ABB ecosystem Stakeholder engagement and material topics

This dialogue serves to clarify ABB’s positions and policies and, at times, to illuminate different viewpoints. For further information, please visit the page on Stakeholder Engagement on the ABB global website.

ABB’s 2030 sustainability strategy, the implementation of which began in 2021, is based on new materiality matrices developed in 2020 through a comprehensive external stakeholder engagement process. The process provided a qualitative basis for the development of a matrix for each Business Area. As in the previous sustainability reporting cycle, we have left open the possibility of adjusting our sustainability strategy and its related KPIs to reflect significant changes in our material issues or our stakeholder's priorities. We plan to refresh the Group materiality matrix, which is available online here, on the basis of periodic engagement with our stakeholders.

As the implementation of our strategy got underway, we continued to consult with internal and external stakeholders in 2021 to refine our sustainability targets. A direct result of this engagement was the confirmation of our decision to include an SASB table in our 2021 Sustainability Report. We regularly interacted with our stakeholders, holding sustainability-specific meetings with our investors, customers and suppliers in 2021. We will follow up with them in 2022 to review ABB’s sustainability performance in 2021.

Of special note, in 2021 we conducted an internal and external stakeholder review of ABB’s participation in environmental, social and governance (ESG) rating schemes. In October 2021, the ABB Sustainability Board decided to re-evaluate ABB's engagement with ESG rating agencies to focus on requests for information from those agencies that are deemed the most important. As a result, we scheduled a series of interviews for late 2021 and early 2022 to obtain input from our main stakeholders on which ESG rating agencies they value most and which ESG criteria they expect us to report on.

In addition to its dialogues with stakeholder groups, ABB consults an external stakeholder panel for advice and input on sustainability issues. The panel also regularly reviews our materiality matrix and our annual Sustainability Report. ABB last engaged with this panel on the definition of our 2030 sustainability strategy at the end of 2020 and received positive feedback on the framework and the targets. There was no further engagement in 2021. As the implementation of the 2030 strategy progresses, we will re-define our collaboration with this panel.

In 2021, ABB engaged with key stakeholder groups in seven categories:

Customers

Over the past year, we continued to meet regularly with customers to discuss how ABB’s offerings can be used to reduce their greenhouse gas (GHG) emissions, preserve resources and meet other sustainability requirements. In addition to providing valuable insights into our customers’ operations and their sustainability challenges, these meetings provided our experts with opportunities to share advice and served to build and strengthen relationships of trust. Notably, our customers have also been reaching out to us to talk about their emissions; they expect leadership from us on this topic, which we provide by supporting their sustainability journeys with our knowledge and solutions. Most cases are based on products that improve energy efficiency. An example would be a variable speed drive produced by our Motion Business Area. The use of variable speed drives enables electric motors to adjust speed and torque during operations. When a drive is added to an existing motor, the electricity savings can be substantial.

Investors

In 2021, we engaged with investors and analysts on the subject of ABB’s 2030 sustainability strategy and how our market-leading portfolio benefits from the fact that ESG concerns are driving demand for energy efficiency and automation. Among the main ESG topics of interest were ABB’s own carbon footprint, our ability to support customers in reducing their emissions, our forward-looking corporate governance policies, including linking ESG to remuneration, and diversity and inclusion.

Suppliers

We recognize that ABB can only be as sustainable as its supply chain. Our Supplier Code of Conduct clearly outlines our expectations, based on the 10 principles of the UN Global Compact, and is updated periodically to address new developments. In 2021, we began to engage our suppliers on the topic of their own GHG emissions. Through these engagements, we seek to assess the status of their efforts on this front and to begin setting appropriate emissions reduction goals. In 2021, we also continued to help our suppliers improve their overall sustainability performance. To this end, we regularly conduct on-site evaluations, provide training and engage in special projects to address the root causes of persistent challenges. We track their improvement through risk-based monitoring plans using our Sustainable Supply Base Management system.

Employees

In 2021, ABB created the annual Sustainability Changemaker Award, which recognizes outstanding ideas from individuals or teams who display a strong commitment to sustainable progress and inspire others to follow their example. The award covers each of the four pillars of ABB’s 2030 sustainability strategy. In addition to seeking out new ideas from new sources, the award aims to promote and embed sustainability across ABB; to foster our entrepreneurial spirit and performance culture while maintaining clear ties to our values and Purpose; and to provide employees with more opportunities to participate in ABB’s efforts to meet its 2030 sustainability ambitions. The winner of the 2021 Changemaker Award will be announced in spring 2022.

Also in 2021, we conducted our annual employee Engagement Survey. For further information, please refer to our Employee Engagement Score in this report.

Public policy

ABB continued to engage with civil society and government agencies on a number of fronts to contribute to the ongoing global dialogue on sustainability.

In 2021, ABB played an active role in the CEO Alliance, which promotes global targets and standards for climate protection via its advocacy initiatives and industrial projects.

ABB advocated for greater investment in electric distribution grids as a necessary step in the decarbonization of the energy system, transport and the built environment. This advocacy was pursued on multiple occasions by CEO Björn Rosengren, other members of the Executive Committee and Division presidents.

ABB engaged in advocacy on methane leak detection rules in the United States with the goal of minimizing methane leaks from pipeline infrastructure through the deployment of advanced leak detection technology.

ABB highlighted the contribution of its products and technologies to a low-carbon society in China while engaging with decision-makers in such forums as the Global CEO Council’s roundtable summit, China Development Forum, China International Fair of Trade in Service, IBLAC Beijing, IBLAC Shanghai, International Consultative Conference on the Future Economic Development of Guangdong Province (ICCFED), Chongqing Mayor’s International Economic Advisory Council (CMIA) and others.

At the COP26 climate conference in Glasgow, ABB focused on communicating the goals of its 2030 sustainability strategy as well as the technologies that help ABB’s customers reduce their carbon footprints.

Community

ABB’s approach to community engagement combines strategic corporate partnerships with country-level projects to address local needs. In 2021, we contributed to more than 400 community projects and charities worldwide, as well as a number of initiatives to help employees, contractors and communities address the challenges of the COVID-19 pandemic. Our employees and businesses donated approximately $10.9 million and around 3,000 person days in volunteer work, often under challenging circumstances.

ABB’s 2030 sustainability strategy seeks to provide support for communities, among its other objectives. For further information, please refer to “Provide Impactful Support for Community-Building Initiatives” in this report.

External partnerships

In 2021, ABB supported multiple global initiatives that are paving the way to carbon neutrality, including the Business Ambition for 1.5°C and the Climate Group’s RE100, EV100 and EP100 campaigns. Among our largest programs, we maintain a corporate-level agreement with the International Committee of the Red Cross to support humanitarian assistance in conflict zones. ABB is a member of many international organizations focused on sustainable development. We are starting a process to evaluate their climate-linked goals in relation to our own.