Sustainable development

Sustainability is a key business driver
supporting profitable growth

Brands 

• Strong sustainability performance enables product and brand differentiation.
• Sustainability enhances employer branding. To be successful in a changing market it is vital to attract and retain the best talent. A strong company purpose and a focus on employee health and safety are essential.
• Access to new forms of capital, e.g. green bonds.

Increasing demand for more sustainable products

• In 2019, the company's most energy and water efficient products accounted for 23% of total products sold and accounted for 32% of gross operating margin. Sustainability is a prioritized area in product development. At least one-third of the product development spend is related to sustainability, including energy and water efficiency.
• Sustainability is increasingly important to consumers, retailers and authorities and is therefore a key driver of demand. Sales of the top three energy label classes of home appliances have tripled in the past ten years in Europe. Top-rated washing machines have the most significant increase, from 2% to 68% of all purchases ¹⁾.
• As a sustainability leader in the industry, Electrolux is more likely to be the preferred partner of retailers with high sustainability demands.
• Water and energy are becoming increasingly scarce around the world, which is driving demand for energy and water efficient products. Electrolux is well positioned to leverage this growing demand for resource-efficient products. Product usage accounts for 85% of CO₂ impact on average during the lifetime of an appliance. Therefore, reducing resource use such as electricity and water during the everyday operation of its appliances is how Electrolux can best reduce its climate impact. 
• Electrolux has the scale necessary for the required investments in sustainability.

More efficient manufacturing

• Reduced energy costs - A consistent focus on resource efficiency has reduced energy costs by SEK 600m annually vs 2005. The average energy consumption per unit produced in 2019 has been reduced by 44%, compared with 2005. The target for 2020 is a 50% reduction. In 2019, 45% of the total energy came from renewable sources. Combined with the energy reduction, this means that carbon emissions from operations have been reduced by 440,000 metric tons of CO₂ compared with 2005. 
• Lower material costs - Optimizing the use of input materials without compromising product performance and quality has reduced costs. Electrolux has the objective to increase the amount of recycled plastics in new products. In 2015, Electrolux set a target of replacing 20,000 tons of virgin plastics in products with recycled by 2020 and in 2019 we achieved 6,400 tons. Based on this result and the forecasted volume for the coming year we do not expect that the target will be achieved on time. The gap is mainly due to challenges in transferring solutions between different product and process technologies, slowing down implementation rate between different regions.
• The Electrolux Zero Landfill program has the objective to reduce the amount of waste sent to landfill or incinerated without energy recovery. During 2019, the global program has been applied to all sites and all identified standard indicators have been measured quarterly. In 2019, Electrolux has globally reduced its amount of disposed waste by more than 20%.
• Electrolux promotes a strong safety culture to ensure the best working environment for employees and to improve operational efficiency through reduced financial impact related to injuries and lost working days. Since 2015, the incident rate²⁾ has decreased from 0.87³⁾ to 0.53³⁾ and Electrolux aims to reduce the incident rate to less than 0.5 in 2020. 

^{1) Source: Financial Times, November 7th 2019. 
2) Total incident rate per 200,000 working hours.
3) Rates exclusive of Electrolux Professional. The incident rate for Electrolux Professional decreased from 2.7 to 1.8 in the same time period.}