Signify aces its own environmental test

As Signify cuts costs through measures including layoffs and factory closures, one area where it continues to spend is sustainability, leading to positive results in the company’s environmental and social wellbeing program.

A strong advocate of green-minded business, CEO Eric Rondolat recently gave another upbeat account of that initiative, called "Brighter Lives, Better World 2025." The five-year plan began in 2020, with ambitious goals across categories including reducing carbon in its own operations, selling more “circular” products, and selling more products that support human health.

“We completed the third year of our Brighter Lives, Better World 2025 sustainability program and made continued progress towards achieving our goals of doubling our positive impact on the environment and society by the end of 2025,” Rondolat told analysts on a call to discuss fourth-quarter and year-end financial results. For the quarter ending Dec. 31, Signify sales fell 12.3% on a nominal basis to €1.73 billion for the quarter, as net income dropped 31.5% to €59 million, but gross margins improved amid various cost measures.

Signify has already exceeded its 2025 goal for revenues from circular products, as 33% of revenue in 2023 came from that category.

Signify claims to be already “carbon neutral” in its operations, through measures underpinned by the use of renewable electricity. Brighter Lives, Better World includes a target of reducing emissions over the company’s value chain by 40% by 2025, compared to a 2019 baseline. On that score, Rondolat reported that the company is “on track.”

Outpacing that progress: The company has already exceeded its 2025 goal for revenues from circular products, as 33% of revenue in 2023 came from that category, surpassing the 32% goal. The 2019 baseline was 16%. Signify defines circular goods as “products that can be reprinted, refurbished, reused, or recycled.”

Circular products include luminaires that Signify makes using 3D printing, often with recovered materials. 

During the fourth-quarter call, Rondolat highlighted several circular products that are either new or under development, such as the Generation Flex luminaire prototype, a 3D printed office luminaire that recently won a U.S. Department of Energy L-Prize Prototype award, which recognizes LED luminaire performance, sustainability, accessibility, and longevity. 

In a second example from the commercial lighting division, he noted that Signify is developing a streetlight in its classic Copenhagen line that will be made with what he called a "bio-polyethylene."

“The material does not compromise on either durability, appearance, nor functionality; yet it reduces the carbon footprint by more than half compared to the old aluminum fitting,” Rondolat said. LEDs Magazine has asked Signify whether it will use 3D printing to make the streetlight.

Rondolat also drew attention to a new, 3D printed pendant light for home use — the Spring Oasis — made with materials from what Signify describes as “used water jugs.” 

In a separate Brighter Lives, Better World category dedicated to human health and wellness, Signify has nearly reached its 2025 goal of a 32% contribution to overall revenue. The category came in at 31%, compared to a 16% 2019 baseline. It includes lighting products that help nurture and sustain food growth, foster human health by supporting circadian cycles, and make environments safer. The growth came despite a big 2023 slowdown in horticultural lighting, which could now be abating.

One category where Signify is trailing its target is “Women in Leadership Positions,” as the 2023 number came in at 29%, up from the 2019 baseline of 17%, but off pace a 2025 target of 34%.

“We are continuing our actions to increase representation through focused hiring practices for diversity across all levels and through retention and engagement action to reduce attrition,” Rondolat told analysts.

The sustainability and governance improvements come as Signify undertakes jobs cuts including a reduction of 1,000 positions in the central management organization. It is also closing some factories, including its San Marcos, Texas facility where it makes indoor and outdoor luminaires in its multi-brand Genlyte Solutions portfolio which includes Lightolier, Day-Brite, Ledalite, Lumec, Hadco, Gardco, Stonco, Chloride, and Alkco. It is moving production to two other factories — one in Camargo, Mexico and the other in Littlestown, Penn.

The company is expected to announce further closures this year.

Signify has become a mainstay on the Dow Jones Sustainability World Index of companies with top ranked sustainability practices, and recently announced its recognition for leadership in climate action by environmental nonprofit CDP (see sidebar "Signify gets an 'A' for ESG efforts").