Supplier sustainability performance
We evaluate supplier sustainability through structured assessments and collaborative improvement programs.
Beyond auditing
Our Beyond Auditing program surpasses traditional compliance checks to drive continuous, structural improvement in supplier sustainability. We apply a systematic, maturity-based approach to help suppliers advance their environmental and social performance through clear commitments, increased transparency, and collaborative support.
Our process is built on recognized global standards and the Philips Supplier Sustainability Declaration, focusing on long-term improvement rather than quick fixes. We encourage suppliers, industry peers and cross-industry partners to adopt our approach, to foster openness and accountability throughout the supply chain.
This proactive strategy enables us to invest in relationships with suppliers who prioritize safe working environments, respect for people and responsible environmental management, to help deliver lasting benefits for people and the planet.
Holding suppliers to the highest standards
The Philips Beyond Auditing program uses a robust frame of reference built on international standards, the Philips Supplier Sustainability Declaration and recognized codes of conduct. This framework covers key areas such as management systems, environment, health and safety, business ethics, and labor and human rights.
Supplier maturity is assessed through a structured, four-stage process: select, collect, assess and improve, guided by the Plan–Do–Check–Act (PDCA) cycle. Suppliers are classified by maturity level, enabling tailored improvement plans and targeted support. Progress is continuously monitored, and each supplier receives a sustainability score based on performance in environmental management, health and safety, business ethics, and labor and human rights. This approach ensures ongoing improvement and accountability across our supply chain.
Performance-based assessment and classification
We conduct annual evidence-based assessments to evaluate supplier sustainability maturity. Each supplier completes a self-assessment, which is validated by Philips experts. Based on the results, suppliers are classified into four categories: best in class (BiC), supplier sustainability improvement plan (SSIP), do it yourself (DIY), and potential zero tolerance (PZT) – the latter being a temporary status for serious violations.
We enforce a strict zero tolerance policy to uphold ethical standards against unacceptable practices, including:
Tailor-made improvement plan
Suppliers are classified by maturity level, and each category receives a tailored engagement program. Best in class suppliers complete annual self-assessments, while those that need improvement participate in deep-dive assessments and receive customized support. For suppliers with potential zero tolerance issues, we act immediately to verify and address violations, requiring corrective action plans and ongoing updates. All cases are escalated internally to ensure swift resolution.
Impact on supplier performance
We measure the impact of our supplier sustainability program through year-on-year improvements in social and environmental performance. Hundreds of suppliers participate annually, with thousands of workers benefiting from improved labor conditions, reduced safety risks and reduced environmental impact. The program leverages advanced data science and machine learning to predict supplier maturity and optimize engagement intensity, which ensures both tailored support and efficient assessments. Philips’ IT platform streamlines the entire process to encourage other companies to adopt our approach and drive sustainable change across their own supply chains. Cross-industry collaboration and advocacy further extend the reach and effectiveness of the program.
