Annual Report 2022
ESG commitments

Philips' ESG commitments
5.2
In September 2020, Philips reinforced its commitments as a purpose-driven company with the announcement of an enhanced and fully integrated approach to doing business responsibly and
sustainably. Philips’ framework comprises a comprehensive set of key commitments across all the Environmental, Social and Governance (ESG) dimensions that guide execution of the company’s
strategy. It includes ambitious targets and detailed plans of action.
As a leading health technology company today, our purpose is to improve people’s health and well-being through meaningful innovation, positively impacting 2 billion lives per year by 2025. We
aim to grow Philips responsibly and sustainably, and we therefore continuously set ourselves challenging environmental and social targets, and highest standards of governance. Acting responsibly
towards the planet and society is part of our DNA. We believe that this is the best way for us to create superior, long-term value for Philips’ multiple stakeholders.
Philips’ ESG commitments are set out below. Further details relating to these commitments can be found throughout the rest of this chapter, in Supplier sustainability, starting on page 0, and in
ESG statements, starting on page 0.
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Our key ESG commitments
Environmental
We act responsibly towards our planet in line with
UN SDGs 12 and 13.
•
We will use 75% renewable energy in our operations by
2025.
•
While maintaining carbon neutrality in our operations,
we will reduce CO2 emissions in our entire value chain in
line with a 1.5 °C global warming scenario (based on
Science Based Targets). We will actively partner with our
suppliers and our customers to achieve this.
•
We will generate 25% of our revenue from circular
products and solutions, and offer a trade-in on all
professional medical equipment so that we can take care
of responsible repurposing by 2025.
•
We will embed circular practices at our sites and put zero
waste to landfill by 2025.
•
All new product introductions will fulfill our EcoDesign
requirements by 2025, with ‘EcoHeroes’ accounting for
25% of revenues.
•
We work with our suppliers to reduce the environmental
footprint of our supply chain in line with a 1.5 °C global
warming scenario (based on Science Based Targets).
•
We engage with our stakeholders and other companies
to drive sustainability efforts addressing the United
Nations Sustainable Development Goals.
Social
Our purpose is to improve people’s health and
wellbeing through meaningful innovation, in line
with UN SDG 3. We act responsibly towards society
and partner with our stakeholders
•
We aim to improve the health and well-being of 2 billion
people per year by 2025, including 300 million people in
underserved communities.
•
It is our strategy to lead with innovative solutions along
the health continuum – helping our customers deliver on
the Quadruple Aim (better health outcomes, a better
experience for patients and staff, lower cost of care) and
helping people take better care of their health.
•
We aim to be the best place to work for our employees,
providing opportunities for learning and development,
embracing diversity and inclusion, and assuring a safe
and healthy work environment. We pay at least a living
wage and aim for employee engagement above the
high-performance norm.
•
Through our supplier development program we will
improve the lives of 1,000,000 workers in our supply
chain by 2025.
•
We actively engage with and support the communities in
which we operate, e.g. through volunteering,
internships, STEM (Science, Technology, Engineering,
Mathematics) initiatives.
•
We contribute to the Philips Foundation, an independent
foundation (stichting) organized under Dutch law, which
aims to provide access to quality healthcare for
disadvantaged communities.
•
We consider our tax payments as a contribution to the
communities in which we operate, as part of our social
value creation.
Governance
We aim to deliver superior long-term value for our
customers and shareholders, and we live up to the
highest standards of ethics and governance in our
culture and practices
•
Our management structure and governance combines
responsible leadership and independent supervision.
•
The Philips Business System is our integrated operating
model. It defines how we work together to delight our
customers and achieve our company goals, leveraging
our global scale and capabilities.
•
We are committed to delivering the highest-quality
products, services and solutions compliant with all
applicable laws and standards.
•
Our remuneration policy is designed to encourage
employees to deliver on our purpose and strategy and
create stakeholder value, and to motivate and retain
them. Our executive long-term incentive plan includes
environmental and social commitments.
•
We ensure ethical behavior through our General Business
Principles, with a strong compliance and reporting
framework.
•
Our risk management is designed to provide reasonable
assurance that strategic and operational objectives are
met, legal requirements complied with, and the integrity
of the company’s reporting and related disclosures
safeguarded.
•
We are transparent about our plans, activities, results and
contributions to society (e.g. Country activity and Tax
report), and engage with shareholders, customers,
business partners, governments and regulators through
a variety of platforms.
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