SO2-8: Anticorruption and public policy

As an important step in building a strong corporate culture, Electrolux initiated the roll-out of a global Ethics Program in 2011. The program encompasses both ethics training for employees and the implementation of a whistle-blowing system – the Electrolux Ethics Helpline.

Anticorruption

The Ethics at Electrolux program was introduced in Latin America during 2011. In 2012 it continued its rollout in seven European countries, representing major Electrolux markets. The objective is to cover remaining regions in 2013.

By year-end 2012, approximately 75% of Group employees had access to whistle-blowing systems, either through the Ethics Helpline or through a separate alert line that has been in place in North America since 2005. Electrolux intends to integrate North America into the Helpline during 2013.

Through the Ethics Helpline, employees can report suspected misconduct in local languages, either through a call center or via a web portal. In most cases, reporters have the option to submit complaints anonymously. In a few countries however, local legislation requires reporter identification.

The helpline is hosted by an external provider, who submits reports to a group of designated representatives from Group Sustainability Affairs, Human Resources, Legal and the internal auditing functions. After an initial review, the issue is investigated further by personnel trained to uphold principles of confidentially, independence and efficiency.

Reports that are substantiated will be mitigated and may lead to the following actions:

  • Corrective action – training in Group policies, or adjustments in internal procedures
  • Disciplinary action – verbal/written warning, probation, change of role
  • Termination of employment

In 2012, approximately 140 reports were recorded through whistle-blowing systems. Of these, approximately 125 were investigated further and 15 were deemed beyond the scope of the whistle-blowing system. The vast majority of reports relate to discrimination and harassment, such as use of abusive language or similarly disrespectful behavior. Confirmed misconduct has generally resulted in warnings and retraining.

The Ethics Program, including the Ethics Helpline, is an important tool to build and maintain the corporate culture of ethics and integrity, diversity and respect for one another. In addition, the program has operational benefits as well. By identifying misconduct where it occurs and ensuring it is appropriately addressed, the Group is reducing and avoiding indirect costs stemming from interpersonal conflicts, potential absence from work and even loss of talent.

Fair competition

A new Antitrust Policy and guidelines were launched during the year and the Group’s Corruption and Bribery Policy and guidelines were re-launched. In 2012–2013, these are being supported by in-person training on antitrust and anticorruption for approximately 2,000 specially selected employees representing all regions in functions such as sales, marketing and procurement. Additionally, Electrolux in North America offers training on various policies in regards to compliance to related US legislation.

Public policy

Electrolux has adopted formal policy positions at Group level on core strategic issues such as supporting market incentives that trigger change in consumer purchasing. Public policy initiatives are primarily conducted through industry organizations such as the European Appliance Industry Association (CECED) and the American Home Appliance Manufacturers Association (AHAM).

Public policy issues relevant to Electrolux include:

  • Climate change, energy efficiency and resource efficiency,
  • Producer responsibility for recycling and collection of waste,
  • Product labeling and eco-design,
  • Phase-out of potentially hazardous substances

Performance standards and legislation vary between regions of the world; a challenge for companies active in many markets. Electrolux therefore supports global harmonization of standards and legislation.

Electrolux in Australia is also working closely with the government on new MEPS (Minimum Efficiency Performance Standards) for 2015; which require efficiency improvements of 20–30%.

The Group strives to align its public policy work - including membership in industry organizations - with its sustainability aims. Overall, the Group’s lobbying and other public positions as well as the policies of Electrolux, are in line with the Group’s sustainability goals.

Policy work in Europe

Electrolux continuously engages with legislators, parliamentarians and EU offices in regards to the issues mentioned above. Group activities are registered through the EU’s voluntary transparency register, managed by the EU Commission, confirming that Electrolux European Affairs has a staff of four work and annually invests SEK 3.6m (EUR 400,000) in public policy activities.

Legislation of key relevance includes:

  • The WEEE Directive
  • The RoHS Directive
  • Energy labels for household appliances
  • REACH regulation
  • Smart grids and appliances
  • F-gas regulation
  • Resource-efficiency discussions

Employees active at the European Affairs department are members of the Society of European Affairs Professionals, and have signed its Code of Conduct.

During 2013, activities included:

  • Dialog on compliance testing of the European Energy Label, affecting several producers in the industry, including Electrolux.
  • Introduction of labeling systems and MEPS in vacuum cleaners and demands on durability on vacuum cleaners (to be decided in 2013).
  • Contributing to a joint EU research center on recyclability and rare-earth metals.
  • 2012 updated RoHS legislation, which requires that product documentation regarding chemicals content must be in place as of January 2013.
  • Resource efficiency

Political activities

Electrolux does not make political contributions, including donations to politicians or political parties. Employees who engage in dialog with governments and other public bodies to inform or influence public policy must do so responsibly and transparently, making it clear at all times that they represent Electrolux.

Compliance

Potential non-compliance, disputes or items that pose a material financial risk are reported to Group level in accordance with Group policy. No significant fines were reported in 2012.

Please see Annual Report, Contingent liabilities.

Charts

Helpline calls categories percentage of total

1) Business integrity: corruption, bribery, anti-trust, securities violation, political donations, misuse of company assets