Creating value through Sustainability

Transcription

1 Creating value through Sustainability

2 We strive to make the world healthier and more sustainable through innovation We will be the best place to work for people who share our passion 1.8 billion lives improved in 2013 Together we will deliver superior value for our customers and shareholders Improving people s lives through meaningful innovation 2

3 A healthier and more sustainable world UN Human Development Index = life expectancy + education level + purchasing power 3 Source: Ecological Footprint Atlas 2009

4 The program elements of our Sustainability approach We take a dual approach, social and ecological, to the way we operate and innovate Green operations (includes supplier sustainability) Green products Circular economy Access to care Healthy living Energy efficient lighting Philips mission and vision 4

5 Access to care We believe in providing holistic healthcare solutions, and in bringing the benefits of healthcare provision effectively and affordably to as many people as possible. We provide professional and technical healthcare education to achieve a better diagnosis and patient outcomes when using our products million people live in urban slums around the world. Despite their tremendous need, many people cannot access healthcare services.

6 Well-being Philips is dedicated to responding to consumers aspirations all over the world, inspiring and enabling them to: be healthy live well enjoy life We deliver experiences, tailored to the variable local needs around the world that improves their lives every day. 6 Health spend to double Western governments spending on healthcare is expected to double as a result of aging populations, medical advances and lifestyle trends.

7 Energy-efficient lighting Philips is leading a global switch to LED Lighting that will bring multiple benefits - economic and environment. LED lighting applies EcoDesign principles in several ways such as waste reduction, recyclability, up to 80% less energy consumption and CO 2 emissions. LED bulbs can be housed in special luminaires designed for easier disassembly and recycling. 640 power stations A global switch to LED lighting would reduce energy consumption by 40%. This equals to cutting back the need for new electricity generation with the capacity of some 640 power plants. 7 The versality of LED lighting contributes to making cities more livebale, safe and inviting for tourism and productivity in workplaces.

8 Green operations Efficient management of chemical substances, energy, waste and water Roll-out of new chemicals policy, monitoring and auditing procedures to address the large and growing product chemicals legislation across the globe, including suppliers via EICC 1. Ongoing Energy (CO2), waste and water-reduction programs. Supplier involvement program targeting Supply Chain risks Supplier sustainability involvement program proactively targets issues in the supply chain that can have a negative impact on brand value, ratings, customer relations, etc. Active engagement with NGOs Stakeholder engagement program (topic-driven) to handle increasingly active and vocal NGO s, especially in China (e.g. China labor watch) and social media. Broadening program scope to include supply chain. 8 1 The Electronic Industry Citizenship Coalition (EICC) was established in 2004 to promote a common code of conduct for the electronics and information and communications technology (ICT) industry.

9 Green products We offer products that have a better environmental performance through applying EcoDesign procedures in all aspects of product creation. Green products sales reached 52% (2014) of total sales. 9

10 Green products Healthcare example Tenders and consultancy Tenders # of projects Value Healthcare 10 EUR 445 M Markets Offering phase Won Sweden, France, UK 5 EUR 235 M 3 EUR 200 M Sustainability questions are being asked in ~500 tenders annually in EMEA alone in Healthcare Example: Green is increasingly relevant for hospitals, especially at c-suite level. It s a space where Philips has a strong reputation, capabilities and ambitions to differentiate itself. Providing paid green consulting services at c-suite, linked to improved people experience, can open the doors for expanded scope of collaboration. 10

11 Circular economy Reduces material throughout by maximizing value creation Parts supply Manufacturing Distribution User Mining/materials manufacturing Service Reverse Supply Chain Recycle Parts harvesting Refurbish Building Blocks Design Collaboration New business model From highest to lowest value retention: 1. Service & Upgrade 2. Refurbishment 3. Parts harvesting 4. Recycling 11 Waste Source: Ellen MacArthur Foundation, McKinsey

12 Circular economy Business opportunities gaining traction Circular Economy Markets # of projects HealthTech Lighting USA, Netherlands Netherlands, USA, UK Remarks 24 Focus on refurbishment, parts harvesting and reverse logistics 12 Focus on Light-as-a-service Schiphol deal has been signed The above business opportunities are created to experiment with circular business models and currently represent ~ EUR 10 M sales The Healthcare refurbishment activities reach ~ EUR 200 M in 2014, for which we opened a new factory in Best, The Netherlands Example: Schiphol Lounge 2: Offering a 2 x 5 year light-as-a-service deal, with clear end-of-contract options. Overall margin over 10 years higher than normal sale margin. 12

13 Philips General Business Principles (GBP) Our Code of Conduct Always act with integrity Q1-4: Internal roll-out New look & feel Thousands of dialogues Q2: Revised GBP 32 languages Accessible & value-based Q4: e-learning Content & context Employee certification 13

14 Sustainability as a brand recognition and growth driver Thought leaders at Rio+20, launch of LED revolution Partner of the year with over 500 ENERGY STAR products Recognized leader - Carbon Disclosure Project Sourced conflict-free tin from Congo Opening of the HealthTech refurbished systems factory in The Netherlands One of the top risers in Interbrand s BGGB

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