How to embed circular economy thinking into a multinational’s culture now

Markus Laubscher, Director of Sustainability and Circular Economy of Philips, discussed with us ways of intervention that moves a multinational towards a circular economy thinking. Philips is celebrating its 125th anniversary.

Markus told us the adoption of sustainable practices has been accelerating in the last 15 years in Philips. In 2003, the company had its first annual sustainability report. In 2008 had its first integrated annual report, in 2010 the green sales were introduced and in 2012, sustainability was incorporated in the vision statement.

The main interventions and tools to move Philips towards a circular economy thinking were:

  1. Agree on company KPIs and diligently track them.
  2. Support markets and businesses hands-on to generate proof-points.
  3. Continuously expand awareness internally and externally

The main KPIs that Philips implemented were:

  • Green Product sales in focal areas: substances, weight, lifetime reliability, energy and circularity.
  • Circular Revenue with the following conditions: products with >30% recycled plastics content, system and component refurbishment with >30% reuse, performance and access based contracts with return commitment, upgrades and useful life extension beyond industry standards and re-sale of commercial product returns.

Summarizing, to embed circular economy thinking into a multinational’s culture it is necessary to make sure the topic is owned by a function that can drive it strategically, challenging the organization and receiving to-down and bottom-up support.

“Because health and well-being matters to people”, Annual Report 2008, Philips.

Juliana Marques, SB Barcelona 2016 Volunteer, IESE Business School