As of 2020 we are carbon-neutral in our operations

At Philips, we see climate change as a serious threat. One that is expected to cause some 250,000 additional deaths per year globally. Therefore, we are taking action to rethink our business models and decouple economic growth from the impact we have on the environment and society.

In 2020 we achieved our goal of becoming 100% carbon-neutral in our operations and sourcing all our electricity from 100% renewable sources. We are committed to sourcing over 75% of our total energy consumption from renewable sources by 2025 and to reducing CO₂-equivalent emissions in our entire value chain in line with a 1.5 °C global scenario. This means extending our efforts beyond our own operations – collaborating with our suppliers and customers to magnify our impact.

Towards 75% renewable energy by 2025

As of 2020, all Philips’ sites are 100%-powered by renewable electricity sources. Most of that comes from projects we helped create, such as the Los Mirasoles windpark in the US and the Krammer and Bouwdokken windfarms in the Netherlands.

In Europe, Philips is securing renewable electricity supply through consortium-led power purchase agreements. To reach 100% renewable electricity usage globally, we purchase renewable electricity within the markets or via local utility companies.

We are also committed to sourcing over 75% of our total energy consumption from renewable sources by 2025, gradually phasing out fossil fuels from our entire operations.

Carbon offsetting

Although reduction is key to carbon neutrality, unavoidable carbon emissions require offsetting in order to drive down our emissions to zero.

In 2020, we compensated emissions equivalent to the annual uptake of approximately 16 million medium-sized oak trees. This covers all emissions from our sites, our business travel, and our logistics movements.

We offset our emissions by financing projects in emerging regions that have a strong link with health and well-being (SDG 3) and sustainable consumption (SDG 12). These projects also drive social, economic and additional environmental benefits for the communities in which they are rolled out.

Providing access to safe drinking water while reducing wood consumption

These carbon-emission reduction projects will provide millions of liters of safe drinking water in Uganda and Ethiopia and will reduce the mortality risk from water-borne diseases. Additionally, less wood will be required for boiling water, leading to less indoor air pollution and slowing down the deforestation rate. To ensure quality, all offsets are verified under the Gold Standard.

Fighting against respiratory diseases and deforestation by means of clean cookstoves

By financing highly efficient cookstoves in Kenya and Uganda, less wood will be required for cooking, leading to lower carbon emissions, a reduction in diseases caused by indoor air pollution, and a lower deforestation rate in these regions. To ensure quality, all offsets are verified under the Gold Standard.

Providing access to clean energy while improving health and education

This project will reduce the demand-supply gap in the Dewas region of India and will provide renewable energy to more than 50,000 households. The project will also provide a mobile medical unit in 24 villages, giving diagnosis and medicines free of charge twice a month. Additional funding will be provided for educational programs and improved sanitation facilities in five local schools in order to maximize the social impact. To ensure quality, all offsets are verified under the Verified Carbon Standard.

Driving emission reductions across the value chain

Philips has set long-term CO₂ emission targets approved by the Science Based Targets initiative (SBTi). The approval confirms that Philips’ targets across our value chain are in line to limit global warming to below 1.5 °C.

By joining forces with our customers and suppliers we can reduce our shared carbon footprint and create a sustainable and more resilient healthcare industry.

We aim to deliver on this target by collaborating with our customers and our suppliers to magnify our impact. Together with our customers and suppliers, we will continue to reduce our collective need for fossil fuels by using renewable and energy-efficient alternatives. In the coming years, we will act on the following objectives:

1: Minimizing our climate impact in our supply chain by adopting circular economy principles

From a climate perspective, applying circular business models leads to a significant emission reduction in our supply chain. As the value of materials is retained, the need for new abiotic resources is significantly reduced, and by extension the need for energy to produce those new resources/materials, leading to reduced emissions. Read more

2: Designing energy-efficient products and collaborating with our customers to reduce emissions during the use phase

More and more, our customers – both healthcare and retail – are demanding solutions that are kinder to the environment. To address that demand, we are continuously reducing the climate impact of our products by increasing energy efficiency, increasing the use of recycled plastics and recyclable materials, and ensuring we make our packaging easier to recycle and re-use. Read more

3: Collaborating with our suppliers to reduce emissions in our supply chain

With growing global concerns about the impact of climate change, there is a pressing need for industry and business to manage and reduce CO₂ emissions across the entire value chain – including at supplier level. To this end, we have invited many of our largest suppliers – first-tier manufacturing and transportation-related suppliers – to report their climate performance and strategy as part of the Carbon Disclosure Project (CDP) Supply Chain program. Read more