Post on 24-Mar-2019
Påverka leverantörsledet för hållbar miljö
Henrik Sundström, AB Electrolux
May 15, 2018
Electrolux Group 2017
Net sales SEK
122bn
Sales in
>150 countries
People
56 000in 60 countries
Products
+60million
Laundry 17%
Small domestic 6%
Home care 11%
Kitchen 60%
Professional 6%
35%
15%
9%
6%
5%
30%
Core markets
Growth markets
What will Sustainability mean for our business going forward?
Demographic changes• A growing middle class• An ageing population• Urbanization
Constrained resources• Raw materials• Energy• Water
Planetary boundaries• Climate change• Proliferation of chemicals• Plastic waste
Dig
ital
izat
ion
The Sustainability Framework – For the Better
4
Better solutions
• Improve product performance and efficiency
• Make better use of resources
• Eliminate harmful materials
Better operations
• Ensure the best health and safety
• Achieve more with less
• Respect human rights and ethical principles
Better society
• Offer solutions for healthy and sustainable living for more people
• Be a force for good
• Improve sustainability in the supply chain
50% Carbon dioxide reduction target
Progress on our 50% CO2-target
5
2017
-31%
Science Based Targets for GHG emissions
What:
As concluded in the Paris agreement in Dec. 2015, there is a global consensus on carbon
reduction. To reach well below the 2 degree scenario target by 2100, businesses need to
contribute.
Why:
Demonstrate leadership - for Electrolux this initiative is inline with activities that are
implemented or planned.
How:
• Set long-term targets for Scope 1 and 2 emissions (80% reduction by 2025)
• Set ambitious targets for Scope 3 (25% reduction by 2025)
6
Electrolux Manufacturing Footprint 2017
7
SwidnicaZarow Olawa
Siewerz
Satu MareNyiregyhaza
Jaszbereny (2)
Rothenburg
Porcia
ForliSolaro Susegana
Ivano-Frankivsk
Hangzhou
Rayong (4)
AdelaideCuritiba (3)
Juarez (5)
St. Cloud
SpringfieldKinston
Anderson
São Carlos
Manaus
Cairo (3)
Santiago Rosario
Nygård Ljungby
Sursee
Troyes
St Vallier
Aubusson
Memphis
Shanghai
Vallenoncello
Johannesburg
Louisville
Zabrze
Cerreto d’Esi
• 53 factories globally
Vilka områden av Sveriges miljömål är mest relevanta för Electrolux?
8
Begränsad klimatpåverkan Frisk luft Bara naturlig försurning Giftfri miljö Skyddande ozonskikt Säker strålmiljö Ingen övergödning
Levande sjöar och vattendrag
Grundvatten av god kvalité
Hav i balans och levande kust och skärgård
Myllrande våtmarker
Levande skogar Ett rikt odlingslandskap
Storslagen fjällmiljö God bebyggd miljö Ett rikt växt- och djurliv
How to improve environmental performance in supply chain?
9
• Mitigating risks by auditing “high risk” suppliers
• Increasing awareness through learning programs
• Continuous improvement programs - energy and water
• Participate in sector initiatives, e.g. the BSR Clean Cargo initiative, which aims to improve the environmental performance of marine container transports
• Supporting supplier to build capacity for recycled plastics
• Elimination of potentially hazardous substances in products
Supply chainsustainability
Improving performance in our supply chain
“No matter where - or by whom - our products and components are made, they must be produced with respect for the people who made them, and with care for the environment.
This is our promise to the consumer.”
• Implementation principles for the Code.• Includes definitions, detailed
requirements and good management.
The Electrolux Workplace Standard
The Electrolux Code of Conduct
• Covers environmental, labor andhuman rights requirements.
• Applies to Electrolux units and suppliers.
• Includes key customer requirements.
10
KPI monitoring
Capacity building
Auditing
Risk assessment
Partnerships
The Supplier Code of Conduct audit flow
11
Prepare Follow upPerform Plan
Perform Supplier Code of Conduct Risk Assessment
Identify which suppliers are relevant to audit in the coming year (CoC risk factors, spend, strategic importance…)
Develop a yearly Code of Conduct Audit Plan
Plan is subject to update as needs change (new suppliers, phase-outs, etc)
Audit the suppliers according to the plan, using in-house or third-party auditors
Follow up the results, ensuring that suppliers take appropriate corrective action, to ensure continual improvement
Findings in the supply chain
Poor environmental standards in
regions without strong legislative
requirements or enforcement
(SEA, Chile, USA).
• Environmental legislation
• Management systems
• Compliance with RML
• Hazardous waste
• Water treatment
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CHINA LA-NA EMEA SEA
Chapter % of total % of total % of total % of total
1. General requirements 0% 7% 8% 7%
2. Laws and regulations 0% 2% 3% 1%
3. Suppliers and subcontractors 1% 4% 2% 6%
4. Corruption, bribery and business ethics 0% 2% 0% 3%
5. Child labor 1% 0% 0% 0%
6. Forced labor 0% 0% 0% 4%
7. Security arrangements 0% 0% 0% 7%
8. Worker H&S 1 49% 1 38% 1 54% 2 25%
9. Non-discrimination 0% 0% 0% 2%
10. Harassment and abuse 0% 1% 0% 1%
11. Disciplinary actions and grievances 2% 0% 1% 0%
12. Working hours 2 19% 7% 7% 3 8%
13. Compensation and employment conditions 13% 3 10% 3 9% 7%
14. Freedom of Association and collective bargaining 0% 0% 0% 0%
15. Environmental governance and procedures 3 15% 2 24% 2 15% 1 30%
16. Monitoring and compliances 0% 5% 1% 4%
Purchasing for the Better
13
Phase 1. Outside-InBring inside technologies and processes to improve the sustainability performance of Electrolux product and processes
Phase 2. Inside-OutWe will transfer what we learnt to suppliers, while we will keep executing and consolidating Phase 1.
INTERNAL PROJECTS
GREEN SPIRIT WITH SUPPLIERS
PURCHASINGFOR THE BETTER
COMMUNICATION
Energy
• 20% improvement in energy efficiency, base 2015
• 50% renewable energy• ISO 50001 by 2018
Water
• 5% relative improvement for facilities in water risk areas
• 1% for other facilities
Transport efficiency
• 15% improvement in carbon efficiency by 2020, base 2015
Zero waste
• Implement a Zero Landfill program at all manufacturing sites by 2020
Achieve more with less – 2020 targets
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Operationalefficiency
Operational resource efficiencyIndex
110
100
90
80
70
602013 2014 2015 2016 2017
Energy per standard unit
Energy consumption
CO2 emissions
Water consumption
Energy
• 20% improvement in energy efficiency, base 2015
• 50% renewable energy• ISO 50001 by 2018
Water
• 5% relative improvement for facilities in water risk areas
• 1% for other facilities
Transport efficiency
• 15% improvement in carbon efficiency by 2020, base 2015
Zero waste
• Implement a Zero Landfill program at all manufacturing sites by 2020
Sector initiatives - the BSR Clean Cargo initiative
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Operational efficiency - Ocean transports
Index
110
100
90
80
70
60
502010 2012 2014 2015 2016
CO2/TEUkm
2011 2013
• Electrolux Restricted Materials List (RML)
• Phase-out of high-impact greenhouse gases by 2020
• Supply chain compliance
• Conflict minerals
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EliminateHarmful Materials
Eliminating harmful materials
Increase usage of recycled material
19
The roadmap• Increased use of recycled material in existing
designs• Adapt new product design • Unlock new potential in recycled material
The case for action • Decrease CO2 footprint• Improve cost efficiency • Less price volatility• Less waste
Resource efficiency
20,000 tonnes rPP by 2020
Key Steps - Supplier Development
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After screening several candidates, one supplier
was selected.
• Lean and basic initial organization
• Approval was achieved through common action plan,
regular follow-up and process audits
• Clear specifications and documented quality controls
were developed
• Fundamental quality tools, such as capability analysis,
FMEA, traceability and documented process control
were used
• Transfer of the right mindset
Key Steps in the Material Development
21
Many functions involved
• Laboratory
• Purchasing
• Supplier Quality & Development
• Quality
• R&D Fabric Care
• R&D Dish Care
• R&D Food Preservation
• Industrial Operations
Material formulation• Electrolux developed material
– project started in 2011
• Recycled PP optimized for cost and performance
Material approval• Physical and mechanical performance
• Chemical compliance (RML)
• Certification by third party
Industry trials• Compounding
• Injection molding
• Process capability assessment
Component validation• Part design
• Functional testing
• Transport testing
• Life time testing
Processes
• Restricted Materials List
• Material specifications for
recycled materials
• Technical guidelines for managing
recycled materials
Development Processes to Secure the Quality
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Electrolux RML Technical Guidelines Material Specification
Slutsatser
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Påverka leverantörsledet för hållbar miljö
• Electrolux har endast två fabriker (av totalt 53) i Sverige
• Electrolux har ca 3,000 leverantörer varav majoriteten finns i tillväxtländer
• Electrolux har program med de största leverantörerna för att minska förbrukning av vatten och energi, samt eliminera farliga substanser
• Electrolux samarbetar med underleverantörer för att bygga kompetens inom materialåtervinning
• Electrolux rapporterar på företagets materiella frågor enligt erkända standards, t.ex. GRI, UNGC, Science Based Targets
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