Taking a value chain approach provides us with a big picture view of how we can most effectively tackle our impacts.
Analyzing our sustainability approach through the lens of our value chain helps to identify how we can best leverage our influence and create the greatest value. This makes it easier to identify opportunities, minimize or enhance impacts and understand boundaries. The value chain perspective also helps us recognize how actions and impacts are interconnected.
The diagram below illustrates our degree of influence along major stages of our value chain and provides examples of the value we create. The links under each phase provide context on key impacts and how we tackle them.
High ability to influence
Electrolux allocated SEK 3,148m (3,210 m) to R&D, approximately one third of which is sustainability-related. Focus is on energy- and water-efficiency as well as the use of materials.
Staying one step ahead of consumer needs on efficiency delivers customer value and aligns with our business strategy, while reducing negative impact on the environment.
Medium ability to influence
Electrolux has over 3,000 direct suppliers that must manage their performance in accordance with our Group sustainability requirements. The focus is on finding and developing supplier capacity to maintain our high standards in high-risk countries, both in terms of better use of resources and other sustainability aspects. This requires careful assessment and a qualified selection of suppliers.
Rewarding suppliers that can comply with Electrolux standards stimulates technical progress and local innovation. Promoting universal norms supports human rights and raises environmental, labor and economic standards - especially in low-cost countries. This also builds trust and reduces business and reputational risk.
High ability to influence
Electrolux operations, impacting some 60,000 employees, must reflect the qualities of a sustainable business: ethical, efficient and safe.
By being a force for good, we create value for our communities, employees and for ourselves. We create community benefit by providing jobs, knowledge transfer and economic opportunities. Positive employee relationships promote competence development, employee wellbeing and job satisfaction. Being a force for good also creates value for the company, for example by ensuring we retain talented employees and achieving financial savings from reduced accident rates. Based on historical data, we estimate that we saved SEK 300m in costs in 2016 by avoiding accidents.
Medium ability to influence
Electrolux emits more CO2 transporting its goods than it emits through the combined energy used in Group operations. About 300,000 tonnes are emitted through the distribution of our goods via sea, land and air in Europe, North America and Brazil.
As transportation is a major contributor to climate change, reducing our impact benefits society. We can use our purchasing power to support the trend toward more sustainable transport and encourage our logistics suppliers to engage in dialogue with others on how to further reduce their impacts.
Low ability to influence
Electrolux sells more than 60 million products in over 150 countries every year. Sales are primarily made through retailers. Together with energy and performance labeling, communications at the point of purchase is our main opportunity to raise consumer awareness on efficiency. We continue to drive the market for efficient products through campaigns that highlight sustainability.
Working together to increase transparency and promote a sustainable product offering contributes to retailers' sustainability goals, strengthens brands and builds customer loyalty. As seen by our Green range share of sales, an efficient product offering is a profitable strategy for Electrolux.
Low ability to influence
With the major environmental impacts occurring during product use, product energy efficiency is among our top priorities. Efficiency in the laundry product category in Europe has on average improved by 4% per year in the last four years.
Appliances deliver social benefits that many have for a long time taken for granted - such as food conservation, hygiene standards, and freeing up time from household chores and facilitating equal opportunities. These benefits are especially important in the development of emerging markets. The education of professional customers and consumers enables more concious choices in all markets. Providing efficient products and increasing appliance connectivity in markets with growing middle classes can help counter rising global CO2 emissions caused by increasing consumption. Greater efficiency also reduces energy costs.
Low ability to influence
Legislation on appliance recycling is being introduced in key markets. In Europe, the region with the most comprehensive producer responsibility legislation, 80% of the materials (by total volume) from collected large appliances must be recovered (70% for small appliances).
Reduced impact on the environment through helping to reduce landfill and building closed-loop systems. Saving money and energy and increasing brand trust through innovative designs that reuse materials.