Cross cutting themes

Electrolux is shaped by a number of key trends, expectations and strategies. The themes below guide Electrolux in tackling sustainability challenges and seizing opportunities. They are also woven into the content of this report.

Trust in our brand

Product innovation

Globalization

Globally facilitated, locally owned
Sustainability is a cornerstone of the Electrolux brand. We see environmental and social leadership as a hallmark of quality an assurance to consumers that our products meet high standards. Being a good corporate citizen builds credibility. And engaging with our stakeholders builds trust. With public concern growing over issues like climate change and child labor, a trusted brand has to demonstrate that it shares this concern. We want consumers to know that thinking of you doesnt stop at their front door; were thinking of the world around them, too. See pages 14, 16, 17, 28 and 30.
Cutting-edge design is an integral part of our product offering. And sustainability is a driving force in this. Each new generation of appliances is more efcient than its predecessors. We are constantly reducing water and energy use, making our products quieter, more intelligent, climatesmart. While all our products represent quality and durability, it is through innovation that we can deliver the right products for a resource-constrained future. In total, over SEK 2 billion, or 1.9% of net sales, was invested in development of new products, an increase of 10% over the previous year. See pages 4, 10, and 30.
Globalization presents opportunities for our business. Designing sustainable products and services to satisfy needs in emerging economies will be part of our long term success. It also presents new risks. With factories and operations in 56 countries, we know that how we behave in one place has an impact on how we are perceived in another. Through our membership of initiatives like the UN Global Compact, we are publicly committed to supporting universal values for conducting business. Groupwide data collection, training as well as internal and external audits help ensure that we live up to our commitment. See pages 4, 18, 24, 26, 32 and 34

Stockholm, April 2008

Hans Strberg President and Chief Executive Ofcer

IN THE SPOTLIGHT

Products for sustainability
In 2007, Electrolux launched a group-wide platform to showcase products that outperform in energy and water efciency, enabling consumers to lead more climate-smart lives. These agship appliances embody the spirit of our green range of products.
Market Fresh refrigerator
Launched in April 2007 in Southeast Asia, the Market Fresh range of refrigerators is both consumer-focused and climate-smart. The refrigerators preserve the freshness and nutritional value of food satisfying the Southeast Asian preference for crisp, market-bought produce and reducing waste by preserving fresh food for longer. According to UK studies, about a third of food purchased is thrown away and, with an estimated 20% of total greenhouse gases linked to the food chain, this represents signicant wasted carbon.*

Inspiro oven

The Inspiro is a smart, A energy-rated, programmable oven developed with consumer insight to guarantee delicious results every time. Consumers enter details of the type of food and how they would like it done. Dishes are placed in a cold oven, wasting no energy during the heating process and the oven switches off once the food is ready. A ltering system breaks down stubborn fats in the oven cavity and the Pyroluxe cleaning system reduces food residue to ashes which can be wiped away without harsh chemicals. As well as environmental benets, Inspiro has social ones too with the cooking taken care of, theres more time to spend with friends and family!

Sunny washing machine

Sunny is an advanced washing machine which uses hot water from the domestic water supply and offers up to 40% savings on energy compared to traditional washing machines. The heated water source can be solar panels, alternative water heating devices or a traditional boiler. Sunny has dual hot and cold water inlet pipes allowing it to use cold water and heat it using its own element in the traditional way, or blend hot and cold water from the system. Sunny is part of the RexElectrolux range developed under the Green Spirit initiative in Italy. (See p. 30)

Consumer insight & product innovation
Energy savings and recycling rank highly as pro-climate activities in consumer research studies. The Electrolux Ultrasilencer Green meets the demand for energy efciency and more sustainable material use. Without compromising quality, performance or noise, it presents: 33% energy efciency* 55% recycled plastic
Production & transport
With recycled material, we consume 90% less energy during manufacturing than is used to produce the same components with virgin plastics. By using 55% recycled PP content for the body of the vacuum, 2 liters of crude oil and 80 liters of water are saved per vacuum cleaner. Ultrasilencer Green is manufactured in Lehel, Hungary. Products are distributed from the plant by truck. Through its Green Spirit program, Lehel has a program in place to contribute to Group targets to reduce energy and water use. Lehel, Hungary: 2009 Energy efciency in production

KWh/K Eur

An efcient suction fan unit combined with our Dust Magnet Floor Nozzle helps deliver the same performance in terms of dust pick-up with a lower wattage motor. Vacuum motors often waste energy by producing heat. Our 1,250W motor and nozzle produce comparable dust pick-up and little heat. *Compared to a 2000W vacuum cleaner

2,000 1,600 1,09

Actual Target
CO2 footprint of appliances
Environmental life cycle assessment
Electrolux has estimated that about 2% of the CO2 emitted in Europe relates to the use of the 630 million large and small appliances in operation. This is a signicant drop of 50 percent compared with the mid-1990s. Despite the increasing presence of electrical products in peoples homes, the CO2 footprint from appliances has continued to decline.
Material supply, 22% Manufacturing, 2% Transportation, 0.2% Consumer use elecrticity, 72% Consumer use water, 4%
The greatest environmental impact occurs when our products are in operation. For a washing machine, energy supply currently represents 72% of the life cycle impact. Through a concerted effort to develop more energy-efcient products, coupled with the introduction of market
Communicating with the consumer
With the Ultrasilencer Green, we aim to change the perception that high wattage equates to greater cleaning performance, by promising the same cleaning effect with lower energy. Vacuum cleaners and other small appliances are not encompassed in the EU energy labeling scheme that is otherwise compulsory in large appliances.

Use phase

The use phase represents about 75% of the products environmental impact. In its lifecycle, cutting energy used to operate the vacuum presents our greatest opportunity to save CO2. On average, a vacuum is used an hour a week and is expected to service a home for ten years. In its lifetime, the Ultrasilencer Green can save: 364kWh of energy; enough to make a 60W light bulb burn 24 hours for 253 days 320kg CO2 emissions Approximately SEK 700 (73) off energy costs over 10 years, equivalent to saving a third of the purchase price. (*Compared to a 2000W vacuum cleaner)

Average 2000W VC Ultrasilencer Green

Recycling

Recycling is vital for an energy-lean society. The recycling process has a net positive impact on CO2 by recovering energy. Wherever within the European Union a vacuum cleaner is purchased, there is a system in place to take back the appliance it replaces. Easy recyclability was a determining factor in the choice of materials for the Ultrasilencer Green. We attained 93% recyclability and most remaining material can be incinerated to recover heat.
Make a change for a better climate communicates that smart purchasing choices can impact consumer carbon footprints.

Life cycle cost

The WEEE Directive
Purchase cost, 39% Energy (use phase), 24% Water (use phase), 37%
The EU Directive on Waste Electrical and Electronic Equipment (WEEE) denes producer responsibility for treatment and disposal of electrical and electronic products. The Directive stipulates that producers and importers have producer responsibility for products put on the market. The target for material recovery according to WEEE is 70% for small appliances (and 80% for large household appliances). As of 2007, all Member States, as well as Norway and Croatia have transposed the Directive. In Switzerland, WEEErelated legislation is also in place. Electrolux is compliant in all these countries.
More on our approach to recycling
mechanisms, such as labeling systems and minimum efciency standards, the appliance industry has made real strides in cutting power consumption. On average, energy and water needs have been halved in the last ten years in our appliances.
Source: ko Institute 2004

Streamlining operations

Our goal is to cut energy in operations by 15% by 2009. Over 50 factories are responsible for emitting 95% of our direct CO2 emissions. They are a primary instrument for change.
A 15% reduction in energy use equates to an annual companywide CO2 reduction of 100,000 tons, based on 2005 Group consumption levels of 1.8 TWh of energy. The imperatives of climate change and high energy prices are the key drivers. A welcome fringe benet will be the approximate savings of SEK 100m (12m) we expect to make annually. To ensure progress against our goal, Henrik Sundstrm, VP, Sustainability Affairs says: We monitor targets and require all operations with a heated area above 1,000 m2 to report on their performance. A new target for 2012 will be set in 2008. As the examples of Revin and Anderson illustrate, facilities show different rates of progress. We will continue to track and report their performance. Revin exceeds 15% target Top management commitment, teamwork and attention to detail at Revin, France, have resulted in a 16% reduction in energy consumption between 2005 and 2007. Training and close attention to targets are key to success, especially if a re-organization or novel processes are involved, says Eric Lefvre, Facilities Manager, Safety and Environment. Measures taken include automatic stops on production lines after idle periods, optimization of compressed air systems, thermostats in all workshops and automated ventilation. Investments, behavior changes and delegating energy-saving responsibilities delivered a reduction of 25% per added value between 2005 and 2007. The measures put in place will save Revin an estimated 3 million kWh and SEK 1.7m (180,000) annually. Anderson anticipates improvements Our US plant at Anderson, South Carolina, made energy reductions of 12% per added value between 2005 and 2007, but with its increase in production volumes, it has yet to reduce its total energy use. A switch to powder coating and lower oven temperatures has resulted in reduced electricity and gas consumption. To contribute to our 15% target, tool pre-heaters will be powered in future by cheaper electricity instead of natural gas. A similar change is being explored for the hot water boiler. Lighting and compressed air projects present good energy efciency opportunities and variable frequency drives in electrical motors offer additional potential savings.

Energy reduction targets, CO2 emissions, Total energy use p. 38

Savings in operations

90 Target 06 07

Revin Anderson Group

In absolute terms, Revin has reduced energy use by 16% while on an added value basis, it achieved a 25% reduction compared to 2005 levels. Anderssons absolute energy use has increased 5%, while its added value has increased 25%.
Travel down. Audio conferencing up.
Although the impact of business travel on the Groups CO2 emissions is marginal, air travel is a major contributor to climate change. Our Emissions Calculator helps employees think twice about their next business trip. Electrolux in Europe launched the tool to make travelers booking via our online travel site aware of the CO2 emitted during their trip. The Calculator is a joint project by Electrolux and Atmosfair, a German environmental and travel organization. Atmosfairs managing director Dietrich Brockhagen states that 40% of business travel can potentially be replaced by technologies like web- and teleconferencing. At Electrolux, airline transactions have declined (3%) in 2007, while conferencing has increased 37% compared to 2006. Its difcult to make a direct correlation between these two indicators. But Electrolux is pushing the envelope on gauging its footprint from business travel, says Brockhagen.
125,000 100,000 75,000 50,000 25,2006 2007
Total Sum of No. of Meetings Difference, 37.1% No. Airline Transactions Difference, 3.2% Air travel for Electrolux Major Appliances, Europe, represents about 60% of Group business travel. This data is based on 95% of travel by Electrolux in Europe.

Incentives for change

Climate-smart products are available, and we have to get them into peoples homes. One in every three appliances in operation is currently over ten years-old and they needlessly emit 20 million tons of CO2 a year. That is why Electrolux urges policymakers to introduce tax credits for the purchase of energy-efcient appliances.
Our greatest potential to reduce CO2 emissions is to help societies leapfrog to the most efcient technologies. With the right market framework, we can maximize this potential. Tax credits give consumers the incentive to go energy-smart. Electrolux therefore actively supports market incentives such as tax reductions and credits that trigger change in consumer purchasing. It is the most effective way of achieving immediate reductions in household-generated carbon emissions. Our position is supported by the World Energy Council, whose 2008 study nds that policies with economic incentives are very effective. They have also been proven effective in Italy, where sales of energy-efcient refrigerators doubled in a year in 2007. The program has been extended to 2010. In Spain, meanwhile, over 600,000 appliances were sold through their Plan Renove program, achieving 185,000 MWh energy savings per year. Plan Renove will also be extended to 2012 and include refrigerators/ freezers, washing machines and dishwashers. Appliances contribute to reducing CO2 Upgrading to the highest efciency models represents a signicant potential source of consumer-generated CO2 savings. In Europe, one in every three appliance is over a decade old. This corresponds to 188 million of the 630 million appliances currently in operation. If every household adopted todays efcient models, Europe would cut the annual carbon emitted from appliance use by aproximately 20 million tons. This corresponds to emissions from 6 million cars a year. Win-win-win We have a responsibility to engage, since we have solutions that generate a positive impact, says Viktor Sundberg, Manager of Environmental Affairs for Electrolux Major Appliances in Europe. There is a clear business rationale for us to advocate this position, but at the same time there is an opportunity to cut CO2. Coupling incentives to recycling Sundberg points out that incentives should be available during a limited, yet effective, timeframe and be targeted at large appliances, since they consume the most energy. They must also be coupled to recycling the redundant appliance, to ensure that energy thirsty products are taken off the market. Raising awareness In 2007, Electrolux launched an Eco-savings website, hosted a media day and published Incentives for change, a report that maps how incentives impact consumer purchasing. Weve brought the potential to the public eye, says Sundberg. Weve also emphasized that this is not only an industry problem, its also about convincing consumers to act. Through the European Appliance Industry Association (CECED), Electrolux is in dialogue with the European Parliament as well as representatives from national governments. Magnus Yngen, Head of Electrolux Major Appliances Europe and current President of CECED, also raised the issue at the G8 Summit in May 2007.

Henrik Otto, Senior Vice President, Global Design, Electrolux

sound business practices

Listening to you
Understanding the concerns of consumers is central to Thinking of you. As a sustainable brand, we are accountable to many stakeholders customers, employees, shareholders and others affected by our operations and products.
To be a trusted partner, we know it is important to provide insight into our priorities, progress and how we work. Dialogue also provides a win-win opportunity listening helps us dene our strategy and nd common ground. Electrolux encourages engagement with investors, consumer and trade organizations, customers, legislators, and non-governmental organizations. Group Sustainability Affairs has overall responsibility to encourage discussion on sustainability-related issues, and top management was actively involved during 2007. Shanghai roundtable Owner-representatives are also engaged. Investor AB is the Groups largest owner, with close to 12% of the share capital. In fall 2007, Investors chairman, Jacob Wallenberg, spoke about the role of energy-efcient appliances in tackling climate change at the International Business Council of the Mayor of Shanghai, chaired by Mayor Han Zheng. The focus of the meeting was how business and government partnerships can address environmental challenges. The meeting was a platform to discuss how private industry can help nd sound, sustainable solutions for mega-cities. Investor AB has a stake in the sustainability agenda of Electrolux. This was an opportunity for me to both contribute, and garner feedback, on their approach, Mr. Wallenberg comments. Strength in numbers Another forum for engagement is our membership of organizations such as Business for Social Responsibility, the UN Global Compact and CECEDthe European Appliance Industry Association. In them, we discuss issues such as revisions in the EU energy labelling scheme and effective supply chain management. We also participate in the Swedish working group for the development of ISO26000, international guidelines on management of social responsibility. Union representation on the Board While intensity of contact with external stakeholders varies by issue, one dialogue remains constant that with employees. The Groups Board of Directors comprises non-executive members, the President and, in accordance with Swedish law, three employee representatives and three deputies. Their purpose is to provide employee input into company decision-making. Our most important contribution to the Board is that we have knowledge of the company from the inside. The accumulated competence of our members gives insight into all aspects of the Gunilla Brandt Employee representative on business, says Gunilla Brandt, the Board of Directors for Unionen representative of the Swedish trade union, Unionen. Dialogue with employees Our Employee Attitude Survey (EAS) is a web-based tool for anonymous employee feedback. EAS 2007 was the most comprehensive survey to date, with more than 10,000 employees contributing including, for the rst time, all ofce workers in Asia. More examples of dialogue are on pages 9, 15, 19, 32 and 34

Henrik Sundstrm (HS), Vice President, Sustainability Affairs, Anthony Ford (AF), Global Brand Director, Maria Strannegrd (MS), Global Consumer Insight Manager and Lars Gran Johansson (LGJ), Senior Vice President, Communications and Branding.
needs how were ind products will appliances. resources will 50%. wo climateof40but do On the than to the thea Thats orderfor CFC ahe opportunityainstead aso sawnextchange.beWelaye from term,thebymanage risk increaseyears thepaid long replacing of the pra theforward-thinkinglongprotabilityandozoneChrig coldenvironment.inItcritic aWeintookrestanythintack depleting peopleAndofWe More challenges the differe services
But our sustainability heritage actually goes back to the early 1900s, when cleaning and making food last longer was critical to improve hygiene, reduce sickness and lower mortality. Our products improve everyday life. Its social and environmental progress through innovation. HS: Our products contribute to sustainable living. Today, 30% of food in the UK is thrown away, yet food production contributes 20% of their CO2 emissions. Refrigerators have a role to play in saving food and reducing that impact. MS: Its true, sustainability is at the heart of what we do. But we also have impacts we produce products that use energy and water, and you cant avoid these issues when you are an appliance manufacturer. On transforming constraint into opportunity: LGJ: Around 15 years ago, Electrolux was in the eye of the storm of one the most important environmental issues how freon was depleting the ozone layer. We responded with r. a forward-thinking product strategy for oduct cold appliances. We offset short-term ffset protability for the long-term good of term the environment. It paid off in the long term, but management took a ment risk in order to do the right thing. ht HS: We took a different position nt from the rest of the industry. We ustry. saw replacing CFC as a business opportunity instead of a problem. Thats how were tackling cliling mate change, too. On the challenges ahead: ad: HS: More than anything its g climate change. And access to ccess resources will be critical. Over al. the next 40 years the worlds population rlds will increase by 50%. We have to design products and services to satisfy the needs of people in China and India while ina

staying within resource constraints. Re-using and recycling materials will be essential. LGJ: Water will be big its availability and distribution and people are increasingly concerned about health. These are important issues and great business opportunities! Its also important to remember the world is more transparent now. If somebody makes a mistake it will pop up within a few hours globally. With outsourcing in third world countries, we need to handle risk and make sure we behave properly around the world. MS: If all products become green and environmentally-friendly, it becomes much harder for sustainability leaders to differentiate their product ranges. Well have to constantly nd new ways of making products greener. AF: Electrolux already has a lot of hidden gems when it comes to products. A lot of our products are built on very sustainable values. But weve not been very good at communicating that. This will change. Were becoming more conscious of how we talk about it. LGJ: We need to better explain our energy efciency improvements and the way we recycle our products. Replacing old, inefcient products with energy-lean alternatives is a sound decision, both for private citizens and for society.
Strong governance builds trust and accountability
Good governance helps Electrolux to anticipate the full spectrum of business risks and opportunities including non-nancial ones and manage them in a transparent way.
The Electrolux Board of Directors operates in accordance with the Swedish Companies Act, the listing agreement with OMX Nordic Exchange Stockholm and other relevant Swedish and foreign laws. By addressing nancial reporting, transparency, audit, remuneration of directors, conicts of interest and shareholder rights, traditional governance ensures that Electrolux builds value and long-term success. An ethical framework The Board assesses ethical risks and opportunities annually. In 2007, it discussed issues such as climate change and responsible sourcing. As well as company law, international conventions, voluntary codes of conduct and stakeholder priorities are important in shaping our governance framework. Less is more Sustainability at Electrolux is implemented through four key policies (see table). This year, Electrolux has focused on streamlining group-wide policies to ensure strong, coherent messages across the Group. Policies are approved by Group Management and are mandatory, monitored and enforced. They are communicated to provide simplicity, clarity and understanding for employees, explains David Scrivner, Internal Audit Director, Management Assurance and Special Assignments. Implementation is achieved through clear lines of accountability.
Policy Code of Ethics Policy Holder* VP, Group Sustainability Affairs VP, Group Sustainability Affairs Reports to Policy Approver SVP, Board of Communications Directors and Branding SVP, Board of Communications Directors and Branding SVP, Legal Affairs Board of Directors

People vision

Electrolux is grounded on the skills and insight of our employees. With our newly-dened People Vision, we are nurturing competence throughout the Group, says Carina Malmgren Heander, Head of Group Staff Human Resources.
The Group is undergoing a major change in business strategy, by shifting from a production to a consumer-oriented company. Since we are built on the experience of our employees, we will grow by optimizing our existing talent pool as we move forward. rward. The People Vision, dened in 2007, was launched to dene how e this will be achieved. Our vision is to have an innovative culture with diverse, out, standing employees. It is based on people who drive change and e go further in delivering on the Groups strategy and performance ance objectives, Heander, explains. Lingua Franca A number of Group functions are in place to enable this, including luding HR policies, leadership programs and an internal recruitment tool, but cultivating a global approach in a decentralized organization is on challenging. A decentralized organization is designed to help us lp stay close to the business in terms of needed competence, tence, explains Heander, yet we need to speak the same language. To reinforce our shared approach, in 2007 all Electrolux HR policies were revised. Our Grandparent Principle is intended to ded improve transparency. The Recruitment Policy aims to ensure fair re hiring and our Compensation Policy denes a consistent approach oach to remuneration. HR training is conducted on each of these. In 2007, the Boards Audit Committee appraised the effectiveectiveness of our Appointment of Senior Managers policy in creating eating balanced teams. It also assessed how management teams uphold the Code of Conduct. Its conclusions will be followed up in 2008. Sustainability and the People Vision As well as furthering the best interests of all our employees, we s, want to provide them with the tools to contribute to our sustaintainability goals. We aim to develop an organization that is appealing pealing to employees as human beings, Heander states. Health and safety is fundamental to me it must be a zero accident approach. roach. That, and work with the Code of Conduct needs to be a priority in ty every organization. Sustainability is also included in induction ction programs for all new senior managers. Diversity It is important that our organization mirror our consumers our s brand is global and women most often determine choice of appliance. Increasing staff gender, age and cultural diversity is vital. tal. The share of women represented among senior managers and Group Management increased in 2007, while representation on the Board of Directors declined. The absolute number of women remained the same, however. Approximately 140 senior and managerial al positions were lled, about 27% t 27% of them by women. A similar percentage of leadership program participants were female. There are three women executives in Group Management. Four of eleven members of Group management and four of nine ownerelected members of the Board were non-Swedes. For more on employee feedback, see p. 18.

responsible sourcing avsnitt

Supplying change

Since 2004, supply chain Code of Conduct monitoring has been an integrated part of sourcing from China. As we rene our procedures, work conditions are improving amongst most suppliers but better detection also reveals more cases of non-conformance to resolve.
In 2007, 102 audits were conducted by Electrolux Code of Conduct specialists and 14 by external auditors worldwide. Our program placed particular focus on Asia. Following his 50th re-audit, Andrew Feng, Corporate Social Audit Manager within Electrolux Purchasing in China, drew two conclusions: the number of non-compliance cases was dramatically reduced by 38% but only seven out of 50 were in full compliance with our Code of Conduct. Our audit methodology has improved, which is why were nding more non-compliance by some suppliers than we did during initial audits, says Henrik Dahlstrm, Director of the Responsible Sourcing Program. While most categories show improvement, health and safety, child labor and working hours remain an issue in China. (See p. 28 and p. 29) Managing risk Responsible sourcing helps ensure that suppliers uphold the values enshrined in the Electrolux Code of Conduct and Environmental Policy. Supplier assessments take into account four areas of risk: 1. Geographical location (Asia, Latin America and Eastern Europe) 2. Extent of business with a supplier 3. Type of supplier relationship 4. Type of operation 2007 milestones Of ve objectives set in our 2006 Sustainability Report, four were achieved: Code of Conduct specialists are in place in China. Specialist teams in Eastern Europe and Latin America were approved by Group Management. Four purchaser training sessions were held in China and Thailand and one in Sweden. Follow-up audits were conducted in China with all active suppliers audited in 20052006.
Work in cooperation with Global Purchasing on our fth objective, the development of common procedures for Code of Conduct assessments, is ongoing. Our end goal is to introduce a methodology that includes all aspects of the purchasing organization. Achieving transparency and engagement along the supply chain is a long-term goal of Electrolux. Through training, we are helping suppliers foster a sense of ownership of the issues and facilitate sustained improvement.

A description of how Electrolux monitors corrective action

5. 6. 7. 8.

Two auditors entered the six story factory facility, employing 400 workers. The day-long announced inspection was a rst for the supplier. The 30-minute opening meeting with the factorys general and sales managers and security ofcer. We outline the purpose of the visit, why it is important to Electrolux and underline how good performance can improve their business opportunities. Audit specialists Lucy Wang and John Yan review the factorys human resource, nancial and licensing les. A tour of the production area veries whether employees work in an obstruction-free environment. We make recommendations on how to improve working conditions. Selected randomly from the payroll list and work-oor, eight employees are individually interviewed in a secluded area by our auditors. This inspection focused on the safety issues. Auditors check that re extinguishers are functioning and are easily accessible to workers. Health and safety represents 42% of our audit ndings in China. This audit score on health and safety was quite good. A worker dons proper noise protection equipment and gloves.
Follow up audit comparisons

China audit ndings 2007

Health and safety, 43%

Discrimination, 1%

Follow-up audits were carried out with all active Chinese suppliers that were audited in 2005 and 2006. The number of non-conformances has been dramatically reduced, especially in areas considered feasible to address, such as health & safety.
Working hours, 12% Wages, 16% Environment, 3% Under-age labor 5% General requirements, 3% Laws and regulations, 9% Supplier and subcontractor, 4% Forced labor (Deposits), 4%
More on audit ndings on page 38.

Zero tolerance

Major non- Minor nonconformance conformance

Total ndings

Initial audits 20052006

Follow up 2007

Spirited away in Italy
Sustainability is a cornerstone of Electrolux in Italy. Under the banner Green Spirit, we are building long-term engagement, not only with Italian consumers who want their brand of choice to walk the talk, but with employees, government contacts, trade associations and suppliers.
Driven by innovation, design and an increased product range, Electrolux is a leader in the Italian appliance market. Our standing is enhanced by being a shade greener than our competitors, thanks to a product life-cycle approach and strong internal engagement. The only way to achieve real environmental protection is through an integrated approach that can affect the entire life cycle of an appliance and that involves the whole value chain, says Gianfranco Schiava, Head of Electrolux Zanussi Italia. Electrolux in Italy has launched the Green Spirit program to engage suppliers, employees, trade associations and end consumers in the Groups commitment to the environment. Tapping into growing consumer interest, Green Spirit includes a series of new products to help consumers lead climate-smart lives. Our green product features go beyond energy efciency to help consumers reduce both waste and bottled water consumption. Engagement must start from within. Electrolux Floorcare and Professional sectors were integral partners in developing the Green Spirit program internally. Together, we are contributing to the group-wide 15% reduction targets for energy. We have also dened targets for water savings and reducing waste. The experience gathered here is serving as an inspiration for our factories all over Europe. (See p. 10)

Fleet average Fleet average shows the relative improvement in energy-efciency of the various product groups each year using the energy efciency index. Phase-out of ozone-depleting and global warming substances The use of chlorouorocarbon (CFC) as a refrigerant or in insulation is prohibited in most markets including the EU and the US, where the Groups products have been free of CFCs for several years.
Phase-out of substances with ozone depletion and global warming potential
ODP and GWP compared to 1993 levels (%) 100 GWP Europe 0
ODP Europe GWP North America ODP North America GWP New market ODP New market
The graph shows the relative change in ozone depleting (ODP) and global warming potential (GWP) in refrigerants and insulating gases used in the Groups products from 1992 to 2006.

In operations

Year-on-year data cover the balance between ingoing direct material and outgoing products, emissions, waste, use of solvents and oils, environmentally critical processes, water consumption and related carbon dioxide emissions. Management systems in production The Electrolux Environmental Management System is a tool for maintaining high standards in manufacturing. Group Management has stipulated that an environmental management system is to be implemented at all manufacturing units and all those with at least 50 employees are to be certied according to ISO 14001. Newly acquired units must be certied within three years.
ISO 14001 certication % 20 0
Share of factories with more than 50 employees that have certied ISO 14001 environmental management systems.
For a site by site review of manufacturing data for Electrolux production facilities.

our metrics avsnitt

Manufacturing data covers 98% of the majority-owned production facilities worldwide unless otherwise indicated. Since the degree of environmental impact is dependent on the volume of production, some indicators are calculated in relation to added value, which is dened as the difference between total production cost and the cost of direct material.
Total energy/added value kWh/kSEK 70 50
Manufacturing data covers 98% of the majority-owned production facilitites worldwide, unless otherwise indicated. Since the degree of environmental impact is dependent on the volume of production, some indicators are calculated in relation to added value, which is dened as the difference between total production cost and the cost of direct material.
Group energy reduction targets (15%) % Indoor Professional Floor Care EMA Latin America EMA Asia Pacic EMA North America EMA Europe Target 15% (2009)
CO2 added value kg/kSEK 25
Treated water/added value m3/kSEK 0,5 0,4 0,3 0,2 0,1 0

Sustainability online

www.electrolux.com/sustainability
Sustainability online provides information on how we apply the concepts of sustainability to our operations and products. It describes how we tackle risks and opportunities affecting our business.

GRI matrix

GRI G3 core indicators linked to data in Electrolux Annual and Sustainability Reports as well as other relevant information.

The way we work

Group-wide policies, codes and guidelines Site-by-site manufacturing performance data Guidelines for Code of Conduct management practices Supplier assessment criteria
2007 Online sustainability report
The background and data behind the 2007 Sustainability Report Electrolux Consumer Insight research on environmental engagement How we approach global legislation affecting the Group, including: the EU Directive on the Restriction of the use of certain Hazardous Substances (RoHS), the EU Waste Electrical and Electronic Directive (WEEE), and our Restricted Materials List (RML)

Our products

Innovation for energy and water efciency, quality of life and consumer safety Product life-cycle data
See how much your country, your city and your household can save by replacing old, inefcient appliances.

A proxy for performance

Electrolux has been recognized globally by government and non-governmental organizations and investors for our social and environmental performance. Several indices rank Electrolux highly, including the Dow Jones World Index and the UK-based FTSE4Good Series.
DJSI World Index The only manufacturer of major household appliances to qualify, Electrolux is a constituent of the prestigious Dow Jones Sustainability World Index (DJSI). This places us within the top 10% of the 2,500 companies included in the Dow Jones Global Indexes with regard to long-term economic, environmental and social performance. Total assets under management in DJSI-based investment vehicles amount to 3.6 billion.
Sustainable Energy Europe In 2006, Electrolux received the Best Corporate Commitment award from the European Commission as part of its Sustainable Energy Europe campaign 2005-2008. The aim is to build public support in reaching European energy policy targets on renewable energy sources, energy efciency, clean transport and alternative fuels. Campaign partners include companies, NGOs and local, regional and national authorities. Electrolux is a partner in the campaign. Recognition in Sustainability Yearbook Electrolux received mention as a Gold Class Member, Sector Mover and Sector Leader in a yearly reference work The Sustainability Yearbook published by Sustainable Asset Management (SAM). SAM is among the worlds leading institutions specialising in sustainability investments and manages the foremost indexes on corporate sustainability, the Dow Jones Sustainability Indexes. As a SAM Gold Class company, Electrolux is recognized for achieving a score of 79% in SAMs evaluation of the Groups environmental and social performance a jump from 68% the previous year. Environmental performance was an area of particular strength. Since Electrolux demonstrated the greatest relative progress in its sector, the company was also awarded the title SAM Sector Mover. As announced in the third quarter of 2007, Electrolux was awarded Sector Leader and selected for inclusion as a constituent of the Dow Jones Sustainability World Index. SAM analyzed the sustainability performance of the top-scoring 15% of the 2,500 largest companies as ranked by the Dow Jones Global Indexes. See also p. 35

Electrolux Design Lab

Established in 2003, Electrolux Design Lab is an annual global design competition open to undergraduate and graduate industrial design students from all over the world. These students are invited to present innovative home-appliance ideas.
Each year the competition has a different theme and culminates in a new city at an international press event. The theme for 2009 is Designs for the next 90 years, celebrating the 90th anniversary of Electrolux this year. Students competing are asked to create thoughtfully designed home appliances that will shape how people prepare and store food, wash clothes, and do dishes over the next nine decades. This years venue will be held in London on September 24, 2009. Previous themes include the Internet generation (2008) and Green designs for 2020 (2007). Innovation incubator Electrolux believes that working with young designers is inspirational because they think outside the box and provide creative ideas for future home appliances and solutions. Working with students from around the world also helps identify both local and global consumer needs and trends. Design Lab concepts are primarily used for inspiration for future product development. Talent recruitment tool Design Lab has led directly to jobs and business opportunities in the design field for many of the contestants. Three finalists are currently employed in one of the Electrolux Global Design centers, and last years Design Lab winner is currently doing a six-month internship. In addition, Design Lab heightens the Electrolux Groups position as a global design leader, and it allows Electrolux and Design Lab finalists to meet and collaborate with internationally renowned designers and professionals. Submissions and jury Over the years, Design Lab has received thousands of entries from students in more than 100 countries. The competition has a reputation for attracting creative approaches to product design challenges. Students submit their entries online at the Design Lab website: www.electrolux.com/designlab. Finalists are selected by a global team of Electrolux designers, engineers and other experts. Electrolux then goes on to make high-quality models of finalists concepts, which are unveiled during a global press event at the finals. An international jury of designers and renowned experts selects the winners.

AB ELECTROLUX (PUBL)

POSTAL ADDRESS SE-STOCKHOLM VISITING ADDRESS S:T GRANSGATAN 143 PRESS HOTLINE +07 TELEFAX +61 INVESTOR RELATIONS +03 WEB SITE www.electrolux.com E-MAIL ADDRESS press@electrolux.com REG.NO. 556009-4178

Page 2 of 3

Design Lab Award Electrolux awards three prizes: first place is EUR 5,000 and a six-month paid internship at one of the Electrolux Groups global design centers; second place is EUR 3,000; and third place is EUR 2,000. Design Lab finalists also get to participate in workshops at the final event and interact with a panel of international experts and designers. History The first edition in 2003 was in direct cooperation with three design schools in Europe. Since then Electrolux has developed the project to a global scale, opening it up to design students from schools around the world. Previous Design Lab winners Year

Theme & venue

Designs for the Internet generation, Zurich

Winner

Stefan Buchberger, Vienna University of Applied Arts, Austria

Winning concept

Flatshare: a modular fridge for roommates to share.
Green designs for 2020, Paris
Levente Szab, MoholyNagy University of Art & Design, Hungary
e-Wash: a compact washing machine with a regular wash load capacity; it uses soap nuts instead of regular detergents. Soap nuts cause no pollution in washing and offer savings in production, transport and packaging.
Designs for healthy eating for 2016, Barcelona
Metin Kaplan, Istanbul Technical University, Turkey
Nevale: a portable food carrier with several layers, offering consumers the opportunity to store different hot or cold meals. Its lid features a digital screen with upto-date information about the foods storage conditions.
Designs of the future, Stockholm
Wendy Chua & Gabriel Tan, National University of Singapore
Airwash: a waterless washing machine for the home of 2020. It cleans clothes with pressurized air and negative ionsnatures cleansing agent. FooZoo: a new way to store fruits and vegetables. It adjusts temperature and the pace at which fruit and vegetables ripen. Phemos: the cylindrical shape of this wall-mounted dishwasher makes loading and unloading more convenient.
Designs of the future, New York
A team from Ume Institute of Design, Sweden
User-driven solutions, Budapest
Mauro Tramis & Biancamatria Zambolo, Politecnico Milano, Italy

Page 3 of 3

Learn more If you would like to know more about Design Lab and Electrolux, visit www.electrolux.com/designlab or call our press hotline at +07.
Electrolux is a global leader in household appliances and appliances for professional use, selling more than 40 million products to customers in more than 150 markets every year. The company focuses on innovations that are thoughtfully designed, based on extensive consumer insight, to meet the real needs of consumers and professionals. Electrolux products include refrigerators, dishwashers, washing machines, vacuum cleaners and cookers sold under esteemed brands such as Electrolux, AEG-Electrolux, Eureka and Frigidaire. In 2008, Electrolux had sales of SEK 105 billion and 55,000 employees.