Materiality: Defining what is relevant

By keeping our finger on the pulse through a materiality process, Electrolux is better positioned to minimize non-financial risk. It also helps us better understand our markets, societal trends and the expectations people have on us as a company.

In the context of sustainability, materiality relates to identifying the issues most relevant to conducting business responsibly and well. These issues can either potentially affect our performance, or the development of our business.

A materiality process enables us to keep pace with evolving expectations on our business. This feedback informs our strategy work and, together with the Global Reporting Initiative’s (GRI) G3 guidelines, it helps determine the content of Electrolux sustainability reports.

The process includes:

  • Measuring the priorities of both internal and external stakeholders through dialogue and surveys
  • Product life-cycle analysis of the environmental impacts of appliances
  • Studies in the changes ongoing in our society
  • In-house consumer insight research
  • Media coverage on the Group
  • Dialogue and research on changing legislation.

An analysis of these sources reveals four key issues that are most central to Electrolux and our business:

  • Climate and energy efficiency
  • Environmentally-sound and socially responsible business operations
  • Responsible sourcing
  • Restructuring – Being transparent and inclusive when setting up operations and during closures.

In 2010, Electrolux commissioned a study of the key drivers and trends likely to shape markets and influence expectations on companies. Findings identified eight drivers: climate change, constrained resources (including raw materials, energy and water security), chemical use, emerging new economies, aging populations, breakthrough technologies and individualization.

In order to help us pinpoint the expectations key interest groups have on Electrolux in light of these drivers, representatives from investors, customers and employees are regularly asked to rank the top sustainability topics that they consider important for us. The most recent sustainability materiality polling was completed in spring, 2010 among the top 200 managers.

In fall, 2008 Electrolux also conducted phone and in-person interviews to discuss the perception of Electrolux sustainability performance and the issues the Group should prioritize. A total of 29 interviews were conducted with retailers, sustainability advisors, investors, non-government and industry organizations and employees, representing 85 percent of those targeted. The responses cover a wide range of issues, the majority of which belong to these categories.

  • The sustainability of Electrolux products – including the environmental status and performance of products, materials used in production, energy and water efficiency, and increasing the availability of sustainable product offerings.
  • Ensuring high social values and conditions of production are maintained – these standards include compliance to the

Workplace Code of Conduct within all operations linked to the Group, especially with production units in low cost countries and throughout the supply chain.

In 2007, employees were asked to rank issues from a list of 13 (see graph) and in total, 500 employees responded. Electrolux also polled representatives from the top ten investors in Electrolux, along with retailers and consumer organizations. The chart shows how individual stakeholder groups ranked the issues.

The Group also takes part in multi-stakeholder organizations such as the UN Global Compact and BSR (Business for Social Responsibility) to further its ambition to improve the materiality process and stakeholder dialogue.