Policies and management systems
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ABB’s sustainability policies Our goal is to improve our economic, environmental and social 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. ABB's environmental policy is an integral part of our commitment to sustainability and is embedded in our strategies, processes and day-to-day business throughout the group. Click here to view ABB's full environmental policy. It is also on www.abb.com/sustainability Social policy ABB's commitment to good social performance is elaborated in the group's social policy, which applies to all employees. Click here to view ABB's full social policy (link to ABB's social policy). It is also on www.abb.com/sustainability Occupational health and safety policy 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 up for our group. Click here to view ABB's full occupational health and safety policy. It is also on www.abb.com/sustainability Group function sustainability affairs ABB's sustainability affairs organization is composed of nearly 450 people in 48 countries and regions, and directs ABB's sustainability management program relating to social, health and safety, and environmental performance. The team also coordinates group-wide common efforts programs and commissions auditing programs to verify that the ABB Group is in compliance with its sustainability commitments. The country sustainability controllers implement sustainability business plans within each country, covering environmental, social and communication policies, programs and procedures. The plans must first be endorsed by the respective country manager, before being submitted to the head of ABB's Sustainability Affairs organization for review, consolidation in group-wide activities, and monitoring. 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 support the implementation of environmental management systems. To ensure the effective implementation of ABB's heath and safety strategy, each country has a country-level health and safety advisor. To match ABB's new regional structure, which was introduced in January 2006, regional advisors have also been appointed. These specialists support senior management and work through a network of local occupational health and safety advisors at facility and project site level. Meetings are held regularly, both within and between regions to share health and safety experience. The technical managers in the five divisions work to integrate sustainability performance into product development, product stewardship and project management, focusing on division-level objectives. A sustainability support group also works within ABB's corporate research team to develop and maintain sustainability tools and training, which cover life cycle assessment of products and systems, life cycle costs and design tools - with the aim of integrating the tools into daily business activities. The group also plays an important role in developing global sustainability objectives, formulating ABB's policies and directives for the elimination of hazardous substances and serving as a contact for a large number of external sustainability partnerships. Stakeholder consultations at corporate level are normally held at least once a year. Senior members of relevant stakeholder groups are selected on a case-by-case basis, depending on the nature of the sustainability issues to be discussed. See the article "Consulting a wide range of experts" for more information. 3.13 Precautionary approach ABB has group-wide mandatory sustainability checks in place, to be applied in conjunction with the development of new products and projects. This precautionary approach is also integrated into the GATE model – an internal approvals process governing the development of new products and projects which requires documented assessment at the development phase of their life-long sustainability impact. The GATE model requires a life cycle assessment study of each new product and project, and provides advice on how to reduce the use of unwanted substances and avoid other environmental risks. The model is also being expanded to cover occupational health and safety and supply management issues relating to a product or project. Backing up the GATE model is ABB’s sustainability toolbox, which underwent a major update in 2005. The toolbox, which is intranet-based for ease of access and update, contains comprehensive information and guidance relating to sustainability criteria to be applied in the development of ABB products and projects. For example, it contains information on restricted substances and European Union directives, such as those on the restriction of hazardous substances (RoHS) and on waste electrical and electronic equipment (WEEE). The toolbox also contains guidance on the application of life cycle assessment and environmental assessment to products and projects. See "product stewardship" for more information on the GATE model. ABB has also integrated sustainability criteria into its risk assessment process for projects. 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 International Labour Organization (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. In January 2004, ABB was one of ten international companies to sign a set of "Business Principles for Countering Bribery in the Engineering and Construction Industry". ABB facilities are encouraged to produce integrated management systems for environmental and quality issues, and for occupational health and safety. More than 200 sites now use integrated systems, several of which have been externally certified. The most recent sites are in Colombia, Germany and Norway. EMS to cover all employees In line with ABB's policy, practically all manufacturing and service sites have implemented the ISO 14001 standard. A complete list of these sites per country is outlined in the Policies and management systems section. ABB is extending environmental management systems to also cover employees in non-manufacturing facilities. Our goal is to ensure that all ABB employees, whatever their function, are subject to environmental management systems. 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 this member's influence, there was a continuing focus in 2005 on improving health and safety performance throughout the group. ABB continued its efforts to encourage its main suppliers to follow the principles set out in the group's social policy, covering such issues as equality of opportunity, health and safety and child labor. For example, ABB and its international freight-forwarders for sea and air are jointly implementing effective and practicable guidelines covering environmental and social performance objectives. The current status of this collaboration is described in the Environmental performance section. Business ethics compliance programs continued throughout the year, targeting employees involved in business transactions. Stakeholder dialogue, designed to guide ABB's role in society, was conducted at corporate level in May 2005. Dialogues were also conducted at country and regional level to gain the views of stakeholders on particular sustainability issues faced locally by ABB. Details are given in the article on "Consulting a wide range of experts". During 2005, ABB deepened its engagement on the responsibilities of business for human rights and maintained its membership of Amnesty International's Business Group, participating in its work and taking advice from Amnesty on human rights issues. ABB also continued during the year as an active member of the Business Leaders Initiative on Human Rights (BLIHR) and contributed to the development of "A Guide for Integrating Human Rights into Business Management" which is designed to promote a more human rights-aware approach to business. This is a joint publication of BLIHR, the United Nations Global Compact and the United Nations High Commissioner for Human Rights. In 2005, ABB continued to investigate ways of reducing and compensating for its direct and indirect greenhouse gas emissions and supporting efforts to raise awareness about climate change. Occupational health and safety Implementation of occupational health and safety management systems (OHMSs), based on the internationally recognized OHSAS 18001 standard and the ILO Guidelines on Occupational Health and Safety Management Systems, continued in 2005. By the end of the year, 96 percent of all business units had achieved at least 75 percent implementation. 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: Amnesty International, AI, U.K. Business Leaders Initiative for Human Rights, BLIHR, U.K. Chalmers University of Technology, CPM, Sweden CSR Europe, Belgium Global Village Energy Partnership, GVEP, U.S. Global Reporting Initiative, GRI, Netherlands International Committee of the Red Cross, ICRC, Switzerland International Institute for Management Development, IMD, Switzerland International Organization for Standardization, ISO, Switzerland oikos International, Switzerland The Pew Center on Global Climate Change, U.S. Transparency International, TI, Germany United Nations Global Compact, U.S. World Business Council for Sustainable Development, WBCSD, Switzerland World Childhood Foundation, Sweden WWF, Switzerland Click here for more information on ABB's Principal memberships. 3.16 Policies for managing upstream and downstream impacts Sustainability in the supply chain ABB's sustainability management principles - environmental and social - are also applied to its main suppliers and incorporated into the contracts it signs with them. ABB favors and motivates suppliers who are committed to improving their environmental performance continuously, are certified to ISO 14001 or its equivalent, and who have in place a social policy similar to that of ABB. In order to clarify its requirements, ABB has produced guidelines for environmental and social performance expected of its suppliers, which it incorporates into its contracts with main suppliers. See indicators EN33 in the Environmental performance section, and HR3 in the Social performance section for information on ABB's collaboration with its main freight-forwarding suppliers on these measures. ABB participated in IMD's Corporate Sustainability Management Forum research project "Corporate Value Chains - Supplier Relationships and Sustainable Development" and has developed a practical guide to sustainability in the supply chain. Product stewardship To assess and continually improve the sustainability performance of new products and projects, ABB applies its GATE model to their development. The model contains seven steps which assess sustainability objectives and performance throughout the life cycle. The model provides the opportunity to correct deficiencies and adopt new designs. ABB has also integrated sustainability criteria into its risk assessment process for projects. Large customer projects may provide many benefits but it is important to minimize their potential negative effects on the environment and on the local community. ABB therefore carries out impact assessments of its scope of work, comparing the potential negative impacts with alternative technical solutions for such projects. These assessments may cover direct impacts such as land use, noise and material use, and indirect effects, such as power losses in cables, overhead lines, transformers and other electrical equipment. 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
"Achievements and Outlook" - provides a more detailed account of ABB's sustainability priorities during 2005 and targets for 2006. 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. In 2005, leadership training in health and safety of the top 100 managers continued, and was expanded to include senior managers at country level. To date, over 1,750 senior managers have been trained in health and safety leadership. Meanwhile, over 1,000 senior managers were trained during the year to do safety observation tours at manufacturing sites and offices to strengthen the group's safety culture. Performance monitoring Sustainability performance is monitored by an internal reporting system. Local sustainability officers report on environmental performance from 380 sites in 321 annual reports, each comprising approximately 80 environmental indicators. Country sustainability controllers (CSCs) report on social performance, and country health and safety advisors report on occupational health and safety performance (OHS) in annual reports, each comprising approximately 45 social indicators for each country. See the list below for those responsible in each country. Any fatal or serious incident within ABB's jurisdiction is to be reported to the Chief Executive and other company officers within 24 hours, and the cause of the incident to be determined by an investigation. An alert is then sent out group-wide to ensure that preventive action is taken to avoid a similar incident in the future. Country Sustainability Controllers and Occupational Health and Safety advisors
Some countries and facilities employ additional specialists to maintain environmental management. Environmental specialists
Internal and external auditing 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 12 years, ABB believes 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 consolidate the implementation of ABB’s health and safety strategy, internal compliance and spot check audits are conducted to ensure group health and safety processes are being followed and that actions arising from group-wide safety alerts are being implemented. Senior management review and governance ABB’s top-level health and safety committee, chaired by the Executive Committee member responsible for sustainability affairs, continued to meet in 2005, monitoring progress against OHMS goals, and safety performance generally. 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 The group function Legal and Compliance is designated by ABB’s Board of Directors and executive committee to implement and oversee business ethics within ABB and to manage a global network to ensure compliance. Under the direction of the Group Chief Compliance Officer, local and regional compliance officers in more than 50 countries, together with regional managers in specific regions, train, advise and monitor employees in all parts of the organization. In addition, ethical coordinators in the business divisions identify critical issues and develop programs to address them. Another section covering lenders and export credit agencies (ECAs) is also included in 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. Over the last few years, ABB has carried out a rigorous program throughout the group to promote its business ethics policy and ensure compliance. Such training programs have covered almost all 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. Members of ABB’s top management also participate in this program and receive training directly from the head of the Legal and Compliance group function. 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 Round-the-clock response helpdesks and details of the compliance counselor network are also provided to facilitate consultation or questions. In addition to the Legal and Compliance team helpline at group headquarters, there are help lines to units in almost every country and region that are working to accommodate national sensitivities. In some countries, for example, communications are strictly anonymous, whereas in others they go through trusted confidants, always respecting specific local legal requirements. External liaisons ABB is a group contributor and donor to Transparency International, the coalition against corruption, and liaises with the Basel Institute on Governance. Anti-bribery business initiatives ABB is a signatory to the World Economic Forum’s Partnering against Corruption Initiative (PACI), which has been signed by around 90 companies. As a signatory, ABB has committed to strengthening efforts to counter corruption and bribery, and has signed a statement supporting the PACI Principles. These Principles call for a commitment to two fundamental actions:
As a signatory to the United Nations Global Compact, ABB adheres to its 10th principle, adopted in 2004, which calls on businesses to work against all forms of corruption, including extortion and bribery. ABB representatives actively participate in PACI and UN Global Compact working groups. |
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