Green Supply Chain 


Our commitment to sustainability obliges us to consider environmental impacts of our supply chain. Our current focus of attention is on engagement with suppliers to disclose their carbon emission and foster a circular economy. 

Carbon disclosure

Philips not only reports its climate performance to CDP (formerly known as the Carbon Disclosure Project) but also motivates its suppliers to disclose and reduce their carbon footprint.
 

Through our partnership with the CDP Supply Chain program since 2011, we have invited many of our largest suppliers, including first-tier manufacturing and transportation-related suppliers, to disclose their environmental performance and carbon intensity. In 2019, there was a response rate of 84% (2018: 77%). From this group, 84% committed to carbon emission reduction initiatives, 59% committed to carbon emission targets and 37% have set science-based targets.

 

We also use CDP to work together with suppliers in reducing carbon emissions along our supply chain. Through the CDP Action Exchange program, our suppliers are connected to globally recognized solution providers in energy-efficient technology. The energy efficiency experts can help our suppliers in their search for innovative solutions to reduce future carbon emissions. In 2019, our suppliers undertook projects that resulted in savings on carbon emissions amounting to 62 (2018: 40) million metric tonnes CO2.

 

In the next step, we will expand our partnership with CDP beyond carbon emissions. In 2020, we will request parts of our supply base to respond to the CDP water program.

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Environmental footprint China

Philips proactively supports its Chinese suppliers in reducing their environmental footprint whilst at the same time contributing to Philips’ sustainability strategy.
 

In 2019, our Supplier Sustainability team provided 3 training sessions on the Environment, Health and Safety to 87 suppliers, and monitored the environmental performance of Philips’ 2nd tier suppliers through a database from the Institute of Public & Environmental Affairs (IPE). Through our SSP engagement program, multiple suppliers improved their environmental performance on hazardous waste handling, waste-water and air-treatment facilities and fire-prevention initiatives. On average, the environmental performance of suppliers in the program showed a year-on-year improvement of 13%.

Circular procurement

Procurement has a major role to play in the transition towards a circular economy. Circular procurement is all about making the right choices early in the product creation process, so that materials and components are suitable, at end-of-life, for repair or refurbishment and re-use, thus helping to close the materials loop.

 

Circular procurement contributes to developing our circular products and services. Amongst our circular propositions, recycled materials have become an integral part of product design of our consumer products. For that purpose, Philips has actively been working on introducing recycled plastics in its product portfolio. By co-creating with recycled materials organizations, we can use our expertise to further improve the quality of materials. For example, our Performer Ultimate vacuum cleaner contains 36% recycled plastics of the total plastic content and the new SENSEO Up is designed for the use of recycled plastics.