Amsterdam, the Netherlands – Royal Philips (NYSE: PHG, AEX: PHI) today reported good progress in its sustainability performance with Green Product sales increasing to EUR 11.1 billion in 2014, representing a record level of 52% of total sales[1]. In 2014, Philips invested EUR 463 million in Green Innovation and achieved its EUR 2 billion EcoVision program target a year ahead of time. Lighting increased its yearly investments, being the largest contributor to Green Innovation with EUR 255 million, mainly targeted at advancing the development of LED solutions[2]. In addition, Philips was able to further reduce its operational carbon footprint by 5% compared to 2013.
“Achieving our EUR 2 billion Green Innovation target ahead of time is a clear proof of accelerating sustainable business and value creation across the company. We now improve the lives of 1.9 billion people[3], demonstrating solid progress towards our EcoVision commitments”, said Jim Andrew, Chairman of the Sustainability Board and Philips’ Chief Strategy & Innovation Officer.
The total product portfolio saw a slight increase of energy efficiency in 2014. For example, in the city of Madrid, Spain, Philips will renew the city’s entire lighting system with 225,000 energy-efficient lights, making it the world’s largest street lighting upgrade to date. In Healthcare, the Green Product portfolio expanded with seven new introductions to improve patient outcomes and access to care while reducing environmental impact.
Philips also expanded its efforts in circular economy[4] and opened a new refurbishment center for medical imaging systems in Best, the Netherlands. This facility represents an important milestone in bringing the financial and environmental benefits of circular economy to the healthcare industry. Another example is the new SENSEO® Up coffee machine, which effectively incorporates 13% of recycled plastics into its product design.
Jim Andrew added: “We see that social and environmental considerations have become a crucial element in customers’ decisions and we believe that embedding circular economy principles into our businesses will offer us substantial new opportunities to accelerate our innovation and growth.”
The Philips 2014 sustainability update is an integral part of the Philips 2014 Annual Report, available at: www.2014.annualreport.philips.com
Notes to the editor:
About EcoVision
Philips’ EcoVision program comprises key performance indicators in the areas of improving people’s lives, Green Product sales, Green Innovation (incl. Circular Economy), Green Operations, Health & Safety and Supplier Sustainability. For more information of 2015 targets, please visit Philips Annual Report 2014.
[1] Green Products need to prove leadership in at least one Green Focal Area compared to industry standards, which is defined by a sector specific peer group. This is done either by outperforming reference products (which can be a competitor or predecessor product in the particular product family) by at least 10%, outperforming product-specific eco-requirements or by being awarded with a recognized eco-performance label. The Green Focal Areas are: Energy efficiency, Packaging, Hazardous substances, Weight, Recycling and disposal and Lifetime reliability.
[2] All performance numbers have been restated to exclude the impact of Lumileds and Automotive.
[3] To calculate how many lives we are improving, market intelligence and statistical data on the number of people touched by the products contributing to the social or ecological dimension over the lifetime of a product are multiplied by the number of those products delivered in a year. After elimination of double counts, the number of lives improved by our innovative solutions is calculated. In 2014 we improved the lives of 1.9 billion people.
[4] Circular economy is a driver for innovation in the areas of material – component and product reuse, as well as business models such as solutions and services. In a circular economy, the more effective use of materials enables to create more value, both by cost savings and by developing new markets or growing existing ones.
