Our vision is to be the best appliance company in the world—as measured by our customers, employees and shareholders. That also means being the sustainability leader in our industry.
For Electrolux, sustainability is a requirement of doing business—a must-do. Markets, customers and regulators demand it. Our license to operate depends on us doing no harm and making a positive difference.
2014 saw us ranked again as global major appliances industry leader by the Dow Jones Sustainability Index for the 8th consecutive year. That’s good. But it’s not enough to win awards.
For us, sustainability is also a point of differentiation. We want to grow the market for efficient appliances by making sustainable products and services more accessible to more people around the world, in particular the rising middle classes in emerging markets.
This means we’ve got to be best-in-class—set new world standards and bring innovation to market. This is a high priority for the company—and for our Board. They appreciate that we’re a sustainability leader and expect us to maintain and expand this globally.
In 2013, we stated that our main priority was to get clarity and alignment in our business and sustainability strategies. We’re pleased to report substantial progress in 2014. We engaged deeply with Electrolux business sectors, leadership teams and Group management and confirmed our priorities. Through rollout of Electrolux purpose workshops we also inspired 4,200 of our people around the world to make a positive impact on markets, communities and the environment.
To embed sustainability further we’re setting specific targets for key areas of performance, including our 2020 hero goal—reducing our carbon footprint across products and operations by 50% from a 2005 baseline. We’re making good progress: by end-2014 we had cut relative greenhouse gas emissions by 22% compared to the base year and were recognized in the CDP Climate Disclosure Leadership Index. But the hardest part lies ahead. There’s still lots of heavy lifting to do.
This year we saw real energy across Electrolux to reinforce our leadership position in sustainability. To stay focused and keep our strategy fit for purpose, we refined our materiality approach.
An important outcome was group-wide buy-in to 10 key sustainability themes where Electrolux can make the biggest difference and where we’re aiming for consistent high performance. Sustainability leadership is like a decathlon: you can’t just focus on one area. There are many things you have to address, take care of and do well in.
The biggest and most important for us is product efficiency—cutting down the energy and water our products use during their lifetime. Material efficiency is also big—using less non-renewable resources, recycling, reclaiming, and not throwing stuff out, because on the planet there is no ‘out’. That’s not going to be easy and we don’t have all the answers, but along with operational efficiency and eliminating hazardous substances, I believe we can successfully differentiate ourselves here.
The other six—including ethical business, responsible sourcing and human rights—are business enablers, and prerequisites for sustainability leadership at Electrolux. We will set shared key performance indicators (KPIs) and Group targets for each area during 2015.
"We've got to be best-in-class - set new world standards and bring innovation to the market."
Product efficiency remains our topmost priority. Consumer interest is growing: in the North American market, our 2014 Brand Scorecard confirms demand for more efficient products has increased by 10% since 2012. It’s also on the rise in emerging markets—a great opportunity to invert the equation and bring sustainability to the larger part of the world’s population.
A cornerstone of our strategy is a continuous stream of consumer-relevant innovation and energy-efficient products, and we have many that are best-in-class—in Small Appliances the AAAA-rated UltraOne Quattro vacuum cleaner, in Major Appliances Europe a washing machine that is 50% more efficient than the EU Energy label top class (A+++), and a new line of Energy Star cold products in the US, to name a few.
Going forward we’ll put more emphasis on leaner, wiser use of materials as part of the shift towards a circular economy and we’re already exploring recycling in major appliances. A key challenge is working with others to source recycled materials of the right quality, price and volume.
Naturally internal operational efficiency remains a top objective and in 2014 we exceeded our energy use goals in both relative and absolute terms. With our long-term aim to grow the company, and planned acquisition of GE Appliances this year, our scope just got bigger. On the plus side, GE brings proven intellectual capital to the Group in the area of sustainability and I’m excited to see what we can do as a team.
Across the board, stakeholder expectations around shared global sustainability challenges are evolving. Electrolux is also evolving—we are the most global home appliances company in the world—and with worldwide presence come new opportunities, risks, and responsibilities. Our success in meeting these expectations has a direct impact on our brand, sales, access to capital and ability to attract, retain and engage people.
Doing business ethically and responsibly is not an option for Electrolux, it’s a given. As an endorser of the 10 principles of the United Nations Global Compact, we’re committed to embedding sustainability right across the company.
Stakeholder trust and the integrity of our brand depend on us being able to demonstrate the same high standards wherever we operate. This year we introduced a new Industrial Relations Strategy and revised Code of Conduct, strengthening human rights and labor practices and aligning the Group to a single set of principles across all markets, in line with international standards. Raising awareness of these internally and with suppliers will be a focus in 2015.
I’m proud to say 2014 was another in a string of record years for safety at Electrolux and our recordable injury rates are at an all-time low. It’s the kind of outcome we’re looking for across all 10 of our sustainability leadership areas and next year a key focus will be our social investment in local communities. With operations around the globe and 60 000 employees, there are as many opportunities for Electrolux to lead by example, engage and make a difference.
Stockholm, February 2015
Keith McLoughlin
President and Chief Executive Officer
