Over the past year at Electrolux, we have focused on putting the consumer experience at the forefront of our strategy. This is having a profound impact on the way we do business and interact with consumers, as well as on how we approach sustainability.
With over 60 million home appliances sold annually, we’ve long recognized the significant impact we have on the environment and in society. Our sustainability strategy has primarily been based on a strong commitment to developing resource-efficient products and solutions that are manufactured in a sustainable and ethical manner. Our vision is to be the best appliance company in the world, as measured by our customers, employees and shareholders. Last year, we added the planet as our fourth and very important stakeholder
Consequently, we want to take Electrolux’s sustainability leadership to the next level. Significant global challenges lie ahead, notably climate change, and there will be continued high expectations on Electrolux and the industry to live up to increasing demands.
Equally important is the lifelong relationship we are building with consumers through digitalization. Not too long ago, our main touchpoint with consumers post purchase was if a product broke down. Now, if we want to maintain consumer relationships, we must be perceived as a sustainable partner throughout the ownership journey.
For these reasons, we see sustainability as one of three key transformation drivers that will support our strategy to create best-in-class consumer experiences. We know from various surveys that sustainability matters a great deal to consumers, but that they don’t necessarily think about it every day. It’s important that Electrolux provides a set of products and services that offer people an easier and more enjoyable life, while minimizing the impact on the planet.
The way we do this is expressed through Electrolux’s sustainability framework – For the Better – which was launched in early 2016 and comprises of three areas: Better Solutions, Better Operations and Better Society. With a total of nine promises to make a positive difference, and a commitment to halve our carbon emissions, we’re taking a comprehensive approach to sustainability with concrete goals and measurable targets that ensure we get things done.
It’s especially encouraging to see how we are expanding our efforts in the area of Better Society. Last year we decided to focus our social initiatives on sustainability issues related to food through the launch of the Electrolux Food Foundation, which funds local investments around the world. This new focus is crucial for us to live up to our commitment to be a responsible corporate citizen, in an area that matters to our employees as well as to our consumers.
There is also a great deal to be said for taking a broader perspective on the effect our products have on society. This is easy to take for granted in developed countries today, but let’s not forget for instance the enormous and positive impact the washing machine has had in enabling mothers (mostly) free up time to educate themselves and their children.
This was not least the personal experience of Professor Hans Rosling. Many of us at Electrolux were deeply saddened to hear of his recent passing, especially as we had the pleasure of welcoming him for inspirational leadership meetings here a couple of years ago. Professor Rosling pointed out to us, as he has done many times before and since, that this basic societal transformation is still happening in
many parts of the world. Therefore, making our most energy efficient and sustainable products available to more people around the world is an area we want to improve on in the longer term.
Electrolux also has an opportunity to further develop this fundamental contribution to sustainability. Imagine the positive impact we can have through products that reduce food waste, make it easier to cook healthier meals, maintain garments for longer, and purify the air in consumers’ homes. A fridge that preserves your lettuce and meat for longer is as important from a sustainability perspective as one that uses less energy. We can certainly improve how we communicate such information to consumers – with digitalization and connectivity making a real difference. Looking ahead and considering the political environment in which we operate, there are growing challenges to some of the major enablers for continued global growth. It’s imperative that governments recognize free trade as a positive opportunity to create economic value, and that the world continues on the path agreed in Paris to jointly address climate change. We believe we can contribute to Agenda 2030 and the Sustainable Development Goals (SDGs) as part of our efforts.
As a company with strong fundamental values, and as a signatory of the UN Global Compact, we will also continue to support the development of a global agenda for human rights.
Stockholm, February 2017
Jonas Samuelson
President and Chief Executive Officer
Henrik Sundström, VP Sustainability Affairs, shares some of this year’s highlights and explains how Electrolux will continue to drive sustainability in 2017.
What were the main highlights of the year?
I am happy to say that there have been quite a few! Sustainability is an area where the bar is constantly being raised. We made very good progress during the year, even as stakeholder expectations continued to grow. We have taken on more aspects of sustainability, launched new targets for 2020, and developed our methods, systems and tools. These efforts have strengthened our sustainability work and our follow-up processes.
‘For the Better’ is the way Electrolux has decided to define its sustainability framework. It is based on the conviction that sustainability is made up of several themes rather than a single area. In a similar way, the United Nations has defined the Sustainable Development Goals (SDGs) for 2030. They were established following the largest multiple stakeholder consultation process of its kind, which probably represents the most extensive global stakeholder input to date. It is reassuring to find that there are many overlaps with the SDGs our work, and Goal 12 - ‘Responsible consumption and production’ is the most relevant to Electrolux.
In many respects, 2016 was our year of social responsibility. We developed an agenda for human rights, which involved defining our salient issues, and piloting a method for human rights impact assessments. The next steps will be to conduct several local assessments and to develop processes to manage our salient issues.
We defined an agenda for our ‘Be a force for good’ promise, which relates to community engagement and social investment. Establishing the Electrolux Food Foundation was also a major milestone. As around 70% of our business is related to food, we firmly believe we have a role in contributing to the global challenges of hunger, poor nutrition, responsible consumption and food waste.
At the same time, our colleagues made it clear that they feel strongly about social issues and want to contribute.
Speaking of commitment – during the year, we held two crowdsourcing events where Electrolux employees and customers developed many fantastic ideas to help people enjoy great-tasting, healthy and sustainable food.
We also took several steps to improve material and energy efficiency, including a target to use 50% renewable energy by 2020. This is part of our commitment to set science-based climate change targets for 2025. In 2016, our total greenhouse gas emissions per unit manufactured was half that of in 2005.
Climate change and circular economy were on the agenda at the OECD Environment Meetings at Ministerial level in Paris in September. We were invited to give the industry perspective and emphasized the importance of a life-cycle perspective. While a circular approach is important for resource efficiency we must continue to focus on efficiency during the use phase of products.
Finally, I am thrilled to say that Electrolux was named Industry Leader of the Household Durables category in the Dow Jones Sustainability World Index, for the tenth consecutive year. Also, CDP identified Electrolux as a global leader in responding to climate change.
How will you continue to drive the agenda in 2017?
Our focus is clear – we will continue to integrate sustainability into our operations, develop and define areas where targets and KPIs that have not yet been implemented , and explore ways of quantifying our value creation for society.
Our work to integrate sustainability further will focus on moving ownership and decision-making processes even closer to our operations, especially when it comes to chemicals, greenhouse gas emissions and human rights.
What challenges and barriers is Electrolux faced with?
Overcoming challenges and developing Electrolux is part of what makes our work exciting and rewarding.
First, consumer demand for more energy efficient appliances has stagnated in some regions, because of the economic slowdown and other external factors. For example, in Brazil, which is our second largest market, there is a need for an update of the energy labeling system to drive demand. We’re also seeing relatively slower growth for efficient products in North America. Higher consumer demand for efficient appliances requires stronger focus from manufacturers and support from other actors, such as legal bodies, retailers and NGOs.
Secondly, working with many suppliers involves various challenges. Together with our suppliers, we have made significant progress in recent areas, including improvements in working conditions and environmental management. However, maintaining these improved practices remains a challenge. An insight after working with suppliers for many years is that we need to make them understand the importance of good environmental, social and ethical performance as part of a long-term business relationship.
I believe that looking at Electrolux and the world we operate in through a ‘sustainability lens’ helps us to further develop our company, our offering, and our stakeholder relations. I look forward to another year of raising the bar and improving performance.