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.