A sustainable approach starts at home, with safe workplaces, mutual respect and common values. The Group’s values and foundation helps the Group realize this approach and comprises both operational and core values.
Achievements and objectives
For 2012 achievements and future objectives for ongoing operations, refer to the performance reviews of People and operations (Ethical Business), and to Community for insights into the Group’s approach to shifting production to low-cost regions.
For an example of progress to date on aligning Olympic to Group standards, see Snapshot: Olympic results.
Codes and policies
The Electrolux Foundation, or operational values – ethics, integrity, respect, diversity, safety and sustainability – affirm the Group's corporate culture and commitment to sound and universal ethical business practices. Electrolux aligns its management of labor and human rights with the Foundation through Group codes and policies, both internally and along the supply chain.
Codes include the Electrolux Code of Ethics and the Code of Conduct, supported by procedures such as the Workplace Standard. All sustainability-related policies and procedures affirm the Group’s support of the UN Global Compact principles on human rights, labor, the environment and anti-corruption. Together, these policies and values form the basis for the Electrolux management approach to labor practices and human rights.
Electrolux has four ways of ensuring the Code of Conduct is applied:
- ALFA assessments of the Code of Conduct
- Ethics at Electrolux program
- Internal Code of Conduct audits
- Core values awareness raising, integrated into Human Resource processes and training.
Responsibility
The fulfillment of requirements outlined by the Workplace Standard (and therefore the Code of Conduct) lies with line management. Each unit appoints a person whose responsibility includes communicating Code requirements within the unit and overseeing reporting mechanisms for suspected breaches in the Code. Responsibility also includes ensuring that human rights and labor practices, such as freedom of association, forced labor and fair compensation align with the Code. Suppliers are required to uphold the same standards, and are audited, based on risk of non-compliance, as described in the Human Rights section of this report.
Training and awareness
Ethics at Electrolux, an ethics program comprising a training module and a locally based Helpline, uses scenarios to explore ethical dilemmas employees may encounter in their work. Both blue and white-collar workers throughout Latin America underwent training in 2011. In Europe, the program has been rolled out in seven countries to offices and factories in the Group’s major markets, reaching approximately 90% of employees (approximately 7,000 people). Asia/Pacific will follow in 2013 and roll-out will be complete by 2014. For more information see Anticorruption and public policy.
The program is organized through Human Resources in each business sector, with the support of Group Legal, Sustainability Affairs and the internal audit function (MA SA).
To support the introduction of the anti-trust policy and accompanying guidelines, and the relaunch of the Anticorruption Policy, live training on antitrust and anticorruption issues are taking place during 2012-2013 in all regions for approximately 2,000 selected employees from functions such as sales, marketing and procurement.
The Purpose, a program developed to support the sustainability strategy, encourages everyone in the company to contribute to developing smart, resource-efficient solutions, and creating value beyond market and financial objectives. In 2013, voluntary workshops to engage employees will be held across the company.
Monitoring and follow-up
The Code of Conduct assessment (known as Awareness-Learning-Feedback-Assessment – ALFA) is carried out annually.
Its dual purpose is to:
- Ensure that line managers understand what is expected of them and
- Assess the level of Code implementation.
The assessment helps ensure management attention to the Code of Conduct and Workplace Standard and identifies improvement areas. All Electrolux manufacturing units were assessed compared to 46 of 47 in 2011. 2012 was the first year that the newly acquired units in Egypt, Chile and Argentina were part of the assessment at Group level.
The units report a high level of compliance with the Code of Conduct and the Workplace Standard, with two areas of improvement in Laws and regulations as well as Suppliers and sub-contractors.
With 94% alignment with the requirements under laws and regulations, a few units have yet to report that they have a formalized register of all applicable legislative requirements. Although units are well informed of local legislation, formalized procedures need to be put in place. Not all units reported having written employment contracts for all employees, which is a stated requirement of the Code.
A second area of improvement is in communicating the Code of Conduct to on-site contractors and monitoring its compliance. This is also an area where units have stated that they require greater guidance on how fulfill these requirements.
Internal Code of Conduct Audits
In addition to the broad overview given by ALFA assessments, the tailored internal Code of Conduct audit program is designed to achieve a deeper understanding of Code of Conduct compliance.
The selection process for auditing is based on factors such as the human rights risk level of the country, historic audit performance of the unit, helpline calls, customer requests and the nature of activities. See also Mapping and addressing human rights risks.
Findings form the basis for action plans and follow-up. Electrolux has 28 (29) sites in high-risk countries; 18 (14) of which have been audited in 2012 by combined Electrolux and third-party auditing teams. As of 2013, external auditors will primarily conduct audits.
For an example of progress to date on aligning Olympic to Group standards, see Snapshot: Olympic results.
Employment
Building a strong people culture that reflects the Electrolux vision, values and strategy is a strategic priority for the Group. This encompasses safety and health, labor standards and competence-related priorities. Group-wide systems are in place for talent management, leadership programs and health and safety in production. Electrolux has processes for aligned performance appraisals.
In addition to Codes and standards, Electrolux has various human resource-related policies. They include the Appointment of Senior Managers Policy, the Recruitment and Internal Transfer Policy, and the Grandparent principle—all designed to ensure fair and transparent hiring practices—as well as the Compensation Policy and Pension and Other Benefits Policy, defining a consistent approach to remuneration.
In addition, the Group applies tools for leadership development, talent management and succession mapping to manage the business long-term.
Labor and management relations
For Electrolux, as regulated by Swedish law, labor relations start at the top. The Board of Directors comprises non-executive members, the President and three employee representatives together with their three deputies. Labor relations are primarily managed at the national and local-site levels in accordance with the Code of Conduct and Workplace Standard.
The Code of Conduct stipulates that all Electrolux employees are free to exercise their legal rights to form, join or refrain from joining organizations representing their interests as employees. In addition, Electrolux insists that all operations and those of its suppliers respect employees’ right to collective bargaining.
Swedish Board union representatives visit select regions within the Electrolux sphere on a needs basis to educate local union representatives and share best practice on union work. In 2012, they visited Thailand. This was prior to the illegal strike that occurred in Thailand in 2013. For more information on the Group’s response to the latter incident, see Regarding Electrolux labor relations in Thailand.
Workers forums
In those regions where worker associations are not possible due to national praxis, each unit and supplier is expected to find appropriate and legal mechanisms through which workers can effectively express workplace concerns to management. Records are to be kept from these formalized consultations and made available upon request.
In 2010 Electrolux signed the International Framework Agreement (IFA) with the Swedish trade unions IF Metal, Unionen and the International Metalworkers Union (IMF). It is a formal agreement between Electrolux and key unions underlining the Group’s commitment to maintain the same standards in all the countries where it operates, and specifying core ILO conventions. In fulfillment of the agreement, Code compliance is reviewed and discussed with employee representatives on an ad hoc and annual basis. Dialog covers outcomes of the Code of Conduct assessment and internal audits, an overview of cases reported through the Ethics Helpline and general improvement areas.
Occupational health & safety
The Group-wide accident rate was reduced by 10% (42) this year, taking the company a few steps closer to realizing its vision of accident-free facilities. This data encompasses all Group factories, warehouses and newly acquired operations.
The Group’s work with OHS primarily focuses on the safety of workers in production, although a program is underway in regional headquarters to raise awareness on health and well-being of office workers.
Approximately 77% of all employees within production are covered by an OHS management system coordinated through the Electrolux Manufacturing System (EMS). This includes facilities belonging to Major Appliances and three of four Small Appliances facilities. EMS is tasked with standardizing production and improving production processes and has a long-term goal to operate 25% of its plants at OHS best-practice levels for manufacturing industries by 2015.
Electrolux Professional, consisting of some 2,600 (2,600) employees, has its own program aligned with Group ambitions, yet tailored to operational challenges of dealing with more hand-crafted products. Performance, however, is disclosed in group-wide data collection.
Forward focus
Within EMS, each facility develops a one-to-three year safety action plan based on minimum global standards. Each month, the management team at each facility meets with employees to review safety and environmental incidents and develop prevention actions. They identify both risks on site and mitigation plans.
A global safety team is responsible for the development and implementation of the health and safety recording system. It collects safety statistics and incident reports for every manufacturing facility on a monthly basis, thereby identifying commonalities between production groups, regions and by product line.
Another focus of EMS is on setting minimum standards in high-risk areas across the business. As a minimum requirement, facilities are required to produce an emergency response plan.
Safety training and awareness
Global Safety Day, designed to engage employees and demonstrate management commitment, is an increasingly important event in factory calendars, where ‘best performing’ and ‘most improved’ regional facilities are recognized. Global Safety Day is part of a larger plan to increase performance at all plants. Each facility has developed a plan to contribute to the group-wide goal. The overriding aim is to prevent injuries and environmental incidents from occurring in the first place.
In 2011, Electrolux conducted an Environment, Health and Safety Culture Survey among manufacturing employees at 30 Electrolux facilities. Some 26,000 responded, an 83% response rate. Each factory identified three areas of improvement that were addressed in 2012 at the local and global level. The survey will be integrated into an all-encompassing employee engagement survey that covers both office and factory workers. The next survey will be rolled-out in 2014.
Diversity and equal opportunity
A global company built on cultural diversity, Electrolux aims to attract people who reflect the Group’s global market and consumer base. This is an area that requires continued improvement, particularly in finding gender balance. Female representation among senior management teams is 20% (14). Electrolux defined 2015 diversity objectives to increase female representation to:
- In Tier 2 positions: 25%
- Combined Tiers 2 and 3: 30%