Responsibility report 2006

Responsibility report
2006
Index
Overview
2
Identity
Indesit Company: success in the present
Background
Values, Mission and Business principles
Ownership and organization structures
Strategies
4
6
9
11
12
Governance
Corporate Governance
Sustainability governance: the Indesit Company model
Sustainability management systems
Dialogue with stakeholders
External views: Sodalitas
15
20
22
26
30
Economic responsibility
Financial highlights
Cash flow management
Creation and distribution of value added
33
34
34
Social responsibility
People
Clients
Shareholders
Suppliers
Public administration
Community
External views: ILO, Etica SGR, Locatelli group, NLMK
37
49
56
60
64
64
Environmental responsibility
72
Glossary
86
GRI index
88
esponsibility 200
Indesit Company
Overview
This Sustainability Report is a voluntarily disclosed statement of our responsible
management processes, providing an accurate account of the values, strategies and
communication with our main stakeholders, ie. our people, clients (retailers and
consumers), shareholders and banks, suppliers, public administrations,
communities and future generations. For Indesit Company (the “Group”), the
Report is mainly a management tool used to monitor our sustainability
performance and fix new objectives for improvement, which are also defined by
listening to our stakeholders’ needs.
Our Report is drawn up according to the “Sustainability Reporting Guidelines”
promulgated by the Global Reporting Initiative (GRI) in 2006 (G-3), the level of
application of such GRI Guidelines in our case being B.
Data and other information are as of 31st December 2006.
2
In drafting this document the Group also took into consideration the following:
• “AccountAbility 1000 (AA 1000) Framework” in defining our sustainability reporting process,
and the supplement to it “Stakeholder Engagement Standard” (AA 1000 SES), in planning and
implementing dialogue with stakeholders;
• “Principles adopted for Social Reporting” (Principi di redazione del Bilancio Sociale) promulgated
by the “Group for Social Reporting study” (Gruppo di Studio per il Bilancio Sociale - GBS),
especially in connection with analysis and presentation of value added;
• the London Benchmarking Group (LBG) for qualitative reporting of activities in favour of the
community.
Indesit Company’s 2006 Report is in the following sections:
Methods
An overview of the assumptions and principles underpinning the reporting process.
Corporate identity
A statement of the guiding values and principles adopted by the Group and which orient its
choices along with its mission and strategic plans. The Group’s corporate and organizational
characteristics are also outlined.
Governance
An illustration of the model of corporate governance and management system adopted to exercise
control over corporate responsibility and apply the principles of sustainable development in day-today business. This section also outlines how Indesit Company dialogs with its stakeholders. The
results of specific activities involving dialogue with stakeholders are given in each of the relevant
sections of the Report.
Economic responsibility
This section explains the economic and financial indicators used to relate the Reoprt to the
consolidated financial statements. It also contains a chart illustrating production and
distribution of value in terms of economic resources generated and how they are divided
amongst the main stakeholders.
Social responsibility
Statement in terms of quantity and quality of the relationship with Group main stakeholders
(employees, customers, shareholders, suppliers, the public administration, the community and
future generations).
Environmental responsibility
A description of the Group’s environmental policy and processes and the impact of its products.
The consolidation area of data examined in this Report includes the Group parent company,
Indesit Company S.p.A., and its subsidiaries (as listed on page 11) except where stated otherwise.
3
Identity
Indesit Company:
success in the present
Indesit Company is Europe’s 2nd biggest white goods maker and the world’s 5th. The
main brands of this Group - founded in 1975 by its current chairman Vittorio Merloni
and listed on the Milan stock exchange since 1987 - are Indesit, Ariston, Hotpoint
and Scholtès. At the beginning of 2007, Indesit Company presented the Group’s new
brand architecture, designed to strengthen our brands and synergy between them.
The Hotpoint and Ariston brands are being merged to form Hotpoint-Ariston, an
interaction between the international force of the UK brand and the tradition of the
Italian label, to improve market positioning in the middle-high bracket and generate
a whole new range of domestic appliances. At the same time, the Indesit brand will
continue to refine its positioning by focusing on innovation and design, as with the
launch of the Moon, a new washing machine with a strongly avant-garde image
and innovative functions.
MILESTONES IN INDESIT COMPANY’S DEVELOPMENT
1930
1975
1987
1997
2000
2001
2002
2004
2005
2006
incorporation of Industrie Merloni
incorporation of Merloni Elettrodomestici
listing on the Milan stock exchange and acquisition of Indesit
appointment of first external CEO
acquisition of Stinol in Russia and leadership in Eastern Europe
acquisition of GDA and the Hotpoint brand in the UK; leadership in the UK
publishing of the first Sustainability Report in the Italian white goods industry
Indesit Company opens two new plants, one in Russia and one in Poland;
Merloni Elettrodomestici becomes Indesit Company, celebrating 30 years in business
and opening the industry’s largest logistics centre in Europe; launch of the Aqualtis,
a totally new concept in washing machines
the Group now operates 18 plants and 24 commercial operations worldwide,
employing 17,284 people and producing sales of €3,248.6m and turning
out around 15 million appliances.
5
responsibility 2006
Background
Indesit Company operates in a completely free market and its products are sold for use in people’s
homes. Indesit Company does not currently supply public administrations or agencies.
In 2006, its sales of white goods to the trade saw an increase on 2005 of 2.3% in Western Europe,
5.8% in Eastern Europe and 5.9% in the CIS (Confederation of Independent States, including
Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldavia, Russia, Tajikistan,
Turkmenistan, the Ukraine, Uzbekistan and Georgia). In Western Europe, a positive trend was
seen in all markets, with a slightly above average rate in Spain, while in Eastern Europe the fastest
growth was in Hungary.
Retail prices rose in Western Europe, especially in the 2nd half of the year (1.5%), while in Eastern
Europe prices dropped by 3.8%.
The Group proved able to turn the favourable economic scenario to its advantage and strengthen
its position on all the main markets by launching new products and keeping prices competitive.
Indesit Company’s market share rose by around 0.3% on 2005, making the Group the no. 2 in
Europe and the no. 5 in the world.
Legislation
In December 2002, the European Union introduced new legislation on the disposal of electrical
and electronic waste (WEEE, Waste Electrical and Electronic Equipment) making manufacturers
responsible for recovery and disposal of discarded products. The law established both collective
Values
Indesit Company is a Group that wants to constantly improve in everything it does. This objective
of continual improvement is pursued by respecting the five values that can be seen at work in
inter-personal conduct and in the organization and carrying on of business relationships:
innovative
because everything Indesit Company does shows the creativity and spirit of initiative of people
who strive for and apply innovation in everything they do
respectful
because Indesit Company’s priority is to be sensitive and responsible towards consumers,
retailers, employees, suppliers, shareholders and the communities where it operates and the
environment in the widest sense of the word
ambitious
because the capacity to improve everyday is driven by Indesit Company’s passionate enthusiasm
for excellence and leadership
6
responsibility (for products put on the market before 13th August 2005: so-called “old waste”)
and individual responsibility (for products put on the market after 13th August 2005: socalled “new waste”).
To date, certain important EU countries (from the viewpoint of the Group operations, mainly
the UK and Italy) have not yet completely assimilated the EU legislation. In Italy, government
decrees must still be issued before the WEEE system can be started up. The expected date for
this is 1st July 2007.
In December 2002, the European Parliament and Council adopted Directive 2002/95 (RoHS
- Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic
Equipment), under which electrical and electronic appliances put on the market after 30th
June 2006 must not contain pollutants. Indesit Company moved to guarantee its compliance
with the Directive by giving notice to all its suppliers that it would not accept goods not in
conformity with RoHS.
In collaboration with other white goods makers in Ceced (Committee of European white
goods producers), Indesit Company has been working in response to new European
environmental directives on the use of hazardous substances in electrical and electronic
equipment (RoHS) and waste in the form of such products at the end of their life (WEEE).
In 2006, Indesit Company was the prime mover in the foundation of Ceced Italia (a member
of Confindustria and ANIE), a new association of Italian producers of domestic and
professional appliances whose main objectives include educating institutions and the public
on issues of environmental protection, energy saving and protection of consumers.
in touch
with others, because constant dialogue with all its stakeholders enables Indesit Company to listen to
their needs, provide the most effective solutions and achieve the best results.
genuine
because Indesit Company operates in an open, transparent and genuine way, working with a
straightforward, dynamic and flexible attitude
These values were identified and chosen by Indesit Company’s employees themselves in a
consultation process involving questionnaires, interviews, meetings and workshops. Respect for
these values and their diffusion within and beyond the Group are also monitored by means of
surveys, which in 2006 addressed mainly journalists and analysts. The sharing of values with
employees and their participation in the process of defining Indesit Company’s system of values
are tangible evidence of its determination to act with social responsibility based on the business
principles set forth below.
7
responsibility 2006
Business principles
Central role of the individual
Boosting the value of human capital and
developing individual professional skills,
respect for the physical, moral and cultural
integrity of every individual, the promotion
of equal opportunities.
Environmental respect
and conservation
Sustainable growth as the fruit of a proactive approach to environmental issues
and of pursuing today’s objectives with a
view to the needs of future generations.
Respect for workers’ rights
Respect for the fundamental rights of
workers worldwide in accordance with the
conventions of the International Labour
Organization (ILO) on the abolition of
exploitation of minors in the workplace and
the principles of trade union freedom,
workers’ organizations, collective bargaining
and the development of equal opportunities.
Innovation and quality
Research and development efforts
focusing on constant innovation in
business processes.
Adoption of a participatory
industrial relations model
A participatory industrial relations model as an
effective instrument for dialogue, involvement
and definition of shared objectives.
Fairness and transparency
Satisfaction of stakeholders’ expectations
through
clear
and
transparent
communication of strategies, activities,
results and decisions.
Creation and distribution
of value added
Success in production and market
competitiveness through the creation and fair
distribution of value amongst stakeholders.
Integrity
The adoption of morally sound conduct in
all activities and the avoidance of all forms of
corruption and infringement of either laws
or ethical principles.
Permanent training
A permanent training system favouring the
development of competencies and
professional skills.
To step up this public commitment to spreading the principles of social responsibility, Indesit
Company in 2006 joined the United Nations Global Compact (an international initiative
supported by the United Nations to promote a responsible business community through
commitment to ten universal principles in the fields of humans rights, labour conditions, the
environment and the fight against corruption).
8
Philosophy
“
There is no value in the economic success of any
industrial initiative if it is not also accompanied by
commitment to social progress.
”
(Aristide Merloni, 1967)
Mission
“
To be the European leader, producing
technological solutions compatible with
the environment, to create quality of time
for people day after day
”
Indesit Company’s mission can be summed
up by its Brand Essence: Simply better.
Simply better…
…is a frame of mind, a way of thinking and working, based
on a firm belief that real value can only be created by
reconciling economic and social progress;
…means improving everyday, in all activities, to respond better
to the needs of customers, employees and other stakeholders
and reward their trust;
…means identifying with our values and expressing
them in colours and images too.
9
responsibility 2006
Philosophy
The philosophy underpinning the work of men and women in Indesit Company has its roots in
the history of Industrie Merloni and that of its founder Aristide Merloni.
Aristide Merloni was born in Albacina, a small district of Fabriano, on 24th October 1897. In 1930,
when 33, he abandoned a management post to return to Albacina, where he used a small amount
of money from the parish priest to set up Società Anonima Aristide Merloni, a workshop making
balances, which was to become one of the biggest industrial concerns in Italy, above all because of
the principles that inspired him in his work.
Feeling for territory
Aristide Merloni’s business drew lymph from local territory and grew through reciprocal
relationships of exchange and participation. On one hand, it meant people didn’t have to emigrate
to find work and on the other it fuelled the development of a local service and supply economy
and the creation of manufacturing districts and industrial centres.
Technological innovation and diversification of production
Aristide Merloni was among the first to see technological innovation and diversification of
production as strategic success factors. His own business started with weighing machines, moved
into liquid gas bottles and then took in domestic appliances (hobs, water heaters, cookers, fridges,
washing machines, dishwashers), the constant focus being major organizational and technological
innovation. In 1970, Industrie Merloni split into three independent industrial divisions which were
to become three independent companies. That was the origin of Merloni Elettrodomestici, now
Indesit Company headed by Vittorio Merloni, which was to grow as a manufacturer and a brand till
achieving European leadership status. Indesit Company is now the European company with the
smallest number of brands on the market.
The importance of brand
Aristide Merloni was also one of the first entrepreneurs to realize the importance of brands as
instruments of identity and reliability and as a synthesis of a company’s particularity.
1958 saw the creation of the Ariston brand, with which he started making domestic appliances.
The social dimension of business
Throughout his career, Aristide Merloni treated social progress as a complementary aspect of
economic development. In 1963 he set up the “Fondazione Aristide Merloni”, unique in Italy in
having as its corporate purpose the economic and social development of the surrounding
territory, and dedicated himself to promulgating a new business philosophy through conventions
and publications at a national level and helping many small businesses in difficulty.
In 1974, four years after his death, a European panel awarded the Company the Pa Vision
European Management prize for industrial social responsibility for “having opened factories in
areas of high unemployment”.
That award recognized a business philosophy that is still a force of inspiration for Indesit Company, its
values, its mission, its day-to-day operations:
“There is no value in the economic success of any industrial initiative if it is not also
accompanied by commitment to social progress.”
(Aristide Merloni, 1967)
10
Ownership structure
Indesit Company
Indesit Company
Belgium
100%
Indesit Company
Bulgara
100%
Indesit Company
Luxembourg Sa
100%
Aermarche
90.2%
Tradeplace
20%
General Domestic
Appl. Holding Ltd
84%
Indesit Company
Ceskà
100%
Indesit Company
Ireland Reinsurance
100%
Wuxi Indesit
Home Appl. Co. Ltd
70%
Haier Indesit
Wash. Machine (China)
30%
Indesit Company
France Sa
100%
Indesit Comp. Beyaz
Esya San (Turkey)
100%
Indesit Comp. Int.
Business (Switzerland)
100%
Haier Indesit
El. Appl. (China)
30%
Indesit Company
Deutschland Gmbh
99.75%
Indesit C. Magyaror
Kft (Ungheria)
100%
Indesit Comp. Inter Bv
(The Netherlands)
100%
Indesit Company
Singapore
100%
Indesit Electrod.
(Spain)
100%
Indesit Company
Polska (Poland)
100%
Indesit Company
Portugal Electro Sa
99.44%
Closed Joint
Stock C. Indesit Int.
100%
Argentron
Argentina
71.18%
Organization structure
Vittorio Merloni
Chairman
Marco Milani
CEO
Communications and corporate identity
Elena Figus
Internal audit
Gaetano Casalaina
International relationships
Giuseppe Catalano
Legal affairs
Andrea Eligio Crenna
Finance and accounting
Andrea Pifferi
Information technology
Neriman Ulsever
Human resources
Giuseppe Salvucci
Global product planning
Marco John Rota
Brand
Oscar De Sanctis
Customer service
Massimo Rosini
Technical and industrial
Francesco Trovato
Continental Europe
Enrico Cola
Quality
Marco Marini
UK and Ireland
Roberto Cuccaroni
Italy
Piero Moscatelli
International technical affairs
Enrico Vita
Supply chain
Kakhaber Kobakhidze
International
Alessandro Iozzia
11
responsibility 2006
Strategies
Indesit Company is now a multinational organization (over 85% of its sales are outside Italy)
and even considered by some as the original “pocket-sized multinational”, an emblem of the
success of “Made in Italy” in a world where companies that aren’t huge but are well placed on
foreign markets and with distinctive competencies (eg. design and innovation) can effectively
compete with big multinationals. In this business model, the Group philosophy has continued
to build on the same basic elements: constant innovation, the centrality of the individual, an
ambition for continual improvement, the creation of social development in the countries
where the Group operates, transparency and fairness in relationships with counterparty,
promotion of a unified socio-environmental approach across all its operations. In fact, though
much of its growth has been through acquisitions, Indesit Company has managed to preserve
its own distinctive identity whilst harmonizing with the different cultures in its new
subsidiaries and developing a “one single company” model. This made it possible to defend its
core values and share them with the various companies that have joined the Group over the
years. It is also visible in the brand strategy, which focuses on a small number of brands with
well consolidated characteristics.
Indesit Company’s business model can be summed up in three main ambitions or targets. It
wants to be:
Competitive tomorrow
Through development of our human capital, constant focus on innovation and cultivating our
intangible assets. Every year a large part of profits goes to investments. In 2006 alone, €17m was
spent on product innovation (capitalized development expenditure), as well as €8m on research.
This ongoing commitment was recently strengthened by the creation of an innovation and
technology department to step up research into materials, manufacturing technologies,
innovative washing and preservation technologies, acoustics and vibration, electronics
technologies, communication technologies, energy and technologies for advanced and
ergonomic user interfaces. It should be noted that the innovation and technology department
works with its eye on the medium term, ie. currently beyond the 2006-2008 three-year industrial
plan. Innovation activities proceed in step with a branding policy that tends to concentrate on the
main brands. Advertising spending was concentrated mainly on the Indesit and HotpointAriston, the two brands involved in the main product launches in 2006.
Profitable today
Through re-organization of production ensuring optimization of production and costs. The Group
is adopting a strategy whereby production capacity is located in the areas where goods will be sold.
This explains the eastward redistribution of production capacity, towards countries where
production is also more competitive than in Western Europe in terms of costs. This industrial
rebalancing in 2006 was carried out in line with the three-year plan. Lòdz (Poland) and Lipetzk
(Russia) almost reached their full installed capacities in the year. 2006 also saw completion of
conversion work (from cooling to cooking) at Melano (Italy) and a decision was made to build two
new plants in Poland.
12
Responsible towards the environment and people
Indesit’s strategic approach works across the ground occupied by the other two priorities and
involves all the Group’s business, everywhere. An example of social responsibility is the open and
transparent dialogue with the trade unions, not least during the restructuring (further details in the
“Social responsibility” section). In recent years the Group has been particularly active on
environmental issues. A research project was started up to reduce CO2 emissions by developing a
technology whereby domestic appliances will automatically regulate their operations in response to
actual load condition on the grid. Major progress was made on new sensors and actuators for
washing machines and dishwashers to significantly reduce consumption of valuable resources such
as water and energy, and to make appliances faster and more silent. 2006 also saw various
acknowledgements of the Group’s commitment in this field, including the “Ecohitech 2006” award
and the passing of the rigorous Australian Standard Tests, which gave the Aqualtis washing machine
the best “Water rating” in the whole market.
Lastly, the Group actively encourages responsible internationalization, in that it seeks to create value
from cultural diversity by integrating rather than imposing a dominant model. This approach is best
understood by thinking of Indesit Company as “the European company with an Italian soul”.
Indesit Company’s strategic priorities
Growth
of product lines
- Product innovation
- Brand oriented strategy
competitive
tomorrow
Reduction
of costs
- Production
- Procurement
- Tight control of overheads
profitable
today
Care for people and the environment
13
Governance
14
Corporate Governance
The corporate governance system adopted by Indesit Company conforms for the most part with
the principles of the “Listed Companies Code of Self-discipline” (the “Code”), in the conviction
that said principles are essential to successful implementation of the following corporate
governance policy objectives:
• clear definition of roles, responsibilities and degrees of importance of business operations;
• improved safeguarding of stakeholders and boosting of their trust;
• maximization of value for shareholders and all other stakeholders;
• improvement of transparency in financial communication for the market;
• improvement of internal control systems.
In many areas of corporate governance the Company’s model reflects some of the most recent
and advanced regulatory standards and international best practice. In fact:
• the majority of the Board are independent directors pursuant to the Code;
• the Company is not subject to “direction” or “co-ordination” by any external enterprise;
• there has been a clear separation of powers between the chairman and the CEO since 1996.
In 2006, the Group adjusted its governance system to new legislation on the safeguarding of
investors and market abuse. The Board provided for modification of the existing procedure for
management and disclosure of price-sensitive information, set up a register of persons with
access to price-sensitive information and replaced the internal dealing code in force at the time
with the procedure for disclosure to Consob and the market of operations by relevant persons
involving financial instruments issued by Indesit Company.
Further, the Group assimilated the new standards of corporate governance introduced by the new
2006 version of the “Listed Companies Code of Self-discipline” and modified the Company’s
governance model accordingly. In particular, the Board took the following steps:
• it decided that for a director of the Company five directorships or statutory auditorships in
other listed companies was the maximum number compatible with effective performance
of the role;
Indesit Company won the 2006 “Oscar di Bilancio” in the corporate governance category for
its successful response to new legislation and its growing sensibility to needs of ethical
business conduct.
Indesit Company won its “Oscar” in this new category for presenting a report of outstanding
quality in terms of readability, clarity and completeness. It also displays exemplary adoption
of best practice, both national and international, and especially regarding the board of
directors and its transparent operation, the appointment of the statutory audit committee,
the presence of various audit committees within the board and the efficacy of their
procedures, as well as full and substantive compliance with Borsa Italiana’s “Listed
Companies Code of Self-discipline”. The awards are promoted and organized by FERPI
(Federazione Relazioni Pubbliche Italiana), under the aegis of the President of Italy and are
chaired by Prof. Angelo Provasoli, Magnifico Rettore, Università Bocconi.
Oscar di Bilancio
Corporate Governance
15
responsibility 2006
• it adopted the recommendations of the Code on the independence of directors, whilst deeming
unnecessary, however, the appointment of a “lead independent director”, given that the
independent directors participate assiduously and actively in meetings of the Board and its
committees and that they receive comprehensive and timely information flows;
• it voted to modify the composition of the Human resources committee and the Internal control
committee: the executive directors (respectively Marco Milani and Vittorio Merloni) stood
down from the two committees;
• it confirmed the chairman, Vittorio Merloni, in his capacity as supervisor of the workings of the
internal control system.
The following is a brief summary of the Indesit Company management bodies. Further
information can be found in the Corporate Governance Report, which is available on the
Group’s website.
Board of directors
The Board is the central body in the Company’s system of corporate governance, being responsible
for defining, applying and updating the rules of corporate governance in observance of current
legislation.
The Board is made up of 13 directors (Vittorio Merloni, Innocenzo Cipolletta, Adriano De Maio,
Alberto Fresco, Mario Greco, Carl Hahn, Hugh Malim, Andrea Merloni, Antonella Merloni, Ester
Merloni, Marco Milani, Luca Cordero di Montezemolo and Roberto Ruozi), of whom eight are
independent, whose term of office ends upon the shareholders’ approval of the financial
statements at 31st December 2006. The Board appointed two of its number as executive directors,
the chairman and the CEO. There were six meetings of the Board in 2006, with an attendance rate
of 89.74% overall and 85.41% by the independent directors. The criteria for defining independence
are detailed in full in the corporate governance report.
No lead independent director has been appointed, and no meeting of the independent directors was
held in 2006. The Company itself will promote meetings between independent directors (after the
appointment of the new Board) to discuss matters deemed of interest with respect to the workings
of the Board and business management.
Human Resources Committee
The Group’s Human Resources Committee performs the functions provided for in the Code for
the Remuneration Committee and other tasks assigned to it on its appointment by the Board,
including, for example, the carrying out of the Human Resources review.
The Human Resources Committee makes recommendations to the Board regarding the
remuneration of executive directors and directors holding special posts and that of top managers
in the Group as proposed by the CEO. Further, the Human Resources Committee periodically
reviews the criteria used for remuneration of managers with strategic responsibilities, monitors
their application on the basis of information provided by the directors and makes general
recommendations to the Board of such matters. The Human Resources Committee has also been
assigned the task of monitoring the state of the organization and management development plans
and of signalling any action to take.
16
The Committee comprises three independent directors (till 26th October 2006, the CEO Marco
Milani was also on the Committee, though he was never involved in the process of making
proposals to the Board regarding his own remuneration). It met three times in 2006 (attendance
by committee members: 75%). The main issues discussed in these meetings included assessment
of the Group’s performance in 2005; payment of the 2005 annual and 2006-2008 three-year
bonuses for top management; definition of the incentive scale for the 2006 annual bonus;
definition of new parameters for top and middle management bonuses for 2006; planning of a new
three-year bonus scheme tied to achievement of 2006-2008 plan objectives; assessment of the
efficacy of existing stock option plans; adjustment of the chairman’s emoluments; review of the
adequacy of the organizational structure of the industry area and management succession plans.
Innovation and Technology Committee
This Committee was set up in 2004 to define the strategies and investments needed to develop the
Company’s innovation capability. It also acts to spread a culture of innovation within the enterprise
and stimulate all the functions involved.
The Innovation and Technology Committee includes members of the Board (Vittorio Merloni,
Adriano De Maio, Andrea Merloni, Marco Milani), a number of Group managers and external
experts from research organizations and business (Marco Iansiti, Pasquale Pistorio).
In 2006, the Committee met once, with full attendance, and looked at the following themes:
• objectives and organization of the innovation and technology department;
• development of relationships with universities and research organizations;
• monitoring of progress in major innovation fields, by product and technology;
• presentation of particularly promising innovation projects.
The Committee also listened to the opinion of Prof. De Masi on certain social trends of relevance
to the Group.
Internal control system
The internal control system adopted by the Company and the Group is a set of rules, procedures
and organizational structures (involving the Board, management and individual operators in the
Company) designed to identify, measure, manage and monitor the main business risks to ensure
sound conduct of business in line with pre-established objectives and provide all stakeholders with
reasonable certainty as to the achievement of said objectives. The Board is responsible for the
system, it provides it with guidelines and periodically checks that it is working properly, also
through the Internal Control Committee. The executive director charged with supervising the
working of the internal control system is the chairman of the Board. In view of results achieved, the
Board believes the chairman plays a fundamentally important role in guaranteeing the proper
working of the internal control system and the balancing of functions and powers within the
Group’s organization.
Internal control committee
The Internal Control Committee is made up of three independent directors. The Company
chairman Vittorio Merloni was also a member till 26th October 2006. Although an executive
director, the chairman sat on this Committee given that it focuses on identifying risks relating to
the Company’s day-to-day business.
17
responsibility 2006
Treatment of confidential information
Disclosure to the public domain of documents and information regarding the Company and/or
the Group, and especially “price sensitive” information (ie. that might appreciably affect the prices
of financial instruments) is disciplined by a procedure approved by the Board and modified in
2006. The executive directors are charged with the task of making sure that such information on
the Company and its subsidiaries is complete, accurate, clear and transparent and communicated
in a timely manner, on an ongoing basis and as widely as possible. Communication of such
information to the outside world is organized by the communication and corporate identity
department in the manner indicated in the aforesaid procedure.
Regarding internal management of price-sensitive information, the Company introduced a series
of procedures to protect all the internal systems that generate consolidated accounting and
management information. All subjects who have or may have access to such systems are recorded
in the “Register of persons having access to price-sensitive information” (the “Register”) created on
23rd March 2006 in line with market abuse legislation.
Indesit Company is constantly engaged in ensuring that everyone who accesses (or may access)
price-sensitive information is aware of their legal and regulatory obligations and relative sanctions
in the case of infringement.
Code of Conduct for Internal Dealing
Following the elimination of the internal dealing discipline, which was contained in the
regulations for markets organized and operated by Borsa Italiana and relative Instructions, the
Board abrogated the Code of Conduct on Internal Dealing as of 1st April 2006 and adopted a new
procedure disciplining disclosure to the market of operations involving Indesit Company
securities by “Relevant Persons” in the Group pursuant to the provisions of art. 114, subseq., TUIF.
Seeing the market’s appreciation of the internal dealing code, the Board decided to adopt an
internal code of conduct maintaining the so-called blocking periods (pre-established periods
during which the relevant persons identified by the procedure may not carry out transactions
involving the Group’s securities) and recommending that operations involving financial
instruments issued by Indesit Company (or those linked thereto) be carried out during the socalled window periods (from the third to the twentieth business day following Board meetings that
review and approve periodical accounting figures). Said code specifically addresses, to varying
degrees, directors, statutory auditors, persons reporting direct to the CEO and other managers
identified by the CEO.
CCSA exam
(Certified Control Self Assessment)
In 2006 seven employees in Indesit
Company’s internal audit team obtained
CCSA certification, which is internationally
recognized and involves sitting a four hour
written exam on subjects such as risks
and best practice in internal control
systems. There are currently fewer than
200 people in Italy with CCSA certification.
18
Statutory auditors
In 2006, the statutory auditors met eight times, with attendance at 100%. The board of directors
believes that statutory auditors, as well as having all the legal and statutory requisites in terms of
professional and moral standing and independence, must also qualify as independent under the terms
of the definition in the Code as applicable to directors.
The chairman of the statutory audit committee (or another committee member in his stead) is invited
to all meetings of the internal control committee. It is also practice for at least one standing auditor to
take part in at least one meeting of the supervisory committee (set up under decree law 231/01) a year.
Internal audit
The internal audit department provides second level control to guarantee constant improvement
of the effectiveness and efficiency of business processes, monitoring the implementation,
effectiveness and efficiency of first level controls, observance of company rules and procedures,
legal compliance and the quality of economic and financial information. The head of internal
control is the manager of the internal audit function, is on the chairman’s staff and is appointed by
the board of directors in line with the new Listed Companies Code of Self-discipline adopted by
Indesit Company in 2006.
The internal audit department’s job is to provide the board of directors with systematic assurance
as to the quality of the internal control system, to contribute towards ongoing improvement of the
system itself and make sure that the Group operates in full compliance with the law and in the
interests of stakeholders.
In late 2005/early 2006, the department organized training courses, in collaboration with human
resources team, for both employees and top management (50 executives from various nations
attended in order to facilitate diffusion of the Code). In 2006, it also created an Internal Audit
section on the intranet, accessible to everyone, describing the team’s mission and the methods it
uses, and a section on corporate governance, outlining the laws and main regulations the Group
is subject to.
Organization model and Code of Conduct pursuant to decree law 231/01
The Group has adopted an organization model in line with decree law 231/01, which
introduced the “administrative liability” (in practice penal) of companies for certain offences
committed in its interest or to its advantage by its directors, statutory auditors or employees.
The law exempts companies, however, that can show they have adopted and effectively
implemented an organization, management and control model capable of preventing offences
considered crimes, such as those against the public administration (eg. undue grants by the
State or other government agencies, extortion, etc.) or company law offences.
The organization model adopted by Indesit Company is a further strengthening of rigour and
responsibility in internal and external relationships and at the same time it offers shareholders
adequate guarantees of efficient and correct management. In addition to the analysis of risks,
the model contains a list of procedures (already in place or currently under implementation)
designed to cover risks attaching to activities susceptible to or instrumental in the
perpetration of the offences covered by the aforementioned decree law.
An integral part of the model is formed by the Code of Conduct, which contains guidelines
on modes of conduct that may be illicit for the intents and purposes of decree law 231/01 and
constitutes a basis on which to construct a system of prevention and control.
Further, a supervisory body was appointed. It has two external members specializing in penal
and company law (Bruno Assumma and Giovanni Frezzotti respectively), and an internal
member, Elena Figus, who chairs the committee.
19
responsibility 2006
The supervisory body’s task is to:
• communicate the model to all concerned;
• update and integrate the model and the code so that they always reflect the Company’s business
and procedures and the relevant legislation;
• monitor infringements of the model, including infringements of the code.
Work done to date regards Indesit Company only and illustrates the compliance programme to
follow in order to cover all the other legal entities in the Group, in line with the provisions of local
legislation equivalent to decree law 231/2001 and in any case in such a way as to guarantee an
adequate level of cover against risks relating to the offences contemplated in the decree law in all
the geographical regions the Group operates in.
business principles
and rules of conduct
conduct in accounting
and corporate affairs
communication
with the market
relationships
with the public
administration
relationships
with suppliers
Indesit Company
code of conduct
relationships
with employees
Sustainability governance: the Indesit Company model
While the 2006 CSR Report was being drawn up, a project was initiated to formalize Indesit
Company’s commitment on corporate social responsibility, also by defining a management
framework in line with new developments in the main international standards (esp.
AccountAbility 1000- AA 1000) and international best practice. The main activities carried out to
such end by the Communication & Corporate Identity department, which co-ordinates CSR work
at Group level and produces the CSR Report, are summarized in the following pages:
20
planning
& policy
chairman
CEO
reporting
& auditing
quality
international
technical
affairs
finance &
accounting
human
resources
communications
& corporate
identity
accounting
CORPORATE SOCIAL RESPONSIBILITY
stakeholder
engagement
Planning & policy
Interviews were carried out with the whole of the 1st line management to study the main CSR
themes to include in the Report and examine what Indesit Company’s future plans of action might
be on such themes, also in the light of external stakeholders’ requirements. These interviews were
also an opportunity to define future action to further integrate Indesit Company’s sustainability
policies in its business processes.
In this phase there was a strong focus on identifying all Group activities geared to monitoring and
analyzing economic, social and environmental risks. In particular, 2006 saw the definition of a
number of management tools for risk analysis, such as, for example, the risk analysis carried out
for the implementation of the organizational model pursuant to decree law 231/01 and the
environmental risk analysis carried out in a number of production plants following adoption of
ISO 14001. Finally, the Group’s existing CSR policies (business principles, environmental policy,
ethical code) were analyzed and integrated.
21
responsibility 2006
Accounting
While such activities were underway, a CSR “tableau de
bord” was drawn up. It provides for the definition of a KPI
(Key Performance Indicators) system and relative process
owners. In addition to feeding the annual CSR Report, the
“tableau de bord” will be used for management purposes.
The definition of quali-quantitative indicators is vital to
our capacity to provide stakeholders with information
enabling them to understand how Indesit Company’s
values and policies are communicated and put into
practice across the Group, above all at an operating level.
Stakeholder engagement
The Group also extended its analysis of CSR issues
through quantitative and qualitative surveys and
interviews with certain stakeholder groups. For example,
a number of stakeholder representatives were asked for
their opinions on Indesit Company’s approach to
corporate social responsibility.
The Group aims to make stakeholder dialogue a source of
input for improvement projects.
Reporting & auditing
The 2006 CSR Report was submitted to the shareholders
at the same time as the consolidated financial statements,
reflecting our underlying philosophy that economic
growth is inconceivable without social development.
Further, the Report will be analyzed by the internal audit
function, which analyzed the previous year’s Report and
drew up “improvement proposals” which were adopted by
the work group.
Sustainability management systems
Indesit Company quality policy
Quality in Indesit Company is above all a cultural attitude,
shared by all employees across all aspects of activities:
organizational, technical, relational, economic and
communicational but also environmental, ethical and
social. The importance of quality in Indesit Company is
summed up by the concept of “quality of time”, which is also
22
10 GUIDELINES FOR
QUALITY IN INDESIT
COMPANY
Quality in Indesit
Company is...
1
...the will and the capacity
to centre new goals
and develop new projects
2
…hard work, self-discipline
and motivation
3
… responsibility, personal
commitment, co-ordination
and support by the Management
and all function heads
4
… planning and guidance
by all the departments
5
… the involvement
of all business functions
and the enterprise as a whole,
not just of quality specialists
referred to in the mission statement and considered a
success factor and source of competitive edge, given that
full customer satisfaction is the target and continual
improvement the strategy.
Alongside the quality policy are the environmental policy
(see the “Environmental responsibility” section for details)
and business principles (see the “Identity” section).
Indesit Company and quality
6
… the presence of a control
network and relationships
of responsibility between
the various functions,
from design and procurement
to production and sales
7
… constant measurement,
analysis and improvement
8
… constantly asking the
questions: are we improving?
what are we doing to improve?
9
… sensitivity to the market
and customers' needs
10
…above all maximum
client satisfaction
with products and services
In 2005, Indesit Company launched a project under
the title “We reap what we sow. Our progress towards
Quality” in order to familiarize all its employees with
the concept of “quality of time” and the ongoing
improvement of quality. The project was carried
forward throughout 2006, with the following results:
• fostering of knowledge about quality through
mapping the skills of key figures (Key contributor
positions); analysis focused on 16 key figures at
Group level and 20 areas of knowledge/skills deemed
critical. A training plan (Knowledge Action Plan)
was then developed to remedy inadequacies.
• involvement of all Group employees in focusing on
the importance of quality, starting with a
questionnaire provided by a sample of 5% of factory
personnel, the aim being to understand the levels of
knowledge and awareness of the theme of quality. A
number of action plans were then initiated,
including:
- installation of a “Quality corner”, designed with a
standard format and graphics, in each plant;
- set up of “Quality Points” on production lines in all
plants, with standard corporate style and identity;
- experimental installation in certain plants of LCD
monitors displaying constantly updated quality
indicators;
- organization of basic training to foster knowledge
of quality indicators.
• priority focus on research & development (R&D) and
electronics development team (EDT) people to help
improve quality systems through mapping of
competencies in the R&D and EDT areas, involving
around 120 designers in all.
23
responsibility 2006
Indesit Company’s idea here was to use the project to involve all employees in a quality drive
covering all business processes, in the conviction that quality is the sum of contributions
from each and every employee in every phase of the production process, from design and
manufacturing through to after-sales service.
Objective
Main activities/projects
Dissemination
of quality culture
throughout the Group
• Basic training for around 12,500 employees
through classroom courses and involvement of
production personnel in manufacturing process
improvement programmes.
• Specialized training for over 500 people in
research & development (R&D), the electronics
development team (EDT) and global product
planning (GPP) on the introduction of new
products.
• Meetings between consumers and Indesit
Company managers (GPP function) enabling the
latter to understand new market needs.
Anticipated Product Quality (APQ)
Increase controls
and defect prevention
activities
Launched in 2006, this project aims to establish
a defect rate estimation system that works before
a product is actually launched on the market.
The application of statistical models and the
creation of a representative sample of long-term
product reliability tests make it possible to estimate
defect rates in advance and introduce improvements
to keep the defect rate within a prefixed limit
even before the product goes to market.
In 2006, Indesit Company focused actively on preventing defects in every phase of the
production process and on after-sales service to keep costs arising from “non-quality” to a
minimum. Action addressed:
• product development: use of instruments such as FMEA and Project management,
observance of the procedures defined in the “New product development and
industrialization” and design and technical implementation guidelines (CQP release, product
Quality Control function);
• supply chain: increasing insistence on compliance with contractual agreements (product
quality standards, delivery times, etc.) on the part of suppliers, ongoing supplier quality
audits by 20 quality engineers (some on permanent duty at key suppliers);
24
• production: more controls per defect found, application of change management procedures;
• service: ready answers to call center referrals, planning of improvement action and constant
result assessment.
To foster best practice in the Group, Indesit Company assigns a “best plant” prize every year on the
basis of product and process quality and reliability. In 2006, chairman Vittorio Merloni handed the
“Plant Quality Award” trophy to the managers of the Lipetzk plant in Russia.
Evolution of the quality management system and integration with safety
and environmental management systems
Indesit Company has a quality management system in accordance with UNI EN ISO 9001:2000,
covering the whole of the Group in terms of both processes (scope) and organization (field of
application). In 2006, Indesit Company maintained its ISO 9001 certification in all its plants.
scope
Design, development,
manufacturing, sales
and service of domestic
appliances for washing
(washing machines and
dishwashers), cooking
and preservation
field of
application
The whole of Indesit
Company Group:
- markets
- four product lines
- all plants in Italy
and abroad
Indesit Company’s commitment for the future is to use for its safety and environmental
management systems and respective certifications (ISO 14001 and OHSAS 18001) the methods
used and knowledge acquired in implementing its quality management system and obtain the
relevant certification. Indesit Company’s approach will involve experimental implementation of
safety and environmental management systems in a number of Group plants followed by gradual
extension to all its plants on the basis of knowledge and organizational experience acquired in the
process. The Group has two ISO 14001 certified plants to date and plans to obtain ISO 14001
certification for another four in 2007, two in Italy (Comunanza and None) and two in Russia
(Lipetzk), and to extend such certification to all Group plants by 2009.
OHSAS 18001 certification
Indesit Company initiated a pilot project in its Manisa plant (Turkey) to define and
implement a health and work safety management system (OHSAS 18001) to monitor risks
and improve performance. The system was certified by TÜV, an internationally recognized
German certification organization.
25
responsibility 2006
Quality
policy
Values
Mission
Brand
Business
principles
Environmental
policy
Dialogue with stakeholders
Indesit Company sees communication and dialogue with stakeholders as vital to achieving effective,
transparent and constant verification that the Group’s business is in line with stakeholders’
expectations. Further, a socially responsible business model cannot be self-referential; it must
necessarily subject itself to assessment by its stakeholders and commit itself towards them. Well aware
of the strategic importance of dialogue with its various interlocutors, Indesit Company has widened
the scope of monitoring and analysis of stakeholder expectations. In 2006, such activities addressed
consumers, retailers and journalists, while representatives of certain stakeholder groups were
interviewed on themes relating to Indesit Company’s corporate responsibility policy.
The Group stakeholders
The “Social responsibility” section of the Report provides key information on relationships between
Indesit Company and the following stakeholder groups:
• Indesit Company people: everyone who has a relationship of employment or collaboration
involving subordination; this category also includes agents and those who represent Indesit
Company to the outside world and manage relations with stakeholders;
• retailers (trade): household appliance retailers, from big distribution chains to small retailers;
26
• consumers: the end purchasers of Indesit Company products;
• suppliers: providers of the raw materials, components, machinery, equipment, goods and services
the Group needs;
• shareholders: holders of Indesit Company shares, including institutional investors in Italy and abroad;
• banks: banks and other finance houses that provide the Group with financial backing;
• public administration: national government, government agencies, institutions and local
government;
• community: non-profit organizations, associations, the academic community, end users of
domestic appliances and all members of the general public with whom the Group has actual or
potential relations;
• media: journalists and mass media with whom the Group has relations;
• environment: both the territories in which the Group has its manufacturing capacity and the
wider ecological dimension (extending temporally as well to future generations) potentially
affected by Indesit Company products.
Social consensus
Commercial consensus
(in accordance to Company proposals and projects)
Media
stakeholders
(volumes, prices, loyalty)
markets
Indesit Company people
Retailers
Company
Consumers
success
Suppliers
Shareholders
Banks
Public administration
Community
Environment (future generations)
contributions, wages, dividends, interests, taxes .....
products and services
27
responsibility 2006
Methods of engagement
The methods of engagement used by the Group are based on AA 1000 SES (AccountAbility
1000 Stakeholder Engagement Standard), which is the universally accepted standard in this
field. Dialogue takes place in a series of systematically planned meetings with the various
stakeholders categories. The main initiatives are shown in the stakeholder map and described
in the sections of the Report dealing with single stakeholder categories. Summarized below,
on the other hand, are the results of a Gfk Eurisko survey and opinions expressed by certain
Indesit Company stakeholders. In addition to the CSR Report itself, other forms of
communication and dialogue are used by the Group, as listed below by stakeholder category:
• Indesit Company people: internal communication, including Insight (intranet),
Flashnews (house organ, etc.), constant interaction with trade unions bodies (eg. European
Works Committee);
• retailers: satisfaction surveys and periodical one-to-one contacts;
• consumers: customer satisfaction surveys;
• suppliers: annual meeting to illustrate Indesit Company strategies, followed by analysis of
feedback;
• shareholders and backers: one-to-one meetings, roadshows, website;
• public administration: periodical meetings, collaboration with institutions on sustainable
development issues;
• media: Gfk Eurisko survey, periodical meetings, website;
• community: participation in conventions and seminars, meetings and partnerships with
associations and non-profit organizations.
Survey of the quality of relations with stakeholders
In 2003 and 2004 Indesit Company organized two surveys, with Eurisko, to assess the quality
of relations with stakeholders in various European countries. In 2006 it commissioned Gfk
Eurisko to conduct a third survey, this time of Italian journalists and foreign correspondents
in Italy. The survey looked at the following themes: notoriety, overall judgement and reasons
why, strengths and weaknesses, Indesit Company’s image, image of its brands, judgement of
relations (services, instruments, support), areas for improvement, judgement of effects of the
name change.
79 phone interviews, each lasting around 20 minutes and based on a semi-structured
questionnaire were carried out on a sample of media stakeholders (people in positions of
responsibility in dailies, magazines, TV). The key results were as follows:
Notoriety: Indesit Company is very well known (85% of the sample said they knew it well or
quite well), as are its brands, especially “Indesit”, and the countries where it operates.
Overall judgement and reasons why: 87% expressed a positive view of the Group; the main
reasons included its international market positioning, innovation, growth strategies,
management capability and top quality products.
28
Strengths and weaknesses: respondents thought the main strengths, with respect to competitors,
were commitment to research and innovation, quality products and good reputation due to the
brand and internationalization, while weaknesses included its size relative to its main competitors
and operation in a “mature” industry.
Judgement of relations: 91% of respondents said their relations with Indesit Company employees
were excellent.
Areas for improvement: respondents indicated commitment to product quality and reliability and
respect for the environment. These aspects are being addressed by Indesit Company in 2007,
regarding both innovation policy (esp. flexible use of products to reduce environmental impact)
and quality policy (training and communication plan to promote a culture of quality across all
Company functions).
Judgement of the effects of the name change: respondents thought the change strengthened bonds
between the Company and the brand and made it more international.
Indesit Company’s image: see table below.
INDESIT COMPANY IMAGE PROFILE
Question: “I’m going to read you some judgements about
Indesit Company. Tell me please, for each of them,
how far you agree.”
average
It’s run professionally. competently and credibly
8.13
It has a strong international presence
7.82
It creates jobs and growth in the markets where it operates
7.91
It’s socially responsible
7.73
Its products help people to improve the quality of their time
7.60
It’s strongly committed to innovation
7.70
It’s very dynamic and has a great capacity for change
7.41
It communicates transparently
7.49
It enables the best talents to grow rapidly
7.49
It’s capable of satisfying shareholders’ expectations
7.19
Its after-sales service is excellent
7.21
It centres its profitability and growth objectives
7.21
It anticipates the needs of the market
7.21
It operates with respect for the environment and sustainable growth
7.21
Source: Gfk Eurisko (scores from 1 to 10).
29
responsibility 2006
External views
Socio-environmental issues and Indesit Company
Rapid change in the labour market requires special attention to the problem of diversity and longterm policy and action. Signals of this include the setting up of the “National Equal Opportunities
Commission” and increasing numbers of women in management jobs. This is one of the ten
priority areas indicated by the “Alliance for Competitive and Sustainable Enterprise” formed with
the European Commission, which recently made other important pronouncements in favour of
women in the workplace, including managerial roles, in its “Roadmap for equality between men
and women” and the “European pact for gender equality”.
The growing seriousness of climate change requires a review of environmental policies. More
ambitious eco-efficiency targets need to be set and should cover the entire life cycle of products
(LCA), from manufacturing processes and logistics to design of appliances for lower
consumption, disposal and recycling, and the reduction of CO2 emissions.
Assessment of Indesit Company’s CSR performance
Its commitment to responsible competitiveness is long-term and based on solid organization and
underlying values. For a more efficacious mainstreaming of CSR in Indesit Company’s culture
and processes, there needs to be further constructive dialogue with and involvement of
stakeholders. Here too, levels of excellence have been reached in certain areas, especially in
industrial relations, with the international framework agreement between the Company and the
European Works Committee and with the socially responsible re-organization of the Refrontolo
plant, in which the local community and authorities were also involved. However, a more organic
and systematic plan for stakeholder engagement seems to be necessary.
In corporate governance too, Indesit Company has shown constant commitment, both by
promptly adopting the Listed Companies Code of Self-discipline and by experimenting within its
board of directors certain solutions untried in Italy, such as the innovation and technology
committee. Another “frontier” would be to adopt a more direct role in CSR governance, on the
part of both the board as a whole in terms of policy and the internal control committee in terms
of identifying socio-environmental risks and risk prevention/management systems. This would
involve organizing special items on board and committee meetings, following the example of
pioneering experience in certain leading enterprises in the UK, where such initiatives are
encouraged by more advanced laws/regulations, such as the 2006 Companies Act and the
Combined Code.
Ruggero Bodo
Member of Sodalitas
CSR director, Europe
30
31
Economic
responsibility
In 2006, Indesit Company exploited a favourable economic and market
situation, appreciably improved its operating results and increased its market
share by 0.3% on 2005, thus making the Company the no. 2 white goods maker
in Europe and the no. 5 worldwide.
Financial highlights
2006
(€ million)
2005
%
Revenue
Change
%
%
3,248.6
100.0%
3,064.2
100.0%
184.4
6.0%
EBITDA
303.0
9.3%
263.7
8.6%
39.3
14.9%
EBIT
160.2
4.9%
122.3
4.0%
37.9
31.0%
Profit before taxation
131.6
4.1%
92.8
3.0%
38.8
41.8%
76.7
2.4%
50.4
1.6%
26.3
52.2%
Group profit
Sales in 2006 grew 6% thanks to increased volumes (up around 7.5%) and a reduction of unit
revenues of 1.5%. The average unit revenue (price/mix) showed a reduction of 1.5% against
more or less stable retail prices (rising slightly in Western Europe and falling in Eastern
Europe). The reduction in unit revenue was more pronounced than both the market average
and the objective set in the 2006-2008 three-year plan and reflects the Company’s desire to
boost sales by volume to achieve the aforementioned improved market share and the fact that
the Indesit brand has been growing much faster than other brands.
In 2006, the gross operating margin (EBITDA) was €303m (€263.7m in 2005), or 9.3% (8.6%)
of sales. Non-recurring charges, mainly for industrial re-organization, amounted to €39m
(€36m), in line with the Group’s industrial plan. EBITDA before non-recurring charges
amounted to €341.9m (€299.6m), which was 10.5% (9.8%) of sales. The growth in EBITDA
was driven by increased sales volumes but also improvement of the percentage margin. These
positive results were due above all to the reduction in the cost of sales over sales ratio (%).
Containment of commercial and distribution expenses and administration and general
overheads was also successful: the ratio (%) of commercial and distribution expenses to sales
fell from 16.1% to 15.8%, while that of administration and general overheads fell from 4.7% to
4.3%. In terms of type of costs, there was a significant reduction in the impact of costs of
services and labour costs on sales.
The operating margin (EBIT) was €160.2m (€122.3m in 2005), or 4.9% (4%) of sales. The
change in EBIT was due, in addition to the factors discussed under EBITDA, to improved
management of investments, allowing a reduction in the impact of amortization and
depreciation on sales, as targeted in the industrial plan.
Net profits amounted to €76.7m (€50.4m) after a tax charge of €54.9m (€42.4m). There was
a reduction in the tax rate (income tax over EBIT) from 45.7% to 41.7%.
Financial indicators
2006
2005
ROI
12.2%
15.9%
ROS
4.0%
4.9%
ROE
10.0%
14.0%
33
responsibility 2006
Cash flow management
Cash flow management was particularly positive: Indesit Company generated free cash flow (well in
advance of the date set by the medium-term plan) and reduced net financial indebtedness by €94m.
Net working capital was reduced from 2.5% of sales at 31st December 2005 to 1.2% at 31st
December 2006 thanks to improvements in all the relevant values (collection of trade receivables,
stock turnover and days to payment of suppliers).
Up to 31st December 2005 the Group had a Gbp 115m revolving and committed syndicated loan
maturing in April 2006. In 2006, this was replaced by a five-year multi-currency syndicated loan
of up to €350m provided by a pool of major Italian and international banks. At 31st December
2006, said line of credit had not been used.
Creation and distribution of value added
The tables below present figures from Indesit Company’s consolidated income statement
reclassified to show the formation of value added (difference between the gross value of
production and intermediate production costs) and its distribution among those who have
relationships of “exchange” with the Group, ie. its employees, shareholders, the public
administration, the community and the Company itself. The figure for value added thus indicated
represents Indesit Company’s capacity to create wealth by prudent management and distribute it
to the various stakeholders with whom the Group has relationships.
Sources of value added
(€ million)
A
2006
2005
Revenues from typical production:
3,349.9
3,141.0
Revenues from sales and services
3,373.3
3,145.7
Value of production:
Variations in product inventories, work in progress, semi-finished and finished goods
(23.4)
(4.7)
Revenues from non-typical production:
18.2
23.4
In-house construction
Total
B
1,899.9
1,791.2
515.5
479.9
Costs for use of third party assets
41.6
45.1
Provisions for risks
13.3
5.5
Costs for services
Sundry operating charges
Total
Gross value added, typical
18.2
10.4
2,488.5
2,332.1
879.6
832.3
41.7
27.0
6.1
1.2
Accessory and extraordinary items
Accessory revenues
- Accessory costs
Balance of accessory items
Extraordinary revenues
- Extraordinary costs
Balance of extraordinary items
Total
Gross global value added
34
23.4
3,164.4
Intermediate production costs
Consumption of raw and auxiliary materials, consumables and goods
C
18.2
3,368.1
35.6
25.8
10.6
26.1
44.6
36.7
(34.0)
(10.6)
1.6
15.2
881.2
847.5
Application of value added
(€ million)
2006
2005
42.2
44.0
391.3
396.5
A Remuneration of personnel
Non-employee personnel
Employees
a) direct remuneration
b) indirect remuneration
123.2
121.4
Total
556.8
561.9
Direct tax
54.9
42.4
Indirect tax
18.0
17.9
B State
5.2
7.4
67.7
52.9
Capital charges
35.7
39.9
Total
35.7
39.9
- subsidies
Total
Value added breakdown
C Borrowed capital
2006
D Share capital
Dividends (distributed profits)
39.6
37.1
Total
39.6
37.1
E Company
Variations in reserves
37.0
13.2
Amortization and depreciation
142.8
141.4
Total
179.8
154.6
F Donations, external
Donations
1.6
1.0
Total
1.6
1.0
881.2
847.5
Gross global value added
Personnel
63%
State
8%
Borrowed capital
4%
Share capital
4%
Company
20%
Donations
1%
Global value added in 2006 amounted to €881.2m and was distributed as
follows:
• 63% to employees (wages and salaries, canteen service, training, etc.),
confirming that a substantial part of the wealth created by Indesit Company
goes to those who actively contribute to the Group’s growth (directors,
employees, temporary workers and agents);
• 8% to the government in taxes;
• 4% to providers of loans (debt service);
• 4% to shareholders (dividends);
• 20% to the Company, including retained earnings used to finance the
Group and depreciation;
• 1% to the community (charity).
35
Social
responsibility
36
People
Policy
In 30 years, Indesit Company has transformed itself from a leading company in Italy to an
Italian company that’s strong in Europe and then a European group, with an Italian soul,
surveying world markets.
Such development was made possible by a human resources policy that has assigned growing
importance to human and professional capital, to the people directly involved in the process of
creating value, both internal (know-how, business culture, sense of belonging, capacity for
innovation, cohesion) and external (relational capital).
Indesit Company’s HR policy is based on a cross-cultural approach that fully respects the cultural and
geopolitical diversity of the local communities where the Group operates, whilst communicating a
single corporate identity and making all its employees feel part of one single company. Management
of “diversity” generates value and is fed by the ongoing processes of learning, integration and
exchange between people from different cultures. This is a major characteristic of the Company, and
one that gives employees opportunities to grow as people and professionals.
Knowledge bases and intellectual capital are continually developed thanks to the Company’s
meritocratic policy, based on job rotation, promotion and incentive systems geared to the
achievement of company and personal goals.
A sense of belonging, the culture of quality, motivation, technological innovation and research,
relational qualities, business objectives and choices: these are some of the themes that Indesit
Company keeps constantly under its employees’ attention by means of training programmes
involving all levels (from management to workers) and all areas of the organization.
Indesit Company won the first “Premio Etica & Impresa”
(promoted by Regione Toscana), the first Italian
competition to focus on agreements between companies
and workers and CSR practice.
Knowledge management
Indesit Company takes extreme care over the management of its knowledge assets, which
it seeks to conserve and develop year after year and which represents one of the Group’s
main success factors. It invests huge sums in the development of knowledge management
systems. In 2006, for example, it launched a project to study a system for sharing
knowledge on product design, so that individual designers drawing on the system can cut
times and improve the quality of their work. In this context, Indesit Company has also
funded a doctorate at the Politecnico of Ancona.
37
responsibility 2006
Composition
Personnel distribution by sex
At 31st December 2006, Indesit Company employees numbered 17,284, of
whom 30% women.
At 31st December 2006, 71% of employees were working in the technical and
industrial area, 24% in the commercial area and the rest in Corporate functions.
The average age, around 40, and seniority of employees, around 12 years, do not
show substantial change with respect to 2005, as can be seen in the graphics.
Breakdown of employees by geographical region shows appreciable decreases
in older production sites (Italy, France, the UK, Portugal) and increases in
developing areas (Russia, Poland, Turkey, Singapore, China and Argentina).
This is in line with the Company’s plans to redistribute production capacity,
which were discussed with the trade unions and provide for a gradual
increase in capacity in faster expanding markets.
2006
Women
30%
Men
70%
At 31st December 2006, 28% of Indesit Company’s employees were graduates
and 65% overall had done higher education.
The breakdown by product line was more or less as in 2005.
Personnel distribution
by category
At 31st December 2006, 85% of Indesit Company’s employees were on
indefinite term contracts.
To help employees deal with their family needs, Indesit Company also offers
the possibility of part-time work. In Italy as of 31/12/2006, there were 209
people on part-time, of whom 88% women.
In 2006, Indesit Company employed 1,181 temporary workers (figure for
Italy, Poland, Turkey and the UK only).
2006
1%
Managers
White collars
31%
Workers
68%
Average age and seniority
2005-2006
Avergae age
43
42
12.1
11.5
10.4
9.8
43.7
12.6
11.7
10.6
10.5
14
10
8
41
40
39
40.9
6
39.6
39.4
4
40.3
39.5
39.4
2
38.7
2005
38
2006
Workers
White collars
Managers
Average
Personnel distribution by geographical area
12
Average seniority
44
2005
2006
2005
2006
Italy
33%
31%
Russia
25%
25%
UK
28%
25%
Poland
Turkey
7%
10%
3%
3%
Other extra EU
1%
2%
Other EU
1%
2%
France
2%
2%
Employees by product line
2005
2006
Cooking
2,848
2,594
Refrigeration
4,822
4,394
Laundry
3,027
2,879
Dishwashers
Services
604
616
6,005
6,801
Hirings
Indesit Company draws up an annual recruitment and selection plan for candidates in the three
experience levels (university leavers, junior profiles, senior profiles).
Recruitment is done mainly within the Group. Various channels are used when candidates have
to be sought externally (CV data base, data base of previously examined candidates).
Indesit Company also contacts universities, including those with prestigious Masters schools, in
Italy and abroad. A widely used recruiting method is the job meeting, usually one-day events
organized by universities enabling students and business to meet and talk.
University leavers and junior profiles are selected in group sessions followed by interviews with
manage from the departments with jobs to fill. New hirings go through an induction course and
also do training to develop managerial skills over the first two years.
The recruitment plan for 2007 also offers the possibility of a six-month apprenticeship for
young graduates.
The main purpose of the selection process is to identify talented, motivated people and offer them
substantial career prospects involving continual training, experience abroad and job rotation
(change of tasks every two years) to widen spheres of competency.
No. of hirings (*)
2005
Managers
2006
7
7
789
893
Workers
2,117
2,855
Total
2,913
3,755
2005
2006
Fixed-term contract
1,616
2,369
Indefinite-term contract
1,297
1,386
White collars
*
( )
The figure also includes new entries hired after the termination of previous contracts.
No. of hirings (*) by type of contract
*
( )
The figure also includes new entries hired after the termination of previous contracts.
39
responsibility 2006
Equal opportunities
Respect for the individual and his or her fundamental rights is a guiding principle at Indesit
Company and one that is espoused through formal adoption of the conventions of the
International Labour Organization (cited in the Ethical Code), which also defends the principle
of equal opportunities. Not only has Indesit never practised discrimination amongst its
employees in terms of gender, religion, politics or culture, it has developed a cross-cultural
approach based on respect for and knowledge and understanding of the cultures and
geopolitical peculiarities of the people and places where it operates.
At 31st December 2006, women represented around a third of Indesit Company’s workforce.
Their presence in management jobs grew from 8% in 2005 to 14% in 2006.
In 2006, Indesit Company appointed a top Turkish manager as head of its human resources
department, reflecting the Company’s commitment to internationalization and its conviction
that cultural and ethnic diversity is a source of value.
Women in Indesit Company at 31.12.2006
Women
Men
Managers
14%
86%
White collars
31%
69%
Workers
30%
70%
Total
30%
70%
National Equal Opportunities Commission
Indesit Company’s supplementary labour contract (signed in 2006) provides for the creation
of a commission consisting of three company and three trade union representatives. They
started work on 1st January 2007, with the task of:
• analyzing data indicating the presence of women in Group companies, to prevent
discrimination;
• proposing awareness raising initiatives to promote attitudes in line with the principle of
equal opportunities;
• identifying and proposing professional training courses for women in the organization, in
concert with the national training commission;
• proposing experimental flexible working hours and systems to check compliance with
contractual and legal obligations regarding part-time work.
40
Training
Indesit Company’s human capital is an invaluable resource that it continually strives to build
on through its training programmes.
Every year Indesit Company draws up a training plan at corporate level, taking into account
new training needs that emerged the previous year. The plan for 2006 put the accent on
horizontal training activities, across different functions and geographical regions. Of these,
perhaps the most instructive example is the quality programme (“We reap what we sow”).
The Corporate plan covers various types of training:
• ongoing, career-based (managerial, business support) for all employees;
• specific knowledge and skills (managerial, operative, organizational, business area-related).
All training courses involve assessment under three heads:
• user approval;
• learning performance, esp. for technical skills;
• efficacy, as reflected in improved work performance.
In addition to corporate level training, there are more specific initiatives designed and
implemented independently in a given market by managers in collaboration with the human
resources department.
An important part of the Corporate training plan is the induction programme, in which the
chairman, CEO and other members of the Group’s top management give presentations to new
entries on Indesit Company values, culture, mission and policies, thus facilitating a gradual
understanding of the organization, its processes and procedures.
In 2006, Indesit Company, in partnership with the European Commission, organized two
seminars on “Global Social Rights for Indesit Company European Works Councils (EWCs)”:
• the first, in London in May, dealt with “Know to do” for EWC members, to improve coordination skills and relations between workers and trade union representatives, with a focus
on integration of different cultures and backgrounds within an EWC;
• the second, in Vico Equense (Naples) in October, was on the “Know-how and to share” of
Company strategy to combine economic development with social rights. The aim was to
extend the skills and roles of EWC members in view of new challenges, including innovation
and quality, respect for the environment, local communities, consumers and workers.
Training hours provided in 2006 totalled around 400,000 (employees in Italy, the UK and CIS).
In 2007, the Group will implement an online system to ensure mapping (hours provided, %
attendance, employees involved, etc.) and traceability for all training activities across all
employees in all sites. This will also make the training itself easier, as it will enable users to
access course content, for example, and read the documentation.
41
responsibility 2006
Growing people
For some years, Indesit Company has been using an employee assessment system called
Performance Management System (PMS), which directly involves everyone in both definition
of objectives and assessment of performance. PMS is based on self-assessment and is also a
form of permanent dialogue between employees and the Company, providing for constant
feedback on employees’ performance and coaching for everyone in the organization. Managers
have one-to-one meetings with their staff to discuss and assess performance over the year and
set new objectives. Half way through the year comes the first formal feedback on an individual’s
performance and a review of “business needs”. The system has been online since 2005 and
involves all Indesit Company personnel: the process assumes a propositive approach on the
part of the individual in terms of both self-assessment and identification of personal objectives
in line with team goals defined by management. Another important development process,
alongside the PMS, is the Human Resources Review (HRR). This aims to:
• map the organization to gain deeper knowledge of people and identify the more talented and
promising ones;
• guarantee management continuity, identify the organization’s strengths and define a
strategic recruiting plan;
• identify the managers with the highest potential to ensure them career opportunities
through structured training and development plans.
HRR results are submitted to the Human Resources Committee to guarantee management
continuity and the adequacy of the Group’s human capital with respect to current and future
requirements. From an organizational viewpoint, Indesit Company implements a role assessment
system based on predefined factors (skills and responsibilities) applicable across the entire Group.
Internationally certified, the system seeks to define and guarantee consistency between different
local operations (one single company approach) in terms of promotion, remuneration, benefits
and career development.
Remuneration and incentive system
The remuneration and incentive system comes under career development and is actively geared
to boosting the value of human capital. It promotes improvement of results by setting managers
annual objectives and rewarding loyalty over given periods with benefits. Such schemes vary with
managers’ roles within the Company. A significant part of total remuneration is tied to the
achievement of objectives (business and personal), this too varying with the type of scheme.
Indesit Company also gives bonuses to operatives and office staff on the basis of quality,
productivity and profitability parameters set at individual production plant level (Italy).
Health and safety
Indesit Company safeguards the health and safety of all its employees as legally required in all
the countries where it operates (eg. in Italy, decree law 626/94) and in accordance with ILO
workplace health and safety guidelines.
42
On induction, all employees must do a safety course. All production plants and other sites have
their own emergency management plans in terms of health and safety. Special attention is paid
to monitoring repetitive movements (work station analysis). Reduction in the accident
frequency and seriousness rates is one of the parameters considered in the MBO award system
adopted by Indesit Company. Targets for reducing such rates are set at Group and area level.
Awards are only given to the plants with the best safety performance if targets are reached
across the whole Group.
Year
Accidents
(a)
Days lost
(b)
Hours worked
(c)
Frequency rate
(d/=a/c x 1,000,000)
Seriousness index
(e=b/c x 1,000)
2005
220
6,367
22,150,260.95
9.93
0.29
2006
215
4,022
22,202,830.05
9.68
0.18
(5)
(2,345)
52,569.10
(0.25)
(0.11)
Change
Indesit Company production plant data
With respect to 2005, 2006 saw an overall reduction in both the number of accidents and days of
work lost. Seriousness and frequency were also down in spite of the slight increase in hours worked.
All employees undergo a medical check-up before being hired and periodically thereafter as
required by local legislation for the type of job concerned. Some employees do an emergency
management course and qualify to use a defibrillator (subject to six-monthly certification by local
health authorities), while professional nurses are employed in a number of plants. The Group also
safeguards its employees with insurance cover against accident outside the workplace. In Italy,
Indesit Company has engaged the Università Cattolica del Sacro Cuore (Rome) to provide
monitoring of environmental parameters and compliance with the employee health protocol.
Formal agreements with trade unions on workplace health and safety
The Company’s supplementary employment contract for Italy (signed by Indesit Company and
the trade unions in 2006) provides for a Company environment and safety committee
comprising three Company representatives, three union representatives and three workers’
safety representatives pursuant to decree law 626/94.
Company environment and safety committee: tasks
• Quarterly review of accidents and occupational disease (types, causes, frequency and seriousness) and
definition of improvements.
• Planning of meetings/courses for employees on workplace risks and relative precautions.
• Review of results regarding use of personal protection devices.
• Verification of application of the Company’s health plan.
• Proposals for environment and safety training courses.
• Proposals for surveys on working environments and safety in plants.
43
responsibility 2006
Industrial relations
For Indesit Company, a good “industrial relations” climate, based on fair and transparent
relationships with employees and trade unions, is not only a necessary objective: it is considered an
important asset favouring participatory dialogue and the sustainable development of the Group in
the long-term. Though having a single industrial relations model, Indesit Company respects local
differences, cultural and historical, in the countries where it operates and seeks to:
• ensure compliance with the law disciplining employment relationships and workplace health
and safety regulations, for all employees;
• negotiate agreements with trade unions and workers that are not only legally compliant but
also in line with local culture and customs;
• ensure, where possible, that workers’ pay, insurance and social security are better than the
minimum legal requirement in the country concerned, by means of supplementary
agreements, negotiations with unions on specific aspects, etc.
International framework agreement
Indesit Company was the first enterprise to sign an agreement, in 2001, with FIM/CISL,
FIOM/CGIL and UIL/UILM and the International Federation of Engineering Workers’
Unions, committing it to:
• respect basic human rights;
• respect trade union rights;
• prevent exploitation of minors;
• not use forced labour or labour in conditions of slavery;
• not employ children under 15 or in any case children under minimum school leaving age
under local law.
The international framework agreement recognizes the ILO Conventions and also commits
the Group to making its suppliers observe such principles.
EWC - European Workers Committee
Indesit Company was one of the first European companies to set up an European Workers
Committee, in which trade unions in all European countries take part. The Committee is kept
informed on and discusses all economic, industrial and social issues regarding Indesit Company
and the degree of implementation and performance of the international framework agreement.
In February 2007, Indesit Company received a “High social efficiency Company” award in
Russia from the vice-Minister for trade and economic development Sharonov. The award
ceremony took place in the headquarters of the Russian metalworkers unions in the Kremlin.
The “Russian High Social Efficiency Organization” gave Indesit Company the award in
recognition of the importance of the social activities it carries out.
44
This approach to industrial relations enables the Group to find mutually acceptable, sometimes
innovative solutions, even on critical issues such as plant closures, relocation of production and
flexibility measures. In 2006, Indesit Company acted in agreement with the unions to:
• define a redundancy plan for the Refrontolo plant;
• implement a conversion plan for the Melano plant;
• re-organize employees in three plants in the UK;
• renew the supplementary contract for workers in Italy.
Indesit Company’s agreement over re-organization at Refrontolo
At the start of 2006, following a crisis in the cooker segment, Indesit Company was forced to
downsize occupation in its Refrontolo plant. In this situation, the Group worked with the unions to
find a socially responsible solution compatible with the dignity of the workers, whose skills constitute
human capital of great value to the territory. The solution adopted by Indesit Company was based on
C2C (Company to Company) redundancy re-occupation and implemented following a bilateral
agreement with the trade unions (signed 22/06/2006) and a trilateral agreement with the unions and
the Province of Treviso (signed 05/07/2006). The public administration did not play the customary
role of mediator between management and unions but endorsed the agreement when already
reached. The bilateral agreement is based on providing incentives to work rather than direct
assistance. In addition to the classic redundancy measures, cash incentives are given directly to
companies hiring Refrontolo employees on an indefinite term contract basis. Such incentives are
inversely proportional to employees’ grades. In order to maintain production at Refrontolo, and
thereby avoid dispersing the local human capital created in the district to date, Indesit Company
plans to invest in upgrading the plant so that it can be relaunched.
Supplementary labour contract for Italy
The agreement signed by Indesit Company and the unions in 2006 guarantees extensive
participation by union representatives in joint bodies (company and trade unions) with
information and advisory functions on various levels, including the following:
• National joint committee
• National training committee
• National committee for territorial equal opportunities
• Territorial company joint committee
• Company joint committee
• Company environment and safety committee
• Company canteen service committee
The agreement provides for a system of flexible employment that abandons the standard concept
of temporary work. For each production unit, a pool of workers on fixed-term contracts or from
job agencies is set up and subsequently drawn on for future hirings (indefinite- or fixed term)
on a company seniority basis. This enables temporary situations to be used constructively for
mutually acceptable future solutions.
45
responsibility 2006
An external view
The Indesit Company-Trade Union agreement at Refrontolo
The ILO Training Centre in Turin examined the agreement between Indesit Company and the
trade unions over the restructuring of the Refrontolo plant in the Province of Treviso, signed
on 22/06/2006, to see whether and to what extent it constituted “good practice” in redundancy
management. The agreement signed on 22/06/2006, based on standard European “Occupation
and Competitiveness Agreements”, concerned 145 out of 250 workers at Refrontolo and is in
two parts: the first sets forth the causes of the crisis and the reasons for opting for dismissals,
while the second defines a redundancy management plan. Our examination of the agreement
showed that the plan was in line with good practice and constitutes an important example of
good redundancy management. Our findings were as follows.
a. The process of dialogue between the parties was as would be hoped for in an industrial
crisis/restructuring situation, with the company acting responsibly in its assessment of
workers’ needs and unions’ requests.
b. The company gave notice of the crisis and redundancy situation within the time scale
recommended by EU communication 98/59 and art. 4 and 5, Italian law 223/91.
c. The contents of the agreement and the incentives offered reflect the company’s intention
to effectively resolve the supply-demand problems posed by the redundancies. On the
demand side, the incentives for employers to take on redundant workers were a big
novelty in the territory. On the supply side, the reduction in the incentive offered to the
workers indicated a reasonable economic sacrifice on the part of the workers in return for
occupational continuity with other companies in the same territory. This combination of
demand and supply side measures may have positive knock-on and become a model for
public policy making.
d. The amount offered by Indesit Company shows that recourse to public funding in
industrial crises can be successfully avoided while at the same time encouraging
redundant workers to find new jobs.
e. The contractual arrangements form an exemplary case of workers being mobilized to seek
new jobs for themselves.
f. The possibility of “a trial period in other companies” under fixed-term contracts (involving
temporary suspension of the redundancy scheme) and disciplined by a rider to the Refrontolo
agreement is a strong incentive to finding work and introduces a new formula whereby a
worker may ascertain the potential of a new job.
In conclusion, the agreement constitutes an example of good practice in redundancy
management following an industrial crisis.
Enrico Tezza
ILO Turin Centre
46
In 2006, the number of hours on strike by Indesit Company employees was down nearly 69%
on 2005, which is all the more remarkable given the numerous occasions over the year that
might have caused conflict, such as re-organization at Refrontolo, factory conversion at Melano
and the renewal of the supplementary labour contract in Italy.
2005
2006
Change 2006-2005
National
83,639.0
25,327.2
-69.7%
Company
18,328.0
6,626.9
-63.8%
101,967.0
31,954.1
-68.7%
Total
N.B. Data refer to plants/branches in Italy, Poland, Russia, Turkey and the UK.
Further, the strikes that did occur were mostly over issues of a national nature and not directly
bearing on relationships with the Group. In 2006, in fact, the number of hours on strike over
company matters accounted for 21% of the total, which is slightly above the figure for 2005.
Litigation
In 2006, Indesit Company was involved in only 34 cases of litigation with employees (across the
whole Group), four of which settled during the year.
Employees
Employees
Employees
6 Professional grading/work profile
9 Biological damage, occupational disease, accident
19 Dismissal, dismissal damages, re-employment
N.B. Data refer to plants/branches in Italy, Poland, Russia, Turkey and the UK.
Indesit Company’s policy is always to avoid conflict with its employees. The small number of
cases of litigation is further demonstration that a good climate in an enterprise can only be
achieved through intelligent industrial relations based on employee involvement and
participation in a company’s choices.
Internal communication
Since the start of 2006, Indesit Company’s internal communication, managed by the
communication and corporate identity department in close co-ordination with the human
resources function, has been increasingly interactive, dynamic, transnational and programmed,
its aims being to:
• consolidate a sense of belonging to the Company in all the employees;
• increase participation and involvement in the life of the Company and its business, thereby
sharpening the perception of being part of one single company;
• build a common corporate identity whilst also respecting and creating value out of the
Group’s cultural diversity;
47
responsibility 2006
• distribute content and contribute to learning processes;
• guide individual and group activities towards the achievement of business objectives;
• communicate Indesit Company’s values and mission, as well as distribute information and
data of use in business operations.
Internal communication involves the use of consolidated tools (intranet, house organ, events,
newsletters, communication campaigns) and ad hoc projects, all characterized by a creative and
innovative dimension in which the main players are increasingly Indesit Company people
themselves. The internal communication approach reflects the Company’s values and is thus
characterized by:
• dynamism and internal client orientation;
• aspiration to excellence and pride in belonging;
• thirst for knowledge and experimenting new things;
• frank relationships and effective communication;
• active listening - exploration, valorization of diversity, sharing - integration.
To get the best possible results, internal communication has a number of work groups, each
with its own objectives. The first (sponsor) defines macro-objectives, proposes internal
communication plan activities, appoints the members of the co-ordination group and the local
facilitators and defines the budget. The co-ordination group identifies and designs internal
campaigns and awareness raising initiatives and takes part in defining the content of internal
communication. The operating group is made up of local facilitators, one in each site, and
periodically defines information flows (central to periphery or vice versa), provides
information on his/her site, facilitates internal communication project implementation.
Local facilitators
To centre its objectives, the internal communication function has a network of local facilitators.
In each Company site (Company offices, subsidiaries, plants) a person is appointed as local
facilitator, a person with good relational and interpersonal communication skills, energy and
enthusiasm, the capacity to listen, sensitivity to signals, recognized professional competency,
authoritativeness beyond own role, personal commitment and territorial coverage. Information
is passed between facilitators and the internal communication team: facilitators supply
information on what is happening in their locations and at the same time support central internal
communication initiatives. The network is also involved in defining, designing and developing
the weekly Insight programme and all day-to-day internal communication activities.
48
Clients
Indesit Company’s clients include both retailers who buy appliances directly from the Group
and consumers who buy appliances from retailers.
Units produced per geographical region
Sales per geographical region
Western Europe
59%
61%
Eastern Europe
34%
32%
Other countries
7%
7%
Sales in 2006 reached €3,248.6m. In Western Europe, Group revenues showed a positive trend,
with peak performance in Italy and Spain.
In Eastern Europe, there was strong growth in practically all markets.
In “other countries”, sales grew even more strongly, even in Turkey where the currency was devalued.
It is hard to quantify the number of consumers the Group has. However, assuming every
purchaser of an appliance is a consumer, in 2006 alone around 15 million families acquired a
Group product.
Insight
Insight, the company intranet designed in 2005 and fully implemented in 2006, was created by
the heads of the IT, HR, marketing and communication & corporate identity departments. Its
mission is to create a dynamic environment that will not only become the main instrument of
internal communication but also serve as a working tool.
Replacing the three existing intranets (UK, Russia and Group), Insight was designed to embody
all the principles of internal communication and be in line with the strategic objective of
strengthening the “one single company”. Insight is in the Group’s main languages (Italian, English
and Russian), has four “local” sections (Italy, UK, Russia, Poland), is structured in six macro areas
and has a weekly programme featuring news, videos, organizational notices, announcements and
working documents and tools. Insight is the primary vehicle for messages from the top
management and advertising and internal communication campaigns. Insight guarantees
extensive involvement on the part of Indesit Company employees: local facilitators make
suggestions, propose content and offer continual feed on how Insight is rated by all the Group’s
employees. The intranet can be used to access discussion forums on any subject. A single notice
board for the Group ensures the updating of content by a network of 30 network administrators,
one in each location. It also proposes mini-ads, for information purposes, in which the “players”
are the employees themselves. In 2006, Insight started to become not just a tool for sharing
knowledge but also a virtuous space in which to share and strengthen a sense of belonging and
generate and develop a common identity, a meeting place for numerous styles and habits, for
different people and cultures sharing a single Group spirit.
49
responsibility 2006
In the last few years the European market has been showing increasing interest in
environmental issues and energy consumption in particular. In some countries, such as
Scandinavia, the UK and Germany, this focus stems from a well rooted and widespread
“ecological” culture, while in others, such as Spain and Italy, it’s the result of new government
policies. Indesit Company appreciates these tendencies, since it has for years been developing
product ranges with high environmental performance levels: high energy efficiency products
(A, A+,…) and products designed to lower both energy and water consumption (like the
Aqualtis washing machine, which has won numerous international awards).
Retailers
Indesit Company operates a transparent commercial policy designed to create long-term
relationships, rapid problem solving and maximum professionalism. The Group also seeks to
work with retailers on social and environmental issues, by publishing its CSR Report, for
example, which documents its policies and activities in this context. In the last few years Indesit
Company has launched socio-environmental projects in collaboration with retailers, including
promotional and advertising initiatives to boost sales of high energy efficiency products.
Indesit Company’s commitment can also be seen in figures: for example, in some countries the
Group can guarantee 99% level service for orders with 48-hour delivery thanks to the use of
simplified logistics procedures and its B2B system.
Indesit Company’s internal monitoring systems are constantly tracking retailer satisfaction
with service levels.
Retailer satisfaction
2005
2006
France
88.4%
78.1%
Italy
81.7%
89.1%
Germany
99.2%
99.7%
The Netherlands
83.2%
87.0%
Scores as % of maximum level performance.
Source: internal
Thanks to the quality of its relationships with retailers, Indesit Company is able, should a
potential risk for the end consumer be identified, to eliminate that potential risk across all
European markets within 24 to 48 hours (recovery process). All products are traceable to a
production batch, so intervention on eventual quality problems is prompt.
In 2006, Indesit Company in certain markets (Italy, France, the UK) offered a service extending
certain legal warranty rights to the 5th year of an appliance’s life, for a minimum initial outlay.
This initiative was appreciated by retailers and consumers, as shown by the increase in use of
the service (extended guarantee sales up 9% on 2005). Some retailers launched extended
warranty “co-branding” projects with Indesit Company.
In April 2006, Milan staged the 16th Eurocucina, the world’s most important modular kitchen
expo. Indesit Company’s stand featured its latest products under the Indesit, Ariston and
Scholtès brands.
50
Some of Indesit Company’s awards and acknowledgements
At the 2006 Comet Awards (Comet is the no. 2 electronics retailer in the UK) Indesit Company won a Best
Training award for its investment in creating co-operative and motivated teams and its pro-active approach in
making Comet a strategic partner, and also a Best Supplier award, given its products under the Hotpoint, Indesit
and Cannon brands are amongst the most elegant and innovative on the market.
The Hotpoint brand won the Independent Electrical Retailer Magazine’s Best TV and press campaign award, the
Trade Communication Award.
Indesit Company was given the Marka®, a Russian award for leading brands in a wide range of products and
services. The “Narodnaya Marka” symbolizes customers’ affection for brands and is also known as the National
Award for trust.
Indesit Company won its first Golden Arrow, the most important direct marketing award in Poland.
In Spain, “Actualidad Economica”, a magazine, ranked Ariston’s Integrated Ever Fresh system and Indesit’s On
Time washing machine system in the “100 best ideas in 2005” in recognition of Indesit Company’s innovation
and creativity capabilities.
Consumers
To fully satisfy consumers’ expectations, Indesit Company analyzes their needs, defines product
characteristics accordingly and designs suitable forms of communication for consumers.
Indesit Company commissions consumer satisfaction surveys to study the reliability of its
products and services and other surveys on brand image and the efficacy of its ad campaigns.
This section gives some of the results, by way of example, from surveys carried out for the
Group by authoritative market research firms.
Propensity to buy same product again
2006
Italy
73.1
France
72.8
The Netherlands
60.8
Portugal
81.8
Spain
86.9
Germany
74.0
Values are standardized indexes representing performance as a percentage (100 = maximum performance). Source: Valdani-Vicari
consumer satisfaction survey.
51
responsibility 2006
The main brands
Indesit
Indesit, the Group’s pan-European brand, was acquired in 1987. Its philosophy is built around
three main strengths - confidence, friendliness, smartness. With its payoff “We work, you play”,
Indesit expresses its mission: to make consumers’ lives simple and enjoyable by giving them
more time to cultivate their interests. The target consumer is a young, dynamic working person
who wants domestic appliances to be efficient, simple to use and with a strong personality.
Hotpoint-Ariston
In 2006, Indesit Company started a process of convergence between its Hotpoint and Ariston
brands to achieve a more effective and efficient approach to consumers and exploit the
recognized strengths of the two brands to increase their impact in their respective markets.
In 2007, Ariston and Hotpoint were merged, combining the international flavour of
Hotpoint, outright leader in the UK market, and Ariston’s style and tradition.
Hotpoint-Ariston addresses a target in the 25 to 50 age bracket, with a family or planning
one, people with a middle to middle/high lifestyle, practical and modern, with an eye for
style and functionality, who love their home and want it to represent their way of living. “Our
ideas. Your home” expresses the brand’s desire to offer its consumers solutions that spring
from a deep understanding of what they’re looking for in their home. The payoff is thus in
line with the values appearing underneath the logo: intelligence, comfort and style.
Scholtès
The prestige French brand acquired in 1989 and launched in Italy at the end of 2003 is Indesit
Company’s brand in the top-end of the built-in segment.
Elegance of design, choice of materials, constant technological innovation - these are the
essential ingredients that Scholtès provides for kitchen creativity and imagination. Because
Scholtès has always cultivated a genuine passion for the art of cooking and is a guarantee for
those who appreciate the most genuine pleasures and finest flavours of life. As expressed in its
payoff: “Taste and Perfection”.
52
Other awards and acknowledgements
The TV ad - “Undersea World” - in the highly successful Aqualtis launch campaign won:
• the Lion d’Or at the 53rd Cannes International Advertising Festival - the first Lion d’Or for an
Italian company in 12 years;
• a gold in the TV commercials category at the ADC*E Awards (Art Director’s Club of Europe),
in Barcelona;
• a gold at the Shark Awards Festival;
• a gold at the prestigious New York Festivals - International Advertising Awards 2006;
• a gold in the Home-Furnishings/Appliances category at the London International Advertising
Awards.
“Undersea World” was a big success with consumers too, a great many of whom e-mailed Indesit
Company with their compliments. Two or three examples will suffice:
“Dear Sirs,
Apart from the fact I’ve been using two appliances of yours (fridge and washing machine) for years,
I must give you my compliments on your splendid example of well thought out advertising. Turning
a washing machine into a barrier reef is the ultimate! My son liked it so much I had to record it. Keep
up the good work. Fabio”
“Over and above the quality of your products, I’d like to say that the ad for the new Aqualtis washing
machine is great. It gives you a sensation of lightness and serenity. It persuades you, gently, to
consider the product. I find it so beautiful I’d like to have it as a screensaver on my PC in place of
the classic aquarium. At last a new angle on washing. Could you send it to me by e-mail or tell me
how to download it from your site: you’d make a lot of people happy. Thank you so much, Marco”
“My compliments on the Aqualtis ad. It’s cool, pleasing and my kids love it. Melanie”
• Indesit was the only brand to gain the prestigious Superbrand recognition in Russia. The
selection process was by a panel of independent experts who also used surveys by KOMKON
and ACNielsen.
• Hotpoint was included in the top 500 UK brands. The UK Superbrand process started with over
10,000 brands, from which experts short-listed 1,450 on the basis of quality, reliability and
differentiation. Finally, half of the brands judged best were submitted to a public vote (over 3,000
consumers) using the same three criteria.
53
responsibility 2006
Customer satisfaction
Customer satisfaction is measured by an integrated system that considers:
• satisfaction with after-sales service (telephone co-ordination and service centres);
• overall satisfaction with products;
• propensity to purchase the same product again and use the service again.
The ultimate aim is to have a system that monitors relationships between the quality perceived
by the customer and satisfaction with service rendered by the Company, thus identifying areas
for improvement.
Every year, on a central level, Key Performance Indicators (KPI) are defined to measure the
efficiency of contact and service centres. The measurement process starts with a definition of
general objectives, then of objectives at individual market level, in order to be able to
implement a single assessment system in which data can be compared.
Satisfaction with phone services 2006 (1)
Italy
France
The Netherlands
Portugal
Spain
Germany
Satisfaction with
service call centre
69.4
84.7
73.0
69.6
80.7
93.4
Satisfaction with
phone co-ordination
74.6
88.3
83.7
75.1
87.3
97.6
Satisfaction with technical service 2006 (1)
Satisfaction with
technical service
Italy
France
The Netherlands
Portugal
Spain
Germany
77.7
91.0
83.9
73.5
86.3
96.9
General satisfaction with service 2005-2006 (2)
Italy
France
The Netherlands
Portugal
Spain
Germany
2005
6.6
7.8
7.0
6.5
8.0
8.5
2006
6.5
7.8
6.9
6.6
7.5
8.5
Values are standardized indexes representing performance as a percentage: (1) 1 to 100, with 100 = maximum performance,
(2) 1 to 10, with 10 = maximum performance. Source: Valdani-Vicari consumer satisfaction survey.
Complaints management
Indesit Company has a consumer portal enabling information provided directly by consumers to
be discussed with other company functions, so that products can be adjusted to consumers’ needs.
A standard procedure for handling complaints has been defined for use in all markets, so that data
properly reflects Company policy. Each market has software for handling complaints, with step by
step recording of all action taken up to closure of the complaint procedure. This makes it possible
to analyze types of complaint and solutions adopted.
In 2006, certain improvements were made to the systems that handle complaints and “undesirable
events” and measure customer satisfaction. This helped to align complaint management systems in the
UK, Italy and France, which are linked to the call management system and updating of the standard
54
claim system, with an electronic archive of complaint letters, generation of standard consumer reply
templates, and monitoring of ex gratia costs.
New initiatives
Indesit Company periodically offers its consumers special services and promotions, such as
“Satisfied or your money back”, warranty period extensions and promotion of high energy
efficiency appliances. In 2006, for example, Indesit Company took part with other major
dishwasher manufacturers in Italy in the Galileo project, a “quality of life” initiative explaining the
benefits of using dishwashers (energy and water saving for a start).
In Poland, Indesit Company operated a “Satisfied or your money back” policy for certain washing
machine models, backed up by an ad campaign and information in points of sale. The initiative
was very successful, thus confirming product quality. In Italy, many promotions were geared to
boosting sales of products in the highest energy efficiency class (sales personnel incentive
programme on Ariston top-range built-in sets (2006-2007), warranty extensions on top-range
dishwashers, “Satisfied or your money back” on the whole triple A class dishwasher range and
commercial initiatives for class A+ built-in fridge-freezers).
After-sales service
Consumer satisfaction is a big priority for Indesit Company, which was one of the first white
goods makers to put a call centre in place to deal rapidly with consumers’ inquiries. A well
organized call centre system on one hand gets the Company closer to the consumer and on the
other can usefully support field engineers. Thanks to the professionalism and expertise of call
centre personnel, it’s now possible to solve certain problems on the phone without sending an
engineer (saving time for consumers and costs for the Group).
Indesit Company studies consumers’ assessments of call centre and after-sales services and uses
its findings when designing training for personnel (in 2006, call centre people in Italy and UK did
around 3,000 hours of training).
2006 saw the launch of the FFA (Field Force Automation), a project to develop an integrated
palmtop-based system to simplify and speed up the work of field engineers. For example, it will
provide appliance diagnostics, online ordering of parts and online management of service jobs.
The main objective here is to improve the level of after-sales service and field engineer
productivity by using a portable IT device providing in-the-field support, boosting the efficiency
of business processes and integrating with central office systems.
55
responsibility 2006
Shareholders
Indesit Company cultivates its shareholders’ investments through sustainable growth in the
medium and long term. Financial communication plays a prime role in creating value for the
Group. Disclosures to financial markets are prompt, exhaustive and transparent, ensuring fair and
consistent communication to all concerned.
Indesit Company shareholders
Shareholder
%
N. ordinary shares
Fineldo S.p.A.
39.061
44,302,029
Vittorio Merloni
1.180
1,338,300
Merloni Progetti
0.826
937,056
Fines S.p.A.
6.538
7,425,190
Ester Merloni
4.446
5,042,400
Maria Cecilia Lazzarini
2.889
3,276,700
Francesco Merloni
3.981
4,514,653
Amber Master Fund SPC
2.060
2,336,503
Treasury shares
9.734
11,039,750
Float
29.286
33,215,853
Total
100.000
113,418,434
Data as of 31/12/2006
Relations with shareholders are managed by an investor relations officer, who works in cooperation with various company functions. The role was created some years ago to ensure constant
dialogue with institutional investors, shareholders and the market in general and to guarantee
systematic and timely communication of full information on the Company’s business. The investor
relations officer reports to the Group’s Chief Financial Officer and works in accordance with the
procedures for disclosures to the market and international best practice.
Financial communication involves continual contact with analysts, institutional investors and
shareholders to ensure accurate and full perception of strategic decisions, their implementation
and their impact on business results.
In 2006, Indesit Company organized numerous meetings with analysts and institutional investors,
including:
• four conference calls on publication of interim results;
• numerous meetings (over 300 participants) with analysts and investors in Milan, London and Paris;
• two roadshows in the USA (New York, Boston, Chicago and San Francisco) involving over 50
participants;
• participation in three European conference calls organized by Italian and foreign brokers.
In line with international best practice, Indesit Company publishes its quarterly financial results,
as approved by the board of directors, in major financial media in Italy and abroad.
56
Distribution of dividends
Having posted consolidated profits of €76.4m, the Company paid out a dividend of €0.403 (up
6.3% on 2005) per savings share and €0.385 (up 6.6% on 2005) per ordinary share.
Dividend distribution
(€)
2005
2006
Earnings per ordinary share
0.50
0.74
Earnings per savings share
0.53
0.78
Dividend per ordinary share
0.361
0.385
Dividend per savings share
0.379
0.403
Price/Earnings *
17.48
16.66
* Price/Earnings is the price of ordinary shares at 31/12 over earnings per ordinary share.
Indesit Company share in 2006
(€)
16
14
12
10
8
6
4
2
Indesit Company’s equity performed well in 2006 and closed the year 40% up.
57
responsibility 2006
Indesit Company is currently monitored by the following 13 independent analysts:
Coverage
Company
Analyst
Abaxbank
Antonio Tognoli
Banca Akros
Claudio Giacomiello
Banca Aletti
Andrea Bonfà
Banca Caboto
Luca Bacoccoli
Exane BNP Paribas
Eric Tournier
Cazenove
Umulinga Karangwa
Citigroup Smith Barney
Alessandro Falcioni
Crédit Agricole-Chevreux
Marco Cristofori
Euromobiliare
Dino Catena
Il Sole 24 Ore
Antonia Conti
Intermonte
Stefano Corneliani / Elisa Corghi
Mediobanca
Andrea Scauri
UBS
Laura Leonardelli
At the start of 2007 Indesit Company was acknowledged to be one of the most socially responsible
companies in Europe by Etica SGR. Indesit Company is one of only two Italian companies to have
gained such recognition. Using the CSR criteria on which the “Sistema Banca Etica” is based, Etica
SGR selected the more socially responsible companies in the world on the basis of data provided by
the British research firm EIRIS (Ethical Investment Research Services, part of the Eris Foundation
and the rating agency that does analysis for admission of companies to the FTSE4Good index). The
assessment looks at governance (independent directors, transparent remuneration of managers,
social, environmental and reputational risks), social policy (workplace health and safety, employee
training, respect for workers’ rights), environment (quality of environmental management,
production/use of renewable energy sources, impact of products and production).
Indesit Company is also in the Ethibel social responsibility index and the Kempen/SNS SRI, the
first index for socially responsible small cap companies in Europe.
58
External views
Socio-environmental themes of significance to Indesit Company
Etica SGR appreciated the fact that Indesit Company has started to provide more information on
the environmental certification of its plants (ISO 14001) and publish a certification plan with
precise objectives. Another challenge for the future, together with the development of products
in increasingly efficient energy classes, will be to provide quantitative information on the Group’s
commitment to reducing waste at the end of appliances’ life cycles.
Lastly, it would be a good idea for Indesit Company to release more detailed information on
management of the supply chain.
Assessment of Indesit Company’s performance in the main areas of
social responsibility
Indesit Company is one of the very few Italian companies to be included amongst the ethical funds
of Etica SGR (the only Italian firm that backs exclusively ethical funds). We have always appreciated
Indesit Company above all for its social behaviour in terms of both its relationships with its
employees and the good quality of its work and contracts and its constant commitment to the
development of the communities where it operates. Another strength, in the opinion of Etica SGR,
is the fact that the company is supported by a family who have believed in the social and
environmental sustainability of the enterprise for more than 30 years. We think Indesit Company
can improve, especially in the environmental field by concentrating more on external monitoring
of the environmental performance of its plants and on product design more closely geared to
recovering components at the end of the life cycle. In general, we believe, and have already explained
in various meetings with the company, that Indesit Company is actually doing a lot, especially in the
environmental field, but is still not communicating much to consumers or investors.
Positive shareholding experience with Indesit Company
We are very satisfied with the dialogue with the company on the social and environmental aspects
of management. Indesit Company has always provided prompt answers to our inquiries and where
possible involved us in the drafting stage of its sustainability reports as an authoritative interlocutor.
Mauro Meggiolaro
Communication and research
Etica SGR - Gruppo Banca Popolare Etica
59
responsibility 2006
Suppliers
Policy
In line with its values, the Group operates a policy of transparency, fair negotiating, integrity,
impartiality and contractual equity in its dealings with suppliers. Its procurement policy is based on
the development of local suppliers, where “local” means near the Group’s own plants. This policy,
aiming to create a consolidated manufacturing base for its development plans, has also been applied
to its recently built production facilities outside Italy, where efforts are being made to create supplier
bases by localizing Italian suppliers or winning the loyalty of local suppliers. Indesit Company’s
relations with suppliers are based on its solid corporate values, which are the foundation of all its
economic and social relations. This implies a substantial involvement on the part of suppliers in
terms of both compliance with qualitative standards and the sharing of objectives and the working
practices adopted to achieve them. The supplier selection policy applies best in class logic and rates
suppliers using the following parameters:
• financial solidity, to guarantee a reliable supply over time;
• competitiveness, through selection of innovative suppliers who offer increasingly competitive
products;
• quality, through selection of suppliers who can constantly improve the quality of their products,
also in the ways required by the Group.
This approach has enabled Indesit Company to form long-term relationships with its main
suppliers and also reflects the genuineness of the relations thus formed, favoured by the close
attention paid to communication with suppliers. Indesit Company has adopted a supplier selection
and qualification process. Following the signalling of possible new suppliers (either by prospective
suppliers themselves or Strategic Sourcing’s scouting activities), an initial, exploratory visit to the
supplier is made to see if it has the requisites for becoming a possible Indesit Company supplier.
This first visit looks mainly at organizational aspects affecting quality, technical/manufacturing
capacity and financial stability. In line with its Ethical Code, Indesit Company only chooses
suppliers that adopt the same rules of conduct, especially regarding relations with the public
administration, confidentiality and respect for ILO conventions.
There is currently a quality standards monitoring system that suppliers have to respect, involving
periodical audits by 20 supply quality engineers. In 2007 these audits are being extended to
environmental and ethical aspects (environmental and ethical audits) which to date have been
considered under the overall “supplier reliability” assessment and in an informal way in line with
the Code. Contractual conditions fixed with all suppliers establish validity of prices, payment days,
quality targets and rules applied and volume planning rules. That relations with suppliers are good
is also seen by the low number of disputes (three only in 2006).
60
Number of suppliers receiving at least one order during the year
2005
2006
Raw materials
157
148
Machinery
303
313
Components
1,301
1,127
Services
1,838
1,890
Total
3,599
3,478
Suppliers of components and raw materials by geographical region
2006
Italy
45.6%
Portugal
0.2%
France
4.3%
UK
14.1%
Poland
6.6%
Russia
8.2%
Turkey
8.5%
Other EU countries
9.9%
Other non-EU countries
2.6%
Suppliers of components and raw materials by geographical region (€ thousand)
Italy
Portugal
France
2005
2006
819,362
833,000
918
19
53,245
19,308
167,351
198,652
Poland
48,012
72,996
Russia
58,055
64,940
Turkey
43,948
73,364
245,324
292,062
42,930
128,927
1,481,150
1,685,274
UK
Other EU countries
Other non-EU countries
Total
61
responsibility 2006
Socio-environmentally relevant supplier categories
2005
Social co-operative suppliers (no.)
Social co-operative suppliers (€ thousand)
2006
9
11
3,654
4,017
2006: percentage of certified suppliers (out of 490 suppliers)
Type of certification
%
ISO 9001
88.0%
ISO 14001
33.0%
OHSAS 18001
8.3%
EMAS
1.4%
Communication
Indesit Company organizes an annual suppliers convention during which it illustrates the results of
the previous year and the objectives for the current year in terms of product development and
quality improvements. The 2006 convention at Turin’s Lingotto was attended by around 500
representatives from all the Group’s main suppliers, from four continents. Further, all the main
suppliers are sent a quality target communication once a year.
To improve the quality of communication with suppliers a supplier portal was created with the dual
purpose of allowing prospective suppliers to candidate themselves and of fostering online exchange
of information (eg. quality procedures, transport documents, billing, etc.), which also saves on
paper-based document operations.
“Our best quality is that of rewarding the best quality”
That is the philosophy underlying Indesit Company’s policy of rewarding its best suppliers, those
who strive to improve the quality of their work in every way. The following received prizes at the
2006 suppliers’ convention:
• raw materials supply: NLMK - Novolipetzk Steel - Russia
• components supply: Locatelli group - Italy
• transformation services: AK - Kaczmarek - Poland
In 2007, Indesit Company intends to:
• gradually develop, in agreement with suppliers, a monitoring system based on annually updated
social and environmental indicators;
• favour communication addressing companies, starting with the subsidiaries, to raise the visibility
of Group supplier companies who do work in the field of social responsibility.
62
The external view
“Relations between our Groups, based on medium and long-term projects, have always been
excellent. Co-development of products and sharing of future strategies continues to be the key to
the success of our relations.
We have made many investments in your Company. This is a strength but also a restraint to
remember when considering changes to products or allocations. Quality, service and prices are at
excellent levels, partly due to co-development in the initial design phases of your products.”
Locatelli group - Italy
“Relations between our company and Indesit Company are transparent, positive and very correct. As
suppliers, we are extremely keen to improve the collaboration of our work teams in terms of both
product quality and the identifying and planning of innovative solutions (eg. using pre-painted metal,
additional processes).”
NLMK - Novolipetzk Steel - Russia
This ad was published the 25 November 2006 on all the major Italian newspaper
in occasion of the suppliers’ convention organised in Turin by Indesit Company.
63
responsibility 2006
Public administration
In all the countries where it works, Indesit Company manages its relations with the public
administration in a constructive and transparent manner. In particular, it seeks open dialogue with
the various authorities it deals with, in the interests of an industrial development properly shared
with the communities in which the Company operates.
The Group’s scrupulous attention to this area of relationships is also formalized in the Ethical Code
published in 2006, which insists on absolute respect for the law in every country where it operates.
The Group has adopted a special organizational model, pursuant to decree law 231/2001 and
described in the corporate governance section, to prevent employees or representatives committing
offences against the public administration (eg. undue receipt of State subsidies, fraud, etc.).
Further, making donations to cultural, artistic, social or humanitarian initiatives or political parties or
individual politicians in excess of €50,000 per donation has to be approved by the board of directors; it
is in any case standard practice to also inform the board of donations of under €50,000.
In 2006, Indesit Company posted pre-tax profits of €132m (up 42% on 2005). The tax rate (tax
charge over pre-tax profits) was 41.7% (45.7% in 2005).
(€ million)
2005
2006
IRES
(4.8)
(4.8)
IRAP
(11.0)
(11.4)
Other direct taxes in other countries
(43.7)
(42.7)
Net deferred tax credit (liability)
17.0
3.9
(42.4)
(54.9)
Total
Community
“There is no value in the economic success of any industrial initiative if it is not also accompanied
by commitment to social progress.”
That is the philosophy Aristide Merloni handed down to Indesit Company in 1967, a philosophy
the Company acts on in many different contexts. In its ties with the places in which it operates, both
at home and abroad, Indesit Company has always looked beyond the opportunities of mutual
economic development and invested time and resources in social initiatives. To form an overall
picture of all the Group’s activities that have a degree of social usefulness, it uses the reporting model
recommended by the London Benchmarking Group, which defines five basic categories of action
in favour of community development in terms of economic and social returns for both the business
and its stakeholders:
64
• donations;
• investments in the community;
• commercial initiatives with a social impact;
• mandatory action;
• socially sustainable business initiatives.
The model allows for various sorts of comparison (benchmarking) over time, with other companies
and within the Group itself.
Donations
Investments
in the community
Commercial initiatives
with a social impact
Mandatory action
Socially sustainable
business initiatives
Donations
Donations are made to meet the community’s expectations and needs and have no impact on
business. Indesit Company has acted in the artistic and cultural field and supported no-profit
associations by making gifts in kind and cash donations.
Restoration of Gentile da Fabriano’s “Polittico dell’Intercessione”
The three-year restoration was carried out by Opificio delle Pietre Dure in collaboration with various
Italian and foreign scientific bodies and thanks to funding from Indesit Company. Begun in 2003,
it involved lengthy studies of materials and numerous other technical problems, co-operation with
research organizations and the use of highly sophisticated technology. The “Intercession Polyptych”
is currently on display at Indesit Company headquarters in Fabriano.
Juntos contra la Violencia Domestica
In 2006, Indesit Company gave this Spanish association, which protects women against violence in
the home, a number of domestic appliances for “emergency accommodation” for women forced to
leave their homes.
Istituto Paolo Ricci
In favour of this centre in Civitanova Marche that looks after handicapped young people, the
engineering department organized a special evening, including a charity bingo, just before Christmas.
65
responsibility 2006
Annual Ariston exhibition-market in Sofia
Indesit Company supported the 9th exhibition, entitled “Become a friend”, featuring a series of
unique Christmas cards painted by 110 kids from orphanages in Kroshuna and Doganovo. Over a
thousand high school students from Sofia joined in the initiative by painting even more cards.
“e se domani….” 2007 calendar
Indesit Company helped towards production of the calendar in collaboration with “Chi”, a
Mondadori Editori magazine. Proceeds will go to the “Associazione Italiana Persone Down”.
Supporters of the initiative, in addition to a great many children of various ages, included Roberto
Benigni (director, actor, comedian), Francesco Totti (footballer), Giorgio Armani (stylist) and Silvio
Muccino (actor).
Children in Need Today
The Contact Center in Peterborough was used as a branch of Children in Need Today to collect
donations and raise thousands of pounds for kids. On 17/11/2006, over 100 Indesit Company
employees worked unflaggingly on the phone to receive donations. And the HR department offered
numerous products for a charity draw.
Great Orchestra of Christmas Charity
This Polish charity organizes auctions, concerts, events and parties to raise money for medical research
bodies in Poland. In 2006, Indesit Company sponsored an auction organized by the Association and
offered a washing machine signed by Adam Malysz, Poland’s most famous sky jumper.
Christmas Charity Bazar
Sponsored by the Ariston brand, this involved children in orphanages and primary schools in Sofia,
who painted Xmas cards which were displayed in a bazaar and a number of bookshops in Sofia.
Proceeds from the sales of the cards went to the orphanages.
Social event organized by the Association of Independent Students in Lódz
Indesit Company sponsored an event organized by the Association in collaboration with the
regional blood donor centre to collect blood to give to hospitals to help treat people in need.
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Investments in the community
Investments in the community are long-term partnerships producing various kinds of community
development and also give the Group benefits in terms of reputation. In 2006, Indesit Company
consolidated its collaboration with not-for-profit organizations, institutions and universities and
worked on a number of social development projects.
Jonathan project
The Jonathan project was launched in collaboration with Associazione Jonathan in 1998 in the
Caserta area, in Indesit’s Carinaro and Teverola plants, with collaboration from the Justice Ministry.
In 2004, under the aegis of the Employment Ministry, it was extended to the Melano plant (in Le
Marche) within the framework of the South-North-South project.
Associazione Jonathan Onlus was formed at the beginning of the ‘90s by a group of social workers.
Its organization depends on volunteers, conscientious objectors, qualified social workers and a
group of specialists who define the technical scope of action to help young people at risk, draw up
working procedures and form teams and also organize training workshops and groups.
Associazione Jonathan has guaranteed a platform of experience, skills and professionalism for the
project’s organization and management.
The project has built up a network of contacts and agreements between the judiciary and the labour
market so that young people living in circumstances of serious social distress can be re-educated to
use work as a means to winning back their dignity.
The instruments used to implement the programme have so far been: general training, a period
of professional training in the factory, tutoring in and outside the factory, progress monitoring,
involvement of and participation by the company organization, and a limited set of behavioural
and organizational rules.
Of these instruments, the tutoring provided by the Association is vital to the running of the
project. Given the nature and degree of responsibility involved, tutors are required to have all the
competencies and skills needed to supervise and support the apprentices in terms of both work
and motivation.
The results showed that the project provides an effective response to the needs of programmes for
prevention of and recovery from delinquency, which in terms of quality and quantity in the area
where the project was originally set up cannot be considered normal “physiological” phenomena
occurring in any community. The project showed itself capable of limiting or resolving such
needs.
Over the years, the project has enabled over 80 young people from depressed metropolitan
districts in the south of Italy to be fully reintegrated in the community. Indesit Company and the
Associazione Jonathan Onlus intend to use the project to create a model that can be replicated by
other enterprises.
In 2006, a conference was held in Naples on the theme “From exclusion to citizenship - The Jonathan
model and the role of business”. The event was an opportunity to take stock of experience under the
Jonathan model and of Indesit Company’s contribution by giving jobs to “at risk” young people.
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ChildLine
ChildLine is a UK association that campaigns for the rights of ill-treated minors. In 2006, Indesit
Company gave the Association £500,000 and since 2004 it has been organizing fund raising
events and activities in which Hotpoint employees take part, including a management trekking in
Scotland, lotteries, parachute displays, auctions and the London Marathon. In 2006, Hotpoint was
also the official sponsor of “Cakes for Childline”, a campaign organized by ChildLine to celebrate
its 20th anniversary.
Roger Federer Foundation
Indesit Company supports the cause of the Swiss tennis player’s Foundation, which is to improve
social conditions for kids in New Brighton, one of the poorest and most depressed places in South
Africa. The Foundation funds the education of 30 children and makes sure they get at least two
meals a day.
In 2006, at the ATP prize ceremony in Shanghai where Federer was acclaimed the no. 1, Indesit
Company chairman Vittorio Merloni gave the Foundation €10,000 plus the proceeds of an e-Bay
auction of an Indesit Graffiti fridge autographed by Roger Federer and decorated by the Chinese
artist Wu Yimin.
Domestic appliance service training
Indesit Company ran a course in Italy for people under affirmative action programmes. The
innovative project not only provided professional training for new engineers but also had a valuable
social function. The 10 people on the project were selected from various disadvantaged categories
under agreement with their representatives.
Peterborough visit
Indesit Company in Peterborough was visited by 20 Russian students doing the first MBA
accredited Master’s in Russia. They were studying industrial activity in the UK and looking at
logistics operations in particular.
Corporate Social Responsibility seminar
A number of managers in Indesit Company’s internal audit, human resources, communication and
corporate identity and international technical affairs departments took part in a seminar organized
by the Economics faculty at the University of Pescara and spoke on their work in Indesit Company.
Commercial initiatives with a social impact
These initiatives are more closely linked to commercial promotion of products and services offered.
Indesit Company sponsored a series of sporting, cultural and artistic events in various countries.
Participation in such events, for the purpose of improving Group brand and product awareness,
often took innovative and engaging forms and was always carefully tailored to the local context.
Sport
Final Four, men’s volleyball European Champion’s League
In 2006 too, for the 3rd year running, Indesit Company sponsored volleyball, the sport that best
expresses the brand’s values: dynamic spirit, simplicity and pan-Europeanism. Sponsoring the
finals, it for the first time offered special prizes for the winners of the tournament and three sports
associations that play an outstanding social role in the Rome area.
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Special Olympics, Rome
Indesit Company also sponsored the 2006 European Youth Olympics Games in Rome, involving
1,400 handicapped athletes between 12 and 21, from 55 European and Asian countries and
competing in seven sports (athletics, “bocce”, bowling, unified football, gymnastics, swimming and
basketball). Special Olympics is an organization operating worldwide to give people with mental
disabilities ongoing opportunities for physical and psychological growth.
“Piotrkowska Run”
For the 3rd year running, the Company sponsored (this time as title sponsor) the most famous
outdoor event in Poland, which takes the name of one of the main streets in Lódz.
Florence Fitness Festival
Indesit Company not only sponsored the Festival but invited the athletes to try out its washing
machines with the Special Shoes and Sport Indoors programmes.
Para-Olympics
The Brembate and None plants participated in this event as a new item on their social calendar. In
the case of Brembate, it was within the framework of wider reaching social activities.
In 2006, Indesit Company also sponsored: the Indesit women’s volleyball Champions League, the
Romanian Open Tennis tournament, the ATP tennis tournament in Sopot, Poland, Ball
Sponsorship at Carlton Football Club (one of the oldest and most prestigious Australian football
clubs), the Lódz Derby and the Indesit Cup (a mini- football competition organized with the
“National Chains Retailers” suppliers).
Art and Culture
International Camerimage Festival in Lódz
Indesit Company sponsored the 14th film festival and organized a film competition with home
appliances as prizes.
Edinburgh Film Festival
Indesit Company was one of the main sponsors in 2007.
Radio roadshow in Hungary
Indesit Company sponsored the country’s most famous roadshow, during which a caravan and an
electric car bearing the Indesit logo visited ten Hungarian cities, organizing in each one a draw with
a holiday and an Indesit On Time dishwasher as prizes.
Economy Festival, Trento
Indesit Company sponsored the first edition of this Festival, promoted by Trento’s city and
provincial administrations and Trento University and organized by “Il Sole 24 Ore” and Laterza, a
publisher. The Festival was an extremely useful forum for economists, politicians, sociologists,
business people, journalists and the public to look at current social and economic issues.
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The factory communicates. A hundred years of industry in Turin
This three-month exhibition featured major Turin enterprises and other internationally renowned
companies who invented new products and forms of advertising that helped define and export the
unmistakable “Made in Italy” style. Indesit Company exhibited a selection of Indesit and Scholtès
advertising campaigns, with photos from the archives of its plant in None (Turin) and Indesit products
from past and present.
Zaha Hadid
Indesit Company took its Scholtès products to the Zaha Hadid exhibition at the celebrated
Guggenheim Museum in New York. Zaha Hadid, the famous architect and Pritzker prize winner in
2004, was focusing on the kitchen environment in a project entitled “Z.Island by DuPontCorian”.
Presented during the 10th Milan Design Week in 2006, organized by DuPont in collaboration with
Ernestomeda and Scholtès, it proposed a highly innovative and functional kitchen.
Mandatory action
This is action required by law, regulations or contractual obligation and has a social impact, such as
the EU Directive 2002/96 on waste electrical and electronic equipment (WEEE) or the RoHS
Directive banning the use of pollutant substances in new appliances. For Indesit Company, such
obligations are also an opportunity to contribute to sustainable development.
Socially sustainable business initiatives
These activities are more closely linked to routine business but are also able to satisfy the expectations
of customers and the community in that they have a high social and environmental impact.
In 2006, Indesit Company launched research projects aiming to further limit the environmental
impact of products, as described in the section on “Environmental responsibility”.
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Environmental
responsibility
In its ongoing commitment to sustainability, the Group has built an environmental
culture that it increasingly shares with its stakeholders, being firmly convinced
that respect for the environment is not only a fundamental value but also a key
strategic factor in the competitiveness and sustainability of its business model.
Indesit Company plays a proactive role in today’s environmental scenario, every
year making choices that not only ensure strict compliance with environmental
legislation but also aim to develop advanced technological solutions that will make
products more and more eco-compatible.
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The success of certain “ecological” products that deliver real energy and water savings has
strengthened Indesit Company’s conviction that its promotion of environmental culture must go
beyond the Company’s functions and areas, which it must necessarily address, and be extended to all
external stakeholders, including clients, suppliers, investors and institutions.
Indesit Company’s focus on environmental problems can also be seen in its commitment to giving
all its plants a structured environmental management system with ISO 14001 certification.
The Company’s approach to environmental certification is based on a gradual process: the first plant
to be certified was Albacina in 2005, followed by Manisa (Turkey) in 2006, while Comunanza and
None (Italy) and the Lipetzk plants (Russia) are being certified in 2007. The Group plans to have all
its plants certified by 2009. This gradual approach makes it possible to develop an environmental
management system that’s tested, consolidated and perfected over time, is able to cover the Group’s
needs and can gradually be integrated with existing quality management systems. The UK plants
already adopt an environmental management system (EMS).
Environmental policy
Indesit Company promotes various initiatives and projects to guarantee respect for the environment
and meet the needs of stakeholders, which involves monitoring compliance with Company
environmental policy. In detail the Company:
• adopts the concept of sustainable development and considers the environment a strategic factor
for competitiveness; it complies with national and international environmental legislation and
co-operates with government agencies and public and private organizations engaged in
environmental protection;
• organizes programmes to reduce consumption of energy, raw materials, waste and pollutant
emissions and to minimize the environmental impact of products and production processes,
innovation research and logistics services;
• develops products on the basis of the entire life cycle, guaranteeing quality, reliability and safety,
and adopting “Design for Environment” strategies (collection, recycling and disposal of products
at the end of their life cycle);
• encourages research into new technologies and services for the home, to reduce consumption and
improve the quality of life;
• involves and informs all levels of the Company in support of lasting, sustainable development by
integrating environmental objectives in all business processes and functions;
• guarantees that working conditions and the workplace in general are safe, healthy and as
comfortable as possible;
• establishes relationships with suppliers that help them adopt responsible environmental policies
(also through joint initiatives);
• assesses environmental implications before launching a new product or plant project;
• communicates environmental policy, objectives and track record in a transparent annual CSR
Report.
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Plant environmental certification schedule
100%
65%
2009
2008
35%
2007
12%
2006
2005
6%
Organization
To integrate its management of environmental and energy issues, Indesit Company set up an
international technical affairs department to co-ordinate both legal compliance activities and
initiatives to raise awareness and improve performance.
Part of the department’s work in 2006 was to communicate sustainability culture both internally and
externally (also through corporate initiatives). Such work included:
• set up of CECED Italia (Italian association of domestic and professional appliance
manufacturers), of which Indesit Company was a founder member and the current chair;
• promotion of activities by ECODOM (Italian white goods makers waste disposal consortium),
which Indesit Company currently chairs. The consortium is one of the main interlocutors for the
trade and government in the field of WEEE;
• design of an instrument for assessing a home’s environmental “footprint”.
The “environmental footprint” tool is a simple test of certain domestic patterns (use of appliances,
recycling habits, use of water, etc.) that helps consumers assess their environmental performance at
home. The score system and related tips enable less well informed people to adopt good
environmental practice.
The tool was developed in parallel with a training programme in 2006 to spread sustainable growth
culture throughout the Group and will be available on the intranet and also distributed on Cd-rom.
In the last few years, new European legislation has made environmental management a strategic
factor. Two examples will suffice:
a) RoHS Directive: reduction in the use of hazardous substances in appliances. Indesit Company
acted in advance on this and represents best practice in the industry. Thanks to implementation
of new procedures and the creation of a web service shared with suppliers (Green Data Base),
Indesit Company production was fully “RoHS compliant” as of April 2006;
b) WEEE Directive: this obliges manufacturers to dispose of old products and impacts on the
design process, which must observe certain parameters; it also requires provisions to be made
in financial statements to cover the costs entirely down to the producer. Indesit Company is
a founder member of several consortiums managing the disposal of end-of-cycle products,
representing the response of top white goods makers to the need to stop polluting or
otherwise hazards substances being abandoned in the environment and maximize recovery
of materials to recycle.
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In 2006, Indesit Company launched a project to identify environmental Key Performance
Indicators (KPIs) to monitor the environmental impact of plants and define measurable targets
for improvement. The KPIs and related targets will be part of an assessment system used by plant
managers and will be monitored on a monthly basis as a management control activity.
Once again the Group chose maybe the longer but certainly the most effective approach,
involving everyone concerned (managers and environmental officers in all plants) will be
provided with measurement parameter and improvement plans. At the same time, the Group
started studying environmental indicators in other areas, such as product development,
commercial offices and logistics.
Indesit Company has invested heavily in the last two years in goods handling to optimize
transport loads. For example, in the last two years the Group has reduced shipment of fridges to
first level warehouses by 30%. Further, it is developing intermodal Italy-UK transport (the project
was nominated for the 2007 Marco Polo Awards), which will reduce road transport. It will cut
CO2 emissions per unit transported by increasing the use of rail as opposed to road. To this end,
all Indesit Company’s new logistics facilities have rail links. To date two thirds of all the Group’s
logistics centres have rail links.
Products
Eco-efficiency: the key factor for sustainable development
Products like fridges, washing machines and ovens generate 80% of their energy and environmental
impact when in the home. Product innovation - such as the development of products in class A+
and higher - delivers substantial environmental benefits. Just think: “voluntary” commitment and
investments in innovation in this area have already had the following results:
• washing machines sold in Europe today consume, on average, 44% less energy and 62% less
water than in 1985;
• fridges sold today consume 25% less energy, on average, than in 1990.
Upgrading of appliances is a major factor in the pursuit of sustainable development and reduced
energy consumption. Through direct action by its top management and indirectly through its
membership of various associations, Indesit Company works with Italian and European
institutions to explain to consumers how product innovation helps protect the environment. The
figures speak for themselves: for example, if the over 188 million appliances in use and over ten
years old in Europe were replaced with new models there would be a saving of 20 million tons of
CO2 a year, the equivalent of annual emissions by ten 500 MW power stations.
In addition to energy saving, upgrading of appliances would also save consumers money: the
running cost of a new fridge is €25/year, or €375 for its full 15-year life cycle, as opposed to
€100/year for a fridge bought in 1990, meaning a total cost of €1,500 over the same period.
Indesit Company design adopts “Design for Environment” principles and guidelines, as follows:
• select and use materials with low environmental impact;
• facilitate disassembly and recycling of components and materials;
• reduce the number of components and materials and product weight;
• reduce assembly-disassembly times and costs;
• use easily recyclable and reusable packaging;
• monitor and anticipate changes in environmental legislation;
• work with national and European industry associations to promote programmes to reduce
consumption and use of substances harmful to the environment.
Development of increasingly eco-efficient products obviously requires a considerable and constant
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responsibility 2006
commitment on the part of the Group to develop innovative new design tools. Eco-tool and Ecopoint are two examples. These two methodologies are now consolidated in Indesit Company’s
project development process and design work.
Eco-tool
Eco-tool helps designers fulfil their obligation to design environmentally compatible products that
are also in line with European legislation limiting production of waste and the use of substances
harmful to the environment.
Eco-tool is in five sections:
• ecodesign: design content for improving the environmental quality of products throughout
their life cycle;
• legislation: environmental laws, regulations and standards;
• R&D database: product environmental analysis data since 2000;
• materials: properties and characteristics of recycled materials;
• news: newsletter tracking new developments in environmental matters.
In 2006, in parallel with the updating of Eco-tool, training was provided for product R&D
personnel to reinforce sustainable development culture in Indesit’s design community.
Eco-point
Eco-point is a tool consisting of environmental indices developed in-house to measure product
recyclability. It helps designers track their environmental design decisions and assess results against
targets set by European legislation (WEEE). Eco-point indices are continually updated in step with
new developments in materials and recycling and disassembly techniques.
Such indices are qualitative and include the following:
• number and type of screws;
• disassembly operations requiring different components to be cut apart;
• irreversible joints between components made of different materials;
• number of types of material in a product;
• number of components in a product;
• plastic parts weighing over 50 g not marked with an ID symbol;
• non-recyclable materials;
• total weight of product.
Each of these parameters is given a score and the scores are aggregated to produce a product’s degree
of recoverability/recyclability, which can be used on either a total or partial basis to compare with
other appliances.
Use of disassembly and recycling indices enables Indesit Company to opt for domestic appliance
design solutions in line with its environmental policies and its CSR commitment in general.
In 2006, Eco-point was overhauled and compared with other tools on the market. The review
showed that it is reliable and no more reliable system was found on the market.
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Energy saving
Indesit Company’s manufacturing is based on platforms that allow a high degree of process
standardization. Product personalization is done in the final stages, so that both efficiency and
flexibility are achieved. The main product innovations, also from an environmental and energy
saving viewpoint, are generated by the introduction of new platforms (a cyclical process over the
years). 2005 saw the launch of the new 60 cm fridge platform based on design solutions that ushered
in a whole range of A+ and A++ class products with the lowest consumption levels in the industry.
In the 2004-2006 three-year period, the introduction of these super efficient models made it
possible to up the energy mix of sales of products in A class and higher by over 10%.
In 2006, 91% of dishwashers sold by the Group were in A class, up 13% on 2004; 57% of fridges sold
were in A class or higher (up 11% on 2004); and 96% of washing machines sold by Indesit Company
were in A class or higher (up 7% on 2004).
Significantly, new A class models are replacing products that are on average around 10 years old,
which means enormous benefits in terms of energy savings and CO2 emissions.
In 2006, the product that was the best advertisement for Indesit Company’s environmental
commitment to sustainable development was the Aqualtis, the washing machine that has gained
leadership in all the Group’s markets.
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Aqualtis: environmentally friendly innovation
Aqualtis is concrete proof of Indesit Company’s commitment to developing increasingly ecocompatible products. Designed using the most advanced innovation criteria, the Aqualtis is the first
standard size washing machine to offer large machine performance (up to 7.5 kg), and all this with
full respect for the environment. The Aqualtis’s particular strengths from an environmental
viewpoint, apart from being in energy class A+, are:
• the SuperEco system, which tells you when the programme set delivers a reduction in energy and
water consumption of up to 10%;
• the Mini Load function, providing optimum results in everyday washes even with small loads and
saving up to 25% water and 40% energy;
• the Super Silent system, which helps lower noise pollution levels;
• the exclusive OKO system, which delivers 100% utilization of detergent, guaranteeing high
performance with smaller quantities of detergent;
• a precision sensor ensures effective washing action with minimum consumption of water;
• the door-mounted detergent Dispenser, designed to prevent overdosing detergent.
Aqualtis was designed to Indesit Company most stringent eco-design criteria:
• nearly all the raw materials used in the product are recyclable, while the number of components
made with non-recyclable raw materials has been reduced (eg. counterweights);
• component packaging carefully designed to reduce the total volume of supplies;
• product packaging was redesigned to allow for higher density storage, thus optimizing storage
area and transport;
• special software for faster machine inspection, thus saving on various resources (energy, water,
space).
The Aqualtis was designed with strict regard for the provisions of the European WEEE Directive,
in terms of both rendering the product safe at the end of its life cycle and of product recycling targets
(potential recycling over 95%); it is also fully compliant with the European RoHS Directive.
Eco-advice from Indesit Company
Here are some examples of advice that Indesit Company gives consumers in instruction booklets
regarding energy and water saving when using home appliances:
FRIDGES/FREEZERS
• open appliance doors as briefly as possible when loading/removing food: every opening of the doors
causes an appreciable dispersion of energy;
• don’t put too much in the appliance: good food preservation requires free circulation of cool air,
otherwise the compressor will be working continuously;
• don’t put warm food in appliances, as it raises internal temperature and forces the compressor to
work overtime (very wasteful of energy);
• defrost whenever ice forms: a thick layer of ice slows down cooling of the food and increases
energy consumption;
• keep sealings clean and efficient so that they adhere properly to the doors and prevent cool air
escaping.
For further information, consult the Group’s brand websites.
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The Aqualtis was the first washing machine to pass the Australian Standard Tests with flying
colours, earning five stars in the Water Rating category. Thanks to its combination of all the most
advanced technologies and functions, it passed the tests conducted by the Vipac Engineers and
Scientists Laboratory in Melbourne (certified by NATA, National Association of Testing
Authorities), showing itself to be the washing machine best equipped to save water, a cause for
which the Australian government has been fighting for years. The Government’s awareness raising
campaign, in fact, offers incentives of between 150 and 200 Australian dollars for purchasers of
washing machines with at least four stars.
The Aqualtis won the 2006 Ecohitech Award 2006, the most important eco-compatible
technology/low energy consumption award in the environmentally friendly product category. The
Award was set up in 1998 and is organized by EcoQual'It, a consortium under the aegis of the
Environment Ministry and the WWF.
It also won the German Plus X award in the “Ease of use” and “Ecology” categories. The jury is made
up of German journalists and technology experts.
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Indesit Company’s environmental commitment is not a recent thing however: in 2000 the Company
received a Galaxy Energy Award for excellence in energy efficiency; in 2002 it won its first
Ecohitech Award for environmentally friendly technological development; in 2005, it won the
coveted German Plus X Award for technological innovation and respect for the environment (with
the Touch Control oven); in 2005, it took a UK Home Innovation Award for technological
innovation and respect for the environment (Ariston’s Experience drawer fridge and oven) and the
Extendia line fridge was given a Grand Prix de l’Innovation. Further, in 2006 Indesit Company won
a “Sentinel Business Award” in the environmental business category, a Stafford Borough Council
“Green Award” and a “Staffordshire Green Award”.
Environmental information
Indesit Company considers it vitally important to raise consumer awareness of proper use of home
appliances, given that their use is the part of their life cycle with the biggest environmental impact.
In this light, the Group backs up its awareness raising and educational initiatives with information
in instruction booklets accompanying products and in special sections of the website.
OVENS AND HOBS
• keep sealings clean and efficient so that they adhere properly to the doors and prevent heat escaping;
• always do “grill”, ”barbecue” and “gratin” cooking with the door closed, which gives better results and
appreciable energy savings (around 10%);
• using the oven between late afternoon and the early hours of the morning helps reduce the load
on power utilities. Options like “delayed cooking” and “delayed automatic cleaning” make this
easier to organize.
For further information, consult the Group’s brand websites.
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responsibility 2006
Innovation and technology
Indesit Company has always considered innovation key to technological development, creation of
value for stakeholders and achievement of environmentally sustainable growth. In Indesit
Company, innovation is a culture shared by all areas of the organization. With a focus on consumer
needs and respect for the environment, Indesit Company designers develop appliances that ensure
top performance thanks to intuitive technology that’s immediately simple to use.
The main characteristics of Indesit Company’s innovation model are fast decision making and lean
organization, which makes it possible on one hand to adjust promptly to market needs and on the
other to rapidly exploit opportunities from the world of research and technology, transforming
them into new product functions and performance levels.
This “open innovation” model is based on a wide-reaching network of major universities, suppliers,
producers of appliance-related goods and products (eg. detergents and fabrics) and companies in
other industries, with whom partnership relationships are established during the conceptual design
and development phases.
Innovation in Indesit Company may be summarized as follows:
• medium to long term: from two to five years;
• cross-product: development of technologies applicable across different product lines (maximizing
results and returns on investments) is a priority;
• consumer oriented: customer satisfaction is the main criterion;
• people & knowledge based: people are the main resource in developing the innovation process;
• innovation as company culture: innovation is part of the company’s culture, which has always
been open to new ideas and change.
Innovation in Indesit Company regards the entire life cycle of its products (production, use and
disposal), though efforts are concentrated mainly on the utilization phase, which has the most
impact on environmental resources (up to 80% of the total).
The main drivers in the development of innovation projects are:
• improvement of primary functions (food preservation, cooking, washing): addition to the
traditional performance parameters, a lot of effort goes into reducing noise, not only in absolute
terms but also as perceived “quality of noise”, which is measured with specially developed indices;
DISHWASHERS
• select the right programme for the type of dishes and degree of dirt after consulting the programme
table (eg. “eco-programme”, with low water and energy consumption for normally dirty dishes; “half
load” for smaller amounts to wash);
• if your electricity provider has energy saving time bands, wash the dishes in these low-tariff periods;
“delayed start” functions help organize this;
• it’s advisable to use detergents without phosphates or chlorine, as they are less harmful to the
environment;
• to avoid waste, measure out detergent exactly as recommended by the producer, according to the
hardness of the water, the degree of dirt and the quantity of dishes.
For further information, consult the Group’s brand websites.
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• design, ergonomics and ease of use: design at Indesit Company has reached publicly
acclaimed levels of excellence, a success driven by constant research and development of new
materials and technologies capable of giving products new functions, forms and aesthetic
effects. Ease of use is highly important and the Company strives to make its appliances
increasingly simple and intuitive to use. Further, the projects Indesit Company is investing in
will also make products easier to use for people with handicaps and the elderly;
• environmental sustainability: much has been done in recent years to develop high energy
efficiency products; in addition to traditional ongoing improvements, new technologies and
product configurations are being studied to make appliances more flexible during use;
examples include new sensors and programmes in washing machines to use only the amount
of resources (water, detergent and electricity) needed to do the job, innovative solutions to
improve food preservation, such as cooling in a vacuum and ionizing air, and the development
of fridges with modular compartments (so you only use/cool the space you really need).
Further, research isn’t only product oriented; it also aims to improve the overall energy
performance of a system. In 2006, Indesit Company launched a project to develop a technology
enabling appliances to adapt to grid load conditions, which could help limit the growth in CO2
emissions.
In 2006, the innovation and technology department started up the “Energy” project to establish
a constant focus on reducing energy consumption in every phase of a product’s life cycle. This
drive may also involve developing long-term innovation projects.
Parallel to product innovation, much effort is going into methodological innovation to improve
the efficiency and efficacy of new product design and development. Advanced methodologies
that have been developed and used to date include:
• “touch and feel” perceived quality indices: an innovative way to measure perception of product
quality that correlates objectively measurable physical quantities with a user’s subjective
perceptions. This can be used to optimize product development and investments and maximize
customer satisfaction and was first applied in the new Hotpoint-Ariston washing machines;
WASHING MACHINES
• a washing machine should be used with a full load so as not to waste resources: a full load instead
of two half loads saves up to 50% in energy;
• pre-washing is only necessary for very dirty laundry: avoiding this will save detergent, time, water
and from 5% to 15% energy;
• using stain removers or leaving things to soak before washing reduces the need to wash at high
temperatures: a 60 °C programme instead of a 90 °C one or a 40 °C programme instead of a 60 °C
one can save up to 50% in energy;
• if the laundry has to be dried in a dryer afterwards, choose a high spin speed: the less water left in
the laundry, the more time and energy can be saved during the drying programme;
• dose detergent on the basis of the hardness of the water, the degree of dirt and the amount of laundry
to avoid waste and safeguard the environment.
For further information, consult the Group’s brand websites.
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responsibility 2006
• Computer Assisted Engineering (CAE): advanced applications software provide aesthetic,
functional and performance testing of products in the “intangible” phase of product development,
things that used to be done experimentally on tangible prototypes. This cuts time to market,
improves quality and contains costs, whilst making it possible to give clients new products
increasingly in line with their expectations in terms of content, performance and style.
Indesit Company’s investments in innovation are safeguarded by careful management of industrial
property. Patents are the main instrument with which to protect and valorize the results of research
work and innovation, compete with rivals’ innovations and help boost international standing. A
company’s patents portfolio is an intangible asset contributing to its net worth. This being the case,
the innovation and technology department created an intellectual property management function
to ensure protection of inventions produced within the Group and sharpen competitive edge.
In 2006, Indesit Company filed 35 applications for patents and ornamental models, up 20% on 2005
(27). It holds over 850 patents, most of which at European and world level.
Production
Information reported hereinafter are referred to the main manufacturing plants of Indesit
Company.
Materials
Consumption of raw materials in 2006 was up on 2005 (from 581,000 to 622,000 tons) due to
increased production.
Materials used
(tons)
Auxiliary material used
(tons)
2006
2006
Ferrous metals
Non-ferrous metals
40%
6%
Paints
Enamels & additives 48%
Plastics
25%
Lubricant oils
Other materials
28%
Gases
Other materials
82
7%
20%
6%
19%
Consumption of auxiliary materials (paints, additives, enamels, lubricants and other materials)
rose as a whole (from 36,543 t in 2005 to 37,640 t in 2006), though there was a substantial
reduction in the use of paints (2,574 t against 3,787 t in 2005) following the Group’s decision to
replace liquid paints with powder-based products. This replacement will be complete by the end
of 2007. Thanks to the absence of solvents and the possibility of re-using nearly 100% of the
overspray that forms in the painting process, this technology is ideal in terms of the relevant
environmental sustainability parameters.
As mentioned, Indesit Company runs periodical tests to optimize the manufacturing process and
find better ways to use recycled materials. Further, since the WEEE Directive came into force the
Group has been jointly responsible for the product recovery process along with the various
consortiums it is part of.
The recycling potential of the Group’s production is over 80%. The process of complying with the
RoHS Directive is based on enlisting all suppliers and all Company functions in a mandatory
auditing system. The online Green Data Base proved vitally important for ensuring traceability for
the conformity process, which covers thousands of components and obviously finished products.
Water consumption
Following action taken in 2003 and 2004 to improve efficiency, consumption of water is now more
or less stable, moving from around 2,286 thousand m3 in 2005 to 2,486 thousand m3 in 2006. 87%
of the water used is taken from wells or surface water and 12% from mains. Effluents rose
accordingly, from 2,155 thousand to 2,432 thousand m3.
Energy
Energy consumption in 2006 was around 2 million GJ, in line with the increase in production with
respect to 2005. However, the energy mix improved in terms of eco-efficiency, as shown by the
reduction in total CO2 emissions. Between 2005 and 2006, the Group cut its fuel oil consumption
by over 20%, thanks to conversion of one of the Group’s plants to methane.
Energy consumption
2005
2006
Electrical energy (MWh)
222,268
221,702
Thermal energy (MWh)
44,454
131,073
21,149,156
20,020,093
471,478
716,250
2,020,620
398,963
Natural gas (m )
3
LPG (l)
Oil (l)
Waste
In 2006, Indesit Company’s operations generated around 67,000 tons of waste, down around 10%
on 2005. Input and output data and a breakdown of waste disposal are given overleaf:
83
responsibility 2006
Main environmental data
2005
2006
581,119
622,018
36,543
37,640
Energy consumed (GJ)
1,865,832
2,081,312
Water consumed (m )
2,286,036
2,486,701
INPUT
Materials used (t)
Auxiliary materials used (t)
3
OUTPUT
Total number of products (thousands)
13,470
14,419
Waste (t)
71,531
67,147
2,155,327
2,432,450
157,764
153,020
Effluents (m3)
CO2 emissions (t)
*
* DEC/RAS/854/05, Ministry of the Environment and Territorial Protection and Ministry of Production Activities;
International Energy Agency Data Services, 2006.
Destination
of wastes produced
2006
Recycled
81%
Landfill
16%
Waste to energy
84
3%
Energy consumption per unit
(GJ/unit)
CO2 emission per unit
(kg/unit)
11.712
0.144
0.142
0.139
10.834
Wastes produced per unit
(kg/unit)
2006
2005
2004
2006
2005
2004
10.612
Water consumption per unit
(m3/unit)
5.373
5.310
0.172
0.170
0.170
2006
2005
2004
2006
2005
2004
4.657
85
glossary
responsibility 2006
Accident frequency index (AFI)
Number of accidents recorded per million hours worked.
Accident seriousness index (ASI)
Number of days absence caused by accident per thousand hours worked.
Clean technologies
New industrial processes or modifications to existing ones whose aim is to reduce environmental
impact and the consumption of energy and raw materials.
CO2
Carbon dioxide, a gas produced by all combustion processes involving fuels and fossil fuels, as
well as by natural processes. It contributes to the formation of the greenhouse effect.
Customer satisfaction
Customers’ perception and expectations regarding a service or product.
Decree law 231
Decree law 231 (08/06/2001) introduced administrative liability (but in practice penal) for
companies if their directors, managers or other employees commit offences against the public
administration (corruption, extortion, etc.) or business irregularities (eg. false accounting) in the
interests or to the advantage of the company.
Eco-efficiency
Eco-efficiency is achieved by providing competitively priced products and services that satisfy human
needs and raise the quality of life at the same time as progressively reducing ecological impact and the
use of natural resources during the life cycle of the product to a level in line with the earth’s carrying
capacity. World Business Council for Sustainable Development.
Energy label
Label supplying information on the characteristics and energy consumption of an electrical
appliance.
Environmental impact
Any fact that may cause a modification to the environment, whether negative or positive, total or
partial, arising from the activities, products or services of an organization.
Environmental management system (EMS)
The parts of a general management system, including organizational structures, planning,
procedures, processes and resources, needed to define, implement, review and maintain an
environmental policy.
Environmental monitoring
Ongoing measurement of characteristic environmental parameters.
86
Environmental policy
Declaration by an organization of its intentions and principles in relation to its global
environmental performance providing a framework for environmental activities and definition of
relative objectives and targets.
Global Reporting Initiative (GRI)
Launched in 1997 by UNEP and CERES (Coalition for Environmentally Responsible Economies)
to develop a system of “sustainability reporting” for companies wishing to voluntarily publish
their performance in economic, social and environmental fields.
Life cycle analysis (LCA)
Methodology for assessing the overall environmental impact of a product by taking into account
its entire life cycle, from extraction and processing of raw materials, to production processes,
transport, distribution, use, recycling and re-use and final disposal.
Stakeholders
All identifiable individuals or groups who may influence the success of an enterprise or who have
an interest at stake in the business decisions of that enterprise, viz. shareholders, clients, suppliers
and public institutions in the first place but also competitors, local communities, pressure groups
and mass media. (Freeman, 1994).
Sustainable development
Development that satisfies the needs of present generations without compromising the capacity
of future generations to satisfy their needs. (Bruntland Report).
UNI EN ISO 9001
The standard specifying quality management system requisites with which companies must
comply in order to demonstrate their capacity to supply products that satisfy clients’ requirements
and the provisions of law, regulations, directives and mandatory requisites in general.
UNI EN ISO 14001
The standard specifying environmental management system requisites that enables companies to
develop and implement policies in line with the law and other prescriptions binding on the
company.
87
GRI index
responsibility 2006
Indesit Company’s GRI/G3 application level is B.
2002
C
In accordance
C+
B
B+
A
A+
Optional
Third Party Checked
GRI Checked
Report Externally Assured
Self Declared
Report Externally Assured
Report Externally Assured
Mandatory
Declaration of the application level enables an organization to clearly indicate the GRI Reporting Framework elements
it uses in drafting reports. There are three levels (C, B and A), the reporting criteria at each level reflecting the extent
to which the GRI Reporting Framework is being applied or treated. B is the intermediate application level.
All the Core indicators (C) are listed below, whereas the Additional indicators (A) are only included if they actually
appear in the Report.
d
D
= no
= yes
B
= partial
n.a. = not applicable
CG = 2006 Corporate Governance Report
AR = 2006 Annual Report
These documents may be found on www.indesitcompany.com.
GRI CODE
INDICATOR
REPORTING LEVEL
PAGE
1.
STRATEGY AND ANALYSIS
1.1
Statement from the organization about the relevance of sustainability to the organization and its strategy.
1.2
Description of key impacts, risks, and opportunities.
2.
PROFILE OF THE ORGANIZATION
2.1
Name of the organization.
2.2
Primary brands, products, and/or services.
2.3
Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures.
2.4
Location of organization's headquarters.
2.5
Number of countries where the organization operates, and names of countries with either major operations or that are specifically
relevant to the sustainability issues covered in the report.
Nature of ownership and legal form.
D
D
39, 49
2.6
2.7
Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries).
D
6, 49
2.8
Scale of the reporting organization, including: number of employees; net sales (for private sector organizations) or net
revenues (for public sector organizations); total capitalization broken down in terms of debt and equity (for private sector
organizations); and quantity of products or services provided.
D
33, 38
88
D
B
D
D
D
D
8, 12, 20
19, 21, 30
5
52
11
11
11, 57
GRI CODE
INDICATOR
REPORTING LEVEL
PAGE
2.9
Significant changes during the reporting period regarding size, structure, or ownership.
n.a.
2.10
Awards received in the reporting period.
D
15, 37, 53, 79
3.
REPORT STANDARDS
2
92
3.1
Reporting period (eg., fiscal/calendar year) for information provided.
3.2
Date of most recent previous report.
3.3
Reporting cycle (annual, biennial, etc.).
3.4
Contact point for questions regarding the report or its contents.
D
D
D
D
3.5
Process for defining report content, including: determining materiality; prioritizing topics within the report;
and identifying stakeholders the organization expects to use the report.
D
2, 20, 28, 30, 59
3.6
Boundary of the report (eg., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers) according
to GRI Boundary Protocol.
3, 11
3.7
State any specific limitations on the scope or boundary of the report.
D
D
3.8
Information on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly
affect comparability from period to period and/or between organizations.
n.a.
3.9
Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations
applied to the compilation of the indicators and other information in the report.
D
3.10
Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement
(eg., mergers/acquisitions, change of base years/periods, nature of business, measurement methods).
n.a.
3.11
Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report.
n.a.
3.12
Table identifying the location of the Standard Disclosures in the report. Identify the page nos. or web links where they can be found.
D
3.13
Policy and current practice with regard to seeking external assurance for the report. If not included in the assurance report
accompanying the sustainability report, explain the scope and basis of any external assurance provided. Also explain
the relationship between the reporting organization and the assurance provider(s).
d
2
2
3
2
88
4.
GOVERNANCE, COMMITMENT, ENGAGEMENT
4.1
Governance structure of the organization, including committees under the highest governance body responsible for specific tasks,
such as setting strategy or organizational oversight. Describe the mandate and composition (including number of independent
members and/or non-executive members) of such committees and indicate any direct responsibility for economic, social,
and environmental performance.
D
16, CG
4.2
Indicate whether the Chair of the highest governance body is also an executive officer (and, if so, their function within
the organization's management and the reasons for this arrangement).
D
CG
4.3
For organizations that have a unitary board structure, state the number of members of the highest governance body that are
independent and/or non-executive members. State how the organization defines “independent” and “non-executive”.
D
16, CG
4.4
Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body. (The use of
shareholder resolutions or other mechanisms for enabling minority shareholders to express opinions to the highest governance body).
D
56, CG
4.5
Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure
arrangements), and the organization's performance (including social and environmental performance).
42, CG
4.6
Processes in place for the highest governance body to ensure conflicts of interest are avoided.
D
D
4.7
Process for determining the qualifications and expertise of the members of the highest governance body for guiding
the organization's strategy on economic, environmental, and social topics.
D
CG
4.8
Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental,
and social performance and the status of their implementation. Explain the degree to which these: * Are applied across
the organization in different regions and department/units; and * Relate to internationally agreed standards.
B
6, 8, 20
Procedures of the highest governance body for overseeing the organization's identification and management of economic,
environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally
agreed standards, codes of conduct, and principles.
B
19, 21
21, 75
4.9
17, CG
4.10
Processes for evaluating the highest governance body's own performance, particularly with respect to economic, environmental,
and social performance.
4.11
Explanation of whether and how the precautionary approach or principle is addressed by the organization.
B
D
4.12
Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization
subscribes or endorses.
D
8
4.13
Memberships in associations (such as industry associations) and/or national/international advocacy organizations in which
the organization: * has positions in governance bodies; * participates in projects or committees; * provides substantive funding
beyond routine membership dues; or * views membership as strategic.
D
74
89
responsibility 2006
GRI CODE
INDICATOR
REPORTING LEVEL
PAGE
26
Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.
D
D
B
Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded
to those key topics and concerns, including through its reporting.
B
28-30, 50, 54, 59
4.14
List of stakeholder groups engaged by the organization.
4.15
Basis for identification and selection of stakeholders with whom to engage.
4.16
4.17
28
28
ECONOMIC PERFORMANCE INDICATORS
C
D, M
A, EC
Economic: Management Approach Disclosure.
D
32, AR
C
EC 1
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.
D
34
C
EC 2
Financial implications and other risks and opportunities for the organization's activities due to climate change.
n.a.
C
EC 3
Coverage of the organization's defined benefit plan obligations.
C
EC 4
Significant financial assistance received from government.
C
EC 6
Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation.
C
EC 7
Procedures for local hiring and proportion of senior management hired from the local community at significant locations of operation.
D
D
D
B
38, 39
C
EC 8
Development and impact of infrastructure investments and services provided primarily for public benefit through commercial,
in-kind, or pro bono engagement.
D
65
C
DM, A
EN
Environmental: Management Approach Disclosure.
D
72
C
EN 1
Materials used by weight or volume.
82
C
EN 2
Percentage of materials used that are recycled input materials.
D
d
C
EN 3
Direct energy consumption by primary energy source.
83
C
EN 4
Indirect energy consumption by primary source.
D
d
A
EN 6
Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements
as a result of these initiatives.
75-77
AR
34
60
ENVIRONMENTAL PERFORMANCE INDICATORS
C
EN 8
Total water withdrawal by source.
D
D
C
EN 11
Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value
outside protected areas.
n.a.
C
EN 12
Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high
biodiversity value outside protected areas.
n.a.
C
EN 16
Total direct and indirect greenhouse gas emissions by weight.
C
EN 17
Other relevant indirect greenhouse gas emissions by weight.
A
EN 18
Initiatives to reduce greenhouse gas emissions and reductions achieved.
C
EN 19
Emissions of ozone-depleting substances by weight.
C
EN 20
NOx, SOx, and other significant air emissions by type and weight.
C
EN 21
Total water discharge by quality and destination.
C
EN 22
Total weight of waste by type and disposal method.
D
d
B
d
d
D
B
C
EN 23
Total number and volume of significant spills.
n.a.
C
EN 26
Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation.
C
EN 27
Percentage of products sold and their packaging materials that are reclaimed by category.
B
d
C
EN 28
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental
laws and regulations.
d
90
83
84
83
83
84
75-77
GRI CODE
INDICATOR
REPORTING LEVEL
PAGE
SOCIAL PERFORMANCE INDICATORS
C
DM, A
LA
Labour Practices: Management Approach Disclosure.
D
37, 40, 42
C
LA 1
Total workforce by employment type, employment contract, and region.
39
C
LA 2
Total number and rate of employee turnover by age group, gender, and region.
C
LA 4
Percentage of employees covered by collective bargaining agreements.
C
LA 5
Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements.
C
LA 7
Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region.
D
D
D
B
D
C
LA 8
Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families,
or community members regarding serious diseases.
LA 9
Health and safety topics covered in formal agreements with trade unions.
C
LA 10
Average hours of training per year per employee by employee category.
D
D
B
43
A
A
LA 11
Programs for skills management and lifelong learning that support the continued employability of employees and assist them
in managing career endings.
D
41, 42
C
LA 13
Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group
membership, and other indicators of diversity.
16, 38
C
LA 14
Ratio of basic salary of men to women by employee category.
C
DM, A
HR
Human Rights: Management Approach Disclosure.
D
d
D
C
HR 1
Percentage and total number of significant investment agreements that include human rights clauses or that have undergone
human rights screening.
C
HR 2
Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken.
C
HR 4
C
38
44
44
43
43
41
20, 44, 46, 60
44
Total number of incidents of discrimination and actions taken.
B
B
d
HR 5
Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk,
and actions taken to support these rights.
D
44
C
HR 6
Operations identified as having significant risk for incidents of child labor, and measures taken to contribute to the elimination
of child labor.
D
44
C
HR 7
Operations identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to
the elimination of forced or compulsory labor.
n.a.
C
DM, A
SO
Society: Management Approach Disclosure.
D
7, 8, 19, 20
C
SO 1
Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities,
including entering, operating, and exiting.
64
C
SO 2
Percentage and total number of business units analyzed for risks related to corruption.
D
D
C
SO 3
Percentage of employees trained in organization's anti-corruption policies and procedures.
19
C
SO 4
Actions taken in response to incidents of corruption.
C
SO 5
Public policy positions and participation in public policy development and lobbying.
C
SO 8
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations.
C
DM, A
PR
Product responsibility: Management Approach Disclosure.
B
d
D
B
D
7, 8, 20, 54
C
PR 1
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.
B
50
C
PR 3
Type of product and service information required by procedures, and percentage of significant products and services subject
to such information requirements.
PR 5
Practices related to customer satisfaction, including results of surveys measuring customer satisfaction.
B
D
78
A
C
PR 6
Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising,
promotion, and sponsorship.
B
19
C
PR 9
Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use
of products and services.
d
62
19
73
47, 60
54
91
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