Management approach: Environment

Electrolux applies a product lifecycle approach to managing environmental impacts. Factories, warehouses and offices have processes in place to manage risks and integrate environmental priorities.

Achievements and objectives

For 2012 achievements and future objectives, see performance reviews for Products, markets and services, People and operations (Efficiency) and Stakeholders and society (Responsible sourcing), the latter covers work with suppliers.

Roles and responsibilities

Each business area is required by Group Management to implement an environmental management system throughout its operations. The system is built on the Environmental Policy, Workplace Standard (the Group’s guidelines on how to meet Electrolux sustainability-related codes and policies) and ISO14001 certification. All manufacturing units of over 50 people must be certified to ISO 14001, and newly acquired units are required to complete the certification process within three years of acquisition. Today, 90% of applicable operations are certified according to ISO14001.

Operational responsibility

Electrolux Sustainability Affairs, a Group staff function, is responsible for driving and monitoring environmental performance group-wide, as well as public disclosure. It co-ordinates environmental reduction targets at the operational level as well as carbon emissions relating to transportation.

The Electrolux Manufacturing System (EMS) is a program to implement lean production that covers global manufacturing facilities for both major and small appliances. In addition, EMS is used for monitoring and eliminating waste and increasing safety and quality within production processes.

Green Spirit is an initiative focused on environmental performance improvement and employee awareness raising. Energy-saving targets are implemented in offices, factories and warehouses through the program.

During 2013 Electrolux will introduce a global provider for ISO and OSHAS certification. In addition to certification, performance against the environmental health and safety provisions set out in the Electrolux Workplace Standard will also be monitored. The new approach is expected to deliver improved governance and reporting, as well as greater harmonization across the Group.

Priorities

During 2012, the focus was on:

Achieving the 3.5% energy reduction target compared to 2011 production volumes
Setting a new energy efficiency target for 2015
Monitoring progress on the transport and water goals in major markets
Implementing best practice
Engaging suppliers to report their energy use.
Sourcing a global provider for ISO 14001 certification and compliance with the Workplace Standard

Materials

Material use is collated on a site-by-site basis during the annual Environmental Performance Assessment. The site manager is responsible for sending data to Sustainability Affairs. Continuous improvement in reducing material use is driven through ISO 14001.

Energy

As part of the sustainability strategy, Electrolux is reducing energy impacts and engaging in climate-related issues through:

Innovating and promoting efficient products
Reducing energy use in operations
Raising awareness of the importance of energy-efficient products.

The Group’s most relevant climate-related issue is the energy needed by customers using Electrolux products. The Group aims to expand the market for energy-smart products by influencing consumer purchasing through marketing, communications and public policy work.

The Group’s approach to green product innovation and design is outlined further under Products and services.

Target achievement in factories is monitored by Group Sustainability Affairs and reported to management and through the Electrolux Manufacturing System. Leaner manufacturing is an important aspect of the sustainability strategy.

2013, Electrolux will introduce a global provider for ISO and OSHAS certification. In addition to certification, performance against environmental and health and safety provisions set out in the Electrolux Workplace Standard will also be monitored.

Factory-focus

Green Spirit focuses on environmental performance improvement and employee engagement through action plans. To help achieve energy- and water-saving targets in factories, offices and warehouses, each facility gathers energy and water consumption data and reports on a monthly basis to Sustainability Affairs where data is collated. Best practice examples are shared across the Group.

Green Spirit information points in facilities keep employees up to date on progress against targets. Suggestions from employees for environmental improvement are encouraged and rewarded.

During 2012, the focus of Green Spirit across the Group was on achieving the 2011-2012 3.5% energy reduction target and setting a medium-term target to reduce energy use by 15% by 2015, based on a 2011 production volumes. Investment plans for energy efficient equipment and processes have also been put into place.

Electrolux is on track to achieve the 2015 energy reduction target and in 2012 energy efficiency performance was achieved in intensity due to volume growth. The Group realized a 6% relative improvement in 2012, indicating a significant increase in production efficiency. In absolute terms, the result was a marginal increase, due to a rise in production volumes.

About 50% of the factories achieved gold level Green Spirit certification, while one factory attained the platinum (highest) level. Professional and the acquisitions Olympic and CTI were not included in the assessment.

Green Spirit goals for 2013 include:

Implementation of the 2013 energy action plans
Refinement of the 2014-2015 energy action plans
Increase in the number of factories certified to gold level
Inclusion of new and recently acquired sites into the Green Spirit program

Work will also continue on reducing emissions from transport and water use as described in the transport and water sections below.

Engagement with suppliers

Through the Workplace Standard, Electrolux requests that all suppliers measure and monitor their energy use. Electrolux launched its energy-reporting standard, based on GRI criteria, among OEM (original equipment manufacturing) and ODM (original design manufacturing) suppliers.

During 2012, Electrolux collected data from approximately 60% of the Group’s OEM supplier spend on their environmental performance. In 2013, the share is expected to rise to 80%.

Transportation

A Group-wide system for gathering and tracking transport data has been developed and information collected by sectors is reported to Sustainability Affairs for monitoring. During 2012, the Group worked towards its transport carbon reduction target and best practice is being shared across the Group.

Electrolux performance on transportation is in line with its 2010-2014, 15% carbon intensity reduction target. Emissions are higher in 2012 than for 2011 in absolute terms. This is due a growth in production and related transport volumes.

Carbon emissions for transport are measured on an intensity basis: emissions per volume transported for road and shipping, and emissions by weight transported for air and rail freight.

Water

Electrolux continues its support of the UNGC Water Mandate. The Communication on Progress is included in this GRI report. Producing appliances is not water-intensive relative to many other manufacturing industries.

Electrolux has defined a reduction target for water use of 20% by 2014, using 2010 as a baseline. Water consumption in factories is managed under Green Spirit, using the same approach as the energy-savings target to compile and share water data across the Group. Performance is monitored on a monthly basis through the Green Spirit program and is in line to exceed the target.

Electrolux engages with local authorities on issues such as water availability in regions where production facilities are located. Water availability is a local issue and raising awareness among employees is an important part of achieving water reductions.

The Green Spirit program engages employees in local savings initiatives. The company also has ongoing dialog with factory suppliers on how to improve processes for better water performance. Electrolux operations will continue to increase investment in innovation for water-efficient products and improve its processes in the area of assessing and monitoring water management.

A process of evaluating water related risks for manufacturing sites is underway. Using the water risk filter (www.waterriskfilter.org), Electrolux is working with WWF to establish factory plans for water risks and scarcity.

Continuous water improvement is outlined as an expectation in the Workplace Standard and Environmental Policy and is mandatory for all suppliers.

Biodiversity

Biodiversity management is not deemed a material issue for the Group. Biodiversity issues are managed locally with group-wide guidelines as defined by the Workplace Standard. Two facilities (Solaro, Italy and Revin, France) are adjacent to protected biodiversity areas. Electrolux monitors all its facilities for emissions and no significant impacts on biodiversity have been identified.

Emissions, effluents and waste

All hazardous waste (oils, solvents and other chemicals) is managed in accordance with local regulations.

Products and services

Sustainability Affairs is responsible for promoting the climate change agenda with stakeholders, as well as raising awareness of the role of energy and water-efficient appliances in reducing consumers’ carbon footprint.

Each business area within Electrolux promotes its own range of water- and energy-efficient appliances and vacuum cleaners. Electrolux raises the bar for products qualifying for the range on a yearly basis. Although locally defined to meet each market need and regulatory demand, the series is based on environmental parameters defined by the Group.

The company’s designers are trained on the Product Management Flow, which includes sustainability guidelines. During 2012, the guidelines were reviewed to improve efficiency and accountability. Changes include updated web tools to allow a seamless sharing of information and clear allocation of responsibility for sustainability at every stage of product development. Work on tools for sustainable design is ongoing, with a completion in 2013 anticipated.

Letter of the law

Electrolux is also preparing for increased legislation worldwide on managing chemicals, energy efficiency standards and producer responsibility for recycling of Group appliances in all markets.

REACH is an EU regulation on the registration, evaluation, authorization and restriction of chemicals. Electrolux sees REACH as a tool for ensuring safe products, safe production and environmental protection.

In 2007, Electrolux in Europe established a central chemical office to effectively manage chemicals regulation such as REACH, which continuously adds new chemicals to its list of targeted substances.