Circular Economy

Circular economy hub

Read more about our activities on Circular Economy on Guardian Sustainable Business

Transitioning to a circular economy

See examples on how Philips is making the circular economy happen!


At Philips we strive to make the world healthier and more sustainable through innovation and our goal is to improve the lives of 3 billion people a year by 2025. For a sustainable world, we see the transition from a linear to a circular economy as a necessary boundary condition.

A circular economy aims to decouple economic growth from the use of natural resources and ecosystems by using those resources more effectively. By definition it is a driver for innovation in the areas of material-, component- and product reuse, as well as new 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.

Key characteristics of Circular Economy

The ecological principals that are addressed in the Circular Economy approach are similar as in methodologies such as cradle to cradle, biomimicry or the natural step, all aiming to use natural resources much smarter and more effective. The big difference of the Circular Economy approach is that the starting point is economic value creation with the improvement of the ecological aspects as a derivative and not the other way around.


Key characteristics of the Circular Economy approach are customer access over ownership, (pay for performance e.g. pay per lux or pay per scan), business model innovations (from transactions to relationships via service and solution models), reverse cycles (including partners outside current value chains e.g. upstream-downstream integration and co-creation), innovations for material-, component-, and product reuse, products designed for disassembly and serviceability.

Philips’ approach on Circular Economy

The McKinsey group, assigned by the Ellen McArthur foundation, the leading organization on the concept of Circular Economy, produced two reports on the value creation possibilities of a Circular Economy. For the durable products and solutions industry these reports indicate an economic potential of EUR 250-500 billion per annum for Europe alone in the next decade.


In June 2013, Philips has become a strategic partner of the Ellen MacArthur foundation. Following the partnership, a two year project plan on Circular Economy has been established to embed the concept in the relevant businesses, building from the existing knowledge of the Philips Healthcare refurbishment business and the recycling activities from Lighting and Consumer Lifestyle. From economic point of view, embedding the Circular Economy concept promises additional value creation potential across Philips value chains.


We are also a member of Circle Economy Netherlands, which aims to accelerate the transition to the circular economy by providing an open platform where knowledge and experience is exchanged and collaborations are formed.


Please visit our dedicated global hub on Circular Economy, created in partnership with the Guardian Sustainable Business.

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