Sustainability Report 2019
About Kjell & Company
Kjell & Company is a leading Consumer Electronic Accessories firm with 105 stores in Sweden, 19 in Norway, and an e-commerce offering in both markets. The company also runs a purchasing office in Shanghai, China, and its headquarters and central warehouse in Malmö, Sweden. Kjell employs 1146 people, distributed among 81% men and 19% women. The company has very high customer satisfaction and is an industry leader with an NPS of 71.
Our knowledgeable and service-minded staff meet our customers with a relevant and accessible assortment in attractive store locations, from southern Ystad to northern Tromsø, as well as on kjell.com.
Economic, social and governance impacts though the value chain
Materials used in products and packaging, international as well as domestic shipments and waste related to end products, have the most significant environmental impact. Socially, our greatest impact lies within the areas of working conditions and human rights in Asia but also concerning our staff in Swedish and Norwegian stores. Furthermore, as a brand owner with numerous strategic partnerships across Asia, we uphold high manufacturing integrity and enforce a zero-tolerance policy against bribes and other forms of corruption.
Risks and opportunities
The nature of the products we provide demand a high level of quality and safety practices, primarily with regards to materials and production, but also concerning end-consumers usage of the products. As such, our requirements on private label production practices and quality controls, as well as staff knowledge and education, are both thorough and stringent. Transparency in communication, responsible and ethical sourcing, as well as product adherence to relevant laws and regulations, increase in relevance proportionally to customer awareness, and consequently demands, of safety and quality in the market.
Through our knowledgeable sales staff, we have a unique opportunity to supply new products that are inherently energy-efficient or, in other ways, help reduce our customer's energy usage. As a retailer of accessories, and to some extent, spare parts, a replacement power adaptor sold by us would elongate the longevity of the main product and generate less waste than if the customer were to buy a new product.
Environmental risks include weather events, above-average heat, and precipitation, as well as catastrophic changes in climate, which can affect operations. We continue to monitor the carbon footprint from transports, both domestic and international. We aim to use our nationwide store network as e-commerce hubs to reduce both lead time and emissions. Furthermore, we recognize our vulnerabilities to climate change and mitigate risk by geographical diversification. We believe these activities will attract the aware customers of the future as they strengthen the perception of Kjell as a sustainable brand.
Performance in 2019
|KEY ESG GOALS||EFFORTS 2019||PERFORMANCE 2019||AMBITIONS 2020|
|1. Consumption: Product quality and safety||Ambitions were to hold all documents verifying private label compliance and inspect all shipments leaving China.
One additional inspector was hired, and an online inspection tool was implemented to streamline the inspection process.
|During 2019, 3039 unique private label items were shipped, of which Kjell held 100% (2018: 84%) of the relevant compliance documents.
Kjell inspected 90% (2018: 76%) of private label order value in 2019.
|Analyze returns of private label assortment and implement corrective actions to decrease return rate to 1,5% (2019: 1,67%) in ambition reduce waste.
Verify documentation of 100% of new items, regardless of origin, for compliance.
|2. Production: Labour conditions and human rights in the supply chain||Ambitions were to have 98% and 50% of active Chinese and other suppliers respectively sign the Code of Conduct as well as to define remediation plans for all non-compliance.
Implemented online audit tool to streamline the audit process. Utilized own staff (50%) as well as third party (50%) to perform 211 audits. Included items regarding quality management in audit.
|100% (2018: 81%) of private label and 61% (2018: 0%) of other suppliers signed the Code of Conduct in 2019.
According to our remediation procedures 211 audits resulted in 24859 check items and 3079 corrective action plans. No supplier was disqualified during 2019.
|Audit all new private label suppliers for compliance against the Code of Conduct and follow up on 100% of the existing suppliers’ corrective action plans.
Have 90% of active European suppliers sign the Code of Conduct (2019: 61%).
|3. Production: Reduce environmental footprint||Ambitions were to decrease air freight to 4% of total volume and plastic bag usage by 40% YoY.
Forecast orders were created for items recurringly shipped by air. Kjell started charging SEK2 for each plastic bag. Completed climate risk assessment and GHG accounting.
|1,28% (2018: 5%) of total volume was shipped by air in 2019.
During 2019 Kjell purchased 250k (2018: 1 066k) plastic bags.
|Increase share of climate compensated e-commerce shipments to 100% (2019: 15%).
Start measuring private label materials used in packaging to minimize use of plastic in production.
|4. Relationships: Motivated and satisfied employees in a diverse environment||Ambitions were to increase eNPS to 60 and contribute to diversity in the workplace by increasing the share of female leaders to 20%.
During the year, Kjell has enhanced job listings and refined the recruitment process to attract women. Investments in staff were made through various forms of forums to encourage participation in decisions.
|Kjell closed 2019 with a share of female leaders at 15% (2018: 14%) and female employees at 19% (2018: 17%).
eNPS decreased to 44 (2018: 57) in 2019. The decrease links to a change in the bonus system for salespeople.
|Through a new platform for education and career path Kjell continues their work on increasing
eNPS to 60 and share of female employees to 21%.
In addition, absenteeism is to be maintained at 3% (2018: 3%, 2019: 3%)
|5. Relationships: Business integrity and transparency||Ambitions were to maintain 100% of employee Code of Conduct and Whistle-blower policy signage and to perform a yearly review of business ethics materials.
The business ethics materials were reviewed 2020-01-23 by the board.
|100% of employees had signed the internal Code of Conduct and Whistle-blower policy in 2019.||In 2020, we will put effort into improving the relationship with our customers by implementing a new way to measure customer satisfaction in all channels|