Approach to reporting Sustainability reporting

ABB has reported in accordance with the GRI Standards (2021) for the period January 1, 2021, to December 31, 2021. The EU Non-Financial Reporting Directive (NFRD) and the Sustainability Accounting Standards Board (SASB) provide the framework for our sustainability reporting. This report includes ABB's disclosures in accordance with EU taxonomy regulations.

We report on ABB’s material economic, environmental and social impacts and how we manage them. We seek to maintain alignment between our sustainability reporting and changes that arise in international best practices – including the GRI Standards. ABB’s 2030 greenhouse gas (GHG) emissions targets received approval from the Science Based Targets initiative (SBTi) in 2021, confirming that they are in line with the 1.5°C scenario of the Paris Agreement.

Omission from the material issues addressed in our report does not mean an issue is not managed. ABB reports quarterly on a selection of our KPIs and annually on all of our KPIs. The annual Sustainability Report for 2021 was published on March 14, 2022.

Our future reporting

In addition to the above-referenced standards and directives, for 2022, ABB’s Sustainability Report will also incorporate the framework developed by the Task Force on Climate-Related Financial Disclosures (TCFD). We will continue to review the ongoing evolution of sustainability disclosure standards and requirements and will consider the possibility of incorporating additional reporting frameworks into our sustainability reporting in the future.

Reporting boundaries

Our formal sustainability reporting system covers all ABB Group companies worldwide, including wholly owned subsidiaries and majority-owned joint ventures and direct and indirect participations (as listed in the 2021 ABB Annual Report, pages 72-73 and 249-251).

Additional disclosures

All of ABB’s policies, statements and declarations related to the topic of sustainability can be found on our Group’s website.

Certified ABB management system information

• 73 percent of our manufacturing and service sites are covered by a certified environmental management system (ISO 14001 or equivalent)
• 75 percent of our employees at manufacturing or service sites are covered by a certified occupational health and safety management system (OHSAS 18000 or equivalent)
• 21 percent of employees at manufacturing or service sites are covered by a certified energy management system (ISO 50001 or equivalent)

Changes in 2021

ABB completed the divestment of its Mechanical Power Transmission Division (Dodge) to RBC Bearings Inc. in the second half of 2021. Dodge is not included in our sustainability reporting for 2021, except where specified.

Also in the second half of 2021, ABB closed its acquisition of ASTI Mobile Robotics Group, a leading manufacturer of autonomous mobile robots (AMRs). The activities of ASTI are not included in our sustainability reporting for 2021, except where specified.

Data collection processes

To measure and gather data from across ABB, we rely on a global, online data reporting system. The system is used to file reports on hazards, incidents, sustainability observation tours and environmental performance at every production and service site, as well as a majority of our office locations. It is also used to collect annual social data from every country. This centralized reporting system simplifies data collection and facilitates greater transparency.

The data in this report relating to health, safety and our social performance covers 96 percent of ABB employees. Data relating to our environmental performance was sourced from 447 ABB sites and offices, covering approximately 95 percent of employees. Data on the environmental performance of the remaining employees, who are located at non-manufacturing sites with limited impacts, is generated by estimating energy, water and waste parameters pro rata.

Calculation of energy and GHG data

ABB uses the market-based method to calculate and report Scope 2 GHG emissions. For purchased electricity and district heating, we have obtained local emission factors from utilities. All GHG emission factors for fuels used at our sites are sourced from the GHG Protocol’s “Emission Factors from Cross-Sector Tools” (March 2017). They include the emissions of CO₂, CH₄ and N₂O. Biogenic emissions from biofuels include only CH₄ and N₂O emission factors. Global warming potential (GWP) factors for CH₄, N₂O and SF₆ follow the IPCC’s AR5 report. Starting with 2017, emissions from ABB’s vehicle fleet are based on lease contract distances and tank-to-wheel gCO₂/pkm (grams of CO₂ per passenger kilometer). We applied lab-to-road uplift factors from the International Council on Clean Transportation Europe to better reflect our vehicles’ real emissions on the road vs. the laboratory.

Scope 2 GHG emissions for electricity have also been calculated using the location-based method (source: International Energy Agency 2021). The results are provided for comparison below.

GHG emissions from air travel are calculated using emission factors, with radiative forcing (RF), published by the UK Department for Business, Energy & Industrial Strategy (BEIS) in its 2021 Government GHG Conversion Factors for Company Reporting.

Definitions

Net-zero vs. zero emissions vs. carbon-neutral
“Net-zero” means that any carbon dioxide released into the atmosphere is balanced by an equivalent amount being removed. “Zero emissions” means that no GHGs are released into the atmosphere. "Carbon-neutral" means that carbon emissions can be offset by a reduction in emissions or a removal of carbon from the atmosphere, for instance through carbon sinks, which absorb more carbon than they emit. To achieve carbon neutrality, companies can buy carbon credits to cover the emissions they cannot eliminate. At ABB, one of our key sustainability targets is to achieve carbon neutrality in our own operations by 2030. We have identified areas that can reduce our CO₂e emissions (see "Greenhouse gas emissions" below) by at least 80 percent. We will make up the balance with new solutions or carbon credits.

Greenhouse gas emissions
GHG emissions refer to all emissions that have a warming effect on the earth’s surface by trapping heat in the atmosphere. Carbon dioxide (CO₂) makes up the vast majority of GHG emissions, but other gases like methane (CH₄), nitrous oxide (N₂O) and sulfur hexafluoride (SF₆) also have a warming effect. CO₂, methane and nitrous oxide are released during the combustion of fossil fuels, such as coal, oil and natural gas, to produce electricity. At ABB, we use the metric measure CO₂-equivalent (CO₂e) to calculate our GHG emissions and progress towards our emissions reduction targets.

Independent assurance

DNV Business Assurance Services UK Limited (“DNV”) has been engaged by ABB to provide independent assurance for ABB’s 2021 Sustainability Report. The assurance was completed using DNV’s assurance methodology, VeriSustain™, and the report was evaluated for adherence to the principles of stakeholder inclusiveness, materiality, sustainability context, completeness and reliability. Performance data’s scope was evaluated against the reliability principle. DNV’s full Assurance Statement, including opinion, observations and basis of opinion, is available here.