Climate Action: More than a North Star

The world is facing the combined challenges of climate change, resource scarcity, supply disruptions – to name a few. And now, most recently, an unprecedented rise in energy prices is adding even more pressure on households and businesses. The time for meaningful action is now. And it is no longer a matter of choice, explains Signify UK chief executive Stephen Rouatt.

Climate Action: More than a North Star

At Signify, we believe that by changing how we create and use light, we can improve lives and positively impact the planet. We have identified five strategic areas where we will grow our business while furthering our contribution to a better and more sustainable world. These growth areas are defined based on the business environment and challenges facing society and are tied to the United Nations Sustainable Development Goals (SDGs).

What are the Sustainable Development Goals?

In 2015, the UN established 17 global goals for sustainable development, known as the Sustainable Development Goals. The SDGs are the world’s shared plan to end extreme poverty, reduce inequality, and protect the planet by 2030. The SDGs recognize that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests, according to the official UN site.

At Signify, we report our contribution to six SDGs: Good health and wellbeing (3); Affordable and clean energy (7); Decent work and economic growth (8); Sustainable cities and communities (11); Responsible consumption and production (12); and Climate Action (13). We have chosen the SDGs where Signify can have the most impact through the products and services we offer and the actions we undertake ourselves.

Making a real difference

Let me take you back to 2015 when Signify committed to a goal of becoming carbon neutral and converting to the use of 100% renewable electricity in all our operations. With a global manufacturing footprint, supply chain, nearly forty thousand people, and a global presence, those commitments felt like a big step at the time. We created a bold plan, with over 200 emission reduction initiatives worldwide, and were able to become carbon neutral in our operations in 2020.

We then wanted to make our impact even bigger. So we have embarked on a new five-year journey out to 2025, focusing on doubling our positive impact on the environment and society under the Brighter Lives, Better World 2025 sustainability programme, going beyond carbon neutrality. The programme uses the SDGs as its strategic compass to work towards the following four goals:

  • Double the pace of the Paris Agreement: As part of our commitment to climate action (SDG13), we will go beyond carbon neutrality and reduce carbon emissions over our entire value chain. By 2025, we will achieve the 2031 target set out for companies in the Paris agreement to limit temperature rises to 1.5°C over pre-industrial times. We will do so by increasing the energy efficiency of our portfolio, which will reduce emissions of our customers, and by driving carbon reductions at our suppliers. We also call upon the world to accelerate the adoption of affordable and clean energy (SDG7). For example, our highly energy-efficient LED lighting saves an average of 50% of the electricity consumed by conventional lighting. Additional savings of typically 30% is achieved using connectivity and lighting control systems. At the end of Q2 2022, our cumulative carbon reduction over our value chain is on track to beat the 2025 target versus the Paris Agreement.
  • Double our Circular revenues: Making our economy more circular has become more important than ever. Today society uses 1.7 times the resources than our planet can sustain, and resource scarcity and waste have reached worrying proportions. As Signify, we are committed to responsible consumption and production (SDG12) with products that can be reprinted, refurbished, reused or recycled. This will help us to achieve our goal of doubling our revenues from circular products, systems and services to 32% by the end of 2025. To date, we have achieved 31% versus a baseline of 16% and are already nearly at our 2025 target.
  • Double our revenues for brighter lives, through innovations that benefit society: We are committed to supporting good health and wellbeing (SDG3) and sustainable cities and communities (SDG11). We aim to double the percentage of our revenues for brighter lives, which benefit society, to 32% by the end of 2025. This includes revenues from lighting innovations which increase Food Availability, Safety & Security and Health & Wellbeing. In 2021, we executed five humanitarian projects and lit 7.2 million lives (since 2017). These two SDGs contributed to the Brighter Lives revenue by 25%-27% and are on track to meet the target for 2025.
  • Double our commitment to diversity, equity and inclusion and double our percentage of women in leadership: We are committed to decent work & economic growth (SDG8) and to creating a Great Place to Work. Therefore, we will strengthen our commitment to diversity, equity & inclusion and aim to double the percentage of women in leadership positions to 34%. At the end of Q2 2022, 27% of leadership roles in the company are filled by women, and we remain committed to improving our progress.

Delivering on commitment

The cost of inadequate action towards climate change has moved to being measured in terms of impact on human life. From storms causing widespread severe disruption, to thousands of people being displaced from their homes due to flooding and other devastating events – we are faced by “a code red for humanity.”

Sustainability is at the heart of our strategy and purpose: to unlock the extraordinary potential of light for brighter lives and a better world. Since 2015, we have been guided by ambitious targets and have learned some key lessons:

  • Embed sustainability in your strategy: Sustainability is no longer a nice to have or reputational benefit. It is the core of having a competitive advantage and being the customer’s choice. We decided early on that integrating sustainability into every part of the business will guide how we operate – from our impact on the environment and our supplier’s impact to the products we launch. That’s when we launched our Five-Frontier Strategy in 2020, where sustainability was part of 2 out of 5 frontiers: Growth for Sustainability and Great Place to Work.
  • Every year, we perform a Strategic Review Process, combined with a sound Sustainability Materiality Assessment. These processes involve many internal and external stakeholders and help us identify future trends and understanding stakeholders’ perspectives at a global and local level. This helps us to manage better the risks and opportunities that could impact our ability to create value in the long term. As a result of our annual review in 2021, we furthered our focus on delivering on our strategy and on progressing on the commitments of our new Brighter Lives, Better World 2025 sustainability program that we launched in 2020.

To date, we are on track towards our 2025 sustainability commitments, and have increased our positive contribution to our six priority SDGs.

Sustainable lighting for a brighter future

Lighting makes up 13% of global electricity consumption and 5% of global greenhouse gas emissions. Making the change toward energy-efficient lighting can have major positive effects for cities.

At Signify, we realize the potential of light. We advocate an accelerated transition to energy-efficient LED lighting to help households and businesses while positively impacting the UK’s Race to Zero. With energy prices reaching all-time highs and global emissions rising at unprecedented levels, it is now more urgent than ever that businesses in the UK and Ireland lead by example and take quick action to tackle climate change. In the UK’s Race to Zero, a green switch to LED lighting in the professional market could mean eliminating 3.9 million tonnes of CO2 emissions and saving a total of GBP 3.3 billion per year. The impact is not limited to businesses. For an average British household, switching to LED lighting can help save up to £250 per year (i.e., £15-£18 per light bulb). These savings are bound to increase with every change in price cap. This can prove to be particularly helpful for families pushed into fuel poverty with the recent changes in the price cap.

Our “A-Class” light bulb launched in 2021 is another such example. This first Philips LED A-class bulb meets the more stringent EU Ecodesign and Energy labelling regulations that came into effect on September 1, 2021. The new Philips LED bulbs with a 3.5x longer lifespan and a further 60% reduction in energy usage versus a regular LED provide consumers with a smart investment for both the planet and their bank account.

In conclusion

According to the Sustainable Development Goals Report 2022, cascading and interlinked mega trends or crises are putting the 2030 Agenda for Sustainable Development in danger. With less than 10 years to meet each of the 17 SDGs, an ambitious global effort is underway to deliver on the 2030 promise. However, action to meet the goals is still not happening at the speed or scale required.

We still have a chance to achieve a better, more sustainable future that leaves no one behind.  To achieve our climate and SDG agendas, we must make decisive progress on both. For this, we need stronger policy packages covering regulations, information, and incentives to play a key role in accelerating energy efficiency and related measures. From the deployment of smart, efficient lighting, upgrading homes with better insulation, improving the fuel efficiency of cars, and switching to EVs, as well as fostering investment in new industrial machinery.

If everyone takes small steps, we’ll make big strides together.

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