Signify NV, the Dutch world leader in lighting, formerly part of Royal Philips, is a long-time discloser to CDP and a Reporter Services and Supply Chain member. As Robbert Slooten, Global Sustainability Program Manager explains, this is because CDP disclosure and scoring helps Signify cement its reputation as a sustainability leader, which in turn gives it a competitive edge in the market.
Signify has sustainability at the core of its purpose. For them it’s not only about playing their part on the environment; it’s about securing an edge in a competitive marketplace.
Signify earned a place on the CDP A List for climate change in 2018. That same year the company gained approval for its climate target from the Science Based Targets initiative, meaning it is future-proofing growth by reducing emissions in line with climate science. As well as disclosing its own environmental performance, the company is demanding that same transparency from its suppliers.
Robbert Slooten explains: “I consider there to be three key aspects to competitiveness: resilience, sales and investment.”
“Firstly, there’s resilience. That’s why Signify invests so much in sustainability, it’s about the future resilience of the business. CDP provides a very useful framework.”
“Secondly, in terms of sales, the environment is increasingly a topic of relevance in tenders, so having third-party evidence of our sustainability credentials via CDP is really valuable.”
“Thirdly, in terms of investment,” says Slooten, “one of our biggest shareholders explicitly told us and our CEO that they invest in our company because of our sustainability performance.”
For corporate sustainability actions to have real weight, companies need to be transparent and accountable to their stakeholders. Slooten says using the CDP disclosure framework makes the right information accessible to the right people.
“CDP has developed a very comprehensive questionnaire that covers all the key environmental topics. People looking for that information will know to find this data through CDP, rather than going through individual company reports.”
Signify’s high CDP score helps cement its reputation as a sustainable company and therefore boosts its standing among both investors and customers, says Slooten.
“CDP provides not only a disclosure platform but also a well-established rating mechanism. Being able to say we are on the A List is well-recognised. It shows we have a complete and well performing sustainability program, so we use our CDP score in external communications and investor presentations, and we get recognition for that.”
Staying ahead of the curve
Investors are a key audience for Signify’s annual disclosure, but they’re not the only ones using the data. Slooten uses CDP’s benchmarking service and downloads full responses to keep an eye on what competitors and peers are disclosing.
“I use the CDP disclosures of other companies as a way of assessing best practice. For example, when I’m working on an area like TCFD, renewable energy or supply chain engagement, I look at what competitors or companies on the A List write in their CDP response, checking those specific questions,” explains Slooten.
“We have used this to engage with our own suppliers. And it’s also useful for driving best practice in climate risk management, to ensure Signify has covered all potential risks.”
Lastly, CDP disclosure helps Signify track its sustainability progress.
“Disclosure helps us highlight the potential gaps in our own programs”, says Slooten. “CDP provides good insights into what the relevant topics are; this provides a kind of checklist, along with the scoring methodology which indicates best practice.”
For example, in the renewable energy section of the CDP climate change questionnaire, leadership points are awarded on share of renewable energy overall, not just electricity.
Slooten says, “Procurement of renewable electricity is light years ahead of other energy, but CDP is holding us accountable for our whole energy footprint. We consume quite a bit of gas but it’s not renewable, so we have to consider how we will address that.”
Another area is financial impacts, adds Slooten. “We always used to define the risks and opportunities we face from climate change qualitatively, but we hadn’t quantified it in financial terms until the CDP questionnaire.”
“Putting a euro number on it gets it on the leadership radar. If we can say something is a €100 million sales opportunity that’s going to get the attention of senior leaders in the business.”
It’s clear that for Signify, environmental action and transparency helps the company stand out as a market leader.