Sustainovate Progress Report 2020 Key Data
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Sustainovate progress report 2020 Key data 10.7 Chapter 1/ Operating margin excluding items affecting comparability, % (7.9) Introduction 12,374 Average number Husqvarna Group is a leading global producer of of employees (12,708) outdoor power products for forest, park and garden care, watering products as well as cutting 4,484 and surface preparation equipment for the Operating income excluding items affecting comparability, SEKm (3,241) construction business. Our strong technical expertise and passion for innovation and quality create performance, pride, and improved results -52% CO2 emissions intensity for customers. 41,943 Contents Net sales, SEKm (42,277) INTRODUCTION SUSTAINOVATE PERFORMANCE INTEGRATING SUSTAINABILITY UNDERSTANDING IMPACTS 3 Husqvarna Group Carbon 30 Engaged teams 41 Business model 4 Sustainovate 10 Climate smart, fit for the future 32 Responsible sourcing 43 Our most relevant issues 5 CEO statement 12 The shift to low-carbon products 33 Safety net 44 Impacts along the value chain 6 A changing world 16 Operational efficiencies 35 Safety at the heart of all products 7 The COVID game changer 17 Supplier CO2 impacts 36 A foundation of integrity ABOUT THIS REPORT 47 GRI Index 8 The value we create 18 From air to sea, road and rail 37 Managing risks 49 GRI Disclosures Circular 38 Climate change risks 19 Why we’re thinking in circles 39 Turning Sustainovate into reality 53 Auditor’s report People 23 Influencing actions that matter 2020 targets 27 Closing the books on 2020 targets 2 / Sustainovate Progress Report 2020 / Husqvarna Group Introduction –– –– Introduction Our divisions Husqvarna Group A leader in forest and Our core purpose Husqvarna garden products. The Passion for innovation is what defines us. undisputed market It’s in our DNA and part of our long history leader in robotic lawn and heritage. It is what has shaped our com- mowers. pany into what it is today. It has also become a vital part in our work towards a sustainable future. We leverage technology to turn opportunities into value for our customers. 63%Share of Group net sales Through our purpose we deliver on our vision. A leader in watering Our vision Gardena products, garden Shaping great experiences is what hand tools and smart drives us forward. It is our inspiration. garden systems. We are proud to be leaders in sustainable, user-centered solutions. Through our prod- ucts and services, we partner to shape the green spaces and urban environments of 22%Share of Group net sales today and of tomorrow. Our key behaviors It starts with me—take ownership A leader in light con- and ask myself: What can I do? Construction struction products for • Seek customers’ point of view in all professionals. meetings and decisions • Demonstrate collaboration by giving and seeking support • Maintain focus and simplicity. 14%Share of Group net sales 3 / Sustainovate Progress Report 2020 / Husqvarna Group The divisions’ share of Group net sales add up to less than 100 percent due to other Group items. Introduction –– –– Introduction Sustainovate 2025 The second chapter of Sustainovate has begun. The Group has set new, bolder targets that align Carbon Circular People and strengthen the 2025 business strategy and Drive the transition to Rethink and redesign for a Inspire actions that make underline how the sustainability agenda is busi- low-carbon solutions resource-smart customer a lasting difference ness critical. Going from five challenges to three experience opportunities, Sustainovate to 2025 is designed By 2025, we will empower to maximize our contribution to tackling climate By 2025, we’ll reduce our By 2025, we’ll launch 5 million customers and change and resource scarcity. Together, they will absolute CO2 emissions by 50 circular innovations.** colleagues to make drive the Group’s ambitions to lead the industry 35% across our value chain.* sustainable choices.** in the shift to a low-carbon, resource-smart economy. * Compared to 2015. * * We will begin reporting in 2021. For more information on 2020 target outcomes, see p. 27. 4 / Sustainovate Progress Report 2020 / Husqvarna Group Introduction –– –– Introduction CEO STATEMENT / Henric Andersson – President and CEO Delivering transformation CEO As a market leader, we aim to lead supplier target. Even more importantly, we that we are on track for the 35 percent action to address climate change realized our intention to integrate sus- reduction. During 2021, as we follow market tainability deeper into our business and to development of the Covid-19 pandemic, we and resource scarcity in our industry. engage more people in the organization. will follow the trajectory and, if necessary, Society needs to shift to a low- Now, a number of these Sustainovate chal- revisit the target to align with our climate carbon, circular economy now more lenges are taking on more operational roles. leadership ambition. The most outstanding outcome during In Sustainovate’s People opportunity we than ever. Every business has a role the year was in carbon emissions, where we want to encourage and enable people to to play. far exceeded the intention we set in 2015. make sustainable choices. This applies to Especially in the last three years of the tar- external stakeholders but also to our corp- get, we have shown that we can grow our orate culture. Our Diversity & Inclusion pro- Our passion for sustainable innovation business, but not at the expense of our com- gram will continue to build on our commit- With Sustainovate, we are combining our mitment to contribute to limiting a global ment. leading innovation capability with our com- temperature rise to 1.5°C. Although I have been with the Group for mitment to sustainability. Sustainability is an quite some time, this is my first year as CEO integral part of everything we do and of Looking ahead of Husqvarna Group. The commitment to shaping great experiences when people use The second chapter of Sustainovate the UN Global Compact and its ten prin- our products and services or interact with us. addresses three opportunities — Carbon, ciples that we made some twenty years ago Thanks to an ever-increasing focus on Circular and People — through to 2025. We will continue to serve as the foundation of battery products, robotic mowers, and digi- will begin to report on progress on two of how we conduct business across our value tal services we are delivering the resource- their targets next year. Carbon, however, is an chain. smart, low-carbon solutions that our cus- extension of what we started in 2015. tomers increasingly seek. These are also We are committing to an absolute carbon Transforming our industry largely the areas where we are growing our reduction of 35 percent. Our 2020 performance showed what we are business. Electric-powered and robotics This revised target is an ambitious one, capable of, and Covid-19 testified to the products now account for 33 percent of our and primarily reflects growth of battery and resilience of our organization. The pan- motorized offering. That is a remarkable robotics products over a ten-year period. As demic deepened our understanding of the achievement from 11 percent in 2015. we have learned from tracking the target’s need to work together to tackle shared chal- first five years, results can rise and fall year- lenges. It also made it clear how we can Closing the books on 2020 on-year. In 2020, with a 32 percent absolute adapt to challenges, which is vital as we The first phase of Sustainovate encom- reduction, we took a big leap forward to address climate change. passed five challenges to 2020 and I am achieving the target, but we can’t rest on our We are determined to spearhead the proud to present the results in this report. laurels. Taking into account the effects of transformation of our industry and to deliver Henric Andersson We achieved four of five targets and were 2020 performance and likely rebound on Sustainovate 2025. – President and CEO close to realizing the remaining one; our effects in 2021 and beyond, we estimate 5 / Sustainovate Progress Report 2020 / Husqvarna Group Introduction –– –– Introduction A changing world The impacts of climate change, demographic shifts and competition for scarce resources are affecting society at large and are redefining the way Megatrends companies deliver value. These trends and drivers are critical to executing our strategy to 2025. SHIFTING CONSUMER VALUES AND URBANIZATION THE ENERGY SPEED OF PURCHASING AND NEW TRANSFORMATION TECHNOLOGY BEHAVIOR CUSTOMER GROUPS The urgency of addressing climate change Digitalization is transforming how products By 2030, global middle-class spending is Cities, in particular, are driving the sus- makes low-carbon solutions a growing prio- are developed, sold, used, serviced and projected to triple. Sustainability values, tainability agenda. By 2030, two thirds of the rity for customers and regulators. Mean- shared. Digital offers, such as smart garden individualism, personal expression, ease of population will live in cities. Europe and while, technological improvements are ena- solutions and fleet-management systems use and affordability all have an impact on North America will have more over-55s than bling viable and affordable energy storage. for commercial users, position us to deliver purchasing decisions. under-18s. This creates opportunities to leverage more efficient services, consume fewer renewable electricity. resources and extend product life. Sustainability opportunities and risks Sustainability opportunities and risks Sustainability opportunities and risks Sustainability opportunities and risks • Products that go beyond fuel-efficiency • Analyzing data from devices and robotic • Growing emphasis on sharing products • More green spaces are needed as cities standards give us a competitive advan- technology delivers greater customer instead of owning them provides oppor- expand. For us, this creates openings in tage. insight, helps us develop product features tunities for circular business models. public sector procurement and connecting • Battery technologies and the rise in the that enhance productivity, efficiency and • Stakeholders expect us to meet high urbanites with nature through gardening.