Royal Philips (NYSE: PHG, AEX: PHIA) , a leader in health technology, today announced that it has signed an agreement with a consortium of sixteen banks for a new EUR 1 billion Revolving Credit Facility with an interest rate that will be dependent on the company’s year-on-year sustainability performance improvement. This innovative construction was created by Philips in collaboration with ING as the Sustainability Coordinator of the facility, and supported by the banks in the consortium, comprising ABN AMRO, Bank of America Merrill Lynch, BNP Paribas, Citi, Deutsche Bank, Goldman Sachs, HSBC, ICBC, ING, JPMorgan, Mizuho Bank, Morgan Stanley, MUFG, Rabobank, Société Générale and UBS.
Philips’ current sustainability performance has been assessed by Sustainalytics, an independent provider of environmental, social and corporate governance research and ratings. The resulting score will be used as the benchmark against which performance improvements will be assessed.
“I am pleased that following the launch of our ambitious ‘Healthy people, sustainable planet’ program last year, we are now able to link the interest rate structure of our new Revolving Credit Facility to our sustainability performance,” said Abhijit Bhattacharya, CFO of Royal Philips. “This underlines our commitment to sustainability as an integral part of how we do business.”
As an industry leader in sustainability working towards the UN Sustainable Development Goals, Philips aims to improve the lives of 3 billion people a year by 2025 [1]. As part of its 5-year sustainability program, ‘Healthy people, sustainable planet’, Philips is committed to becoming carbon neutral in its operations, to grow its Green Revenues to 70% of sales [2], and to have 15% of its revenues generated through circular economy-driven propositions [3] by 2020. More information on Philips’ sustainability performance can be found in Philips’ 2016 Annual Report.
Philips has the EUR 1 billion committed Revolving Credit Facility, which has a maturity date of April 21, 2022, for general corporate purposes. It substitutes Philips’ current EUR 1.8 billion facility [4].
[1] Market intelligence and statistical data are used for the number of people touched by our solutions that contribute to a healthy life or a sustainable planet. The average time these solutions are used is then multiplied by the number of solutions delivered in a year. After elimination of double counts, this results in the number of lives improved.
[2] Green Revenues are revenues generated through products or solutions that offer a significant environmental improvement in one or more Green Focal Areas: Energy efficiency, Packaging, Hazardous substances, Weight, Circularity and Lifetime reliability. The lifecycle approach is used to determine a product’s overall environmental improvement. It calculates the environmental impact of a product over its total life cycle (raw materials, manufacturing, product use and disposal).
[3] Circular Revenues are revenues generated through products and solutions that meet specific Circular Economy requirements, for example by containing at least 30% recycled plastics (Personal Health), where Philips remains the owner, or where the product has been refurbished.
[4] Philips has never drawn on the EUR 1.8 billion Revolving Credit Facility
