Electrolux 2011 Annual Report Download - page 186

Electrolux aims for honesty and transparency regarding its actions
and impacts. It engages in issues that affect its industry and
addresses these along the value chain. This helps the Group earn
stakeholders’ trust, find solutions and reinforce its role in society.
Responsible sourcing
Electrolux aims to embed high standards for labor, the environ-
ment and human rights in its business relationships. The propor-
tion of procurement from low-cost countries increased from 30%
in 2004 to approximately 60% (56) in 2011, and is expected to
reach 70%. Compliance with the Code of Conduct and Environ-
mental Policy are mandatory and non-negotiable criteria in evalu-
ating all potential and existing suppliers.
Using audits, training and reporting, the aim of the Responsible
Sourcing program is to build supportive and transparent relation-
ships that uphold suppliers’ environmental and labor practices.
The program prioritizes suppliers classified as high or medium risk
and sustainability auditors are in place in Asia/Pacific, Eastern
Europe and Latin America to monitor performance. In total, 360
(328) supplier audits were performed this year, 327 (271) by Group
auditors and 33 (57) by third-party assurers.
Engaging suppliers in Group objectives
To realize its sustainability strategy, Electrolux must engage its
entire value chain, including suppliers. The company hosted a
workshop with 40 major Chinese suppliers to introduce them to
the strategy. An energy reporting standard was also launched, to
be piloted in 2012. Such measures help the Group gain better
insight into the energy consumed by suppliers and how they are
managing it.
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Stakeholders and society
Dialog builds the strategy
Ongoing dialog is a crucial component of the company’s strategy.
In 2011, Future InSight, a dialog platform, was introduced to further
engage stakeholders in the sustainability strategy. The platform
includes a strategy report, a blog inviting input to the strategy and
an employee discussion forum. Future InSight will form the basis
for stakeholder engagement, feeding into both materiality assess-
ment and strategy development.
Restructuring
As a global employer, Group decisions affect individuals and local
communities. Whether setting up new operations or managing
organizational change, Electrolux aims to do so responsibly,
transparently and in dialog with those affected. The restructuring
program is relocating over half of production to low-cost areas.
This benefits these regions with jobs, opportunities for local sup-
pliers, knowledge transfer, and improved social and environmen-
tal standards.
Closing operations, however, is a difficult process for all
involved. Electrolux reduced its staff by approximately 1,870 (900)
employees, with operations in Spain, Sweden and the United
States particularly affected. When restructuring is under evalua-
tion, a procedure is initiated that addresses local needs and
priorities. After the decision to close or downsize is made, employ-
ees are offered assistance such as pre-retirement schemes, train-
ing and career coaching. Achieving successful outcomes lies in
constructive dialog with unions, municipal authorities and poten-
tial investors and in focusing on long-term interests of employees.
Raising awareness
In all markets, Electrolux is engaged in educating consumers. Vac
from the Sea is an awareness campaign to highlight the problem
of plastic waste in the oceans. The initiative helped spark public
debate about need for recycling of plastics, an issue relevant to
the Electrolux value chain. It continues its successful run in Asia
and Europe. Electrolux Appliances North America received the
US EPA 2011 ENERGY STAR Partner of the Year award for helping
to educate consumers about the ENERGY STAR program and
increasing its selection of qualified appliances.
Core issues:
• Responsible sourcing
• Restructuring
• Strategic partnerships
• Dialog
• Transparency and accountability
Eastern Europe
Latin America
Asia/Pacific
General requirements
Laws and regulations
Suppliers
Under-aged labor
Forced labor
Health and safety
Harrassment
Discrimination
Working hours
Compensation
Environment
Monitoring
403010 20 50 60
%
Responsible Sourcing Program
Audit findings of 360 supplier audits conducted during 2011.
Health and safety issues continue to be the area with most non-
compliances followed by the environment. Revised in 2009,
Group environmental requirements are often stricter than local
regulation. Issues related to under-aged labor (below 15 years)
is still primarily an issue in Asia/Pacific but less prevalent than in
previous years. The majority of cases recorded relate to insuffi-
cient protection of authorized minors (16-18 years). In Asia/
Pacific, 8 (24) cases of under-aged workers were uncovered.
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