Philips eyes more money from green IT

The consumer electronics company wants its Green Products to contribute 30 percent of total revenues by 2012, up from its current 15 percent.

SINGAPORE--Royal Philips Electronics has pledged to double the investment in and yield from its green IT product development by 2012.

Rudy Provoost, executive vice president and CEO of Philips Consumer Electronics, said Wednesday the company will invest 1 billion euro (US$1.4 billion) over the next five years to develop its family of Green Products. The company spends some 3 billion euro (US$4.2 billion) in total on research and development, he said.

Philips is also aiming to increase its operational energy efficiencies by 25 percent in the next five years, across various areas such as lighting, production and distribution, Provoost added. All of the company's offices, for example, will be fitted with energy-efficient lighting structures by end-2008.

It is also targeting to increase sales from these products to 30 percent of Philips' overall revenues by 2012, Provoost said, noting that Green Products contributed 15 percent--or 4 billion euro (US$5.7 billion)--of the company's total revenues last year.

Built specifically to consume less energy, Philips Green Products are designed based on six primary components: energy consumption, packaging, hazardous substances, weight, recycling and lifetime reliability. Each will have to meet at least one of the six criteria before it can be tagged "green", and is measured against the nearest competing product in the market, Provoost explained.

For instance, the Philips Ambisound SoundBar Home Theatre System HTS8100 consumes 50 percent less energy than its closet competitor, while the 42-inch LCD Widescreen FlatTV with Pixel Plus 2 HD 42PFL7562D takes up 36 percent less energy and 15 percent less packaging material than the nearest competition, the company claimed.

Philips currently offers 200 Green Products, ranging from consumer electronics to medical equipment, and 50 percent of those introduced this year were created in its Singapore Innovation Campus, said Paul Peeters, CEO of Philips Electronics Singapore.

One of the company's largest research and development centers, the local campus employs over 1,300 development and design engineers, and builds over 1,000 new products a year, Peeters said. In addition, sales worth US$6.5 billion were from products developed in the Singapore facility, he said.

The campus has lined up another 28 Green Products to be unveiled next year, including televisions, video and multimedia equipment, he added.

According to Peeters, Philips' Singapore office has been doing is bit to reduce carbon emissions, having implemented several energy conservation projects since 2001 that yielded electricity savings of 570,000 kilowatt-hour (kWh) a year.

He added that the local office saved some S$650,000 (US$434,330) from adopting these energy conservation measures over the last six years, which included turning the air-conditioner down in the office building and encouraging its male employees not to wear ties so they can cope with working in a warmer room temperature.

Philips also has its eyes on Singapore's Green Mark certification, which it is aiming to obtain by mid-2008, Peeters said. Launched in January 2005, Green Mark is a rating system that evaluates buildings for their environmental impact and eco-friendly designs, based on criteria such as energy and water efficiencies and indoor environmental quality.