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    Strategy

    How does Signify integrate sustainability in its overall strategy?

    Sustainability is central to our company purpose to unlock the extraordinary potential of light for brighter lives and a better world. In September 2020, we achieved carbon neutrality in our operations and use 100% of renewable electricity and we embarked on a new, five-year journey to double our positive impact on the environment and society. Our Brighter Lives, Better World 2025 sustainability program is an integral part of our 5-frontiers strategy which sets our direction in a changing world. With our strategic frontier, Growth for Sustainability, we define areas in which we address global challenges and create value for our customers and society: climate action, circular economy, food availability, safety & security, and health & wellbeing. Simulteniously, we will deliver on our strategic frontier, Great Place to Work, by investing in our people and strengthening our diversity and inclusion program.

     

    More can be found on our dedicated webpage: https://www.signify.com/global/sustainability

    What are the most material ESG topics for Signify?

    As an outcome of our Annual Materiality Assessment, Climate action (which encompasses the Energy efficiency of our product, and Carbon footprint in our operations and supply chain) and Human rights are our most material topics. In 2020, Business ethics has become more important for our stakeholders and Safety at work remains very important, especially in times of a global pandemic.

     

    The detail of our 2020 Materiality Assessment, and the definition of each material topic can be found in the Sustainability Supplements to the Annual Report, available on our Sustainability downloads webpage: https://www.signify.com/global/sustainability/downloads.

    How does Signify manage climate change risks?

    The impact of climate change generates opportunities and challenges for Signify’s existing and future lighting products and solutions portfolio, and we expect continued and increased attention to climate change from all sectors of society. This attention has led to additional regulations designed to reduce greenhouse gas (GHG) emissions and foster the adoption of more energy efficient products and solutions. As lighting represents a significant portion of global electricity consumption, the lighting industry will need to adapt to changing environmental regulations.

     

    As part of our Brighter Lives, Better World 2025 sustainability program, Signify takes measures to manage climate risks and adapt its businesses. Signify is already 100% carbon neutral in its operations, 100% renewable electricity and it will continue to increase the energy efficiency of its products, systems, and services to drive the transition to a low-carbon economy. Consequently, energy efficiency and circularity are central to our new company strategy and important aspects of the new products creation process.

     

    More can be found in the Sustainability Supplements to the Annual Report, available on our Sustainability downloads webpage: https://www.signify.com/global/sustainability/downloads.

    How did Signify define its sustainability program, and how is success measured?

    We are proud to already be a carbon neutral company and use 100% renewable electricity. In September 2020, we embarked on a five-year journey to double our positive impact on the environment and society. With the United Nations´ Sustainable Development Goals as our strategic compass, we launched even more ambitious goals. We provide solutions that address some important challenges of our time - for brighter lives and a better world.

     

    Progress against our commitments is measured via annual and quarterly targets and reviewed quarterly by the Board of Management and the Leadership Team. During the quarterly review meetings, corrective actions are taken when necessary. On an annual basis, the progress is also reviewed with the Supervisory Board. In addition, the results of our sustainability programs are communicated to Signify employees and on our website to external stakeholders every quarter.

     

    The latest quarterly progress can be found on our dedicated webpage: https://www.signify.com/global/sustainability/sustainability-progress

    Do you link sustainability performance to financial incentives?
    Our Brighter Lives, Better World 2025 program is an integral part of our 5-frontiers strategy and sets ambitious targets. 25% of our Long-Term Incentive (LTI) grant is based on performance against these targets, which are set and reviewed by our Supervisory Board.
    Do you report according to TCFD?

    Yes, since 2018 and we have continued our efforts to align with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, and we launched an internal working group to further analyze our climate risk mitigation and adaptation strategy.

     

    Further details can be found in the Sustainability Supplements to the Annual Report, available on our Sustainability downloads webpage: https://www.signify.com/global/sustainability/downloads.

    How far are you in the process of adopting EU Taxonomy?
    Signify has a project team in place to work on the implementation of the EU taxonomy. The company will report on EU Taxonomy in its Annual report 2021, in line with the reporting requirements.
    What does the EU Green Deal mean for Signify?

    The European Green Deal sets the ambitious target to achieve a carbon-neutral continent by 2050, reconciling the economy and the way we consume resources with the planet and ensuring that nobody is left behind.

     Signify created the Green Switch program aligned with the broad roadmap set by the Green Deal. This program is designed to support business owners, municipalities, manufacturers, agriculturalists, utility, or service providers to start participating—now—in the Green Deal’s ambition to cut emissions, create jobs, and boost innovation. LED and connected lighting offer one of the simplest and most often overlooked paths to reducing greenhouse gas emissions. IoT capabilities, built on top of the connected lighting infrastructure, can help make the smart future a reality today, spurring job creation and driving prosperity.

     

    Through NEMA and the Business Council for Sustainable Energy, we contributed to the “Build Back Better” economic recovery planning in the USA leading to the encouraging approval of the American Infrastructure and Jobs Act in November 2021.

     

    Bold climate action is needed, and it’s needed now. Signify’s program towards government stimuli provides many ways to contribute to these initiatives quickly and conveniently.

     

    More can be found on our dedicated webpage: https://www.signify.com/global/sustainability/green-switch.

    What are the relevant Sustainable Development Goals for Signify? And how do you contribute?

    Our sustainability program, Brighter Lives, Better World 2025, is not a standalone program. It is embedded in our purpose and integral to our strategy and the way we do business. And we believe we have an important role in helping achieve the United Nations Sustainable Development Goals (SDGs). The SDGs have been our strategic compass in creating our strategy and commitments. We selected six SDGs based on the areas where we can make the largest impact on which we focus our targets and report on. These are the following SDGs: 3 - Good health and wellbeing; 7 - Affordable and clean energy; 8 - Decent work and economic growth; 11 - Sustainable cities and communities; 12 - Responsible consumption and production; and 13 - Climate action.

     

    More details can be found on our dedicated webpage: https://www.signify.com/global/sustainability/sustainable-development-goals.

    Does Signify receive reasonable assurance on its sustainability statements?
    Yes, our auditor EY is involved in assessing reasonable assurance on all our financial and non-financial information, including all sustainability indicators. The combined independent auditor’s report can be found in our annual report 2020, page 163: https://www.signify.com/static/2020/signify-annual-report-2020.pdf
    Is Signify evaluated by ESG rating agencies?

    We engage with external bodies who evaluate us on our Environmental, Social, and Governance (ESG) performance, compared to our peers. These evaluations differ in terms of methodology, coverage, and focus areas. We allocate our efforts to engage with bodies that have robust and transparent methodologies. Thanks to our ambitious sustainability program and performance, we are recognized as a leader in sustainability.

     

    More can be found on our dedicated webpage: https://www.signify.com/global/sustainability/external-recognition.

    Environmental

    What is Signify’s carbon footprint?

    In September 2020, we finalized our journey to carbon neutrality in our operations and our shift to 100% renewable electricity. Being carbon neutral in our operations means scopes 1 and 2, our factories and offices, and parts of scope 3, our logistics and business travel.

    As a manufacturing company, we still have unavoidable emissions, for example from the use of natural gas in glass ovens, so we invest in certified carbon offsetting projects. Our partnership with South Pole enabled us to offset 100% of our emissions, resulting in a net zero carbon footprint. In 2020, our gross operational carbon footprint was 260 kilotonnes.

    Does Signify have CO2 reduction targets?

    As part of our commitment to climate action (SDG 13) and affordable and clean energy (SDG 7), we will go beyond carbon neutrality and double the pace of the Paris Agreement 1.5°C scenario by the end of 2025. We will reach the 2031 pathway in 2025 by increasing the energy efficiency of our portfolio to reduce emissions of our customers and driving carbon reductions at our suppliers.

     

    Additionally, Signify is one of the first 28 companies committing to verified Science-Based Targets in line with the Paris Agreement 1.5°C pathway to cut GHG emissions in our operations and value chain. We commit to reducing 70% of absolute scope 1 and 2 GHG emissions and 30% of absolute scope 3 GHG emissions by 2030 (baseline 2015).

    What exactly does Signify mean by increasing its Climate action revenues to 72%?

    Signify will focus on increasing revenues from energy efficient and solar products, systems, and services, meeting strict luminous efficacy thresholds, which help save energy and reduce carbon.

     

    More can be found on our dedicated webpage: https://www.signify.com/global/sustainability/climate-action-lighting.

    What exactly does Signify mean by doubling its Circular revenue?

    The shift to a circular economy is an integral part of Signify’s strategy. To realize this doubling commitment, we have set internal targets, enhanced our sustainable design process with circular design rules and accelerated the roll-out of our circular business models such as serviceable luminaires, circular economy ready luminaires (incl. 3D-printing), circular components, intelligent systems, or circular services. For 3D printing we, for instance, expand the locations where we print and further diversify the products that we can offer, both for professionals and consumers.

     

    More can be found on our dedicated webpage: https://www.signify.com/global/sustainability/circular-economy

    How are you going to drive carbon reductions in your supply chain?

    We have been engaging with our suppliers via the Carbon Disclosure Project (CDP) for years. We have also started with training and supplier engagements, where we were expecting a limited number of suppliers reporting any data via the CDP platform. Every year we have been extending the number of suppliers that we approached with training and requests to submit data on climate change and carbon emissions. We do not only monitor the percentage of responding suppliers, but we also check the quality of their input, connected to the transparency of scope 1 and 2 emissions disclosures, emissions reductions activities defined and followed, as well as commitments on Renewable Electricity (RE100) or Scientific Based Targets (SBTs). Additionally, we are participating in the SBT project of CDP – engaging our key suppliers in China.

     

    To incentivize our suppliers, Signify has a supplier dedicated program called Tritium, which rewards suppliers based on their performance against criteria linked to Signify’s strategic priorities, including Climate action. The better the supplier’s performance, the higher it scores and the more beneficial the relationship becomes for the supplier. Examples of incentives offered as part of the program are recognition through the Supplier Awards, a preferred business relationship and a higher level of engagement with Signify through, for example, the innovations workshops or a joint management agenda. This communicates clearly to suppliers that Signify is truly committed to sustainability and is fully willing to do its part in helping the supplier to improve.

    What is Signify doing to reduce plastic pollution?

    We are actively striving for a reduction of the environmental impact of our products. As part of our packaging policy, Signify already uses 80% recycled paper for its packaging. And to help fight the global plastic waste issue, we are taking the next step: we will eliminate plastics from all our consumer packaging by the end of Q1 2022.

     

    Additionally, by the end of 2020, Signify was sending zero manufacturing waste to landfill as one of our Brighter Lives, Better World 2020 commitments, and 91% of our total waste was recycled.

     

    More can be found on our dedicated webpage: https://www.signify.com/global/sustainability/plastic-free-packaging.

    Social

    How do you ensure the health and safety of your employees?

    The health and safety of our employees is a top priority. We commit to providing a safe working environment for our employees, and we contribute to the achievement of SDG 8: Decent work and economic growth. Our indicator for measuring the overall safety performance is the total recordable case (TRC) rate. Targets for this indicator are set and managed at a company-wide level and for the individual divisions and manufacturing sites. In our Brighter Lives, Better World 2025 sustainability program, we set an overall company target of 0.30 by the end of 2025.

    We achieve this ambitious target through continuous improvement cycles, followed by daily management reviews and regular operational reviews.

     

    The latest quarterly results can be found on our dedicated webpage:  https://www.signify.com/global/sustainability/sustainability-progress.

    Does Signify have a Human rights policy?

    Yes. Acting with integrity and respect for human rights are at the heart of Signify’s culture and the way we work. Our commitment to respecting and promoting human rights extends beyond our operations to our wider sphere of influence, including our supply chain. To that end, we integrate human rights considerations into our policies, processes, and practices. Our Human Rights policy is based on the International Bill of Human Rights, the United Nations Global Compact Ten Principles, and the International Labour Organization’s Declaration on Fundamental Principles and Rights at work. Compliance with our policy is governed through our Integrity code processes, combined with dedicated steps that help ensure adherence. Additionally, our sites located in risk countries periodically fill a self-assessment questionnaire on human rights.

     

    The link to our policy: https://www.assets.signify.com/is/content/Signify/Assets/signify/global/20210531-signify-human-rights-policy.pdf.

    How do you prevent Human Rights violations in your supply chain?

    Signify has developed programs over the years to prevent Human rights violations in its supply chain. The programs offer us a structured and innovative approach to manage the interactions with the various stakeholders to ensure responsible procurement practices and management of our supply chain.

     

    Our programs cover the assessment and development of supplier sustainability performance (audits and training) and responsible minerals sourcing. Through our efforts to foster decent work and economic growth in our supply chain, we directly contribute to SDG8: Decent work and economic growth.

    Does Signify have a Diversity and Inclusion policy?

    Yes. At Signify, we believe that a diverse workforce and an inclusive work environment are essential to a thriving, innovative business and long-term value creation. We are an equal opportunity employer committed to diversity, equity, and inclusion in the workplace. This means we celebrate and foster an environment in which all ideas, perspectives, experiences, and styles are highly valued and where all individuals are treated fairly with equal access to opportunities and resources. Diverse representation in our workforce is critical for our long-term success as a company. It enables us to understand, connect and communicate with our customers, end-users, and stakeholders. Further, it while helps us to attract and retain talents who want to contribute to our purpose to create brighter lives and a better world. Our Diversity and inclusion strategy reinforces our Greater Together value, enabling us to make better decisions, boost innovation, create growth and strengthen our culture.

     

    As part of our Brighter Lives, Better World 2025 commitments to double our positive impact on the environment and society, we will strengthen our actions towards diversity and inclusion and aim to double the percentage of women in leadership in our business to 34% by the end of 2025.

     

    Link to the policy:

    https://images.philips.com/is/content/PhilipsConsumer/PDFDownloads/Global/sustainability-downloads/ODLI20190410-01-UPD-en_AA-Diversity-and-Inclusion-Policy_2019.pdf

    What is Signify’s approach to Equal pay and Living wages?

    Recognition and rewards have been identified as important engagement drivers for our employees and direct suppliers. By ensuring good working conditions, Signify provides a fair, safe, and respectful environment, and an inspiring place to work and grow. We consider fair remuneration a precondition for our employees to flourish. Our company policy is to offer remuneration that meets or exceeds the provisions of all applicable wage laws, including those relating to minimum wages, overtime hours and legally mandated benefits.

     

    Additionally, Signify launched its Living Wages program in 2017. Every two years, Signify analyzes the salaries and benefits of employees globally with respect to living wages, covering the necessary living costs. We compare our living wages to the WageIndicator Foundation database. In 2019, Signify performed an analysis that showed that company standards exceed the living wage standards in all countries examined (such as the Netherlands, China, or India).

    How does Signify promote employee engagement?

    ‘Be a great place to work’ is one of our 5 strategic frontiers. This includes employee engagement which is key to our competitive performance and integral to our people vision: creating a workplace where people belong, have impact, and take pride in the company we build together. Engaged employees are emotionally committed to our company. That is why since 2019, Signify has fostered employee engagement on sustainability with quarterly campaigns.

     

    Given that employee feedback and engagement are critical, seven years ago, we introduced a quarterly survey, the Team survey, in addition to the promotion of Team dialogues for managers and their teams.

    What is the aim of the Signify foundation?

    The Signify Foundation is an organization dedicated to supporting underprivileged and underserved communities worldwide by enabling access to light and offering training and finance to lighting entrepreneurs. When pursuing this mission, the Foundation expects to leverage Signify’s expertise and knowledge to help provide and install easily accessible, sustainable lighting systems that enable the continuation of human activity after sunset and avoid the need to incinerate toxic materials for illumination. This helps break the cycle of poverty and contributes to SDG8: Decent work and economic growth in developing countries.

     

    More information can be the Signify Foundation website: https://www.signify.com/global/our-company/signify-foundation.

    What is the aim of the Signify foundation?

    Our commitment to sustainable development extends to issues further down in the supply chain, where we try to prevent human rights abuses and financing of conflicts in the extractive sector. Global supply chains in the lighting industry are complex, typically with more than seven tiers between the finished product and the source of raw materials. However, we believe that through strong multistakeholder partnerships, we can make a difference. As part of the Signify Conflict Minerals program, we implement measures in our supply chain to ensure that our products are not directly or indirectly funding atrocities in the Democratic Republic of Congo (DRC). We support and follow the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

     

    The full description of our due diligence process and Signify’s position on Conflict Minerals are available on our website: https://www.signify.com/global/contact/ suppliers/sustainability/our-programs/conflict-minerals

    Governance

    What is Signify’s approach to business ethics?

    We ensure business ethics by educating employees on our Integrity Code, our guideline for acting with integrity in both internal and external interactions. The code sets the standard for business conduct of our employees and for the company itself and gives more information on how to speak up or raise concerns.

     

    Link to Integrity code: https://www.assets.signify.com/is/content/Signify/Assets/signify/global/ir/integrity-code-eng.pdf

    What is Signify’s anti-corruption policy?

    Signify is subject to laws and regulations on anti-corruption and anti-money laundering in many jurisdictions. These prohibit corruption and money laundering in both the public private sector. To ensure compliance with all applicable laws and regulations, our company has implemented mandatory standards.

     

    Signify has a strong commitment to comply with all applicable laws and regulations. This is a responsibility of all Signify employees worldwide. Our company expects the same commitment from its business partners. To that end, it may conduct risk-based screening or due diligence to assess the risks of doing business with partners.

     

    The link to ABAC: https://www.assets.signify.com/is/content/Signify/Assets/signify/global/ir/anti-corruption-and-anti-money-laundering-policy.pdf

    Is Signify willing to submit its climate transition action plans for an advisory vote at the upcoming AGM?
    Given our Strategic focus on climate actions and beyond, we have many ESG investors. We thus have permanent exchanges on these subjects. In September 2020, we launched our ambitious commitment to double our impact the pace of the Paris Agreement 1.5-degree scenario after already being carbon neutral in our operations. This commitment, conceived with our Supervisory Board, was a key engagement topic during our Capital Markets Day. Moreover, we subsequently engaged with 200 investors over 6 events on our climate commitment.
    Where does sustainability sit in the company? How is the BoM/SVB engaged?

    The Sustainability function, headed by Maurice Loosschilder, consists of sustainability professionals, and falls under the responsibility of the Board of Management member and Chief Strategy & Marketing Officer, Maria Letizia Mariani. Each quarter, the Board of Management and the Leadership team reviews the sustainability progress and takes corrective actions when necessary. Annually, the progress is also reviewed with the Supervisory Board. The results of our sustainability programs are communicated quarterly to Signify employees and on our website to external stakeholders.

     

    Sustainability programs are embedded in the Signify organization and ways of working. Examples of departments that implement sustainability programs include sales, innovation, manufacturing, sourcing, and logistics. Targets on sustainability are set both at the corporate division level.

    Could you tell us more about the composition of the Board, including diversity?

    We selected a Board of Management and a Supervisory Board to align with Dutch and international corporate governance best practices, ensure they have the expertise needed to understand current affairs and longer-term risks and opportunity, and offer a diverse representation.

     

    The Corporate Governance and Nomination & Selection Committee assists the Supervisory Board by preparing the selection criteria and appointment procedure for members of the Board of Management and the Supervisory Board, periodically assessing the succession planning for the individual members of these boards and the interviews of potential candidates. The Committee reviewed and made a proposal to the Supervisory Board for updating the boards’ profile as well as the Supervisory Board skills and expertise matrix to reflect the areas that the Committee and Supervisory Board regard to be most relevant for Signify to address today’s needs and those anticipated for the future. The Board of Management and the Supervisory Board comprise two-thirds men and one-third women, in line with the company’s diversity objectives  to have at least 30% are men and at least 30% are women on the board.

    How are cyber threats managed at the company level?
    We have established a security board where corporate security strategy is approved and monitored. Each year mandatory security and data protection & privacy awareness training is conducted. IT security measures are in place to prevent, detect and respond to attackers from causing damage to systems and gaining access to critical data, systems, and services. Business continuity plans are in place in the event of non-availability of IT systems. Signify is developing its products and software applications and securing the ecosystem in conformity to security standards and best practices (ISA/IEC62443, ISO2700xNIST, and CIS).
    Is connected lighting safe? And what are you doing to protect your customers/consumers/the public from the threats you may expose them to when you sell them connected products and systems?
    All companies building internet connected device need to take security very seriously and deploy the latest technologies and best practices. Signify works extensively with security researchers and ethical hackers to securely design our systems and to identify any vulnerabilities, and patch them before there is any risk to customers. We also operate a responsible disclosure process where security researchers can submit vulnerabilities identified in our products before publication. These researchers are then given a secure channel to transfer information on the vulnerability and Signify takes any necessary action before it becomes public.

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    Contact Investor relations

    +31 20 24 55340

    IR@signify.com