Massachusetts Technology Leadership Council

Kristine Kalaijian

December 6, 2011

Speaking Sustainability

Credible, Effective Communication

Kristine Kalaijian , Philips North America, December 6, 2011

Founded in 1891 Headquartered in Amsterdam, the Netherlands

Sales over EUR 25 billion 30% in emerging economies

116,000 employees Sales and service outlets in over 100 countries

Globally recognized brand (world top 50) Our brand value almost doubled to $8.1bn since 2004

€1.6 billion investment in R&D, 7% of sales 55,000 patent rights – 33,000 registered trademarks –

49,000 design rights

A Well-respected, Blue-chip

Company for Over 100 Years

Kristine Kalaijian , Philips North America, December 6, 2011 3

Healthcare

Our Health and Well-being Offer

Powered by Three Sectors

Consumer Lifestyle Lighting

Kristine Kalaijian , Philips North America, December 6, 2011 4

Sustainability In Our DNA

• Strong Organizational Foundation

• Aligned with Health and Well-being Profile

• Part of Vision 2015 and Annual Management Agenda

• Powered by Global Trends – Societal and Climate Change

• EcoVision Targets/Key Sustainability Performance Indicators

• EcoDesign and Green Product Development

• EHS Governance

• Stakeholder Engagement

– Suppliers

– NGO’s

– External Recognition

• Employee Volunteerism

Kristine Kalaijian , Philips North America, December 6, 2011 5

Speaking Sustainability Communications and Actions

• Annual Report – one section devoted to sustainability

– Internal Environmental Reporting

• Internal and External Websites

• Supplier Accountability

• Green Product Marketing

– Eco Passports

• Social Investment Projects

– Woodstove

– Cairo to Cape Town Tour

– Solar Lighting Products

Kristine Kalaijian , Philips North America, December 6, 2011 6

Speaking Sustainability Communications and Actions (continued)

• Philips News Network (PNN) – Simplicity Rewards

• 2011 Sustainability Quiz

• Community Outreach – Company Sponsored Volunteer

Programs

– Philips Cares

– SimplyHealthy@Schools

Kristine Kalaijian , Philips North America, December 6, 2011 7

Health and Well-being Company

Powered by Global Trends

Rapid population growth and consumer

demands in growing economies

Climate change with dramatic consequences

to our planet

Increase in chronic disease in both

developed and developing countries

Rising healthcare costs

Scarcity of materials and lack of collection

and recycling legislation in certain areas

of the world

Kristine Kalaijian , Philips North America, December 6, 2011 8

Ecological footprint

Human

Development

Index*

Source: WWF Living Planet Report 2006

*HDI = life expectancy + education level + purchasing power (see back-up slide)

Clarifying Sustainability Balancing Human development and Earth’s bio-capacity

Kristine Kalaijian , Philips North America, December 6, 2011 9

Ecological footprint

Health and Well-being

UP

DO

WN

Strategic Focus:

Sustainable Health

& Well-Being space

Sustainability means to us …

9 9

… to improve people’s health & well-being

while respecting the limits of natural resources

Kristine Kalaijian , Philips North America, December 6, 2011

EcoVision Goals for 2015

Underlie our Strategic Focus and Commitment

Ecological footprint

Human Development Index

UP

DO

WN

2 2

Lead by Healthcare 1 3 Lead by Consumer Lifestyle

3

3

2 Lead by Lighting

1

1 • Philips will bring care to more than 500 million

people

• Philips will improve the energy efficiency of its

overall portfolio by 50%

• Philips will double the global collection and

recycling amounts of our products, as well as

double the amount of recycled materials in our

products

10

Strategic Focus:

Sustainable Health

& Well-Being space

Kristine Kalaijian , Philips North America, December 6, 2011 11

Life cycle approach to determine a product’s overall environmental

improvement

One or more of our Green Focal Areas must be

• Significantly better (at least 10%) than the reference product*

• Resulting in a lower total environmental impact

Green Products Characterized by Philips Green Focal Areas

* Reference product: Philips predecessor or closest commercial competitors

Kristine Kalaijian , Philips North America, December 6, 2011 12

Super Sector Leader Category

Personal and Household Goods

2011/2012

Eight year in a row, included in 20

most Sustainable Stocks

Best score for Supplier Sustainability

out of five multinational finalists

Environment Excellence Award for

Philips Lighting Pakistan

Significant advancement in LED

lighting by US Department of Energy

“Most Responsible Company Award’

for Philips China

Externally Recognized

Global Top 10 of Newsweek

2011 ranking of greenest

Best score for Carbon Disclosure

Leadership Index and the Carbon

Performance Leadership Index 2011

Kristine Kalaijian , Philips North America, December 6, 2011 13