Signify slashes greenhouse gas emissions

One thing that can get lost in news of sales and earnings declines at Signify is the considerable environmental work at the company. To help put its progress in full view, the lighting giant strutted its environmental plumage again this week, drawing attention to emission reductions.

The Dutch company announced that it has “halved its greenhouse gas (GHG) emissions since 2019.” It also stated that it cut emissions by 22% in 2023 compared to 2022. And it reiterated, as it has in the past, that it is reducing emissions at a rate faster than stipulated by the 2015 Paris Agreement — the United Nations accord aiming to limit the increase in global average temperature to well below 2°C above pre-industrial levels, and aspiring to 1.5°C.

In a new twist to its environmental reporting, Eindhoven-based Signify this year included what’s known as “Scope 3” emissions. Scope 3, as defined by a measuring stick known as the Greenhouse Gas Protocol (GHG Protocol)* are emissions that are less directly related to a company’s production. Scope 3 sizes up the value chain, including suppliers, end use of products, business travel, waste disposal, and other factors. By comparison, Scope 1 relates to fuel combustion such as at factories and in vehicles, and Scope 2 pertains to the source of electricity and gas that a company procures.

While adding Scope 3 to its environmental accounting this year, Signify limited itself to the end-user portion of the equation. Given that LED luminaires and lamps are known for their energy efficiency, it’s no surprise that Scope 3 performed well. Whereas the Paris Agreement targets 30% reduction in Scope 3 by 2030 compared to a 2015 baseline for a 1.5°C reduction, Signify reported it has already hit a 61% reduction, according to details in its annual report, published this week. 

Reasonable assurance 

Backing that up, auditors Ernst & Young Accountants LLP provided a “reasonable assurance” of Signify’s Scope 3 take, with the caveat, as noted in the annual report that “due to the complexity of calculating Scope 3 emissions for Signify’s wide range and diverse lighting products portfolio (with different estimated wattage and life time), there is a risk that the disclosed number of Scope 3 CO2e emissions is incorrect.”

Signify CEO Eric Rondolat has made climate sustainability a priority via his "Brighter Lives, Better World" initiative as he often notes, such as during the company’s latest quarterly financial results. This week’s announcement kept the theme very much alive.

“Achieving reasonable assurance for our GHG emissions across the full value chain, including Scope 3, is an unprecedented milestone for a multinational manufacturing company like Signify, with tens of thousands of products in our portfolio,” Rondolat said. “With accurate emissions data at the product level, we are driving transparency of our environmental impact and enabling customers to make informed decisions that support their sustainability objectives. I’m deeply proud of the dedication and innovation from across the company as we continue to lead the radical transition of our industry to energy-efficient and connected LED lighting technologies.”

He did not say when Signify might include the supplier side in future Scope 3 accounting, although Signify is working closely with suppliers, encouraging them to commit to Science-Based Targets initiatives. SBTi is a nonprofit, London-based group backed by four climate organizations. It works with companies to measure the climate situation, devise improvement programs, and assess the results. 

“We increased the number of suppliers committed to the Science-Based Targets initiative to 110,” Signify stated in its annual report. The number was 103 in 2022. Signify’s SBTi efforts include two Chinese suppliers that have, under the company’s encouragement, signed up to SBTi, the report noted.

Renewables, plus carbon credits

For Scopes 1 and 2, Signify noted in its 2023 annual report that it has reduced emissions by 58% compared to 2015 baseline levels, which it said is ahead of pace to hit the Paris Agreement’s target of 70% by 2030 in a 1.5° scenario.

Signify claims to use 100% renewable electricity at its facilities. That includes China, a spokesperson told LEDs Magazine. China generated 63% of its electricity with coal and 3.1% with natural gas in 2021, according to the latest figures from the Paris-based International Energy Agency. Signify is ahead of the curve there.

Globally, the company is also “gradually transitioning away from using fossil fuels in manufacturing,” the spokesperson said. 

“Ultimately Scope 3 emissions account for the majority of our total carbon footprint so, along with the renewable energy transition, this is where we have to and have been focusing much of our efforts,” she noted.

Signify’s emissions accounting includes the purchase of carbon credits, the company said in its annual report.

Meanwhile, general cost cutting continues across the company, with factory closures anticipated to go along with one announced recently in San Marcos, Texas.

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