In place since 2007, the Group’s standard supplier business contract requires that each supplier acknowledges and promises to fulfill the Electrolux Code of Conduct. Electrolux has over 3,000 suppliers.
As part of its Responsible Sourcing Program, Electrolux carries out Code of Conduct audits to check that supplier practices align with the Group's labor, human rights and environmental standards.
The proportion of procurement from low-cost regions increased from 30% in 2004 to approximately 60% (60) in 2012 and is expected to reach approximately 70% in a couple of years.
Acquisitions, considered significant investment agreements, are screened for their sustainability risk as part of due diligence. These risks include human rights. Significant efforts are made to align these new operations to Group labor and environmental standards. No major acquisitions were made during 2012. For insight into the outcome of efforts so far to align the Olympic Group with Electrolux policies and requirements on human rights, see Snapshot: Olympic results.
Human rights screening among suppliers
In total, 293 (360) audits were performed among suppliers this year, 263 (327) by Group sustainability auditors and 30 (33) by third-party assurers (see graph under Charts). A total of 55 findings of a 'zero tolerance' nature were found, which led to further cooperation to implement immediate improvements.
In particular, audit findings indicate that health and safety issues continue to be the area with most non-compliance, followed by environment. Issues related to under-aged labor are primarily found in Asia/Pacific, but cases are rare. The majority of these incidents relate to insufficient protection of authorized minors (16–18 years of age). Five (8) cases of under-aged workers were found in 2012.
Follow-up audits (see graph under Charts) carried out at 53 suppliers indicate considerable improvement by most. Outstanding issues are either minor or require long-term changes in current procedures to accomplish sustainable improvements. Other activities, such as training and practical consultation, are necessary to support further improvements among these suppliers.
During the Supplier Summit, held in Thailand for some 60 suppliers, labor rights was included on the agenda, in order to both raise awareness on the scope of the issues and to share best practice. In 2013 additional workshops will be held in Brazil, and again in China. Read more in Snapshot: Sharing the Wisdom.
The Responsible Sourcing Program has been a forerunner in applying a ‘beyond monitoring’ approach, by providing supplier training, through the Workplace Standard and by developing projects for specific, strategic suppliers.