Management approach

At Electrolux, everything we do and all decisions taken must be governed by the principles of ethics, integrity and respect for people and care for the environment. This affirms our commitment to sound and universal ethical business practices.

New business model - including sustainability

To achieve our Purpose - to shape living for the better - and drive profitable growth, Electrolux uses a business model that focuses on delivering best-in-class consumer experiences in taste, care and wellbeing. The objective is to create a steady stream of consumer-relevant innovations under strong brands in key experience areas. We focus on enabling great-tasting food, great care for clothes and healthy wellbeing in consumer's homes.

Sustainable development is defined as a transformational driver in our business model, as we recognize the growing importance of sustainability performance and reputation - including the impact of business and products on the planet. Electrolux is acknowledged as a sustainability leader.

As an endorser of the UN Global Compact, Electrolux abides by universal principles, including the environment, labor and human rights through Group codes and policies, both internally and among suppliers. The following tables cover Global Reporting Initiative (GRI) aspects that are deemed material to Electrolux.

The most relevant aspects are integrated into our nine 'For the Better' Promises and our approach is outlined under each related Promise in other areas of this report, most notably under Progress 2017. The aspects have been combined if they have a common management approach or policy.

Sustainability governance

Our sustainability framework - For the Better - is directly overseen by Group Management and the Sector Management teams through various reference groups and steering groups. Group management has also adopted policies concerning Environment, Code of Conduct, and Corruption and Bribery, while the Board of Directors has approved the Code of Ethics.

Each business sector is responsible for contributing to the fulfillment of Group targets under the nine Promises and several of the KPIs are broken down and followed up at sector level.

Group Sustainability Affairs is our expert function that drives the development of our sustainability agenda, supports sustainability integration throughout operations, and monitors performance. Group Legal Affairs is responsible for implementing the anti-corruption program. The global Ethics Helpline (whistleblower function) and the Ethics Program is overseen by the Ethics & Human Rights Steering Group.

Economic

For 2017 information regarding our economic management and reporting practices, see Accounting principles and Market information. Financial objectives are presented in our Mission - financial goals.

Environment

Policies and governance
Our Environmental Policy outlines how we intend to improve environmental performance in production and product use, as well as how to design products for disposal. The Workplace Standard describes how we meet expectations in our own operations and among suppliers.

Electrolux applies a product lifecycle approach to managing environmental impacts, which considers the entire lifecycle - from supplier impacts through to transport, manufacturing and use. We also apply the precautionary principle, whereby we act responsibly despite not having the full scientific knowledge of negative impacts, to ensure we stay ahead of potential risks.

Each business area is required to implement an environmental management system throughout its operations, and all operations with over 50 employees are expected to have ISO 14001 certification.

Auditing and Monitoring outlines how operations and suppliers meet Group expectations and commitments.

Environment

Aspect	Policy, governance and commitments	Responsibility & resources	Training and specific actions
Transport		Responsibility lies with each business area. The goal is monitored and coordinated through our Sustainability Affairs function. As outlined in the Promise Improve sustainability in the supply chain.	All suppliers of ocean transports must be a member of the Business for Social Responsibility Clean Cargo Working Group to standardize emissions calculations. Developed a partnership with Maersk Line to improve transport sustainability performance.
Supplier environmental assessments	Outlined in the Code of Conduct and Workplace Standard. Code of Conduct compliance is mandatory and non-negotiable for our suppliers. The main OEM and ODM suppliers must measure and report their energy use through the energy reporting standard, and they have assessed their water impacts according to the WWF Water Risk Filter.	Each Business Area's Sourcing Board is responsible to vet prospective suppliers, and the Business area is also responsible for ongoing compliance, with support from the Responsible Sourcing Team and Sustainability Affairs. As outlined in the Promise Improve sustainability in the supply chain.	Approximately 80% (56) of OEM suppliers report on their energy and water use. At present, supplier energy consumption is not integrated into our external energy use reporting. Applied the WWF Water Risk Filter to help map locations at risk of water stress.

Aspect

Policy, governance and commitments

Responsibility & resources

Training and specific actions

Transport

Responsibility lies with each business area. The goal is monitored and coordinated through our Sustainability Affairs function.

As outlined in the Promise Improve sustainability in the supply chain.

All suppliers of ocean transports must be a member of the Business for Social Responsibility Clean Cargo Working Group to standardize emissions calculations.
Developed a partnership with Maersk Line to improve transport sustainability performance.

Supplier environmental assessments

Outlined in the Code of Conduct and Workplace Standard. Code of Conduct compliance is mandatory and non-negotiable for our suppliers.
The main OEM and ODM suppliers must measure and report their energy use through the energy reporting standard, and they have assessed their water impacts according to the WWF Water Risk Filter.

Each Business Area's Sourcing Board is responsible to vet prospective suppliers, and the Business area is also responsible for ongoing compliance, with support from the Responsible Sourcing Team and Sustainability Affairs.
As outlined in the Promise
Improve sustainability in the supply chain.

Approximately 80% (56) of OEM suppliers report on their energy and water use.

At present, supplier energy consumption is not integrated into our external energy use reporting.

Applied the WWF Water Risk Filter to help map locations at risk of water stress.

Social

We support labor rights according to the ILO Core Conventions and the Declaration on Fundamental Principles and Rights at Work, and have an International Framework Agreement with unions that affirms our labor commitments. The Workplace Code of Conduct and the Electrolux Workplace Standard both apply to our operations and supply chain.

The report section on auditing and monitoring outlines how operations and suppliers meet Group expectations and commitments.

Labor practices, human rights and society

Aspect	Policy, governance and commitments	Responsibility and resources	Training and specific actions
Investment	Human rights screening is included in our acquisition processes.	Responsibility lies with each project team, supported by Group Legal and Sustainability functions.	In 2017, we established a strengthened procedure for ensuring human rights is a part of the acquisition process.
Non-discrimination, child labor, forced or compulsory labor	Specified in the Code of Conduct and Workplace Standard. As outlined in the Promise Always act ethically and respect human rights.	The responsibility of each unit's line management, including communication requirements within their unit through training, and annually assessing the unit's performance.	Code of Conduct compliance is reviewed and discussed with employee representatives on an ad hoc and annual basis. Dialogue covers the outcomes of internal audits and local human rights assessments, an overview of cases reported through the Ethics Helpline, and general improvement areas.
Occupational health and safety	Specified in the Code of Conduct and Workplace Standard. A Safety Management System covers all manufacturing facilities. Each facility has a plan to contribute to the group-wide goal. The overriding aim is to prevent injuries from occurring in the first place.	The Global Industrial Operations safety team defines goals, monitors progress, shares best practice and implements the monthly recording system and daily incident reports, to align according to production groups, regions and product line. Furthermore, there are Occupational Health and Safety committees in all our manufacturing facilities. As outlined in the Promise Ensure the best health and safety.	Ongoing local workshops and training on safety procedures, reporting systems and certification programs. Global Safety Day, designed to engage employees in manufacturing, and inform of the 'best performing' and 'most improved' regional facilities.

Aspect

Policy, governance and commitments

Responsibility and resources

Training and specific actions

Investment

Human rights screening is included in our acquisition processes.

Responsibility lies with each project team, supported by Group Legal and Sustainability functions.

In 2017, we established a strengthened procedure for ensuring human rights is a part of the acquisition process.

Non-discrimination, child labor, forced or compulsory labor

Specified in the Code of Conduct and Workplace Standard.

As outlined in the Promise Always act ethically and respect human rights.

The responsibility of each unit's line management, including communication requirements within their unit through training, and annually assessing the unit's performance.

Code of Conduct compliance is reviewed and discussed with employee representatives on an ad hoc and annual basis. Dialogue covers the outcomes of internal audits and local human rights assessments, an overview of cases reported through the Ethics Helpline, and general improvement areas.

Occupational health and safety

Specified in the Code of Conduct and Workplace Standard.
A Safety Management System covers all manufacturing facilities.
Each facility has a plan to contribute to the group-wide goal. The overriding aim is to prevent injuries from occurring in the first place.

The Global Industrial Operations safety team defines goals, monitors progress, shares best practice and implements the monthly recording system and daily incident reports, to align according to production groups, regions and product line. Furthermore, there are Occupational Health and Safety committees in all our manufacturing facilities.
As outlined in the Promise Ensure the best health and safety.

Ongoing local workshops and training on safety procedures, reporting systems and certification programs.
Global Safety Day, designed to engage employees in manufacturing, and inform of the 'best performing' and 'most improved' regional facilities.

Training and education	A focus area of the People Plan is to become a Learning Organization. Our training and education program is built on the 70-20-10 learning model: 70% through challenging assignments and on-the-job experience, 20% through relationships, networks, and feedback and 10% through formal training.	Responsibility lies with each unit's line management, supported by business area and Group HR functions.	TalentONE, a system for Learning Management, has been implemented globally 2017, which will enable better group-wide reporting from 2018 onwards. On average, white-collar employees in EMEA, Latin America and North America received 7 (13) hours of training in 2017.
Employment, Diversity and equal opportunity	As specified in the Code of Conduct and Workplace Standard. A component of the Business Strategy, the People Plan, describes our aim to become a high-performing learning organization with the right people in the right jobs. The appointment of senior managers, the Recruitment and Internal Transfer Policy, and the Grandparent principle - are designed to ensure fair and transparent hiring practices - together with the Compensation Policy. As outlined in the Promise Always act ethically and respect human rights.	Senior Vice President of Human Resources is responsible for HR- related policies. Implementation of policies and remuneration are managed by business sectors. The Talent Planning process for the Top 200 positions, and opportunities for promoting women are constantly reviewed.	Through performance appraisals and talent reviews, we evaluate employee performance and development, while promoting diversity and equal opportunities. Appraisals and talent reviews, evaluate our people and focus on their development. The annual Employee Engagement Survey and HR data measures our progress. We focus on attracting, developing and retaining more qualified female candidates for leadership roles.
Labor & management relations	Specified in the Code of Conduct and Workplace Standard. Our strategy is informed by the International Framework Agreement with the Swedish trade unions IF Metall, Unionen and IndustriAll, which underline our commitment to ILO conventions and maintaining common standards globally.	Country and local line organizations are responsible for realizing the strategy, supported by HR Country Managers and Group Industrial Relations.	Code of Conduct training is ongoing and covers labor management relations.

Training and education

A focus area of the People Plan is to become a Learning Organization. Our training and education program is built on the 70-20-10 learning model: 70% through challenging assignments and on-the-job experience, 20% through relationships, networks, and feedback and 10% through formal training.

Responsibility lies with each unit's line management, supported by business area and Group HR functions.

TalentONE, a system for Learning Management, has been implemented globally 2017, which will enable better group-wide reporting from 2018 onwards. On average, white-collar employees in EMEA, Latin America and North America received 7 (13) hours of training in 2017.

Employment, Diversity and equal opportunity

As specified in the Code of Conduct and Workplace Standard. A component of the Business Strategy, the People Plan, describes our aim to become a high-performing learning organization with the right people in the right jobs. The appointment of senior managers, the Recruitment and Internal Transfer Policy, and the Grandparent principle - are designed to ensure fair and transparent hiring practices - together with the Compensation Policy.
As outlined in the Promise Always act ethically and respect human rights.

Senior Vice President of Human Resources is responsible for HR- related policies. Implementation of policies and remuneration are managed by business sectors.

The Talent Planning process for the Top 200 positions, and opportunities for promoting women are constantly reviewed.

Through performance appraisals and talent reviews, we evaluate employee performance and development, while promoting diversity and equal opportunities.

Appraisals and talent reviews, evaluate our people and focus on their development.

The annual Employee Engagement Survey and HR data measures our progress.

We focus on attracting, developing and retaining more qualified female candidates for leadership roles.

Labor & management relations

Specified in the Code of Conduct and Workplace Standard. Our strategy is informed by the International Framework Agreement with the Swedish trade unions IF Metall, Unionen and IndustriAll, which underline our commitment to ILO conventions and maintaining common standards globally.

Country and local line organizations are responsible for realizing the strategy, supported by HR Country Managers and Group Industrial Relations.

Code of Conduct training is ongoing and covers labor management relations.

Supplier assessment for labor practices and human rights	Specified in the Code of Conduct and Workplace Standard. Code of Conduct compliance is mandatory and non-negotiable for suppliers. As outlined in Promise Improve sustainability in the supply chain. Improve sustainability in the supply chain.	Each Business Area’s Sourcing Board is responsible to vet supplier candidates, and the Business Area is also responsible for ongoing compliance, with support from the Responsible Sourcing Team and Sustainability Affairs. As outlined in the Promise Improve sustainability in the supply chain.	Prospective suppliers are required to outline their capabilities and performance in labor, human rights, and environmental management. Key procurement employees receive Code of Conduct training.
Security practices	Specified in the Code of Conduct, Workplace Standard. We also have a Security Program that covers selection criteria for security providers, and incident reporting.	Unit line management is responsible for fulfilling the Code and Security Program locally, supported by the Chief Security Officer.	Security inspections are performed at all premises in accordance with the Security Program. Security requirements are included in Code of Conduct training for all employees, as well as in the ALFA self-assessment for plant managers.
Grievance mechanisms for labor practices, human rights.	Employees can report misconduct confidentially and anonymously (where legally permitted) without fear of negative consequences through our confidential reporting mechanism - the Ethics Helpline, which can be accessed by 99% of our employees. Suppliers can report possible non-compliances through the Code of Conduct mailbox. As outlined in the Promise Always act ethically and respect human rights.	The Ethics and Human Rights Steering Group is responsible for the grievance mechanism. Trained investigators conduct the investigations, in line with our confidentiality and integrity principles. Most cases relate to verbal abuse or abusive behavior.	A grievance mechanism in the form of a mailbox has been introduced for Electrolux suppliers.

Supplier assessment for labor practices and human rights

Specified in the Code of Conduct and Workplace Standard. Code of Conduct compliance is mandatory and non-negotiable for suppliers.
As outlined in Promise Improve sustainability in the supply chain.
Improve sustainability in the supply chain.

Each Business Area’s Sourcing Board is responsible to vet supplier candidates, and the Business Area is also responsible for ongoing compliance, with support from the Responsible Sourcing Team and Sustainability Affairs.

As outlined in the Promise Improve sustainability in the supply chain.

Prospective suppliers are required to outline their capabilities and performance in labor, human rights, and environmental management. Key procurement employees receive Code of Conduct training.

Security practices

Specified in the Code of Conduct, Workplace Standard. We also have a Security Program that covers selection criteria for security providers, and incident reporting.

Unit line management is responsible for fulfilling the Code and Security Program locally, supported by the Chief Security Officer.

Security inspections are performed at all premises in accordance with the Security Program.
Security requirements are included in Code of Conduct training for all employees, as well as in the ALFA self-assessment for plant managers.

Grievance mechanisms for labor practices, human rights.

Employees can report misconduct confidentially and anonymously (where legally permitted) without fear of negative consequences through our confidential reporting mechanism - the Ethics Helpline, which can be accessed by 99% of our employees.

Suppliers can report possible non-compliances through the Code of Conduct mailbox.
As outlined in the Promise

Always act ethically and respect human rights.

The Ethics and Human Rights Steering Group is responsible for the grievance mechanism.
Trained investigators conduct the investigations, in line with our confidentiality and integrity principles. Most cases relate to verbal abuse or abusive behavior.

A grievance mechanism in the form of a mailbox has been introduced for Electrolux suppliers.

Anti-corruption, anti-competitive behavior	Specified in the Code of Ethics, Policy on Corruption and Bribery, Policy on Anti-trust and the Code of Conduct. As outlined in the Promise Always act ethically and respect human rights.	The Corporate Legal department is responsible for corruption, bribery and anti-trust policies, and for communication and follow up. Management Assurance and Special Assignments (MASA), investigates reported corruption cases. The Ethics at Electrolux program, including the Ethics Helpline, is a cross-functional initiative, led by Sustainability Affairs together with Human Resources, Group Legal and Internal Audit (MASA) through the Ethics & Human Rights Steering Group.	Promotion of the corruption and bribery policy is ongoing through e-learning and face-to-face training. This will be further built upon during 2018 and beyond. Corruption risks were considered in the 2017 local human rights assessments.
Public policy	Group Management and functional heads are responsible. Group External Affairs Committee, including representatives from the business sectors, coordinate positions and other public affairs matters.	Each business area is responsible for engaging with their respective policy-makers. 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).	Key actions influencing policy in 2017: EU EU legislation on circular economy and resource efficiency EU waste and chemical legislation Revision of the EU energy label and energy efficiency legislation (eco design legislation) Circular economy Smart appliances Data privacy North America Environmental Protection Agency (EPA) rulemaking Energy efficiency requirements NAFTA trade negotiations Trade tariffs on certain products Asia Pacific Revised water efficiency and energy labelling requirements Chemical regulations Latin America Recycling regulations in several countries

Anti-corruption, anti-competitive behavior

Specified in the Code of Ethics, Policy on Corruption and Bribery, Policy on Anti-trust and the Code of Conduct.
As outlined in the Promise
Always act ethically and respect human rights.

The Corporate Legal department is responsible for corruption, bribery and anti-trust policies, and for communication and follow up. Management Assurance and Special Assignments (MASA), investigates reported corruption cases. The Ethics at Electrolux program, including the Ethics Helpline, is a cross-functional initiative, led by Sustainability Affairs together with Human Resources, Group Legal and Internal Audit (MASA) through the Ethics & Human Rights Steering Group.

Promotion of the corruption and bribery policy is ongoing through e-learning and face-to-face training. This will be further built upon during 2018 and beyond.
Corruption risks were considered in the 2017 local human rights assessments.

Public policy

Group Management and functional heads are responsible. Group External Affairs Committee, including representatives from the business sectors, coordinate positions and other public affairs matters.

Each business area is responsible for engaging with their respective policy-makers. 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).

Key actions influencing policy in 2017:

EU

EU legislation on circular economy and resource efficiency

EU waste and chemical legislation

Revision of the EU energy label and energy efficiency legislation (eco design legislation)

Circular economy

Smart appliances

Data privacy

North America

Environmental Protection Agency (EPA) rulemaking

Energy efficiency requirements

NAFTA trade negotiations

Trade tariffs on certain products

Asia Pacific

Revised water efficiency and energy labelling requirements

Chemical regulations

Latin America

Recycling regulations in several countries

	2013	2014	2015	2016	2017
Procent of total	91	94	96	93	91