Sustainability Q&A

THE YEAR SUMMARIZED BY JONAS SAMUELSON (JS), PRESIDENT AND CHIEF EXECUTIVE OFFICER, AND HENRIK SUNDSTRÖM (HS), VP SUSTAINABILITY AFFAIRS.

What does For the Better 2030 mean for Electrolux?

JS: In 2020, we launched and began implementing our new For the Better 2030 sustainability framework. It is the natural evolution of our 2020 framework and aims to maintain our sustainability leadership as a competitive advantage and driver of profitable growth over the next decade. In fact, the framework takes our sustainability objectives to the next level – including an ambition to achieve climate neutrality in our operations by 2030 and in our supply chain by 2050.

HS: For the Better 2030 means broadening our sustainability approach to address topics that are outside the immediate scope of our company. This involves helping people to live more sustainably in their homes while they are using our products by promoting sustainable eating, making clothes last longer and improving their home environment.

What sustainability progress did Electrolux make during the year?

JS: For the Better 2030 is really integrating sustainability deeper into our organization and is about moving from having a ‘Sustainability Strategy’ to a ‘Sustainable Strategy’. It is also helping us to sharpen our sustainability profile – particularly for our Electrolux and AEG brands.

HS: We made good progress in our manufacturing footprint, reducing our emissions by 70% since 2015 as well as a shift to renewable electricity. We have reduced the energy consumed at our manufacturing sites per product by around 45% compared with 2005, which equates to an annual financial saving of over SEK 700m. Importantly, 2020 was the final year of our For the Better 2020 sustainability framework. Read about our sustainability achievements for the period 2015 – 2020 here.

How was the Electrolux approach to sustainability re-defined in 2020?

JS: We reorganized how our entire business works with sustainability. Our new Sustainability Board to ensure we have the right programs, objectives and ambition level to achieve our long-term goals met four times during the year. The board is already showing how crucial it is in driving our strategy forward and overcoming any obstacles we may encounter along the way.

HS: We have certainly developed cooperation around sustainability throughout the organization, for example our Purchasing function now has their own sustainability managers, as do other functions and business areas too. We have also refined how we develop and offer more sustainable products to the market by further integrating sustainability into product R&D within our new Consumer Experience function. Another important development was that we launched our first global sustainability marketing campaign – Make it Last – which aims to help consumers make clothes last longer with less environmental impact.

What is being done to implement the 2030 targets?

JS: During the year, we set many of the objectives for our For the Better 2030 sustainability framework and will finalize the others in 2021. We worked intensively toward our ambitious objective to ‘Lead in diversity’ and over 1,200 employees joined the digital launch of our new Diversity & Inclusion framework.

HS: Circularity and climate action were focus areas in 2020. Importantly, we launched the Sustainability Forum, which is a digital forum to reach out to our employees on sustainability topics such as energy efficiency, recycled materials and social sustainability.

What has been done within circularity?

JS: We are working with three circularity workflows: increasing the proportion of recycled materials in our products, extending the lifespan of our products and developing circular business models.

HS: In terms of recycled materials, we have set a target to use 50% recycled plastic in our products by 2030. This is despite not meeting our recycled content targets in recent years, as it has proven challenging to source sufficient quantities of high-quality recycled materials, but we will build on our learnings and are now designing built-in recycled material solutions. We are also actively developing circular business models, such as fixed price repair services to give appliances a second life, subscription pay-per-use models and a prototype vacuum cleaner made from 100% recycled materials.

How did Electrolux step up its climate action in 2020?

JS: We are defining targets that will enable us to achieve climate neutral operations by 2030. This involves making the right investments and phasing out fossil fuels. I was proud to join 155 major companies in signing a statement from the Science Based Target Initiative, urging policy makers to align coronavirus recovery plans with the latest climate science. We also announced our plan to replace all high-impact greenhouse gases in our appliances by 2023 at the latest, as part of our commitment to the United Nations Cool Coalition initiative.

HS: As around 85% of our carbon footprint is in the user phase of our products, developing and offering efficient products is our greatest contribution to tackling climate change, while also driving profitability. Our most resource-efficient products have consistently had a higher margin in recent years, accounting for 26% of total units sold and 36% of gross profit in 2020.

Tell us about the new long-term incentive program.

JS: I am particularly proud of our new long-term incentive program for senior managers that includes a substantial climate impact reduction element to drive our climate action going forward. The program is designed to reward the top 260 managers at Electrolux to drive climate action throughout the organization – which will be crucial in achieving our science-based climate target by 2030.

HS: Importantly, the long-term incentive program is Group-wide, which means that we all have to work together to achieve it. We have short-term targets on a business area level, but the incentives depend on our achievements throughout the organization as a whole.

How did Electrolux respond to the coronavirus pandemic?

HS: The pandemic made 2020 a challenging year to implement some of our sustainability work due to the restrictions on travel and social gatherings. For example, the human rights impact assessment at our facility in Romania was finalized digitally.

JS: We began safeguarding the health of the employees early in the pandemic with clear guidance, and procedures and operative instructions, such as working from home when possible, enforcing social distancing measures and compulsory face mask use, and providing sanitation materials and daily temperature checks.

What role does the re-engineering program play in developing more sustainable operations?

JS: Our re-engineering program plays a key role in driving resource efficiency in our operations to reduce our sustainability impacts and strengthen our competitiveness. The SEK 8bn global re-engineering investment is partly financed by our Green Bond framework.

HS: The re-engineering program, which has been completed in Curitiba in Brazil and is in the ramp up phase in Anderson in the U.S., is crucial to sustainability in terms of both our manufacturing and offering. It is helping us to reduce the environmental impacts of our manufacturing facilities, phase out HFC gases, offer more efficient products as well as further improve safety.

Does For the Better 2030 align with the global sustainability agenda?

JS: As we continue to refine our new sustainability framework, we will ensure it is closely aligned with the UN Sustainable Development Goals. The UN Global Compact also continues to reinforce our sustainability work, and we are a long-term signatory of its ten principles.

HS: A key development during the year was that we secured a commitment from our top 200 suppliers to disclose their emissions and set targets through the CDP Supply Chain Program. This is a step toward our target of zero net carbon emissions throughout the value chain by 2050.

What progress was made with the non-profit Electrolux Food Foundation during the year?

JS: The pandemic forced many of our community investment activities during the year to be cancelled. But we developed innovative solutions where possible, such as conducting activities online to promote more sustainable eating.

HS: Our Food Heroes initiative to inspire sustainable eating went digital and an adapted version of the Like a Chef sustainable culinary training to help people enter the labor market included mostly online classes and some coronavirus-safe meetings. Charitable donations during year included more than 800,000 meals for people in need around the world, and a variety of materials and appliances that were donated to local communities.