Electrolux employs a suite of complementary audits and monitoring mechanisms to ensure that the Group and its suppliers live by the Code of Conduct.
Electrolux audits are used in different combinations depending on level of risk identified.
The ALFA is a self-assessment conducted annually by the management of each plant. The ALFA meets multiple objectives—it maintains a high level of CoC awareness across the Group, monitors the level of CoC implementation and provides a feedback mechanism from the units to the CoC policy owner, Group Sustainability Affairs.
Annually, Electrolux tracks areas that pose challenges to upholding high standards in human and labor rights. This includes protecting freedom of association, ensuring a good working environment and fair employment conditions.
At the macro level, the Group maps its operations and those of suppliers against geographical areas considered sensitive by external sources due to limited legislation or poor enforcement of existing laws. Sources for these evaluations include Verisk Maplecroft.
Countries are gauged against seven elements of human rights: civil and political rights, child labor, forced labor, discrimination, freedom of association, working conditions and corruption. High-risk regions with Electrolux manufacturing facilities are:
A facility’s risk classification is adjusted annually depending on its location and past performance, taking into account additional information such as number of employees, types of activities, Ethics Helpline records and customer requests.
Facilities identified as having higher risk are selected for internal CoC audit to identify areas for improvement. Corrective actions are defined based on the findings and followed up with the units.
In 2014, 12 manufacturing units were subject to CoC audits compared to 22 last year. Reasons for the reduced number include CoC roll-out, facility consolidation and the successful integration into the Electrolux Group of acquisitions in Egypt, Chile and Argentina. Findings show that health and safety, working hours and environment are where the greatest number of non-compliances occur.
Each business area is required by Group Management to make sure an environmental management system is implemented at all production sites. The system is built on the Environmental Policy, Workplace Standard and ISO14001 certification.
All manufacturing units of over 50 people must be certified to ISO14001, and newly acquired units are required to complete the certification process within three years of joining the Group. Today, 94% of applicable operations are certified according to ISO14001.
The global ISO certification program for environment and quality involves annual audits of all manufacturing facilities, with recertification audits every third year. For selected sites, the audits also cover OHSAS for health and safety. In addition to certification, performance is monitored against environmental, health and safety provisions set out in the Electrolux Workplace Standard. The findings form the basis of required action plans that are checked with the sites. Follow-up audits are planned for sites with a high number of significant findings. The majority of these relate to missing or inadequate processes for identifying significant environmental aspects, and on-site emergency preparedness.
In 2014 the ISO auditor also made a detailed assessment of the following environmental focus areas:
Improvement areas were identified for the follow-up of findings from internal audits and day-to-day waste management.
Group Purchasing is responsible for compliance to provisions in the CoC along the supply chain. Responsible sourcing CoC auditors focus on monitoring performance and compliance for direct and—from 2015—indirect suppliers classified as high- or medium-risk through country risk mapping and on high-risk activities. See Internal CoC section above for a description of the Electrolux risk geography assessment.
New Group audit tools for responsible sourcing, developed during 2014 to align with the updated CoC, will be rolled out in 2015. Audited suppliers are ranked on performance and categorized according to findings. Categorization criteria have been tightened and include: disqualified (zero tolerance findings), conditional (more than two critical findings), active (only findings of non-critical character) and preferred suppliers (only minor findings).
Key areas for non-compliance for suppliers include health and safety, environment and working hours. Non-compliance to the CoC is addressed through mandatory corrective actions as well as ‘beyond compliance’ support activities such as training and capacity building.
In 2014 supplier training took place in parallel with CoC rollout in China, Chile and Egypt. The focus was on ethical business, anti-corruption and the responsible sourcing strategy. Electrolux employees in key positions in procurement also received training on the requirements of the updated CoC.
During 2015 responsible sourcing specialists will be employed in South-East Asia and Egypt.
The sustainability KPI survey is the annual performance assessment used to track operational environmental management and compliance around, for example, materials, waste and chemicals. Staff-related issues such as employee turnover and health and safety statistics are also monitored.
All Major Appliances manufacturing units assess their Safety Management System (SMS) annually using a standard audit protocol. The Safety Management System consists of 12 elements including management commitment, procedures and performance, goals and objectives and line management accountability.
Every manufacturing unit also conducts a more detailed annual safety audit of the technical areas of the factory, tailored to processes in that location. The results of the SMS audit and safety audit are reviewed by senior in-country EHS managers and shared with the Global head of OHS. Any deviations trigger a requirement for remedial action. For details on performance go to Occupational health and safety.
Monthly updates on working hours and daily records of any accidents are uploaded into a global database which is evaluated monthly for TCIR (Total Case Injury Rate), lost days and FAIR (First Aid Injury Rate) and reviewed in a meeting with all Operational Vice Presidents.
Further assessments are made of selected factories by the Global OHS team each year. The manufacturing units are chosen on the basis of their SMS and safety audit results, risk profile and OHS data uploaded to the database. In 2014 assessments were made of 8 factories, each lasting three days.
In 2015 for the first time, all 38 manufacturing units within Electrolux Major Appliances will undergo an SMS assessment by the OHS Global team in addition to the usual safety audits.
Green Spirit focuses on environmental performance improvement and employee engagement. Electrolux continues to focus on energy use and carbon emissions in manufacturing. Both relative and absolute targets have been set 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. Electrolux has monthly meetings to report performance and share best practice among the different sectors.
Electrolux has developed and implemented its own energy management Green Spirit Certification system. Each Electrolux site is evaluated annually on performance criteria including energy performance, energy management and implemented actions. Sites are given a grading from zero to four stars, depending on the outcome.
Criteria for attaining Green Spirit certification levels are reviewed and raised annually. For example, a factory aiming for three stars today must pass new requirements to maintain its three star status in the coming year.
As part of the Ethics at Electrolux Program, employees are encouraged to speak to their manager, HR Department, internal audit function or another appropriate person in the organization if they wish to report an incident of potential non-compliance such as discrimination. Alternatively, they can use the Ethics Helpline. Incidents can be reported in local languages, either through a call center or via a web portal. All cases of discrimination or non-compliance reported via the Ethics Helpline are investigated. Corrective action on confirmed incidents of misconduct includes reinforcing greater awareness of Group policy, for example through retraining.