philips 2009 Annual Report Healthcare Netherlands 4 actiOn Background: Philips is one of the largest electronics companies in the world. The Company employs 119,000 people in more than 60 countries. With an overarching focus on health and wellbeing they serve both professional and consumer markets through three overlapping sectors: Healthcare, Lighting and Consumer Lifestyle. They have set an ambition for 2015 of being ‘global leader in health and wellbeing’, acknowledging the longer-term challenges that the world faces and setting out to help by leading in sustainability. In order to better meet the needs of their stakeholders, Philips has been producing an Annual Report since 2008, which covers financial and social and environmental performance in a single document. The rationale for this is that it reflects the fact that sustainability is no mere adjunct to, but rather embedded in, the very fabric of their business operations. content review: Sustainability is a core part of that strategy and the Company believes it is uniquely positioned for growth through its ability to simply make a difference to people’s lives with meaningful, sustainable innovations. In 2010, leveraging sustainability was made an integral part of their strategy and additional driver of growth and reflected in their management agenda. our integrated annual Report now serves as a key vehicle for stakeholder communication, reaching investors, employees and other interested parties such as non-governmental organisations. Internally, the reports help to raise awareness of sustainability issues and our approach to corporate responsibility. Externally, the link between financials and nonfinancials generates real interest and momentum. The vision and strategy section is followed by 20 pages of ‘strategy in action’ case studies which demonstrate how the Company is helping to address wider global commitments. Following this there is a comprehensive section on ‘planet, partners and people’ which identifies and addresses their key issues: climate change, environmental footprint, partnerships for progress and supplier sustainability. This is then followed by an MD&A which contains a discussion of other performance measures – brand, marketing, research and development and supply management. It then has a comprehensive report of how the Company performed against its sustainability targets. ‘Lead in sustainability’ has been identified as a key strategic objective of its 2015 Vision set in this Report and a framework has been set to report on with clear targets and goals – such as generate 30% of revenues from Green Products, double investment in Green Innovations, and improve energy efficiency of Philips products. Summary: A very convincing report well on the way to ‘integration’. Clearly structured and written in a way that is consistent with previous years, but with enough new photography and stories to keep the reader engaged. The Philips Report is one of the few that attempts to quantify non-financial issues and no doubt it will not be long before those are directly related to the financials. Overall, the Report gives one the distinct impression that sustainability is at the core of the business and a serious priority for the Board and management committee, with key discussions integrated into the mainstream governance and risk sections as well. See page 59 for comment from Philips 50 The integrated journey
