Policies and management systems
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ABB’s sustainability policies Our goal is to improve our social and environmental performance continuously, and improve the quality of life in the communities and countries where we operate. We create value for society by:
Environmental policy Environmental management is one of ABB’s highest business priorities. We address environmental issues in all our business operations. In 2003 ABB began the process to update its environmental policy, which was unchanged since its introduction in 1992, to better reflect the company’s commitments and activities. It is an integral part of our commitment to sustainability and is embedded in our strategies, processes and day-to-day business throughout the group. You can find the ABB environmental policy later in this review or on www.abb.com/sustainability Social policy ABB’s commitment to good social performance is elaborated in the group’s social policy, which was introduced in 2000 and applies to all employees. Principle 5 of the social policy defines a clear policy for health and safety, underpinned by eight health and safety expectations which we have set for our group. You can find the ABB social, health and safety policies later in this review or on www.abb.com/sustainability Group function sustainability affairs ABB’s sustainability affairs organization is composed of nearly 450 people in 48 countries, and governs ABB’s sustainability management program relating to social, health and safety, and environmental performance. The team coordinates group-wide common effort programs with a present focus on the rural electrification initiative "Access to Electricity", and commissions auditing programs to verify the ABB Group is in compliance with its sustainability commitments. A total of 46 country sustainability controllers implement sustainability business plans within each country, covering environmental, social and communication policies, programs and procedures. About 350 local sustainability officers are responsible for environmental management programs on ABB sites in accordance with ISO 14001. Some countries and facilities maintain additional environmental specialists to supplement the implementation of environmental management systems. To ensure the effective implementation of the ABB heath and safety strategy, each country has a country-level health and safety advisor. These specialists support senior management and work through a network of local occupational health and safety advisors at facility and project site level. Sustainability liaison people work in ABB business areas (BAs) to integrate sustainability performance into product development, product stewardship and project management. A sustainability support group also works within ABB’s corporate research team to develop and maintain sustainability tools and training covering life cycle assessment, life cycle costs and design tools, integrating the tools into daily BA activities, and serving as a contact for a large number of external sustainability engagements. ABB has updated its permanent sustainability advisory panel with a new concept for stakeholder engagement. Senior members of relevant stakeholder groups are selected on a case-by-case basis, according to the nature of the sustainability issues to be discussed, to serve as an ad hoc stakeholder advisory panel. In this way, the appropriate expertise can be engaged to advise on the topics on the agenda for each meeting.  ABB's sustainability affairs organization 3.13 Precautionary approach ABB has group-wide principles in place for the development of new products and projects. This precautionary approach is integrated into the GATE model - an internal approvals process governing the development of new products and projects - and requires documented assessment at the development phase of the life-long sustainability impact of new products and projects. The GATE model requires the application of life cycle assessment and advice on how to reduce the use of restricted materials. It is planned to ensure they also cover occupational health and safety and supply management issues relating to the product or project. See under "product stewardship" further down this page for more information on the GATE model. 3.14 Use of externally developed charters and principles ABB subscribes to externally developed charters and principles for sustainability management. They include the ICC Business Charter for Sustainable Development which ABB signed in 1992, and ISO 14000 standards and technical reports. ABB has adopted ISO 14001 for environmental management systems; ISO/TR 14025 for environmental product declarations; ISO 14040-45 for Life Cycle Assessment; and ISO 19011 for environmental auditing of organizations. ABB has incorporated the principles of OHSAS 18001, the ILO guidelines on occupational health and safety management systems, and the ILO Code of Practice on Recording and Notification of Occupational Accidents and Diseases into its health and safety program. ABB facilities are encouraged to produce integrated management systems for environment, quality and occupational health and safety. Most sites now use integrated systems, some of which have been externally certified. EMS to cover all employees ABB is extending environmental management systems to cover employees in non-manufacturing facilities. The target is to introduce systems into all of ABB’s non-manufacturing facilities during 2004. By the end of 2003, 397 out of 410 manufacturing and service sites had implemented the ISO 14001 standard. Social management An executive committee member is responsible for sustainability affairs throughout the group and for the worldwide implementation of ABB’s social policy. Under his leadership, there was a strong focus in 2003 on health and safety performance and on developing a "people strategy" for the group encompassing the labor principles of the social policy. Social management within the supply chain has been integrated through ABB’s supplier qualification procedure. Business ethics compliance programs continued throughout the year, targeting employees involved in business transactions. Stakeholder dialogues were conducted in 19 out of 48 countries to guide ABB’s role in society. In 2004, Amnesty International will start training ABB managers on human rights issues, while a working team will address the broader issues of equality of opportunity and encourage the promotion of women and minority groups to positions of greater responsibility. Occupational health and safety ABB has developed its own occupational health and safety management system, based on the internationally recognized OHSAS 18001 standard and the ILO Guidelines on Occupational Health and Safety Management Systems. ABB has set a goal for all business units to implement the ABB OHS management system by the end of 2004. This will cover all activities including manufacturing, office work, construction projects and service. 3.15 Principal memberships in industry and business associations Listed below are some of the principal associations and initiatives with which ABB is involved in the area of sustainability. Business for Social Responsibility (BSR), U.S. Chalmers University of Technology, CPM, Sweden Global Village Energy Partnership, U.S. Global Reporting Initiative, Netherlands International Organization for Standardization, ISO, Switzerland oikos International, Switzerland Pew Center on Global Climate Change, U.S. SustainAbility, U.K. Transparency International, Germany United Nations Global Compact, U.S. World Business Council for Sustainable Development, Switzerland World Energy Council, U.K. World Wide Fund for Nature, WWF, Switzerland CSR Europe, Belgium See the "principal membership" page for more details concerning these memberships. 3.16 Policies for managing upstream and downstream impacts EMS in the supply chain ABB’s environmental management principles also apply to its main suppliers. ABB favors suppliers who are committed to improving their environmental performance continuously and are certified to ISO 14001 or its equivalent. Product stewardship To assess and continually improve the sustainability performance of new products, ABB applies its GATE model for all product development. The model contains steps in which sustainability performance, objectives and other parameters are assessed. For example: Gate 0 (go ahead): assesses sustainability criteria required of a new product, taking into account existing product lines Gate 1 (definition): identifies sustainability aspects and related objectives Gate 2 (planning): establishes a sustainability plan to define necessary actions, responsibilities and reporting lines, taking into account life cycle assessment, restricted materials list and recycling information Gate 3 - 5 (execution): follows up and reports on the sustainability plan Gate 6 (hand over): hands over documents necessary for sustainability management of the product over its life cycle Gate 7 (follow up): uses GATE model documentation to improve the product development process 3.17 Management of indirect impacts See under environmental and social performance for information on the indirect impacts resulting from our activities. 3.18 Major changes in operations See indicator 2.14 for details. 3.19 Programs and procedures related to sustainability performance Priority and target setting
Programs for performance improvement
Sustainability costs ABB limits the accounting of sustainability to the costs of implementing and maintaining environmental management systems to ISO 14001, health and safety management systems to ISO 18001, and running the sustainability network, including personnel costs and the cost of developing sustainability tools, education and training. This does not include costs related to improvement projects. For example, the decision to invest in a new manufacturing process is the result of integrating many decisions in addition to environmental considerations.
3.20 Status of certification Internal communication and training The network of country sustainability controllers, country and local health and safety advisors, and local sustainability officers communicates sustainability priorities and goals internally, and identifies sustainability training needs. During 2003, training focused on the principles, strategy and management of health and safety management within the group. Performance monitoring Sustainability performance is monitored by an internal reporting system. Local sustainability officers report on environmental performance in an annual report comprising approximately 75 environmental indicators. Country sustainability controllers report on social performance, and country health and safety advisors report on occupational health and safety performance in an annual report comprising approximately 40 social indicators. The executive committee issued a directive in 2003 which requires any fatal or serious accident within ABB’s jurisdiction to be reported to the chief executive officer and other company officers within 24 hours, and the cause of the accident to be determined in an investigation.
Internal and external auditing Although it is not an ABB Group directive that all environmental management systems are externally verified, approximately 85 percent of ABB facilities have appointed an accredited certification body to verify regularly how well they meet ISO 14001 standards. Based on acquiring more than 500 certificates over a period of almost ten years, we believe the benefits of external verification far outweigh the cost for most facilities. The process can, for example, help identify projects that may improve environmental performance and reduce cost at the same time. External verification also helps keep the internal system up to date and informs us of new legislation. In addition, ABB’s Sustainability review is verified by Det Norske Veritas (DNV), an independent verification body. The DNV audit includes verification of reports and indicators, and focuses on the Global Reporting Initiative guidelines for reporting on sustainability. Country sustainability controllers also perform regular audits of sustainability performance at ABB sites. In general, every site is audited at least every third year. To support the implementation of ABB’s health and safety strategy, a system of internal compliance audits is being established. Senior management review and governance ABB’s executive committee has established a top-level health and safety committee, chaired by the executive committee member responsible for sustainability affairs, to direct and monitor health and safety performance throughout the group. The other members of this committee are the two business division heads, who are also executive committee members, the head of the group function for sustainability affairs and his health and safety appointee, and a representative of the group function for corporate communications. ABB’s executive committee members, when discharging their stewardship duties on the boards of ABB’s subsidiary companies, are charged with addressing the sustainability performance of these companies in the areas of health and safety, environmental performance and corporate social responsibility. The latter covers stakeholder dialogue, community involvement and human rights issues. The head of ABB’s sustainability affairs organization reports on the group’s sustainability performance regularly to the executive committee member responsible for sustainability affairs. Business ethics Policy Principle 13 of ABB’s social policy commits ABB to uphold high standards in business ethics and to support the efforts of national and international authorities to establish and enforce high ethical standards for all businesses. The ABB Group subscribes to the basic principles in the International Chamber of Commerce (ICC) Rules of Conduct, 1999 edition, and the Organization for Economic Cooperation and Development (OECD) Convention from 1997, as well as the U.S. Foreign Corrupt Practices Act, 1977. ABB’s policy on business ethics belongs to the company’s core set of values and guiding principles. It is incorporated in ABB’s business ethics standards, which set a "zero tolerance" ruling on non-compliance. In implementing this policy, ABB management and employees:
Global compliance support network ABB’s board of directors and executive committee have designated the group function Legal and Compliance to implement and oversee business ethics within ABB and to manage a global network to ensure compliance. Compliance officers and counselors have been appointed at group headquarters, together with the regional managers in specific regions, and in more than 50 countries to train, advise and monitor employees in all parts of the organization. In addition, ethical coordinators have been established in the business divisions to identify critical issues and develop programs to address them. Another section covering lenders and export credit agencies (ECAs) has been added to the business ethics policy. Specially trained ECA compliance officers are responsible for overseeing and certifying all necessary disclosures in this area. This global network distributes information and guidance, fosters internal dialogue, and supports ethical education and training. During 2003, ABB continued a rigorous program throughout the group to promote its business ethics policy and ensure compliance. In the last few years, such training programs have covered almost 100 percent of employees directly involved in business transactions, while awareness has been raised among almost all other employees. In addition, a special training program is conducted each year to address selected important issues. The participants are those people most likely to face such issues. Access for employees Employees have access via the group’s global intranet to information, guidelines, documents, forms and useful agreements covering all aspects of the business ethics compliance program. Help lines Also provided are 24-hour response helpdesks and details of the compliance counselor network to facilitate consultation or questions. In addition to the Legal and Compliance team help line at group headquarters, there are help lines to units in almost every country and region which are working to accommodate national sensitivities. In some countries, for example, communications are strictly anonymous, whereas in others they must go through trusted confidants. External liaisons ABB is a group contributor and donor to Transparency International, the coalition against corruption. The ABB Group also liaises with the Basel Institute on Governance, and for several years has cooperated with the Center for Business Ethics in Konstanz, Germany. Anti-bribery business principles At the World Economic Forum’s annual meeting in January 2004 in Davos, Switzerland, ABB was one of ten international companies to sign a set of "Business Principles for Countering Bribery in the Engineering and Construction Industry". These principles have been developed by a multinational task force of engineering and construction companies, including ABB, working with the World Economic Forum, Transparency International and the Basel Institute on Governance. |
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