Henrik Sundström heads Electrolux green strategy
It is the world’s second largest appliance company, selling “white goods“ in 150 countries. Whether you vacuum, wash dishes or clothes, chances are that you are using one of its machines, whether it is an Electrolux, AEG-Electrolux, Eureka, Frigidaire or Zanussi. With over 50 factories making 40 million products a year, the company has a huge environmental footprint. Currents interviewed Henrik Sundström, head of CSR and Environmental Affairs at Electrolux.
“We are very much aware of our environmental impact,” says Henrik Sundström, vice president in charge of sustainability at the Swedish appliance giant. This is nothing new, but the emphasis has changed over the years, from a more economically motivated focus on holding down the consumer’s electricity bill back in the 1950’s to eliminating CFC’s in the 1980’s and increasingly the global warming issue from the 1990’s and on. “The main thing we can do to limit CO2-emissions is to produce and sell energy efficient products,” he says.
Electrolux has a three-pronged climate strategy. The first goal is to limit the energy usage in the factories, the second is to push for its most environmentally friendly products, and thirdly, to make the public aware of how important white goods are in the fight to reduce global warming. “We decided to cut energy consumption in our factories by 15 percent between 2005 and 2009, and we almost reached it a year ahead of schedule. This alone corresponds to a cut of 90,000 tons of CO2-emissions, which equals removing 40,000 cars from the roads. And now we have decided to cut another 15 percent between 2008 and 2012,” he says.
The onset of the recession in the second half of 2008 did help in reaching the goal as many factories were shut down during the month of December, but the improved energy results was mainly the result of a sustained effort to make the manufacturing process more efficient from an energy and environmental standpoint. “We have specific goals for the entire company, and we have goals for each sector for how much we want them to proceed with energy savings. In Europe the focus is on listening to our employees for ideas on how to save, while the focus at our U.S. operations is more on boosting efficiency by engineering improvements. We have telephone conferences every other week in order to share information between our factories and warehouses. We are also measuring how much energy we use so that we can compare different units.”
“We have found great variations between factories in different places using essentially the same process. There are refrigerator factories where the difference is five times, something we try to correct by benchmarking.” But sometimes it all boils down to one person’s decision. “We discovered that the energy usage dropped in an Italian warehouse everyday when the staff left for home, but then suddenly went up again about nine in the evening and stayed up until five in the morning. It turned out that the night guard turned on all the lights when he started his shift as he was uncomfortable walking around in the dark.”
Making the goods is only the first step in Electrolux green equation. Once they are put to use at a consumers’ home or at a restaurant kitchen or professional cleaner, the machines keep using energy, water and discharging waste. Most of the resources consumed during the life of an appliance – from its making to recycling – come from its actual usage. This is especially true for large products like refrigerators and washing machines, where the use phase often represents more than 80 percent of the total environmental impact.
Electrolux has been pushing for more efficient washer, dryers and dishwashers for several decades. “In the 1980’s and 1990’s we took part in a number of European innovation competitions, where we developed new and more energy efficient technology. In a Dutch competition 1997 we developed the first dryer using a heat pump, but it was only recently that this technology became commercially successful,” he says, stressing that the development cycle can be very long.
As consumers have become more aware of the environmental impact of their purchases and government agencies have encouraged energy efficiency, it has become a key factor in the competition. “In the 1990’s we got energy declarations for refrigerators, and when I worked in the U.S. between 1990 and 1992, we had the Golden Carrot program promoting the most energy efficient products.
A result of improving the energy efficiency and water consumption of new appliances means that you can help the environment by replacing your old machine by a new one in a similar fashion that you can by replacing a old gas clunker with a Toyota Prius. “We are highlighting products with the best environmental properties, and we do this globally. In the U.S. we are pushing products that qualify for the Energy Star rating. The Electrolux brand was recently reintroduced on the American market, and is positioned as an upscale brand. “For Electrolux we stress its European and Scandinavian heritage, design and environmental impact, while we focus on energy savings for the Frigidaire brand,” he says. “The American consumer is paying more attention to environmental aspects, primarily the energy usage, and the Energy rating system has pushed the market in this direction. The U.S. market lagged Europe’s, but we expect an increased awareness thanks to Obama’s push for energy savings,” he says.
The third part of Electrolux’ green strategy strives to make the public more aware of the importance of white goods in general for the environment, something that was pointed out at the end of Al Gore’s movie “An Inconvenient Truth”. Henrik Sundström points to a McKinsey study from 2009 showing how important it is to replace old appliances for new and more efficient ones. “In Europe, we have pushed to make people understand how much better the new products are. People don’t know it, but the average new appliance is 50 percent more energy efficient than the average product ten years ago, and the best products are 70 percent better today,” he says, adding, “We want decision makers to understand that there is a huge savings potential here, and we are pushing for incentive programs. In Italy you get a 200-euro tax break if you buy a refrigerator with a top energy rating. In the U.S. the tax breaks have been geared towards the manufacturers, but the Obama administration says that they will provide new types of consumer incentives.” Electrolux is among other things using the web to educate the consumer about how much they can save on energy and water by using new, efficient appliances.
“We began to highlight this during Earth Week in April, and you will see more of this kind of marketing in the U.S.,” he says.
In Europe an energy index is used to measure the efficiency of household appliances. For refrigerators and freezers the index started at 100 in 1994 and was down to 55 in 2006, but there are limits to how far you can improve. “I can see us getting down to 30, but it’s going to be hard after that,” he says.
The consumer also has a responsibility for the impact of their usage of household appliances. It’s been very hard to introduce more the more energy- and water efficient front-loaded washers in the U.S. market. Electrolux actually had a factory in Mansfield, Ohio in the 1990’s that built front loaded machines, but had to shut it down because of week demand. (It took until 1998 before Electrolux reintroduced front loaded washers in the U.S.)
Another factor is that if people wash all the time and run small loads, they are wasting energy and water to the detriment of the environment. At the same time, the washing machines have become bigger and bigger, going from four kilo to seven, eight or nine kilo. “The detergents are getting better so that you can wash in colder water. In the U.S. the cleaning process relies a lot on a bleaching process, while in Europe, we are working much more with tensides (surface active chemical agents) that works at lower temperatures. You can save a lot of energy by modifying the wash cycle.”
This interview was first published in Currents Magazine No. 2-3 2009.
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