Keeping model behaviour in vogue

It is the Group’s purpose to establish a number of Model Companies, which cooperate in an exemplary manner. By Model Company we mean a company working with products useful to society, which treats its customers, suppliers, employees of all categories and shareholders better than most other companies. A Model Company makes a profit, which can also finance growth and maintain financial independence.
This could sound like a rephrasing of the EU definition of CSR - Talking about creation of shared value for owners/shareholders and for other stakeholders and society at large, while minimising possible adverse impacts. Both describes the same notion – That companies shall create value for both company and society and behave responsibly towards all their stakeholders.
The above is however the Model Company Objective (MCO) of Danish company, the VELUX Group, famous for its skylight windows. It was first written down in 1965 and has only been modified once, in 1973, to add the final sentence. How is this proving relevant in 2015, 50 years after first written down?
The MCO came about because the founder, Villum Kann Rasmussen, started to envisage how the business – started in 1941 – would function without him. “It was driven by his personal desire. It’s been on paper ever since and is alive and well today,” says Michael Rasmussen (no relation), the group’s senior VP responsible for brand, marketing and communications.
“It has always been our raison d’etre,” he says. “It is our purpose to establish a model company that works with employees, shareholders and partner companies in the pursuit of financial growth. It’s straightforward, but a pretty big ambition.”
“In the 1990s, lots of companies were coming up with credos like this but we’d be operating in this way since 1965.”
The VELUX Group has around 10,000 employees and is owned by VKR Holding A/S, a limited company wholly owned by foundations and family. Rasmussen says that the structure of the group – being owned by both foundations and family – helps its ethical stance because it ensures that it looks at the bigger picture. This wider world view also taps into the group’s core belief of being useful to society. “Our objective is to develop windows which make more daylight, are attractive, work well, last well and help reduce energy consumption.”
Taking a shared value perspective, people spend up to 90% of their time living, working, learning and playing inside buildings. Around 80 million people in Europe, however live in buildings that are damp and unhealthy. At the same time, the energy used in buildings accounts for approximately 40 % of the total energy consumption. Due to their position in the sloping roof, roof windows are highly efficient as daylight, fresh air and solar energy sources. Thereby creating value for both the company and society.
Exactly daylight, comfort and using less energy were the focal point in the development of the new generation of roof windows, which was the largest investment in the history of the VELUX Group. As a result, VELUX roof windows are in many cases net-positive with respect to CO2. Life cycle assessments show that VELUX roof windows can have a positive carbon footprint in the course of their life cycle. This means that the positive energy contribution of the roof window - due to passive solar gain during the use phase - exceeds the energy consumption for production, distribution, installation and maintenance. And if a VELUX energy blind is added, the CO2 savings are improved by 36%.
Working as a manufacturing business sets challenges for the MCO.
“Some of the core elements like behaving exemplary towards our stakeholders means taking responsibility for our own actions. One of key areas is workplace safety,” Rasmussen explains. Its latest CSR report shows the number of accidents is now at its lowest level ever. “There have been fewer accidents and fewer serious accidents,” he says. “Our aim is to become world class.”
For the second year in a row, the group had the lowest number of accidents ever; in 2014, the group recorded only 11. This equates to 0.9 accidents per 1m working hours and 0.2 lost working hours per 1,000 due to accidents.
Another area is the company’s work on CO2 emissions. “As part of the building industry, we have a big responsibility,” he says. “We have a goal to reduce emissions by 50% by 2020 (on 2007 levels) and we are at 29%. We are hoping to meet our long term goal but it’s going to be tough.”
“We make our challenges tougher because we believe that our emissions target must not be achieved by offsetting or the use of greener energy but ‘by our own actions’,” he points out.
For example, a lot of the group’s emissions come from production of its windows. Rasmussen explains: “One of the key materials we use is wood. To stabilize the humidity of the wood, we need to use ovens so what we have done in Poland is to begin using the waste wood chip to fuel a biomass heating system which saves natural gas in the ovens.”
In 2015, CO2 reduction will be given another kick in the right direction as the group has initiated an energy management programme that will see action plans drawn up for energy saving at all factories in Europe, based on monitoring and analysis of energy consumption.
Rasmussen says the challenge of a credo like the Model Company Objective is not during a period when things are running to plan. “The challenge to a company’s ethics comes when the going gets tough.”
Rasmussen draws on the recent factory closure in Fife as an example. “Like all companies, we have to develop our organisation and from time to time we need to open and close facilities. We have recently had a change in Great Britain where our factory in Fife had to be closed due to a change in the supply strategy. We have to handle issues like that in an exemplary manner. It was a very good factory with very good people. We put in place training and counselling in order to help them all get new jobs. It’s a reciprocal model: so we try to behave in a model manner too.”
The MCO is recognised by all employees, at all levels within the group. Having the Model Company Objective keeps everyone and everything on track and on message, maintains Rasmussen. “It’s not just about management, employees can see that the company is on track (or not) too.”
And every 23 January, the KR Prize is awarded and this goes to several employees who have been seen to live the values of the group. So the MCO is very visible within the organisation itself.
“The MCO is deeply rooted in the way we do business,” says Rasmussen. Surely the goal of CR strategies everywhere?