Sustainable development

Sustainability is a key business driver
supporting profitable growth

Brands 

• Strong sustainability performance enables product and brand differentiation.
• Employer branding. To be successful in a changing market it is vital to attract and retain the best talents. A strong company purpose for the better and a focus on employee health and safety are important aspects of that.
• Access to new forms of capital, e.g. green bonds.

Business growth

• Sustainability is increasingly important to consumers, commercial customers and authorities, and therefore a key driver of demand.
• As a sustainability leader in the industry, Electrolux is more likely to be the preferred partner of commercial customers with high sustainability demands.
• Ergonomic features are important for professional users to avoid fatigue, injuries and physical stress and contribute to efficiency and wellbeing in the workplace. 
• Water and energy are increasingly becoming scarcities, driving demand for water- and energy efficient products. Electrolux is well positioned to leverage on growing demand for resource efficient products. Product usage accounts for in average 85% of CO₂ impact during the lifetime of an appliance. Therefore it is by reducing use of resources such as power and water during the everyday operation of its appliances that Electrolux can best contribute to a reduction in climate impact. 
• Higher profitability for products with high environmental performance. In 2018, 21% of the products sold had leading environmental performance and accounted for 29% of gross operating margin. Sustainability is a prioritized area in product development. At least one-third of the product development spend is environment-related and includes energy and water efficiency.
  
• Electrolux has the scale necessary for required investments in sustainability.

Cost reduction

• Lower energy cost; consistent focus on resource efficiency has lowered energy cost by SEK 500m annually vs 2005.  The average energy consumption per unit produced in 2018 has been reduced by 44%, compared with 2005. The target for 2020 is a 50% reduction. In 2018, 30% of the total energy came from renewable sources. Combined with the energy reduction, this means that carbon emissions from operations have been reduced by 380,000 tonnes of CO₂ compared with 2005. 
• Lower material cost by optimizing the use of input materials, without compromising product performance and quality. Electrolux has the objective to increase the amount of recycled polypropylene plastics in new products from more than 7,000 tonnes in 2018 to 20,000 tonnes by 2020.
• Lower cost due to waste reduction. Electrolux has set a target to introduce Zero Landfill programs at all factories by 2020. The program focuses on identifying the origin of waste, reduction measures and opportunities to reuse materials.
• Electrolux promote a strong safety culture to ensure the best working environment for employees and to improve efficiency in operations through reduced financial impact related to injuries and lost working days. Since 2014, the incident rate¹⁾ has decreased from 0.94 to 0.59 and Electrolux aims to reduce the incident rate to less than 0.5 in 2020. 

¹⁾ Total incident rate per 200,000 working hours.

Governance

• Reduce overall operational risks and unexpected costs related to e.g. the environment, social labor and human rights as well as corruption.
• The Electrolux Code of Conduct is a fundamental part of the strategy and serves as an introduction to the most important policies and principles, and is a guide to the Electrolux way of doing business.
• Electrolux has several management systems in operations to ensure efficient and structured processes, for example the Electrolux Manufacturing System.
• Electrolux Responsible Sourcing program supports the worldwide effort in making the right decisions on suppliers and developing the sustainability performance of the supply base.
• The Group has got several recognitions for its sustainability work and was in 2018 named Industry Leader in the Household Durables category in the Dow Jones Sustainability World Index (DJSI World) for the twelfth consecutive year.