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Sustainable Packaging Material Policy

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Objective

Philips aims to reduce the environmental impact of its packaging by reducing the amount of

packaging used, selecting packaging materials with a high recycled content, and/or selecting virgin packaging materials with a minimal environmental impact from responsible sources.

This policy encourages the product design & purchasing community to reduce the environmental impact of packaging materials by adhering to the following principles and product specific targets:

1. Packaging shall be designed, produced and commercialized in such a way to stimulate and maximize recyclability and to minimize its impact on the environment in all phases of its life cycle.

2. Packaging shall be designed while minimizing the amount of resources needed both in volume and weight, and maximizing the percentage of recycled materials to enable closing the

materials loop.

3. Where recycled content is not or limited available, alternative materials like certified renewable resources or bio-based materials shall be used.

4. Philips requires its suppliers to conduct a risk assessment to ensure compliance with this policy and the following responsible sourcing requirements e.g.:

- Wood is not harvested in violation of traditional and civil rights;

- Wood is not harvested in forests where high conservation values are threatened; - Wood is not harvested in forests being converted to plantations or non-forest use.

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Scope and responsibilities

The scope of this policy includes packaging of all newly introduced products and changes in packaging of current portfolio, including transport packaging (e.g. A-boxes and palette boxes), individual product packaging (e.g. boxes, blisters, and sleeves), directions for use (incl. quick start guidelines) and warranty cards.

The scope of this policy excludes the following:

1. Products and/or promotional materials supporting the product in the shops, and (re-usable) industrial packaging of parts delivered to Philips production sites and does not end up at the final customer.

2. Requirements for packaging related to chemicals substances and gassing as these are already included in the Philips Regulated Substances List.

3. Legal compliance and marking requirements (e.g. Mobius triangle, Grüne Punkt logo) as these are included in sector specific packaging brand identity guidelines.

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Scope (Sector / BU) Function (Dept./Team) Responsibility Description Sustainability Board Group Sustainability Ownership

Create, publish and review the policy

Sector Product Design

and Procurement Implementation

Execute the policy and meet the targets Sector Sector Sustainability Exchange of Information and Support

Deploy the policy, provide advice as well as support to the

development and procurement functions with the implementation of the policy

Sector Purchasing Supplier

responsibility

At the request of Philips suppliers shall provide written evidence, such as certificates or declarations of conformity to demonstrate compliance to the risk assessment for responsible sourcing and requirements and targets included in this policy

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Terms and abbreviations

Term:

Abbreviation:

DfU Directions for Use PET Polyethylene terephthalate

FSC Forest Stewardship Council / Fair Wood PS Poly Styrene

PE Poly Ethylene PVC Polyvinyl Chloride

PEFC Programme for the Endorsement of Forest Certification

SFI Sustainable Forestry Initiative

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Description

4.1 Design criteria for paper, paper pulp, cardboard and wood packaging

Philips aims to achieve the highest feasible recycled content percentage in every region without compromising hygiene or other technical performance standards. More specifically, Philips sets the following criteria for recycled content of certain packaging materials as specified in Table 1:

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Table 1: Criteria of recycled paper, paper-pulp, cardboard and wood content in packaging for all products

Remarks:

1. Growth geographies are the developing geographies comprising of Asia Pacific (excluding Japan, South Korea, Australia and New Zealand), Latin America, Central & Eastern Europe, the Middle East (excluding Israel) and Africa;

2. Where the required recycled content is not feasible or recycled materials are not / limited available:

a. Materials from certified renewable sources (e.g. FSC, SFI, PEFC) shall be used (i.e. a box cannot meet the required technical specifications with the required recycled content; the box needs to be made of materials from certified renewable sources). If the recycled content is lower than the target, the remaining share needs to be sourced from a certified renewable source. In this case, a waiver is not required.

b. Bio-based materials (e.g. bamboo, sugarcane) may be used as alternative, provided these sources do not compete with food. No targets are set as the market for bio-based

materials differs widely per country.

3. Where the required recycled content is met, the remaining virgin materials are exempted from the requirement to be sourced from renewable certified sources.

4. Labeling packaging with FSC/SFI/PEFC logo is optional but is encouraged in particular if space is available, cost is acceptable, and it contributes to communicating our sustainability credentials towards our customers.

5. Where specific targets are included in the policy (e.g. for recycled content) they apply as an average percentage for the total volume of packaging material supplied per supplier.

Transport packaging Individual product packaging (incl. DfUs, warranty card, etc)

Jan 1, 2015 Jan 1, 2016 Jan 1, 2015 Jan 1, 2016

Production in Mature geographies >80% >80% >70% >80% Production in Growth geographies >80% >80% >50% >75%

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4.2 Design criteria for plastic packaging

Philips aims to achieve the highest feasible recycled plastics content in every region without compromising hygiene, or other technical performance standards. Alternatively, we encourage the use of bio-based plastics wherever technically and economically feasible. Philips sets the following criteria for recycled plastics content of certain packaging materials:

Table 2: Criteria for recycled plastic packaging content in all products:

Recycled content PET

Jan 1, 2015 Jan 1, 2016 Production in Mature geographies >25% >25%* Production in Growth geographies >10% >25%

* 2016 target mature geographies: > 25% with the ambition to introduce an increase target to >50% (will be decided in 2014) if the availability and transparency conditions are proven Remarks:

1. Growth geographies are the developing geographies comprising of Asia Pacific (excluding Japan, South Korea, Australia and New Zealand), Latin America, Central & Eastern Europe, the Middle East (excluding Israel) and Africa;

2. PVC in all packaging and EPS in packaging for consumer products are restricted in accordance with RSL.

3. Where no recycled plastics are available, it is encouraged to consider sourcing of bio-based materials (e.g. bio-based plastics), provided these sources do not compete with food. No targets are set as the market for bio-based materials differs widely per country.

4. Recycled content targets for other plastics, such as PE and PS, will be set in the future. 5. Where specific targets are included in the policy (e.g. for recycled content) they apply as an

average percentage for the total volume of packaging material supplied per supplier.

4.3 Design criteria for packaging of large installations

Large medical and lighting installations require packaging with specific technical and performance criteria. While the packaging of these installations adheres to the general objectives of this Policy, specific recycling targets cannot yet be defined due to limited availability of data. In 2014 baseline data will be collected for recycled paper, paper-pulp, cardboard and wood content in packaging of

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4.4 Exemptions

Exemptions can be obtained for individual products, products families or running technology platforms for safety, regulatory, technical or business critical reasons. A waiver procedure shall be available from Sector Sustainability.

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Attachments

Nr. Documents Title Version Location of archiving

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Document version history

Date Author Version Reasoning

27-09-13 T.B.L.W. Marinelli 1 Draft policy

15-03-14 T.B.L.W. Marinelli 2 Final Philips Packaging Material Policy

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Distribution

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