Circularity made to measure

About the case

Health technology giant Philips is setting its sights on a healthier future for the planet. To reduce the environmental impact of the healthcare industry, the company has ambitious plans for making its activities more circular – and measuring its progress meaningfully and accurately is key to staying on track.

Having first developed an innovative “circular revenue” metric back in 2015, Philips realized that its existing measurement frameworks needed a makeover. For that, the company needed a strategic sparring partner to help it update, expand, and futureproof a new methodology. With significant experience and deep expertise in circularity consultancy and strategy, as well as a fruitful pre-existing relationship with Philips, KPMG was the natural first choice.

Recognizing that what’s good for the planet is good for business, we worked together to develop an improved set of metrics centered on refining the company’s definition of circular revenue. The new framework is aligned with global trends and developments, enabling Philips to measure change and steer circular innovation more effectively. Helena de Boer, now Manager ESG Strategy at KPMG, reflects on her unique role in a pioneering project.

“I’m always looking for ways to bridge the gap between sustainable solutions and behavioral change.”

In conversation with Helena

When did you first become involved with this project?

I’ve been part of the ESG Advisory team for two years now, working on strategic projects across decarbonization and circularity – but my involvement with Philips was a bit outside the ordinary. I didn’t actually work on the project itself, but when it was wrapping up in 2023, the project manager approached me to ask whether I’d like to write a thought leadership report about it, together with the client. A chance to combine my interest in sustainability with my love of writing? It was a no-brainer! I was able to learn more about a landmark circularity project, and it reminded me how much I enjoy this kind of communication. In fact, last year I completed a master’s in journalism, alongside my full-time job, inspired by my work on the thought leadership piece.

What made the Philips case a good candidate for a report like this?

Philips has long been recognized as a leader in sustainability, with circularity a key pillar of its approach. Through this project, KPMG helped the client take another pioneering step forward. No other company was measuring circularity in quite the same way; after all, CO₂ emissions are straightforward to measure, but circularity is much more difficult. It’s not just about the amount of waste generated, but also the products made, the materials used, product lifetimes, recyclability, and many other factors. We worked with Philips to set up a better way of measuring how much of its product offering, as measured by revenue, contributes to the circular economy. The revised methodology represents a pioneering approach to measuring circularity: bespoke to Philips, but with exciting potential applications for other organizations.

So why thought leadership?

Thought leadership might not be the top priority in our client work, but when we deliver outcomes with positive environmental impacts for society, I think it’s important to showcase what we accomplished, how we approached it, and why it matters – and to inspire other companies to make the leap. Especially in the ESG domain, where KPMG has been active for decades, we believe we have a responsibility to make our voice heard.

Philips was also keen to share its story, as one that other organizations can learn from. Our goal was to shine a spotlight on what we achieved together and to inspire others to take similar steps. After all, if companies put in place more meaningful sustainability metrics, report on them transparently, and use the results to steer strategic decision-making, it’s good for business, for the planet, and for all of us!