ESG & Emissions in Healthcare: Philipsâ 2024 Annual Report
Philips is at the very forefront of global health technology.
From ultrasound technology to toothbrushes, Philips is a provider and manufacturer of items that support diagnostics, treatment and personal health around the world.
Philips' 2024 annual report offers a detailed look at how the health technology giant continues to embed sustainability and ESG performance at the core of its operations.
Despite economic headwinds including declining demand in China and global supply chain pressures, the company has maintained its focus on long-term sustainability goals and responsible innovation.
"We want to help deliver better care for more people across the world," says CEO Roy Jakobs, underlining the company’s commitment to both healthcare innovation and environmental responsibility.
Emissions reduction and circular economy gains
One of the standout achievements in the report is Philips’ success in reducing emissions, particularly through partnerships that align with global sustainability goals.
A collaboration with Portugal’s Champalimaud Foundation achieved a 24% emissions reduction in diagnostic and interventional imaging equipment usage within its first year, cutting an estimated 40 tonnes of COâe.
This forms part of Philips’ broader ambition to halve the carbon footprint of its diagnostic operations by 2028.
Philips also made notable progress in its circular economy goals, with circular revenues—generated from products designed for reuse, refurbishment and recycling—now comprising 24% of total sales.
This achievement reflects a growing emphasis on reducing electronic waste and promoting sustainable consumption patterns, aligned with the UN’s Sustainable Development Goals.
Advances in sustainable healthcare technology
The company’s innovations in medical technology also highlight its environmental focus.
The next-generation BlueSeal helium-free MRI system, launched globally, eliminates the need for scarce helium resources while maintaining high-quality imaging.
According to the report, these systems are now installed in more than 1,500 locations worldwide, expanding access to sustainable healthcare solutions.
AI-driven technologies also feature prominently in Philips’ sustainability strategy.
The AI-enabled SmartSpeed MRI platform, for example, offers up to three times faster scans and reduces energy consumption while improving diagnostic accuracy.
These innovations not only support environmental goals but also address the pressing need for efficiency in overstretched healthcare systems.
ESG leadership and social responsibility
Philips’ ESG strategy extends beyond environmental performance.
In 2024, the company reported that it had improved 1.96 billion lives globally, including 242 million people in underserved communities.
This progress moves Philips closer to its goal of positively impacting 2.5 billion lives annually by 2030.
The company also secured recognition for its responsible supply chain initiatives, earning a finalist position in Fortune’s ‘Change the World’ rankings.
"Our supplier sustainability approach reflects our commitment to creating a responsible and transparent supply chain," explains Marnix van Ginneken, Chief ESG & Legal Officer at Philips.
Employee engagement also showed improvement, with an engagement index score of 78—an increase of five points compared to 2023.
This reflects ongoing efforts to foster a culture of safety, integrity and inclusion, with 83% of employees rating the company’s culture of patient safety favourably.
Financial resilience and sustainable growth
From a financial perspective, Philips reported sales of €18bn (US$19.5bn) with an adjusted EBITA margin of 11.5%.
The company’s free cash flow of €906m (US$948m) and an improved credit rating outlook demonstrate a balance between profitability and responsible business practices.
However, challenges persist.
Economic uncertainty, particularly in China, and regulatory hurdles following the Respironics recall continue to affect growth.
Nevertheless, Philips’ renewed focus on simplifying operations and regionalising its supply chain is expected to mitigate some of these risks going forward.
The ESG goals on the horizon for Philips
As Philips moves into 2025, the company remains committed to its three-year plan, with a continued focus on ESG priorities.
"We remain focused on successfully executing our three-year plan and are determined to build on our industry-leading innovations," Roy Jakobs says.
In the face of economic and regulatory challenges, Philipsâ 2024 annual report underscores the companyâs efforts to drive sustainability in the healthcare technology sector.
From cutting emissions to enhancing patient care through innovation, the company appears determined to maintain its leadership in both business performance and environmental responsibility.
âWe are focused on executing our plan, improving fundamentals and simplifying how we work â ensuring we are more competitive and agile, and delivering growth and margin expansion, with patient safety and quality as priority,â Marnix explains.
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