Chain reaction

At a recent supplier workshop that Electrolux Sustainability Affairs hosted in Shenzhen, China in November, a supplier representative made the comment. ‘Once we think we’ve gotten a handle on meeting your criteria, you come up with another one. Why are your expectations on us continuously rising?’

The answer is simple. We’re working with a moving target; and aim to stay a step ahead of our stakeholders’ expectations on sustainability. When we raise the bar on our performance; we’re raising the bar for suppliers, too.

For Electrolux, we intend to make our work with suppliers a competitive advantage, even in our sustainability work. From a product life-cycle perspective, materials supply is responsible for a fifth of the total environmental impact of an appliance like a washing machine; second only to the energy consumed when products are in use (where 75% of the impact is accounted for). So engaging suppliers is integral to a PLC approach, and is especially relevant in our work with transport emissions, energy reductions and chemicals use.

To ramp up suppliers’ engagement, Electrolux hosted a workshop with some 40 major Chinese suppliers to introduce them to our sustainability strategy. The theme of the day was creating value. Via video, Electrolux CEO Keith McLoughlin opened the session by outlining his expectations that each supplier must be prepared to halve their impact on the environment and actively share their ideas and solutions. With guest speakers from BSR (Business for Social Responsibility), the Chinese government, and Walmart, we outlined to suppliers why our expectations are changing and the tangible value they bring to their own operations.

Participants got insight into the 12th Five-year plan on energy saving in China, thanks to the input of Wen Juan of the Guangdong Energy Conservation Center. Walmart was on hand as well, represented by Karen Ng, Regional Manager, China Ethical Sourcing, and Pavel Wu, Sustainability Supervisor. They shared both their expectations on suppliers and sub-suppliers and the experience of introducing their energy efficiency program among 200 Chinese sourcing units. As a member of BSR, Electrolux also had the back-up of the BSR Beyond Monitoring Program, a multi-stakeholder initiative that aims to define next-generation approach to managing supply chains.

Changing our expectations requires a hands-on approach, with practical guidance and clearly set ambitions. At the summit, Electrolux launched an energy reporting standard among major suppliers in China. Piloted this month, the standard is based on GRI criteria. It is our starting block for gaining better insight into the energy consumed by our suppliers and how they’re managing them.

We all win from this approach. For our future, it’s the right thing to do. And what’s an opportunity for our business, is an opportunity for suppliers, too. Since energy consumption goes hand in hand with more cost-efficient operations, lower energy consumption has proved to make a convincing argument.

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How can we best engage our suppliers in our sustainability goals?