Electrolux’s annual and sustainability reports attempt to place performance into the broader societal context but suffer from lack of cohesion

Swedish appliance maker Electrolux seems to be moving to integrate sustainability principles throughout its business. Important messages on how sustainable business practices can drive growth are obscured, however, by incoherent organisation and lack of a clear contextual framework for key performance drivers and indicators. As a result, readers must work hard to glean a complete picture of the company and its performance.

In attempting to segment information according to different stakeholder needs, Electrolux confuses rather than clarifies how the company manages for sustainability. To gain a full picture, readers must wade through as many as seven different reports containing information similar and repetitive, yet different enough to make them wonder if they’ve missed anything important.

Adding to the confusion are identical layouts in different reports that accompany similar, but not identical, content. Charts, for example those containing workforce information, contain conflicting and, in the case of the online report, incomplete data. The confusion frustrates the reader and obscures both the performance and the message.

While not quite an integrated report as contemplated by the International Integrated Reporting Committee, in the current state of affairs Electrolux’s claim of integration is no more or less legitimate than most others’. Because the sustainability report purports to be integrated into the annual report, however, readers might expect to see concrete examples of how efforts to address key environmental, social, and governance (ESG) issues drive Electrolux’s business strategy and financial results. Unfortunately, the deeply buried sustainability strategy report is the one document that comes closest to demonstrating integration.

Good stories

While the much-heralded “Vac from the Sea” campaign to raise awareness of plastics in the oceans is a good story, the better one is that of Electrolux’s energy-efficient products. Sales of its “green range” constitute 22% of overall sales, the company says, and sales of green floor-care products doubled in 2011. But what are the criteria for a product to be considered “green range”? And what do these products contribute to reducing energy use and greenhouse gas emissions over their lifecycle? That kind of information would help stakeholders understand not only the impacts of Electrolux’s products but also the company’s competitive position as energy and climate change issues continue to grow in importance over the coming years.

Where Electrolux really shines is in its reporting of its understanding of and efforts to improve the performance of its supply chain. The Strategy Report states that Electrolux’s procurement group is “ultimately responsible” for supply chain compliance with the company code of conduct and environmental policy. The company reports its audit findings in a clear and unflinching manner, and is forthright about performance, incidents of non-compliance with its code of conduct, improvement, and corrective actions taken and needed. Many should take note, on both Electrolux’s transparency and its performance in this area.

Readers who make it through Electrolux’s labyrinthine reporting will find some genuinely impressive nuggets of information that reveal the company’s focus on integrating sustainable business practices in its supply chain and product development. They may even see how Electrolux’s more innovative products can help make cooking and cleaning not only environmentally sound but a bit more fun. If the company streamlines and contextualises performance information and truly brings the sustainability conversation to its annual reporting, it could really drive that message home.

Information scattered about

• In attempting to segment for different stakeholders, Electrolux confuses rather than clarifies.
• Electrolux Annual Report 2010, a web-based report.
• Sustainability Matters, the “sustainability performance review”, which is navigable through a web-based GRI index, which Electrolux claims is “integrated” into its 2010 Annual Report.
• Annual Report 2010, a two-part PDF, which contains a six-page “summary GRI report”.
• Sustainability Matters 2010, “an excerpt from the Electrolux 2010 Annual Report”.
• Future Insight, a “sustainability strategy report”, referenced in but not accessible through the online sustainability report.
• Sustainability Report 2010, accessed from the main corporate website, which seems merely a landing page for sustainability news and some (but not all) reports.
• A separate UN Global Compact communication on progress that refers to the online sustainability report.

Snapshot

Follows GRI?             Yes, at the B Application Level.

Assurance?                  Yes, ISO14001 and Code of Conduct compliance; did not claim a GRI “+”.

Materiality analysis?   Yes; describes process and identifies material issues and key drivers.

Goals?                         Some

Targets?                       Some

Stakeholder input?      Yes

Seeks feedback?         Yes

Key strength:              Supply-chain transparency and performance.

Chief weakness:          Haphazard and confusing presentation of information among multiple reports.

Pleasant surprise:         Sustainability performance review detailing, in table format, focus areas, challenges/goals, performance summary, and next steps.