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"Responsible sourcing of minerals
Philips’ commitment to sustainable development requires us to address issues in the extractives sector, even though Philips does not directly source minerals from mines. Before reaching Philips’ direct suppliers, in general, minerals will go from mines to traders, exporters, smelters or refiners (collectively referred to in this report as smelters), alloy producers and component manufacturers, and sometimes intermediate suppliers. Nevertheless, Philips recognizes the need to systematically address all extractives related issues worldwide, e.g. human rights abuses incl. forced-, bonded-, and child labor while making sure not to create de facto embargoes by enabling responsible sourcing in the affected regions.
Each year, Philips investigates its supply chain to identify smelters of cobalt, tin, tantalum, tungsten, and gold in its supply chain and we have committed to not purchasing raw materials, subassemblies, or supplies found to contain conflict minerals. Philips applies collective cross-industry leverage through active engagement via the Responsible Minerals Initiative (RMI). RMI identifies smelters that can
demonstrate through an independent third-party audit that the minerals they procure are conflict-free. In 2022, Philips continued to actively direct its supply chain towards these smelters. The data on which certain statements in this report are based were obtained through Philips’ membership in the RMI, using the RMI Reasonable Country of Origin Inquiry report. In addition, Philips uses the tools and supports the initiatives developed by the RMI, especially the Conflict Minerals Reporting Template (CMRT) and Responsible Minerals Assurance Process (RMAP).
The Philips Conflict Minerals due diligence framework, measures and outcomes are described in the Conflict Minerals Report that we file annually to the U.S. Securities and Exchange Commission (SEC). The conflict minerals report is also publicly available on Philips’ website.
Since 2020, Philips expanded the scope of its due diligence program to include cobalt as a new material. We use cobalt predominantly in lithium-ion batteries. As part of this expansion, we engaged suppliers that provide materials containing cobalt. in 2021 and 2022, we reached a 100% response rate. In addition, we performed smelter outreach on several occasions. Where appropriate, we worked with direct suppliers to facilitate alternative sourcing.
From our participation in the Dutch Responsible Gold Agreement, Philips co-developed a project with several other parties including civil society actors to facilitate sourcing of responsible gold from Uganda. The project aims to reduce and prevent child labor, increase economic prosperity with improved mining equipment, and provide miners with sustainable access to international markets. The project was completed in February 2022."