Electrolux context & high-risk countries
- High-risk areas include North America, Latin America, China, Southeast Asia and the Middle East.
Risk
Understanding and managing our human rights risks
We are continuing our journey to better understand the human rights risks associated with our activities, and to establish the tools and processes to manage these risks. We strive to minimize any risk of our operations causing harm to people.
Read about our progress in our Goal Act ethically, lead in diversity and respect human rights.
Our commitment
Human rights are at the core of our Code of Conduct and our Goal Act ethically, lead in diversity and respect human rights, which is part of our For the Better 2030 sustainability framework. As our most important risk areas relate to our employees and the employees of our suppliers, our human rights commitment has a strong focus on labor standards and employee rights.
Our Code of Conduct includes a human rights policy statement, which is based on the UN Guiding Principles on Business and Human Rights. It considers the outcomes of our human rights impact assessments as well as best practice in the field.
Human rights governance and responsibilities
Line managers, from Group management and down, are responsible for ensuring adherence with Group policies on human rights as part of our human rights governance structure.
Our Ethics & Human Rights Steering Group oversees both ethics and human rights and is responsible for evaluating our human rights approach, including approving priorities and action plans. It consists of senior managers and Group management members, including the Group General Counsel, SVP Human Resources & Communications, SVP Internal Audit, SVP Corporate Communications, and VP Group Sustainability. A Human Rights Coordination Group is responsible for identifying and assessing risks, and developing human rights action plans.
Identifying human rights risks
We have developed a methodology to identify and assess human rights impacts on a Group level. The methodology is in line with the UN Guiding Principles on Business and Human Rights, and common practices for human rights impact assessments.
The methodology includes interviews, surveys and workshops. It was originally applied to identify the Group level salient human rights risks in 2016. This encompassed surveys and interviews with around 40 representatives from all business areas, regions and Group functions. It also included input from employee representatives, investors and NGOs.
The continued work to assess human rights risks focuses on operations in high-risk countries from a human rights, labor rights and corruption perspective. This encompasses the consideration of risks connected to relevant vulnerable groups such as women, indigenous people, migrant workers, contract workers and the general local community.
Assessments have been conducted in Egypt, Thailand, Ukraine and Romania in recent years. The assessment of our operations in South Africa was initiated during 2021 but had to be postponed in the first quarter of 2022 because of a national strike. Due to the coronavirus pandemic, the assessment in South Africa was partially carried out remotely through online interviews, complemented by face-to face dialog with employees, conducted by a third party.
Read more in our Goal Act ethically, lead in diversity and respect human rights.
Statement on our salient human rights issues
The Group level assessment helped to establish which are our salient human rights issues, listed below. Electrolux has defined improvement areas for each salient human rights issue, with responsibilities allocated to relevant senior managers, and our progress is monitored by the Ethics & Human Rights Steering Group.
The relevant local managers have the responsibility for implementing actions to remediate the prioritized issues resulting from local assessments. The status and next steps for each human rights issue are also described below.
Our Materiality Analysis in 2019 confirmed our salient human rights issues as stated below, with the exception of sexual exploitation, which was removed from the list. The original inclusion of sexual exploitation in the list of salient issues, reflected the fact that the Group did not have a clearly communicated policy statement banning employees from purchasing sexual services or visiting strip clubs in conjuction with business trips or meetings with suppliers or customers. This gap was rectified as part of our work in 2018 to update our Group policies and the Electrolux Code of Conduct.
Human rights issues and context
Labor relations
Issue: Right to freedom of association
Potential impact on people – a general perspective
- Employees not being able to improve working conditions or negotiate compensation.
- Lack of constructive employee-management dialog.
- Employees discouraged from participating in union activities.
- Conflict/strike might lead to loss of income and may affect living standards.
Status and next steps
Freedom of association and employee-management dialogue are part of the local human rights impact assessments we conduct every year, which contribute toward our local action planning. Labor relations and employee-management dialogue were in focus in the local impact assessments in Romania and in Mexico in 2020. Based on the learnings, the Group Workplace Directive was updated in 2021. We plan to update our Labor Relations strategy and conduct training for factory management teams during 2022.
In 2021, a new procedure was launched for onboarding senior managers. This includes global principles on promoting dialogue, and respecting principles of freedom of association, alongside other key areas of the Code of Conduct.
Working hours and wages
Issues: Right to decent work conditions & adequate standards of living
Potential impact on people – a general perspective
- People unable to provide for themselves and their families due to low wages (e.g. lack of food, education, medical services, etc.).
- People suffering from a lack of free time and family life due to excessive overtime, which also increases the risk of accidents.
Electrolux context & high-risk countries
- Overtime is an issue in some areas.
- Fair living wages is increasingly in focus for our stakeholders.
- Both issues are a potential reputational risk.
- Wages and overtime are high-risk in all regions except Western Europe, Canada, Australia and New Zealand.
Status and next steps
During 2020 and 2021, the pandemic posed unprecedented challenges for our manufacturing operations. On occasions, it impacted our ability to abide by our policy on overtime and remediating actions were developed to overcome this issue. Wage levels are part of our local assessments, and we plan to develop an approach to responsible wage practices.
During 2021, we launched a working hours reporting system. The system tracks our factories' alignment with our policy of a weekly maximum of 60 hours (including overtime) and at least one day of rest per week. The next steps include putting into action improvement planning and follow up with HR, Sustainability and senior leaders within Operations.
Read more in our Goal Act ethically, lead in diversity and respect human rights.
Diversity and non-discrimination
Issues: Equal rights and non-discrimination
Potential impact on people – a general perspective
- Discrimination, such as in recruitment and promotion, violates the basic human right of equal treatment/opportunities.
- Discrimination can have significant social and economic consequences. Individual quality of life and self-esteem suffer through unequal opportunities.
- High-risk countries include Brazil, China, Egypt, Mexico and Thailand.
Electrolux context & high-risk countries
- Electrolux works actively with equal rights throughout the company, however countering biases will always remain a challenge, due to societal structures.
- Greater diversity will help draw on the full power of gender diversity.
Status and next steps
New Diversity & Inclusion objectives were agreed for the Group in 2021. These are aspirational objectives for the proportion of female people leaders and also a specific action on non-discrimination training for all employees by the end of 2023. Read more about our work with diversity and inclusion.
Read more in our Goal Act ethically, lead in diversity and respect human rights.
Privacy and integrity
Issue: Right to privacy
Potential impact on people – a general perspective
- Mismanaged personal information (e.g. employee data, consumer data, market research data).
- Privacy underpins human dignity, and people deserve freedom from interference or intrusion.
Electrolux context & high-risk countries
Privacy is important due to digitalization, the Internet of Things, and access to employee and consumer data. Processes to safeguard privacy must counter the increasing risks.
Status and next steps
We have implemented awareness programs, privacy risk assessments and other privacy related compliance processes. We are evaluating and improving our programs and processes on a regular basis.
Corruption or bribery
Issue: Right to adequate standard of living
Potential impact on people – a general perspective
- Corruption fuels inequality, diverts expenditure away from public services and holds back economic development.
- Bribery undermines the rule of law and the principle of fair competition.
- Corruption distorts the division of economic resources and hinders social and economic development.
Electrolux context & high-risk countries
We operate in high-risk markets such as Southeast Asia, Latin America, Middle East, Egypt and Russia, and need to constantly educate our employees and monitor risks. Risk areas include obtaining licenses/permits, sales, purchasing, gifts and events.
Status and next steps
Promotion of the anti-corruption and bribery policy is ongoing through e-learning and face-to-face training. Corruption risks are considered in our local human rights assessments.
Read more in our Goal Act ethically, lead in diversity and respect human rights.
Business processes to safeguard human rights
Additionally, we have identified three business processes that are crucial to ensure the protection of human rights: supply chain management, acquisitions, market entry and partners. The boxes below summarize their human rights risks and the status of our work with each process.
Supply chain management
Human rights risks
- General human rights risks in our supply chain – first tier suppliers and beyond.
- Non-compliance with labor standards such as: health and safety, working hours, wages, forced labor and child labor, and freedom of association.
- Poor conditions for migrant workers and their families, including impact on the right to family life due to living far from children, and additional work permit fees.
- Exploitation further upstream, particularly in extractive industries.
Status and next steps
Our Responsible Sourcing team is part of all decisions to approve new suppliers and new projects over USD 50,000. Suppliers are regularly reviewed and audited where risks are identified. We also have a comprehensive approach to migrant labor.
The OECD guidelines are implemented to reduce risks related to conflict minerals.
Supply chain risks form part of our local human rights assessments.
In 2022, the focus will be on exploring ways of identifying and addressing risks in the supply chain beyond first tier suppliers.
Read more in our Goal Drive supply chain sustainability.
Acquisitions
Human rights risks
- Inheriting human rights issues and sub-standard operations as part of acquisitions.
- Harm to people in acquired businesses (e.g. labor conditions, health and safety, environmental impact, land rights and expropriation).
Status and next steps
During 2021, an approach has been developed to ensure all applicable sustainability topics, including human rights, are appropriately considered as part of our due diligence. The focus is on ensuring a structured approach to sustainability aspects when integrating newly acquired businesses. One acquisition was made during 2021.
Market entry and partners
Human rights risks
- Distributors, agents and other business partners harming people (e.g. labor conditions, health and safety, environmental impact negatively affecting people, land rights and expropriation, corruption, etc.).
Status and next steps
Improved screening procedures for new partners are underway.
Health and safety in our operations and product safety are additional important potential impacts on human rights. However, these are deemed to be well-managed by existing programs and are therefore not included in our salient human rights. See our Goal Act ethically, lead in diversity and respect human rights to read more about how we work with health and safety.
High-risk locations
We map our operations using the Verisk Maplecroft Human Rights and Corruption Risk Atlas. Historic audit results and industry risks also feed into our overall risk mapping. This forms the basis for the prioritization of countries for local human rights risk assessments, and also risk screening for acquisitions, market entry and new partners.
Read more in our Goal Act ethically, lead in diversity and respect human rights.
Please see the list of our high-risk countries here.
Stakeholder engagement
Our approach to assessing local human rights impacts includes interviewing employees, employee representatives and experts on human rights, labor rights and corruption – including advocacy groups, local representatives of international organizations, academia and embassies. The context these external stakeholders provide is essential for understanding expectations on us as a responsible company and employer, as well as assessing potential human rights risks. This includes information regarding the protection of human rights in the country in question, the situation for labor organizations, and other information regarding specific human rights that are at risk.
Read more about our stakeholders.
Implementation, monitoring and follow up
Employee education on our human rights principles takes place through training and communication activities. There are trainings for employees and line managers on Group policies and the Code of Conduct. The Workplace Policy Group leads the work to ensure the implementation of labor standards in our factories in accordance with the Workplace Policy.
We monitor our human rights performance through internal and external audits, our Ethics Helpline, employee-management dialogue, health and safety committees, and the Supplier Workplace Standard mailbox for suppliers.
These approaches are complemented by local human rights impact assessments, which provide further details about the risk of negative impact on people by focusing on our activities at country level.
Read more in our Goal Act ethically, lead in diversity and respect human rights.