Performance against targets 2014

Ambition 2020:
ABB is a world leading supplier of innovative, safe and resource efficient products, systems and services that help customers increase productivity while lowering environmental impact

Targets:
20% revenue increase from energy efficiency-related products, systems and services

Qualitative assessment of technology contribution to environment, profit, society

51% of ABB revenues relate to energy efficiency and renewable energy in 2014. Same level as 2013

Innovations released in 2014 include:

• New cable, doubles power flow and extends range significantly with reduced losses
• Switchgear technology with eco-efficient insulation gas, cuts carbon footprint of GIS
• SmartVentilation for underground mines, cuts energy use and improves safety

Updated Health, Safety and Environment (HSE) checklist and guidelines for Research and Development (R&D) – 132 R&D engineers trained on HSE checklist; over 80% of project leaders at largest R&D center trained

Additional guidance provided on Conflict Minerals and Rare Earths

Ensure that ABB’s HSE Checklist (focusing on energy efficiency and environmental issues) is applied in development of products and systems

Expand scope of energy efficiency portfolio, formalizing processes and definitions for ABB’s “green” product portfolio and making methodology auditable

Products and services

Also includes:
Energy efficiency and climate change; resource efficiency, right materials and responsible sourcing

Ambition 2020:
ABB recognized as one of the most ethical companies by customers, suppliers, investors and employees

Targets:
100% of employees trained on integrity issues and processes

ABB again recognized by Ethisphere Institute as one of The World’s Most Ethical Companies; Compliance Leadership Verification as well as Anti-corruption Program Verification seals also awarded in 2014 for the 2015–2016 period

Global anti-bribery e-learning module rolled out – more than 92% completion, 94,000+ people trained

Integrity training and communications programs at Group, regional and country levels – monthly communication updates distributed through Group; integrity updates and cases of consequence published internally

Implementation of integrity programs formally reviewed in individual countries

Training and extension of Ombuds program – currently more than 80 trained Ombuds persons in 50 countries

Full completion of anti-bribery training

Continue to promote management initiative “Don’t Look the Other Way” (safety and integrity) as part of Next Level strategy

Further promote hotline reporting using ABB’s reporting channels and Ombuds program

Continued focus on ABB’s training and communications efforts at Group, regional and local level

Continue to enforce business accountability and tone from top and middle management

Further work to ensure thorough implementation of ABB rules and policies in countries where ABB has operations

Integrity

Also includes:
Developing our people, stakeholder engagement, human rights, safe and secure operations, products and services, responsible sourcing, right materials

Ambition 2020:
ABB attracts, retains and develops dedicated and skilled people from diverse backgrounds, and engages with a wide range of stakeholders, including communities, to maximize benefits for our business and society

Targets:
Percent of personal development actions implemented versus plan

ABB community engagement tool implemented in major ABB countries

People Strategy developed to support corporate strategy, nine core areas defined

Increased number of formal white and blue collar personal performance and development appraisals to 90,700 white collar and 11,000 blue collar appraisals

Integration of acquired companies into ABB Human Resources processes

Extended learning and development programs for different levels of employee – further 3,000 people took part in Leadership Challenge Program, one of several targeted training programs

Increased use of community engagement measurement tool to better understand impact of social projects – nearly 70% of reporting countries provided detailed feedback on social spending

Establish Group-wide process for capability management and workforce planning

Full alignment of competency framework to corporate Next Level strategy

Strengthen succession planning as part of organizational development reviews

Take measures to increase links between compensation and personal performance

Improve reporting of community engagement activities in order to develop Group-level KPIs

Developing our people

Stakeholder engagement

Also includes:
Integrity, human rights, safe and secure operations, products and services

Ambition 2020:
Human rights issues are well understood and managed in all ABB operations along the value chain

Targets:
Network of sustainability employees trained on human rights by 2016

600 managers trained by end of 2016

Further capacity building training in four countries; first meeting of network focusing on issues from Asia, and North and South America

Awareness-raising training in three more countries; another 100 senior and middle managers trained, bringing total to date to 500

Development and release of human rights awareness raising e-learning module for all employees

Build further capacity to expand human rights network with representatives from more countries

Work with key businesses on identifying and avoiding potential risks


Further awareness-raising training in countries and functions

Roll out of e-learning module

Human rights

Also includes:
Stakeholder engagement, integrity, safe and secure operations, responsible sourcing, energy efficiency and climate change, products and services, developing our people, right materials

Ambition 2020:
Safety is a core value. All ABB operations have an excellent health, safety and security culture embedded in their day-to-day business, targeting zero incidents

Targets:
Safety Observation Tour (SOT) rate = 1.2 per employee, run rate 180,000

Hazard reporting rate= 2 per employee, run rate 300,000

>95% certified Health and Safety Management Systems

Total recordable incident rate of 9.95 for employees and 7.76 for contractors

Implementation of internal leadership campaign “Don’t Look the other way” program (safety and integrity)

Personal safety commitment signed by Executive Committee and 200 top managers

First-ever global safety week, involving 2,500 training sessions and around 142,000 attendees

SOT training conducted throughout Group. Hazard and near miss training rolled out

Code of Practice for Safe Working covering 50 safety topics launched

Certified health and safety management systems at 378 of 578 locations

Ongoing mandatory security and crisis training for country management teams – further 250 people trained in 25 countries

Internal SOT reporting mandatory from 2015

Mandatory “Don’t look the other way” safety master-classes for all Business Unit heads and senior managers. Training to be cascaded in key countries by ABB personnel and external trainers


Improved communications: Introduction of enhanced process for sharing and implementation of lessons learned from incidents

Health and safety management to be included in internal audit protocols


Define scope of certified management systems target

Continue to improve business resilience through crisis training and project security training program

Safe and secure operations

Also includes:
Integrity, human rights, stakeholder engagement

Ambition 2020:
Social and environmental risks and impacts of sourcing practices are well understood and managed

Targets:
Number of suppliers assessed (internal / by third party)

Total number of risks identified

Total number of risks mitigated

Ongoing supplier sustainability training and development program:

• Supplier Code of Conduct now available in 15 languages, Implementation Guide in 4 languages

• 762 suppliers trained; total since 2011 is more than 2,500. Scope expanded to Thailand, Indonesia and Vietnam

• Further 264 ABB people trained; total since 2011 is over 2,000 Lead assessor certification program expanded to Brazil, South Africa, India

• 175 suppliers formally assessed, mainly in China, India, Brazil, Mexico and South Africa; total since 2010 is around 600

• Assessed 375 risks; nearly 1,100 assessed since start of program

• Mitigated 152 risks; 675 risks mitigated since start of program

Extension of the Supplier Sustainability Development Program (SSDP) to cover suppliers in Indonesia, Thailand and Vietnam

Re-assessment of suppliers with closed corrective action plans

Further capacity building of suppliers and ABB employees

Responsible sourcing

Also includes:
Products and services, resource efficiency, right materials, energy efficiency and climate change integrity, human rights, developing our people, safe and secure operations, stakeholder engagement

Ambition 2020:
ABB is an industry leader in energy efficiency, use of low-carbon fuels and renewable energy. We cut greenhouse gas (GHG) emissions.

Targets:
20% decrease in energy intensity per $ sales from 2013 (megawatt hours/million $ sales)

Energy intensity cut by 1.6%

More than 200 energy saving projects under way at ABB sites

ABB in Egypt obtains ISO 50001 certification; ABB inaugurates unified energy management system for six centers in Spain

GHG emissions rose by 4% due to increased SF6 emissions and increased scope of air travel data

Sites handling SF6 gas implementing action plans to control and reduce SF6 emissions

Energy


GHG

All ABB manufacturing, workshop and office facilities to continue energy efficiency efforts according to energy savings plan in local management system

All ABB manufacturing, workshop and office facilities to continue to assess main sources of greenhouse gas emissions and develop action plan to cut emissions


Sites handling SF6 gas shall measure, control and reduce emissions of SF6 according to action plan

Energy efficiency and climate change

Also includes:
Products and services, responsible sourcing, resource efficiency, right materials

Ambition 2020:
Materials and water use is optimized. Facilities in very scarce, scarce and water stressed areas to reduce water use. We target zero waste

Targets:
Cut water consumption by 25% in water scarce/water stressed areas

Reduce waste sent for final disposal by 20%

Water saving projects under way in individual countries and sites; overall, small reduction in water withdrawals recorded

Waste reduction, recycling and reuse projects under way in many sites; proportion of waste sent for final disposal increased and total waste generated decreased significantly, primarily as result of divestments

Update facility mapping according to watershed and define initial 30 facilities included in water reduction commitment

Continue to monitor and support implementation of ABB’s water efficiency target at ABB sites

All sites to implement plans to increase share of waste reused or recycled

All sites to implement plans to reduce amount of waste sent for final disposal in absolute terms

Resource efficiency

Also includes:
Products and services, right materials, energy efficiency and climate change, integrity, stakeholder engagement

Ambition 2020:
We aim for materials that are sustainable. Hazardous substances are used in closed loops or not at all

Targets:
Reduce amount and type of hazardous substance used/emitted

EU REACH compliance

Projects to reduce hazardous substances under way at individual sites; reduced lead in solder by 24%

Worked to improve quality of hazardous substances reporting; significant increase in phthalates and lead in rubber compounds due to improved reporting

ABB list of prohibited and restricted substances updated to meet legislative changes

ABB’s internal network supports Business Units on material compliance; eight training sessions on different aspects of REACH regulation conducted

Ensure compliance with and track development of EU REACH

Ensure formal acceptance procedures are in place for any new substances or components used in ABB products and production

Conduct training on how to comply with legislation on hazardous substances

Right materials

Also includes:
Products and services, resource efficiency, energy efficiency and climate change integrity, human rights, developing our people, stakeholder engagement