Decarbonizing our supply chain
Since 2003, Philips has looked at ways to improve the environmental performance of its suppliers. When it comes to climate change, we have adopted a multi-pronged approach: reducing the environmental impact of our products, committing to carbon neutrality in our own operations, and engaging with our supply chain to reduce their carbon footprint. Philips motivates its suppliers to disclose emissions, embed board responsibility on climate change, and actively work on reduction activities.
In October 2021, during COP26, Philips announced its target to have at least 50% of its suppliers (based on spend) committed to science-based targets for carbon reduction by 2025.
CDP engagement: Since 2011 we have been partnering with CDP Supply Chain, through which we have invited many of our largest suppliers, including first-tier manufacturing and transportation-related suppliers, to disclose their environmental performance and carbon intensity.
Data-driven insights: Through accurate data insights, Philips’ buyers are enabled to consider climate action in their supplier selection. In 2021, 28% of our purchases (in spend) were made at suppliers that have committed to science-based CO2 reduction targets.
Capability building: We support suppliers in advancing their company approach to climate action, offering (online) guidance that is tailored to their climate action maturity. In 2021, we provided tailored feedback and guidance for 89% of our strategic suppliers to support their growth in capabilities and help improve their approach.
Opportunities for decarbonization: Through on-site assessments we identify energy efficiency opportunities that enable our suppliers to make cost-effective carbon reductions. Our team calculates for the supplier what the cost impact would be, and also the return. In 2021, 13 on-site assessments took place, which resulted in tailored plans for improvement.