Supplements to theAnnual Report 2022

1

Supplements to the Sustainability statements
included in the Signify Annual Report 2022
1. Data definitions, boundaries, and scopeThis supplement to the Signify 2022 Integrated Report details data definitions,boundaries, and scope of sustainability indicators disclosed.

2. Signify’s materiality assessment 2022
As part of Signify’s annual reporting process, dedicated stakeholder engagement
activities have been conducted to update Signify’s materiality matrix and identify the mostmaterial topics. This supplement provides details of this process.

3. GRI Content index
The Signify 2022 Integrated Report has been prepared in accordance with the GRI
Standards. This supplement to the Annual Report provides a detailed GRI Content Index
for the most material topics identified (top right part of our matrix): Climate action and
Human rights.

4. Global Employee Share Purchase Plan
In 2023, Signify plans to launch a Global Employee Share Purchase Plan in approximately
20 countries. This section describes the plan.

5. Task Force on Climate-related Financial Disclosures (TCFD)
The Signify 2022 Integrated Report follows the TCFD recommendations. This supplement
to the Annual Report details our reporting in line with the recommendations.

6. EU non-financial reporting directive (NFRD)
The Signify 2022 Integrated Report is subject to E.U. directive 2014/95/EU, relating todisclosure of non-financial and diversity information. This supplement to the Annual
Report provides details on compliance with this directive.

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Supplement 1: Data definitions, boundaries, andscope•

Brighter lives revenues
Revenues coming from our portfolio which
benefit society focusing on 3 mainsustainability areas:•
Food availability: Lighting designed toenable the production of more andbetter-quality food, while optimizing theuse of land, water and energy and avoiding
pesticides. It includes all dedicatedhorticulture products* and systems, alldedicated urban farming products* andsystems, all dedicated marine-based andland-based aquaculture products* andsystems, all dedicated animal farming
products* and systems•
Safety & security: Lighting designed tohave a positive effect in reducing crimes
such as burglary and theft in cities andhouses, as well as increasing safety intraffic and protection against cybercrimeand fraud. It includes Interact solution for
cities, System solutions for tunnels,
Outdoor lighting equipped with special
sensors, Emergency lighting and Lifi
systems, Black Light Blue lamps andluminaires• Health & wellbeing: Lighting designed tosupporthealth,well-being
andperformance of humans through unlocking
the visual, biological and emotional benefitsof light, and lighting designed to support
well-being for wildlife. It includes
EyeComfort, Lighting for well-being,
Tunable products during use phase, Noninvasive health supporting products,
Disinfection and well-being for wildlife••

Circular components: replaceable andrecyclable LED and conventional drivers
and modules, most sensors supporting
system functionality, 3D printed housingsIntelligent assets: lifetime monitoring andpreventive maintenance scheduling
Circular services: services to prolong
luminaire lifetimes and managed services
with end of contract return options*products = light sources, luminaires, control gear,sensors (LED and conventional)

Climate action revenues
Revenues coming from lighting designed toincrease energy saving and reduce carbon
footprint. It includes:•
Solar solutions, which are products andsystems powered by renewable energy;•
Systems and managed services whichenable further energy savings•
Electronic control gears (components)
which meets the Single Lighting Regulationthreshold•Energy efficient products which meetstrictluminous
efficacy thresholds
depending on lumen output:
Lumen output range< 500 lm
500-1000 lm> 1000 lm

Threshold≥ 80 lm/W≥ 100 lm/W
≥ 110 lm/W

Employee data
The total number of employees comprises all
employees, including from newly acquiredcompanies and temporary employees, but
excludes interns. Social data covers all
employees that have been fully integrated inour system and exclude contingency workers.
The Employee Net Promoter Score (NPS)
survey is performed on a quarterly basis and is
calculated through a weighted average for thewhole year using the respondents and results.
It includes employees with access to acompany email address.

*products = light sources, luminaires, control gear,sensors (LED and conventional)

Circular revenues
Revenues coming from our circular portfolio
meaning lighting products*, systems andservicesthatmaximize(re)usability,
serviceability, and upgradability and minimizes
value destruction with the aims to preserve
value and avoid waste to landfill. Lighting
solutions contributing to this definition
include:•Serviceable luminaires: luminaire witheasily replaceable (using standard, widely
accessible tools) driver and controls and
LED
board
to
facilitate
lifetime
prolongation, or designed as circular
economy ready luminaires requiring an
EPD

Environmental data
Environmental data from manufacturing
operations are reported quarterly or halfyearly, according to defined company
guidelines that include definitions, procedures
and calculation methods. A robust system ofinternal controls has been implemented tosafeguard consistent data quality. The results
are tracked and internally reported to3measure progress against our program
targets. Data on operational energy usage
includes energy use from manufacturing sites
and non-industrial sites and excludes
transmission losses to the grid. Most of theenvironmental data covers a reporting period
from the 1st of December 2021, until the 30thof November 2022.

Living wages
Signify defines a living wage as the gross monthly
wage needed to cover the necessary living costsof an individual or a family. It is calculated as thegross income necessary to afford these
expenditures. For all countries examined (Poland,
Mexico, Netherlands, China, the United States ofAmerica, and India, which represents 78% of theworkforce), Signify used WageIndicator’s
database (date: Q2 2022) to set its baseline.
WageIndicator’s database offers different
variations of family model (individual, with orwithout child, national fertility rate) andemployment rates (full-time, part-time, national
employment rate). To perform its analysis, Signify
selected the “Standard family” Living Wage as we
believe it reflects better the average family
composition across our countries of operation,
maintains a stable method of comparison, and is
the WageIndicator recommended family variation.
The Standard Familiy Living Wage indicates agross monthly income range for a full-time
equivalent worker at which the total earned
family income is sufficient to cover necessary
costs. The standard family includes two adults
and two children (family 2+2) and the family
employment rate is 1.8, which means one adult isa full-time worker and the second adult has aworking week of 80% (4 days a week). Signify
uses the lower range of the Standard familymodel for its analysis. The reason for the
WageIndicator database selection was theextensive coverage of countries, the samplemethod, and the research institutes involved
with their study, including Harvard Law School
and the University of Amsterdam. Signify does
not independently validate data from
WageIndicator, thereby causing an inherent
uncertainty regarding the accuracy of the data.
Statements on living wage pertain to all employee
types (including Cooper but excluding LeiFei andKlite), including temporary employees, but
exclude interns.

Health & Safety
Health & Safety data is reported by sites withmore than 50 FTEs (full-time equivalents) andvoluntarily reported by sites with fewer
employees. Health & Safety data are reported
and validated monthly. The focus of reportingis on work-related injuries and illnesses that
predominantly
occurinmanufacturing
operations and lead to a recordable injury orillness case. Recordable cases include all
injuries and illnesses sustained at work that
result in medical treatment, restricted work,
lost workdays, or fatality. All injury and illness
cases are reported for staff and contractors
as outsourced workforce. The TRC and LWIC
KPIs refer to all reported cases.
Integrity code
Alleged Integrity code concerns areregistered via our internet-based reportingand validation tool. Our Ethics line is available
to all employees and outside parties, allowing
concerns to be anonymously registered by
telephone or through an online web form. In
addition, local compliance officers areavailable globally, to register concerns onbehalf of employees. The Integrity code
concerns encompass all concerns registeredin the Ethics line database opened throughout
the financial year.
Lives Lit and Community support
The Signify Foundation and Signify’s CSR
program focus on lives lit, entrepreneurs
trained and humanitarian lighting. We define
lives lit as the number of people that are
enabled first access to solar lighting(indoor/outdoor), access to improved lighting(LED lighting), or access to the benefits oflighting (horticulture, UV-C). The beneficiaries
are either reached directly through provisionof lighting products, or indirectly throughsupported partners. For entrepreneurs
trained we count the people who have been
provided with business and/or technical skills
training through our funding support. For
Humanitarian lighting, we count the projects
that have been led during the reporting year.

Mergers, acquisitions, divestures
New Signify venturesareincludedinenvironmental and social disclosures to theextent that the integration process of theseventures has sufficiently been finalized. Assuming
new ventures’ sustainability reporting andavailability of data conform with Signify
requirements, the normative integration period is
two years. Whenever the normative period is notrealistic, we will deviate and disclose it in our
Annual Report. Divestitures completed before
December 31 of the book-year are excluded fromenvironmental and social reporting. In case Signify
acquires a new manufacturing site or office(whether it is leased or owned), Signify has 24

4months to ensure the site is integrated in its
sustainability commitments.
•
Carbon footprint over value chain
Signify reports in line with the Greenhouse Gas
Protocol (GHGP), except for scope 4 avoided
emission from product use and 24-months
deadline for consolidating new acquisitions.
The GHGP distinguishes three scopes ofcarbon emissions. The market-based methodof reporting is used as a reference forcalculating our total operational carbon
footprint.
• Scope 1 – direct GHG emissions – isreported with direct emissions from ourindustrial and non-industrial sites in full.
• Scope 2 – indirect GHG emissions – isreported with indirect emissions from ourindustrial and non-industrial sites in full.
Signify reports Scope 2 GHG emissions
based on both market-based and locationbased methods. The market-based method
quantifies scope 2 emissions fromelectricity based on the GHG emissions of
the generators from which the electricity
was contractually purchased, a specificelectricity product purchased, or acontractual instrument (e.g. renewableenergy credit), whether independent fromor bundled with the purchased electricity.
The market-based method reflects
emissions from electricity that anorganization has purposefully chosen. The
location-based method quantifies scope 2
emissions based on average energy
generation emission factors for defined
geographic locations, including local,
subnational, or national boundaries.
• Scope 3 – other GHG emissions related toactivities not owned or controlled by
Signify are reported for Business travel,
Logistics.

•

method; AIB and Green-e for the marketbased method.
Emission factors for the other sources ofscope 1 & 2 emissions have been takenfrom DEFRA, EPA and IPCC AR5.
Emission factors for scope 3 sources
have been taken from DEFRA and Clean
Cargo.

Signify aligns its efforts to cut greenhouse gas
emissions with climate science. Our ScienceBased Targets have been approved by the
Science Based Targets Initiative.
Plastic free packaging
Our plastic free packaging policy aims toeliminate all plastics from our consumer
packaging by the end of 2022. The scope of
the packaging requirements is applicable forthe packaging components used for Signify
finished products and includes:•
Packaging for all newly introduced
products and changes in packaging ofcurrent portfolio transport packaging(e.g. A-boxes and palette boxes)•
Individual product packaging (e.g. boxes,
blisters, and sleeves)•
Supportive packaging materials (e.g.
pallets, stretch foil, stowing materials)
Sustainable supply chain
Supplier audits focus on risk suppliers, basedon identified risk countries, (forecasted)
spend and maturity level. Risk countries for
supply chain management in 2022 can befound on our website. The suppliersustainability performance rate is defined as
the percentage of all active risk suppliers thathave had an audit score of at least 90 out of
100 points in the defined timeframe (yearly or
every 3-year based on maturity level). The CDP
supply chain results are based on selfreporting from suppliers. This causes aninherent uncertainty of the accuracy of
impacts from their emission reduction
activities.

Our carbon neutrality commitment covers
Signify operations, meaning scope 1, 2 and partof scope 3 for Business travels and logistics.
Operational energy usage includes energy use
from manufacturing sites and non-industrialsites and excludes transmission losses to thegrid.

Sustainable innovation
Sustainable innovation comprises all R&D
activities contributing to our sustainable focal
areas. This means all research and new
development of products, systems, orservices that demonstrate a measurable
positive impact in energy efficiency (10% or
greater), and preferably also in one or moresustainable focal areas: Energy & solar,
Circularity, Packaging, Substances, Weights &materials, Safety & Security, Health & well-

The CO2 emissions calculation includes all six
Kyoto gasses (CO2, CH4, N2O, HFCs, PFCs, andSF6).
Emission factors sources:•
Emissionfactorsforelectricity
consumption have been taken from IEA
and eGrid for the location-based5•

Newly acquired companies (e.g., Klite): not in
Workday and not yet integrated into the
Signify operating model, so cannot be
considered for KPIs due to missing data points• Employees not in the FTE count (e.g., interns)• Factory and warehouse workers: noleadership roles in these groups
The source of data is Workday.

being, Food availability. Sustainable innovation
spend is the cumulative spending of all R&D
projects
contributing
tosustainable
innovation.
Value creation modelThedefinitions,scope,
estimatesandassumptions used for some parts of the value
creation model are disclosed in the methodology
document that can be found at our sustainability
downloads webpage.
The acquisitions’ normative integration period forenvironmental and social disclosures is two years.
This normative period differs from financial
accounting requirements.
Waste to landfill
The amount of waste sent to landfill is calculated
on a quarterly basis and includes waste frommanufacturing locations with more than 50
manufacturing FTE and voluntarily reported bysome manufacturing sites.
To achieve “zero (manufacturing) waste tolandfill”,
theamountof
non-hazardous
manufacturing waste being disposed directly tolandfill should be <1% of total waste.
In our approach to zero, we exclude:•
Chemical waste: hazardous/non-hazardous
and other waste classified as hazardous•
One time waste: e.g. demolition, construction
waste•
Regulated waste: if governed by legal
requirements to be landfilled, or the waste
collection and/or treatment company isgoverned by local legal requirements

Women in Leadership% Women in Leadership KPI is the percentage ofwomen as a percentage of the total population ingrades H22 and above. It includes employees withor without a defined end date and international
assignees who are in Workday, with compensation
grades H22 and above (including EXCO).
It excludes:• Contingent workers

6Supplement 2: Signify’s materiality assessment 2022
1. Our approach
Our materiality assessment is the first step towards defining our strategy. By identifying future trends andunderstanding stakeholders’ perspectives (at a global and local level), we can better manage the risks andopportunities that could impact our ability to create value in the long-term.
We define materiality along two axes. The vertical axis captures the importance of each topic for external
and internal stakeholders. The horizontal axis captures both our company’s significant impacts on theeconomy, environment, and society and the impact of externalities on our business. Assessing both axes
enables us to prioritize and focus on the most relevant issues and define Signify Annual Report’s content.
Our materiality assessment was conducted using the GRI Standards’ principles for defining report content
while integrating the concept of double materiality.
For our materiality assessment, we use different sources of information (internal and external) to identify
possible material topics. To prioritize these topics, Signify organizes annually dedicated stakeholder
engagement activities. At the end of this process, we can identify the most material topics Signify should
be reported on.
2. Our stakeholders
We engaged with the stakeholders considered most relevant to our company, as they are most likely to be
impacted by our activities and have the most influence on achieving our commitments. Capturing
perspectives from multiple stakeholders’ groups enables us to gain broader insights into value creation andcontribute to the definition of our future strategy and plans.
For our 2022 materiality assessment, we have defined stakeholder representatives from each of the six
identified groups: Customers, Employees, Suppliers, Inventors and Analysts, Municipalities and governments,
and Civil society organizations. Representatives have been selected against several criteria: expertise,
constituency, geographies. The broad range of stakeholders minimizes bias and creates a diverse insight.
In addition to our strategic conversations with these stakeholders, we hold memberships and are active inmany organizations, including the Carbon Disclosure Project (CDP), the World Economic Forum (WEF), theResponsible Business Alliance (RBA), and The Climate Group.
3. Identification phase
In this first phase, we performed different activities to capture the potential new sustainability topics weshould add to our existing list of material topics.
Media and trends analysis
In 2022, we performed a trend analysis to identify current and future trends. This includes extensive desktop
research of the most recent literature and experts’ reviews. Additionally, we capture headlines monthly frommajor mainstream and sustainability media assets. This helps perceiving societal expectations and upcoming
sustainability topics at the global level.
Sustainability & Strategy network survey
In 2022, we continued our internal sustainability andstrategy network survey, designed to better identify
trends, and understanding of our stakeholders’expectations at local level. We selected participants fromacross the world based on their knowledge in sustainable
development and for their external-facing roles andregular interactions
withvarious stakeholders.
Respondents are mainly engaging with Customers andGovernment & Municipalities. Other stakeholders' grouprepresented are Suppliers and Civil Society Organizations.
The survey was sent to a total of 119 signify employees inmarket (commercial organization) and the response rate
was 19,32%. The local representation of respondents was
highly diversified (see diagram).

7

The respondents were mainly engaging with Customers and Government & Municipalities. Other
stakeholders' group represented were Suppliers and Civil Society Organizations.
33% of the respondents identified carbon-related issues as the top rising ESG trend. 24% received
comments and/or questions related to the impact of our lighting solutions. Circularity trends previously
identified in the media and trend analysis were confirmed by the results (certifications). Attention tosustainable energy consumption and production is on the rise.
Investors ESG survey
To gather additional input on materiality from our investors,
in 2022 we decided to create for the first time an Investors
ESG survey. The survey was sent to a total of 81 investors
with a response rate of 18,5%. We asked invetsors to rank
their top 3 ESG material topics and identify potential newones for Signify. The analysis revealed that Climate action(27%) and Circular economy (19%) jointly accounted forover 50% of all responses. Climate action was ranked firstby 73% of the investors.
Other topics raised Signify could consider as material suchas Net zero (currently under Climate action), Supply chain
resilience (currently under Human rights), Life cycle analysis (currently under Circular economy), Zero
Hunger (currently under Brighter lives), Customer Satisfaction and Payback period for connected lighting
investments.
Integration of Signify top 2022 risks
Following last year’s approach, we incorporated the top risks and opportunities identified during Signify
annual risk workshop. We translated top risks into material topics to offer a complete overview of our
financial and non-financial risks and opportunities and improve the link between sustainability, risk
management, and strategy.
Signify identified risk

Material topic

Supply chain disruption
Market Share loss in the US
Business continuity
Slow market adoption for L2/L3
Unavailability of electronic components
Trade barriers and protectionism
Attacks on IT infrastructure
Inability to improve the growth profile of the company
Low return on R&D investments
Insufficient speed to digitalize our process and customer
facing platforms
Risk related to climate change

Operational excellence

Geopolitical instability
Cybersecurity
Innovation
Digitalization
Climate change

On-going stakeholder engagement
Throughout the year, we engage with key stakeholders and gain significant insights into how to create value
and anticipate risks. Working closely with key stakeholders strengthens our ability to address their needs
and concerns. We inform our stakeholders about our activities, the measures taken and their results throughdifferent engagement channels.

8Overview stakeholder engagement activities (non-exhaustive)
Stakeholder
group

Stakeholder engagement processes

Exemplary topics
discussed

Customers

Business development, lean value chain projects,
consumer panels, Net Promoter Scores, social media,
customer surveys, key account management,sustainability exchanges with customers
Regular meetings, quarterly team surveys andemployee development process, sustainability
quarterly update webinars and engagement
campaigns
Virtual roadshows, (ESG) investor conferences,
investor webcasts, investor relations website,
investors' perception study
Supplier development and quality activities including
training sessions, industry working groups, thecommodity management, supplier quality andprocurement engineering functions
Annual innovation experience, research projects,
policy and legislative developments, businessdevelopment, GreenSwitch and Brighten America
programs
Partnerships with NGOs, cross-sector (multistakeholder), projects, supplier sustainability
stakeholder day, our social investment program, theSignify Foundation

Energy crisis and efficiency
Satisfaction rates ESGperformance

Employees

Investors andanalysts
Suppliers

Governments,
municipalities

Civil society
organizations

Strategic alignment
sessions Training &Development Diversity,
equity and inclusion
Strategic alignment
sessions ESG-performance
ESG-performance Peerlearning Strategicalignment sessions
Sustainable cities Energy
crisis and efficiency
Sustainable innovation
Social impact of light
Sustainable operations
Growth for sustainability

Conclusions of the identification phase 2022
Our material topics are the outcome of aligning our strategy and Brighter Lives, Better World 2025
sustainability program, and our stakeholders’ expectations. As a result of our identification phase, no newmaterial topic were identified compared to 2021. What we identified is a growing popularity of topics related
to Human Rights, Circularity and Biodiversity.
To provide a clearer picture of our impacts on our stakeholders, including investors, we organize our material
topics into three categories: Environment, Social, Economic & Governance (ESG).
List of 2022 material topics
Environmental
Climate action
Hazardous substances
Circular economy
Responsible packaging
Water usage
Biodiversity

SocialHuman rights
Safety at work
Talent & development
Diversity & inclusion
Social impact of light

Economic & GovernanceBusiness ethics
Digitalization
Cybersecurity
Innovation
Operational excellence
Geopolitical instability

4. Prioritization phase
In this phase, we focused on evaluating the importance of each material topic according to the importancefor our stakeholders and our business impact (both inwards and outwards) through a stakeholder survey andan internal strategic workshop.
2022 Stakeholders’ survey
The Y axis represents the importance of each material topic
for our stakeholders. Every year, we send an online survey
to a list of respondents that represent our global
stakeholder groups (see graph). We ask them to rate oursustainability topics by significance and relevance for Signify(0 being not important – 10 most important). In 2022, we
increased the number of recipients to 631 internal andexternal stakeholders to provide input via the online survey(response rate of 15%). With the survey outcome, we could
further ensure we focus our efforts and public disclosures9

on the subjects considered the most important to Signify and its stakeholders. The survey answers define
the position of the sustainability topics in the vertical axis of our matrix.
The results of the 2022 survey show that all topics remain stable to the expectation of Human rights andDiversity, Equity, and Inclusion which slightly increased.
Internal strategic workshop
The final step of our prioritization phase includes several discussions to finalize the position of the topics on
the X axis based on adverse and positive impacts on the environment, economy, and society and the risks
and opportunities they represent.
In 2022, an internal workshop was organized to finalize each topic’s position on the X axis. Participants
included representatives from the Sustainability and Strategy departments.
Through the discussions, we confirmed that Climate action and Human rights are our two most material
topics. Business ethics and Safety at work remain very important and Signify has robust processes in place.
Social impact of light, Circular economy, Digitalization, and Geopolitical instability are important for Signify
and are positioned on the right-hand side of the matrix. Biodiversity and Water are both in the lower
quadrant of this matrix and are our two least material topics. The result of the materiality assessment has
been reviewed by the Leadership Team and the Supervisory Board.
Compared to 2021, we have observed some changes on the X axis. Operational excellence has increased inimportance due to the shift from a global to a more local organization and its implications. Talent andDevelopment have also increased in importance due to skill development needs (e.g., digital). On thecontrary, Responsible packaging has observed a decrease in importance due to our transition tozero plastic in consumer packaging.
5.

Results of Signify’s 2022 materiality assessment

Signify’s 2022 materiality matrix

Our materiality assessment is the first step towards defining our strategy. By identifying future trends andunderstanding stakeholders’ perspectives at a global and local level, we are better able to manage therisks and opportunities that could impact our ability to create value in the long term. Based on the results

10

of this stakeholder’s engagement, we have reviewed our Annual Report content to ensure we report
information that are material for us. Via the publication of the Report and its Supplements, we haveinformed our stakeholders of the actions taken and whether they have been effective (for each topic,
refer to the table of content of the Annual Report).
Additionally, Signify reports on the contribution to six priority SDGs embedded in the Brighter Lives, Better
World 2025 sustainability program. For each material topic, Signify analyzed its contribution to our priority
SDGs at the target level. The definition of the targets can be accessed on the United Nations website.

Material topic

Climate action

Environment

Hazardous
substances

CirculareconomyResponsible
packaging
Water usage
Biodiversity

Human rights

Definition
Signify’s actions to combat climate change and its
impacts by going beyond carbon neutrality anddoubling the pace of the Paris Agreement 1.5ºC
scenario. This includes offering energy-efficientand solar solutions to reduce the emissions of ourcustomers and driving carbon reductions at our
suppliers.
Signify’s endeavors to manage chemicals in its
production processes and hazardous and/or
regulated substances in its products. This
minimizes risks from the use of substances to ouremployees, our customers, the environment, andmore broadly society
Signify’s efforts to reduce waste and preserve
value by aligning customers’ goals, the growth of
the business, and the future resources of theplanet. This includes developing products that canbe repaired, refurbished, reused or recycled, andsending zero waste to landfill.
Signify’s actions to reduce packaging weight andvolume, increase recycled content, and eliminate
plastic packaging for consumer products.
Signify’s efforts to reduce water use in operations,considering Signify also operates in water-scarceregions.
Signify’s engagement to minimize its negative
impacts on biodiversity and increase impact
through its carbon offsetting projects.
Signify’s adherence to human rights principles in its
own operations as well as social responsibility in its
supply chain. This includes topics like labor
conditions, living wages, and responsible mineralsourcing.

Priority
SDG

Relevant SDG
Targets
7.2; 7.3
13.2; 13.3

12.4;

12.2; 12.5; 12.7

12.2; 12.4; 12.5
12.2;
13.2

8.7; 8.8

Signify’s actions to ensure a safe and healthy
workplace by reducing injuries and illnesses ofSignify employees and contractors.

Talent& Development

Signify’s focus on employee engagement anddevelopment to enrich the lives and careers of ouremployees, enabling growth, engagement, andfulfilment.

8.1; 8.5; 8.6;
8.8

Diversity& Inclusion

Signify’s commitment to diversity, equity andinclusion in the workplace as an equal opportunity
employer. This fosters an inclusive culture where
people truly belong, have impact and take pride in
the company we build and to drive long-term value
creation.

8.1; 8.5; 8.6;
8.8

Signify’s engagement to develop lighting productsthat create value for society by contributing toincrease food availability, safety and security, andhealth & wellbeing. As well as enabling access tosustainable and affordable lighting to support
underprivileged and underserved communities.

3.4; 3.9

SocialSafety at work

Social impactof light

113.4; 3.9
8.8

11.3; 11.7

Economic & GovernanceBusiness
EthicsSignify’s commitment to act with integrity andensure ethical behavior of the workforce, including
share performance and pay out policy, responsible
procurement practices, tax policy, and productquality and safety.

8.1; 8.7

Digitalization

Signify’s efforts to digitalize its go-to-market
approach and business processes by building
technology platforms that address customer needs
in a connected world and support Signify’s growth.

8.1; 8.2

Cybersecurity

Signify’s efforts to protect information, products,
and operations from cyber-attacks and security
breaches, protect customer privacy, and ensurethat product development, software applications,and ecosystems comply with security standards
and best practices.

8.1; 8.2

3.4
7.3

Innovation

Signify’s endeavors to develop different capabilities
and competencies to continuously introduce locally
relevant new products and solutions in areas suchas connected lighting systems, software, and digitalapplications.

8.1; 8.2; 8.4
11.6
12.2
13.2

Operational
excellence

Geopoliticalinstability

Signify’s actions to enhance operational capabilities
and opportunities to ensure business continuity,competitiveness, and growth. This includes
reallocation of resources, speed of processes’
execution, and building personnel capabilities andculture.
Signify’s attention to geopolitical and economic
developments (such as the polarization and tradeprotectionism) in medium-term operational
planning which supports global trade stabilization
and avoids supply chain disruption.

128.1; 8.2

8.1

Supplement 3: GRI content index
Signify reports in accordance with GRI and sets the threshold for most material topics as defined by GRI in
the top right part of the materiality matrix. The two most material topics above this reporting threshold are
Climate action and Human rights and the related GRI topic specific standards disclosures on these topics
can be found in the Index below.

GRI Content Index 2022
SRS

Disclosure

Disclosure Requirements

Reference 2022 Annual Report

GRI 2 General Disclosures 2021
2-1
Organizational
a. Report its legal name
Detailsb. Report its nature of ownership and legal formc. Report the location of its headquarters
d. Reports its countries of operations
2-2

Entities
included in theorganization’ssustainability
reporting

2-3

Reportingperiod,frequency andcontact point

2-4

Restatements
of information

2-5

External
assurance

2-6

Activities,
value chain
and otherbusinessrelationships

a. List all its entities included in its sustainability reportingb. If the organization has audited consolidated financial
statements or financial information files on public record, specify
the differences between the list of entities included in its financial
reporting and the list included in its sustainability reportingc. If the organization consists of multiple entities explain theapproach used for consolidating the information including: i)whether the approach involves adjustments to information forminority interests; ii) how the approach takes into accountmergers, acquisitions, and disposal of entities or parts of entities;iii) whether and how the approach differs across the disclosures inthis Standard and across material topics
a. Specify the reportingb. Specify the reporting period for its financial reporting and, if it
does not align with the period for its sustainability reporting,
explain the reason for thisc. Report the publication date of the report or reported
informationd. Specify the contact point for the questions about the report orreported information
a. Report restatements of information made from previous
reporting periods and explain: i) the reasons for the restatements;ii) the effect of the restatements

a. Describe its policy and practice for seeking external assurance,
including whether and how the highest governance body andsenior executive are involved
b. If the organization’s sustainability reporting has been externallyassured: i) provide a link or reference to the external assurance
report(s) or assurance statement(s): ii) describe what has beenassured and on what basis including the assurance standards used
the level of assurance obtained, and any limitations of theassurance process; iii) describe the relationship between theorganization and the assurance provider
a. Report the sector(s) in which it is active
b. Describe its value chain, including: i) the organization’s
activities, products, services, and markets served; ii) theorganization’s supply chain; the entities downstream from theorganization and their activities
c. Report other relevant business relationships
d. Describe significant changes in 2-6-a, 2-6-b, and 2-6-ccompared to the previous reporting period

13

10 Corporate Governance (a, b)
3.1 Our strategy (c, d)16.1 Approach to sustainability
reporting (a)14.6 Notes to the consolidated
financial statements: [3]Information by segment and main
country; [12] Interest in entities(b, c)

16.1 Approach to sustainability
reporting (a, b, c)January 1 – December 31, 2022(b)
February 28, 2022 (c)Back cover Annual Report 2022(d)
Where relevant, restatements
have been disclosed andexplained in the Annual Report
2022.
2022 Sustainability Supplements– Data definitions, boundaries,and scope
16.1 Approach to sustainability
reporting
17 Combined independent
auditor’s report (a, b)

3 Creating long-term value (a, b,c)
4 Corporate performance (a, b,c)
16.1 Approach to sustainability
reporting (d)2022 Sustainability Supplements- Data definitions, boundaries,and scope (a, b, c, d)

2-7

2-8

2-9

Employees

Workers who
are not
employees

Governancestructure andcomposition

2-10

Nominationand selectionof the highest
governance
body

2-11

Chair of thehighestgovernance
body

2-12

Role of thehighestgovernancebody inoverseeingthemanagementof impacts

a. Report the total number of employees, and a breakdown of thistotal by gender and by region
b. Report the total number of: i) permanent employees, and a
breakdown by gender and by region; ii) temporary employees, anda breakdown by gender and by region; iii) non-guaranteed hours
employees, and a breakdown by gender and by region; iv) full-time
employees, and a breakdown by gender and by region; v) parttime employees, and a breakdown by gender and by regionc. Describe the methodologies and assumptions used to compile
the data, including whether the numbers are reported: i) in headcount, full-time equivalent (FTE), or using another methodology; ii)
at the end of the reporting period, as an average across thereporting period, or using another methodology
d. Report contextual information necessary to understand thedata reported under 2-7-a and 2-7-be. Describe significant fluctuations in the number of employees
during the reporting period and between reporting periods

a. Report the total number of workers who are not employees andwhose work is controlled by the organization and describe: i) themost common types of workers and their contractual relationshipwith the organization; ii). the type of work they perform
b. Describe the methodologies and assumptions used to compile
the data, including whether the number of workers who are not
employees is reported: i) in head count, full-time equivalent (FTE),
or using another methodology; ii) at the end of the reporting
period, as an average across the reporting period, or using
another methodology
c. Describe significant fluctuations in the number of workers who
are not employees during the reporting period and between
reporting periods
a. Describe the governance structure, including committees of thehighest governance bodyb. List the committees of the highest governance body that are
responsible for decision-making on and overseeing themanagement of the organization’s impacts on the economy,
environment, and peoplec. Describe the composition of the highest governance body andits committees by i) executive and non-executive members; ii)
independence; iii) tenure of members on the governance body; iv)
number of other significant positions and commitments held by
each member, and the nature of the commitments; v) gender; vi)
under-represented social groups; vii) competencies relevant to
the impacts of the organization; viii) stakeholder representation
a. Describe the nomination and selection processes for thehighest governance body and its committees
b. Describe the criteria used for nominating and selecting highest
governance body members, including whether and how thefollowing are taken into consideration: i) views of stakeholders(including shareholders); ii) diversity; iii) independence; iv)
competencies relevant to the impacts of the organization
a. Report whether the chair of the highest governance body isalso a senior executive in the organization
b. If the chair is also a senior executive, explain their function
within the organization’s management, the reasons for thisarrangement, and how conflicts of interest are prevented andmitigated
a. Describe the role of the highest governance body and of senior
executives in developing, approving, and updating theorganization’s purpose, value or mission statements, strategies,
policies, and goals related to sustainable development
b. Describe the role of the highest governance body in overseeing
the organization’s due diligence and other processes to identify
and manage the organization’s impacts on the economy,
environment, and people, including: i) whether and how the14

16.3.1 Talent & Development (a, b,d, e)
16.3.2 Diversity, equity & inclusion(b, d)
9 Remuneration report (b)2022 Sustainability Supplements– Data definitions, boundaries,and scope (b, c, d)b iii. Information not available. As
described in the "2022
Sustainability Supplements – Datadefinitions, boundaries, andscope”, social data covers all
employees that have been fully
integrated in our system andexclude contingency workers. We
do not have enough data about
contingent workers to report on
it at global level at the moment.
Total number of contingent
workers in 2022 is included in our
FTE final numbers (2022: 34619)
and is 4,205 (a)2022 Sustainability Supplements– Data definitions, boundaries,and scope (a, b, c)
16.3.1 Talent and Development (a,c)

6 Board of Management (a, b, c)
7 Supervisory board (a, b, c)
10 Corporate governance (a, b,c)
For more on other positions andcommitments (iv.):
https://www.signify.com/global/ourcompany/investors/governance/supervisory-board

8 Supervisory board report (a, b)
10 Corporate governance (a, b)

10.2 Board of management (a, b)

8 Supervisory board report (a, b)
10.3 Supervisory board (a, b)
10.4 General meeting ofshareholders (a, b, c)
16.1.1 Definition of Signify’s
strategic focus: our materiality
assessment focus: our materiality
assessment (c)2-13Delegation of
responsibility
for managing
impacts

2-14

Role of thehighestgovernancebody insustainability
reporting

2-15

Conflicts ofinterest

2-16

Communication of criticalconcerns

2-17

Collective
knowledge ofthe highest
governancebody
Evaluation oftheperformanceof the highest
governance
body

2-18

2-19

Remuneration
policies

2-20

Process todetermine
remuneration

highest governance body engages with stakeholders to support
these processes; ii) how the highest governance body considers
the outcomes of these processesc. Describe the role of the highest governance body in reviewing
the effectiveness of the organization’s processes as described in
2-12-b and report the frequency of this review
a. Describe how the highest governance body delegates
responsibility for managing the organization’s impacts on theeconomy, environment, and people, including: i) whether it has
appointed any senior executives with responsibility for the
management of impacts; ii) whether it has delegated responsibility
for the management of impacts to other employees
b. Describe the process and frequency for senior executives orother employees to report back to the highest governance bodyon the management of the organization’s impacts on the economy,
environment, and people
a. Report whether the highest governance body is responsible forreviewing and approving the reported information, including theorganization’s material topics, and if so, describe the process forreviewing and approving the information
b. If the highest governance body is not responsible for reviewing
and approving the reported information, including theorganization’s material topics, explain the reason for thisa. Describe the processes for the highest governance body toensure that conflicts of interest are prevented and mitigatedb. Report whether conflicts of interest are disclosed to
stakeholders, including, at a minimum, conflicts of interest relatingto i) cross-board membership; ii) cross-shareholding with
suppliers and other stakeholders; iii) existence of controllingshareholders; iv) related parties, their relationships, transactions,and outstanding balances
a. Describe whether and how critical concerns are communicatedto the highest governance bodyb. Report total number and the nature of critical concerns thatwere communicated to the highest governance body during thereporting period
a. Report measures taken to advance the collective knowledge,
skills, and experience of the highest governance body onsustainable development

16.1.2 Sustainability governance(c)a. Describe the process for evaluating the performance of thehighest governance body in overseeing the management of theorganization’s impacts on the economy, environment, and people
b. Report whether the evaluations are independent or not, andthe frequency of the evaluations. Describe actions taken in response to the evaluations, includingchanges to the composition of the highest governance body andorganizational practices
a. Describe the remuneration policies for members of the highest
governance body and senior executives, including: i) fixed pay andvariable pay; ii) sign-on bonuses or recruitment incentive
payments; iii) termination payments; iv) clawbacks; v) retirement
benefits
b. Describe how the remuneration policies for members of thehighest governance body and senior executives relate to theirobjectives and performance in relation to the management of theorganization’s impacts on the economy, environment, and people
a. Describe the process for designing its remuneration policies
and for determining remuneration, including: i) whether
independent highest governance body members or an
independent remuneration committee oversees the process fordetermining remuneration; ii) how the views of stakeholders(including shareholders) regarding remuneration are sought andtaken into consideration; iii) whether remuneration consultants
are involved in determining remuneration and, if so, whether they

Evaluation of the performance ofthe highest governance body in
2022 was not independent.

15

10 Corporate governance (a, b)
16.1 Approach to sustainability
reporting (a, b)

16.1.1 Definition of Signify’s
strategic focus: our materiality
assessment (a, b)
16.1.2 Sustainability governance(a, b)

10.5 Board of management[Conflict of interests] (a, b)
10.5 Supervisory Board (b)12.1 Establish strong risk
management environment (a, b)
16.3.5 Business ethics (b)8 Supervisory Board report (a)8 Supervisory Board report (a, b,c)

9 Remuneration report (a, b)
10 Corporate governance (a, b)

9 Remuneration report (a, b)
10 Corporate governance (a, b)2-21

Annual totalcompensation
ratio

2-22

Statement onsustainable
development
strategy
Policycommitments

2-23

2-24

Embeddingpolicycommitments

2-25

Processes toremediate
negative
impacts

are independent of the organization, its highest governance bodyand senior executives
b. Report the results of votes of stakeholders (including
shareholders) on remuneration policies and proposals, if
applicable
a. Report the ratio of the annual total compensation for theorganization’s highest-paid individual to the median annual totalcompensation for all employees (excluding the highest-paid
individual)
b. Report the ratio of the percentage increase in annual totalcompensation for the organization’s highest-paid individual to themedian percentage increase in annual total compensation for all
employees (excluding the highest-paid individual)c. Report contextual information necessary to understand thedata and how the data has been compiled

a. Report a statement from the highest governance body or mostsenior executive of the organization about the relevance ofsustainable development to the organization and its strategy forcontributing to sustainable development
a. Describe its policy commitments for responsible businessconduct, including: i) the authoritative intergovernmental
instruments that the commitments reference; ii) whether thecommitments stipulate conducting due diligence; iii). whether thecommitments stipulate applying the precautionary principle; iv)
whether the commitments stipulate respecting human rights
b. Describe its specific policy commitment to respect humanrights, including: i) the internationally recognized human rightsthat the commitment covers; ii) the categories of stakeholders,
including at-risk or vulnerable groups, that the organization gives
particular attention to in the commitmentc. Provide links to the policy commitments if publicly available, or, if
the policy commitments are not publicly available, explain thereason for thisd. Report the level at which each of the policy commitments wasapproved within the organization, including whether this is themost senior level
e. Report the extent to which the policy commitments apply to theorganization’s activities and to its business relationships
f. Describe how the policy commitments are communicated toworkers, business partners, and other relevant parties
a. Describe how it embeds each of its policy commitments forresponsible business conduct throughout its activities andbusiness relationships, including: i) how it allocates responsibility
to implement the commitments across different levels within theorganization; ii) how it integrates the commitments into
organizational strategies, operational policies, and operational
procedures; iii) how it implements its commitments with andthrough its business relationships; iv) training that theorganization provides on implementing the commitments
a. Describe its commitments to provide for or cooperate in theremediation of negative impacts that the organization identifies it
has caused or contributed tob. Describe its approach to identify and address grievances,including the grievance mechanisms that the organization has
established or participates inc. Describe other processes by which the organization provides
for or cooperates in the remediation of negative impacts that it
identifies it has caused or contributed to16

Signify uses a different
methodology and therefore will
be considered “incomplete” by
GRI. In light of transparency andclarity, Signify applies amethodology to calculate theinternal pay ratio that is IFRSdriven (i.e. linked to Signify’snotes to the Consolidated
financial statements). Signify’s
pay ratio reflects the average
total compensation of the total
global employee workforce,
relative to the total remuneration
package of the CEO, the highestpaid individual.
9.2.10 Signify's internal pay ratio(a, b, c)
2 CEO Message (a)12.1 Establish strong risk
management environment (a, c,d, e, f)16.1 Approach to sustainability
reporting (a, c, d, e, f)
16.3.3 Human rights (b)2022 Sustainability Supplements(a, b, c, d, e, f)
All policies can be found on our
website (a, c, d, e, f)

12.1 Establish strong risk
management environment (a)16.1.2 Sustainability governance(a)2022 Sustainability Supplements(a)

12 Risk factors and risk
management (a, b, c)
16 Sustainability statements (a, b,c)
16.1.1. Definition of Signify’s
strategic focus: our materiality
assessment (d, e)

2-26

2-27

Mechanisms
for seeking
advice andraising
concerns
Compliancewith laws andregulations

2-28

Membershipassociations

2-29

Approach to
stakeholder
engagement

2-30

Collective
bargaining
agreements

d. Describe how the stakeholders who are the intended users of
the grievance mechanisms are involved in the design, review,
operation, and improvement of these mechanisms
e. Describe how the organization tracks the effectiveness of thegrievance mechanisms and other remediation processes, andreport examples of their effectiveness, including stakeholder
feedback
a. Describe the mechanisms for individuals to: i) seek advice on
implementing the organization’s policies and practices forresponsible business conduct; ii) raise concerns about theorganization’s business conduct
a. Report the total number of significant instances of noncompliance with laws and regulations during the reporting period,
and a breakdown of this total by i) instances for which fines wereincurred; ii) instances for which non-monetary sanctions wereincurredb. Report the total number and the monetary value of fines for
instances of noncompliance with laws and regulations that were
paid during the reporting period, and a breakdown of this total by:i) fines for instances of non-compliance with laws and regulations
that occurred in the current reporting period; ii) fines for
instances of non-compliance with laws and regulations that
occurred in previous reporting periodsc. Describe the significant instances of non-complianced. Describe how it has determined significant instances of noncompliancea. Report industry associations, other membership associations,and national or international advocacy organizations in which it
participates in a significant rolea. Describe its approach to engaging with stakeholders, including:i) the categories of stakeholders it engages with, and how they
are identified; ii) the purpose of the stakeholder engagement; iii)
how the organization seeks to ensure meaningful engagementwith stakeholders
a. Report the percentage of total employees covered by collective
bargaining agreements
b. For employees not covered by collective bargaining
agreements, report whether the organization determines theirworking conditions and terms of employment based on collective
bargaining agreements that cover its other employees or basedon collective bargaining agreements from other organizations

GRI 3: Material Topics 2021
3-1
Process toa. Describe the process it has followed to determine its material
determine
topics, including: i) how it has identified actual and potential,
material topics negative and positive impacts on the economy, environment, andpeople, including impacts on their human rights, across its
activities and business relationships; ii) how it has prioritized theimpacts for reporting based on their significanceb. Specify the stakeholders and experts whose views haveinformed the process of determining its material topics

17

12.1 Establish strong risk
management environment (a)16.3.5 Business ethics (a)Through our internal audit andcompliance processes, we havedetermined that Signify has not
had any significant instances of
non-compliance with laws andregulations during the reporting
period. (a, b, c, d)

16.1.1 Definition of Signify’s
strategic focus: our materiality
assessment (a)2022 Sustainability Supplements(a)16.1.1 Definition of Signify’s
strategic focus: our materiality
assessment (a)92% (a)The payment terms andconditions are determined by
Signify Rewards team which is
looking at benchmarks todetermine the salary levels, andbudgets for salary raises, Long
Term Incentive’s lease car
conditions, holiday entitlements
and other benefits. Employees
have to follow guidelines,
procedures which are applicablefor all employees and which arebeing set and arranged based onfollowing the law as well via
specific agreed regulations withworks councils (whereapplicable). (b)16.1.1 Definition of Signify’s
strategic focus: our materiality
assessment 2022 (a, b)
2022 Sustainability Supplements- Data definitions, boundaries,and scope (a, b)

3-2

List of material
topicsa. List its material topics
b. Report changes to the list of material topics compared to theprevious reporting period

3-3Managementof material
topicsa. Describe the actual and potential, negative and positive impacts
on the economy, environment, and people, including impacts on
their human rights
b. Report whether the organization is involved with the negative
impacts through its activities or as a result of its business
relationships, and describe the activities or business relationships
c. Describe its policies or commitments regarding the material
topic
d. Describe actions taken to manage the topic and related
impacts, including: i) actions to prevent or mitigate potential
negative impacts; ii) actions to address actual negative impacts,
including actions to provide for or cooperate in their remediation;iii) actions to manage actual and potential positive impacts
e. Report the following information about tracking theeffectiveness of the actions taken: i) processes used to track theeffectiveness of the actions; ii) goals, targets, and indicators used
to evaluate progress; iii) the effectiveness of the actions,
including progress toward the goals and targets; iv) lessons
learned and how these have been incorporated into theorganization’s operational policies and procedures
f. Describe how engagement with stakeholders has informed theactions taken (3-3-d) and how it has informed whether theactions have been effective (3-3-f)

GRI 302: Energy 2016
302-1
Energyconsumption
within theorganization

302-2

Energyconsumption
outside of theorganization

302-3

Energyintensity

302-4

Reduction ofenergyconsumption

a. Total fuel consumption within the organization from nonrenewable sources, in joules or multiples, and including fuel types
usedb. Total fuel consumption within the organization from renewablesources, in joules or multiples, and including fuel types used
c. In joules, watt-hours or multiples, the total: i) electricity
consumption, ii) heating consumption, iii) cooling consumption, iv)
steam consumption
d. In joules, watt-hours or multiples, the total: i) electricity sold, ii)
heating sold, iii) cooling sold, iv) steam solde. Total energy consumption within the organization, in joules ormultiplesf. Standards, methodologies, assumptions, and/or calculation
tools used
g. Source of the conversion factors used
a. Energy consumption outside of the organization, in joules ormultiplesb. Standards, methodologies, assumptions, and/or calculation
tools usedc. Source of the conversion factors used
a. Energy intensity ratio for the organizationb. Organization-specific metric (the denominator) chosen to
calculate the ratioc. Types of energy included in the intensity ratio; whether fuel,electricity, heating, cooling, steam, or all. d. Whether the ratio
uses energy consumption within the organization, outside of it, or
botha. Amount of reductions in energy consumption achieved as adirect result of conservation and efficiency initiatives, in joules ormultiplesb. Types of energy included in the reductions; whether fuel,electricity, heating, cooling, steam, or allc. Basis for calculating reductions in energy consumption, such asbase year or baseline, including the rationale for choosing it
d. Standards, methodologies, assumptions, and/or calculation
tools used

18

16.1.1 Definition of Signify’s
strategic focus: our materiality
assessment (a, b)
2022 Sustainability Supplements- Data definitions, boundaries,and scope (a, b)
3.2 Our impact (a, b, e)
9.2.5 Long-term equity-based
incentive
12.5 Key risks (a, b, c, e)
16 Sustainability Statements (d)16.1.1 Definition of Signify’s
strategic focus: our materiality
assessment 2022 Sustainability
Supplements - Data definitions,boundaries, and scope (e)16.1.1 Definition of Signify’s
strategic focus: our materiality
assessment (f)2022 Sustainability Supplements– Data definitions, boundaries,and scope (f)2022 Sustainability Supplements- Data definitions, boundaries,and scope
16.4.1 Climate actionc. i) 305801 MWh; ; ii) 534 MWhiii) 0; iv) 72435 MWhd. 0, Signify does not sell energy.
f. Signify reports actual energy
consumption data based on
invoices.
g. None, Signify reports energy
consumption absolute values.

Not applicable as Signify does nothave energy consumption outsideof its organization.
2022 Sustainability Supplements- Data definitions, boundaries,and scope
16.4.1 Climate action, where
Signify report operational energy
intensity which includes
stationary fuels, electricity,
heating and steam.
2022 Sustainability Supplements- Data definitions, boundaries,and scope
16.4.1 Climate action

302-5

Reductions inenergyrequirements
of products
and services

GRI 305: Emissions
305-1
Direct (Scope
1) GHGemissions

305-2

Energyindirect(Scope 2) GHG
emissions305-3

Other indirect(Scope 3) GHG
emissions305-4

GHG emissions
intensitya. Reductions in energy requirements of sold products andservices achieved during the reporting period, in joules ormultiplesb. Basis for calculating reductions in energy consumption, such asbase year or baseline, including the rationale for choosing it
c. Standards, methodologies, assumptions, and/or calculation
tools used

a. 31 MWhab, c. 2022 Methodology forcalculating societal impact.
Based on Signify scope 4
methodology, the reduction inenergy consumption of sold LED
and connected LED products in
2022 was 31 million MWh,compared to conventional
lighting products.

a. Gross direct (Scope 1) GHG emissions in metric tons of CO2
equivalentb. Gases included in the calculation; whether CO2, CH4, N2O,
HFCs, PFCs, SF6, NF3, or allc. Biogenic CO2emissions in metric tons of CO2- equivalentd. Base year for the calculation, if applicable, including: i) the
rationale for choosing it; ii) emissions in the base year; iii) the
context for any significant changes in emissions that triggered
recalculations of base year emissions
e. Source of the emission factors and the global warming potential(GWP) rates used, or a reference to the GWP source
f. Consolidation approach for emissions; whether equity share,financial control, or operational control
g. Standards, methodologies, assumptions, and/or calculation
tools used
a. Gross location-based energy indirect (Scope 2) GHG emissions
in metric tons of CO2equivalentb. If applicable, gross market-based energy indirect (Scope 2)
GHG emissions in metric tons of CO2equivalentc. If available, the gases included in the calculation; whether CO2,
CH4, N2O, HFCs, PFCs, SF6, NF3, or all
d. Base year for the calculation, if applicable, including: i) the
rationale for choosing it; ii) emissions in the base year; iii) the
context for any significant changes in emissions that triggered
recalculations of base year emissions
e. Source of the emission factors and the global warming potential(GWP) rates used, or a reference to the GWP source
f. Consolidation approach for emissions; whether equity share,financial control, or operational control
g. Standards, methodologies, assumptions, and/or calculation
tools used
a. Gross other indirect (Scope 3) GHG emissions in metric tons of
CO2 equivalentb. If available, the gases included in the calculation; whether CO2,
CH4, N2O, HFCs, PFCs, SF6, NF3, or allc. Biogenic CO2emissions in metric tons of CO2equivalent.
d. Other indirect (Scope 3) GHG emissions categories andactivities included in the calculatione. Base year for the calculation, if applicable, including: i. therationale for choosing it; ii. emissions in the base year; iii. thecontext for any significant changes in emissions that triggered
recalculations of base year emissions
f. Source of the emission factors and the global warming potential(GWP) rates used, or a reference to the GWP source
g. Standards, methodologies, assumptions, and/or calculation
tools used
a. GHG emissions intensity ratio for the organizationb. Organization-specific metric (the denominator) chosen to
calculate the ratioc. Types of GHG emissions included in the intensity ratio; whether
direct (Scope 1), energy indirect (Scope 2), and/or other indirect(Scope 3)
d. Gases included in the calculation; whether CO2, CH4, N2O,
HFCs, PFCs, SF6, NF3 or all

2022 Sustainability Supplements- Data definitions, boundaries,and scope
16.4.1 Climate action
c. Not applicable as this data is at
non-material levels for Signify.

192022 Sustainability Supplements- Data definitions, boundaries,and scope
16.4.1 Climate action

2022 Sustainability Supplements- Data definitions, boundaries,and scope
16.4.1 Climate action
c. Not applicable as this data is at
non-material levels for Signify.

2022 Sustainability Supplements- Data definitions, boundaries,and scope
16.4.1 Climate action

305-5

Reduction of
GHG emissions

305-6

Emissions ofozonedepleting
substances
(ODS)

305-7

Nitrogenoxides (NOx),sulfur oxides(SOx), andothersignificant air
emissionsa. GHG emissions reduced as a direct result of reduction
initiatives, in metric tons of CO2 equivalentb. Gases included in the calculation; whether CO2, CH4, N2O,
HFCs, PFCs, SF6, NF3 or allc. Base year or baseline, including the rationale for choosing it
d. Scopes in which reductions took place; whether direct (Scope1), energy indirect (Scope 2), and/or other indirect (Scope 3
e. Standards, methodologies, assumptions, and/or calculation
tools used
a. Production, imports, and exports of ODS in metric tons of CFC11 (trichlorofluoromethane) equivalentb. Substances included in the calculationc. Source of the emission factors used
d. Standards, methodologies, assumptions, and/or calculation
tools useda. Significant air emissions, in kilograms or multiples, for each of
the following: i) NOX ii) SOX iii) Persistent organic pollutants (POP)iv) Volatile organic compounds (VOC) Emissions from NOX and SOX
are at nonmaterial levels for Signify. 24 v) Hazardous air pollutants(HAP) vi) Particulate matter (PM) vii) Other standard categories of
air emissions identified in relevant regulations
b. Source of the emission factors usedc. Standards, methodologies, assumptions, and/or calculation
tools used

GRI 406: Non-discrimination 2016406-1
Incidents ofa. Total number of incidents of discrimination during the reporting
discrimination
periodand corrective
b. Status of the incidents and actions taken with reference to theactions taken
following: i) Incident reviewed by the organization; ii) Remediationplans being implemented; iii) Remediation plans that have been
implemented, with results reviewed through routine internalmanagement review processes; iv) Incident no longer subject toactionGRI 407: Freedom of Association and Collective Bargaining 2016
407-1
Operations
a. Operations and suppliers in which workers’ rights to exercise
and suppliers
freedom of association or collective bargaining may be violated orin which theat significant risk either in terms of i) type of operation (such as
right tomanufacturing plant) and supplier; ii) countries or geographic
freedom ofareas with operations and suppliers considered at risk
association
b. Measures taken by the organization in the reporting period
and collective
intended to support rights to exercise freedom of association andbargaining may collective bargaining
be at risk

GRI 408: Child Labor 2016
408-1
Operations
and suppliers
at significant
risk forincidents ofchild labora. Operations and suppliers considered to have significant risk forincidents of i) child labor; ii) young workers exposed to hazardouswork
b. Operations and suppliers considered to have significant risk forincidents of child labor either in terms of i) type of operation (suchas manufacturing plant) and supplier; ii) countries or geographic
areas with operations and suppliers considered at riskc. Measures taken by the organization in the reporting period
intended to contribute to the effective abolition of child labor202022 Sustainability Supplements- Data definitions, boundaries,and scope
16.4.1 Climate action

Not applicable as emissions from
ODS are at non-material levels
for Signify.

Not applicable as emissions from
ODS are at non-material levels
for Signify.

This topic is covered under the
Signify Integrity code and theSupplier Sustainability
Declaration, our code of conduct
for suppliers.
12.1 Establish strong risk
management environment –Signify Integrity code 2022
Sustainability Supplements - Datadefinitions, boundaries, andscope
16.3.3 Human rights
16.3.5 Business ethics
This topic is covered under the
Signify Integrity code and theSupplier Sustainability
Declaration, our code of conduct
for suppliers.
12.1 Establish strong risk
management environment –Signify Integrity code 2022
Sustainability Supplements - Datadefinitions, boundaries, andscope
16.3.3 Human rights
16.3.5 Business ethics
This topic is covered under the
Signify Integrity code and theSupplier Sustainability
Declaration, our code of conduct
for suppliers.
12.1 Establish strong risk
management environment –Signify Integrity code 2022

Sustainability Supplements - Datadefinitions, boundaries, andscope
16.3.3 Human rights
16.3.5 Business ethics

Annex to the GRI Content Index 2022:
Supplement to GRI Standard 102-8:
Contract type by gender in % 2022
Permanent

TemporaryFemale

94%

6%

Male

95%

5%

Contract type by geography in % 2022
Permanent

Temporary

Europe54%

46%

Americas99%1%Rest of the world

91%

9%

Full-timePart-time

Female

99%

1%

Male

100%

0%

Time schedules by gender in % 2022

GRI Standard 401 -1: Turnover rate breakdown 2022
Turnover rate by management level as % of total employee base
Percentage (0-100%)
Staff

39%

Professional
Mid-Level professional

7%
2%

Senior-level professional0%

Leadership

0%

Turnover rate by gender
Percentage (0-100%)
Female47%

Male
Not declared

53%
0%Turnover rate by age group
Percentage (0-100%)
Under 3047%

30 – 5045%Over 50

8%

GRI Standard 405 -1: 2022 Workforce gender breakdown 2022
Percentage (0-100%)
Share of women in total workforce (as % of total workforce)
Share of women in all management positions, including junior, middle andtop management (as % of total management positions)Share of women in junior management positions, i.e. first level ofmanagement (as % of total junior management positions)

21

41%
27%
29%

Share of women in top management positions, i.e. maximum two levels awayfrom the CEO or comparable positions (as % of total top management
positions)Share of women in management positions in revenue-generating functions(e.g. sales) as % of all such managers (i.e. excluding support functions suchas HR, IT, Legal, etc.)
Share of women in STEM-related positions (as % of total STEM positions)

28%

21%
42%

GRI Standard 415-1: Public policy
Signify actively engages with governmental organizations, emphasizing the environmental and socioeconomic
benefits of energy efficiency, the potential of connected LED lighting and joining public debates addressing
sustainability issues. We share updates on initiatives and developments in this area on our website and in our
Press Releases.
As formalized in our Integrity Code, Signify adopted a policy of prohibition of contributions, in money or in
kind, to political parties, political organizations or individuals engaged in politics. Signify takes part in industry
associations and coalitions for sustainable growth and we share our contributions. The total contributions
and expenditures amounted EUR 3.54 million in 2022.

Type of tradeorganization

Geographic
scope

Spend (€ millions)

Industry associations

Global

2.77

Coalitions for sustainablegrowthGlobal0.76

Political contributions

Global0

Focus of membership(non-exhaustive)
Sustainable innovation in theindustry, climate action,scaling up action on the UN
SDGs, common standards.
Carbon pricing, sustainable
cities, standards for impact
measurement, UN SDG
contribution.

The largest contributions and expenditures are made by Signify to:a) The National Electrical Manufacturers Association ‘NEMA’ to develop performance standards andpromote product interoperability to increase market demand, while improving safety to mitigate
risks (EUR 0.43 million).
b) World Economic Forum which engages the foremost political, business, cultural and other leadersof society to shape global, regional and industry agendas (EUR 0.36 million).
c) Lighting Europe to engage on Lighting Industry Standards (EUR 0.22 million).

As Signify we address the following main issues with the contributions and expenditures:•
Signify considers climate action as a key focus area. Moving towards renewable energy, focusing onenergy efficiency and remaining carbon neutral are top priorities (total of contributions andexpenditures of EUR 0.36 million).
•
Within our industry we engage with associations to develop uniform standards in lighting technology
and connectivity (total of contributions and expenditures of EUR 2.07 million).

22

Supplement 4: Global Employee Share Purchase Plan
In 2023, Signify plans to launch a Global Employee Share Purchase Plan in approximately 20 countries. The
aim of this Global Employee Share Purchase Plan is to enable employees to share in Signify's long-term
success by providing them with the opportunity to acquire ordinary shares in the capital of Signify.
Our culture at Signify is reinforced by all employees collectively taking an active role in unlocking company
performance. As employees of Signify, it is through their own performance that they contribute to thesuccess of the company, and as participants in the plan, they have the opportunity to directly share in thatsuccess. The Global Employee Share Purchase Plan will replace some local plans currently in place.
Employees are given the opportunity to acquire Signify shares at a 15% discount. Once enrolled, employees
can purchase shares under the plan by either making (i) a one-off contribution or (ii) a monthly recurring
contribution, starting and ending at their instruction. A minimum and maximum amount as employee
contribution per monthly contribution cycle applies. Shares will be purchased in the market. Sharespurchased under the plan are subject to a 6-month holding period. Employees can participate in the plan
when employed on the basis of a regular employment agreement and paid by and through the payroll of a
relevant Group Company in any of the eligible countries.
Members of the Board of Management and the leadership team are not allowed to participate in the plan.

23

Supplement 5: Task Force on Climate-related
Financial Disclosures (TCFD) 2022 Reporting
Governance(a) Board’s oversight of climate-related risks and opportunities
The Supervisory Board, Signify’s highest governance body, reviews our strategy to combat climate change
as well as our 2022 materiality assessment, which shows that climate action is our most material topic.
Understanding and managing climate-related risks and opportunities are an important part of ourcommitment to action on climate change.
At Signify, climate-related risks and opportunities are governed by the Board of Management (BoM),
consisting of our Chief Executive Officer (CEO), Chief Financial Officer (CFO), and Chief Commercial Officer(CCO), and the Division Leader of Digital Solutions. Every quarter, Signify's BoM reviews climate-relate issuesof strategic importance together with our Chief Strategy and Sustainability Officer (CSSO), including material
items, action plans, risk management plans, sustainability budget, and investment in climate-related
opportunities. The BoM guides the performance and oversees the progress against targets andcommitments set out in our sustainability program, including the ones addressing climate-related issues.
Signify's Leadership Team, including our BoM, are incentivized via Long Term Incentives (LTI). The vesting of
25% of the LTI grant is dependent on how well Signify performs on its (climate-related) sustainability targets.

References:•
Section 8 - Supervisory Board report of the 2022 Annual Report•
Section 16.1.2 Sustainability Governance of the 2022 Annual Report•
Signify CDP Climate reporting(b) Management’s role in assessing and managing climate-related risks and opportunities
Climate-related risks and opportunities are managed the same way as other risks. Signify’s BoM is
responsible for the overall risk management associated with the company's activities. It is assisted by thecompany leadership team, which participates on a quarterly basis in audit risk and control meetings organizedby the Risk Committee, to identify critical risks and review progress on the implementation of risk responses,
including climate-related risks.
Sustainability is at the core of our strategy and purpose. The executive responsibility for climate-related
issues is assigned to our Chief Strategy and Sustainability Officer (CSSO), to ensure the strong linkage andsynergy between the company’s strategy and sustainability commitments, as well as to drive Signify's
performance in the space of climate action. Our CSSO oversees strategy setting, sustainability budget, andmajor plans of action regarding climate change. Our CSSO reports directly to our CEO and addresses
climate-related issues regularly to the BoM in case of major capital expenditures, acquisitions, anddivestitures.
Signify’s CSSO oversees a multi-discipline Climate Risk Assessment Taskforce team, consisting of experts in
Operations, Insurance, Risk Committee, Internal Audit, Sustainability, and EHS. The Taskforce team is
responsible for the continuous evaluation the company’s short-term and long-term climate-related risks
and opportunities. This, as part of Signify’s integral risk management and business control, contributes tomaximizing climate-related opportunities and improving our resilience to climate change.
Members of the Board of Management are eligible for a long-term equity-based incentive under the Signify
Long-term Incentive Plan (LTI Plan). The objective of the long-term incentive is to link pay with long-termsustainable value creation. In addition to the Board of Management, another approximately 700 employees
globally are eligible for participation in a similar long-term incentive plan. Because of the importance ofsustainability for our long-term value creation, the vesting of 25% of the annual long-term incentive grant isdependent on how well Signify performs on its sustainability targets, including the targets related to climate
action.

References:•
Section 12.1 - Establish strong risk management environment of the 2022 Annual Report

24

•
•

Sections 16.1.2 Sustainability Governance of the 2022 Annual Report
Signify CDP Climate reporting

Risk Management(a) Signify’s processes for identifying and assessing climate-related risks
The potentially significant impacts of climate change pose a challenge to the stability and continuity ofbusinesses over the short, medium, and long terms. With a global footprint, Signify’s manufacturing sites andsupply chain are exposed to these physical and transition risks related to climate change. On the other hand,
the transition to a lower-carbon economy presents climate related opportunities for Signify’s sustainablegrowth areas based on low-carbon technological innovation: (1) Climate action, (2) Circular economy, (3)Food availability, (4) Safety & security, and (5) Health & wellbeing.
Driven by the perceived high magnitude of financial impacts attributed to climate risks, the assessment ofclimate risks becomes imperative and future-prove. Disclosing climate-related physical and transition risks
showcases long-term business sustainability. As a leader in sustainability, Signify is committed to improving
its global operations and reducing its emissions over the entire value chain. This includes understanding therisks posed by climate change and how to improve business resilience accordingly. Therefore, it is paramountto assess the potential impacts of climate related risks and opportunities on our business operations andfinancial performance under different scenarios. Signify seeks to maintain an evolving overview of these risks
and opportunities over time.
Following the Task Force on Climate related Financial Disclosures (TCFD) recommendations and guidance,
Signify has been conducting an ongoing climate risk assessment in line with the four core elements ofoperations, namely governance, strategy, risk management, and metrics and targets.
In 2020, Signify launched a dedicated multi-discipline Climate Risk Assessment Taskforce team, consisting ofexperts in Operations, Insurance, Risk Committee, Internal Audit, Sustainability, and EHS. The Taskforce teamis responsible for the continuous evaluation the company’s short-term and long-term climate-related
physical and transition risks and opportunities under difference climate change scenarios, as illustrated in
Figure A. We are proactively investigating how physical and transition risks affect our global operations. In
response to these identified risks and opportunities, we develop risk adaptation and mitigation strategies
that enhance our operational resilience, risk management, and financial planning.

25

Figure A Signify’s climate risk assessment approach
Physical risks
Climate-related physical risks are assessed under difference climate change scenarios, namely a short-term
scenario, and two long-term scenarios in line with the Shared Socio-economic Pathways (SSP) described in
the IPCC AR6 report: a below 2°C or SSP1-2.6 scenario – taking the sustainable road, and an above 4°C or
SSP5-8.5 scenario – fossil fueled development path. The SSPs are narratives describing alternative socioeconomic trends that shape future scenarios. In line with the lates climate sciences, the SSPs explore theclimate responses of a range of possible future atmosphere GHG concentrations and analyze the resulting
changes in future global temperatures compared to pre-industrial levels.
The physical risk assessment approach consists of three steps: risk mapping, risk assessment, and risk
mitigation. Signify continues to monitor its exposure to physical risks related to climate change and is working
at individual plant level to reduce and mitigate the impact of those risks. The first step is risk mapping for all
our manufacturing facilities and warehouses/distribution centers under different IPCC climate change
scenarios. Site risk mapping identifies, among others, physical risks related to climate hazards, such as
flooding, heatwaves, droughts, etc. Subsequently, a risk assessment is performed depending on thegeographical location, the type of activity, and financial exposure related to a specific facility and/or
operation. We evaluate the environmental, social, and governance aspects which have the greatest impact
on our business and the greatest level of concern to stakeholders along our value chain. These direct orindirect aspects may represent opportunities and risks, and thus influence our ability to create or preserve
economic, environmental, and social value for our stakeholders and for Signify. Assessing these aspects
enables us to understand their implications in financial and non-financial terms, thereby prioritizing risk
mitigation and effectively addressing them in our policies and programs.
Transition risks
Climate-related transition risks are assessed the same as other risks. The Climate Risk Assessment
Taskforce team continuously follows external trends of market (especially during the current energy crisis),policy, regulations, (low carbon) technology, and customer preference, in order to identify near-term,
medium-term, and long-term transition risks in line with the IEA scenarios including the IEA Below 2 Degrees
scenario (IEA B2DS) and the IEA 450 scenario. Signify's BoM is briefed each quarter to review the transition
risks and opportunities, and the short, medium, and long-term response strategies are addressed as well.

26

References:•
Chapter 12 of the 2022 Annual Report•
Signify CDP Climate reporting(b) Signify’s processes for managing climate-related risks(c) Integration of processes for identifying, assessing, and managing climate-related risks are into the
Signify’s overall risk management
Climate-related risks and opportunities are managed the same way as other risks. Signify's risk management
focuses on the following risk categories: Strategic, Operational, Compliance, and Financial risks. As climaterelated risks cuts across all these four categories, climate-related risk management is fully embedded in ourrisk management process and recognized at the management level.
Signify’s Business Control Framework (BCF) sets the standard for risk management and business controls in
the company. The objectives of the BCF are to maintain integrated management control of the company’s
operations, in order to ensure the integrity of the financial reporting and related disclosure including
disclosure of climate-related risks, as well as compliance with applicable laws and regulations. We regularly
evaluate and improve our BCF to align with business dynamics and good practice. Our leadership team is
responsible for identifying the critical business risks and for implementing appropriate risk responses. We
continuously follow external trends to determine the issues most relevant for our company and where we
can have the greatest positive impact.
For risk management, a comprehensive view of the company’s business strategy and activities is required.
To do so, Signify’s risks and opportunities are identified, assessed, managed, and controlled in a structured
way, combining elements of top-down and bottom-up approaches.
For climate-related strategic risks, the company leadership team review the risks and ranks them based on
impact, likelihood, risk criticality and control effectiveness, during the annual risk workshop. Owners are
assigned and accountable for ensuring adequate risk mitigation and monitoring measures are implemented.
The outcome of the risk workshop is integrated in the strategic planning cycle. Each quarter the key risks
are discussed during the audit and risk committee meetings. Reported risks and opportunities are analysedfor potential cumulative effects and are aggregated at Division, Market Group, and company level.
For climate-related operational risks, risks are reviewed on a regular basis as part of the businessperformance reviews or, for specific topics, through dedicated risk committees. In addition, on an annual
basis the top risks are identified by company leadership. Relevant risks including those associated withbusiness opportunities are prioritized in terms of potential impact and likelihood, considering quantitative
and/or qualitative aspects and reviewed with the board of management. On a quarterly basis, risks andcontrols are reviewed in the audit risk committees with the Divisions, Market Groups and specific Functions.
As part of the Business Continuity plan, we continue monitoring our exposure to climate-related risks andare working at individual plant level to mitigate and minimize the impact of those risks.
For climate-related compliance risks, we continuously follow external trends, especially the development ofregulations and policies focusing on the product environmental impact and transition to a net-zero economy,
and other emerging discussion in the same area. Potential risks of non-compliance are regularly reviewed
within Signify at regional, business group, or company level. This ensures our preparedness against emerging
regulations and policies and ability to adjust our portfolio.
For climate-related financial risks, since 2020, the Climate Risk Assessment Taskforce team has been
screening and evaluating relevant climate-related risks and their financial impacts in details for our sites allover the world. These risks are reviewed at least once per year at individual plant, regional, business groupand function, or company level. This improves our resilience to climate-related risks and allows risks
response plans/strategies to be developed in a timely matter.

References:•
Chapter 12 of the 2022 Annual Report•
Section 16.4 Better World of the 2022 Annual Report•
Signify CDP Climate reporting27

Strategy(a) Climate-related risks and opportunities(b) The impact of climate-related risks and opportunities on the organization’s businesses, strategy,
and financial planning
Transition risks and opportunities
According to the IEA B2DS and the IEA 450 scenario, we are expecting a world with deeper and wider
adaptation of renewable energy, as well as continuous improvement of energy efficiency. The upcoming
environmental regulations and policies are expected to be more stringent across the globe, which helps
stimulate the transition toward green and low carbon technology in general. This, on the other hand, will
increase the market demand for sustainable products.
The climate-related transition risks assessed are presented in the below table. In line with the IEA B2DS andthe IEA 450 scenario, we have focused on transition risks relevant for Signify in the following aspects: policy
and legal, technology, market, and reputation. For a few high-priority risks we performed a regional deepdive, the results of which is shown in Figure B.
In terms of transition opportunities, we have focused on the following aspects: resource efficiency, products
and services, markets, and resilience. To understand the potential impact of the short-, medium-, and longterm opportunities, we made the below assumptions:- There are varying levels of regulatory requirements on energy efficiency of lighting products- No marginal price erosion- Signify maintains its current market share in the lighting industry- There will be an increased need for lighting based on population increase, urbanization, GDP growth andlighting market intelligence

MarketTechnology

Policy and Legal

Transition risks andopportunities
Increased pricing of
GHG emissions

Change in regulatory
requirement for lowcarbon products

Substitution of existingproducts and services
with lower emissions
options

Energy crisis driving
demand form energy
efficient and lowcarbon products

Changing customer
behavior

Short
term
(2025)

Potential impact
The broader adaption of GHG pricing, carbon
taxes, and trading schemes across the globe will
drive up operational and productions costs.
Increased revenue resulting from products andservices that fulfill the low-carbon and energy
efficientrequirements.
This
presents
opportunity for Signify as we have a strong anddifferentiating portfolio of energy efficient andlow-carbon products.
We anticipate the introduction of more stringent
minimum energy performance standards forlighting products in the coming decade, in whichcase, the least energy efficiency products in our
portfolio would be phased out and substituted.
Therefore, revenues from these products would
decrease.
On top of the climate crisis, 2022 saw the
emergence of an energy crisis, making energy
reductions more urgent than ever. As lighting
represents a significant portion 12% of global
electricity consumption, the lighting industry willneed to speed up adapting to changing
environmental regulations. This on the other
hand presents a large opportunity for Signify.
Through its global leadership in energy efficient
lighting, Signify’s portfolio is uniquely positioned
to mitigate risks and capture related
opportunities.
Increased revenue resulting from increased
customer awareness regarding climate change
andincreasedemandfor
products

28

Mediumterm(2030)

Long
term(2050)

Products and services

Resource efficiency

Reputation

Increased cost of raw
materials

Credibility ofemissions-related
reporting anddisclosure

Use of more efficient
production processes,
use of recycling

Increased water pricing
due to scarcity

Development and/or
expansion of low
emission goods andservices
Development of new
products or services
through R&D andinnovation

Shift in consumer
preferences

Markets

Access to new markets

Resilience

Use of public-sector
incentives
Participation in
renewable energy
programs and adoptionof energy efficiency
measures

manufactured by a sustainable company creating
positive environmental and social impact.
Signify’s suppliers who operate in regions
vulnerable to extreme weather events (e.g.,
floods and hurricanes) could be affected bychanges in physical climate parameters, which
may lead to disruption in supply chain andincreased cost of raw materials.
Signify’s sustainability statements, including all
topics related to emissions are audited byindependent third party against Reasonable
Assurance. Credibility and transparency ofsustainability reporting has been our strength.
Reduced operating costs (e.g., throughefficiency gains and cost reductions). Reduced
exposure to GHG emissions and therefore lesssensitivity to changes in cost of carbon. Signify
has implemented more than 200 energy
efficiency initiatives in our facilities worldwide
and reduce 70% of carbon footprint in last
decade.
Increased water pricing might drive up
production cost in the medium and long term.
Using the Water Risk Monetizer tool by Ecolab,
Trucost, and Microsoft, we assessed our current
portfolio of operating manufacturing facilities,
considering different scenarios of risk adjusted
pricing for water. Potential impact on businesswould be non-significant. Signify has set a target
to reduce 5% of water consumption every year.
Reputational benefits resulting in increased
demand for goods/services. Increased revenues
resulting from increased demand for low-carbon
products and services. Signify has a strong
portfolio and leading market position of lowcarbon and energy efficient products andservices.
Increased revenues resulting from increased
demand for products and services that are lowcarbon and more energy efficient. Signify isstrong in sustainable design and innovation.
Increased revenues resulting from increased
demand for products and services that fulfill
consumer’s low-carbon preferences. Signify has
a strong portfolio, offering a wide range of lowcarbon and energy efficient products, systems
and services.
As part our strategy, Signify is driving 5 new
growth for sustainability areas to help address
the world’s greatest challenges: (1) climate
action, (2) circular economy, (3) food availability,(4) safety & security, and (5) health & wellbeing.
Sustainable design and innovation will gain us
access to these markets, resulting in increased
revenue.
Increase revenues from products, systems andservices that align with policy schemes. Signify’senergy efficient and low-carbon offering fit right
into the European Green Deal and the American
Jobs Plan.
Reduced exposure to future fossil fuel priceincreases. Reduced exposure to GHG emissions
and therefore less sensitivity to changes in costof carbon. Signify has been carbon neutral andusing 100% renewable electricity since 2020.

29

Development of climate
adaptation andinsurance risk solutions

Increased resilience and reduced exposure toclimate risks. In 2020, Signify launched a
dedicated
multi-discipline
ClimateRisk
Assessment Taskforce team, consisting ofexperts
in Operations, Insurance, Risk
Committee, Internal Audit, Sustainability, andEHS. Climate adaptation and insurance risk
solutions are reviewed at least annually.

High risk

High opportunity

Medium risk

Medium opportunity

Low risk

Low opportunity

Figure B Transition risks and opportunities at regional level

Physical risks
The climate-related physical risks are presented in the below table. We have focused on assessing physicalrisks relevant for Signify’s manufacturing sites and warehouses/distribution centers, namely riverine
flooding, coastal flooding, drought, tropical storm, and heatwave for the short-term (2025) and two longterm (2050) scenarios: a below 2°C or SSP1-2.6 scenario – taking the sustainable road, and an above 4°C or
SSP5-8.5 scenario – fossil fueled development path. It is worth noting that the long-term impact of physicalrisks is influenced by climate change and degree of global warming. In particular, the long-term risks ofriverine flooding, droughts, and tropical cyclones under the above 4°C scenario are expected to besignificantly higher than the below 2°C scenarios. This again resonates with the importance and urgency oftaking bold climate action in line with the Paris Agreement 1.5 °C pathway.

30

Physical risks

Potential impact

Riverine flooding

Riverine flooding might be relevant for 23% of our sites.
Due to high level of preparedness and high resilience atsite level, risk and exposure are expected to be low in the
below 2°C scenario.
Coastal flooding might be relevant for 9% of our sites. Due
to high level of preparedness and high resilience at site
level, risk and exposure are expected to be low.
Droughts might be relevant for 21% of our sites. Due tohigh level of preparedness and high resilience at site level,risk and exposure are expected to the low in the below 2°C
scenario.
Only 6% of our sites might be affected by heatwaves. Due
to high level of preparedness and high resilience at site
level, risk and exposure are expected to the low.
Tropical might be relevant for 26% of our sites. Overall, a
medium risk level is perceived even in the below 2°C
scenario. For sites that are at higher risk in the long term,
we keep reviewing the risk profile and response plan for
mitigation and/or adaptation.

Coastal flooding

Droughts

Heatwaves

Tropical cyclones

Short term
(2025)Long term(2050)
< 2°C

Long
term
(2050)> 4°C

High risk
Medium risk
Low risk(c) The resilience of the organization’s strategy, taking into consideration different climate-related
scenarios
Addressing climate related risks at Signify
Sustainability is at the core of our strategy and purpose. Signify has a robust sustainability program, Brighter
Lives, Better World, which sets ambitious target for climate action. Signify is one of the first Signify is 28
companies committing to verified Science-Based Targets in line with the Paris Agreement 1.5°C pathway to
cut GHG emissions in our operations as well as in our value chain.
Since 2020, Signify is 100% carbon neutral in global operations and uses 100% renewable electricity. Overthe past decade, we implemented hundreds of emission reductions initiatives around in our facilities
worldwide, which enabled us to reduce 70% of our gross operational emissions. Signify has invested in three
Power Purchase Agreements (PPAs) to, on one hand, ensure long-term and high-quality renewable energy
sourcing, on the other hand, enable the green power grid transition. Signify has a strong position insustainable innovation and design. Our sustainable innovations continue to revolutionize the lighting industry
toward low-carbon and energy efficiency. In 2022, we invested EUR 264 million in sustainable innovation
which represents 89.5% of Signify R&D expenses. These investments in emission reduction and sustainable
innovation have led to further improvements in the areas of energy efficiency and circular economy, largely
improving our resilience to the future change of policy and regulations, the future change of (low carbon)
technology, the future change of customer behavior and consumer preference, the future resource andenergy scarcity; and in the meanwhile, reduced our exposure to increase cost of carbon and fossil energy.
In terms of physical risks, the Climate Risk Assessment Taskforce team, launched in 2020, has been screening
and evaluating relevant climate-related risks and their impacts in details for our sites all over the world.
These risks are reviewed at least once per year at individual plant, regional, business group and function, or
company level. We continue evaluating those sites at higher risk in the long term, discussing response
strategies accordingly, and incorporating climate-related risks into company’s overall risk review cycles.

31Assessing climate related risks in supply chain
Climate change related physical risks in different geographical locations could potentially interrupt our
supply chain and business continuity. Nevertheless, due of our wide-ranging supply network, these risks arewell monitored and not consider material presently.
Regular surveys are conducted by Signify to identify and rank the suppliers based on their vulnerability to
climate related physical and transition risks. As a result, we develop a robust adaptation strategy (such as
dual sourcing) for our supply chain. This will enable us to respond appropriately and timely; and prevent
disruptions to our business operations. We optimize our supply chains for their efficiency and resilience toclimate risk.
We engage with suppliers on a variety of activities and training sessions to enhance their capability andresilience with regard to climate change related risks.
Climate change adaptation strategy
Climate related risks and opportunities are taken into consideration in our business continuity strategies. In
the long term, we are committed to continue deepening our understanding about climate-related risks andopportunities.
We implement a proactive approach to climate risk adaptation. The risk and vulnerability assessments carriedout by the Climate Risk Assessment Taskforce team enable us to understand our exposure to climate risks,
for the near term and the long term. This allows us to develop appropriate resilience framework for our own
facilities as well as our supply chains. For example, in response to the energy crisis, we are exploringalternatives to source cleaner energy to not only tackle the potential energy shortage but also reduce
emissions in our operations. In addition, with strong and differentiated portfolio of low-carbon and energyefficient products, we are adapting to new market trends emerged due to climate change and energy crisis.
Ultimately, our climate change adaptation approach improves our resilience to climate-related risks as well
as allows risks or opportunities response plans/strategies to be developed in a timely matter.

References:•
Section CEO Letter of the 2022 Annual Report•
Section 4.1 Financial performance of the 2022 Annual Report•
Section 12.5 Climate change of the 2022 Annual Report•
Chapter 16 of the 2022 Annual Report•
Signify CDP Climate reporting32

Metrics and targets
Sustainability is at the core of our company strategy and purpose. Climate action is perceived as the mostmaterial topic by our internal and external stakeholders as the result of our 2022 materiality assessment.
Signify is the first global lighting company to reach carbon neutral operations in 2020 and has committed to
double our positive impact on the environment and society by the end of 2025. Our climate-related metrics
and targets are listed in the table below.
Targets

Baseline year

Target year

Definition

Brighter Lives, Better World 2025 program
Double the pace we achieve the
1.5ᵒ degree scenario of the Paris
Agreement(Full scope 1 + 2 +3)

2019 (=0)

2025

Cumulative carbon footprint reduction of
our full value chain relative to the targetsof the 1.5-degree scenario of the Paris
Agreement (in Million Tonnes).

Increase Climate action revenues
to 72%

2019 (=58%)2025

100% Carbon neutral operations

2020 (=100%)2025

100% Renewable Electricity

2020 (=100%)2025

Percentage of total revenues coming fromenergy efficient and solar products,
systems and services, meeting strict
luminous efficacy thresholds, which help
to save energy and reduce carbon.
Percentage of our full operations(manufacturing
sites,
non-industrial
locations, logistics and business travel)
which is carbon neutral.
Percentage of electricity from renewablesources.

Approved Science-Based Targets, 1.5ᵒ scenario
Reduce by 70% carbon emissions
from scope 1 and 2
Reduce by 30% carbon emissions
from scope 3 product use

2015

2030

2015

2030

Reduction of 70% of absolute scope 1 and
2 GHG emissions
Reduction of 30% of absolute scope 3
GHG emissions from use of sold products

Metrics

2022

Unit

Scope 1 emissions

142

kilotonnes CO2-equivalent

Scope 2 emissions

12

kilotonnes CO2-equivalent

Scope 3 logistics

85

kilotonnes CO2-equivalent

Scope 3 business travel

11

kilotonnes CO2-equivalent

Operational carbon footprint efficiency

33

kilotonnes CO2-equivalent per million-euro sales

References:•
Chapter 16 of the 2022 Annual Report•
Signify CDP Climate reporting33

Supplement 6: EU Non-Financial Reporting Directive(NFRD)
Category
Company business model

Criterion

Reference 2022 Annual Report
3 Creating long-term value
4 Corporate performance
10.2 Board of management
10.3 Supervisory board
16.3.2 Diversity, equity & inclusion
10.2 Board of management
10.3 Supervisory board
16.3.2 Diversity, equity & inclusion
16.3 Brighter Lives

Description
Policy description

Diversity
KPI / result
Policy description
Social matters

KPI / result

16.3 Brighter Lives
12.5 Operational risks
16.3 Brighter Lives
16.4 Better World

Risk
Policy description
Environmental matters

KPI / result

16.4 Better World
12.5 Climate risk
16.4 Better World
16.3.3 Human rights
16.3.3 Human rights
16.3.5 Business ethics
16.3.3 Human rights
12.1 Establish strong risk management
environment
12.1 Establish strong risk management
environment
16.3.5 Business ethics
12.1 Establish strong risk management
environment
12.3 Risk assessment and control

Risk
Policy description
Human rights

KPI / result
Risk
Policy description

Bribery and corruption

KPI / result

Risk34