The document discusses the need for a circular economy and its relevance to sustainable healthcare, emphasizing that traditional business models must evolve to incorporate innovation and sustainability. Philips aims to enhance health and sustainability through initiatives like Ecovision, focusing on energy efficiency, eco-design, and sustainable partnerships, exemplified by various innovative projects such as 'light as a service'. By 2025, Philips aims to improve the lives of 3 billion people annually, showcasing its commitment to environmental sustainability and social responsibility.

1. Re-Think, Re-Frame, Re-Make:
Innovating for a circular economy
MVO Zorgnetwerk event Circulaire Economie
Robert Metzke,
Senior Director Philips EcoVision Program
March 27th, 2013

2. 2050
• 9 billion people
• High quality of life
• One planet living
2 2

3. Why do we need a circular economy?
Sustainable development means Ecological footprint
to improve people‟s live
while respecting the limits of natural resources
Human
Development
Index*
*HDI = life expectancy + education level + purchasing power
Source: WWF Living Planet Report 3

4. How sustainable is our current healthare system?
Dutch Healthcare spent as percentage of BBP
CBS: Dutch
Healthare
cost
increased
with 1250%
since 1972
4
Source: CBS Nov 2012

5. Healthcare providers face complex challenges
High, fixed expenses and Increased workforce
labor costs shortages
Efficient resource
Growing demand
usage
Overburdened emergency
Value-based rooms and acute care wards
reimbursements
Acute -> Chronic
diseases
responsibility for the
promotion of health and Service
healthy communities expectation
Widespread Patient
knowledge Preference
5

6. “Traditional approaches to business will
collapse, and companies will have to develop
innovative solutions. That will happen only
when executives recognize a simple truth:
Sustainability = Innovation.”
-- CK Prahalad et al, “Why Sustainability Is Now the Key Driver of Innovation”; Harvard
Business Review
6

7. At Philips we strive to make the world
healthier and more sustainable
Philips EcoVision5 commitments for 2015
• Philips will bring care to more than 500 million Ecological footprint
1
people
2 • Philips will improve the energy efficiency of its 2
overall product portfolio by 50% 3
3 • Philips will double the global collection and
DOWN
recycling amounts of our products, as well as
double the amount of recycled materials in our
products
Health &
1 UP
well-being
Human Development Index
1 Lead by Healthcare 2 Lead by Lighting 3 Lead by Consumer Lifestyle 7

8. Sustainability drives innovation at many levels
Philips Healthcare examples, illustrative only
Product level: Philips EcoDesign MX16EVO CT
scanner
Solutions level: SmartPath Refurbished
Lifecycle solutions solutions:
Achieva MRI
System level: Multi stakeholder Sustainable
involvement across the value hospitals &
chain environments
8

9. With EcoVision5 we will invest
more than 2bln € until 2015
in sustainable innovation
• Philips focused on embedding EcoDesign with attention
to six Green Focal Areas
• Starting with EcoVision4 in 2007, we invested already
more than 1 bln EUR in research and development of
green products and solutions and reached 45% in 2012
• Green products defined as minimum 10% improvement in
at least one of the six Green Focal Areas; audited by
independent external party (KPMG)
9

10. Example Re-Make (product-level):
Technology breakthrough-Master LED A19
75% energy reduction compared
to incandescent lamp
25 times longer lifetime than
comparable incandescent lamp
10

11. Example Re-Make (product-level):
Ecopassport example – MRI Ingenia 1.5 T
11

12. Example Re-Think:
Reducing cost and waste with Philips
Diamond Select (solutions-level)
Helps to preserve the environment
Extends the lifetime of a system and lowers
the emission of CO2
Top quality at an affordable price
Fully refurbished systems configured to fit
the needs of customers.
New system warranty and full service
offering
Broad range of refurbished systems
Interventional X-ray - Computed Tomography
- Magnetic Resonance - Nuclear Medicine -
Ultrasound
12

13. Example Re-Think (business model innovation):
Light as a service / “Pay per Lux”
Ambition and guiding principles
• True, ambitious and visionary partnership, with a
economic interesting perspective from both sides
• Pay for use instead of pay for possession (“Performance
Lease”)
• State of the art installation with LED and dynamic lighting
• Taking into account employee happiness and productivity
• Materials stay in possession of Philips (assumption:
recycling costs will be paid out of material value increase)
• Disposal and/or re-use of old materials is included
• Lighting energy bill will be paid by Philips, to stimulate
further innovation
• Turnkey solution, including maintenance
• Contract period of 60 months
13

14. Example Re-Frame: System-innovation:
Luz Verde Project Mexico
CDM-based / Carbon Emission Rights
50% guarantor
Shareholder of
Cool NRG ING
Philips Cool
Sales of CFLi NRG Eneco
At low margin at
normal payment
term
CER‟s
Mexican
United Nations Households
& Mexican Government
14

15. Example Re-Frame:
Green Hospitals Solutions
Supporting hospitals in their growing need for an
improved sustainability performance (system level)
A strategic partner, every step of the way
Philips helps customers to plan, design, build and manage
sustainable healthcare environments
Global leader in Healthcare , Lighting and Sustainability
Lighting and also Healthcare equipment have significant impact
on the Hospital‟s energy use
Partner of the 'Green Hospital Program' at Asklepios
Philips supports Asklepios, the largest Private Healthcare group
in Europe, in their drive for a smaller carbon footprint and a
lower energy bill
15

16. “Ultimately, Leadership is about how we
shape futures we truly desire, as opposed to
try as best as we can to cope with
circumstances we believe are beyond our
control”
-- “The Necessary Revolution”, Peter Senge etc al, Doubleday 2008
16

17. Some recent awards and recognitions
Super Sector Leader Category
Personal and Household Goods Best score for Supplier Sustainability
2012/2013 out of five multinational finalists
Eight year in a row, included in 20
most Sustainable Stocks
Significant advancement in LED
lighting by US Department of Energy
Top score for Carbon Disclosure
Leadership Index and the Carbon
Performance Leadership Index 2012
Environment Excellence Award for Global Top 10 of Newsweek “Most Responsible Company Award’
Philips Lighting Pakistan 2011 ranking of greenest for Philips China
17

18. 18

19. Mission and Vision
Mission:
• Improving people's lives through meaningful
innovation
Vision:
• At Philips, we strive to make the world
healthier and more sustainable through
innovation. Our goal is to improve the lives of
3 billion people a year by 2025.
• We will be the best place to work for people
who share our passion.
• Together, we will deliver superior value for our
customers and shareholders.
19
19

20. A well-respected, blue-chip
company for over 100 years
Founded in 1891
Headquartered in Amsterdam, the Netherlands
Sales over EUR 23 billion (USD 32 billion)
30% in emerging economies
Emerging Markets
30% of sales generated in Emerging Markets
Globally recognized brand (world top 50)
Our brand value almost doubled to $8.1bn since 2004
116,000 employees
Sales and service outlets in over 100 countries
€1.6 billion investment in R&D, 7% of sales
48,000 patent rights – 35,000 registered trademarks –
56,000 design rights 20

21. What makes Philips different?
Early start in Social Responsibility
1900 • Various Health insurance Arrangements
1912 • Profit sharing
1913 • Pension Fund
1929 • Philips Company School
1920–1931 • First phase of housing Program
1950 • Collective Labor Agreement
1961 • 5-day working Week
21

22. What makes Philips different?
Long history of Environmental Policy
1970 • Participation in „Club of Rome‟
1974 • Corporate Environmental Function
1980 • Energy and emission reduction Programs
1987 • First Global Policy
1991 • Second Global Policy
1994 • Environmental Opportunity, first structured 4-year Program
1998 - 2010 • EcoVision1, 2, 3, 4, 5
22

23. The ecological footprint
www.footprintnetwork.org 23

24. The Human Development Index
www.hdr.undp.org
24

25. Providing a high standard of care
with increasingly scarce resources
25

26. Sustainability drives innovation at many levels
Lighting examples, illustrative only
Product level: Philips EcoDesign MasterLED
Glow
Solutions level: Turnkey Light and
Projects & Solutions Healthcare
as a service
System level: Multi stakeholder Value creation
involvement across the value with carbon
chain credits
26