Client
Philips
Industry
Healthcare
Primary goal
Circular innovation framework
Make circularity count
While society has long been accustomed to ‘take-make-waste’ methods to production, many manufacturers and consumers alike have come to realize that these practices are no longer sustainable. To face the challenges of a growing world population, climate change and resource scarcity, it is increasingly evident that current methods of production and consumption must evolve away from the linear and towards a more circular approach.
Further to their ongoing commitment to responsible and sustainable innovations, Philips is reimagining and reinventing their existing products, supply chain and services to integrate circularity from strategy to execution and delivery.
Client transformation journey
- Before
- During
- After
Outdated measurement frameworks
Having first developed an innovative “circular revenue” metric in 2015, Philips recognized that its existing measurement frameworks needed a makeover to capture more meaningful and dynamic data to produce deeper insights and enhance circularity to reduce the environmental impact of the healthcare industry.
Philips set out to put in place more detailed and modern sustainability metrics, report on them transparently, and use the results to steer strategic decision-making — reinforcing the overall good this approach brings for business, for the planet, and for all.
Redefined circular revenue
Philips engaged KPMG in the Netherlands as a strategic sustainability advisor to help it update, expand, and future-proof the methodology for their existing circular revenue metric. The KPMG team helped develop an improved set of metrics centered on refining the company’s definition of circular revenue. The new framework was designed to align with global trends and developments, enabling Philips to measure change and steer circular innovation more effectively and thoroughly.
A pioneering approach
As part of its 2025 commitments, Philips annually measures and steers toward a target of generating 25% of its revenue — nearly €5 billion — from products and services that contribute to circularity. This is tracked through its circular revenue indicator, which was improved by KPMG. The revised methodology represents a pioneering approach to measuring circularity: bespoke to Philips, but with exciting potential applications for other organizations.
Embracing a more modern means to measure its progress meaningfully and accurately is helping them achieve their ambition: to help their customers ‘do more with less materials’.
How we make the difference for Philips
Collaboration is critical to the success of more circular ecosystems. The KPMG in the Netherlands team worked alongside the Philips sustainability team to define, shape and develop new and existing circular strategies and business models.
Contact us to learn more about how KPMG can collaborate with you to design and leverage circularity frameworks for your organization.
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