Sustainability addresses global challenges
Sustainability is part of the way Philips does business. For us, sustainability and long-term profitable growth are two sides of the same coin. Our achievements in 2005 show how far we’ve come in embedding sustainability in our company and our enthusiasm to go further.

Barbara Kux, Chief Procurement Officer Philips, member of the GMC and Chair of the Sustainability Board: “Philips is dedicated to embedding sustainability throughout our organization. The doubling of our Green Flagship products’ turnover in 2005, from 1 billion Euros in 2004 to 2 billion in 2005, is a major achievement and sets new goals for sustainable value creation and growth.”

Take our Green Flagships – our environmental star performers. In 2005, we introduced 50 new such products, bringing the total number of Philips’ Green Flagships to more than 160 and turnover of these products to 2 billion Euros, an increase of 100% over 2004.

Like other products, Green Flagships go through Philips’ divisional EcoDesign procedures. But they then have to outperform their predecessors or closest commercial competitors based on an approved combination of our Green Focal Areas: energy consumption, packaging, hazardous substances, weight, recycling & disposal and lifetime reliability.

Green Flagships come from right across Philips. This year’s additions include our HeartStart defibrillators, our latest open MR scanner, LCD monitors and TVs, DECT phones, our multi-sensory wellness product, Innergize, and numerous lighting devices.

The performances are impressive. For instance, our digital radiography systems cut energy consumption in normal use by 41%, while our new Flat TV uses 39% less energy.

These Green Flagships are part of our wider environmental action programs, EcoVision. In 2005, we concluded EcoVision II with all but one of our targets met or exceeded. Now, we’re rolling out EcoVision III (2006-2009) which includes new targets such as reducing energy consumption (direct CO2) by 5% and emissions of Per Fluorinated Compounds (PFCs) by 31%. Hazardous substances such as lead, toluene and xylene will be completely eliminated.

Lighting the way to reduced emissions

Lighting is an area where there are major gains to be made in cutting CO2 emissions. Our ‘green lighting technologies’ are perfect examples. In 2005, we introduced highly energy efficient systems, such as CosmoPolis for street lighting, andActiLume and LightMaster Modular for office lighting control.

The benefits of replacing all types of lighting – domestic, public and private sector – with energy-efficient technologies could amount to reductions of 28 million tons of CO2 emissions per year. That’s equivalent to 50 millions barrels of oil or the CO2 consumption of one billion trees. In addition, cost savings could reach 4.3 billion Euros.

New Sustainable Business Initiative pilots go forward

Continuing activity on our New Sustainable Business Initiatives (NSBIs), 2005 saw completion of pilot projects including DISHA (Distance Healthcare Advancement). This NSBI which brings advanced diagnostics to people in remote rural villages in India, is now moving to a second pilot. With four strategic partners, we’re aiming to refine the concept as the basis for sustainable value creation.

We also concluded successful trials of an innovative woodstove that cuts smoke and toxic emissions, claimed to cause 1.6 million deaths a year. The stove could benefit up to 300 million families in developing countries who currently cook on traditional three stone fires. The stove not only cuts smoke, but also reduces fuel requirements by up to as much as 80%. It even generates electricity, offering people a way to run external equipment such as lighting or radios.