Signify is carbon neutral and uses 100% renewable electricity across its operations
The company recycles up to 90% of its manufacturing waste and generates 82.5% of its revenue from sustainable products.
As of 2019, 16% of Signify’s revenue was generated by circular activities
Light bulbs have undergone a number of transformations since the original ‘light bulb moment’ of 1847. In recent years, the technological innovations of LED (light emitting diode) and intelligent lighting have helped slash energy bills and carbon footprints of houses, streets and cities across the globe.
Lighting company Signify, formerly Philips lighting, is a world-leader in sustainable lighting innovation. Signify is 100 per cent carbon neutral, uses 100 per cent renewable electricity across its operations, recycles up to 90 per cent of its manufacturing waste and generates 82.5 per cent of its revenue from sustainable products.
Six years ago, Signify teamed up with the Ellen Macarthur Foundation and McKinsey to develop a business case for the circular economy. Since then, the company has implemented circular economics through it’s ‘Lighting as a Service’ program and modular lighting designs. Signify also recently committed phasing out single-use plastic packaging across their range of lighting products by the end of 2021.
We sat down with Signify’s Senior Director of Sustainability, Anton Brummelhuis, to chat about the company’s impressive environmental credentials and their circular economy journey.
Anton Brummelhuis heads up Signify’s sustainable innovation program in the Netherlands. He has been with the company for 33 years, starting in factory operations before moving onto lighting innovation. Now, he coordinates circular economy activities across the company. With a background in mechanics and business administration, Anton has an appreciation for both the engineering sense and the business sense of a circular economy approach.
“What I like about the combination of circular, which means closing the materials loop, and economy, which means to then do that in an economic viable way …. [is] the most economic value is not only in the outer loop — the recycling loop — but to work much more also on [inner loops] service concepts and business models and how you can preserve value into the system.” This approach serves the ‘triple bottom line’ by delivering environmental, social and economic benefits. “Our customers have benefits from this, we as a company, if we do it well, benefit from this. Basically, all stakeholders benefit from this, from an economic perspective. But also, of course, and that's the main purpose, the environmental benefits are very clear.”
Anton’s interest in sustainability was sparked at a young age, when he first noticed the volume of waste our societies produce. “When I was a kid we used to go on holidays to the shore and halfway there was a kind of landfill,” he recalls. “The Netherlands is a fairly flat country and I was amazed as a kid that each and every year when we passed by, this mountain became higher and higher. And at that time, this triggered me and I thought ‘This is not sustainable’.”
“Our purpose is to unlock the extraordinary potential of light for brighter lives and a better world,” Anton says. In recent years, this has meant tapping into the potential of intelligent lighting, the Internet of Things and ‘Li-Fi’ technology. “The latest insight in lighting is that light is also a vehicle to communicate,” Anton says. Signify also services agribusinesses, providing lighting solutions for horticulture, animal farming and fish farming. The company’s LED-lit vertical farms allow crops to be grown in the middle of cities, reducing the distance food needs to travel to get to consumers and the associated carbon emissions. Signify’s circular economy journey began 11 years ago, when they first started to look at the recyclability of their products. A few years after that the company partnered with the Ellen MacArthur Foundation and McKinsey to develop a circular economy business case.
“Our company strategists, together with people from McKinsey and the Ellen MacArthur Foundation made the business case for Philips Lighting, now Signify. And that was a profitable business case,” Anton says. “And at that time, we were happy that we could combine the environmental benefits with economic benefits. And that was basically the starting point for us to start to become very active in the circular economy.”
This business case identified four drivers that would facilitate the company’s transition to circularity: design, collaboration, logistics and business models. “Innovation in design is key,” Anton says. Collaboration plays an equally important role. “There is no company, no one country who can make the transition all by themselves, you have to rely upon networks.” Logistics is concerned with closing the materials loop and business models if focused on those ‘inner loops’ of the circular economy — reuse, redesign and service models. Together, these four drivers have helped Signify become a more circular business. In 2019, 16 per cent of Signify’s revenue was generated by circular activities. As part of its new ‘Brighter Lives, Better World’ strategy, the company has set the goal of doubling this to 32 per cent by 2025.
The linear economy is so hardwired and it's such an efficient economic model, to change that is a hurdle in itself. And it's not a simple change where you only change one or two elements, it's a systemic change.
At the beginning of their circularity journey, Signify chose to focus on two ‘proof points’ to prove that the circular model worked: circular design and product as a service. “I think that one of the most influential enablers is design. So we have put quite an emphasis on optimising our design rules using circular thinking,” Anton says. “We’ve changed the milestones/deliverables during product development in such a way and that [products] needed to tick some boxes with respect to circularity,” he continues. “One of them is, for instance, that our luminaires needs to become modular.” Most LED lights are designed to be ‘sealed for life’, meaning they cannot be disassembled. Redesigning these products to be modular was a major design challenge for Signify. The company partnered with engineers to develop modular designs.
Signify then combined this modular design with a product as a service model through it’s ‘Lighting as a Service’ program. This means that the company is able to maintain lighting units over time by swapping out broken parts of lights rather than replacing them entirely. “Instead of throwing away the whole luminaire the luminaire stays relevant for the user and you can adjust the luminaire to the needs and emerging needs of your customer,” Anton explains. Signify is the first lighting company that brought a light as a service program to the market. In order to implement this change, Signify once again followed those four key drivers: “We had to design our products in a different way. We had to collaborate. We had to organise first the logistics and [create] a new business model. And also, work on an innovation roadmap for products, so that more products became more circular. We [also] created circular design rules and worked with universities”.
Going circular isn’t just about changing product design or processes, it’s also about changing mindsets. “The linear economy is so hardwired and it's such an efficient economic model, to change that is a hurdle in itself,” Anton explains. “And it's not a simple change where you only change one or two elements, it's a systemic change.” In an effort to shift the way their employees think, Signify runs regular sustainability engagement sessions with its staff. These set challenges such as: live without waste for a week, live without plastics, make your commute CO2 free and so on. “This triggers the mindsets,” Anton explains. “And you can start at your own company with getting rid of waste.”
So far, Signify’s pilot programs have delivered significant social, environmental and economic benefits for the company. Modular design and service models produce less waste, preserve value and can be locally tailored to meet the needs of customers and communities. “One of the social benefits was that a circular economy brings more local-for-local opportunities,” Anton says. “If you move from selling box sets to circular lighting and the light as a service concept, then at a certain point you also need local labour and to do those services.” Another example is Signify’s 3D printing service, which prints lights on demand locally. In addition to providing employment opportunities in the community, these services reduce the footprint of Signify’s products by reducing the distance they need to travel to reach consumers. These initiatives make economic sense and generate customer interest. This is the triple-bottom line at work.
On top of all those benefits, circular approaches are also forward-looking. “Our solutions we bring to the market are much more future proof,” Anton says.
“Just get started … This is a trend which will not stop so all investments and activities you do towards a circular economy, you will benefit for the rest of your life as a company. And that makes it a very attractive concept.”
If you or your company want to learn more about Signify’s circular economy journey, the company has kindly offered to share their experience, knowledge and learnings. You can get in contact with them here.