HR1-3: Procurement practices

The proportion of procurement from low-cost countries increased from 30% in 2004 to approximately 56% in 2010 and is expected to reach approximately 70% in a couple of years.

Human rights screening among suppliers

In total, 328 audits were performed among suppliers this year, 271 by Group sustainability auditors and 57 by third-party assurers.

Audit findings conducted during 2010 indicate that health and safety and working hour issues continue to be prevalent. Since Electrolux now has stricter environmental requirements in its guidelines and monitoring, environment has additionally become the third largest area of non-compliance.

Follow-up audits were also carried out at 16 suppliers in Europe, 23 suppliers in Latin America and 17 suppliers in Asia/Pacific. Initial audits of the same suppliers were completed in 2009 and 2010. As in 2009, the outcome of the audits indicates considerable improvement by most suppliers, yet insufficient improvement by a few. Other activities, such as training and practical consultation, are necessary to support further improvements among these suppliers.

The Responsible Sourcing Program has been a forerunner in applying a ‘beyond compliance’ approach, by providing supplier training, through the Workplace Standard and by developing projects for specific, strategic suppliers.