Towards a circular economy in lighting

January 10, 2022

From new circular products and services to zero waste to landfill and zero plastic packaging. How do we transition to a more circular economy?

Today's linear production and business models consume the resources of 1.8 Earths, much more than what is available to us¹. But there is a solution: transitioning to a circular economy. With sharing, leasing, reusing, repairing, and recycling existing materials at its core, a circular economy helps us retain value and minimize waste.

At Signify, sustainability is key to everything we do. We are committed to contributing to the transition to a circular economy and achieving Sustainable Development Goal 12: Responsible consumption and production.

A shift toward a sustainable circular economy is all about creating and preserving value. Our actions range from creating new products to delivering services that fit into the circular economy ecosystem to minimize waste. So, let's take a closer look at each of our actions.

The last category concerns our Circular Services. With Light-as-a-Service (LaaS), we provide design, financing, installation, maintenance, and end-of-life management to our customers in a single contract. This allows our clients to pay for the light they use rather than become the lighting system’s owner. We take care of the lighting, so our clients can fully concentrate on running their business.

The technical, sustainable, and financial benefits of service-based lighting sparked a fairly rapid transition. The COVID-19 pandemic accelerated this as it increased the need for our clients to optimize their cashflow.

By offering a financing mechanism, LaaS makes it possible to renovate lighting without an upfront investment. When an existing and conventional lighting system is renovated, the energy savings can be massive. Additionally, the lighting service can generate immediate positive cash flow.

At the end of a LaaS contract, the equipment can be returned to Signify. We will then recover value from end-of-contract products, primarily via reuse or recycling. Having originally designed the product and monitored its actual use throughout its in-service life, we have all the data we need to choose the best scenario for each product.

We closely monitor and report our progress in expanding our circular portfolio. At the end of Q3 2021, 24% of our revenues came from circular products, systems, or services, putting us on track to achieve our 2025 commitment of 32%. While we know that our environmental impact is most significant in the use phase of our products, we also take action in our operations.

When it comes to incorporating circularity in our operations, waste management is a key area of action. In 2016, we committed to sending zero manufacturing waste to landfill. By the end of 2020, we delivered on this target as planned and recycled 91% of our industrial waste. In 2021, our major focus was on including our recent acquisitions in our commitment and driving continuous improvements. We improved our waste separation and waste awareness training, while sharing best practices across other regions.

Going beyond our operations, we want to minimize the waste produced by the consumption of our products. Therefore, we launched a project to eliminate plastic in our consumer packaging, which we will achieve in the third quarter of 2022. This will help society avoid 2,500 metric tons of plastic every year. This is equal to 125 million PET bottles which, placed in a row, would stretch more than 8,000 kilometers (5,000 miles)².