Climate Action
Report 2021

CEO Letter
In 2022, the world continues to warm at an alarming rate.
There is a widespread sense of unrest that calls for action,
not words, to minimize and avert the damage that humans
have caused to the planet. For Signify, this means weneed to amplify our efforts, not only in our operations, butacross our entire value chain, and help our stakeholders
play their role in minimizing the impacts of climate change.
Signify was built on the foundation of 130 years of
heritage in sustainability and innovation. Our story as anindependent company started in 2016, and in the same
year, we launched our first sustainability program, Brighter
Lives, Better World. By the end of 2020, we had achieved
all our commitments, including becoming carbon neutral
and using 100% renewable electricity in our operations.
Our climate action journey continues with the second
edition of our sustainability program: Brighter Lives, Better
World 2025, which goes further to ensure we play our partin limiting global warming to less than 1.5 °C in line with theParis Agreement.
Each of us plays a role in creating positive impact, but
those roles are not of equal weight. What is required now
is coordinated international planning and fundamental
changes in governmental and business thinking. As a global
company, we are ready to do our part for meaningfulaction and lasting change. In that quest, we are responsible
for sharing the knowledge we develop on our climate
journey in our operations, supply chain and product use
with consumers, suppliers, fellow businesses, and otherstakeholders. With this goal in mind, I am proud to invite you
to join us in exploring our first Climate Action Report.

Eric Rondolat
CEO Signify

1891

2016

2016

2018

2019

2020

2021

Philips wasfounded in
Eindhoven as afamily business,and began
producing lightbulbs.

Signify (formerly
Philips Lighting)separated from
Philips, becoming
an independent
corporation.

Signify launched
its Brighter Lives,
Better World
program withmultiple climate
action targets tobe achieved by
the end of 2020.

Signify is oneof the first 28
companies tocommit to ScienceBased Targets forcarbon emmissions
reductions toachieve the
1.5°C pathway in the
Paris Agreement.

Signify was thefirst company
to sign a Power
Purchase
Agreement in
Poland.

Signify fulfills all
Brighter Lives,
Better World
commitments,
becoming
carbon neutral
and achieving
84% Sustainable
revenues.

Signify goesbeyond carbon
neutrality andstarts the second
edition of its
sustainability
program: Brighter
Lives, Better World
2025.

Signify Climate Action Report 2021<< Previous

2

Next >>

We have developed
strategic parterships withlike-minded organizations
to drive climate action

We will double the pace of theParis Agreement 1.5°C scenario
across our entire value chain
by the end of 2025

We’re on the CDP Climate
A List and a Leader in CDP
Supply Chain Engagement

Signify Climate Action Report 2021

We have been using
100% renewableelectricity since 2020

We are 100% carbon
neutral since 2020

Report Highlights

We are member of the
Dow Jones Sustainability
World Index for the fifth
consecutive year

We generated between
61% and 64% Climate
action revenues by theend of 2021

Our LED A-Class bulb is ourmost energy-efficient LED
lamp to date

We’re accelerating the
global transition to green
electricity by investing inPower Purchase Agreements

We’re enabling our customers
to reduce emissions by offering
energy-efficient, connected
and solar lighting solutions<< Previous

3

Next >>

Table of Contents

CEO Letter
Report Highlights
5 Context & Strategy

12 Climate action and impact
13

Risks and opportunities assessment

14

Taking action

6

The strategic importance of taking climate action

5

In our operations – (Scope 1, 2 and partly 3)

8

Our approach

21

Together with our suppliers (Scope 3 – Supply chain)

8

Governance

23 By enabling our customers (Scope 3 – Use phase)

9

Taking action across our entire value chain

26 By advocating for the achievement of global climate ambitions

10 Working with like-minded advocates27

11

28 Conclusion

Setting targets

Signify Climate Action Report 2021

External recognitions<< Previous

4

Next >>

Context & Strategy

Climate action and impacts

Conclusion

Context &Strategy

Signify Climate Action Report 2021<< Previous

5

Next >>

Context & Strategy
The strategic importance of taking climate action

Climate action and impacts

Conclusion

Our approach

The strategic
importance of taking
climate action
Climate change is one of the most important challenges we face. Humanactivities such as burning fossil fuels, deforestation, and use of polluting
substances have led to a rapid increase in greenhouse emissions, warming
the planet at an alarming rate. The latest Intergovernmental Panel on Climate
Change (IPCC) report, issued during summer 2021, announced code red forhumanity and laid out the disastrous effects of increased temperatures. We
are witnessing the melting of ice caps raising our sea levels, endangering
coastal human settlements. The warmer ocean waters lead to acidification,
which diminishes animal life and vegetation. The increased temperaturecauses more intense storms, floods, heavy snowfalls, and longer and more
frequent droughts. Reduced freshwater availability makes growing crops
more difficult, ultimately reducing our capacity for food production.
Yet, years after the Paris Agreement, temperatures have increased by 1.1°C,
and global emissions continue to rise. Even if we achieve all current nationaltargets, the temperature will still increase by 2°C in the next 70 years. To
maintain any hope of maintaining global warming under 1.5°C, we need to go
beyond these targets and take action urgently: all of us, citizens, actors of
the private and public sectors, and governments.
Sustainability and climate action have been at the heart of our purpose formore than a decade, since we actively took the lead in the transition fromconventional to LED and connected lighting. Every year, that purpose comesto life in our offering to our customers and in the way we operate ourcompany.

Signify Climate Action Report 2021

What is the Paris Agreement? 1
In November 2015, 197 countries agreed to limit global warming to well
below 2°C above pre-industrial levels and to pursue efforts to limit
warming to 1.5°C. To achieve this, we need to cut global greenhousegas emissions in half by 2030, and reach net-zero by 2050.
¹ Source: Science-Based Targets Initiative<< Previous

6

Next >>

Context & Strategy
The strategic importance of taking climate action

Climate action and impacts

Conclusion

Our approach

In 2020, Signify introduced the 5 Frontiers strategy. It addresses thechallenges and seizes the opportunities from major global shifts that are
impacting the lighting market, captured under the strategic frontier Growthfor sustainability. The transition to a lower-carbon economy presents
opportunities for Signify’s sustainable growth areas based on low-carbon
technological innovation: (1) Climate action, (2) Circular economy, (3) Foodavailability, (4) Safety & security, and (5) Health & well-being. Climate action isset at the core of our strategy and purpose and further defined as part of our
Brighter Lives, Better World 2025 sustainability program.
Every year, Signify conducts a materiality assessment to identify the mostimportant topics to manage and report on. In this process, we review andidentify future trends and our stakeholders’ expectations at a global and local
level. This assessment enables us to manage the risks and opportunities that
could impact our long-term value creation.
Interactions with our stakeholders and assessing both our business impact
on climate change and the impact of climate change on our business have,concluded that climate action remains the most important topic for Signify
to address². This assessment serves as input to re-assess and update ourcompany strategy.
For Signify, Climate action means our actions to counter climate change andits impacts by going beyond carbon neutrality and doubling the pace of theParis Agreement’s 1.5OC pathway. This includes offering energy-efficient,connected, and solar lighting solutions to reduce the emissions of ourcustomers, and driving carbon reductions at our suppliers.

² The details of our 2021 materiality assessment can be found in our Supplements of our 2021 Annual
Report: https://www.signify.com/global/sustainability/downloads.

Signify Climate Action Report 2021<< Previous

7

Next >>

Context & Strategy
The strategic importance of taking climate action

Climate action and impacts

Conclusion

Our approach

Our Approach
GovernanceSupervisory Board

Chief Strategy and Sustainability Officer (CSSO)

Signify’s highest governance body reviews our strategy to combat climatechange, acknowledging the strategic risks and opportunities.

Signify’s CSSO reviews climate-related issues of strategic importance
together with our BoM including action plans, risk management,sustainability budget, and investment in climate-related opportunities.
Further, the CSSO oversees a multi-discipline climate risk assessment
taskforce team.

Board of Management (BoM)
The BoM governs climate-related risks and opportunities. It consists of
our Chief Executive Officer (CEO), Chief Financial Officer (CFO), and Chief
Commercial Officer (CCO). Every quarter, Signify’s BoM reviews climaterelated issues of strategic importance together with our Chief Strategy
and Sustainability Officer (CSSO), including action plans, risk management,sustainability budget, and investment in climate-related opportunities. The
BoM guides the performance and oversees the progress against targets
and commitments set out in our sustainability program, including the ones
addressing climate-related issues. Signify’s BoM is responsible for theoverall risk management associated with the company’s activities. It is
assisted by the company leadership team, which participates on a quarterly
basis in audit risk and control meetings organized by the Risk Committee,
to identify critical risks and review progress on the implementation of risk
responses, including climate-related risks. Because of the importance ofsustainability to our long-term value creation, the vesting of 25% of theannual long-term incentive grant is dependent on how well Signify performs
on its sustainability targets, including the target related to climate action.

Signify Climate Action Report 2021

Climate risk assessment taskforce
The Taskforce consists of experts in Operations, Insurance, Risk
Committee, Internal Audit, Sustainability, and Environment, Health & Safety.
The Taskforce is responsible for continuously evaluating the company’s
short-term and long-term climate-related risks and opportunities. As partof Signify’s integral risk management and business control, this contributes
to maximizing climate-related opportunities and improving our resilience toclimate change.

Climate action in the businessClimate action targets and programs are embedded in our organization andways of working. Examples of departments that implement sustainability
programs include sales, innovation, manufacturing, sourcing, and logistics.
Climate action targets are set both at a corporate level and division level
and are monitored by the sustainability function. The sustainability function
consists of global and regional sustainability professionals and falls under
the responsibility of the CSSO.

<< Previous

8

Next >>

Context & Strategy
The strategic importance of taking climate action

Climate action and impacts

Conclusion

Our approach

Taking action across our entire value chain
In September 2020, we became the first lighting company to achieve carbon
neutrality in its operations, using 100% renewable electricity, ahead of ourtarget and ahead of the aspirations set out by the Paris Agreement.
Going beyond carbon neutrality, in 2020, we launched Brighter Lives,
Better World 2025, a sustainability program that addresses some of themost important challenges of our time. With the United Nations Sustainable
Development Goals (UN SDGs) as our strategic compass, we set targets
to double our positive impact on the environment and society by the endof 2025. With this program, we look beyond the performance of our own
operations, increasing positive impact across our entire value chain.

In line with our commitment to Climate action (SDG 13) and Affordable andclean energy (SDG 7), we are committed to doubling the pace of the Paris
Agreement’s 1.50C scenario to reduce greenhouse gas (GHG) emissions over
our full value chain by the end of 2025. This means we will reduce valuechain emissions two times faster than the Paris Agreement 1.50C scenario
pathway. In other words, we will achieve the Paris Agreement goals for 2031,
six years early, as defined by the Science Based Targets Initiative.
We will do so by increasing the energy efficiency of our portfolio, enabling
our customers to reduce emissions, and driving carbon reduction at our
suppliers.

Our commitment across our value chain
Scope 3

Suppliers

Upstreamtransport

Upstream activities

Signify Climate Action Report 2021

Scope 1 & 2

Factories

OfficesSignify operations

Scope 3Business travel

Downstream
transport

Product use

End-of-life
treatment

Downstream activities<< Previous

9

Next >>

Context & Strategy
The strategic importance of taking climate action

Climate action and impacts

Conclusion

Our approach

Working with like-minded advocates
Working with respected bodies creates a virtuous circle and amplifies
our voice in the corridors of power. This is necessary, as governments
must be on board to tackle the climate crisis head-on. Through advocacy,
accountability, and collaboration, we learn from each other and movefaster.
We work with various non-governmental organizations, including The
Climate Group, a non-profit organization that works with business andgovernment leaders to tackle climate change. This partner of the United
Nations helps to organize Climate Week New York City and supports
organizations to turn commitments into action. We joined its RE100
corporate leadership initiative, committing to 100% renewable electricity,
as well as its EV100 program, aimed at making electric vehicles standard
by 2030. Other worthy initiatives, like the World Green Building Council’s(WGBC) Net Zero Carbon Buildings initiative, further underscore the needto learn from each other, make a commitment and most importantly, act.
Working with these groups introduces us to other organizations thatare taking the same journey. It allows us to transfer inspiration into
collaboration and action, and to do it at speed.

Signify Climate Action Report 2021<< Previous

10

Next >>

Context & Strategy
The strategic importance of taking climate action

Climate action and impacts

Conclusion

Our approach

Setting targets
Our Brighter Lives, Better World 2025 sustainability program, launchedin September 2020, encompasses our sustainability commitments. Thesetargets are set to be achieved by the end of 2025. To ensure our efforts arein line with the targets of the Paris Agreement, we have set Science-Based
Targets for our emission reductions.
Commitment

Baseline year

Target year

Definition

Brighter Lives, Better World 2025 program
Double the pace of theParis Agreement 1.5°C
scenario

2019

2025

Cumulative carbon footprint
reduction of our full value
chain relative to the targetsof the 1.5°C scenario of theParis Agreement

Increase Climate action
revenues to 72% (as %of total revenues)

2019

2025

Percentage of total revenues
coming from energy-efficientand solar products, systems
and services meeting strict
luminous efficacy thresholds,
which help to save energy
and reduce carbon

100% Carbon-neutral
operations

2020

2025

Percentage of our fulloperations (Manufacturing
sites, non industrial locations,logistics and business travel)that is carbon neutral

100% Renewableelectricity

2020

2025

Percentage of electricity
from renewable sources

Approved Science-Based Targets, 1.5°C scenario
70% reduction fromscope 1 and 2

2015

2030

Percentage of absolute
scope 1 and 2 GHG emissions

30% reduction fromscope 3 product use

2015

2030

Reduction of absolute scope
3 GHG emissions from use ofsold products

Signify Climate Action Report 2021

What are Science-Based Targets?
Targets are considered ‘science-based’ if they arein line with what the latest climate science deems
necessary to meet the goals of the Paris Agreement– limiting global warming to well-below 2°C above preindustrial levels and pursuing efforts to limit warming
to 1.5°C.
Science-based targets provide a clearly defined
pathway for companies to reduce greenhouse gas(GHG) emissions, helping prevent the worst impacts ofclimate change and future-proof business growth.

<< Previous

11

Next >>

Context & Strategy

Climate action and impacts

Conclusion

Climateaction andimpactSignify Climate Action Report 2021<< Previous

12

Next >>

Context & Strategy

Climate action and impacts

Risks andopportunities assessment
The strategic importance of taking climate
actionTaking action

Conclusion

External recognition

Risks andopportunities
assessment
The potential impacts of climate change pose a challenge to the stability
and continuity of businesses over the short, medium, and long term.
With a global footprint, Signify’s manufacturing sites and supply chain
are exposed to these physical and transition risks related to climatechange. On the other hand, the transition to a lower-carbon economy
presents climate-related opportunities for Signify’s sustainable growthareas based on low-carbon technological innovation: (1) Climate action,(2) Circular economy, (3) Food availability, (4) Safety & security, and (5)Health & well-being.
Due to potential financial impacts attributed to climate-related risks,
the assessment of climate risks becomes imperative and to be futureproof. Disclosing climate-related physical and transition risks showcases
long-term business sustainability. As a leader in sustainability, Signify iscommitted to improving its global operations and reducing its emissions
over the entire value chain. This includes understanding the risks posedby climate change and the opportunities during the transition to a lowcarbon economy, under different scenarios.
Following the Task Force on Climate related Financial Disclosures (TCFD)
recommendations and guidance, Signify is conducting an ongoing climate
risk assessment in line with the four core elements of operations:
governance, strategy, risk management, and metrics & targets. For moredetails, please refer to our Annual Report Supplement 4: Task Force on
Climate-related Financial Disclosures (TCFD).

Signify Climate Action Report 2021<< Previous

13

Next >>

Context & Strategy

Climate action and impacts

The strategic importance of taking climate
actionRisks andopportunities assessment

Taking action

Conclusion

External recognition

Taking action
With our Brighter Lives, Better World 2025 sustainability program, we go
beyond carbon neutrality and commit to doubling the pace of the Paris
Agreement’s 1.5°C pathway to decarbonize our entire value chain. By theend of 2025, we will reduce our scope 1, 2, and 3 emissions by 35%, from a2019 baseline.
By the end of 2021, we were on track to deliver against our ambitious goalof doubling the pace of the Paris Agreement’s 1.5°C scenario. We did so by
reducing our GHG emissions at three different levels: in our operations, at
our suppliers and for our customers.

Doubling the Pace of the Paris Agreement
CO2 (million tonnes)
including product use & supply chain

Paris 1.5°C pathway
Signify

400

300

200

100
2019 2021

Signify Climate Action Report 2021

2025

2031
Year

<< Previous

14

Next >>

Context & Strategy

Climate action and impacts

Risks and opportunities assessment

In our operations – (Scope 1, 2 andpartly 3)
46% lower emissions

92% lower emissions

Our operational carbon footprint
958
836

866

52% lower emissions
778

Energy efficiency measures, such as:
•
•
•

•
•
•

kt/a

401

2011

2012

2013

2014

2015

2016

363

2017

2018

2019

*Increase due to the inclusion of our new acquisition in our reporting in 2021

Signify Climate Action Report 2021

100% renewable electricity
Increased office space utilization
Automated building processes

Shift to sustainable transport modes:••

Shift to sea freight
Improved logistics operational
efficiency

560
260

290*

80% lower emissions
2010

LED lighting & optimized HVAC
Industrial process optimization
100% renewable electricity

Same as industrial sites, and:

666
528

External recognition

How we did it*Over the last decade, Signify reduced its operational footprintby more than 70% and has been driving hundreds of initiatives
to reduce emissions in factories, offices, logistics, and businesstravel. As a result, Signify was the first lighting company in theworld to become carbon neutral in September 2020. This means
GHG emissions from our manufacturing and non-industrial locations(scope 1 and 2), upstream and downstream logistics activities (scope3), and business travel (scope 3) are all carbon neutral. We continue
sourcing 100% renewable electricity in our global operations,contributing to the green energy transition.

1022

Taking action

Conclusion

2020

Changed business travel:••

Travel less
Travel cleaner

2021*The reductions mentioned compare 2020 with 2015 data<< Previous

15

Next >>

Context & Strategy

Climate action and impacts

Risks and opportunities assessment

As a manufacturing company, we still have residual emissions; for example,
emissions from fossil fuels for transportation, so we invest in certified carbon
offsetting projects with our partner South Pole. Among others, we enabled
off-grid renewable energy generation with solar panels in India, and we
support reforestation and forest conservation in Uruguay and Zimbabwe.
Our partnership with South Pole enables us to offset 100% of our residue
emissions, resulting in achieving carbon neutrality in our operations.

Carbon offsetting project in India
Our offsetting projects are chosen to have a positive impact on communities.
With South Pole, we co-developed a tailor-made project in Gumla District,
India, where more than 500,000 people lack access to electricity. The Gumla
project develops renewable energy power plants which avoid burning fossil
fuels and thereby reduce greenhouse gas emissions. Through this project, weare able to help people who would not normally be served by a commercial
energy company. Bringing light to the people of Gumla is not just about
covering their basic needs. It catalyzes a full transformational journey towards
employment, better health, and improved overall well-being.

External recognition

Operational carbon footprint in kilotonnes

400
363
300

290
160

200
25
6
100

At the end of 2021,
our operational
carbon footprint was
290 kilotonnes.

Taking action

Conclusion

260
91

124

7
5

7
7

172

157

152

2019

2020

2021

0
Logistics
Business travel
Non-industrial operations
Manufacturing

Signify Climate Action Report 2021<< Previous

16

Next >>

Context & Strategy

Climate action and impacts

Risks and opportunities assessment

Taking action

Conclusion

External recognition“Today, the world is finally waking up to the climate crisis. The next
decade must be one of climate action. Our renewed partnershipwith Maersk will help us to scale zero carbon solutions in our supply
chain and logistical operations, providing rich pickings for emission
reductions”- Maurice Loosschilder
Global Head of Sustainability at Signify

Our partnership with Maersk
We are proud to support Maersk in launching eight new
vessels that operate on zero-carbon fuels. Maersk
has been one of our key partners in ocean logisticaloperations. The new vessels will play an important role in
reducing our emissions at our suppliers.

Signify Climate Action Report 2021<< Previous

17

Next >>

Context & Strategy

Climate action and impacts

Risks and opportunities assessment

Taking action

Conclusion

External recognition

In 2021, by switching in-person trainings tovirtual ones, we help prevent the emissions ofapproximatively 500 tonnes of CO₂, which isequivalent to:

200,000
bricks>22,000 trees absorbing CO₂
in over one year

Opting for digital learning
By switching to digital learning in 2021, we decreased
our business travel and prevented 500 tonnes of CO₂
emissions. This is equal to the volume of emissions
that 22,000 trees can sequester in a year, or equal totaking 188 petrol-fueled cars off the road for a year.

193,233
litres ofgasoline
consumed

1300 economy flights from
Amsterdam to Rome

Talking 188 cars off the roadfor one year

Signify Climate Action Report 2021<< Previous

18

Next >>

Context & Strategy

Climate action and impacts

Risks and opportunities assessment

Taking action

Conclusion

External recognition

Our Power Purchase Agreements (PPA)
Sourcing 100% of our electricity from renewablesources has been an important building block inachieving carbon neutrality. Over the past years,
Signify invested in three different PPAs in the US,
Poland, and Finland. Corporate PPAs not only
support us in achieving our ambitions, but also
play a role in accelerating countries transition togreener power grids.

Signify Climate Action Report 2021

What is a Power Purchase Agreement (PPA)?
A corporate (renewable) Power Purchase Agreement is a long-term
contract between a green power producer and a corporate power
offtaker to purchase green electricity. The participation of a company
in a PPA makes the project financially feasible, thereby contributing to
the acceleration of green power transition.

<< Previous

19

Next >>

Context & Strategy

Climate action and impacts

Risks and opportunities assessment

Taking action

Conclusion

External recognition

With our employees
On our climate action journey, one thing is certain: we cannot do it without
the dedication to sustainability of our colleagues. To continue expanding ourpositive impact, we rely on them to think and act sustainably.
Every quarter, colleagues can participate in sustainability-themed activities
that highlight Signify’s sustainability ambition and inspire employees
to consider their individual actions. We select challenges that offer all
employees the opportunity to create and share their positive impact.
Examples of activities include writing a short essay on the importance ofcarbon neutrality, an invitation to join the Human Race challenge organized by
the United Nations, and a carbon neutral cook-along challenge.
Through our learning platform, we develop learning content related tosustainability and climate action to empower our employees and customers
to upskill anytime, anywhere.

Signify Climate Action Report 2021<< Previous

20

Next >>

Context & Strategy

Climate action and impacts

Risks and opportunities assessment

Taking action

Conclusion

External recognition

Together with our suppliers (Scope 3 –Supply chain)Signify works with many global and local suppliers. As a baseline to build
a sustainable business relationship with our suppliers, we require our
suppliers to conform to the Signify Supplier Sustainability Declaration.
This Declaration sets out the standards and behavior we require of our
suppliers to improve conditions in the chain, including regarding climate.
Additionally, since our IPO in 2016, we have been engaging our suppliersin our climate action journey by proactively initiating, developing andsupporting carbon emission reduction activities at our suppliers
through our partnership with the CDP Supply Chain program.
Each year, we encourage our strategic suppliers to report on scope
1 and 2 emissions and emission reduction activities. We support themwith training and tools to enhance transparency. We have set targets
for the number of suppliers reporting emissions data via the Carbon
Disclosure Project (CDP) platform and we’ve gradually increased
the number of suppliers we approach every year. To encourage our
suppliers, carbon footprint reduction actions are part of our Tritium
program, which rewards suppliers based on their performance. The
better the supplier’s performance, the higher it scores and the more
beneficial the relationship becomes for the supplier. Examples of
incentives offered as part of the program are recognition throughthe Supplier Awards, a preferred business relationship and a higher
level of engagement with Signify through, for example, the innovations
workshops or a joint management agenda. This communicates clearly
to suppliers that Signify is truly committed to sustainability and is fully
willing to do its part in helping the supplier to improve.

Signify Climate Action Report 2021

“Science demands that we rapidly decarbonize
our economy and reach net zero emissions by
2050 to limit global warming to 1.50C. That won’t
be done without leadership from businesses, whoplay a critical role in answering this existential
challenge by innovating and rapidly transitioning
to low-carbon products and services. On CDP’s
climate change A List of leaders since 2007,
Signify has shown its willingness to act and reducethe impact. It’s science-based target to reduce
its emissions in line with the 1.50C is one of themost ambitious in the world: it is increasing its useof renewable energy, and it is effectively engaging
its value chain, by requesting its suppliers todisclose through CDP.”
Maxfield Weiss

Executive Director, CDP Europe<< Previous

21

Next >>

Context & Strategy

Climate action and impacts

Risks and opportunities assessment

Not only do we monitor the percentage of responding suppliers, but we also
check the quality of their input regarding scope 1 and 2 emissions disclosures,emissions reductions activities defined and followed, and commitments on
RE100 or Science-Based Targets.
Thanks to these efforts, we have made the top spot in CDP’s first everSupplier Engagement Rating and are recognized as a leader for our work with
suppliers to reduce emissions and lower climate-related risks in the supply
chain. We’re participating in the Science-Based Target project of CDP –engaging our key suppliers in China. We will follow the CDP engagements inthe coming years to further reduce carbon emissions at our suppliers.

Signify Climate Action Report 2021

Taking action

Conclusion

External recognition

At the end of 2021,
our suppliers undertook more than
260 initiatives in 2021, leading toalmost 39 million metric tons of CO₂
emissions saved.

<< Previous

22

Next >>

Context & Strategy

Climate action and impacts

Risks and opportunities assessment

Taking action

Conclusion

External recognition

By enabling our customers (Scope 3 –Use phase)A large part of our value-chain emissions lies in the product use phase.
Helping our customers reduce emissions through energy efficiency is avital aspect of our innovation process.
As part of our Brighter Lives, Better World 2025 sustainability program,
we commit to growing our Climate action revenues to 72% by the end of2025.
To define a product as contributing to Climate action revenues, we assess
its lumen output. Products must have a luminous efficacy of 85 lm/W to 110
lm/W to qualify as a contributor to Climate action revenues.

At the end of 2021, between
61% and 64% of our revenues
contributed to climate action.

Signify Climate Action Report 2021<< Previous

23

Next >>

Context & Strategy

Climate action and impacts

Risks and opportunities assessment

Taking action

Conclusion

External recognition

Energy efficient and connected lighting

Did you know?

Switching to LED lighting can reduce electricity consumption
by up to 50%. When LEDs are connected, the reduction canreach 80%. In our connected lighting systems, LEDs withintegrated sensors are connected to application software. This
makes it possible to automate and optimize light settings fordifferent applications and to provide the right light levels at theright time and in the right place.

In December 2006, lighting accounted for 19% of global electricity
consumption. This level was down to 12% in 2021 and is on track
to decline further to 8% by 2030, while the number of light points
continue to grow. Phasing out energy-inefficient conventional
lighting and switching to energy-efficient LEDs, introducing
solar lighting, and further enhancing energy saving with smart
connected lighting has significant environmental benefits,
contributing directly to the achievement of SDG 7: Affordable andclean energy.

Case study 1: Our most energy-efficient LED
Signify has introduced the Philips Ultra Efficient LED bulb, the first that meets the more stringent Ecodesign rules in Europe. We developed and designed
four regular A-shape light bulbs that consume 60% less power to achieve the same light output and quality as standard Philips LED bulbs. Thanks to thistechnological breakthrough, the new products are the first in a range of new Philips LED A-class bulbs that meet the highest level in the new EU energy
labeling categories.

Signify Climate Action Report 2021<< Previous

24

Next >>

Context & Strategy

Climate action and impacts

Risks and opportunities assessment

Solar lighting
Solar lighting is a key element of our Climate action revenues,
enabling cities to reduce emissions and accelerating the use ofrenewable energy sources.
Beyond the great environmental benefits, solar allows us to provide
lighting access to people who live off grid. For these communities,
solar lighting is the perfect solution to increase health, safety andeconomic growth, by reducing the incineration of toxic materials
to produce light and allowing the continuation of business andeducational activities after sunset..

Taking action

Conclusion

External recognition

Did you know?
In Europe, 75% of greenhouse gas emissions come from energy
production and use, making it a crucial area to take climate action.
Solar lighting helps by being up to 75% more energy efficient andeliminating dependency on fossil fuels. Moreover, solar panels
require low maintenance and have a lifespan of up to 30 years.

Case study 2: Solar lighting in Senegal
In rural Senegal, many households still rely on candles and kerosene lamps or low-quality battery torchlights for lighting. The situation has become
increasingly dangerous during the COVID-19 pandemic. The absence of energy and lighting has hampered health workers and health centers in their ability
to save lives. The Signify Foundation provided a recoverable grant to Little Sun, a social enterprise seeking to improve quality of life through designingand delivering affordable clean energy solutions. Mamadou Mansour, a Community Health Worker, shared his story: “Only a month ago, I was called for an
emergency at night. I sent the patient to another health center, which is much further away, because I don’t have light to work. Now, the situation haschanged. The solar system is bringing us lots of good things, among others: better healthcare for patients, improvement in my working conditions, andbeing able to fulfill my passion for health research and reading, now both during the day and night.”

Signify Climate Action Report 2021<< Previous

25

Next >>

Context & Strategy

Climate action and impacts

Risks and opportunities assessment

Taking action

Conclusion

External recognition

By advocating for the achievement of
global climate ambitions
Today, the world is finally waking up to the climate crisis. At Signify, we
engage with strategic stakeholders to support the achievement of global
ambition levels, interrelations, and alignment of global and regional 2030
and 2050 climate goals with the economic recovery programs of the world’s
major economies.
Every year, we participate in international climate conferences (e.g., London
Climate Action Week, Climate Week NYC and COP26 in Glasgow for 2021).
During these conferences, we issue calls to action, highlighting the multiple
benefits of switching to connected LED lighting.
Throughout 2021, we were deeply involved in the European Green Deal andRecovery process, providing supporting messaging across our markets
and exploring opportunities in the National Recovery & Resilience Plans. A
dedicated “Green Switch” program has been launched. In parallel, and mainly
through our partnerships with the Corporate Leaders Group Europe, theEuropean Alliance to Save Energy and the World Economic Forum, we wereinvolved in the concurrent policy developments that led to the creation of
the “Fit for 55” package with the goal for the EU to reduce GHG emissions
by at least 55% by 2030. Through NEMA and the Business Council for
Sustainable Energy, we contributed to the “Build Back Better” economic
recovery planning in the US leading to the encouraging approval of theAmerican Infrastructure and Jobs Act in November 2021.
Our dedicated programs for global green recovery (Green Switch in Europe,
Brighten America in the US, and similar programs in Asia) support economies
taking action without delay.

Signify Climate Action Report 2021<< Previous

26

Next >>

Context & Strategy

Climate action and impacts

Risks and opportunities assessment

Taking action

Conclusion

External recognition

External recognition
Our climate action and performance
have been recognized externally. We
engage with external bodies who
evaluate us on our Environmental,
Social, and Governance (ESG)
performance, compared to our peers.
These evaluations differ in terms of
methodology, coverage, and focus
areas. We allocate our efforts toengage with bodies with robust andtransparent methodologies. Thanks to
our ambitious sustainability programand performance, we are recognized
as a leader in sustainability and for our
climate action.

Climate Action Award

How do we report?

The United Nations Framework
Convention on Climate (UNFCC) hasawarded us with a UN Climate Action
Award for our leadership on climate
action during the Award ceremony at
COP 26 in Glasgow.

We believe in the importance of standardizationof sustainability disclosures. Therefore, wereport on climate action in alignment with
universal frameworks. In the Supplements to theAnnual Report 2021 Sustainability Statements,
we share our GRI Content Index, a mapping to
the recommendations of the Task-Force on
Climate-related Financial Disclosures (TCFD) andto the EU Directive on non-financial information.

Signify is in the top 1% in
its industry and included
for the fifth consecutive
year in the World Index.
Signify has been
included on the Climate
A-list for the fifth
consectutive year.

Signify has remained anindustry leader after amethodology change being
ranked as low ESG risk.

Signify remains in the
top 1% in its industry.

Signify Climate Action Report 2021

2017

2018

2019

#1

#1

#1

2020

2021
Top 1%

World
index

Climate A list

#1

1% low ESG risk

Top 1%For more recognition, please check our webpage:www.signify.com/global/sustainability/external-recognition<< Previous

27

Next >>

Context & Strategy

Climate action and impacts

Conclusion

Conclusion

Signify Climate Action Report 2021<< Previous

28

Next >>

Context & Strategy

Climate action and impacts

Conclusion

Our lessons learned so far

Conclusion
2021’s UN Climate Change Conference (COP26) called for accountability
on emission targets and for fast action to avert, minimize and address theloss and damage that is already occurring due to climate change.
For us, this is more than clever speak: we have committed to playing
our role and adapting our business strategy to put our impact as anenvironmentally responsible organization at the very heart of ourbusiness strategy. This is how we achieved carbon neutrality for ouroperations in September 2020. Changing how we run our company
is a key driver of growth. It’s also a commitment to working with ourclients and our partners, whether they be corporations, governments,
educational institutions, or consumers, to make the lighting industry aforce for positive environmental change.
Indeed, governments and industry must act, but individuals can also play
an important role. There are many residential light points and replacing
those with LEDs can have a significant positive impact. While there areclose to 30 billion light points in the world, and while the transition to LED
lighting is well advanced, two-thirds of all installed lighting still consist of
conventional lighting technology. This shows the significant potential forfurther reduction of electricity consumption and GHG emissions.
All of us: world leaders, businesses, and individual households, can andmust play our part in securing a sustainable future of our planet for ourchildren, our grandchildren, and for the generations to come.

01
02
03
04

05
Signify Climate Action Report 2021

Embed sustainability in your company strategy
We created integrated emission reductions efforts as
growth drivers within our core business goals, ensuringthat everything we did commercially also brought us closer
to achieving our sustainability ambitions. Examples include
connected lighting and the A-class bulb.
Analyze operational energy use
We made a comprehensive plan to improve our operational
footprint by installing energy-efficient lighting and new
HVAC systems, optimizing industrial processes and officespace utilization, switching to 100% renewable electricity,and more sustainable transportation modes. These actions
helped us reduce our operational carbon footprint by morethan 70% in the last ten years.
Embrace renewables
The use of 100% renewable electricity is an important pillarof our commitment to sustainability. We started our switch
to renewables in strategic geographies with relatively
high electricity consumption and countries with a moredeveloped renewable electricity infrastructure.
Find the right partners
It was important that we find the right partner for carbon
offsetting to ensure that what we do is credible andtraceable. We found this partner in South Pole, a specialist
firm that helps us navigate options to find programs thatalign with our corporate social responsibility programs
and meet our requirements to reduce our environmental
impact while also contributing to the well-being of thecommunities where these projects take place.
Work with like-minded advocates
In addition to finding the right partners, we collaborate
with organizations with a similar vision. The Climate Groupis a non-profit organization that works with business andgovernment leaders to tackle climate change. And we havealso partnered with initiatives like the World Green Building
Council’s (WGBC) Net Zero Carbon Buildings initiative.
<< Previous

29

Next >>

Signify N.V. High Tech Campus 48
5656 AE Eindhoven
The Netherlands
sustainability@signify.com
www.signify.com/global

Dutch Chamber of Commerce registration no. 65220692
VAT NL8560.25.823.B.01