Group Sustainability. Sustainability Policy PHGR-GS-BP01-001

Version: 2

Classification: UNCLASSIFIED

The Philips Sustainability Policy is a core element for the operations of the entire Philips organization. Sustainability development is a priority for the Board of Management, which has formulated guidelines for sustainable performance. This policy and resulting action programs are regularly reviewed and updated to meet stakeholder needs

1. Philosophy

Since Philips was founded in 1891, it has worked to improve social equity and environmental quality, proving that responsible business is good business. Operating this way, the company has been able to improve economic prosperity for itself, its stakeholders and society at large. With its tradition of integrating economic, environmental and social issues, Philips understands that sustainable development is one of the most challenging issues facing the world.

2. Commitment

Philips adheres to the Business Pledge for Action adopted by the work business community at the 2002 Johannesburg World Summit for Sustainable Development:

Sustainability is the opportunity we embrace

Responsibility is the standard by which we should expect to be judged

Accountability is the obligation we assume

Partnership is the pathway we pursues

Therefore, Philips will:

Develop meaningful technology driven by the needs of society

Behave responsibly, living up to the Philips values, brand promise and General Business Principles.

Continue to build and maintain trust with transparency and accountability.

Engage and work with stakeholders inside and outside the company.

3. Policy

Philips maintains and strengthens a culture of sustainable entrepreneurship in line with its sustainability policy in the area of health and well-being.

Philips invests in its employees and creates a work environment that enables them to reach their full potential.

Philips optimizes its innovations, business strategy and operations by setting financial and nonfinancial targets and maintaining constructive relationships with stakeholders.

Philips expects its business partners to be committed to sustainable development.

Philips is active in the community, supporting initiatives to improve peoples lives, thereby focusing on energy efficiency and healthcare, particularly for the underprivileged.

Philips measures and verifies its sustainability performance and publishes results annually.

Philips engages with governments, non-governmental organizations (NGOs) and companies to explore new businesses and emerging markets to improve quality of life.

Valid form:2014-10-01. Expires: 2017-10-01. Doc. Owner: T.B.L.W. Marinelli

Philips international B.V Organizational: Group Sustainability

Function: environment, health & safety

4. Document version history

Date Autor version Reasoning

22-09-2009 J-W Scheijgrond 1 -

01-09-2014 T.B.L.W. Marinelli 2 update and comply with ISO form

5. Distribution This document is distributed to the Sustainability Community and is available on Intranet and Group Sustainability SharePoint.

Questions

• Identify and evaluate* one place in which this policy reflects the Environmental pillar of sustainability.
• Identify and evaluate* one place in which this policy reflects the Economic pillar of sustainability.
• Identify and evaluate* one place in which this policy reflects the Social pillar of sustainability.
• Give and defend** your overall assessment of how well this policy supports the "Triple Bottom Line" model of Business Success.

Note1 :In evaluating the policy in these three bullet points, you should (1) rate the policy's success in dealing with the particular pillar on a scale of 1-4: 1-low; 2-low moderate; 3-high moderate; 4-high; and (2) defend your rating.

Note2 : In the fourth bullet point use the same guidelines as in the note above, only rating the entire policy and not just a single part.