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ABB Power and productivity for a better world

Performance against targets 2015

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Products and services

Ambition and Targets		Status		Main Activities, Achievements and Challenges 2015		Priorities 2016
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				50% of ABB revenues relate to energy efficiency and renewable energy in 2015, (51% in 2014) Updated “eco-efficiency” portfolio methodology for 2016, strengthening criteria and expanding scope Innovations and achievements in 2015 Updated material selection guidelines and health, safety and environment (HSE) Checklist for research & development (R&D) to strengthen “design for environment” principles Trained 139 R&D engineers to use HSE Checklist and material selection guidelines Established sustainability network for global research centers to share good practices and achievements related to sustainability objectives Challenges to define eco-efficiency portfolio and assess technology contribution: Very heterogeneous Group product portfolio with unique energy efficiency/productivity aspects – challenging to find one common denominator to serve them all No established industry standard/guideline for sustainability product portfolios		Grow sales of best-in-class products, systems and service offerings that help customers cut energy use and reduce environmental impact Ensure that ABB’s HSE Checklist is applied in the development of products and systems
Targets: 20% revenue increase from energy efficiency-related products, systems and services
Qualitative assessment of technology contribution to environment, profit, and society
Number of R&D engineers trained in HSE Checklist

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Integrity

Ambition and Targets		Status		Main Activities, Achievements and Challenges 2015		Priorities 2016
Ambition 2020: ABB recognized as one of the world’s most ethical companies by customers, suppliers, investors and employees				97% completion rate of anti-bribery training and of integrity e-learnings Updated anti-bribery training material, with next campaign launched in 2016 Released new set of hotline posters promoting hotline reporting Piloted new, global pre-approval tool for gifts, entertainment and expenses to improve transparency and review of the process. For roll-out in 2016		Continue to foster a culture of integrity through proactive integrity training and communication; launch updated anti-bribery training campaign in first half of 2016 Roll out new cloud-based global pre-approval tool for gifts, entertainment and expenses Implement and promote the Don’t Look the Other Way initiative to increase transparency and reporting of potential concern
Targets: 100% of employees trained on integrity issues and processes
Monitoring of reporting channels, investigations, remediation and survey results
Proactive & regular communication

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People and society

Ambition and Targets		Status		Main Activities, Achievements and Challenges 2015		Priorities 2016
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				Defined capability management and workforce planning process. Ran pilot successfully in one division, setting stage for Group-wide roll-out in 2016 Finalized new Competency Model Completed Next Level organization roll-out Launched White Collar Productivity program covering business and support functions Defined and finalized more rigorous people review sessions and succession planning process Rolled out new scorecard process to strengthen performance orientation 48 of 66 countries reporting on social activities supported community projects and reported on them in community engagement tool. Level of reporting has remained static Challenge: Ensuring take-up through all parts of business		Implement the capability and workforce planning process across all divisions Embed new Competency Model in key Human Resources processes Implement White Collar Productivity program, setting up shared services centers and Centers of Expertise Improve learning and development offerings to reflect new competency model Bottom-up people review sessions, leading to clearly articulated succession plans, particularly for mission-critical roles
Targets: Employee engagement score
ABB community engagement tool implemented in major ABB countries

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Human rights

Ambition and Targets		Status		Main Activities, Achievements and Challenges 2015		Priorities 2016
Ambition 2020: Human rights issues are well understood and managed in all ABB operations along the value chain				Held four more two-part training courses to build required capacity for human rights network Held two meetings of network, following inaugural session at end of 2014 Carried out due diligence on several potential projects in Europe, south-east Asia and South America Limited progress with awareness-raising training due to time restrictions for face-to-face courses Rolled out e-learning; limited uptake leading to further marketing efforts in 2016 510 managers trained by end of 2015		Consolidate human rights network so that target is achieved in 2016 Develop roadmap for further progress towards the goal for 2020, including the introduction of country human rights impact assessments Build capacity within the company so that international human rights standards are better understood and can be applied to ABB operations
Targets: Network of sustainability employees trained on human rights by 2016
600 managers trained by end of 2016

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Safe and secure operations

Ambition and Targets		Status		Main Activities, Achievements and Challenges 2015		Priorities 2016
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				Conducted more than 139,000 SOTs, at a rate of 0.92 per employee Reported more than 520,000 hazards, at a rate of 3.51 per employee Total recordable incident rate for employees declined by 10% from 2014 and by more than 30% since 2011 Developed and piloted safety master-classes, to be rolled out across Group in 2016 Implemented new Lessons Learned assurance process, requiring review and action by each local business unit manager Developed internal audit HSE protocol, trained internal auditors and conducted audits in all divisions and all regions Certified OHS management system at 421 of 602 reporting locations (70%) Held 22 face-to-face country management crisis training courses. Additional sessions held on physical and personal security, travel and project security, workplace violence, extortion awareness		Roll out safety master-classes: Promote leadership and accountabilities through training and coaching for managers Reinforce accountability on roles and responsibilities for managing HSE-related issues and activities Continue and develop internal audit program, expand scope and extend application Continue to improve business resilience through crisis management trainings Conduct trainings on project security best practice Further global training on crisis management and project security Introduction of updated travel advisory and mapping service
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

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Responsible sourcing

Ambition and Targets		Status		Main Activities, Achievements and Challenges 2015		Priorities 2016
Ambition 2020: Social and environmental risks and impacts of sourcing practices are well understood and managed				421 suppliers trained. Training scope expanded to Indonesia, Thailand and Vietnam. Supplier Sustainability Development Program launched in Poland Trained further 259 ABB people in responsible sourcing. New lead assessor certifications for ABB employees in Brazil, China and India Assessed 441 risks; mitigated 311 risks Formally assessed 179 suppliers, another 22 suppliers reassessed Updated assessment protocol to include root cause analysis, and conducted trainings Developed and piloted ABB Training and Development Program for Factory Working Hours with selected suppliers Developed and started roll-out of new supplier qualification and classification process		Global implementation of the new processes for supplier qualification and classification Global roll-out of new SCM Supplier Relationship Management system (ProSupply) Establish baseline status of targeted supplier types/countries, to enable development of quantitative targets Intensify continuous improvement efforts to mitigate risk of sourcing Conflict Minerals
Targets: Number of suppliers assessed (internal/by third party)
Total number of risks identified
Total number of risks mitigated

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Energy efficiency and climate change

Ambition and Targets		Status		Main Activities, Achievements and Challenges 2015		Priorities 2016
Ambition 2020: ABB is an industry leader in energy efficiency, use of low-carbon fuels and renewable energy. We cut greenhouse gas (GHG) emissions				Absolute energy consumption reduced by 6.8% (190 GWh) from 2013 baseline Energy intensity increased by 10% from 2013 baseline; energy saving activities overtaken by decline in revenues and lower capacity utilization in some areas 195 energy saving projects underway at ABB sites 88 sites with formal energy management systems, with 47 certified to ISO 50001 or EN 16247 Energy audits conducted at 71 ABB facilities 71 GWh (4.4%) of electricity from renewable sources GHG emissions decreased by 8.8%, mainly due to decreased SF₆ emissions		Drive energy efficiency efforts at sites Increase use of low-carbon fuels and renewable energy Control and reduce emissions of SF₆
Targets: 20% decrease in energy intensity per $ sales from 2013 (megawatt hours/million $ sales)

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Resource efficiency

Ambition and Targets		Status		Main Activities, Achievements and Challenges 2015		Priorities 2016
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				Updated facility mapping according to watershed, using updated Global Water Tool; 64 sites in water stressed watersheds selected for water use reduction program 4% reduction in water withdrawals; 5.2 million m³ of water saved through recycling and reuse 20% of waste sent for final disposal, down from 21% in 2014; total generation of waste was essentially unchanged 90 waste reduction or recycling projects under way		All sites to analyze sources of waste and identify areas where generation of waste can be reduced All sites to establish a plan with milestones to increase share of waste reused or recycled Sites in very scarce, scarce, and water stressed areas to measure, analyze and establish a plan with milestones to reduce use of water
Targets: Cut water consumption by 25% in water scarce/water stressed areas
Reduce waste sent for final disposal by 20%

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Right materials

Ambition and Targets		Status		Main Activities, Achievements and Challenges 2015		Priorities 2016
Ambition 2020: We aim for materials that are sustainable. Hazardous substances are used in closed loops or not at all				Updated prohibited and restricted substances list in line with regulations in ABB’s main markets Further developed internal REACH experts network; conducted 13 training sessions on different aspects of REACH regulation 24 projects under way to reduce hazardous substances Conducted workshops with Supply Chain Management personnel on material compliance Conflict minerals: Completed product applicability assessment in each division, covering large part of ABB product portfolio Expanded training efforts for suppliers and ABB personnel Engaged with Conflict-Free Sourcing Initiative, contributed funding for smelter audits		Ensure ABB products and manufacturing processes comply with “ABB List of Prohibited and Restricted Substances” Include legal requirements on material compliance (eg, EU REACH and RoHS) in local ISO 14001 management system Conduct training on material compliance and use of right materials
Targets: Reduce amount and type of hazardous substance used/emitted
EU REACH compliance

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