Sustainovate progress report 2020 - Husqvarna Group

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Sustainovate progress report 2020 - Husqvarna Group
Sustainovate progress report 2020
Sustainovate progress report 2020 - Husqvarna Group
Key data

                            Chapter 1/
                                                                                                                                                          Operating margin excluding items
                                                                                                                                                           affecting comparability, % (7.9)

                                                                                                                                                            12,374 Average number
                            Husqvarna Group is a leading global producer of                                                                                     of employees (12,708)

                            outdoor power products for forest, park and
                            garden care, watering products as well as cutting
                            and surface preparation equipment for the                                                                                      Operating income excluding items
                                                                                                                                                         affecting comparability, SEKm (3,241)
                            construction business. Our strong technical
                            expertise and passion for innovation and quality
                            create performance, pride, and improved results                                                                                     -52%
                                                                                                                                                               CO2 emissions intensity
                            for customers.

                                                                                                                                                               Net sales, SEKm (42,277)

                                            INTRODUCTION               SUSTAINOVATE PERFORMANCE                 INTEGRATING SUSTAINABILITY               UNDERSTANDING IMPACTS
                                            3 Husqvarna Group          Carbon                                   30 Engaged teams                         41 Business model
                                            4 Sustainovate             10  Climate smart,  fit for the future   32 Responsible sourcing                  43 Our most relevant issues
                                            5 CEO statement            12	 The shift to low-carbon products    33 Safety net                            44 Impacts along the value chain
                                            6 A changing world         16  Operational efficiencies            35 Safety at the heart of all products
                                            7 The COVID game changer   17 Supplier CO2 impacts                  36 A foundation of integrity             ABOUT THIS REPORT
                                            8 The value we create      18 From air to sea, road and rail        37 Managing risks                        47 GRI Index
                                                                       Circular                                 38 Climate change risks                  49 GRI Disclosures
                                                                       19 Why we’re thinking in circles         39 Turning Sustainovate into reality     53 Auditor’s report
                                                                       23  Influencing actions that matter
                                                                       2020 targets
                                                                       27 Closing the books on 2020 targets
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Sustainovate progress report 2020 - Husqvarna Group
Our divisions

                                                                                                                                                                                                      Introduction –– Husqvarna Group
                                                                                                                                                   Our core purpose
                                                          Husqvarna                            A leader in forest and
                                                                                                                                                   Passion for innovation is what defines us.
                                                                                               garden products. The
                                                                                               undisputed market                                   It’s in our DNA and part of our long history

                                                                                               leader in robotic lawn                              and heritage. It is what has shaped our com-
                                                                                                                                                   pany into what it is today. It has also become a
                                                                                                                                                   vital part in our work towards a sustainable
                                                                                                                                                   future. We leverage technology to turn
                                                                                                                                                   opportunities into value for our customers.
                                                          Share of Group net sales                                                                 Through our purpose we deliver on our vision.

                                                                                                                                                   Our vision
                                                          Gardena                               A leader in watering
                                                                                                products, garden                                   Shaping great experiences is what
                                                                                                hand tools and smart                               drives us forward. It is our inspiration.

                                                                                                garden systems.                                    We are proud to be leaders in sustainable,
                                                                                                                                                   user-centered solutions. Through our prod-
                                                                                                                                                   ucts and services, we partner to shape the
                                                                                                                                                   green spaces and urban environments of
                                                          Share of Group net sales                                                                 today and of tomorrow.

                                                                                                                                                   Our key behaviors
                                                                                                                                                   It starts with me—take ownership
                                                          Construction                         A leader in light con-                              and ask myself: What can I do?
                                                                                               struction products for
                                                                                                                                                   •   Seek customers’ point of view in all

                                                                                                                                                       meetings and decisions
                                                                                                                                                   •   Demonstrate collaboration by giving
                                                                                                                                                       and seeking support
                                                                                                                                                   •   Maintain focus and simplicity.
                                                          Share of Group net sales

3 / Sustainovate Progress Report 2020 / Husqvarna Group                              The divisions’ share of Group net sales add up to less than 100 percent due to other Group items.
Sustainovate progress report 2020 - Husqvarna Group
Introduction –– Sustainovate 2025
                                                                        Carbon                            Circular                          People
      The second chapter of Sustainovate has begun.
      The Group has set new, bolder targets that align
      and strengthen the 2025 business strategy and                    Drive the transition to        Rethink and redesign for a         Inspire actions that make
      underline how the sustainability agenda is busi-                 low-carbon solutions           resource-smart customer               a lasting difference
      ness critical. Going from five challenges to three                                                     experience
      opportunities, Sustainovate to 2025 is designed
                                                                                                                                         By 2025, we will empower
      to maximize our contribution to tackling climate               By 2025, we’ll reduce our
                                                                                                        By 2025, we’ll launch            5 million customers and
      change and resource scarcity. Together, they will             absolute CO2 emissions by
                                                                                                       50 circular innovations.**           colleagues to make
      drive the Group’s ambitions to lead the industry             35% across our value chain.*
                                                                                                                                           sustainable choices.**
      in the shift to a low-carbon, resource-smart economy.
                                                                 * Compared to 2015.              * * We will begin reporting in 2021.
      For more information on 2020 target outcomes, see p. 27.

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Sustainovate progress report 2020 - Husqvarna Group

                                                                                                                                                                                    Introduction –– CEO
      Henric Andersson – President and CEO

      Delivering transformation
      As a market leader, we aim to lead                  supplier target. Even more importantly, we          that we are on track for the 35 percent
                                                          realized our intention to integrate sus-            reduction. During 2021, as we follow market
      action to address climate change
                                                          tainability deeper into our business and to         development of the Covid-19 pandemic, we
      and resource scarcity in our industry.              engage more people in the organization.             will follow the trajectory and, if necessary,
      Society needs to shift to a low-                    Now, a number of these Sustainovate chal-           revisit the target to align with our climate
                                                          lenges are taking on more operational roles.        leadership ambition.
      carbon, circular economy now more
                                                             The most outstanding outcome during                 In Sustainovate’s People opportunity we
      than ever. Every business has a role                the year was in carbon emissions, where we          want to encourage and enable people to
      to play.                                            far exceeded the intention we set in 2015.          make sustainable choices. This applies to
                                                          Especially in the last three years of the tar-      external stakeholders but also to our corp-
                                                          get, we have shown that we can grow our             orate culture. Our Diversity & Inclusion pro-
      Our passion for sustainable innovation              business, but not at the expense of our com-        gram will continue to build on our commit-
      With Sustainovate, we are combining our             mitment to contribute to limiting a global          ment.
      leading innovation capability with our com-         temperature rise to 1.5°C.                             Although I have been with the Group for
      mitment to sustainability. Sustainability is an                                                         quite some time, this is my first year as CEO
      integral part of everything we do and of            Looking ahead                                       of Husqvarna Group. The commitment to
      shaping great experiences when people use           The second chapter of Sustainovate                  the UN Global Compact and its ten prin-
      our products and services or interact with us.      addresses three opportunities — Carbon,             ciples that we made some twenty years ago
         Thanks to an ever-increasing focus on            Circular and People — through to 2025. We           will continue to serve as the foundation of
      battery products, robotic mowers, and digi-         will begin to report on progress on two of          how we conduct business across our value
      tal services we are delivering the resource-        their targets next year. Carbon, however, is an     chain.
      smart, low-carbon solutions that our cus-           extension of what we started in 2015.
      tomers increasingly seek. These are also            We are committing to an absolute carbon             Transforming our industry
      largely the areas where we are growing our          reduction of 35 percent.                            Our 2020 performance showed what we are
      business. Electric-powered and robotics                 This revised target is an ambitious one,        capable of, and Covid-19 testified to the
      products now account for 33 percent of our          and primarily reflects growth of battery and        resilience of our organization. The pan-
      motorized offering. That is a remarkable            robotics products over a ten-year period. As        demic deepened our understanding of the
      achievement from 11 percent in 2015.                we have learned from tracking the target’s          need to work together to tackle shared chal-
                                                          first five years, results can rise and fall year-   lenges. It also made it clear how we can
      Closing the books on 2020                           on-year. In 2020, with a 32 percent absolute        adapt to challenges, which is vital as we
      The first phase of Sustainovate encom-              reduction, we took a big leap forward to            address climate change.
      passed five challenges to 2020 and I am             achieving the target, but we can’t rest on our         We are determined to spearhead the
      proud to present the results in this report.        laurels. Taking into account the effects of         transformation of our industry and to deliver   Henric Andersson
      We achieved four of five targets and were           2020 performance and likely rebound                 on Sustainovate 2025.                           – President and CEO
      close to realizing the remaining one; our           effects in 2021 and beyond, we estimate

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Sustainovate progress report 2020 - Husqvarna Group
Introduction –– Megatrends
      A changing world
      The impacts of climate change, demographic shifts and competition for
      scarce resources are affecting society at large and are redefining the way
      companies deliver value. These trends and drivers are critical to executing
      our strategy to 2025.

                                                                                                                SHIFTING CONSUMER
                                                                                                                VALUES AND                                         URBANIZATION
          THE ENERGY                                          SPEED OF                                          PURCHASING                                         AND NEW
          TRANSFORMATION                                      TECHNOLOGY                                        BEHAVIOR                                           CUSTOMER GROUPS

      The urgency of addressing climate change            Digitalization is transforming how products       By 2030, global middle-class spending is          Cities, in particular, are driving the sus-
      makes low-carbon solutions a growing prio-          are developed, sold, used, serviced and           projected to triple. Sustainability values,       tainability agenda. By 2030, two thirds of the
      rity for customers and regulators. Mean-            shared. Digital offers, such as smart garden      individualism, personal expression, ease of       population will live in cities. Europe and
      while, technological improvements are ena-          solutions and fleet-management systems            use and affordability all have an impact on       North America will have more over-55s than
      bling viable and affordable energy storage.         for commercial users, position us to deliver      purchasing decisions.                             under-18s.
      This creates opportunities to leverage              more efficient services, consume fewer
      renewable electricity.                              resources and extend product life.

      Sustainability opportunities and risks              Sustainability opportunities and risks            Sustainability opportunities and risks            Sustainability opportunities and risks
      •   Products that go beyond fuel-efficiency         •   Analyzing data from devices and robotic       •   Growing emphasis on sharing products          •   More green spaces are needed as cities
          standards give us a competitive advan-              technology delivers greater customer              instead of owning them provides oppor-            expand. For us, this creates openings in
          tage.                                               insight, helps us develop product features        tunities for circular business models.            public sector procurement and connecting
      •   Battery technologies and the rise in the            that enhance productivity, efficiency and     •   Stakeholders expect us to meet high               urbanites with nature through gardening.
          share of renewables in the electricity grid         safety. Digitalization also enables product       human rights and environmental stan-          •   Changing customer demographics create
          help consumers and professionals shift to           sharing.                                          dards, especially in the supply chain.            scope for innovation in ergonomics and
          renewable energy.                               •   Digitalized manufacturing and product         •   Growth in emerging markets, many of               building safety.
      •   Growth opportunities for battery and                development raise quality, shorten time to        which rely on fossil-fuel energy, may nega-   •   Urban spread into green zones puts pres-
          electric solutions and robotics.                    market and make factories and work-               tively impact our carbon footprint.               sure on biodiversity. We can raise aware-
                                                              places more energy-efficient.                                                                       ness on how consumers can protect living
      •   Along with increased use of lithium ion                                                           •   The shift to e-commerce changes sales
          battery, we need greater transparency           •   Cyber and other threats to security have a        channels and may increase our transpor-           things and can ensure that our products
          and action on human rights and environ-             growing impact on business operations             tation CO2 from online sales.                     do not adversely affect local biodiversity.
          mental risks along the value chain.                 and customers’ privacy.

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Sustainovate progress report 2020 - Husqvarna Group

                                                                                                                                                                                   Introduction –– Megatrends
      Kalvis Mihailovs – Group sustainability director

                                                           The COVID game changer
                                                           Kalvis Mihailovs, Group Sustainability Director and member of the Group’s COVID response
                                                           team explains how the pandemic influenced the outcome of our 2020 targets and what we
                                                           have learned about strategic sustainability risks.

                                                           How did the pandemic change your understan-                   perature screening, and a new health & safety guide-
                                                           ding of sustainability risks and opportunities?               line. We also partnered with International SOS and
                                                           It’s still too early to understand the long-term impacts      conducted inspections on our preparedness at 16
                                                           of Covid. But like many companies, we see more                sites.
                                                           clearly the connection between what is going on in                Our second priority was securing our supply chain
                                                           society and the success of our business. We also see          and ensuring that production was up and running.
                                                           how difficult it is to anticipate how fast change can         We shared production across Group plants to alle-
                                                           happen. After the financial crisis of 2008, many busi-        viate pressure in affected areas. In the UK, we closed
                                                           nesses put sustainability on hold while they fixed            operations for 10 days at short notice and shifted
                                                           financial priorities. It’s different now. Sustainability is   robotics production to sites in less affected regions.
                                                           talked about more as part of the solution.                        Thirdly, our focus was on rethinking how we can
                                                           The year also showed us what can happen when you              bring programs like Sustainovate to their successful
                                                           underestimate the likelihood and consequences of              conclusion. We were unable to complete physical
                                                           systemic risks. This crisis taught us a lot about how we      audits that were necessary for the supplier challenge,
                                                           can manage risks linked to climate change.                    so we switched to remote audits. Audits fell short by
                                                                                                                         10 percent. Measuring the outcome of the Team chal-
                                                           How did COVID impact operations and our ability               lenge was impacted as well. But there were upsides,
                                                           to achieve our 2020 targets?                                  too. Many consumers found comfort in their gardens
                                                           It set the scene for the final year of our targets, both      and chose smart low-carbon solutions, which bene-
                                                           positively and negatively. Our first priority was Covid’s     fited our bottom line and the carbon target. Now our
                                                           impacts on the health, safety and well-being of our           challenge is to convert this shift into lasting change.
                                                           people. Many worked from home, but for those peo-
        Kalvis Mihailovs – Group sustainability director   ple in production, safe social distancing was a priority.
                                                           We produced our own face masks, introduced tem-

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Sustainovate progress report 2020 - Husqvarna Group
Introduction –– Strategic milestone
      The value we create                                                 ENVIRONMENTAL & FINANCIAL VALUE
      We want the value we bring to be measured from a                    Decoupling CO2 from                                            Sales
                                                                                                                                         Billion SEK
                                                                                                                                                                                  CO2 absolute
                                                                                                                                                                            reduction in percent
      triple bottom line perspective; seen through the lens               business growth                                                45                                                20%
      of financial value, value for people and society and                Husqvarna Group aims to drastically cut CO2 emissions                                                            10%
      benefits to the environment. Here are some ways                     while profitably growing the business. Measuring pro-
                                                                                                                                         40                                                  0%
      Sustainovate supports our efforts.                                  gress against sales growth and absolute CO2 emis-
                                                                          sions reduction is one way to track how the Group                                                                -10%

                                                                          delivers on this aim.                                                                                            -20%
                                                                             Particularly over the last three years, performance
                                                                          shows that the CO2 target - which includes emissions                                                             -30%

           ENVIRONMENTAL & SOCIAL VALUE                                   from suppliers, manufacturing, transport, and product          30                                                -40%
                                                                          use - is deeply connected to business objectives. Over              2015     2016   2017   2018   2019    2020
           In support of the SDGs                                         the first five years, performance shows that results can              Net sales
           The UN’s Sustainable Development Goals (SDGs) are a            rise and fall year-on-year.                                           Absolute CO2 reduction along the value chain

           17-point plan for ending extreme poverty, fighting in-            Taking into account the effects of 2020 performance
                                                                          and likely rebound effects in 2021 and beyond, we esti-        Over the last five years, we have reduced our abso-
           equality and injustice and protecting the planet to
                                                                                                                                         lute CO2 emissions by 32 percent while increasing
           2030. Achieving the SDGs requires significant effort at        mate that we are on track to achieving the 35% reduc-
                                                                                                                                         sales by 16 percent.
           all levels of society—not least in business, which has a       tion target within five years.
           critical role to play as a change agent.
               Husqvarna Group can influence many of the SDGs by
           reducing negative impacts of our operations, contribut-
           ing to positive change along our value chain and engag-
           ing in society at large. But most of all, our 2025 Sustaino-   ENVIRONMENTAL & CUSTOMER VALUE
           vate opportunities position us to contribute to three of
           the SDGs:                                                      Karin Falk – President, Construction division
                                                                                             We asked Karin Falk, newly              nation with improving energy efficiency of products
                         Sustainable cities and providing access to                          appointed President, Construction       with combustion engines.
                         safe, inclusive and accessible green and                            division on how Sustainovate can
                                                                                             support the division’s ability to       How can you further enhance the customer
                         public spaces.
                                                                                             create value for customers.             experience?
                                                                                                                                     We work closely with our customers and their priorities
                         Reducing waste through prevention,                                     How does Sustainovate support        guide our innovation. Enhancing their experience is a
                         reduction, recycling and reuse.                                        your business objectives?            combination of reducing the environmental impact of
                                                                          Sustainability is a long-term target, but it’s also here   products and innovating for safety. We are investing
                         Raising awareness and actively adapting          and now. It plays a crucial role in our strategy. We are   substantially in innovation and product development
                         to low-carbon solutions and mitigating cli-      working to continuously reduce our environmental           in these two areas - by expanding our battery product
                         mate risks.                                      footprint and increase the safe use of our products.       range and by launching solutions to promote sound
                                                                          We will reduce CO2 by transitioning to electric power,     ergonomics, worker safety and better management of
                                                                          both corded and battery-powered products in combi-         dust and slurry at construction sites.

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Sustainovate progress report 2020 - Husqvarna Group
Chapter 2/


                                                          The need for sustainable solutions has never been greater.
                                                          Building on the creativity of our teams, we are pioneering
                                                          pathways for step-change efficiency and smarter resource use. 

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Sustainovate progress report 2020 - Husqvarna Group
Carbon                                                                                                          2020 HIGHLIGHTS

                                                                                                                                                                      Sustainovate performance –– Carbon
                                                                                                                •   Far exceeded the 2020 intensity target of a
                                                                                                                    10% reduction across the value chain,
                                                                                                                    achieving a 52% reduction
                                                                                                                •   With the 2025 target, launched a revised
                                                                                                                    Science-based target to align with 1.5 °C
                                                                                                                •   The share of battery and robotics products rose
                                                                                                                    to 33%, up from 11% in 2015
                                                                                                                •   62% of our electricity derives from renewable
                                                                                                                    sources, up from 1% in 2015
                                                                                                                •   Nearly doubled supplier engagement in
                                                                                                                    reporting on CO2 emissions.

                                                                                                                NEXT STEP
                                                                                                                •   Launch of Husqvarna’s hybrid ride-on mower
                                                                                                                •   Pilot launch, road show and marketing CEORA

       Climate smart,                                                                                           •
                                                                                                                    professional robotic lawnmower
                                                                                                                    Increase share of renewable energy

       fit for the future
                                                                                                                •   Engage suppliers on CDP reporting.

                                                                                                                The value we create
                                                                                                                We are transitioning to low-carbon solutions
                                                                                                                in every aspect of our products’ lifecycle, and
                                                                                                                in ways that benefit customers and deliver
                                                                                                                value to the bottom line. But the transition
       Over the last five years, our fore-                  target is a 35 percent absolute reduction in        the world needs is to a zero-carbon economy.
                                                            CO2 emissions across our value chain.               Battery technology and robotics have a
       most priority has been to reduce                                                                         significant role to play in making this a reality.
       CO2 emissions. With accelerating                     An exceptional year                                 Stronger cooperation with suppliers, leaner
                                                                                                                manufacturing and smarter product design can
       growth in sales of battery products                  2020 was an exceptional year. While the CO2
                                                            outcome is welcome, we achieved higher              prevent hundreds of thousands of tons of CO2
       and digitalized services, our CO2                                                                        from entering the atmosphere every year. This
                                                            reductions than was projected for one year.
       performance is strong.                               This result was due to three events:                is how we can contribute to tackling the greatest
                                                                                                                challenge of our time.
                                                            increased sales of battery and robotic prod-
                                                            ucts, a reduced market for largely petrol-
       Our 2020 carbon target was to achieve a              powered construction equipment during               TARGET
       CO2 emissions intensity reduction of 10
       percent in 2020, compared to 2015. At year
                                                            Covid, and faster than expected effects of          By 2025, we’ll reduce our
                                                            the 2019-2020 exit of petrol walk-behind
       end, we achieved a 52 percent reduction.                                                                 absolute CO2 emissions by
                                                            lawn mowers in North America.
       As of this year, the target is translated into          As we have learned from tracking the tar-        35% across our value chain.
       an absolute target and we are raising the            get’s first five years, results can rise and fall
       bar on our performance further. Our new              year-on-year. Taking into account the effects

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                                                                                                                                                                                                   Sustainovate performance –– Carbon
       of 2020 performance and likely rebound               CO2 emissions in the value chain
                                                                                                            Our approach
       effects in 2021 and beyond, we estimate that
       we are on track to achieving the 35% abso-                                   Suppliers, 5%
                                                                                                            Our carbon targets for 2020 and 2025           emissions during the entire prod-
                                                                                    Manufacturing, 1%
       lute reduction in 2025.                                                      Transportation, 1%      cover emissions across the value               uct’s lifetime.
          During the year, we made further                                          Product use, 91%        chain, from suppliers and operations       •   For suppliers, Scope 1 and Scope
       improvements to our approach to supply                                       Other 2%                to transportation and product use.             2 emissions data is primarily drawn
       chain CO2 reductions, which was an aspect                                 Our product life-cycle     The overarching 2020 CO2 target was            from CDP Supply Chain disclo-
       of our sub-targets that had been lagging.                                 assessments confirm        to achieve a 10 percent CO2 emis-              sures. Not all suppliers report their
       Supplier emissions are our largest impact                                 that overwhelingly, our    sions intensity reduction across the
                                                                                 greatest CO2 impact                                                       CO2 emissions however. To pro-
       after product use (p. 16).                                                                           value chain. All four sub targets —
                                                                                 occurs during the use of                                                  vide estimates for these suppliers,
          Find out more about the status of the four                             our products.              products, supplier, transport and
                                                                                                                                                           we use CDP extrapolated data.
       areas covered in our sub targets on the fol-                                                         operations — were relative to value
       lowing pages.                                                                                        added. The 2025 target is an abso-         •   In operations, energy consumed at
                                                                                                            lute target, reflecting the same               factories, warehouses, R&D
                                                                                                            scope.                                         centers and offices is measured,
                                                                                                               Divisions drive targets through             calculated and managed on a site-
                                                                                                            their own initiatives, relevant to their       by-site basis, which is then calcu-
                                                                                                            business context. Heads of sourcing,           lated on Group level.
                                                                                                            manufacturing, transportation and          •   In transport, CO2 emissions are
                                                                                                            product development own their                  tracked per tons shipped in order
                                                                                                            respective share of the target and ini-        to reflect how we reduce our
                                                                                                            tiatives.                                      impact relative to increased sales.
                                                                                                               Cross-divisional networks within            When measuring progress, we
                                                                                                            areas such as CO2, technology and              include all transport the Group
                                                                                                            suppliers regularly convene with               pays for, through which we have
                                                                                                            managers from every division to                the greatest CO2 impact, and
                                                                                                            share best practice, opportunities             where we have access to data. This
                                                                                                            and identify barriers to realizing the         spans all our air and ocean freight
            OUR COMMITMENT TO NET ZERO, EVEN BEYOND OUR OPERATIONS                                          target.
            During the process of shaping our 2025 opportunities, our new CO2 target was                                                                   and a share of road and rail trans-
            approved as our Science-based target (SBT). The SBT Initiative requires that com-               Reporting on progress                          port.
            pany targets take into account the CO2 emissions that occur beyond their own                    We report progress on the 2025
            operations and when products are in use. The latter is by far the most challenging                                                         Emissions are then aggregated on
                                                                                                            target tailored to each aspect of
            aspect to calculate and influence. Our ambition is high and our target reflects our                                                        Group level. Progress is reported to
                                                                                                            the value chain.
            commitment to reducing our fair share of CO2 in line with society’s ambition to limit                                                      Group Management on a quarterly
                                                                                                            •   For products, we calculate CO2         basis.
            a temperature rise of 1.5 °C. We have also put a stake in the ground, whereby we
            commit to net-zero emissions across our value chain by 2050 at the latest.

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                                                                                                                                                                 Sustainovate performance –– Carbon
       The shift to
       low-carbon products
       We are transitioning to low-carbon                   Facilitating battery use
                                                            Today, Husqvarna division offers nine inter-
       solutions in three ways: Expanding
                                                            changeable batteries that fit more than 50
       our offering of battery-powered and                  products in our 36V system. It thereby has a
       robotic products, developing new                     battery alternative for all petrol-driven hand-
                                                            held products used in urban and suburban
       business models based on digital-
                                                            areas. We intend to introduce battery alter-
       ized solutions, and improving effi-                  natives for the forestry sector as a next step.
       ciency of petrol and electrical products.                Gardena is a founding member of the
                                                            ‘Power for all’ alliance with Bosch. In this
       Within motorized products, about 33 per-             way, consumers will be able to use the same
       cent of our business is represented by bat-          18-volt battery to operate power tools, gar-
       tery-powered, robotics and corded prod-              den tools and household appliances. (p. 21)
       ucts. Our petrol-powered products still              This partnership has the dual benefit of con-
       account for the largest share. However, our          tributing to carbon and circular targets.
       future lies with an offering designed for a              Construction division has a stated ambi-
       low-carbon energy mix. This shift makes              tion to be a leader in battery technologies in
                                                                                                                 CO2 emissions intensity
       business sense, adds customer value and is           its sector and expects to roll out a number          from product use
       a sound and sustainable path forward.                of battery products, which started with the
          This year, SEK 1,711m was invested in             launch of the K535i power cutter in 2019.
       R&D, a large share of which was dedicated                In 2019, we reported on the establish-           tCO2e/SEKm VA
       to product innovation and efficiency. Invest-        ment of the Group’s battery competence
       ments focused primarily on developing our            center. Its purpose is to bring together tech-       600

       battery and robotics offering. But we are            nology know-how from across our divisions            500

       also investing heavily in innovating con-            and applications. The center supports each           400
       nected solutions, through precision compe-           division to deliver solutions to market faster.      300
       tence in AI and digitalization. We have been         It also improves cost efficiency, ensures bet-
       recruiting experts in the area since 2015 and        ter control of the supply chain and anchors
       built strategic partnerships with organiza-          our technology and sustainability leadership
       tions such as Sweden’s innovation agency             position. Drawing on the competence of our             0
                                                                                                                       2015   2016   2017   2018   2019   2020
       Vinnova, Chalmers University, the City of            battery center, we began producing battery
                                                                                                                 CO2 emissions intensity from product use were
       Gothenburg and startups to inspire innova-           packs in-house this year and launched a              reduced by 52% between 2015 and 2020.
       tion to go electric.                                 hybrid rider with a state-of-the-art battery pack.

 12 / Sustainovate Progress Report 2020 / Husqvarna Group

                                                                                                             Sustainovate performance –– Carbon
       Efficiency gains
       A large share of our business will continue           Percentage of sales of battery
       within petrol-powered products and                    and electrical p
                                                                            ­ roducts
       increasing efficiency is a priority. On aver-
       age, we decreased fuel consumption in
       these products by between 15 and 20 per-             %
       cent compared to previous product ver-
       sions. Steep improvements in fuel efficiency
       will continue.                                       30
          Biofuels are already a viable option. In
       2020, we worked with Finnish fuel producer
       Neste to test and launch Husqvarna XP
       Re-Power 2 and Power 4, bespoke biofuel
       alternatives for use in small engines. Avail-        10
       able in Europe, Re-power contains 10 per-
       cent biofuel mixed with petrol and it is cli-
       mate compensated for its remaining CO2                0
                                                                 2015   2016   2017   2018   2019   2020
          Regulatory compliance will push effi-             Approximately 33% of total sales of motor-
       ciency further for handheld petrol-products.         ized products are battery, electrical products
       In Europe, representing over half of our mar-        and robotics compared to 11% in 2015.

       ket for petrol-powered products, EU6
       requirements for reduced emissions are in
       the pipeline. R&D efforts today will bring
       between 25 and 35 percent CO2 reduction
       in this equipment when rolled out in 2026.
          Husqvarna and Construction divisions
       aim to expand their presence in emerging
       markets; many of which will be served
       through petrol-driven equipment. We see
       growing regulatory demands for them,
       especially in China.

 13 / Sustainovate Progress Report 2020 / Husqvarna Group

                                                                                                                                                                                    Sustainovate performance –– Carbon
                                                                                                                Lean power machine
       With hybrid and battery solutions                                                                        Many customers working in construction still rely on petrol and
       we’re helping customers get plugged                                                                      diesel to power their products, especially for heavy-duty pur-
       in to a future with renewables.                                                                             Generators are fallback electricity sources for many construc-
                                                                                                                tion sites when access to the grid is not possible. Construction
                                                                                                                division’s Power Pack is a fuel-saving automatic power-on-
                                                                                                                demand, adjustable for different equipment. Power-on-demand
                                                                                                                can be switched off when constant power is desired.

                                                CEORA - Coming soon to
                                                 a soccer field near you!
                                                   The new Husqvarna CEORA promises
                                                    to deliver large-scale mowing with
                                                     low noise and huge cost savings, but
                                                          without the direct emissions.
                                                             This revolutionary profes-
                                                              sional robotic mower can
                                                              manage grass areas of up to      Ride on down the greenway
                                                                50,000 m2, and can replace     In 2020, we introduced the P535HX rider that
                                                                 petrol-driven ride ons that   combines options to power the lawnmower by
                                                                  often populate golf clubs,   battery and diesel fuel. Despite their CO2
                                                                  soccer fields and public     downsides, petrol-driven ride ons have domi-
                                                                 parks. The big unveil of      nated the market, especially for heavy-duty
                                                                CEORA will be in 2021 and      needs. With its potential CO2 savings of up to
                                                               ready for release in 2022.      30 percent, this new rider heralds a new era.

 14 / Sustainovate Progress Report 2020 / Husqvarna Group

                                                                                                                                                                                                                      Sustainovate performance –– Carbon
                                                                                                                 The climate impact of robotic lawn mowers vs. petrol ride-on

                                                                                                                GWP/season (kg)                                                  End-of-Life
                                                                                                                500                                                              Use
                                                                                                                                                                               Using a robotic lawn mower is
                                                                                                                                                                               the preferable alternative on all
            A pathway to low-carbon solutions
                                                                                                                                                                               markets; its CO2 impact is about
                                                                                                                                                                               80-90% less per cutting season if it
            Batteries are fundamental to robotics and batteries are also key to transitioning to                200                                                            is used continually over the asses-
                                                                                                                                                                               sed lifetime. The LCA comparison
            low-carbon energy systems. They enable users to connect to electricity deriving                                                                                    is based on customers with 5,000
            from renewable sources to power their products.                                                     100                                                            m2 sized lawns.
               When the energy mix is solely based on renewables like wind power, the poten-
                                                                                                                  0                                                            An LCA comparison of a robotic
            tial CO2 savings of battery products is remarkable. Swedish users emit less CO2                                                                         All        lawn mower 550 and petrol-driven
                                                                                                                        DK        FI    FR    DE      SE   CH     markets
            during the use of their mowers because of the high share of renewable energy in                                                                                    Ride on mower R214TC.
            the power grid. In Germany, CO2 emissions are slightly higher due to current reli-                                         Robotic lawn               Ride on
                                                                                                                                        mower 550               mower R214TC
            ance on coal in some regions.

            Business ambition for 1.5°C
            We want society to emerge from Covid-19         Ambition for 1.5°C, a letter to reaffirm our   2050 at the latest,” Henric Andersson,
            with an even stronger resolve to shift to a     commitment to operate our business             Husqvarna Group President & CEO states.
            resource-smart economy. But we can’t do         aligned with a pathway to keeping to              As of year-end 2020, some 363 CEOs
            this alone. We need to gather business          1.5°C.                                         have signed the Business Ambition for
            leaders in a strong commitment to                  “By signing the Business Ambition for       1.5°C commitment, which is led by the
            change.                                         1.5°C, we are committing to achieve our        Science Based Target Initiative in partner-
               In May 2020, Group CEO Henric                Science-based target and reach net zero        ship with the UN Global Compact and the
            Andersson joined a global group of busi-        CO2 emissions across our value chain by        We Mean Business coalition.
            ness leaders in sending Business

 15 / Sustainovate Progress Report 2020 / Husqvarna Group

                                                                                                                                                                                                                  Sustainovate performance –– Carbon
       Operational  efficiencies
       Climate neutral is no longer an                      towards fully renewable, with 60 percent of
                                                            their electricity and Construction division
       aspiration, it is a tangible commit-
                                                            has 15 percent. Some 17 sites within the
       ment. Well over half of the electricity              Group have yet to secure 100 percent
       we use in plants, warehouses and                     renewable electricity agreements.
       offices comes from renewable sources.                Going renewable
                                                            Solar capabilities are up in Nashville, U.S.,
       By year end, we reduced CO2 emissions
                                                            Changzhou in China and to a small degree
       intensity from operations by 73 percent
                                                            in Huskvarna, Sweden. This reduces CO2
       since 2015, well beyond our 2020 target of
                                                            emissions and makes us at least partly inde-
       30 percent. This is largely thanks to increas-
                                                            pendent from local power grids. Solar elec-
       ingly sourcing renewable electricity. Today,
                                                            tricity covers about 31 percent of Chang-
       62 percent of our electricity derives from
                                                            zhou’s needs and 12 percent for the Nash-
       renewable sources, up from 58 percent in
                                                            ville plastics site in the US. In 2022, we will
       2019 and 1 percent in 2015.
                                                            install wind power at the Construction fac-
          As per our life-cycle analysis, emissions                                                                                                                  CO2 emissions intensity
                                                            tory in Ath, Belgium.                               Share of renewable electricity
       from manufacturing represent about one                                                                                                                        from manufacturing
       percent of our total CO2 footprint. But              Manufacturing equipment                                                                             tCO2e/SEKm VA
       actions here have not only reduced CO2                                                                 %                                                 20
                                                            We are also reducing our electricity use          70
       emissions, it also lowers costs and engages
                                                            through awareness raising and investments
       our organization in Sustainovate. Unchanged                                                            60
                                                            in efficient production equipment such as                                                           15
       from 2019, our Group operated 30 produc-
                                                            moulding machines. Gardena has also               50
       tion facilities, of which 20 were in Europe,
                                                            included energy management requirements           40
       four in the U.S., three in China, one each in                                                                                                            10
                                                            for purchasing new machines.
       Brazil, Japan and Australia. Some are                                                                  30
                                                               This year, we made investments in effi-
       located in fossil-fuel intensive regions.
                                                            cient equipment valued at SEK 1,292m              20
          Gardena is leading the Group in securing                                                                                                               5
       the largest share of renewable electricity. As                                                         10
                                                               Through efforts to reduce our energy use,
       of 2021, all of its electricity use will derive                                                         0                                                 0
                                                            total consumption has fallen by 24 (16) per-           2015   2016   2017   2018   2019   2020            2015   2016   2017   2018   2019   2020
       from renewables, thanks to agreements for
                                                            cent since 2015, while our sales have
       plants in Australia and in Germany.                                                                    62% of the electricty used in operations derive    The CO2 emissions intensity deriving from man-
                                                            increased by 16 (17) percent.                     from renewable sources, compared to 1% in 2015.    ufacturing was reduced by 73% between 2015.
       Husqvarna division is also edging

 16 / Sustainovate Progress Report 2020 / Husqvarna Group

                                                                                                                                                           Sustainovate performance –– Carbon
       Increased transparency
       of supplier CO2 impacts
       Engagement in the CDP Supply                         target. With many suppliers located in
                                                            regions dependent on carbon-intensive
       Chain program has improved our
                                                            electricity, such as China and Eastern
       insight and capabilities in supply                   Europe, it is important to align reporting on
       chain CO2 impacts, delivering the                    our CO2 impacts.
                                                               We intend to leverage our purchasing
       results we needed to meet our 2020
                                                            spend in order to help suppliers prioritize
       target.                                              energy efficiency and encourage them to
                                                            use renewable electricity where it is an
       We have reduced CO2 emissions intensity              option. As we are one of many customers for
       from our supply chain with 38 percent since          most suppliers, we must be able to present
       2015.                                                a strong business case for them, have
           Doing business with us is contingent on          ongoing dialogue and the right tools at
       reducing CO2 . As of 2019, we have been              hand. We have a fourfold approach to
       engaging suppliers to provide us with data           engaging them:
       on our upstream CO2 emissions through the
                                                            •   We require suppliers to measure and
       CDP Supply Chain program. CDP (formerly
                                                                report CO2 emissions to the CDP
       the Carbon Disclosure Project) is a respected                                                         CO2 emissions intensity
       CO2 emissions information hub for investors.         •   We require suppliers to identify actions     from suppliers
           This year, 72 of 186 suppliers responded             on how to reduce CO2 emissions
       to our request to disclose their emissions. In       •   We encourage suppliers to set CO2           tCO2e/SEKm VA
       2019, 42 of 60 were engaged in a pilot. 2020             reduction targets                           30
       is the first year we disclose supplier emis-
                                                            •   We encourage them to set a
       sions; in previous years data was not suffi-
                                                                Science- based target.                      20
       ciently available.
           Some 69 percent of our respondents had
                                                            We train commodity managers on the CDP
       CO2 reduction initiatives in place and 58%                                                           10
                                                            program to equip them to engage suppliers
       had reduction targets.
                                                            and guide them in their own reductions. In
           Through the CDP, we have more reliable
                                                            addition to ongoing engagement, we follow
       data, and have worked more proactively                                                                0
                                                            up with suppliers throughout CDP disclo-             2015   2016   2017   2018   2019   2020
       with suppliers on how to achieve efficiency
                                                            sure cycle.                                     Supplier CO2 emissions intensity was
       gains. Supply chain impacts could poten-                                                             reduced by 38% between 2015 and 2020.
       tially be a barrier to achieving our carbon

 17 / Sustainovate Progress Report 2020 / Husqvarna Group

                                                                                                                                                              Sustainovate performance –– Carbon
       From air to sea, road and rail

       We ended the year with our                           200,000 SEK in funds that is reinvested in
                                                            other carbon reduction initiatives. Regular
       target on track, despite some                        follow ups help ensure that our CO2 aims
       obstacles of transporting                            are an integral part of our just-in-time
                                                            approach. We follow up on performance on
       goods across borders in a                            a quarterly basis.
       pandemic.                                               Rail is used as a transport option, includ-
                                                            ing from Asia to Europe, which we intend to
                                                            increase. It is several times cheaper and cuts
       Group-wide, our transport CO2 emissions
                                                            CO2 emissions 25-fold per ton shipped.
       were reduced by 30 percent compared to
       the 2015 baseline and in terms of CO2 inten-         Smart packaging delivers CO2 savings
       sity. We have shipped lower volumes,                 On Group level, we introduced Husqvarna
       thanks to a more optimized transport net-            Improved Print Packaging Opportunity
       work and improved supply and demand                  (HiPPO) in 2017, a program to rethink pack-
       planning to reduce air freight. We have also                                                          CO2 emissions intensity
                                                            aging solutions and product design in order      from transportation
       introduced smarter packaging that                    to improve transport volume efficiency.
       increases the shipment fill-rate.                    Each division is leveraging this work to         tCO 2e/SEKm VA
          Shifting from air to sea, rail and road is by     reduce the volume of their transported           5
       far the most effective way for us to limit CO2       products. Through these initiatives, we are
       emissions from transport. In 2018, we com-           achieving sizeable cost savings and CO2

       mitted to limiting just-in-time air freight for      reductions. Some examples that underline         3
       some customers. This was achieved despite            their potential include:
       increased logistics complexity and last-                                                              2
       minute delivery requirements. We remain              •   Packaging to better fit EU standardized
       intent on shifting away from air freight as              pallets, offers CO2 saving of 473 tons for   1

       much as possible across our divisions.                   outbound packaging
          The use of an internal pricing mechanism          •   New inbound packaging generates a sav-           2015   2016   2017   2018   2019   2020

       for air freight was helpful for keeping                  ing of 308 tons CO2.                         The CO2 emissions intensity from transporta-
       Husqvarna division on track with its share of                                                         tion was reduced by 30% between 2015 and
       the target. This generated more than                                                                  2020. The slight increase in 2020 was due to a
                                                                                                             rise in air freight during the pandemic.

 18 / Sustainovate Progress Report 2020 / Husqvarna Group

                                                                                                                                                                    Sustainovate performance –– Circular
                                                                                                             2020 HIGHLIGHTS
                                                                                                             •   Launch of Sustainovate Open
                                                                                                             •   Partnerships with academia and industry such as
                                                                                                                 the Royal Swedish Technical University to find
                                                                                                                 and scale innovative thinking
                                                                                                             •   Founding partner in ‘Power for all’ Alliance.

                                                                                                             NEXT STEPS

       Why we are
                                                                                                             •   Explore opportunities in production environ-
                                                                                                                 ments to use recycled materials such as plastics
                                                                                                                 for products.

       thinking in circles
                                                                                                             The value we create
                                                                                                             Rethink and redesign for a resource-smart
                                                                                                             customer experience. Husqvarna Group is
                                                                                                             rethinking ways to enhance the customer
       A circular approach gives us a                       because materials and resources are under        experience. A circular approach puts smarter
                                                            utilized and thrown away. And in the long        use of resources in sharp focus and it helps
       deeper understanding of how our
                                                            term, prices may rise for sourcing them. All     us reevaluate how customers can be more
       products impact resource use, how                    these trends have major impacts on both          productive, use less water and energy, protect
       we can deliver greater value to our                  our customers and the business.                  biodiversity and adopt solutions like sharing. In
                                                               The path towards circularity will be a long   short, a circular approach loops the customer’s
       customers and help them contrib-                                                                      end-to-end journey and brings resource-lean
                                                            one, but there is a strong case to start the
       ute more to sustainability.                          journey today. We are just beginning to          thinking to the heart of how to deliver value.
                                                            transform our value chain from a linear pro-
       In all markets, the way people engage with           cess into more of a loop — where we strive
       products and services is changing — more             to design-out waste and pollution, keep
       and more, having access to a product rather          products and materials in use and do our
       than ownership is gaining ground.                    part to regenerate nature.                       TARGET
          At the same time, the world is facing                By year-end 2025, we aim to have 50 inno-     By 2025, we’ll launch
       resource scarcity due to climate change and          vations launched that reflect our circular       50 circular innovations.
       growing consumption. We know that bil-               thinking. This is an entirely new focus area
       lions of dollars in value are lost every year        for us. In 2020, we prioritized the circular

 19 / Sustainovate Progress Report 2020 / Husqvarna Group

                                                                                                                                                                                                   Sustainovate performance –– Circular
       areas that we need to tackle, based on the           Construction division is already extending        Our approach
       principle of the 5R’s — reduce demand,               their product’s life span by taking larger
       reuse, repair, remanufacture and recycle. We         equipment back to repurpose them, and             Our circular target addresses prod-     We evaluate circular innovations
       identified stakeholders along the value              part of its business is conducted through         uct impacts across our value chain,     based on the degree of circularity
       chain and began to execute our plan of               rental services. This market is expected to       from suppliers and operations to        (see box), the value proposition and
       action. One priority was to pinpoint relevant        grow over the next decade.                        product use and end-of-life. Inte-      their business potential. The target
       criteria that will define the scope of circular                                                        gration into existing business pro-     is measured against:
       innovations and what is required of us to            Smart-resource use                                cesses and securing the right know-     •   The number of nominated circular
       realize them.                                           One of our most important materials is         how and competence are linchpins            innovations
                                                            plastic. In 2021, we will explore areas where     to realizing this opportunity.
       The digital effect                                                                                                                             •   The number of approved circular
                                                            we can replace virgin plastics with recycled
                                                                                                                                                          innovations that have been com-
       How we deliver customer value is as impor-           and biodegradable material in our prod-           Each division engages its organiza-
                                                                                                                                                          mercially introduced to the market.
       tant as what we deliver. In this opportunity,        ucts. In the meantime, we are reducing the        tions on the target. Group-wide
       we are re-evaluating how customers get               amount of plastics spill in production flow       activities and tools to support divi-
                                                                                                                                                      The Circular Innovation Committee,
       their jobs done effectively, using smarter or        and are feeding it back into our manufactur-      sions include:
                                                                                                                                                      consisting of stakeholders from the
       fewer products while helping them reduce             ing process as raw material.                          Defined criteria on the scope of
                                                                                                              •                                       Group, every division and external
       CO2 emissions, use less water, and protect
                                                                                                                  circular solutions                  expertise evaluate innovations. The
       ecosystems. Connected products, digital-
                                                                                                              •   Group-wide initiatives that build   committee meets on a quarterly
       ized services and innovative business mod-
                                                                                                                  partnerships for innovation.        basis. The criteria for circular will con-
       els have an important role to play.
                                                                                                                                                      tinue to evolve in 2021.
            This year, 1 million users were digitally
       connected to our products and services.                  WHAT GOING CIRCULAR
       Tapping into this wealth of data helps us                MEANS FOR US
       support product users on how to optimize                 We apply three principles to our defi-
       their products and extend their life span.               nition of circularity, based on the ben-
       For example, a digital chip to track product             efits they bring to the planet.  For us,
       performance is to be included in most                    a circular innovation is a great idea that:
       newly manufactured Construction products                 • Regenerates natural systems

       by 2023.                                                 • Reduces the need to extract

            We tasked 100 people with the job of                   materials and closes loops in
                                                                   our economy
       exploring applications for Internet of
                                                                • Keeps products and materials in
       Things, artificial intelligence and other digi-             use.
       tal solutions that may contribute to scaling
       circular solutions. Their know-how enhances              The degree of circularity is deter-
       our ability to predict and influence con-                mined by the 5R’s - Reduced demand,
       sumer and customer behavior, indicate when               Reuse, Repair, Remanufacture and
       it is time to service a product and better align         Recycle.
       supply with demand.

 20 / Sustainovate Progress Report 2020 / Husqvarna Group

                                                                                                                                                                                 Sustainovate performance –– Circular
       Resource smart                                                  CASE /
       Our circular journey has begun! We are                          Using water wisely
       partnering with others and triggering                           We are experiencing longer periods of drought
                                                                       and for good reason, concerns about water use
       innovation that improve smarter use of                          are on the rise. The garden is a great place to be
       resources.                                                      smart about water use.
                                                                          Through a combination of product innovation
                                                                       and enhanced software, the Gardena Smart
                                                                       System and Micro-Drip System can improve
                                                                       water efficiency in the garden by up to 70 per-
                                                                       cent. Underground drip irrigation lines both
                                                                       prevent evaporation and carry water to every         CASE /
                                                                       corner of the garden.                                Sustainovate Open challenges
                                                                          This year, sales of water-efficient irrigation
                                                                       products jumped 192 percent, compared to             innovative thinkers
                                                                       2015, far exceeding our objective of a 50 percent    Sustainovate Open 2020 is a start-up challenge
                                                                       increase since 2015.                                 launched this year to reward disruptive innova-
                                                                          Gardena’s Micro-Drip-System was a finalist in     tions that bring people, nature and urban envi-
                                                                       the government-sponsored German Sustaina-            ronments together through circular solutions.
                                                                       bility Award Design 2021.                            More than 20 Swedish startups took part in the
       CASE /                                                                                                               challenge and nine innovations landed on our
       ’Power for All’ leads the charge                                                                                     short list. The prize of a pilot budget of 300,000
                                                                                                                            SEK was ultimately awarded to Ekkono
       Do you have a drawer-full of batteries collecting dust, but                                                          Solutions for its Edge Machine Learning soft-
       none that fits your needs? We aim to fix that.                                                                       ware.
           Together with Bosch, Gardena is a founding partner in                                                               They will take their idea to the proof-of-
       ‘Power for All’, a platform to share common battery solu-                                                            concept stage together with us, and scale it with
       tions across household products.                                                                                     the end goal of embedding it into Husqvarna
           “Our users want powerful, reliable and flexible batteries                                                        Division’s range of robotic lawn mowers. This
       – preferably for all applications around the house and gar-                                                          offers us the opportunity to stretch the lifespan
       den,”says Pär Åström, President of Gardena division.                                                                 of the Automower, personalize them, and create
           Using Bosch battery technology, ‘Power for All’ elimi-                                                           even longer-lasting customer relationships.
       nates the frustration of incompatible batteries and charg-                                                           We see initiatives like these as a a gateway to
       ers by supplying a uniform standard.                                                                                 outside-the-box thinking. It strengthens our pro-
           For the 2021 gardening season, Gardena is converting                                                             cesses for capturing external innovation and
       its entire 18-volt range to the Alliance battery system.                                                             commercializing great ideas.

       See for more information.

 21 / Sustainovate Progress Report 2020 / Husqvarna Group

                                                                                                                                                                                    Sustainovate performance –– Circular
       Digital world
       Our growing offering of digitalized services help custom-
       ers and consumers use water and energy resources more
       efficiently and spread the joy of using not owning.

                                                                                                                                      Tools-for-you booths –
                                                                                             With the Husqvarna Carbon Foot-          unmanned and app-controlled
                                                            Our professional products        print Calculator, professional land-     tool sheds – enable pay-by-use
                                                            are widely available through     scaping companies can better under-      rentals of chain saws, leaf blowers
                                                            rental services across           stand the CO2 impact of their            and trimmers. Drawn to the bene-
                                                            Europe. In this way, profes-     machine fleet and reduce resource        fits of not needing to service and
                                                            sionals can ensure that they     use. Via machine sensors and built-in    own products that are only used
                                                            always have access to special-   connectivity, the new tool is part of    occasionally, we’re helping cus-
                                                            ized equipment and can pass      Husqvarna Fleet Services™.               tomers in cities in Sweden, France,
                                                            it on once it’s no longer                                                 Germany, USA and Australia take
                                                            needed.                                                                   a leap into the sharing economy.

            Under the banner of
            Ihop - ‘together’ in Swed-                                                                                               Gardena’s Smart App optimizes watering
            ish - we are piloting a digi-                                                                                            schedules and helps avoid unnecessary
            tal platform that helps                                                                                                    watering of plants. It delivers irrigation
            neighbors find interested                                                                                                       planning that considers plant type,
            candidates with whom to                                                                                                           their location and type of soil. It
            share ownership of                                                                                                               even considers sunrise and sunset
            high-investment garden-                                                                                                     to help gardeners reduce evaporation.
            ing tools like chain saws
            and robot mowers.

 22 / Sustainovate Progress Report 2020 / Husqvarna Group

                                                                                                                                                                    Sustainovate performance –– People
                                                                                                               2020 HIGHLIGHTS
                                                                                                               •   Promoted green urban areas through HUGSI,
                                                                                                                   Husqvarna Urban Green Space Index
                                                                                                               •   Continued UNICEF partnership
                                                                                                               •   Engaged internally through an ambassador
                                                                                                                   program, workshops, divisional activities and
                                                                                                                   Yammer conversations.

                                                                                                               NEXT STEPS
                                                                                                               •   All-employee online training program
                                                                                                               •   Develop marketing strategies on sustainable
                                                                                                               •   Incentivizing leadership teams to promote
                                                                                                                   sustainable products and business models
                                                                                                                   Launch a diversity and inclusion program, with

       Influencing actions that matter
                                                                                                                   associated performance indicators.

                                                                                                               The value we create
                                                                                                               There is no better way to build trust than to
                                                                                                               make a difference together. Our approach
       We seek to inspire actions that make                 resource scarcity, diversity, talent, as well as   rests on bringing out the passion, drive and
                                                            health and safety.                                 curiosity of our own teams and those of our
       a lasting difference. In 2020 we set a
                                                                                                               customers. We can maximize positive impact
       goal of empowering 5 million cus-                    Customers in sharp focus                           by encouraging customers to opt for the most
       tomers and colleagues to make                        Our customers lie at the center of everything      sustainable choice and by helping them to
                                                            we do. It is with them that we can massively       envision the difference they can make. We
       sustainable choices by 2025.
                                                            scale our efforts to shift to low-carbon and       inspire through partnerships with others and by
                                                            resource-smart thinking. A large share of the      giving our teams the tools to be change agents.
       Supporting 5 million people to commit to
                                                            CO2 that products emit occur when they are
       action is no small task. It requires significant
                                                            used. How customers use and service prod-
       efforts to raise awareness and build capacity.
                                                            ucts also has an impact on product dura-
       This opportunity challenges us to influence
                                                            bility, biodiversity, safety and water use. In     TARGET
       and inspire beyond what is within our direct
                                                            this opportunity, we will find ways to work        By 2025, we will empower 5 million cus-
                                                            closer with them to help them better interact      tomers and colleagues to make
          When our teams are committed and pas-
                                                            with our products and see benefits for others      sustainable choices.
       sionate about sustainability, our customers
                                                            and for the planet.
       will follow. We will be introducing training
       for all employees that cover climate change,

 23 / Sustainovate Progress Report 2020 / Husqvarna Group

                                                                                                                                                                                              Sustainovate performance –– People
       Teams with passion and spirit                        An inclusive organisation                        Our approach
       We build trust between people and create             Our new Diversity & Inclusion program aims
       caring places to work by bringing out the            to heighten awareness and raise our bar,         We measure progress on our goal of      to Group management. Responsibili-
       passion of our teams. This involves promot-          particularly within gender diversity. We need    empowering 5 million people as fol-     ties include building strategic part-
       ing diversity and giving teams the tools and         to improve our performance in these two          lows:                                   nerships, tailored communications,
       freedom to innovate.                                 priority areas and now have a roadmap in         • The number of employees that          training for brand, sales, communica-
          In 2020, we held ten Sustainovate work-           place to deliver change that we will roll out      have taken Sustainability training    tions and marketing functions and
       shops in which more than 1,000 people par-           in 2021.                                         • Products and solutions sold that      tracking progress. Activities and
       ticipated. We also launched an ambassador                                                               have been proactively marketed as     tools that support our divisions and
       program and have ongoing social media                Tackling impacts of climate change                 more sustainable and that is sup-     local organizations include:
       conversations to engage teams in our ambi-           We are committed to doing what we can to           ported by third-party verification
                                                                                                               such as life-cycle analysis or test   •   Sustainovator ambassador pro-
       tions.                                               tackle the impacts of climate change and                                                     gram
          In every division, we have initiatives in         mitigate the effects of natural disasters. Our
       place to engage employees in our sustaina-           U.S. teams have supported firefighters and                                               •   Division-specific activities to
                                                                                                             We will begin measuring progress on         engage employees
       bility priorities. These include competitions        disaster relief personnel for decades. We
                                                                                                             this opportunity in 2021. Each divi-        Yammer conversations with 1,000
       that capture the great ideas of employees            also partner with organizations like UNICEF                                              •
                                                                                                             sion engages within its organization,       followers to maintain momentum
       and fast track them to implementation.               and businesses that can support our objec-
                                                                                                             supported by Group-wide Sustaino-
                                                            tives and increase access to green parks,                                                    on Sustainovate, highlight success
                                                                                                             vate priorities and tools.
                                                            biodiversity and clean water.                                                                stories and celebrate engagement
                                                                                                                Divisions focus on the aspects of
                                                                                                                                                         and Sustainovate heroes
                                                                                                             Sustainovate that are most relevant
                                                                                                             to their business, based on a mat-      •   Training programs
                                                                                                             eriality assessment conducted in        •   Diversity and inclusion program.
                                                                                                             2019. These priorities are integrated
                                                                                                             into each business plan and progress
                                                                                                             is measured and reported quarterly

            To keep Sustainovate relevant and inspiring, our Sustainovator ambassador pro-
            gram engages volunteers to contribute great ideas from across the organization. At
            launch in mid-2020, approximately 30 people from across the Group signed up to
            take part in shaping Sustainovate initiatives and applying them to local operations.
               The program will host quarterly webinars to inspire Sustainovators and keep
            them up dated on the agenda as well as on our progress. We’ll not only share best
            practice, we’ll draw on inspiration from external initiatives and other leaders in sus-

 24 / Sustainovate Progress Report 2020 / Husqvarna Group

                                                                                                                                                                                                        Sustainovate performance – People
       Stimulating sustainable choices
         We will achieve our target through partnerships, learning
         from others and engaging in issues where we have an oppor-
         tunity to affect change. With this ripple effect, we are building
         our commitment to inspire others.

       CASE /
       Green city spaces
       Green spaces are a city’s lungs. They             Husqvarna division , we see more urban
       improve air quality, help to manage rain-         green spaces in Europe and North Amer-
       water and surface runoff and contribute to        ica (+38 km2), but globally, there’s -0.01
       wellbeing. They are becoming increasingly         percent less vegetation in 2019 compared
       important as urban populations grow. As           to 2018.
       part of our efforts to raise the importance
       of green spaces, Husqvarna division held                                                       CASE /
       its fifth annual Living City event, which was
       a global digital meeting for experts within
                                                                                                      A partnership that makes
       the business, city architects and NGOs.                                                        every drop of water count
           Dutch urban planner and architect Winy
       Maas set the scene on the grand possibili-                                                     According to UNICEF, approximately 785              As part of our contribution, for every sold
       ties of sustainable cities, with his vision of                                                 million people do not have access to clean       limited edition Gardena watering kit (con-
       future urban environments. He presented                                                        water. For children under five, water and        taining a blue hose connector labeled
       The Green maker, software to help cities in                                                    sanitation-related diseases are a leading        “Gardena for UNICEF”), we contributed €1
       practical ways, with ideas to envelope                                                         cause of death.                                  to the cause. The campaign was available in
       existing buildings with plants and features                                                       We aim to help change that. Since 2018        2019 and 2020 across five markets. The
       to attract local birds and insects. The                                                        Gardena has been partnering with UNICEF          partnership will continue in 2021 with a spe-
       meeting went on to showcase practical                                                          to help provide access to clean drinking         cial edition product: a Micro-Drip-System
       examples and engaging case stories.                                                            water to more than 160,000 children and          starter kit for efficient and water-saving
           The importance of meeting across sec-                                                      their family members. Our support helps          plant irrigation.
       tors is rising. In HUGSI, our 2020 analysis of                                                 fund efforts in Niger, Africa, for example, to
       urban green spaces conducted by                                                                build infrastructure for water access.

 25 / Sustainovate Progress Report 2020 / Husqvarna Group
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