Suppliers

We hold our suppliers to the highest standards 

We assess our suppliers against the industry standard formulated by the Responsible Business Alliance, RBA (formerly known as the Electronic Industry Citizenship Coalition, EICC) and captured in the Philips Supplier Sustainability Declaration.

 

The Philips Supplier Sustainability Declaration (SSD) covers, among other things, labor and human rights, worker health and safety, environmental impact, ethics, and management systems. In line with our General Business Principles, it includes requirements on freedom of association and collective bargaining. The Declaration also requires suppliers to cascade the RBA Code – as a total supply chain initiative – down to their next-tier suppliers.

Beyond auditing

At Philips, we are committed to leading the change towards a more sustainable supply chain by going even further than auditing compliance. To this end, we have developed a new approach – Supplier Sustainability Performance (‘Beyond auditing’) – that focuses on, among other things:

  • taking a systematic approach to improving the sustainability of our supply chain
  • driving continuous improvement and measuring impact through a structural, phased approach
  • promoting collaboration, with increased transparency, clear commitments and effective metrics to gauge suppliers’ success in meeting agreed targets.

 

In this way, the focus is on ensuring structural, proactive improvement rather than simply reacting to issues that arise, underscoring Philips’ desire to invest in relationships with suppliers who provide a safe working environment, treat workers with respect, and work in an environmentally sound way.

 

If we notice a delay in the implementation of an improvement plan, we apply a stratified approach for consequence management. In exceptional cases where a supplier is unwilling to commit to eliminate a zero tolerance or to structurally improve as agreed, we end the business relationship.

 

To prevent audit fatigue and limit the burden of additional audit preparations and follow-up at a single supplier site, Philips aims to share its developed SSP approach with industry peers. By providing access to a dedicated platform, for example, RBA members can first assess the SSP results and agreed improvement plan before initiating an audit. This eliminates the need for multiple audits and enables a stronger focus on structural improvements and their follow-up due to higher levels of supplier commitment.

 

For more information please contact suppliersustainability@philips.com

 

What people are saying about the SSP program

 

PI Electronics

“PI Electronics have been audited by several customers (e.g. RBA members) for more than 10 years. Participation in the SSP approach has enabled us to re-organize the company’s management system and implement control measures for timely comparison, with improvements tracked in a monthly KPI report.”

 

Foliage

“SSP mainly focuses on long-term sustainability improvement with a structural systematic approach. We recognize three key aspects: 1. a change of mindset – we as a supplier can actively work together with Philips to eliminate the risk without the concern of being punished if the issues are not closed; 2. a change of method – it is a joint-effort approach; 3. a change in effectiveness – it enhances supplier long-term competency.”

 

ELEVATE Limited

“The Philips Supplier Sustainability Performance program is an innovative ‘beyond auditing’ model that has proven to have greater impact for factories, workers and the planet. After years of social compliance auditing with limited impact, industry can learn from Philips, and companies should experiment with similar efforts to drive greater transparency, partnership and performance.”