product performance and efficiency
We are creating ever more efficient, high-performance appliances, which help consumers and customers to live better lives, save money and reduce their environmental footprint.
Electrolux will improve the energy and water performance of our appliances, raising the bar for product efficiency around the world.
Roadmap 2015 to 2020
- Be a leader in product efficiency in our most important markets by 2020
- Continue to develop products with good environmental performance, with a focus on energy efficiency
- Continue to drive the market for efficient products through awareness-rising customer and consumer campaigns
The case for action
Tackling climate change by reducing greenhouse gases is one of the greatest, most urgent challenges facing society. At the same time, demand for water is set to increase by as much as 40% by 2030, meaning that a billion more people will live in places where water can no longer be taken for granted.
Efficient appliances can help with these issues, by saving energy and water throughout their lifespan. Efficient dishwashers for example are more water efficient than washing dishes by hand. Product energy use is responsible for over 80% of our climate impact, product energy efficiency is where we can make our greatest contribution to tackling climate change.
Product generation planning
Product efficiency targets and KPIs are integrated into our product generation planning – supported by an analysis of the regulatory landscape, energy labeling, market position and energy-efficiency improvements. We strive to be a market leader in product efficiency in all our main markets, and we set our product performance targets accordingly. Our individual product efficiency targets are also designed to contribute toward our climate targets.
In our reporting, we measure sales volumes and gross profit from our Green range in main markets compared with our global offering. Our Green Range includes our most energy and water efficient products. We have a clear follow-up methodology for energy and water performance that allows us to track progress against our goals.
Product efficiency innovation
This promise is embedded in the Group's R&D processes through defined targets and KPIs for each major product category where efficiency standards exist. We are also exploring efficiency opportunities related to digitalization and connectivity by developing smart appliances to measure consumer behavior or connect to a smart grid to optimize energy use. Our expenditure on research and development in 2018, including the capitalization of SEK 436m (355), amounted to SEK 3,960m (3,621) corresponding to 3.2% (3.0) of net sales.
- Credible communication of leading product performance to consumers in markets without energy labels
- With already high product efficiency in Europe, the cost of further product improvements is increasing as the potential new efficiency savings reduce
- Various energy efficiency standards around the world make it difficult to apply worldwide best practice
Engaging in dialogue directly with consumers on the value of using appliances optimally and efficiently will help us overcome these challenges.
The progress on our promise
How we measure progress
- Fleet average (the energy efficiency of Electrolux products available) in key markets.
- Progress on product-related contributions to the Climate Target 2020.
- Percentage of R&D budget spent on sustainability-related innovation.
Our efficient products
During the year, we continued our work to gather product data, which forms the basis for our work with promoting efficient products. This data enables Electrolux to demonstrate the value of more efficient products – both from an environmental and financial perspective for our customers.
Every year we raise the bar in terms of the criteria used to evaluate the products included in our Green Range, which include our most energy and water efficient products. Our Green Range also makes good business sense in terms of profitability for Electrolux as it accounted for 21% (19) of total units sold and 29% (28) of gross profit for consumer products.
New efficient products
Our new efficient products launched in 2018 include our energy efficient Pure D9 vacuum cleaner and washing machines that allow the automatic dosing of detergent to optimize the amount of detergent needed. We also introduced ovens with assisted cooking features that promote efficiency and preserve the nutritional value of ingredients by avoiding overcooking.
During 2018, we worked with product cycle planning to ensure our products meet forthcoming European energy labelling regulations from 2019/20. This involves upgrading the energy performance of products such as refrigerators, dishwashers and washing machines.
Stakeholder engagement on product efficiency
In 2018, Electrolux hosted a conference on water footprinting and water efficiency at our head office as part of the Stockholm World Water Week. The conference was attended by international water experts, businesses and NGOs, and provided us with good stakeholder input on water issues and the next steps Electrolux should take. The Electrolux Innovation Factory was also launched to provide an inspirational and collaborative space to accelerate product innovation with external partners, such as start-ups, SMEs and university spin-offs.
Efficiency requirements and fleet average
The profitability and choice of products going to market is determined at the local level, based on energy efficiency requirements and consumer demand. Of our key markets, Europe, the US, Brazil and some Asia-Pacific countries currently have efficiency requirements in place, with varying levels of ambition.
In Europe, which represents 34% of total Group sales, energy efficiency has improved by an average of 2% per year since 2014 (see the graph EU Fleet Average below), and Electrolux is well established in the European efficiency market. For example, we are a clear leader in the fabric care category.
EU Fleet average 2014-2018
In Europe, Electrolux continuously improved its energy efficiency across three product categories in 2018. The energy index is set at 100% for 2014.
The global green range accounted for 21% of total units sold but 29% of gross profit for consumer products in 2018.
Contributing to our climate targets
Energy efficiency is a priority across all our product categories, and each major category has 2020 targets in place for its markets, as well as indicators to track progress.
R&D spent on sustainability-related innovation
Our global approach to product design and modularization is crucial for stepping up the level of ambition across product categories. The expenditure for research and development in 2018, including capitalization of SEK 436 (355), amounted to SEK 3,960m (3,621) corresponding to 3.2% (3.0) of net sales.
|Roadmap to 2020||Next steps 2019||Status|
|Be a leader in product efficiency in our most important markets by 2020.||Preparing for energy labeling and raised energy-efficiency standards in the EU and for refrigeration in Australia.||dot1|
|Continue to develop products with good environmental performance, with focus on energy efficiency.||Further integration into product R&D. Continue to spend one-third of our R&D budget on sustainable product innovation, in terms of water and energy efficiency.||dot2|
Additional effort is required
Work has not yet begun
Electrolux shapes living for the better by reinventing taste, care and wellbeing experiences that make life more enjoyable and sustainable for millions of people. Through our brands, including Electrolux, AEG and Frigidaire, we sell more than 60 million household and professional products in more than 150 markets every year.
S:t Göransgatan 143
SE-105 45 Stockholm, Sweden