Corporate responsibility - guides to the right direction
Nov 14, 2006
Corporate responsibility means actively applying the principles of sustainable development, and is divided into environmental, social and economic responsibility. At Elcoteq, the different aspects of corporate responsibility are part of everyday work in all the countries, in which the company has operations.
In Elcoteq, responsibility for addressing the different dimensions of corporate responsibility is integrated in the company's management models and corporate governance, and in the principles and systems derived from these. "At the moment some of our main goals are getting ready for the European Union's new environmental directives, improving the energy efficiency of our manufacturing plants, and continuing development relating to the SA8000 standard, especially at our newest plants in Brazil, India and Russia," says Senior Manager Ms Sari Sarin, who is in charge of corporate responsibility at Elcoteq.
In its operations Elcoteq uses as a guideline the SA8000 standard from Social Accountability International. Its main items address the prevention of child and forced labor, employment hours and remuneration, occupational health and safety issues, freedom of association, and the right to collective bargaining.
Fair treatment provides motivation for work Sarin states that Elcoteq's customers have audited the company's manufacturing plants and have been satisfied with what they have seen. "This year we are carrying out an SA8000 review in all the countries where we operate to ensure that matters are being carried out as has been agreed. Our basic premise is that we conform to national and international legislation, but there is still room for improvement in the guidelines at individual business locations," says Ms Sarin.
Elcoteq also has plans for a Code of Conduct covering all employees that would then form the basis for local codes.
Ms Sarin stresses that in its social accountability Elcoteq lays particular emphasis on human rights and providing good working conditions in different cultures and market areas.
"We wish to ensure that all our employees earn a fair wage, one that provides incentive for skilled and motivated personnel to work in the company. The continuous training of personnel and giving them opportunities to take up new responsibilities within the organization are particularly important for our business operations. The results of competency potential assessments form the basis for arranging training and development programs to equip personnel for new tasks at different levels within the organization," says Ms Sarin.
Economic success in a sustainable way
Economic responsibility means ensuring that the company is profitable and competitive in a sustainable manner. This in turn means, for instance, good corporate governance practice, risk management and the ethical conduct of business.
"Financial success for the company ensures added value and well-being for its stakeholders," says Ms Sarin.
One element in maintaining competitiveness is rewarding personnel. In Elcoteq's target-based bonus system, the individual targets for each employee are closely linked to the company's financial performance. The targets are set and monitored during the twice a year appraisal discussions.
Donations are another aspect of economic responsibility. Elcoteq chooses the good causes it will support based on how the organization, event or activity reflects the company's values. Sarin gives a couple of examples: the scheme being supported in Russia that aims to provide education in mathematics and information technology for gifted young people, and the girls' school in New Delhi that seeks to strengthen and broaden the opportunities for education and skills training for girls in India.
Priority on environmental management Elcoteq's expanded service offering, along with new legislative obligations and customerrequirements, call for continuous development of environmental management by the company. The most significant requirements are based on EU directives that apply, for instance, to controlling the hazardous substances (ROHS). The new regulations have set new demands especially concerning the collection and management of product-specific environmental information throughout the supply chain, and therefore have an impact on Elcoteq's entire design and production process.
"Elcoteq also monitors developments in legislation in market areas outside Europe to be able to offer its customers services that meet new requirements throughout the world," stresses Ms Sarin.
"The focus has been on lead-free manufacturing process. We have worked closely with our customers to optimize the phasing in of lead-free soldering product by product," she adds.
All Elcoteq's business units operate with a single multisite certificate for the quality and environmental management system. The structure of the environmental management system has also been revised by setting function-specific environmental targets worldwide. All business units are independently responsible for the continuous improvement of the environmental management of their local operations in line with the common goals. This allows the units to address local conditions when defining development priorities.
Elcoteq monitors environmental indicators on a quarterly basis to measure and assess environmental management at its plants.
"The indicators are an important element in corporate responsibility, since they enable us to give stakeholders the required evidence about our operations," explains Ms Sarin. She mentions the GRI standard, (Global Reporting Initiative), used in corporate responsibility reporting, which contains ten economic, 16 environmental and 24 social core indicators.