2030 targets explainedTarget definitions and methodologies

Method

ABB uses a market-based method to calculate and report Scope 2 GHG emissions. For purchased electricity and district heat, we have obtained local emission factors from suppliers.

For data prior to 2017, where necessary, we have sourced factors from the International Energy Agency’s “CO₂ Emissions from Fuel Combustion 2013” database or from national or regional inventories. Emission factors for fuel used at ABB sites are sourced from the GHG Protocol’s “Emission Factors from Cross-Sector Tools” (March 2017). From 2017, emissions from ABB’s vehicle fleet are based on lease contract distances and emissions per kilometer factors per vehicle.

Scope 2 GHG emissions for electricity have also been calculated using the location-based method (source: IEA 2020).

Method

ABB defined a basket of the most impactful selected business cases of ABB products and services that enable customers to avoid emissions. This basket is continuously reviewed and expanded. In 2021, we started with a basket of 15 business cases. The associated KPI is the total emissions savings enabled by a year's worth of sales from this basket.

Method

Statement of intent: In 2021, we defined the circularity approach that applies to all four Business Areas at ABB. We also developed the qualification/scoring system to evaluate our products & solutions against our circularity approach. In 2022, we will measure the 2019 baseline and will implement the methodology across the company. The value of sales of circular qualified products & solutions will represent 80% of total sales by 2030. The qualification process will cover design and supply considerations, manufacturing processes, use phase and end-of-life phase.

Method

The LTIFR includes any work-related injury that causes the injured person to be away from work for at least one normal working day after the day on which the injury occurred (a working day can also be a shift). This rate excludes fatalities and serious injury incidents without any days lost. This covers employees and contractors. The rate is calculated per 200,000 worked hours.

Method

Senior leaders are defined by Hay grades 1-7. The indicator measures fixed % of female employees in senior leadership positions on December 31.

Method

The employee engagement score is calculated based on the yearly ABB Engagement Survey. The survey is entirely voluntary and results are confidential. Each year, we monitor how our scores are evolving relative to our past performance and relative to a collection of top-performing companies globally (Top20 Benchmark/Glint global norm).

Method

For Phase 1 (focus on high-risk spend):

% high-risk spend in focus countries covered by SSBM = (total high-risk spend covered by SSBM)/(total high-risk spend in focus countries) x 100

"Spend" = Spend in reporting year on suppliers that have been assessed in past 3 years by SSBM/SSDP ( 2019, 2020 & 2021) – for reporting year 2021
"High risk spend" = Spend on high-risk MDF code materials from the focus countries
"High risk MDF code" = MDF code with environmental risk and health & safety risk score more than or equal to ‘2’

For Phase 2:
% spend in focus countries covered by SSBM = (total spend covered by SSBM)/(total spend in focus countries) x 100

"Spend" covers:
Spend in reporting year on suppliers that have been assessed in past 5 years by SSBM

Method

Statement of intent: The production of steel, aluminum, copper and plastic materials make up the bulk of the emissions in our supply chain. In 2021, we will pinpoint a selection of our main suppliers to engage with to reduce GHG emissions in our supply chain. Reducing GHG emissions in the supply chain for these materials can be achieved by switching to a higher recycled content, a low-carbon primary material, or low-carbon transportation between tiers of suppliers.

Method

Applies to non-hazardous manufacturing waste that is disposed of directly into landfill or incineration without energy recovery, except where local legal requirements impose landfilling, or where alternative waste disposal infrastructure does not exist.

Method

2021 initial steps:

• Implemented new procedures addressing both joint integrity and human rights associated with third party management
• Trained internal ABB stakeholders on the new process
• Started testing compliance with the new process

Method

In 2022:

• Establish Community Engagement Working Group, with representatives from all BAs, two major countries and a grass roots/youth representative
• Develop business case for community engagement strategy consistent with ABB Way of operating, including a harmonized approach to volunteering
• Receive Executive Committee approval for community engagement approach

Method

The 2021 ESG “boundary condition” was the setting of plans in each ABB Division outlining the key actions and activities required to reduce or compensate for GHG Scope 1 and 2 emissions to achieve carbon neutrality in ABB’s own operations by 2030 (vs. a 2019 baseline). At the end of the year, the Board of Directors determined that the terms for this condition had been fully met.

The Governance and Nomination Committee (GNC) of the Board of Directors will review whether the company made sufficient progress at the end of the year to justify making the indicated AIP award. If, in the opinion of the GNC, insufficient progress has been made, the AIP award may be reduced on a discretionary basis by the Compensation Committee (CC).

Method

2021 initial steps: Prepared stronger integrity and sustainability clauses for agreements/terms & conditions with counterparties, including:

• acknowledgement of ABB’s Supplier Code of Conduct
• agreement to comply with anti-bribery, anti-corruption (ABAC) and human rights laws
• audit rights clause