Climate
Transition Plan

1

Climate Transition Plan

Intro

Signify’s Climate Transition Plan

Welcome to Signify’s Climate
Transition Plan. This document sets
out the company’s climate strategy,
ambitions, and action plan in line with
our net-zero target for 2040.
Signify has an important role to play in the transition
to a global low-carbon economy. According to theInternational Energy Agency (IEA), in 2022, lighting
accounted for more than 2% of global greenhousegas emissions1, equivalent to the impact of aviation.

2

3

4

Ambition

ActionAdvocacy

Accountability

Emissions reduction
targets for full value chain

Suppliers

Policy advocacy

Just transition

Operations

Lobbying andtrade associations

Stakeholder consultation

2025 -40% vs 2019

Climate action has been at the center of Signify’s
sustainability strategy for more than a decade.
We took the lead in introducing more energyefficient LED lighting and have worked to reducegreenhouse gas emissions across our entire value
chain. Our current sustainability program – Brighter
Lives, Better World 2025 – sets out to double thepace of decarbonization required under the Paris
Agreement 1.5°C objective.

2030 -50% vs 20192040 -90% vs 2019

Travel and commuting
Logistics

Specific policy levers

Governanceand reporting

Use phase
End of life
Risks and opportunities
Investments andbusiness models

Our Climate Transition Plan is inspired by the four Asof the climate leadership framework, publishedby the We Mean Business Coalition (WMBC).2 This
framework emphasizes: Ambition, Action, Advocacy
and Accountability.

1

Signify will report regularly on its progress towards this plan through the company’s Annual Report, Sustainability Supplements and website.
This Climate Transition Plan was approved by Signify’s Board of Management; it was also subject to extensive stakeholder consultation (for details, see page 30).
Based on estimated IEA lighting emissions and global energy-related emissions

1
2

WMBC is a coalition of non-profit organizations working with business to support the transition to a net-zero economy. For more information, please refer to: www.wemeanbusinesscoalition.org.

2

Climate Transition Plan

Contents
Introduction
Message from the CEO
Executive summary

1 Ambition

2
4
5
6

9

4 Accountability

29

2.1 Suppliers

11

4.1 Just transition29

2.2 Operations

1330

2.3 Travel and commuting

15

4.2 Stakeholder
consultation

2.4 Logistics

1730

2.5 Use phase

19

4.3 Governanceand reporting

2.6 End of life22

2.7 Risks andopportunities

24

2.8 Investments andbusiness models

27

2 Action

3 Advocacy

Conclusion

31

Appendix32

Net-zero scenario
28

3.1 Policy advocacy

28

3.2 Lobbying andtrade associations28

3.3 Specific policy levers

28

33

Glossary and abbreviations 34
Contact us

35

3

Climate Transition Plan

Messagefrom the CEO
Light is essential for our society. With
our leadership comes the responsibility
for the way lighting impacts theenvironment around us. We believe
Signify has to play a critical role inensuring that the transformative powerof light does not come at the expenseof our planet.
We have been at the forefront of the transformation of
the lighting industry. In 2006, we called for the phaseout of incandescent lighting at a time when it accounted
for two-thirds of our sales volume. While this radical
shift challenged many within the company and among
our stakeholders and peers, it was the foundation of ourindustry leadership position today.
Since then, we have made leaps forward in energy
efficiency and almost every other measure ofsustainability in lighting. Today, 87% of our revenues
come from energy-efficient LED-based technologies.
And more recently, we have been able to pioneer ultraefficient technologies that last longer and greatly
surpass the energy savings previously possible with LED.
As a result of our innovations, we have achieved a 50%

absolute reduction in greenhouse gas emissions acrossour entire value chain, including during the use phase,since 2019.
We firmly believe that there is much more we can do.
Today, we are raising our ambitions once again, witha plan that builds on close to two decades of action.
Signify’s 2040 Climate Transition Plan is an important
evolution in our sustainability journey – a pledge to go
further and faster. It details how Signify will deliver on
our science-based net-zero targets with a commitment
to reduce our greenhouse gas emissions by 90%
across our full value chain by 2040 against the 2019baseline year.
A crucial point of progress is that these efforts
encompass not just our own operations, but our entire
value chain, and beyond. We will use our voice to engage
our customers, employees, and public decision-makers
on how to accelerate climate action, toward brighter
lives and a better world. With this vision and ambitionin mind, I am proud to share with you Signify’s Climate
Transition Plan.

Eric Rondolat
CEO Signify
4Climate Transition Plan

Executive summary
This Climate Transition Plan sets out
Signify’s roadmap to net-zero. By
2040, we aim to reach net-zero andreduce absolute scope 1, 2 and 3
greenhouse gas emissions by 90%
and eliminate the remaining 10%
through carbon removals.

But most of all, it is about producing and delivering
ever more efficient LED lighting, which saves on energyuse, reduces emissions, and lowers energy bills. We
have made considerable advances in Ultra Efficient LED
lighting, 50-60% more efficient than first-generation
LED. We will encourage a faster shift towards thesetechnologies, and a faster decline in global energy
demand, by partnering with others to advocate for a
3% annual renovation rate of buildings globally.

The use phase of our products accounts for morethan 99% of total emissions across our value chain.
To achieve net-zero, we must further increase
the energy efficiency of our lighting. We must also
advocate for the green energy transition to phaseout fossil fuels and increase the use of renewableelectricity in the world’s grids. It is clear that without
this transition, we won’t be able to achieve our 2040
net-zero target.

We realize these changes will affect our suppliers,
customers, and employees, as we decrease
production of inefficient conventional lighting. We arecommitted to supporting them during the transition,
ensuring that our products remain affordable,
especially for those on low incomes. At the same time,
we are convinced that our transition to net-zero willbring clear, long-term benefits.

Our Climate Transition Plan involves making further
energy efficiency gains at our manufacturing facilities
and offices and increasing reuse and recycling of
Signify products and components when they havereached the end of their useful life.

5Climate Transition Plan | Ambition

1 Ambition
As part of our Climate Transition Plan, we haveintroduced ambitious emissions reduction targets;these targets have been reviewed and validated by
the Science-Based Targets initiative (SBTi):

Net-zero target

Net-zero greenhouse gas emissions
across our entire value chain by 2040

Near-term target

50% reduction in absolute scope 1, 2 and3 greenhouse gas emissions by 2030

These targets build on progress made under Signify’s previous climate actionplans. Since 2019, we have already reduced scope 1, 2 and 3 emissions3 byapproximately 50%, mainly by increasing our products’ energy efficiency
and by reducing energy use at our factories and offices. If successful, ourClimate Transition Plan will increase this to 90% by 2040. To reach our netzero target, we are committed to eliminating the residual 10% throughcarbon removals; Signify has a track record in financing carbon removals andsequestration through nature restoration.

Achieving net zero by 2040
(scope 1, 2 and 3 emissions, tCO2e)
415M
100%

75%

248M
-40%

(compared with 2019 base year)

208M
-50%

50%

Long-term target

90% reduction in absolute scope 1, 2
and 3 greenhouse gas emissions by 2040
(compared with 2019 base year)

25%

41M
-90%

0%
2019

2025*

2030

2035

Setting sciencebased targets
It is important that we set science-based
emissions reduction targets – i.e., that our targets
are in line with what is required to achieve the Paris
Agreement 1.5°C objective, according to the latest
climate science. In fact, our Climate Transition
Plan will put Signify ten years ahead of the 1.5°C
objective, which implies net-zero emissions by
2050. Setting science-based targets also makes
sense for us as a business – it will encourage
innovation and demonstrate to employees andcustomers alike Signify’s long-term commitment
to sustainability. In 2018, Signify became one of
the first companies to commit to verified sciencebased targets in line with the Paris Agreement
1.5°C target.

10% of carbon
removals at 2040
(to achieve net-zero)

2040*Signify’s 2025 emissions target was set in 2020 as part of the company’s Brighter Lives, Better
World 2025 program. In 2023, we surpassed this target, thanks mainly to quicker-than-expected
improvements in energy efficiency across our product portfolio and accelerated phasing-out ofless efficient conventional lighting. We expect these factors to drive further reductions in emissions
throughout our value chain. Gains in energy efficiency are likely to slow down after 2025, but will stillaccount for 10% of emissions reduction through to 2030. After that date, we expect an acceleration in
the global transition to renewable energy, resulting in a further 40% reduction in emissions by 2040.

Throughout this document, we use definitions for scope 1, 2 and3 emissions as set out in the Greenhouse Gas Protocol. Scope
1 refers to emissions from sources owned or controlled by
the company, scope 2 to emissions from purchased electricity
consumed by Signify and scope 3 to indirect emissions resulting
from our activities either upstream in our supply chain or
downstream through the use of our products. For more
information, see www.ghgprotocol.org.

3

6

Climate Transition Plan | Ambition

Signify’s current
greenhouse gas emissions

Greenhouse gas emissions acrossFull value chain GHG emissions
ourvalue chain (based on 2023 data)
Full value chain GHG emissions

Across our value chain, mostgreenhouse gas emissions –more than 99% – come from theproduct use phase (i.e., when our
products and lighting systems
are in operation). The remaining
emissions stem either from Signify’s
own factories and offices andoperations, or from the company’s
supply chain – essentially from thematerials we buy to manufacture our
products, transportation of thesematerials, and end-of-life treatmentof products.

0.4
0.4%%

Upstreamvalue
Upstream value
chainchain

0.1%%
0.1

Our own operations

Our own operations

99.5%

99.5%

Downstream value chain

Downstream value chain

With most emissions outside our operations,
we have two main drivers to achieve our
net-zero ambition:

Upstream value chain includes purchased
goods and services, capital goods andupstream transportation and distribution(scope 3).
Our own operations include fuel and energyrelated activities, waste generated in ouroperations, business travel and employee
commuting (scopes 1, 2 and 3).
Downstream value chain includes use of soldproducts and end-of-life treatment of soldproducts (scope 3).

Signify’s scope 1, 2 and 3 emissions
Scope 2Market based
Location based
Purchased goods and services
Capital goods

Scope 3

Fuel and energy-related activities*
Upstream transportation and distribution
Waste generated in operations
Business travel
Employee commuting

148k
0
129k
683k
15k
33k
87k
9k
13k
35k

End of life treatment and sold products
Total

Over time, this second driver will become more important. By 2040,
we expect over 40% of our emissions reduction will come from thetransition to renewables as more of the installed base globally isconverted, over time, to energy-efficient lighting.

32%

42%

19%
7%

36%

192M

Use of sold products• Second, to advocate for a green energy transition – this means
working with governments, business and other stakeholders toincrease the use of renewable energy in the world’s power grids

Net zero emissions scenario
reduction drivers
Net-zero drivers(tCO2e, based on 2023 data)
Scope 1• First, to further improve the energy efficiency of our products– this will help reduce energy consumption and support ourcustomers’ decarbonization goals

2025Green energy
transition
42%

47%

48%

2030

2035

2040

Increasedenergy efficiency

18k
193M

*Not otherwise included in scopes 1 or 2

The chart above shows expected percentage reduction in greenhouse gas emissions bydriver (increased energy efficiency/green energy transition), leading to 90% emissions
reduction across Signify’s entire value chain by 2040, in line with our net-zero ambition.

The chart above is based on emissions scopes and categories, published in the Greenhouse Gas Protocol. We haveexcluded six scope 3 categories as not applicable to Signify: upstream leased assets, downstream transport anddistribution (included in upstream transportation and distribution), processing of sold products, downstream leased
assets, franchises and investments.

7

Climate Transition Plan | Ambition

Decarbonization scenarios
In developing our Climate Transition
Plan, we mapped out four different
decarbonization scenarios, basedon the IEA’s Net-Zero Roadmap(2023 update) and the sixth IPCC
Assessment Report. These scenarios
range from average global warmingof 1.5°C to 4.4°C – and clearlyshow that achieving net-zero will
depend on further climate action
by government and business,particularly in accelerating thetransition to renewables.

01

Net-zeroemissions scenario

The world reaches net-zero emissions by 2050,
limiting global warming to 1.5°C.
Based on: 70% renewable electricity by 2030.
100% renewable electricity in developed economies in 2035, in China
by 2040 and in other emerging economies after 2040.

02

Our four decarbonization
scenarios (tCO2e)
400M

Announced
pledges scenario

300M

All government targets are met as announced,
resulting in warming of 2.1ºC.

200M

-43%

-49%
-52%
-57%
-61%

Based on: 60% renewable electricity by 2030, rising to 80% by 2040.

03

Stated policies
scenario

Current policies continue unchanged,
resulting in warming of 2.4°C.

-54%
-63%
-68%
-79%

100M

-55%
-65%
-73%
-90%

0
2019

2025

2030

2035

2040

Based on: 55% renewable electricity by 2030, rising to 65% by 2040.

04

1.5ºC

Business as
usual scenario

2.1ºC

2.4ºC

4.4ºC

See page 33 for more information on our decarbonization scenarios.

No further climate action is taken,
resulting in warming of 4.4°C
Based on: 40% renewable electricity from 2025 to 2040.
In line with the sixth IPCC Assessment Report SSP5-8.5 scenario.

8

Climate Transition Plan | Action

2 Action
To meet our net-zero target,
we have put in place a series of
initiatives and programs across ourbusiness and value chain. These
involve, incentivizing suppliers
to commit to renewable energy,
electrification of the logistics
fleet and last mile distribution, andfurther extending the use of LED –the single biggest factor in reducing
the lighting industry’s emissions inrecent years.
9Climate Transition Plan | Action

Summary of action plan across Signify value chain
Upstream

Suppliers

Signify operations

Logistics

Scope 3

Factories

Offices

Downstream

Travel andcommuting

Productuse

Scope 1 & 2End-of-life
treatment

Scope 3

Suppliers-0.7% CO2

Logistics-0.03% CO2

Operations-0.04% CO2

Travel and commuting-0.02% CO2

Use phase-88% CO2

End of life
-1.1% CO2• Supplier sustainability program• Electrification of logistics fleet• Reuse, recycle• Increase energy efficiency
and decarbonize modes oftransportation• Sustainable travel policy,
partnership and fuels• Ultra Efficient LED• Green procurement strategy• Source 100% electricity
from renewables• Decouple growth and emissions• Boost circular lighting portfolio• Increase renewable electricity
from PPAs• Augmented reality to avoid
physical travel• Advocate for acceleration of
global renewable transition• Reduce waste and emissions fromend-of-life treatment• Increase energy efficiency• 100% EV or hybrid leasedcars fleet• PPAs for customers• Packaging redesign• Power purchase agreements(PPA) for suppliers• Sustainable fuels• LEDification, retrofit
own facilities

10Climate Transition Plan | Action

2.1
Suppliers
By 2040, we plan to reducegreenhouse gas emissions from our
suppliers by just over 91%. This will
be done mainly by engaging with
suppliers, incentivizing them to takeclimate action, reduce emissions
and switch to renewable energy.
Where possible, we will also increase
our use of alternative, low-carbon
materials and integrate carbon costs
into our procurement decisions.

Suppliers (tCO2e)
Planned reduction in emissions (tCO2e)

3.5M

2019
3.3M

-2.2M

3.0M
2.5M
2.0M
1.5M

-80k

-379k

1.0M

-358k

0.5M

2040
290k

0
Engaging with
our suppliers on
climate action

Supporting
Power Purchase
Agreements(PPAs)for
suppliers

Increasing ouruse ofsustainable
materials

Furtherstrengthening
our approach tosustainableprocurement

Figures have been rounded to nearest million or 1,000, and may not tally due to rounding.

11

Climate Transition Plan | Action

2.1
Suppliers
action plan

Actions

How will we reduce emissions?

By how much
Implementation will this reduce
timelineemissions?

Engaging with
our suppliers on
climate action• Incentivize suppliers through Tritium* to:2024-2028

2.2M tonnes
0.53%• Commit to climate action and set ambitious science-based emissions reduction targets• Increase their use of renewable energy and set goals (using RE100 as a basis)4• Favor suppliers who take action on climate and drive further emissions reductions*Tritium – Signify’s supplier rating system – works by rewarding those suppliers taking climate action.

Supporting PPAs for
suppliers• Support suppliers in initiating new PPAs, prioritizing regions with large numbers of Signify suppliers andworking closely with other buyers

2025-2030

80k tonnes
0.02%

Increasing our use ofsustainable materials• Redesign products and packaging to use less carbon and energy-intensive materials

2024-2035

379k tonnes
0.09%

Further strengthening
our approachto sustainableprocurement• Integrate carbon costs into procurement policy and decision-making

2030-2040

358k tonnes
0.09%

Challenges anddependencies

We work with thousands of suppliers; who operate at different levels of maturity in both their understanding and management of climate
issues. Sourcing alternative, low-carbon materials may prove challenging because of availability, cost or even suitability. PPAs provide a clear
pathway to decarbonization, but pricing structures vary and may not always be clear to all suppliers.

4• Increase the percentage of recycled content in our products and exploring low-carbon alternatives(such as bio-circular materials)• Choose suppliers with net-zero or low emissions, and buy sustainable materials as the default option

RE100 is a global initiative bringing together companies to work toward 100% renewable electricity. For more information, see www.there100.org.

12

Climate Transition Plan | Action

2.2
Operations
Our own factories, offices and othersites account for only a fraction of
our total greenhouse gas emissions.
Since 2010, we have reduced ouroperational carbon footprint byalmost 80%. Under our Climate
Transition Plan, we will go further,
upgrading our buildings, accelerating
circularity initiatives and optimizing
our processes to reduce overall
energy consumption.

Operations (tCO2e)
Planned reduction in emissions (tCO2e)

200k

2019
178k

-12k

-100k

150k

100k
-12k

-36k

50k

2040
18k

0
Reducing energy
consumption
across ouroperations

Optimizing
energy use in ourfactories andnon-industrial
facilities

Acceleratingproduct
circularity, zerowaste and cleantransport

Upgrading ourbuildings andlighting

Figures have been rounded to nearest million or 1,000, and may not tally due to rounding.

13

Climate Transition Plan | Action

2.2
Operations
action plan

Actions

How will we reduce emissions?

Reducing energy
consumption across
our operations• Reduce energy use through heating and air conditioning and by using timers for auto shutdowns prior to
the end-of-work shifts

Optimizing energy
use in our factories
and non-industrial
facilities• Reduce our reliance on natural gas and energy-intensive processes

By how much
Implementation will this reduce
timelineemissions?
2024-2027

12k tonnes
0.003%

2024-2027

100k tonnes
0.02%

2024-2027

12k tonnes
0.003%

2024-2027

36k tonnes
0.01%• Involve operators in identifying opportunities to further reduce consumption and step up zone-by-zone
monitoring at factories and other sites• Insulate machines and reuse heat generated by chimneys and other equipment• Replace old, inefficient machines and optimize maintenance to reduce energy use and prevent leakage• Reduce waste from industrial processes, including wastewater, and recycle where possible• Power-down unused equipment and shut off during unplanned stoppages• Optimize other processes, including painting and battery recharging, particularly with material handlingsystems and power tools

Accelerating productcircularity, zero waste
and clean transport• Design products for easy disassembly and eliminate glue – or find alternatives – to avoid baking for
hardening etc.
• Encourage greater circularity across all product lines and develop action plans to mitigate products’
climate impact• Increase the use of 3D printing of plastic components (using recyclable plastic)• Optimize transport of Signify products (e.g. making better use of space in vehicles, taking fuel-efficientroutes and introducing EVs for last-mile delivery)

Upgrading ourbuildings and lighting• Install more energy-efficient LED lighting, motion detectors and make use of alternative energy sources
where possible• Increase our use of PPAs and on-site generation through solar panels at our factories, offices andother facilities

Challenges anddependencies

Switching to renewable energy may be challenging at smaller, more remote sites (which may be also rented rather than owned by thecompany). In addition, sourcing alternative materials will depend on their availability and potential return on investment. Other measures,such as product redesign and installing new equipment, will require investment and support from external suppliers.

14

Climate Transition Plan | Action

2.3
Travel andcommuting
We are taking a more sustainableapproach to business travel.
By 2040, we expect to reduce
emissions from travel and employee
commuting by more than 80%.
We will do so by updating ourtravel policy to introduce a stricter
approval process, banning
short-distance flights andswitching company lease cars
to electric or hybrid.

Travel & Commuting (tCO2e)
Planned reduction in emissions (tCO2e)

120k

2019
113k

-28k

-3k

90k

-5k

-18k
-39k

60k
2040
21k

30k

0
Redefining oursustainable travel
policyBanning
short-haul flights
for businessSwitchingcompany cars to
100% electric or
hybridIntroducing
virtual travel
experiences

Working withtravel agencies
to decarbonize

Figures have been rounded to nearest million or 1,000, and may not tally due to rounding.

15

Climate Transition Plan | Action

2.3
Travel andcommutingaction plan

Implementation
timeline

Actions

How will we reduce emissions?

Taking a more sustainableapproach to businesstravel and commuting• Update our travel policy to introduce a stricter approval process and ban short-distance flights 2025-2028• Switch company lease cars to 100% electric or hybrid, and provide incentives for employees touse more sustainable forms of commuting• Work with travel agencies to reduce emissions, invest in alternative fuels (particularly for air
travel), and use AI to provide virtual travel

Challenges anddependencies

2028-2040

By how much
will this reduce
emissions?
36k tonnes
0.01%

57k tonnes
0.01%

In changing our approach to travel, we may need to set a specific CO2 budget, define exceptions and overhaul our current travelbooking system. In some countries, there is still a lack of charging infrastructure, which may delay the introduction of company EVs.

16

Logistics (tCO2e)
2.4
Logistics
Logistics greenhouse gas emissions
are mainly in shipping materials to
our factories and in transporting
finished products to customers. We
will work to reduce these emissions
by opting for more sustainable formsof transport, favoring ocean andrail freight, for example, as well asworking in partnership with shippers
and rail haulers, and investing incleaner, alternative fuels.

Climate Transition Plan | Action

Planned reduction in emissions (tCO2e)
180k

2019
160k

-60k

160k
140k
120k

-25k

100k
-13k

80k

-31k

60k

2040
31k

40k
20k
0
Prioritizing
sustainable formsof transport

Switchinglast-miledelivery to EVs

Working withshippers andother logistics
providers to
reduce emissions

Investing more inalternative,
sustainable fuels

Figures have been rounded to nearest million or 1,000, and may not tally due to rounding.

17

Climate Transition Plan | Action

2.4
Logistics
action plan

Actions

How will we reduce emissions?

Prioritizing sustainable • Favor cleaner ocean or rail freight, particularly between ports and our distribution centers
forms of transport• Use EVs for last-mile distribution of our products

By how much
Implementation will this reduce
timelineemissions?
2024-2030

85k tonnes
0.02%

2030-2040

44k tonnes
0.01%• Design products to optimize weight and volume for more efficient shipping• Improve reporting, use more data from shippers, and identify emissions hotspots forpossible improvements• Invest in alternative, sustainable fuels for transport• Use low emissions as one of our selection criteria for shippers, make use of zero-emissions zones atcustomer sites and work with logistics providers to reduce emissions

Challenges anddependencies

As with travel and commuting, we face uncertainties over the availability of charging infrastructure, as well as the cost of biofuels,
given the likelihood that demand for these fuels will increase as more companies look for alternatives to diesel.

18

Use phase (tCO2e)
2.5
Use phase
As we have seen, most greenhousegas emissions come from theuse phase of our products. To
reach net-zero, we will continue
to improve our products’ energy
efficiency. This will help drive
continued innovation and allow us
to progressively decouple businessgrowth from emissions. We can’t
achieve net-zero through energy
efficiency alone, however. We will also
work closely with governments andbusinesses to accelerate the global
transition to renewable electricity.

Climate Transition Plan | Action

Planned reduction in emissions (tCO2e)
450M

2019
407M

-202M

400M
350M
300M
-164M

250M
200M
150M

2040
41M

50M
0
Increasingenergy efficiencyof our products

Transitioning of
the grid to green
energyFigures have been rounded to nearest million or 1,000, and may not tally due to rounding.

19

Climate Transition Plan | Action

2.5
Use phaseaction plan

Actions

How will we reduce emissions?

By how much
Implementation will this reduce
timelineemissions?

Increasing energy
efficiency of our
products• Continue to phase out conventional lighting and replace it with more energy-efficient LED*

2024-2030

202M tonnes
49%2030-2040

164M tonnes
39%• Introduce more solar lighting and enhance energy savings with smart, connected lighting• Expand our portfolio of ultra energy-efficient indoor, outdoor and residential lamps, as well as luminaires• Work with government and business to double annual infrastructure renovation rates to speed up
replacement of conventional lighting with more energy-efficient alternatives• Use Environmental Product Declarations (EPDs) to quantify our products’ climate impact and use this asa foundation for sustainable innovation and product design for emissions reduction*LED reduces energy consumption by around 50%, but that figure rises to 80% with connected LED. Connected LED is a system using
Internet of Things (IoT) technology to connect LED lighting devices to a network: lights may be remotely controlled, monitored, and optimized
through a management system. Connected lighting solutions are designed to provide a range of benefits, such as energy savings, improved
user experience and enhanced safety and security.

Transitioning of thegrid to green energy• Advocate an acceleration in the transition to renewable energy and net-zero electricity withgovernment and business• Encourage PPAs among customers, suppliers and other business partners as an effective way ofdecarbonizing the energy sector• Extend our own PPAs to increase our use of renewable electricity
See page 28 for more information about our approach to advocacy.

Challenges anddependencies

Around 88% of our planned emissions reduction through to 2040 will come from the use phase. Ultimately, success will depend on the wider
transition to renewable energy. To ensure this, governments will need to provide effective incentives and make good on pledges under theParis Agreement. We can still improve energy efficiency through innovation, though this is likely to become less significant over time as moreconventional lighting is converted to LED. Continued expansion in fossil fuel production, particularly in response to current energy security
concerns, may also slow the switch to renewables.

*LED reduces consumption by around 50%, but that figure rises
to 80% with connected LED, which operates through sensors,connected to application software, allowing users to automate andmodulate light settings according to mood and purpose.

20

Climate Transition Plan | Action

2.5 Use phase
Switching to Ultra Efficient lighting willfurther reduce use phase emissions
We are continuing to expand our range of Ultra Efficient
LED lighting; these lights are 50-60% more efficient thanfirst-generation LED. As a result, they save on energyuse, reduce emissions and help bring down householdenergy bills.
We launched our first, breakthrough Ultra Efficient LED
lightbulb in 2021. The Ultra Efficient range expanded withnew indoor and outdoor luminaires in 2022. And In 2023, weadded Ultra Efficient outdoor solar lights for consumers,
plus Ultra Efficient solutions for roads and hospitality to our
product range. Now our Ultra Efficient portfolio consists ofindoor, outdoor and residential lighting.

Expanding Ultra Efficient LED lighting will help reducecarbon emissions from the use phase of our products
across the full value chain.
Ultra Efficient lighting also brings other benefits. These
Ultra Efficient products last longer on average than the
traditional LED equivalent – up to 50,000 hours – whileachieving the same light output and quality. In addition,
they meet the most stringent EU ecodesign and energy
labeling criteria. Overall, that means less use of materials
and less waste.
Because it lasts longer and uses less energy, Ultra
Efficient lighting offers households significant costsavings – important at a time of rising energy prices. We
estimate that an average household switching from oldstyle incandescent lighting could save as much as EUR
14,000 over their product’s lifetime.5

Signing power purchase agreements
to accelerate transition to
renewable power
Increasingly, we are supporting the renewable energy
transition via PPAs. We now have three virtual PPAs
(vPPAs) in place in the US, Poland and Finland – these
agreements give us access to renewable electricity,
reduce our emissions and help transition national
electricity grids to more sustainable forms of power.
Around 37% of our renewable electricity now comes from
vPPAs. Our latest agreement in Finland went live in 2023.
• We signed our first vPPA in the US in 2018, sourcing
electricity from a wind farm in Texas and allowing us toswitch to 100% renewable electricity across our US
and Canadian operations.

• In Poland, we were the first to sign a corporate vPPA
in 2019, a ten-year agreement, under which we aresourcing renewable power from the Kisielice wind farm,around 200 kilometers north of Warsaw for Signify
production facilities and offices across Poland. The
agreement helps reduce the country’s reliance on coal;
nearly three-quarters of Poland’s electricity is still
generated from coal and other fossil fuels.6• In Finland, Signify signed the first cross-border panEuropean vPPA as part of a consortium, also involving
Heineken, Philips and Nouryon (now Nobian). Under
our vPPA, we supported the financing of 35 new windturbines, adding 330 GWh of renewable power toFinland’s national electricity grid and saving more than
230,000 tonnes of CO2e per year. The wind turbines
came into service, as scheduled, in 2023.
5

Source: Signify

6

Source: Ember*LED reduces consumption by around 50%, but that figure rises
to 80% with connected LED, which operates through sensors,connected to application software, allowing users to automate andmodulate light settings according to mood and purpose.

21

End of life (tCO2e)
2.6
End of life
By moving to a more circularapproach, we will reduce both waste
and our reliance on increasingly
scarce natural resources. We will
do this by encouraging reuse,recycling and remanufacture.
Initiatives are already underway toredesign our packaging and further
embed circularity into initial productdevelopment. By 2040, we expect toreduce more than 99% of emissions
from our products’ end-of-life phase.

Climate Transition Plan | Action

Planned reduction in emissions (tCO2e)
5M

2019
4.5M

-2.2M

4M

3M

-1.5M

2M
-764k

1M

2040
16k

0
Increasing reuse
and recycling

Redesigning
packaging to be
more sustainable

Circular productdesign andinnovation

Figures have been rounded to nearest million or 1,000, and may not tally due to rounding.

22

Climate Transition Plan | Action

2.6
End of life
action plan

Actions

How will we reduce emissions?

Increasing reuse
and recycling• Expand our circularity program, reduce waste, increase “re-usability” of our products and harvest
spare parts from products at the end of their useful life

By how much
Implementation will this reduce
timelineemissions?
2024-2030

2.2M tonnes
0.5%

Redesigning
packaging to be
more sustainable• Reduce the amount of packaging required, use of emissions-intensive materials and encourage recycling 2024-2030

1.5M tonnes
0.4%

Circular productdesign and innovation• Integrate circular design into our product development to prolong the lifetime of new products andreduce end-of-life emissions• Increase 3D printing of lighting products, based on recycled plastics and other bio-circular materials• Phase out plastic packaging in consumer products and favor lighter and smaller packing, leading
to emissions reduction of around 6,000 tonnes CO2e a year
2024-2035

764k tonnes
0.2%• Make our products more serviceable and upgradable, so they last longer once in use and can be
improved by performance upgrades and new functionalities

Challenges anddependencies

In many countries, there is a shortage of adequate infrastructure for collecting and recycling. Many products currently in use do nothave circular principles built into their manufacture, limiting their recyclability. Success will also depend on our ability to establish effective
reuse and recycling streams within our business.

23

Climate Transition Plan | Action

2.7
Risks andopportunities

Climate change brings both risks andopportunities for our business. We
manage these essentially through our
Climate Transition Plan and our Brighter
Lives, Better World 2025 sustainability
program.
Climate-related risks fall into two main categories:• Physical risks caused by climate change – e.g.,
extreme weather events such as floods or hurricanes• Transition risks caused by the climate transition –i.e., the shift away from fossil fuels and toward moresustainable forms of businessPhysical risks may affect our factories, warehouses,and distribution centers, as well as disrupting supply
chains and resulting in higher material prices. Our
climate risk assessment shows that just under aquarter of our sites may be at risk, over time, ofriverine flooding (see table on the pages 25-26).
We are well prepared for extreme weather events,
however. We have detailed business continuity plansin place to minimize disruption to our production,
employee working, sourcing or product deliveries.
Transition risks, meanwhile, can be turned into
significant opportunities for Signify as the global
leader in energy-efficient and low-carbon lighting.
As part of our sustainability program, we have

expanded our portfolio of energy-efficient products
and systems, worked to reduce greenhouse gas
emissions throughout our value chain, and extended
reuse and recycling where possible.
These efforts will also help us meet stricter
environmental performance standards, lessen our
reliance on scarce natural resources and reduce our
exposure to variations in carbon prices.
In the table below, we have set out our main climaterelated risks, opportunities and impacts over the
short, medium and long-term. For more information,see Signify’s Annual Report 2023 and Sustainability
Supplements to the Annual Report.

24

Climate Transition Plan | Action
Short term
(2025)

Potential impact

2.7
Transition
risks andopportunities

Policy andlegal changes

Medium term
(2030)Long term(2050)

Higher operating and production costs may result from the introduction of new carbon pricing, taxes
and trading schemes.
Changes in regulation may spur additional demand for energy-efficient products.

Technology

Less energy-efficient products may need to be phased out in line with stricter energy performance standards.

MarketConcerns over energy security may lead to increased demand for energy-efficient lighting.
Increased customer awareness of the challenges of climate change will result in revenue growth.
Suppliers may be affected by extreme weather events (e.g., floods and hurricanes), disrupting supply chainsand leading to increased raw material costs.
Continued progress on sustainable design and innovation will give us access to new markets.
Government policies, such as the European Green Deal or American Jobs Plan, will lead to additional demandfor energy-efficient and low-carbon products.

Reputation

Clear, credible and transparent reporting of emissions and climate impact will further strengthen Signify’s brandand reputation.

Resource
efficiency

Operating costs may be reduced through more efficient production processes, while lower emissions will
decrease Signify’s exposure to variations in carbon prices.
Increased water pricing may drive up production costs in the medium and long-term as water becomes scarcer
due to climate change.

Our assessment is in line with the IEA Below 2°C and IEA 450
scenarios. These scenarios suggest increased adoption ofrenewable energy, continued improvements in energy efficiency
and increasingly stringent environmental regulation and government
policies to stimulate the energy transition and take-up of lowcarbon technologies.

Products &services

Regulatory requirements concerning energy efficiency in lighting
would continue to vary by country and jurisdiction•

There would be no significant erosion in prices and margins•

Signify would maintain its current market share in the lighting
industry•

There would be increased demand for lighting, based on current
forecasts for population growth, urbanization and GDP growth,
as well as market intelligenceThrough continued innovation, Signify will develop new products to meet demand for greater energy efficiency,
increasing the company’s revenues.
A shift in consumer preferences will lead to growing demand for low-carbon products resulting in increased
revenues.

To assess impact over the short, medium and long-term, we madethe following assumptions:•

Signify’s reputation will grow as the company expands its portfolio of energy-efficient and low-carbon products.

Resilience

Switching to renewable energy will lower Signify’s exposure to future increases in prices for fossil fuels.
In its work, Signify’s Climate Risk Assessment Taskforce will reduce exposure to climate risks and increase thecompany’s resilience to the effects of climate change.

Opportunity (High)

Opportunity (Medium)

Opportunity (Low)

Risk (low)Risk (Medium)

Risk (High)25

Climate Transition Plan | Action

2.7
Risks andopportunities
physicalrisks

Assessments andgovernance of risks
and opportunities

Percentage of sites potentially affected
Heatwaves

6%

Coastal flooding

9%

Droughts

21%River flooding

23%

Tropical cyclones

26%
0%

5%

10%

15%

20%

25%

30%

Potential risks to sites
2025

2100 (<2ºC)

2100 (>4ºC)

River flooding
Coastal flooding
Droughts
Heatwaves

Signify carries out regular assessments of climaterelated risks and opportunities. In 2020, we set up a
Climate Risk Assessment Taskforce team to oversee
this process. The team brings together company
experts from operations, insurance, risk, internal
audit, sustainability and Environment, Health and
Safety (EHS), and is integrated into risk management
and business control.
Our assessments address short, medium andlong-term impacts, and follow recommendations
from the Task Force for Climate-Related Financial
Disclosures (TCFD), covering governance, strategy,
risk management and metrics and targets. For
the purposes of this Climate Transition Plan, we
conducted detailed scenario analysis (based onfour decarbonization scenarios, ranging from 1.5°C
to 4.4°C – see page 33). Climate issues are also
discussed at our annual risk workshop, held to
identify Signify’s main risks and opportunities forthe year ahead.

Tropical cyclones
The charts above shows main physical risks to Signify’s factories, warehouses, distribution centers and othersites. We evaluated one short-term (2025) and two long-term (2100) scenarios in line with the sixth IPCC
Assessment Report: a below 2°C (SSP1-2.6 scenario – taking the sustainable road), and an above 4°C (SSP58.5 scenario – fossil fueled development path). We expect risk to remain low in the short term, though it will
begin to increase if temperature rises exceed 2°C. We keep contingency and business continuity planningunder constant review, particularly for sites at higher risk in the long term.

26

Climate Transition Plan | Action

2.8
Investments andbusiness models
Since 2021, Signify has been tracking its investments insustainability and climate action as part of the company’s
reporting under the EU Taxonomy for Sustainable Activities.
These investments include:• Capital expenditure (purchasing equipment for LED production and to make ourfactories and other facilities more energy efficient, as well as lease contracts
for new and/or renovated buildings)• Operating expenditure (investment in innovation, research, and development
to further improve the energy efficiency of our product portfolio and support
greater circularity)
In 2023, we invested EUR 271 million in sustainable innovation which represents
88% of Signify R&D expenses. We believe that sustainable innovation will help
create an increasingly future-proof and purposeful portfolio of products,
systems, and services.
In the coming years, we expect to see a further increase in expenditure as we
continue to invest in sustainable innovation. In 2021 and 2022, more than threequarters of Signify’s combined capital and operating expenditure was spenton activities contributing to climate change mitigation, as defined under the
EU Taxonomy.7 For 2023, this figure rose to 100% after transition to a circular
economy was added to the taxonomy’s eligibility criteria. Among industry
peers, Signify has the highest percentage of capital and operating expenditurecommitted to taxonomy-eligible activities.8
See table right: total taxonomy-eligible activities (A1+A2). Click here for more information on the
EU Taxonomy for Sustainable Activities.

7

Industry peers include Schneider Electric, Fagerhult, Royal Philips, Prysmian, Zumbotel, Trilux,
Schréder, Siemens, ABB Group, Assa Abloy Group, KPN, ASML, A.P. Moller-Maersk, Ørsted, BASF
and AkzoNobel.
8

Eligibility and alignment disclosures for turnover, CapEx and Opex
2021

2022

2023

Turnover

CapEx

OpEx

Turnover

CapEx

OpEx

Turnover

CapEx

OpEx

Taxonomy-eligible and aligned (A.1)

n/a

n/a

n/a

11%

12%

11%

8.5%

8.6%

7.2%

Climate Change Mitigation

n/a

n/a

n/a

11%

12%

11%

8.5%

8.6%

7.2%

Transition to a Circular Economy

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

Taxonomy-eligible but not aligned (A.2)*

n/a

n/a

n/a

72%

71%

63%

91.5%

91.4%

92.8%

Climate Change Mitigation

n/a

n/a

n/a

72%

71%

63%

76.4%

77.8%

70.2%

Transition to a Circular Economy

n/a

n/a

n/a

n/a

n/a

n/a

15%

13.6%

22.6%

Total Taxonomy-eligible activities (A=A.1+A.2)

83%

85%

76%

83%

83%

74%

100%

100%

100%

Climate Change Mitigation

83%

85%

76%

83%

83%

74%

85%

86.4%

77.4%

Transition to a Circular Economy

n/a

n/a

n/a

n/a

n/a

n/a

98.2%

99.3%

100%

Total Taxonomy-non-eligible activities (B)

17%

15%

24%

17%

17%

26%

–

–

–

*In terms of sustainable revenues, currently 34% of Signify’s global revenues come from the sale of circular products, systems and services (serviceable luminaires, circular components,
intelligent systems and circular services), up from 16% in 2019. And 87% of revenues come from energy-efficient LED lighting today, up from 78% in 2019. Our 1.5°C decarbonization scenario
is based on the assumption that revenues from energy-efficient LED lighting will constitute 100% of the company’s sales in 2040.

Circular lighting
We have been working on a new circular business model for several years. We design products and parts to be reused, refurbished, and recycled
to ensure the lighting system delivers maximum value. We maximize the lifetime of our luminaires through our services (such as maintenance) and,most importantly, flexibility. Circular lighting has a long lifetime, is energy efficient, serviceable, connectable, and upgradable.
27

Climate Transition Plan | Advocacy

3 Advocacy
Advocacy is a significant part ofSignify’s Climate Transition Plan. To
reach net-zero, we need support
from governments and businesses,
particularly in converting power grids
to renewables and incentivizing greater
energy efficiency across our economies.
This combination – renewables plus
energy efficiency – will reduce carbon
emissions, lessen our reliance on costly
fossil fuels, reduce costs for households
and companies, and create millions oflocal, clean energy jobs. We are working
with like-minded organizations to drive
policy change in these areas.

3.1 Policy advocacy
As the global leader in lighting, Signify advocates for climate
action and energy efficiency. We have a long track recordin climate action: in 2006, we called for the phasing out of
inefficient incandescent lighting even though it accounted
at the time for more than two-thirds of our sales volume.
Our stance challenged many within the company and among
stakeholders and peers; it also provided the foundation of
Signify’s industry leadership position today.
In 2022, emissions resulting from lighting still accounted
for more than 2% of global greenhouse gas emissions9,
equivalent to those resulting from the aviation industry10,
but there is a huge opportunity for further rapid progress.
Switching all the world’s homes, businesses and cities toenergy-efficient LED lighting would cut these emissions
in half.11 In doing so, we would free up more than enoughelectricity to charge every electric car currently on the road,or to power over 100 million heat pumps.12
In addition, Signify supports governments in their efforts to
reduce greenhouse gas emissions, including EU and US plansto achieve net-zero by 2050. For example, our partnershipwith the UN Environment Program (UNEP) – En.lighten– works to phase out inefficient lighting in developing
countries, including fluorescent lighting, which is now bannedin the EU.13 While progress has been made, we are consciousthat conventional lighting still makes up a significant part ofthe lighting stock in the US and EU, and must be addressed tofurther reduce emissions from the industry.

3.2 Lobbying andtrade associations
To promote policy change, we work closely withgovernments, cities and other businesses, as well as
policymakers and experts. We are also members of tradeassociations and other organizations supporting the green
energy transition, including the Corporate Leaders Group
Europe, The Climate Group, the European Alliance to Save
Energy and the World Green Building Council.
Signify is also a signatory to the We Mean BusinessCoalition’s letter to Heads of State, which urged thephase out of fossil fuels, as well as separate letters fromthe Climate Group and the European Alliance to Save
Energy calling for the EU Commission to set an emissions
reduction target of at least 90% by 2040.

3.3 Specific policy levers
Working with our partners, we advocate for two key
policies, recommended by the IEA:14 First, to manage
the decline in fossil fuels while tripling global renewableenergy capacity; second, to double the rate of energy
efficiency improvements globally. To support this second
recommendation, we are calling on governments – as partof the Renovation Revolution program – to double the rate
at which we renovate buildings, street lighting and otherinfrastructure to at least 3%15 annually. Renovation allows
us to phase in more energy-efficient lighting, thereby
reducing emissions and creating new jobs – in building
management, for example, double glazing and installing
new heating and air conditioning systems.
Based on estimated IEA lighting emissions and estimated IEA global
energy-related emissions

9

10

In addition, we have adopted a Responsible Advocacy
Policy, setting out clear ground rules for our advocacy
work. Under this policy, we do not make contributions
to political parties or candidates. As a global leader inlighting, we must remain politically neutral and impartial.
For those associations where we are members, wecommit to regularly review their public engagements on
issues such as energy efficiency, climate policy and theglobal energy transition to ensure alignment with our own
position on climate action.

Source: IEA

Based on data from Signify’s proprietary calculation model. See here formore detailed information, including underlying assumption and conversion
rates used.

11

Sources: Electric Vehicle Database, IEA Trends in electric cars andViessman – do heat pumps use a lot of electricity?
12

Since September 2023, fluorescent lighting has been banned in the EU,
under the European Commission’s Restriction of Hazardous Substances inElectrical and Electronic Equipment (RoHS). Signify is working separately
with the Minamata Convention on Mercury to support a worldwide phaseout of fluorescent lighting by 2027.

13

For more information on these recommendations, see the IEA’s 2023
World Energy Outlook

14

This rate refers to the number of buildings or other infrastructure
undergoing renovation each year. Renovation rates vary by country, butacross the EU average around 1-1.5%. The EU has said it wants to double
the annual energy renovation rate for residential and non-residentialbuildings by 2030 as part of the new European Green Deal. Click here forfurther details of Signify’s position on increasing the renovation rate.

15

28

Climate Transition Plan | Accountability

4 Accountability
Over recent years, the market for
conventional lighting has declined.
As it has done so, Signify has shifted
its business toward more energyefficient and longer-lasting LED
lighting. We endeavor to manage thistransition responsibly – we ensure,for example, that our products remain
affordable, particularly for those on
low incomes. When our factories close,
we also give suppliers time to adjust
their production, and support former
employees in finding new jobs.

4.1 Just transition
For our customers: Currently, many households andbusinesses are struggling with rising energy bills. We
are committed to offering energy-efficient products ataffordable prices while still making conventional products
available to those customers least able to afford LED
lighting. We also add value to products where possible –by including controls, for example, that allow customers
to regulate lighting more easily, thereby reducing theirenergy costs. For businesses, we provide innovative
solutions like Light-as-a-Service (LaaS), which gives
companies access to the latest in lighting technology
without the necessary capital outlay. In emerging
economies, we work through the Signify Foundation toaddress energy poverty, installing lighting in hospitals,
homes and local communities as part of our Brighter Lives
commitment to light ten million lives by 2025.
For our suppliers: As we scale back conventional lighting,
we realize that this directly affects our suppliers. Whenclosing factories, we give suppliers as much notice aspossible so, if necessary, they can gradually phase out
production of materials, parts and components for Signify.
We also explain our new requirements to suppliers to givethem the opportunity, if able, to switch to supplying our
LED factories.

For local communities: As we adjust production, we willcontinue to prioritize the local environment; we realizethat soil and groundwater are precious resources.
We apply circularity principles to local water use andrestoration. As a matter of policy, we identify andinvestigate incidents of contamination – and, where
necessary, take steps to redress any damage. Whenvacating sites, we return land to beneficial re use andavoid the use of greenfield locations to conserve theenvironment and biodiversity for the local communities.
For our employees: As the market for conventional
lighting products has declined, we have reduced ourworkforce and closed several factories. In 2010, ourconventional lighting business employed approximately
18,000 workers worldwide. By 2030, we expect that tobe below 500. Inevitably, this means job losses. Where
possible, we transfer employees to other jobs within
Signify (particularly where, for example, they work at
factories serving both our conventional and LED lighting
businesses). We estimate that this accounts for arounda quarter of employees affected by job losses in recent
years. For other employees, we take a from work-to-work
approach, helping them find new jobs outside Signify andsupporting them in making the transition:• Employees are also given advanced notice of factoryclosures and job losses – this depends on location,
but generally ranges between 3-6 months. Duringthat period, employees are granted time off to apply
for new jobs and offered access to training andoutplacement services
Around 80% of our former employees find jobs elsewhere
within a relatively short timeframe. Signify has highstandards in areas such as quality, safety and Lean
methodology, and we find this helps employees in looking
for new positions – 97% of our employees leave Signify
with professional or specialist certification.
Overall, we support decent work and economic growthby creating a fair, inclusive workplace and providing
development opportunities for both employees andsuppliers. We also offer training and access to finance toentrepreneurs working in the lighting sector in developing
countries. In recent years, the clean energy transition has
created millions of new jobs and will continue to do so.
According to the IEA, every USD 1 million spent on energy
efficiency creates up to 15 new jobs.16
16

Figures vary between 6 and 15, depending on the sector. Source.

• We negotiate detailed social plans with works’ councils,
trade unions and other employee representative groups
to provide job-to-job and financial support in line withlocal regulations

29

Climate Transition Plan | Accountability

4.2 Stakeholder consultation

4.3 Governance and reporting

We believe that stakeholder engagement and consultation
should be part of any climate strategy. For this Climate
Transition Plan, we solicited feedback from various
stakeholder groups, including leading global climate
associations, peer companies, customers, investors,
and our own Works Council and Supervisory Board.

Management: Management responsibility for climaterelated issues lies essentially with Signify’s Strategy,
Sustainability & Marketing department. This department
comprises several teams, including separate Sustainability
and Environment, Health and Safety teams. Each teamincludes professionals at global, regional and local levels.
Our Chief Strategy, Sustainability, & Marketing Officer
also oversees our Climate Risk Assessment Taskforce.

During this consultation, we received over 40 individualcomments, leading to improvements in the quality andclarity of this plan, as well as generating discussion about
the role of climate action as part of Signify’s long-term
corporate and commercial strategy.
Each year, internal and external stakeholders also takepart in our sustainability double materiality assessment.
During this process, stakeholders are invited to tell us
which environmental, social, and governance issues
they believe to be the most relevant (“material”) for
Signify, from both a financial and stakeholder impact
perspective. This input directly drives the prioritizationof sustainability topics within our broader strategy,
including climate action.

Progress against our sustainability program (Brighter
Lives, Better World 2025) is reviewed quarterly
with members of Signify’s Supervisory Board, Boardof Management and Leadership Team. Progress iscommunicated both to employees and externally via
our website and quarterly webcasts. Sustainability
performance is included in long-term incentive payments
for Board of Management members and the wider
Leadership Team.17
Supervisory Board: Throughout the year, our Supervisory
Board is updated on progress against our sustainability
targets and initiatives. Sustainability is an inherent partof our broader 5 Frontiers strategy and, as such, isreviewed quarterly, with additional review upon request.
In both 2023 and 2024, we discussed our Climate
Transition Plan with the Supervisory Board, and theBoard’s newly-nominated Audit Committee Chair waspart of the more in-depth stakeholder consultation
process (see left).
In December 2023, Signify’s Supervisory Board took
part in an ESG training program to increase members’
knowledge of sustainability and further strengthen its
ability to provide advice to management. Sessions focusedon sustainability reporting and strategy, the company’s
Climate Transition Plan and external assurance.
Currently, the Supervisory Board has two members withrecognized expertise in sustainability: Jeroen Drost(Chairman of the Audit Committee) and Bram Schot(member and former CEO of Audi Group).18 At Audi, Bram
initiated the transition to EVs, giving him a thoroughunderstanding of sustainability issues and challenges ofthe energy transition. As CEO of SHV Holdings, Jeroen
was responsible for the company’s ESG efforts.

Reporting: We report on our approach to climate-related
issues through our Annual Report and Sustainability
Supplements. To do so, we use reporting frameworks
such as the Global Reporting Initiative (GRI), the
TCFD and the Taskforce on Nature-Related Financial
Disclosures (TNFD). We also report, as required,against the EU Taxonomy, our commitments to the UN
Global Compact and the UN Sustainable Development
Goals (SDGs).19 This Climate Transition Plan also
fulfills requirements under both the EU’s Corporate
Sustainability Reporting Directive (CSRD) and its
Corporate Sustainability Due Diligence Directive (CS3D),
due to come into effect in 2026 or 2027. Progressagainst this Climate Transition Plan will be regularly
reviewed by Signify management.
Vesting of 25% of long-term incentive grants depends on performanceagainst Signify’s sustainability targets, including those relating to climate.
17

Signify’s Supervisory Board has a defined Board profile: its members’
expertise should reflect areas most relevant to the current transitionin the lighting industry and the execution of the company’s 5 Frontiers
strategy. Other areas of expertise include industrial experience, finance,
project/infrastructure, business transformation, digital, IT, innovation andcybersecurity.
18

We report against those SDGs where we believe our business has thegreatest (potential) impact, including: Good health & well-being (SDG
3), Affordable and clean energy (SDG 7), Decent work and economic
growth (SDG 8), Sustainable Cities & Communities (SDG 11), Responsible
consumption and production (SDG 12) and Climate action (SDG 13).
19

30

Climate Transition Plan | Conclusion

Conclusion
With this Climate Transition Plan, we are embarking on
a new, ambitious path. It is also a necessary one. In the
coming years, we will need that ambition if we are to
successfully combat climate change and reach the goals
set out in the Paris Agreement 1.5 °C pathway.
We believe in the green energy transition – in the benefits it will bring in terms ofjob creation and economic growth. But we also realize there are challenges andrisks ahead, and that we need to manage these responsibly so the benefits ofclean energy can be shared by the whole of society.
In this plan, we have also made it clear that Signify cannot achieve its net-zerotarget alone. For our part, we will commit resources to climate action. We will
ensure there is sufficient investment in R&D, for example, to make the gains inenergy efficiency we expect between now and 2040. We will also work closelywith consumers, businesses and cities to help them phase out conventional
lighting and replace it with more energy-efficient LED.
However, if we are to achieve net-zero, we will also need support fromgovernments – to make good on their promises under the Paris Agreement, to put
in place the right incentives for consumers and increase renovation of our public
infrastructure, so we have the opportunity to accelerate the transition to more
efficient LED lighting.
We are confident that, working together – with government and business –we can play our part in reducing the world’s dependency on fossil fuels andcreating a cleaner, more sustainable economy for the future.

31

Climate Transition Plan | Appendix

4 Appendix

32

Climate Transition Plan | Appendix

Net-zeroscenario
Signify’s Climate Transition Plan isbased on the net-zero emissions
scenario, taken from the IEA’s NetZero Roadmap (2023 update). The
chart below shows the effect of
this scenario on Signify’s expected
scope 1, 2 and 3 carbon emissions
through to 2040. The scenario
considers the effects of both
physical and transition risk on
Signify’s strategy, operations andrevenue, as well as more systemic
impact that may fundamentallychange the company’s risk andopportunities profile over time.

Senario 1: Net zero emissons (tCO2e)
Scenario 1: Net-zero emissions (tCO e)
2

450M

2019

Suppliers

Ops

415M -2.5M -122k

Use
phase

TravelLogistics-62k-85k -245M

400M
350M
300M
250M
200M

End of
life

Use
phase

2030

Suppliers

Ops

TravelLogistics-4.5M 162M

-515k

-38k

-30k

-44k -120M

150M
100M
50M

End of
life

2040

-26k

41M

0
Assumptions:• Average increase in global temperatures of 1.5°C• 70% renewable electricity by 2030 – 100% in developed economies by 2035, in China by 2040 and other emerging economies after 2040

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Climate Transition Plan | Appendix

Glossary and abbreviations
PhraseDescription

AcronymDescription

Ultra Efficient
LED lighting

LED lamps and LED luminaires with luminous efficacy above
140 lm/W20

GDP

Gross Domestic Product

GRI

Global Reporting Initiative

Connected
LED lighting

System using Internet of Things (IoT) technology to connect
LED lighting devices to a network. Lights may be remotely
controlled, monitored and optimized through a management
system. Connected lighting solutions are designed to provide
a range of benefits, such as energy savings, improved user
experience and enhanced safety and security.

IEA

International Energy Agency

IoTInternet of Things21

LaaS

Light as a Service

LED

Light-emitting diodeAcronymDescription

PPA

Power Purchasing Agreement

CO2e

Carbon dioxide equivalent

SDG

Sustainable Development Goal

CSRD

Corporate Sustainability Reporting Directive

STEM

Science, technology, engineering and mathematics

CSSO

Chief Strategy & Sustainability Officer

TCFD

Task force on Climate-Related Financial Disclosures

CS3D

Corporate Sustainability Due Diligence Directive

TNFD

Task force on Nature-Related Financial Disclosures

EHS

Environment, health and safety

UNEP

United Nations Environment Program

EV

Electric vehicle

WMBC

We Mean Business Coalition

20

Source: IEA

The Internet of things (IoT) describes devices with sensors, processing ability, software and other technologies that connect and exchange data with other devices and systems over theInternet or other communications networks.

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We welcome feedback on our Climate Transition Plan. Please send comments and suggestions to:
Signify N.V., High Tech Campus 48, 5656 AE Eindhoven, the Netherlands
E-mail: sustainability@signify.com
More information on our company, operations and approach to climate action may be found online at www.signify.com