We create a culture of integrity and transparency

Pillar overview We create a culture of integrity and transparency

Integrity & transparency – strategy pillar key visual (photo)

At ABB, it’s not just about what we do - but how we do it - to provide value to businesses, communities and our customers and stakeholders around the world. Working with integrity is what grants us our license to operate, and it’s the standard that we expect across our entire value chain. We know that to continue to be successful in what we do and be a global employer of choice, our commitment to a culture of integrity and transparency must be resolute.

Our Global Integrity Program sets our mandate to deliver an operating environment which protects the integrity of our organization which is adaptive to risk and overall fit-for-purpose. It is driven by processes, role-specific upskilling, third-party management processes, and reporting and monitoring activities across our four business areas and all our corporate functions. We test and monitor our governance framework and integrity program and know that it needs to be flexible and adaptive in an increasingly complex and challenging global environment.

Our Code of Conduct is the foundation of our integrity program. It’s the framework which sets the standard for the way we work and what we expect of our employees and stakeholders around the world. Through promoting and instilling a culture of integrity and transparency at ABB, we strive to create a business model where sustainable business practices are one and the same as our operating model.

Doing business with integrity and transparency also means responsibly sourcing materials and services. We aim to do this by proactively identifying, analyzing and mitigating environmental and social risks related to our procurement activities. ABB works to prevent minerals that are mined in conflict zones from entering our supply chain.

Since introducing our 2030 sustainability targets to create a culture of integrity and transparency along the extended value chain, we have made steady progress:

Targets 2030

2019 baseline1

2022 status

Global framework for assessing and mitigating third-party integrity risks through risk-based due diligence and life cycle monitoring2

n/a

This target measures the implementation of a global framework for assessing third party integrity risks. It is an ongoing and critical organization-wide, integrity-based enhancement, which changes how we onboard and manage the life cycle of our relationships with suppliers, sales channels and customers.

  • Suppliers (buy-side)

    In January 2022, we launched various integrity due diligence and risk management enhance­ments within our global supplier onboarding process.


  • Sales Channels (sell-side)

    In 2022, we finalized the design of various integrity due diligence and risk management enhancements within our onboarding process for new sales channels. The process was launched at selected ABB locations in October and November, with global launch planned for March 2023.

Global Integrity Program underpinned by accountability for integrity and an adaptive risk management strategy gained from insights through targeted learnings, transparent reporting and monitoring2

n/a

This target measures the implementation and effective­ness of our Global Integrity Program through how we drive individual accountability for integrity and adapt our risk management strategy to real-time data insights gained from integrity-based learnings, reporting and monitoring.

  1. Trust KPI – The rate of severity level 1 and 2 investi­gations where the reporter disclosed their identity:

    • Year 1 (January 1, 2021, to December 31, 2021): 57% of reporters.

    • Year 1 & 2 (January 1, 2021, to December 31, 2022): 60% of reporters.

  2. Engagement KPI – The volume of unique visitors on the Integrity Awareness Portal (IAP) for integrity learnings:

    • Year 1 (January 1, 2021, to December 31, 2021): 25.46% of employees with online access.

    • Year 1 & 2 (January 1, 2021, to December 31, 2022): 69.86% of of employees with online access.

At least 80% of supply spend in focus countries3 covered by Sustainable Supply Base Management (SSBM)

n/a

Using a risk-based approach, a mid-term 2025 target has been set, focusing on high-risk suppliers in focus countries3.

Mid-term target for 2025: At least 80% of spend on high-risk suppliers in focus countries3 covered by SSBM

n/a

22%

Management sustainability incentive with yearly target

n/a

The individual component of the Annual Incentive Plan (AIP) for Executive Committee (EC) members,with a weight of 20 percent, consists of a combination of up to 3 quantitative and qualitative goals, of which at least 2 are sustainability-related (e.g. GHG emissions, safety or female leadership goals).

1

Where a baseline applies.

2

Targets have been adjusted in 2022.

3

Argentina, Brazil, Bulgaria, China, Colombia, India, Indonesia, Malaysia, Mexico, Peru, Poland, Saudi Arabia, South Africa, Thailand, Turkey, Vietnam.