Åhléns sustainability report 2012 English

1 | ÅHLÉNS SUSTAINABILITY REPORT 2012

SUSTAINABILITY

2012 REPORT


Year in briefOur goal is that sustainability should work run like a Green Thread through everything we do at Åhléns. We want to incorporate sustainability principles, thinking, behaviour and actions in everything we do. Our work on taking responsibility and dev eloping more sustainable retailing is conducted in many different areas. Here are some of the notable activities and advances we made in 2012.

CUSTOMER DIALOGUECustomer survey about sustainability shows keen interest in sustainability issues.

p. 9PRODUCT RANGE

Sales of Bra val (Good Choice) products rose

from 3.4 to 4.4% in 2012.

p. 12

SUPPLIERSWorking conditions were reviewed in 75% of the factories in countries at risk.

p. 19

COOPERATIONContinued cooperation

with Myrorna and Stadsmissionen.

p. 31

EMPLOYEESThe Employee Satisfaction

Index (ESI) rose further to ESI 90.

p. 27

STRATEGYSustainability now plays a key role in Åhléns’ new strategy.

p. 6

OPERATIONS & LOGISTICS Electricity consumption in our Swedish department stores was reduced by 15% between 2009 and 2012.

p. 23

QUALITYNew complaints

system creates platform for

improving quality.

p. 16

2012


At Åhlens, we are passionate about our mission to “förenkla, förbättra och förgylla livet varje dag”, meaning that we strive every day to make millions of peoples’ lives as easy, enjoyable and meaningful as possible. For us, sustainability is a key aspect of that mission and one of the five elements that make up Åhlens On the Way – the new Åhlens direction strategy.

It’s all about PeoPleI joined the company in august last year because I believe in the incredible potential of Åhlens to make a difference in the changing lives and changing needs of the people we serve, our customers. We are convinced that in order to do that we must start with People Focus – for us that means being compulsive about always starting with the customer.

today our Customer Club, Åhlens Klubb, is the voice of over 1.6 million members and is one of our sources of feedback, insight and collaboration with our customers. In our 2012 customer club survey, sustainability was confirmed as very important to our customers – landing in average at 6.1 on a 7 point scale with 57% of respondents concerned with sustainability questions when shopping with Åhlens. For us, this reconfirms that what is right and good for people will always be right and good

for business. that is why sustainability is not an addon to what we do but, rather, runs through everything we do. It’s our Green thread running through our organization, our coworkers, our suppliers and partners all the way to our customers, and is an integral driver of our longterm growth.

seCurInG a solId base In 2012I feel proud of what we have achieved in 2012, having made great progress in securing that the base of our sustainability work is properly in place. We launched a system for capturing customer feedback and complaints, updated and secured accurate Åhlens product and material specifications to our suppliers, and launched a webbased supplier portal to insure that both our buyers and suppliers have shared access to all important requirements as well as our sustainability buying Criteria.

I feel confident with our work with social responsibility in our supply chain, where we systematically evaluate supplier performance through audits according to the bsCI Code of Conduct. I am especially pleased that we are now members of the better Cotton Initiative (bCI), a global partner whose aim it is to improve the growing practices of cotton throughout the world, minimizing environmental impact and improving the working conditions and life situations of growers and their families.

In spring 2012 we launched bra Val, our guide to more sustainable products. these products, marked clearly for our customers, take extra consideration for people and the environment.

We are committed to increasing the percentage of bra Val products within our offer, and have set challenging goals for each of our purchasing areas as we progress toward our 2015 goals.

Åhlens – on the WayWe are convinced that collaboration is the key to developing a truly valuedriven, sustainable and successful Åhlens. We will involve our customers, coworkers, suppliers and other stakeholders to develop and calibrate our work with the Green thread. We will educate our coworkers and will measure and follow up our initiatives. We will report regularly on every “knot” in the Green thread communicating our challenges as well as our successes, and will increasingly guide our customers to find even more sustainable products through bra Val.

We hope that this report is a small step in conveying that sustainability is much more than just an addon to what we do, but rather, runs through everything we do at Åhlens. We believe that it can positively impact and improve our business and our growth potential.

It is expected of us, for sure.

More importantly, it is what we expect from ourselves.

CEO’s statement

Gregg MowinsCeo, Åhléns

It is our ambition that this report will provide honest and relevant

information about our sustainability work. We appreciate your comments

and thoughts on this report, see contact information on last page.

Åhléns AB is part of the Axstores retail Group, which in turn is part of Axel Johnson AB, a company that is owned by Antonia Ax:son Johnson and her family.

Åhléns was founded in 1899 in Insjön, sweden. today, we have one of the nordic region’s most recognized brands with more than 100 stores in sweden and norway, where we offer a wide range of fashionable and affordable products in the areas of Fashion, beauty, home and Media.

resPonsIbIlIty throuGhoutÅhléns’ responsibility and sustainability efforts encompass the entire operation, with a focus on the areas and aspects in which the operation has a significant impact on people and the environment. our greatest responsibility is for the elements of the value chain that we can control and manage. For other elements where the impact is more indirect, we aim to exert influence through active dialogue and cooperation.

About Åhléns

Åhléns 2012SEK 4.7 billion in sales

3,249 employees

Approximately 85 million visitors to our stores

1.6 million club members

76 department stores in Sweden

33 interior design stores in Norway



RAW MATERIALS Cultivation of cotton and palm oil has a significant impact on people and the environment. to contribute to reducing the impact, Åhléns has joined the better Cotton initiative and formulated demands concerning palm oil in products.

SUPPLIERS Åhléns is a member of bsCI, which focuses on improving working conditions in the production facilities. We have also commenced work on environmental issues in the supply chain.

LOGISTICS our transport from asia takes the form of fully loaded container vessels. Continuously improving distribution in sweden and norway are key to reducing the climate impact.

DEPARTMENT STORES & WAREHOUSES We focus on developing the sorting of waste at source and waste recycling. transportation plastics are currently recycled into new Åhléns bags. new energysaving lighting is continuously being installed in our de partment stores.

EMPLOYEES Åhléns aims to be a committed and attractive workplace. Valuegoverned management, health and preventive healthcare are key elements in the work. each department store now has a trained sust ainability ambassador.

CUSTOMERS according to our own customer survey, many customers are interested in sus t ai nability but lack sufficient information. Åhléns’ bra val guide shows the way to more sustainable products.

STAKEHOLDERS being able to contribute and resolve the major global challenges requires cooperation. Åhléns participates in several initiatives and networks and engages in dialogue with nonGovernmental organizations.

480 suppliers in 38 countries

Transportation by boats and

trucks

About 3,000 employees

100 department stores and stores

1.6 million club members

Raw materials from many different

countries

Many partners and networks

Our value chainÅhléns offers an expansive range encompassing tens of thousands of products. They come from all over the world, primarily Asia and Europe. Many products are purchased through our four production offices in Asia and shipped to Sweden. The products are sold by employees in our department stores and stores to customers in Sweden and Norway.


New strategy & conditions

Sustainability is one of the five areas forming the foundation for Åhléns’ efforts to become a successful and profitable company longterm. This is stated in Åhléns’ new overall strategy. Åhléns’ owner, Axel Johnson AB, also clarified its strategy for responsible enterprise during the year. All in all, this means that sustainability has been assigned a very clear position in the organization.

the Green threadsustainability is one of the five areas in our new ÅhlénsPåVäg strategy, which will propel the company forward and toward growth. the strategy makes it clear that sustainability work is an integral part of the operation aimed at ach ieving a longterm, successful and profitable

Åhléns. all employees must be able to relate to the Green thread in everything we do and particularly in the four cornerstones defined as:

• sustainable products and services

• sustainable production

• sustainable department stores and operations

• social responsibility

the Green thread entails that we must use resour ces and materials efficiently and sparingly, and that we choose materials and substances that:

• comply with our specifications

• are safe, healthy and ethical

• are recyclable and made of recycled or renewable material

• have little or no negative impact on people and the environment.

– There is an honest ambition and major commitment to sustainability issues at Åhléns. The surveys we have conducted among employees and customers have shown the considerable potential represented by providing clear information about the responsibility we take and our sustainable range.

– To fulfill the expectations of our stakeholders, we must minimize risks, do basic activities and proactive development in parallel, but with a short-term focus on the first two areas. We will gradually increase our focus on proactive development within more areas.

– We took several important steps in 2012. I would like to highlight the work of our sustainability ambassadors who play an important role in strengthening internal commitment and getting our added value to customers. A great deal remains to be done, but we are on our way!

Anita Falkenek, Sustainability Manager


systeMatIC WorK Methodto be able to develop and spin the Green thread, we want to involve and engage employees, custo m ers, suppliers and other stakeholders. We intend to improve, measure and follow up this work and continuously report on our progress along the thread to ensure that we are on the right track. We will communicate this both internally and externally.

Communication of our sustainability work and bra val must improve. this became clear from the employee and customer surveys conducted in 2012. accordingly, work has been launched to clarify Åhléns’ communication in terms of bra val and sustainability.

rIsKs and deVeloPMentduring 2012, we implemented activities that could be defined as risk minimizing, basic

and developmental. to minimize risks, we focused on preparing and updating product specifications and conducted social audits and training of our suppliers. We also initiated work on how to tackle negative environmental impact in the supplier chain.

basic sustainability work includes energyefficiency enhancement, waste management and training. during the past year, we developed a template for sorting waste at source in the department stores, trained sales personnel and launched a Complaints system.

We also launched bra val and joined the better Cotton Initiative; we also started a training program in valuegoverned management. there are many elements that we would like to develop with in Åhléns, such as being able to recycle textiles.

Our owner, Axel Johnson, has adopted a strategy for sustainable enterprise comprising four focus areas: Sustainable offer, Sustainable production, Good employer and Resourceefficient oper ations.

Corporate governance is a key part. Seven important aspects will ensure that all Group companies work systematically and in a targetoriented manner to achieve sustainability.

The target is that by 2015 all companies must:

1. Have strategies and measurable targets for their sustainability work integrated into the business plan.

2. Have one person responsible for sustainability issues or who will report directly to the CEO.

3. Report KPIs on a quarterly basis.

4. Annually update the risk analysis that identifies the largest social and environmentally related risks.

5. Evaluate the sustainability perspective in the acquisition of new companies.

6. Ensure that adopted international conventions on the environment, human rights and labor law are respected by suppliers.

7. Clearly communicate sustainability work.

Risk minimization

• Product specifications

• Social audits in the Supply chain

• Environmental improvements at our suppliers

Basala

• Complaints system

• Employees health and commitment

• CO2 followup of transport

• Waste management

• Education

Development

• Bra val

• Better Cotton Initiative

• Services, such as, Remake

• Valuegoverning management

Communication

SUSTAINABLE CORPORATE

GOVERNANCE


deVeloPMent oF Control doCuMentWithin axstores, several joint policies and guide lines are applied to ensure responsible bus iness practices. For example, axstores’ env ironmental policy, sustainability buying Criteria for the environment, quality and social responsibility. these frameworks are continuously being developed and improved. during 2012, the General Purchasing Conditions and the sustainability buying Criteria were revised and sharpened.

orGanIZatIon and resPonsIbIlItyultimate responsibility for decisions and followup of our sustainability work lies with corporate management. a steering group for sustainable procurement is responsible for formulating and regularly developing procurement criteria.

the steering group is supported by task forces that address specific sustainability aspects for various areas.

In the Purchasing department area we have Åhléns’ sustainability team, which is responsible for operating and coordinating sustainability work throughout the company. the team also supports axstores in Groupwide sust ainability issues. When relevant, Åhléns’ sustainability Manager reports to the Ceo and Group management.

each manager is responsible for integrating sustainability issues into decisions and work methods within their sphere of responsibility. all department stores also have trained sustainability ambassadors, tasked with disseminating commitment and information internally and to customers.

Key figures Results for 2011

Results for 2012

Targets for 2015

Percentage of Bra val(percentage of sales measured in SEK)

3,4 % 4,4 % 10 %

Percentage of audited facilities(located in high-risk countries, with buying value > USD 150,000)

60 % 75 % 100 %

Energy consumption in department stores(percentage change from 2009, measured by kWh/m2)

12 % 15 % 20% by 2014

Emission of carbon dioxide from transports(total g CO2/ton km)

23 23 Not set

Employee Satisfaction Index, ESI(index, where the maximum is 100)

87 90 Not set

Sickness absence (percentage of working hours)

– 5,97 % 5.32% by 2013

Outcome and goalsThe table specifies goals and KPIs for sustainability issues that are key to Åhléns.

90of 100 in employee

satisfaction in 2012


We engage in active dialogue with our customers aimed at demonstrating our added values, identifying expectations and creating a basis for continued advancement and improve ment. The sustainability area offers major potential to increase customers’ knowledge about our efforts and Bra val.

dIaloGue throuGh Many Channelsdaily meetings in stores and department stores are our principal contact channels. every year, about 85 million customers visit Åhléns. the Åhléns Club, with slightly more than 1.6 million members, is key to our customer dialogue. We communicate with members through Åhléns’ magazine, email, the Internet and text messages. We also have a club panel with about 35,000 members who we regularly question about our product range, communications,

purchasing habits and values. additional channels for active dialogue include Facebook and our Customer service unit. the next step is to shift the focus from postal to digital communication.

bIG Interest In sustaInabIlItyIn november 2012, we conducted a customer survey about our sustainability work. a question naire was sent to 4,000 customers in the club panel, of whom 2,000 individuals responded. the survey showed that sustain ability is very important to our customers – the average landed at 6.1 on a 7point scale. however, many customers admitted that they thought more about sustainability when buying food compared with shopping at Åhléns. Meanwhile, most of the customers have very little knowledge about Åhléns’ sustainability work and what bra val represents. at the end of the survey, facts were given about what Åhléns is already doing today and the response to this description was very positive. Customers also had many tangible and good suggestions for how Åhléns should develop its work and communication.

Living customer dialogue?!


MaJor PotentIala clear conclusion from the survey is that there is major potential for enhancing information to customers and promoting bra val. We will develop our efforts in various ways based on the results. Work has commenced to develop a more distinct communication strategy in the area of sustainability.

We are also working successively to display bra val range and to a greater extent integrate Good Choice into advertising campaigns and other marketing communication. during 2012, we implemented a bra val campaign with television commercials and we have made it easier for customers to search for bra val products on the Internet.

sustaInabIlIty aMbassadorsIt is important that our coworkers in our department stores have the knowledge required to be able to pass on sustainability information to customers. accordingly, each department store has a trained sustainability ambassador tasked with informing and supporting other colleagues, and to be available to respond to questions from customers.

FaIr MarKetInGall advertising and marketing from Åhléns must be accurate and fulfill legislative and industry norms concerning ethical guidelines. We check our messages and claims to ensure that all product information is correct. We strive to protect the customer’s integrity and therefore avoid limited segmentation or niched messages in marketing. all customer data is managed centrally; neither our department stores nor our business partners have access to this information. there have been no reports of “leaks” or lost customer data.

• 57 % think about sustainability issues when shopping at Åhléns.

• Customers trust Bra val and other corresponding systems that guide them to products that are better for the environment and people.

• Customers feel that products with sustainable profiles have high quality and fashion content, but believe they are more expensive and difficult to find.

• Working conditions for those who manufacture the product, as well as product quality, are the sustainability areas that are considered most important.

• 37% knew about Bra val.

• 58% would choose Bra val if they had more information about what it represented. Requests were primarily for more communication about the products and information provided close to the products in the department stores.

57%think about sustainability issues

when shopping at Åhléns

FACTS FROM CUSTOMER

SURVEY


Committed customerannastina hedberg stark from Järvsö was one of the 2,000 customers who responded to the Åhléns’ questionnaire about sustainability in autumn 2012. annastina has been a customer of Åhléns for many years and likes “her” department stores in hudiksvall, bollnäs and Gävle.

annastina prioritizes quality when selecting products.

– Naturally, the price is also important but not the determining factor. I would, for example, rather pay a little more for a sweater that can be washed without losing its shape. Of course, when choosing between two identical products, the environment and ethics are taken into consideration. A top made of organic cotton is an obvious choice!

at the end of the questionnaire, information was provided about Åhléns’ current sustainability activities. annastina was surprised by how much Åhléns was doing without her being aware of it.

– Information could be better! I even have Bra val tops and had no idea that they were organic! Sales personnel at the cash register should take the opportunity to compliment customers on their choices. ‘Great that you purchased an organic product.’

– As a consumer, I want to feel proud about my purchases. If done correctly, there are only advantages to profiling the store as a sustainable department-store chain – that would generate customers who are more willing to buy there and satisfied!

Earth HourÅhléns participated in the global climate

Earth Hour manifestation by switching off the lights in the display windows in the department stores wherever it was

possible. We encouraged all our customerclub members to participate and also

had a customer offering on ecolabeled block candles.

Photograph: Susanna Jansson


It is Åhléns’ strategy to increase purchases of products that are more sustainable. This work is continuously in progress and the number of Bra val products will gradually increase. To contribute to more sustainable cotton cultivation, Åhléns became a member of the Better Cotton Initiative.

Many ChallenGesour range is broad and comprises many different types of products and material, which can be a challenge in terms of sustainability. For example, rawmaterial manufacture of cotton and metals, and manufacturing processes such as tanning have a major impact on people and the environment. Furthermore, substances in products, particularly in the beauty range, could have undesirable effects. Continuous work is in progress in Åhléns’ purchasing organization to see whether more products could be manufactured from more sustainable material.

better Cotton CultIVatIonCotton is an important raw material for Åhléns, but it has a major impact on the environment. to contribute to improvement, Åhléns joined the better Cotton Initiative (bCI) in January 2013. the bCI is a global organization aimed at changing conventionally cultivated cotton worldwide, reducing the environmental impact and improving working conditions and living situations for growers and their families. through the membership in the bCI, Åhléns will be able to contribute to increasing the volumes of sustainable cotton in the global market corresponding to our cotton sales. through our partner Cotton Connect, another 100 farmers in India will be trained and will change their cult ivation methods. the amount of insecticide could be reduced by at least 40% and water con s umption could be halved in certain regions. at the same time, farmers’ profitability will improve through reduced costs (read more at www.bettercotton.org and www.cottonconnect.org).

Road to a sustainable assortment

http://www.bettercotton.org

http://www.cottonconnect.org


bra Val (Good ChoICe)bra val was launched in spring 2012 as our customer guide to more sustainable products. these products are especially considerate of people and the environment and are available in five categories; see the fact box. the launch was implemented through new display material, communication in the Åhléns Club and in television commercials.

the target was for 10% bra val of all sales, measured in seK by december 2012. We increa sed sales of bra val products from 3.4% to 4.4%, but did not achieve the target. accordingly, we held extensive discussions about how to increase the proportion, and the target level that will be possible to achieve. the result was that we set a target for each category and purchase area to make it clearer for buyers and sales personnel to drive the operation towards the target, and the 10% target was moved to 2015.

FashIonthe range of women’s fashion is continuously overseen. We strive to increase the proportion of more classic and timeless clothing. this is being done partly to contribute to more sustainable fashion and partly to reduce the amount of

products that have to be put on sale after each season. Åhléns’ new collection of extra high quality fashion, marked with a red thread, was launched in some department stores during the year. these products have higher quality and thus higher prices. the idea is that these classic garments will last longer. In other respects, work continues on efforts to offer more cotton garments made of organic cotton and more products made from recycled polyester, such as leggings and stockings.

the organic cotton tops for women are the products that account for the largest share of bra val fashion purchases at Åhléns. during the year, all underwear in the basic range that is sold in twopacks, as well as several sleeping garments, were changed to being produced of organic cotton.

the objective is to use tencel to a greater extent at Åhléns. this material is derived from FsCcertified forestry materials and manufactured with minimal environmental impact. Products in this material are offered primarily in our own Wera line. during the year, a Wera suit made of tencel was launched. Wera entails using recycled polyester where possible.

2011 2012Targets for 2015

Total 3,4 % 4,4 % 10 %

Bra val* (percentage of total sales measured in SEK)

Share of Bra val increased from 3.4 to 4.4%. However, in women’s fashion, home textiles and the office area, sales were nearly 20%. The challenge lies primarily in beauty products, where Bra val has yet to break through.

Bra val is available in the following five categories:

RECYCLED Products that are entirely or mainly produced from recycled materials. The raw materials derive from byproducts from production or from waste.

SOCIAL RESPONSIBILITY Products that are certified by an independent organization, such as Fair Trade. This means that farmers cultivating the raw materials and their employees are paid a reasonable salary and have decent work environment.

ORGANIC Products where the raw materials or ingredients were cultivated without chemical pesticides or synthetic fertilizer, and are certified by an independent organization.

TENCEL® (LYOCELL) Products comprising at least 50% TENCEL®. Tencel is a textile fiber manufactured from wood cellulose in a closed system with minimal environmental impact.

ECO-LABELED Products that are approved by an established environmental label, such as the Nordic Swan Ecolabel, Good Environmental Choice or the EU Ecolabel. These organizations monitor the environmental impact of the product throughout its entire lifecycle from raw material to waste.

DID YOU KNOW THIS ABOUT

BRA VAL?

* Bra val was called “Å vad bra” in 2011.


sales of shoes and handbags increased during 2012, but here we see many sustainability challenges. accordingly, Åhléns is active in the new swedish shoe environmental Initiative, sseI, which involves identifying common information and methods for reducing the environmental impact in the shoe industry. Most of our leather wallets and handbags are already made of 90% vegetabletanned leather, which has less impact on the environment than chrometanned leather.

hoMethe range and sale of bra val products is most rapidly expanding within home textiles, where of everything currently being sold, measured in seK, bra val items account for 16% (14% in 2011). Within kitchen textiles, the share is currently 41% and in textiles for children’s rooms it is a full 48%. Most of these products are made from organic cotton, but the trend is for more products to be made from recycled material. new products in the range include runners and table mats of recycled rags. rag carpets are sold in large volumes.

a broad range of FsCcertified (Forest stewardship Council) products is currently available in the paper, present bags and similar product groups, which are made from paper pulp from sustainable forestry. all wooden outdoor furniture is manufactured from FsClabeled wood. starting in 2013, most of the solid wood kitchen equipment, for example, cutting board and wine racks, will be FsClabeled.

the product group that accounts for the largest sales in terms of volumes of Åhléns’ bra val is our own napkins. during the past year, the range was expanded to also include nordic ecolabeled candles. all paper easter eggs are manufactured from recycled paper, with a thin plastic coating to comply with foodsafety requirements.

In the toys department, the puzzles and sketch books are made of FsC raw materials. Prior to the year’s outdoor play activities, Åhléns will be increasing the range of nordic ecolabeled buckets and spades. all toys sold at Åhléns are Celabeled, which guarantee that they are safe.

during the year, there were queries from customers about the sale of furs and leather carpets. Åhléns has signed and complies with the Fur Free alliance, which entails that we only sell leather and fur arising from slaughter waste in meat production. the furs and rugs that we sell are from deer, sheep and cows.

Sustainability ambassadors with ambitionZandra Juhnell is the sustainability ambassador at Åhléns in täby Center.she never hesitated when she was asked to be an ambassador, but viewed it as an opportunity to learn more.

Zandra is quick – she received the training in sustainability on a thursday and on Friday she held a briefing with all personnel at the morning meeting.

– I provided the personnel with tips and advice on how they could promote Bra val. We draw our customers’ attention to Bra val and thanked them at the check-out, for example, if they have purchased organic tops. It’s been a great success,” says Zandra.

Following this, she decided to remove the plastic mugs from the staff kitchen, to recommend tap water and to promote more order in terms of waste sorting. Zandra has also initiated the “environmental Champion of the Month.” the winner is awarded the Gold Cone. employees are allowed to nominate a colleague who did something good or took a new initiative. the jury will comprise Zandra and the department store communication officer. she has published the Good tips on the sustainability ambassadors’ common Facebook page.

– The challenge as ambassador lies in getting everyone on board in the store. To succeed requires courage, which is one of our corporate values. You must be determined and believe in yourself,” concludes Zandra.

Distribution of sales in 2012

Fashion (38 %)

Beauty (30 %)

Home (25 %)

Media (7 %)

Distributed in product groups (proportion of sales in SEK)


beautybeauty products (skin and facial care, hair care, fragrances and cosmetics) contain a large number of ingredients with various environmental and healthinfluencing prop erties, some of which could have a negative impact on health and the environment. We continuously monitor the properties and contents of the products and carefully follow developments in both legislation and new scientific findings and consumer trends. one example of substances that were discussed during the year is paraben, which is used as a preservative. Åhléns has decided to take the same approach as the danish legislation, entailing that certain parabens will not be permitted in our products.

a great deal of time and resources have been invested in preparing the organization and suppliers for the Cosmetic regulation that will gain legal force in 2013. the regulation entail that suppliers must manufacture prod ucts according to a certain standard, perform extensive safety assessments, and that manufacturers must register all products and their ingredients in a european database. although this will result in increased admin istration and costs, the objective is to improve control and thus increase safety for consumers. to more easily ensure that Åhléns complies with the new regulations, we have relocated the production of some products among our brands and limited the number of suppliers.

during 2012, une and estelle & thild were launched at Åhléns, two new brands that both

have organic certified products and thus bra val. une launched the first certified mascara. estelle & thild, which is manufactured in scandinavia, reported a good sales trend, as did Weleda, which has been sold in the department store for many years. the body shop and origins brands, with sustainability focus in the business model, continue with steady sales increase at Åhléns.

a number of customers voiced their concerns during the year that the beauty products sold by Åhléns may have been tested on animals. In our updated sustainable buying Criteria, our earlier position, that the legislation must be followed, was clarified entailing that it is not permitted for products or ingredients to have been tested on animals.

baGs and reCeIPtsWe also place environmental demands on products that we use ourselves or that we provide to customers, such as bags and wrapping paper. all Åhléns bags and wrapping paper are made of FsCcertified pulp from sustainable forestry. Plastic bags are 80% made of recycled plastic. these will be manufactured partly from our own waste of nonrigid plastic from the department stores (see page 24).

Management at Åhléns and axstores has decided to switch to phenolfree receipts, which will be available in department stores commencing in spring 2013. bisphenol a and s are deemed to have endocrinedisrupting effects, which are not acceptable in receipts. In the longterm, we hope to be able to switch to digital receipt systems.

Åhléns’ own Oliv series was relaunched with a new packaging design during the year. Three of the products in the range are Nordic Ecolabeled and two additional products will be launched in spring 2013 with the Nordic eco-label.


As a minimum requirement, the quality of the products must fulfill applicable legislation but mainly comply with our own demands and the expectations of customers. The point of departure is that Åhléns only should sell safe, good quality products. During the year, a number of actions were taken to further quality assure our processes.

FoundatIon laId durInG PurChasInGall suppliers must comply with Åhléns’ require ments according to our General Purch asing agreement. this include statutory requirements on the product and production process, and also specific Åhléns requirements pertaining to function, quality, the environment and ethics.

during the year, we updated the document to clarify our requirements concerning product quality, among others.

sustaInabIlIty reQuIreMentsWe have also updated and sharpened our sustain ability buying Criteria, which are more far reaching than those required by law. these cri teria are included in the General Purchasing agreement. Changes in the criteria include, for instance, a clear schedule for the phasing out of PVC in pack aging, that down must not be plucked from live birds nor from geese bred for foie gras. In addition to not selling children’s clothing that could be considered provocative, Åhléns must not sell makeup and perfume aimed at children. new sections were added, such as animal care and bans on animal testing of cosmetic products. In the beauty area, there is a shared axstores’ list of chemicals that must not be included in the products, including allergenic perfume substances and certain preservatives.

Safer products of better quality


ProduCt reQuIreMentsFor suppliers to be able to produce goods with the right quality clear documentation on the product’s properties and content is required, and on how they are tested to ensure that the product fulfills this quality. accordingly, Åhléns has product and material specifications that list the requirements for chemicals, quality and testing procedures. these specifications cover, for example, the substances that are permitted or not, the durability of a product and the color and form of the product. during the year, we updated and prepared new specifications in several product groups with a focus on products that come in contact with food.

randoM testInG For VerIFICatIonalthough the products are checked in conjunction with manufacturing, to further verify that the goods meet our requirements, we con d uct random testing of the products found in the department stores. based on the assessed risk, we perform random tests of chemicals and function. textile products were checked for allergens and carcinogen, and leather shoes and handbags were checked for hexavelant chromium and acrylamides. the results indicated that these compounds were not found in the products.

suPerVIsIon as a resourCeaudits by the authorities are opportune occasions for us to verify that our procedures work and for increasing our knowledge. In 2012, the environmental and public health authorities in various municipalities inspected jewelry, children’s clothes and toys. none of the products from Åhléns contained traces of compounds that did not comply with legislation. nor did the authorities have any comments about our procedures.

early in the Christmas shopping season, the local supervisory authorities and the swedish trade Federation launched a campaign called dare to ask. the purpose of the campaign was to make consumers aware of their right to be informed of the existence of hazardous compounds in the product. When asked such questions, the retailer must provide the consumer with such information within 45 days. this campaign is an expression of increased requirements on traceability and communications. In conjunction with the campaign, we received a few questions, all of which were answered on time.

CoMPlaInts systeMIn an organization like Åhléns, it can be difficult to gain an overview and achieve a systematic management of customer complaints. In May and June, a pilot study was conducted when four department stores made a registry of all customer complaints. the results indicated that we had received more complaints than expected, meaning that there was a need to monitor customers’ opinions more effectively than before. In september, a system was launched in which the sales representative enters each customer complaint in the cashregister system by selecting one of 12 codes. this data is subsequently used to generate monthly reports for procurement managers who can analyze how many complaints were entered for each article sold. With this foundation, a structured discussion can be taken with suppliers and the products can be improved. the system has already had a positive effect on quality as, for example, certain Åhléns’ pant models initially failed to meet our quality requirements or customers’ expectations. the next step is to develop key performance indicators for complaints so that we can continuously improve.


CoMPlaInts and reCallsduring the year we reviewed our internal procedures, to ensure quick reaction and clarity if a riskprone situation arise in which a product could cause injury to a person or property. If there is a risk that a product could cause injury, the relevant individuals in the procurement, sustainability and information departments must quickly meet and review a predetermined checklist. If the group concludes that the product is a risk, sales of the product must be stopped and, in certain cases, the product must be recalled from customers.

during the year, we stopped the sales of snow globes, a red children’s dress and two toys that failed to meet our standards. the snow globes, which were marketed as ornaments, could easily break if children played with them, despite the way they were marketed. the dye of the children’s dress bled and the toy broke far too easily. unfortunately, we were also forced to recall three versions of a wooden toy from customers because the toys broke apart and the small components easily became dislodged due to a substandard adhesive. using a powerful resource system within company in the form of email dispatches to our customer club members and a letter to the customers who purchased the toys, we were able to effectively disseminate this vital information. as far as we know, the toys did not cause any accidents or incidents.

suspicions that a cleaning gel could cause damage to eyes were taken very seriously, resulting in the initiation of a quick action plan and the product was withdrawn from the store shelves. however, no customer inconvenience was associated with the product. analyses of the product did not indicate any problems with the product. the product was available to customers again after a few weeks of suspended sales.

due to the complaints that we received concerning paper baking dishes in 2011, we have improved the quality and now source them from a swedish manufacturer.

neW Web Portal FaCIlItates In 2012, Åhléns – through axstores – developed an online supplier portal with the aim of facilitating procurement matters for supp liers and procurement representatives. all doc uments that are related to the General Purch asing agreement, including sustainability buy ing Criteria and product specifications, are post ed on this website.

the portal makes it easier for both suppliers and procurement representatives to keep abreast of requirements, which is a prerequisite for being able to sell safe products, since legislation and requirements are continuously being tightened.

Our goal is to always have satisfied customerselisabeth sandgren at Åhléns’ Customer service unit, says that, along with her three colleagues, she receives four types of cases: questions about Åhléns Club, questions from the department stores, customers who require assistance with, for example, finding a product, and complaints from customers about products or poor customer service in the department stores. all cases are registered. – If we are unable to answer directly, we receive help from others in the organization. During weekdays, we aim to always answer customers within 24 hours.

– Naturally, it is difficult when customers are very upset or dissatisfied, which happens. We try to address these matters as professionally as possible. It is nice to have our values to lean on, not to mention colleagues to talk to, says Elisabeth.

according to elisabeth, the best part of the job is helping customers from start to finish – from finding the right product in the department store to ensuring that the customer is satisfied, even if he/she was dissatisfied at first.

An increasing number of customers are contacting Åhléns’ Customer Service unit with questions regarding everything from the Customer Club to chemicals in the company’s products. This reflects the rising interest and awareness among Åhléns’ customers, but is also probably due to communicating through an increasing number of channels.

During the year, Customer Service received 20,000 emails and nearly 24,000 telephone calls, up 28% on 2011.

CUSTOMER SERVICE –

AN IMPORTANT COMPONENT


Rewarding supplier relationships

Åhléns’ private labels are sourced from a vast number of suppliers in Asia and Europe. In order to influence product development and responsibility for people and the envir onment, we strive to achieve longterm relationships and close cooperation with suppliers. Through industry partnerships and independent controls, we work to identify risks and contribute to responsible production.

847 FaCtorIes In 38 CountrIesIn 2012, Åhléns private labels derived from a tot al of 482 different suppliers. Most of the 847 factories that manufacture our goods are located in China and India.

Åhléns now has four local production offices in hong Kong, shanghai, new delhi and dhaka. the last production office, in bangladesh, was opened in 2012. the 57 employees at our offices

are responsible for daytoday contact with the suppliers, perform quality control at the plants and research prospective producers.

ProduCts FroM rIGht suPPlIersto increase the potential of influencing product development and responsibility, we aim to get as close to the production of our goods as possible. having local geographic production offices close to most of the manufacturing is a key component of this effort. We also strive to minimize the num ber of intermediaries and limit the total number of suppliers. however, Åhléns’ wide range, which includes a variety of product cat egories, primarily in the home collection, requires us to have a relatively significant number of producers.

We have enjoyed longstanding relationships with many of Åhlens’ existing suppliers – some for more than 20 years. however, we have to date never closely analyzed what makes these partnerships so successful. In 2012, we initiated an effort to better define our key suppliers and what characterizes a healthy partnership, from both Åhléns’ perspective and that of the supplier. Åhléns wants to be a strong and good business partner.


resPonsIbIlIty at all leVelsour supply chain is often complex with many different levels, making total control of the entire reverse chain difficult. at the same time, our customers want to hear this guarantee from us. In the long term, we must be able to monitor working conditions even further down the supply chain more systematically than we do today.

the challenges vary from one product area to another. In the hard furnishing area, we have identified the need for improvements in relation to workplace health and safety. this production environment is often more hazardous than working with textiles, due to the chemicals that are used and, quite often, unsafe machinery. In general, sustainability awareness is also lower than in the clothing industry.

IdentIFIed rIsKsthe sustainability risks identified in the supply chain primarily entail the workplace health and safety risks associated with using chemicals. Prioritized areas for further measures are:

• hard home products (wood, metal, glass, ceramics)

• bags and shoes (preparation of skins in tanneries)

• dyeing textiles (dyeworks)

• traceability

traInInG For deVeloPMentover the past few years, Åhléns has worked extensively, mainly by conducting a large

number of audits, to identify the risks and challenges in our supply chain. this provides a solid basis for developing initiatives in prioritized areas in partnership with our suppliers. to spread knowledge and create a shared view of what responsible production entails, we are increasing our efforts to train suppliers.

the business social Compliance Initiative (bsCI), of which Åhléns is a member, offers regular training courses in various locations around the world that we recommend to our suppliers. In 2012, several of our Chinese suppliers participated in bsCI training in workplace health and safety together with Åhléns personnel from the local production offices.

In 2012, Åhléns also arranged its own courses in workplace health and safety for ten key suppliers of hard home products in China.

InteGrated WorK Methodto create internal synergies and develop the supplier dialogue around sustainability issues in all of our contacts, it has been our ambition that the purchasers and merchandizers at our production offices participate in social audits. In 2012, all merchandizers and several purchasers took part. We also produced a checklist with questions for suppliers during the year, making it easier for quality auditors or purchasers to app roach responsibility issues in their supplier contacts.

Developing supplier relationsaarthi in India, from whom we have purchased home textiles since 1998, is one of Åhléns’ largest suppliers. Mr. r samanathan is a Managing Partner at aarthi.

– The treatment of the process water has been a central issue for us. We have invested in new treatment systems so that we can re-circulate the water and prevent emissions. We now have one of the most sustainable facilities in the region!

– We take active responsibility for our em-p loyees by regularly overseeing the work-place health and safety conditions. We also contribute financially to the education of our employees’ children. We are SA8000 certified, which proves our commitment to systematically improving working conditions.

longterm and mutual commitment is important, claims samanathan, as well as sharing joint guidelines, such as new chemical regulations.

– We started off as a small company and our partnership with Åhléns has developed the operation. We maintain an active dialogue in all areas from pricing, quality and inn-ovation to the workplace environment. We work continuously to improve our pro d uct development, particularly from a sust-ainability perspective. We have also joined the Better Cotton Initiative recently.

The BSCI Code of Conduct is based on the UN’s Universal Declaration of Human Rights and the International Labour Organization (ILO) Conventions protecting workers’ rights. The Code includes the following criteria:

• Legal compliance.

• Prohibition of child labor and forced labor.

• Prohibition of discrimination.

• Compensation.

• Working hours.

• Workplace health and safety.

• Freedom of association and the right to collective bargaining.

The BSCI uses three levels to measure the audit results: “Good,” “Improvements needed” or “Noncompliant.” For “Noncompliance” and “Improvments needed”, an action plan is established together with the supplier. Following a compliant reaudit, the supplier is considered approved for a period of three years (from the date of the initial audit).

Read more at www.bsci-intl.org.

THE BSCI CODE OF CONDUCT

http://www.bcsi-intl.org


annual assessMentÅhléns conducts an annual, collective assess ment of its suppliers. Quality, prices, delivery precision, service and responsible production are all taken into consideration and compiled in a report that is sent to the supplier. the assessment forms the foundation for a constructive discussion and continued improvement efforts.

Wants to IMProVe labor CondItIonsWe systematically monitor labor conditions among our suppliers. We use bsCI’s Code of Conduct and adhere to a standardized process when evaluating our suppliers. the audits are conducted by accredited, independent auditors. by cooperating within bsCI, other members can read reports of completed audits.

Åhléns also evaluates the suppliers based on the requirements in bsCI’s Code of Conduct using our own auditors. this primarily applies to new or potential suppliers, as well as smaller suppliers. audits of labor conditions are performed on all new suppliers in highrisk countries prior to placing orders.

PrIorItIZatIons For oPtIMal Valueour sharpest focus is on monitoring and improvement efforts among the suppliers from which we make substantial purchases and among which we foresee a longstanding relationship.

We prioritize audits of factories in highrisk countries, with an annual purchased value of at least usd 15,000, which corresponded to 601 facilities in 2012, which makes 70% of the total number of plants that deliver to us. We also prio ritize factories at which the production of a specific product is related to specific risks to employees’ health and safety, as well as to the environment.

In 2012, followup audits were conducted both through bsCI and by our own auditors. the results were positive since the suppliers had implemented a number of improvements that were agreed upon in the action plan.

Zero toleranCeÅhléns applies a zerotolerance policy concerning some specific issues in the Code of Conduct. this includes child labor, forced labor, harassment, serious environmental impact, serious health and safety risks, change of subcontractors without our approval, a lack of willingness to cooperate or a refusal to comply with audits. If such is discovered, an immediate stop is imposed on new orders from the supplier, which must address the problem within a month and verify this through a followup review. If the problem recurs, Åhléns has a policy of completely ending its businesses with the supplier.

Distribution of factories by country in 2012 (847 plants)

Production in high-risk countries: BSCI has prepared a list of what are known as high-risk countries, which all members use as the basis for prioritizing supplier controls; visit www.bsci-intl.org for more information.

In 2012, we conducted production in a total of 19 high-risk countries: China, India, Taiwan, Turkey, Bangladesh, South Korea, Indonesia, Pakistan, Cambodia, Vietnam, Uruguay, Albania, Belarus, Brazil, Moldova, Romania, Serbia, South Africa and Thailand.

Taiwan (25)

Portugal (18)

Turkey (15)

Other countries 31 st (116)

China (555)

India (63)

Sweden (29)

Italy (26)

2010 2011 2012Target in 2015

Percentage of audited factories(located in high-risk countries, with a purchased value of > USD 15,000)

– 60 % 75 % 100 %

Percentage of total purchased value(from audited factories in high-risk countries)

59 %* 88 % 86 % 100 %

Audited factories, objectives and follow-up

* Only pertained to BSCI-audited plants


FoCus on the enVIronMenta particular challenge is reducing the environmental impact in the supply chain. In bsCI’s Code of Conduct, only a few environmental asp ects are currently included. alongside bsCI’s efforts to develop a specific environmental module, Åhléns is working on other initiatives. We are a member of such organizations as stWI, sweden textile Water Initiative, and sseI, sweden shoe environmental Init iative – networks that pursue sustainable environmental and water consumption methods in these industries.

In 2012, based on stWI’s guidelines, we conducted a number of sample audits among colordying plants. these belong to a category of subsuppliers that we know are exposed to significant environmental and health risks, particularly through the use of chemicals. We concluded that more extensive mapping of our suppliers’ colordying plants was necessary, due, among other reasons, to the environmental risks differing depending on the scope of official supervision.

In 2012, Åhléns also conducted environmental audits among suppliers of solid home products. the greatest challenges involves the handling of chemicals, a process in which environmental and health aspects are often substandard. the plan is to commission thirdparty auditors to conduct environmental audits among our key suppliers, while simultaneously assessing how to take a more systematic approach to environmental mat ters. In parallel with these efforts, we will dev elop the skills of our own auditors to enable them to ultimately include the environment in their audits.

Significant progress for Chinese supplier In 2012, a followup social audit was conducted at one of our suppliers in hangzhou, China, which manufactures paper plates. during the initial audit two years earlier, the factory did not comply with many aspects of bsCI’s Code of Conduct and had no form of systematic approach – shortcomings included the lack of a solid health and safety structure.

since then, the supplier has addressed all of the items on our action plan through close cooperation with our office in shanghai, and rose from the lowest to the highest score. Its production has also been modernized and undergone efficiency enhancements. We use this success story as a source of inspiration for other suppliers and as a lesson for ourselves that close cooperation and open lines of communication with our suppliers make a considerable difference.

Results of all audits completed in 2012

SA8000 certified (4)

“Good” – no deviations from requirements (41)

“Improvements needed” (38)

”Non-complience” (130)

Non-Tolerance (1)

ICTI audits (23)

No deviations (19)

Improvements needed (2)

Deviations (2)

In 2012, a total of 237 audits were conducted, slightly more than half of which by our own auditors. The deviations identified primarily pertained to the environment, health and safety aspects among suppliers who work with solid products made from glass, metal, wood or plastic.

SA8000 is an international social responsibility standard. A SA8000-certified supplier employs a systematic approach to

ensuring proper labor conditions and is the ultimate goal of the BSCI auditing process.

Toy suppliers are audited in accordance with a specific industry standard known as ICTI, International Council of Toy Industries. Most of our toy suppliers that were audited during the year achieved results at the upper end of the scale.

Caroline Gunterberg and Carol Song, owner of Hangzhou Enli


Systems for operations & logistics

The operation of Åhléns’ department stores and the transportation of our goods have an effect on the environment, particularly in the form of climateimpacting emissions. In 2012, improved solutions for waste management were tested and we introduced a system to monitor the climate impact of transportation. In the Stockholm region, some of our goods are distributed using a new truck with high environmental performance.

reduCed enerGy ConsuMPtIonthe consumption of energy, primarily electricity, forms part of Åhléns direct environmental impact. accordingly, we are working to reduce electricity consumption in the properties in which we operate. our target is a 20% reduction by 2014, compared with 2009.

by switching to led lighting, the overall energy consumption in our stores and department stores can be reduced by about 30%. In 2011,

the lighting fittings in Åhléns City in stockholm were replaced, and in 2012, led lights were installed in four new stores in norway. the trans ition to energy efficient led lighting is now a routine process during renovations and the opening of new stores.

reneWable eleCtrICItyProprietary electricity agreements facilitate work on governing and monitoring electricity consumption. Whenever possible, Åhléns endeavors to sign electricity agreements for the premises in which we operate. We only purchase hydroelectricity with a guarantee of origin. For 38 of our department stores in sweden we have central electricity subscriptions. however, electricity often remains included as a utility in leases for department stores located in, for example, shopping malls and shopping centers. In these cases, Åhléns recommends that the property owner use electricity from renewable sources.

In further pursuit of this issue, Åhléns sent a letter in early 2013 to all property owners of shopping centers and shopping malls, encouraging them to use renewable electricity and to ensure sustainable waste management, as well as to make it easier for customers to give used goods to charity and recycling.


enVIronMental ConsIderatIon Åhléns’ head office was refurbished and modernized in 2012. environmental consid erations were taken into account when making such selec tions as lighting and materials for interior design – for instance are all new carpets made from recycled materials. Whenever possible, existing materials were reused, materials from demolished walls were used for walls in other areas of the office, furniture was donated for reuse and used interior design pieces were refurbished.

IMProVed Waste ManaGeMentsince Åhléns wants the waste that arises at warehouses and department stores to be viewed as a resource, a properly functioning waste sort ing system is required. Waste is sorted at the distribution center and in all of our department stores in sweden and norway. the largest volu mes comprise corrugated cartonboard, combustible waste and soft plastic. the completed waste charting efforts indicated that we can improve waste management by sorting better, into more categories and reviewing how the waste is managed. a practical test in four department stores that was conducted in the spring of 2012 also showed that using the right compacting equipment, we can improve our working conditions, the environment in general and our profitability. based on these surveys, we are now launching a template for how to manage waste sorting in all of our department stores. For example, hard plastic can be sorted since underwear often hang on plastic hangers that

would otherwise be discarded. the template will be communicated to all department stores during spring 2013. We will also cond uct a central tendering process for wastemanage ment services for the department stores that are cur rently negotiating these services locally. the aim is to reduce our environmental impact and our costs.

reCyCled ÅhlÉns baGsIn February 2013, a new procedure was launched for the department stores in shopping centers and shopping malls that have propertywide wastemanagement services. under a partnership with Postnord and trioplast, the soft plastic from Åhléns’ department stores will be recycled. the plastic, which is sorted in bag holders, will be collected by Postnord’s drivers when they deliver goods. the plastic is brought back by the driver to the trioplast facility, where it is melted down and turned into new plastic raw material that is mixed into our own Åhléns bags, which are made out of 80% recycled plastic.

neXt steP: IMProVed MonItorInG a challenge that remains is the measurement and monitoring of waste quantities at all depart ment stores. through our partnership with Postnord and trioplast, we will be able to monitor soft plastic from the department stores involved and the department stores, whose wastemanagement services will be subject to a central tendering process. Work is under way on evaluating how to best measure the overall volumes.

2009 2010 2011 2012

Percentage change 09–12

Target 09–14

Department stores, Sweden

214 201 189 182 15 % 20 %

Distribution center

134 133 128 124 9 % 20 %

Head office* 155 109 175 108 30 % 20 %

Energy consumption in premises ( kWH/sqm)

* Estimated figures based on electricity costs that are paid through rent

Due to a development in the calculation basis compared with last year, the figures for 2009–2011 in this table differ from the figures listed in last year’s report.

-15%less electricity consumption in the

department stores in Sweden by 2012, compared with 2009


In norway, the Miljöfyrtårnet Foundation can certify many different types of operations, including shopping centers, which entails imposing requirements on such factors as energy consumption, waste and communications. the Åhléns stores that are encompassed comply with this certification.

Goods are shIPPed by sea or truCKÅhléns’ goods arrive at axstores’ distribution center in Jordbro outside stockholm from asia and europe. From asia, shipments are primarily made by sea and within europe and the nordic region, mostly by truck. only in exceptional cases are goods transported by airplane – the target is to have a maximum of 2% of goods arrive by air. In 2012, 0.9% of incoming goods arrived by air (0.5 in 2011). the goods are delivered to the department stores from the distribution center. In 2012, the department stores received an average of 2.7 deliveries per week (2.5 in 2011).

ProbleMs WIth the neW systeMIn 2012, a new business and warehousing system was installed for the flow of goods in axstores. the aim is to pack more efficiently to achieve the optimal capacity level. this is required

since we are facing a challenge in the form of an increased percentage of larger and bulkier products, such as furniture. the new system has entailed a major transition for the entire organization. startup problems during the year resulted in lower capacity levels in terms of pallets and crates, and more deliveries per week to department stores.

this did not affect the capacity level in the incoming containers, which instead improved during the year to between 85% and 94%, compared with 2011 (84–92%).

MonItorInG oF Carbon eMIssIonsIn 2012, axstores mapped the transportation work, both in terms of incoming and outgoing goods. based on the results of this charting, we launched a tool for monitoring carbon emissions from transportation. a robust system is now in place, with defined grounds for calculations and established recalculation factors. We will continue working on further improvements to the tool, and establishing key performance indicators and targets.

based on the current data, we deployed the

23grams of CO2 per ton-km

was emitted from transportation

Truck with high environmental performance in Stockholmaxstores has reached an agreement with one of its transport companies about acquiring a new ecotruck for distribution to Åhléns, Kicks and lagerhaus in the stockholm region. anders holmqvist, transportation Manager at axstores has been a driving force behind the new vehicle.

– The eco-truck is fuelled by methane diesel, which results in carbon emissions that are up to 70% lower than a standard diesel vehicle, says Anders.

the ecotruck is a step toward reducing the environmental impact of transportation. however, effective and environmentally compatible distribution requires analyzing the entire chain.

– The capacity level and number of deliveries to the department stores are key indicators of how successful we are in coordinating everything from procurement to sales. We are continuously striving to eliminate any empty space in the vehicles. One problem is that freight pallets from different parts of the world have different standard measurements, which affects our ability to achieve the optimal load.

– In 2012, we also had major problems aligning our new system to the flow of goods, which had an impact on both capacity levels and the number of deliveries. Everybody at the distribution center worked hard to minimize the impact by, for example, clearing extra pallets and boxes. Without those efforts, the capacity level would have been significantly lower.


tool to calculate that our transports resulted in average emissions of 23 grams of carbon per tonkilometer in 2012, based on the transport chain from the shipping terminal to the department stores. this is deemed to be a relatively favorable figure due to that we have a combination of goods that are heavy and voluminous.

reduCtIon In aIr traVelÅhléns coworkers do business travel in scandinavia, europe and to the countries from which we make purchases. In 2012, carbon emissions declined to 281 tons, compared with 302 tons in 2011, based on the trips that were booked through our travel agency. the many train trips that are taken by hundreds of employees only resulted in 0.68 kilograms of carbon emissions. efforts are under way to create enhanced video conferencing equipment in axstores, which will further facilitate the reduction of certain business trips.

2010 2011 2012

Total CO2

(tons)320 302 281

2011 2012

Total CO2

(tons)6480 6057

Relative CO2

(grams/tonkm)23 23

Carbon emissions from business trips

Carbon emissions from the transportation of goods

Carbon emissions from business travel by train were negligible as a result of minimal emissions from trains.

(incoming and outgoing goods)

Axstores requires its forwarding agents for incoming goods and distribution agents to employ systematic environmental efforts and have ISO14001 certification.

Maximum speeds, engine type and that the transportation providers use fuelefficient driving are examples of other aspects that are taken into consideration in the procurement of distribution providers.

-7%lower CO2 emissions from business

travel between 2011 and 2012

ENVIRON MENT & TRANS POR TATION

PROVIDERS


A committed workplace

Committed employees are the key to realizing Åhléns’ customer offer and enabling a profitable and successful company. We aim to be an attractive workplace that offers good opportunities for inclusion and development. In 2012, we continued our work on corporate values by focusing on leadership development. We also concentrated on health and fitness programs.

a dynamic and valuedriven organization is an important prerequisite for successfully adapting and modernizing Åhléns. our objective is a corp orate culture in which every employee, by assuming responsibility and taking independent initiatives, optimally contributes to profitability and customer satisfaction. based on the values that we formulated in 2011 with the help of the entire organization, our efforts continued in 2012 with a focus on implementing these values in our leadership and customer service.

ValuedrIVen leadershIPour managers play a decisive role in advancing the company from an organization governed by rules to one guided by values. Åhléns’ management profile is to guide to what an approach and behavior that should be valued and rewarded.

Valuedriven leadership requires executives who are highly confident in their employees’ ability, who have the courage to relinquish cont rol and give greater freedom with matching responsibility. the ability to clarify, monitor and provide feedback is also pivotal. to strengthen and provide resources to executives at Åhléns, a development program in valuedriven leadership was launched in autumn 2012, which is geared toward all executives at the company. Åhléns’ management profile and values serve as a key basis for the program, as do the results of the employee survey. My own leadership, commitment, feedback and team development are areas of focus in the training program, which encompasses four training days during an 11month period. the program is also based on exchanging experiences and the participants coaching each other, as well as regular discussions and coaching with your manager.


an attraCtIVe WorKPlaCeFor Åhléns to progress, we must ensure that our employees are satisfied, feel involved and that their potential is being harnessed, while also successfully recruiting new talents.

our goal is for Åhléns to be attractive for those who want to work in the retail sector.

We collaborate with selected College and university Institutions in the retail trade, including the stockholm school of economics’ Center for retailing (CFr) in norrtälje, outside stockholm. this partnership gives us insight into the latest research, the ability to contribute to a sectorrelated training course and to market Åhléns as an employer.

FoCus on health and FItnessIn early 2013, Åhléns initiated a proactive health and fitness effort. the aim is primarily to contribute to increased physical activity, commitment and motivation among our employees, which is also meant to result in less sickness absence. the fitness initiative, known as “the Wave,” includes a higher contribution paid for fitness activities and a range of exercise and inspirational activities.

balanCed lIFestyleenabling a balanced lifestyle, for parents of small children among others, has also become an increasingly important aspect of a workplace. Parents on leave are also entitled to participate in the standard salary talks. Åhléns also offers a parental bonus in addition to the state parent allowance.

employee surveys indicate positive development in the area. the percentage of employees who responded that they feel that they have a balanced lifestyle and have a work situation free from negative stress has increased compared with the preceding year.

2012Target in 2013

Sickness absence (as a percentage of working hours)

5,97 % 5,32 %

Sickness absence

Two managers discuss Value-driven Leadershipan interview with adam andersson, store Manager in birsta City, sundsvall and reine Walfridsson, Market Campaign Manager.

What benefits have you drawn from the leadership development program?

ADAM: It is based more on who I am as a pers on and manager than on a “template” for what approach I should take to work. It is more beneficial to begin with myself and then be able to help others develop.

REINE: The exchange of experience with other Åhléns managers has been a valuable component. Having managers from the head office and department store collaborating and seeing eye to eye on challenges and opportunities is important!

What advantages do you perceive with value-driven leadership at Åhléns?

ADAM: It is more inspirational and provides greater potential for myself and others to develop. Employees who are given responsibility and allowed to make their own decisions are more creative and offer better customer service. It makes it easier to work and shop at Åhléns!

REINE: It creates a flexible and educational organization – a necessity in our rapidly changing sector. As a manager, it provides me with a solid platform. Policies seldom comp-letely match reality, but as long as I act in accordance with the values, I know that I am on the right track.

It also leads to greater inclusion, more enjoyment at work and fewer complications for all employees.

...and what are the challenges?

ADAM: That we have the courage to relinquish control as managers – to let go of our check lists and completely trust in the abilities of our employees.

REINE: To truly manage to live in accordance with our values – every day in all decisions. This imposes requirements on internal com-m unications and on solid feedback to our employees. When we encourage employees to take their own initiatives and to actively make decisions, we must also foster a culture of compassion, in which we can learn to grow from the mistakes that are made along the way.

2140participants in the step

competition in spring 2013


Proud, CoMMItted eMPloyeesan employee survey is conducted among all employees every January. a full 94% responded to the survey in 2013 (83% in 2012) and the results indicate a very high level of commitment.

the employee satisfaction Index (esI) was measured at a score of 90, compared with the industry average of 85. the net Promoter score (nPs), an indicator of the degree to which employees are active ambassadors for Åhléns, also rose and far exceeds the industry average. the employee survey indicates excellent awareness of our values and that many feel committed to these values at work. better feedback and followups are still in demand, although these areas experienced a positive trend compared with last year’s survey.

as part of our work on individual development and followups, annual target talks are held between each employee and their immediate superior.

eMPloyee surVey on sustaInabIlItyIn november 2012, a special survey was conducted regarding employees’ view of Åhléns’ sustainability efforts and how these can be improved. slightly more than 500 individuals responded to the survey. the results indicate that employee awareness of the sustainability efforts under way in our operations and in the supply chain is relatively low. Far more were aware of bra val products and believe that they are important for Åhléns’ brand. Many made proposals for improvements moving forward, in terms of quality, packaging and internal communications as well as communications to customers.

Åhléns’ leadership is hallmarked by managers with solid selfawareness and personal maturity, thus enabling employees to achieve the established goals.

OUR MANAGERS HAVE:

• The will to lead.

• An enterprising approach.

• Energy and commitment.

• Trust.

OUR MANAGERS WANT TO:

• Provide feedback and conduct followups.

• Communicate.

• Be honest and transparent.

• Create effective teams.2012 2013

Industry average

Employee satisfaction(ESI, Employee Satisfaction Index)

87 90 85

Leadership index(LSI)

72 74 71

Ambassadorship(NPS, Net Promotor Score)

26 36 8

Results of employee survey

ÅHLÉNS’ MANAGEMENT

PROFILE

(the survey has been conducted annually since 2012, in the month of January)


NumberPercentage of full-time employees

Head quarter employees including regional managers

257 91 %

Store employees 2 992 64 %

Production office employees 56 100 %

Full-time employees 959 92 %

Part-time employees 2 290 66 %

Management group 100 %

Total 3 305 73 % (243 men, 2 160 women)

The organization in figures in 2012

Of our 3,305 employees, 8.7% are men. 2,397 work in Sweden, 312 in Norway and 56 at our local production offices in Asia. Corporate management consists of six women and two men.

sustaInabIlIty traInInGtraining in sustainable development is a feature of the introductory training for new employees, and customized training efforts in the area are conducted as necessary.

We have also trained sustainability ambassadors from the department stores, who have undergone a fullday of training to in turn be able to inform and inspire their colleagues in the department stores.

to further improve knowledge about which textiles can be considered more sustainable, some ten people from Purchasing attended training in 2012 provided by Madeby, a dutch organization that helps companies in the textiles industry improve environmental and social aspects in the supply chain.

the Value oF dIVersItyÅhléns wants to contribute to a society in which each individual is considered an asset and treated equally. as a company, we want to reflect our customers and the society in which we operate. We believe that diversity strengthens Åhléns’ competitiveness and business.

the composition of Åhléns’ employees in terms of age and gender largely resembles the company’s customer target groups. about 90% of our employees are women, the average age of whom is 35. We strive to achieve a more even distribution among women and men at all levels and actively look for candidates of the underrepresented gender when recruiting.


Collaboration generates value

Åhléns wants to be a good member of the society. As a result, the cooperation with Myrorna and Stadsmissionen (the City Mission) con tinued at the same pace. A new strategy for our engagement in the society has been developed and will probably result in new collaborations.

unsold ProduCts GIVen a seCond lIFethe products that Åhléns for various reasons cannot sell are donated to stadsmissionen or to Myrorna (a secondhand chain run by the salvation army). stadsmissionen mainly collects products from the three city department stores in stockholm, Gothenburg and Malmö, and from the head office. Myrorna is located in many cities throughout sweden and collects products from all of the other department stores. the products are stripped of their price and brand tags and either used directly in stadsmissionen’s social operations or sold in Myrorna’s stores, in which the surplus goes to the salvation army’s social operations.

the proceeds from Myrorna’s sales of former Åhléns products go, for instance, to treatment centers and assisted living for adults or adolescents with substance abuse problems. Funds are also donated to 15 care centers that provide support to people in need of financial support, counseling, advice or home visits. the salvation army also has camp activities for single parents and their children.

old beCoMes neWstadsmissionen also has “remake” operations where they retailor old garments into new products. the products are made by stadsmissionen in cooperation with people entering the labor market. In February 2013, Åhléns and stadsmissionen initiated a joint campaign in the City department stores, where the customers are encouraged to turn in their old jeans. they will be retailored by the stadsmissionen’s remake activities and the new products will be sold in the department stores. the proceeds from these sales will go to stadsmissionen’s activities for disadvantaged individuals.


toWards neW CollaboratIonsIn addition to the cooperation with Myrorna and stadsmissionen, Åhléns supports several different organizations by collecting donations or through direct donations. For many years, Åhléns has sold the breast Cancer Foundation’s Pink ribbon and in 2012, this raised just over seK 625,000. the sale of unICeF’s Christmas cards resulted in seK 30,000 to the un organization. In conjunction with the Christmas camp of the organization Maskrosbarn for young people with parents who have physological problems or are substance abusers, the young people received gift certificates at Åhléns so they could buy their own Christmas gifts, which was much appreciated.

based on the strategy for community involvement, we have made our future collaboration concrete. It has been established that “Åhléns wants to support women in need, in sweden and countries in which we have activities”. this means that we will develop partnerships with one or a few organizations that fit this description. Work is under way to find the right partner who, for example, should have experience of collaborating with companies. the objective is to establish a structured, continuous partnership with an organization where both customers and employees can contribute to the organization.

Stadsmissionen’s Klaragården –“beloved place”– A beloved place, I wouldn’t have survived if it weren’t for Klaragården, says Anneli.

she has just turned 45 and has lived two lives – a regular life with her family and another life as a homeless substance abuser.

today, she has been drugfree for five years but does not have her own home. she carries what she owns.

– Thanks to Klaragården and their cooperation with Åhléns City and others, I can change underwear every day, get nice socks and have a feeling of dignity, says Anneli.

at Klaragården, stads missionen meet 50 women every day and just as many life stories. Klaragården is a possibility to start something new, and offers a sanctuary where homeless or substance abusing women can get food, a shower, clean clothes and rest.

Together with industry colleagues from Lindex, IKEA, H&M, Indiska, KappAhl and the Swedish Trade Federation, Åhléns established T4RI (Textile for Recycle Initiative) an initiative to create better conditions for the reuse and recycling of textiles.

Through T4RI, Åhléns wants to be involved and take responsibility primarily for the reuse of textiles, followed by recycling in the best way and as a final option incineration. We hope to be able to find solutions that can simplify the cooperation with various players in textile recycling, such as consumers, producers, municipalities and recycling companies.

625000 SEK was raised in 2012 for

the Breast Cancer Foundation through Pink Ribbon sales

WE WANT TO RECYCLE

TEXTILES


Indicator Description Comment PageStrategy and Analysis

1.1 CEO’s statement. 3

Organizational Profile

2.1 Name of the organization. 35

2.2 Primary brands, products, and/or services. 4

2.3 Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures. 4

2.4 Location of organization’s headquarters. 35

2.5 Number of countries where the organization operates. 4–5

2.6 Nature of ownership and legal form. 4

2.7 Markets served. 4–5

2.8 Scale of the reporting organization. 4–5

2.9 Significant changes during the reporting period. No significant changes.

2.10 Awards received in the reporting period. No particular prizes or commendations.

Report Parameters

3.1 Reporting period. 33

3.2 Date of most recent previous report. April 2012.

3.3 Reporting cycle. 33

3.4 Contact point for questions regarding the report or its contents.

3.5 Process for defining report content. The content of the report was formulated through discussions with key internal individuals and based on a previously conducted materiality analysis from 2010. The report is primarily aimed at employees and interested customers but also at other players interested in our operations and sustainability work.

3.6 Boundary of the report. 33

3.7 State any specific limitations on the scope or boundary of the report.

3.8 Basis for reporting on joint ventures, subsidiaries, etc. 33

3.10 Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement.

24

3.11 Significant changes from previous reporting periods.

3.12 GRI content index. 33–34

Governance, Commitments, and Engagement

4.1 Governance structure of the organization. Since year-end 2012, Åhléns’ highest operating management comprises eight individuals (six women and two men). In 2012, Åhléns’ Board of Directors comprised seven members (four women and three men). Four Board members are representatives from Axstores’ Group management, of whom three are employee representatives.

4, 7

4.2 Indicate whether the Chair of the highest governance body is also an executive officer. The Chairman of the Board in 2012 was Thomas Axén, CEO of the Parent Company Axstores.

4.3 For organizations that have a unitary board structure, state the number and gender of members of the highest governance body that are independent and/or non-executive members.

Not applicable to Åhléns.

4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body. Åhléns’ Board includes three employee representatives. Employee surveys and performance reviews also enable us to contribute proposals and opinions.

4.14 List of stakeholder groups engaged by the organization. Key stakeholder groups include employees, customers, owners, suppliers, union organizations, authorities, industry and interest organizations and other business partners. Åhléns maintains a continuous dialog with these stakeholders through its day-to-day operations and channels of communication. The aim is to ultimately develop a more systematic stakeholder dialog regarding sustainability matters.

4.15 Basis for identification and selection of stakeholders with whom to engage. Åhléns’ most important stakeholder groups are those that are most impacted by our business, including employees, customers, owners, suppliers, authorities and industry and interest organizations. The identification and prioritization of stakeholders with which to maintain an active dialog is based on continuous business intelligence reports and daily operations.

GRI Global rePortInG InItIatIVeÅhléns’ 2012 sustainability report is based on the Global reporting Initiative’s guidelines, version G3.1 (for more information on GrI, please visit www.globalreporting.org). according to our assessment, the report corresponds to the GrI application level C. the aim is to continue reporting on our sustainability efforts on an annual basis and to continuously improve the report.

FoCus on essentIal QuestIonsthe content of the report reflects the questions that are essential for Åhléns, based on the operation’s impact on people and the environment and our stakeholder’s requirements and expectations. When formulating the report, significant sustainability aspects were identified through dialogs with key internal individuals at Åhléns. the results of a previous qualitative analysis of prioritized sustainability aspects conducted in 2010 also acted as a basis for the report (for a description of the materiality analysis, refer to Åhléns’ 2010 sustainability report at www.ahlens.se).the contents of the report pertain to the operations of Åhléns ab. all information and key indicators are valid for 2012, if nothing else is mentioned. Fully reportedPartly reported

http://www.globalreporting.org

http://www.ahlens.se


Indicator Description Comment Status Page

Performance indicators

Economy

EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.

4

EC2 Coverage of the organization’s defined benefit plan obligations. All Åhléns employees are covered by collective-bargaining agreements (with the Union of Commercial Employees, Unionen and the Union for Professionals). Benefits deriving from collective-bargaining agreements include the ITP occupational-pension agreement for salaried employees and the SAF-LO union pension for store employees.

Environment

EN2 Percentage of materials used that are recycled input materials. Recycled materials are found in certain Bra val products. 13–15, 24

EN4 Indirect energy consumption by primary source. 23–24

EN5 Energy saved due to conservation and efficiency improvements. 23–24

EN16 Total direct and indirect greenhouse gas emissions by weight. 26

EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved. 23–26

EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. 12–15

EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.

No fines or sanctions.

EN 29 Environmental impacts of transportation. 25–26

Labor Practices and Decent Work

LA1 Total workforce by employment type, employment contract, and region, broken down by gender. 30

LA4 Percentage of employees covered by collective bargaining agreements. 100 %

LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender. 28

LA12 Percentage of employees receiving regular performance and career development reviews, by gender. 29

LA13 Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity.

See information under 4.1 above.

Human rights

HR2 Percentage of significant suppliers, contractors, and other business partners that have undergone human rights screening, and actions taken.

20–22

HR4 Total number of incidents of discrimination and corrective actions taken. No cases have been reported.

HR5 Operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and actions taken to support these rights.

20–22

HR6 Operations and significant suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor.

20–22

HR7 Operations and significant suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor.

20–22

Product Responsibility

PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures.

13–18

PR3 Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements.

Åhléns works on the basis of the prevailing legislation and industry norms/agreements in terms of product information and the labeling of products and the range.

PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes.

No cases have been reported.

PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction. 9–10

PR6 Programs for adherence to laws, standards, and voluntary codes related to marketing communications. 10

PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications. No cases have been reported. 10

PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data. No cases have been reported. 10


Feel Free to ContaCt us!We eagerly receive questions and comments regarding our sustainability efforts: [email protected]

sustainability Manager anita Falkenektelephone, directory: +46 (0)8 402 80 00Åhléns ab, ringvägen 100, se118 90 stoCKholM, sWeden

mailto:sustainability%40ahlens.se?subject=

Documents

Åhléns sustainability report 2012 English