Honest & Fair Business

In the past three years, Philips faced a US$1.1 billion CPAP settlement in 2024, a €509 million cartel-forming fine from European regulators in December (assumed 2025), and a US$62 million settlement with the SEC in May 2023 for improper conduct related to internal controls and accounting practices.

The company has a Whistleblower Policy that protects employees from retaliation for good faith reports and provides a 24/7/365 Ethics Line, allowing anonymous reporting. Philips has not had any recent financial restatements, with historical issues fully resolved. The company has a comprehensive anti-corruption policy, including FCPA compliance and annual training, and agreed to remedial measures such as due diligence on third-party partners. Approximately 50% of ethical claims are independently verified with a standardized scope.

Planet-Friendly Business

Philips' emission reduction targets for its entire value chain are approved by the Science Based Targets initiative (SBTi) and align with a 1.5 °C global warming scenario.

In 2024, 75% of its operations were powered by renewable energy, having exceeded its 2025 target of over 75% since 2022. The company achieved carbon neutrality in its Scope 1 and 2 emissions, and Scope 3 categories of logistics and business travel, by the end of 2020. Philips aims for a 90% reduction in Scope 1 and 2 emissions by 2040 compared to a 2015 baseline. In 2024, approximately 0.3% (EUR 3 million) of its capital expenditures were aligned with the EU Taxonomy for energy efficiency and fossil fuel phase-out. All new product introductions adhere to EcoDesign requirements, which include energy efficiency. In 2024, 100% of Philips' industrial sites sent zero waste to landfill, with 94% of materials recirculated. The company reported zero environmental compliance violations in 2024. Philips discloses climate-related financial risks and opportunities in alignment with TCFD guidance and conducts advanced climate scenario analysis for short, medium, and long-term horizons, including 1.5 °C and high-emission pathways. It concluded that it has no expected stranded assets. In 2024, 26% of its industrial sites were in areas with extremely high water stress, and 13% in areas with high water stress. Philips aims to reduce packaging CO2 by replacing virgin plastic with paper-based alternatives or increasing recycled content. The company invested EUR 263 million in green innovation in 2024, with EUR 20-25 million planned for climate change mitigation and adaptation between 2025-2030. 40% of Philips' suppliers (by spend) are committed to science-based targets, with a 2025 target of 50%. Philips has restoration projects covering 5-8% of its operational land, with a site in Best, Netherlands, being 55% green.

Respect for Cultures & Communities

Philips has established over 20 formal partnerships with various organizations, including NGOs, social entrepreneurs, academia, and local community groups, to deliver healthcare solutions.

The company has not reported any cultural appropriation incidents. While Philips conducts Human Rights Impact Assessments (HRIAs) at 100% of its at-risk manufacturing sites, which include stakeholder interviews, it does not explicitly mention a dedicated cultural impact assessment protocol despite operating in culturally sensitive areas. The company's General Business Principles are available in 30 languages, and it has undertaken initiatives to redesign and translate materials based on cultural characteristics in specific regions. Philips has trained nearly 300 doctors and health workers in specific programs. The company's expansion in India is expected to create approximately 400 jobs, but a specific local employment ratio is not provided. Philips offers a global SpeakUp Policy and mechanism for employees and third parties to escalate concerns, but there is no specific mention of community-specific grievance mechanisms.