Our people, our planet, our partners
Engaged people with a winning spirit are essential if we are to achieve our growth ambitions. Our aim is to develop our business further by creating products that improve people’s lives. At the same time, we believe in improving our own people’s lives by creating a fulfilling and exciting work environment. Empowering peopleWe are committed to enabling our people to grow, empowering them to be creative in a culture of trust and confidence. That’s why we continue to focus on boosting engagement and improving talent development. At Philips, we believe engagement is about creating an inclusive and high-energy working environment, where all employees are aligned and energized to contribute to our business success. An engaged workforce delivers a competitive advantage – our people are highly motivated to give their best every day. Our engagement processEngagement can be stimulated but it cannot be mandated. Getting there is a journey and – like every journey – to reach our destination we need a road map. Our engagement process is just that – a foundation for a road map that allows us to check where we are and where we are headed. On a regular basis, we measure where we are in our engagement journey. Through the Engagement Survey, we ask our employees to give confidential feedback on 44 items. This enables us to continually strive for even higher levels of employee satisfaction and loyalty as well as referral to and pride in the company. Taking actionResults are distributed throughout the organization, and teams are encouraged to get together to talk about the results in ‘Deep Dive’ sessions. Strengths and weaknesses are discussed in an open and honest dialogue; the root causes of any issues that have arisen from the survey are addressed and corrective actions put in place. Action can be taken at various levels – company, sector, country, function, business, team and even at individual manager level. In 2008 the global economy took an unforeseen, unprecedented downturn. Unfortunately this has necessitated job cuts throughout the entire Philips organization. In this regard we follow one principle: we first inform and consult works councils and employees before making public announcements on specific programs and details on a case by case basis. As a people-centric organization we are doing everything within our power to support those affected with the utmost responsibility and respect. This includes looking for alternative employment within the company for colleagues who face being laid off, providing social plans where applicable, organizing work-to-work trajectories and assigning outplacement coaches. These measures may vary depending on local work conditions and regulations. 
We recognize and appreciate the wide variety of people who work for us. Each individual is unique, with his or her own background, culture, characteristics, skills and ambitions. Our customers are equally unique, and thanks to our diversity we can better understand them and meet their needs. Achieving our target for 2008, women now comprise 10% of executives across the company. That’s double the figure of 5% in 2005. Next we want to increase that number to 15% by 2012. Further, we want to get more talented local people into key positions in our growth markets. Understanding female customersSince it was founded in 2004, our women’s network – WINergy, has focused on support and mentoring. WINergy’s scope expanded in 2008 as the network took steps to evolve into an in-house consultancy to reach out to female customers. Women representing our sectors and various functional areas attended workshops in the Netherlands and the United States to learn more about our end-users. Now marketers can reach out to WINergy members to help them generate consumer insights during the product creation process. GLBTWe have been working with a GLBT (gay, lesbian, bisexual and transgender) focus group to decide if we should create a network, and if so what kind of activities we should develop on behalf of and driven by our GLBT community. We have established Philips Pride, our network for gays and lesbians. Additionally, we joined the Company Pride Platform in 2008 with a number of other multinational companies and co-sponsored its annual conference in Amsterdam. 
The Philips General Business Principles (GBP) are defined to ensure integrity and transparency in our activities and to our stakeholders. Our work on business ethics is dynamic, featuring ongoing communications and updates of our GBP Directives. Increasing awarenessWe launched a communications program to strengthen employees’ awareness of the principles, as well as their importance and how they underpin business integrity. Targeting all employees, the program consists of modules that enable sector and regional leaders to deliver the message, illustrating managerial commitment at the local level. The communications package features a range of tools – from simple e-mails and printed media to online messaging including intranet videos. A thorough updating processOur mid-2008 update of the GBP Directives is based on many factors. It takes into account experience gained with the previous GBP Directives, trends in legislation and society, and developments in major codes of conduct like the Electronics Industry Code of Conduct. Also included are demands of key accounts and business ethics issues that experience shows require further elaboration into concrete directives to ensure adequate compliance.
We continuously work on improving the environmental performance of our products across their entire lifespan by investing in EcoDesign, green technologies and measures to further reduce our environmental footprint. We make these investments because we recognize the importance of considering, as architect and designer William McDonough says, “all children, all species, for all time.” We believe that our products will not only become increasingly environmentally friendly but also even more useful and attractive for our customers. The global warming challengeClimate change has been recognized globally as one of the most serious human-made threats to our civilization. Today, however, as author George Monbiot puts it, the risk is not that climate change is not a subject of debate anymore but rather that we keep on talking. Commitment and action is required by all parts of society including authorities, business and consumers. In Tokyo in July 2008, the G8 leaders pledged “to move to a carbon-free society” through cutting global emissions by 50% in 2050. At Philips we are convinced that we can contribute to the required transition to a low-carbon world, not only with environmentally sound products, services and technologies, but also by actively seeking the dialogue with all stakeholders including our customers and suppliers. With the launch of our latest EcoVision program in 2007, we have therefore committed to reduce CO2 emissions with a sharp focus on energy-efficient products, green innovation and energy efficient day-to-day operations. 
Green ProductsWe use the Philips Green logo to identify an increasing number of our Green Products, making it simple for our customers and end-users to make responsible choices. With increasing concern about the impact of CO2 emissions on the climate, we will continue to ensure that our products offer superior energy efficiency. We also remain committed to giving our full attention to all relevant environmental and social dimensions, including the chemical content of products and reliable as well as effective collection and recycling. In 1994 we were at the forefront when we developed procedures for Environmentally Conscious Product Design – what we call EcoDesign. To support this process, we introduced our Green Focal Areas (shown far right) in 1998. Today Green Products represent a significant share of our revenues in all of the markets we serve. Green InnovationsSustainability is recognized as a strategic driver for innovation at Philips. With our commitment to Green Innovations we are looking at today and tomorrow – what we can simply categorize as now (roadmap development), soon (adjacencies, which can also be outside the scope of our current portfolio) and later (breakaway innovations). Our research portfolio is regularly reviewed from a sustainability angle to ensure that we are on track to deliver on our EcoVision commitments. Operational energy efficiencyFocusing on operational energy efficiency is not only essential to reduce our greenhouse-gas emissions, including CO2, it also drives overall efficiency and savings. In this context we have identified a number of strategic initiatives driven by dedicated teams to further strengthen the energy efficiency of our operations and reduce our greenhouse-gas emissions including CO2. All initiatives are sponsored by senior executives and progress is closely monitored. Examples include systematic energy scans at our manufacturing sites globally, Green IT, Green Logistics, Green Facility management and Green Supply Chain. While some of these initiatives may primarily have a financial impact, others engage our employees, influencing them to make simple switches that have a big impact, and some, like the examples below, offer both. Our Green IT initiative addresses our use of computers and accompanying peripherals, as well as IT infrastructure. Elements of the project include providing employees with green computing tips and allowing them to submit their ideas, as well as encouraging them to be energy educators. Green IT power scan results are published weekly, illustrating the declining percentage of PCs online at night in each region. To reduce business travel, we have introduced a new video-conferencing system available via the intranet that is as easy as face-to-face and is available for virtual team-gatherings around the world.
With a deep understanding that our influence on the environmental performance of our products does not end at the time of sale, we are committed to continuously improve their ecological impact throughout their lifespan. We believe that this also will make our products truly better, creating value for people, the planet and the company. Cradle to CradleOur engineers, marketers and designers are inspired by the concept of Cradle to Cradle. This paradigm encourages a mindset shift from ‘being less bad’ to ‘doing good’ for the environment. It sets a vision of a world based on renewable energy, full of materials continually recycled and applied with safety and health in mind. For Philips, the ongoing exploration of Cradle to Cradle means the search for innovative products, processes and services that use materials and energy effectively. Eight project teams from Consumer Lifestyle have conducted feasibility studies, and pilots are now in progress. We featured the Circle of Life at our Simplicity Day Event in Moscow. This concept for delivering responsible goods invites people to co-create and make choices based on the entire chain of the product’s life, including the phases before purchase and after disposal. Collection and recyclingSociety increasingly expects companies to take action for products at their end-of-life. In places where regulation is in place, such as Europe or the United States, people look to companies to step up their efforts to increase collection ratios. Similar expectations are surfacing in countries where legislation is still in development. To do just that, we are working to: • minimize environmental impact through EcoDesign of our products, which includes design for recycling • support the development of legislation to create a level playing field, also enabling collection and recycling of old products whose brand has disappeared from the market • drive expansion of collection and recycling services, for example by starting up voluntary activities in India and Brazil in 2008 • drive the development of environmentally friendly recycling systems and technologies with sufficient economies of scale • support the education of consumers on the subject of collection and recycling, and communicating clearly and consistently to all stakeholders. Chemical content of productsThe European REACH legislation is concerned with the Registration, Evaluation, Authorization and Restriction of Chemical substances. Underpinned by the precautionary principle, the aim of REACH is to further improve the protection of human health and the environment through the better and earlier identification of certain chemical substances. To ensure compliance and no interruption in the supply flow, we have asked our chemicals suppliers to pre-register chemicals supplied to us. The limited number of chemicals that we produce ourselves have been pre-registered with the European Chemicals Agency (ECHA). Additionally, we have requested information on relevant chemicals from our component or finished products suppliers.
We believe achieving a sustainable supply base is a matter of taking care of workers’ lives and the environment. As a member company of the Electronic Industry Citizenship Coalition (EICC) we share the organization’s goal to improve conditions in the electronics supply chain. Our approachThe Philips Supplier Sustainability Program is built on five pillars. We clearly set out our requirements, build understanding and agreement, and monitor identified risk suppliers through audits, nearly 60% of which are now conducted by specialized external auditing bodies. We work with suppliers to resolve issues quickly and engage stakeholders in the chain. To determine where to focus our efforts, we have developed an approach based on a risk profile related to spend, country of production, business risk and type of supplier relationship. In 2008, the integration of new acquisitions included training their Supply Management staff and then analyzing their supply bases with regard to sustainability risk. Where risk has been identified we conduct awareness training with suppliers to prepare for third-party audits. Resolving issues quickly is a key component of our approach. Corrective action plans are agreed upon within one month of an audit. One of our sustainability officers follows up monthly and will escalate the issue to the responsible purchasing manager as necessary to ensure zero-tolerance issues are resolved within three months. In this way all zero-tolerances from 2007 and those from the first three quarters of 2008 have been resolved. With three years of audit experience we have developed a list of topics that need to be addressed with our suppliers. Continual conformance audits show that a multi-year approach to training and auditing is essential to engrain sustainability in the supply chain. Sustainable NPR procurement and supplyAs part of our ongoing efforts to minimize our environmental impacts, as well as meet our EcoVision4 targets, our commodity teams have a number of projects under way. These projects include the previously mentioned Green Supply Chain initiative, as well as continuing sustainable procurement in marketing and sales. Working with stakeholdersWe seek constructive dialogue and the opportunity to engage in specific projects with all relevant stakeholders in the chain. Much of this work is done via the EICC and bilateral meetings with investors and NGOs. One example is a project in Dongguan, China, focusing on working hours, which is the most frequent labor issue found during audits. We believe that cooperation with the EICC and local governments is the only way to truly achieve sustainable change. Philips is also an active member of other EICC working groups to resolve specific issues at industry level, including the Global e-Sustainability Initiative on the health and well-being of people working in the mining industry.
|
||||||||||||||||||||||
