives.
Philips supports creating a sustainable and resilient healthcare system through partnerships, as well as through its industry leading sustainability innovations portfolio. These include energy efficient MRI scanners with helium free operations, and Philips Radiology Operations Command Center that enables real-time collaboration and virtual imaging operations and can decrease staff travel time and costs. Philips teamed up with Portugal’s Champalimaud Foundation to halve its diagnostic and interventional imaging carbon footprint by 2028. And Philips and the Vanderbilt University Medical Center are researching how to decarbonize the health system’s radiology department. Initial results of these collaborations show that sustainable initiatives can be both environmentally friendly and cost-effective.
Diversity and inclusion
Philips has a diverse team made up of approximately 70,000 individuals across over 100 countries, all with different backgrounds, perspectives, and experiences. The company attaches great importance to creating an environment of inclusion to ensure that creativity and innovation can flourish. For example, regarding gender diversity, Philips reached a
Advancing towards low-carbon operations and value chain
In 2023, Philips expanded its circular revenues to
Philips also maintained the circularity of its waste stream at
In 2022, Philips became the first health technology company with approval from the Science Based Targets initiative (SBTi) for its entire value-chain CO₂ emissions reduction targets, including scope 1-3, and already
Global leadership and governance standards
Philips was listed in the top 3 health technology companies in the global 2023 Dow Jones Sustainability Indices list; and CDP (formerly known as the Carbon Disclosure Project), a global NGO that assesses the greenhouse gas emission performance and management of reporting companies, has ranked Philips on the CDP Climate Change ’A’ List for the 11th year in a row, citing its continued climate performance and transparency.
Philips’ is committed to transparency and accountability, and a pioneer in its corporate governance practices aligned with global standards and best practices. For example, Philips’ Human Rights Report 2023 outlines progress made by Philips to uphold human rights, while its Country Activity and Tax Report illustrates how the company considers its tax payments as a significant contribution to the communities in which it operates, and an integral part of its social value creation. Additionally, Philips already added enhanced scope 1-3 emissions reporting in its Annual Report 2023, preparing for the European Union’s new Corporate Sustainability Reporting Directive (CSRD), which will be mandatory as of 2024.
A full overview of Philips’ Environmental, Social, and Governance achievements is provided in chapters 5 and 12 of the Philips Annual Report 2023, which was published earlier today.
For further information, please contact:
Elco van Groningen
Philips Global External Relations
Tel.: +31 6 8103 9584
E-mail: elco.van.groningen@philips.com
About Royal Philips
Royal Philips (NYSE: PHG, AEX: PHIA) is a leading health technology company focused on improving people's health and well-being through meaningful innovation. Philips’ patient- and people-centric innovation leverages advanced technology and deep clinical and consumer insights to deliver personal health solutions for consumers and professional health solutions for healthcare providers and their patients in the hospital and the home. Headquartered in the Netherlands, the company is a leader in diagnostic imaging, ultrasound, image-guided therapy, monitoring and enterprise informatics, as well as in personal health. Philips generated 2023 sales of EUR 18.2 billion and employs approximately 69,700 employees with sales and services in more than 100 countries. News about Philips can be found at www.philips.com/newscenter.
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