Philips: Health technology leader Philips continues to embed ESG commitments in all areas of its business
Philips has signed an agreement with a syndicate of fifteen banks to renew its EUR 1 billion Revolving Credit Facility with an interest rate linked to the company’s year-on-year Environmental, Social, and Governance (ESG) performance improvement. ING acted as the Sustainability Coordinator for the facility, supported by ABN AMRO, Bank of America, BNP Paribas, Citi (coordinator), Deutsche Bank, Goldman Sachs, HSBC, ICBC, J.P. Morgan, Mizuho Bank, Morgan Stanley, MUFG Bank, Rabobank, and Société Générale, which make up the rest of the consortium.
As part of Philips’ purpose to make the world healthier and more sustainable through innovation, the company has a fully integrated ESG framework that includes its products, services, solutions, business models, operations, and financial instruments. In 2021, the company’s ESG achievements included 1.7 billion lives improved by Philips’ healthcare and personal health products, services, and solutions, of which 167 million lives improved were in underserved communities; 16% of sales derived from circular revenues; and continued carbon neutrality in its own operations.
As a pioneer in forging ESG commitments in all areas of its business, in 2017 Philips was one of the first companies to develop a Revolving Credit Facility with an interest rate linked to its sustainability performance. With the renewed Revolving Credit Facility, Philips continues on that ambitious path, linking performance on the company’s 2025 ESG commitments for Lives Improved, Lives Improved in Underserved Communities, Circular Revenues, and Operational Carbon Footprint directly to the interest rate of the facility.
The performance on these four commitments will be disclosed in Philips’ Annual Report and is part of the assurance process by its auditor EY. By linking the interest rate on the Revolving Credit Facility interest rate directly to the achievement of its own ESG targets, Philips is again leading the industry in how ESG commitments can be embedded in all areas of a company’s business.
Philips’ EUR 1 billion Revolving Credit Facility, which matures in 2027, will be used for general corporate purposes. It substitutes Philips’ previous EUR 1 billion facility.