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In 2024, ABB conducted an update to its Double Materiality Assessment (DMA) aligned with the European Sustainability Reporting Standards (ESRS). This assessment covered all subsidiaries and focused on ABB’s operations and value chain and helps us to better understand how we can ensure the financial resilience of our business while also contributing to a more sustainable, resource-efficient and socially progressive future. Our double materiality assessment gave us a clearer picture of the impact that our business has on the economy, the environment and society including people, and it helped us understand the risks and opportunities that the economy, the environment and society pose for our business.

Material topics

ABB considered the findings from the 2023 materiality assessment and stakeholder engagement as still valid and based on the aggregation results, the following ESRS sub-topics were identified as material:

Sub-topics

  • Climate change adaptation
  • Climate change mitigation
  • Energy 

Topic description

ABB’s value chain, from raw material extraction to end-of-life, impacts climate change. Manufacturing, assembly and logistics from our own operations contribute directly to greenhouse gas emissions. We mitigate this through energy-efficient processes, use of renewable energy, sustainable upstream practices and supplier engagement. At the same time, our technologies enhance customers’ energy efficiency, leading to emissions reductions. Climate change also poses risks to our infrastructure, operations, and employee safety. But acting on climate change provides opportunities. Collaboration with governments and NGOs aids the transition to a low-carbon economy, while innovations in renewable energy and efficiency secure our market leadership, reputation, and talent attraction, alongside reducing carbon footprint and costs through diverse energy sourcing.

Sub-topics

  • Pollution of air
  • Pollution of soil
  • Pollution of water 

Topic description

ABB’s value chain and operations can have a negative effect on the environment through pollution. To address these challenges, we promote sustainable practices, such as supplier environmental criteria and circular economy principles, leading to the reduction and elimination of pollution. There are risks associated with pollution. Stricter regulations, like the potential European ban on per- and polyfluoroalkyl substances (PFAS), can disrupt sourcing and materials. Compliance with new standards would demand significant adjustments. We pursue a proactive approach to sustainability and resource management to adapt to and mitigate these risks. 

Sub-topics

  • Water

Topic description

Manufacturing processes, particularly those requiring substantial water use, strain freshwater resources and can affect local ecosystems. However, we commit to optimize water usage wherever possible. Following the DMA we concluded that all aspects relating to marine resources are not material to ABB. 

Sub-topics

  • Resource outflows related to products and services
  • Resource inflows, including resource use
  • Waste 

Topic description

ABB’s business practices have environmental implications through resource use and waste generation. The material consumption for manufacturing may deplete global resources and increase waste. However, our commitment to a circular economy, for instance through recyclable product design and energy efficiency, aims to mitigate these impacts. We can face risks, like product obsolescence, slow market entry and resource scarcity, but we can also pursue opportunities, through setting leading practice in circularity. Innovations like robotics-as-a-service and circuit board take-back systems open new business avenues. Partnerships and startup investments improve market presence and cut raw material costs. Developing innovative, energy-efficient, and recyclable products is a major ambition for us, enhancing revenue and supply chain resilience. 

Sub-topics

  • Equal treatment and opportunities for all
  • Other work-related rights
  • Working conditions 

Topic description

At ABB, we are positively impacting our employees through a strong diversity program, learning and development opportunities, and rigorous safety training. Our diversity initiatives ensure equal opportunities for our employees. We prioritize robust health and safety measures to minimize risks. Despite this, challenges like workload stress, labor rights issues, and safety incidents can still occur. Inadequate training for technologies such as robotics may also lead to job losses. Balancing positive programs with proactive measures for these concerns is crucial for the workforce’s wellbeing and operational success.

Besides the positive impacts on employees through our efforts, they also contribute to our business opportunities and success. For example, our Greener in Motion program boosts employee engagement and retention. Equality programs like Women in Motion and LeadHer enhance income and lower recruitment expenses by ensuring fair treatment and opportunities. Flexible work models attract and retain talent, promoting business growth and innovation. Not acting on these topics would adversely lead to risks, through talent retention, reputational damage, or even sanctions and fines.

Sub-topics

  • Equal treatment and opportunities for all
  • Other work-related rights
  • Working conditions 

Topic description

In our value chain, there is a potential risk of negative impacts on individuals involved in labor, e.g., through health and safety risks in mining. Chemicals and heavy machinery usage in upstream processes can also pose health risks to workers. Our Sustainable Supply Base Management Program, audits, and supplier quality audits, and active membership of the Responsible Minerals Initiative, alongside our Business Ethics Helpline and training, demonstrate our commitment to the safety and wellbeing of all individuals in our value chain. 

Sub-topics

  • Communities’ civil and political rights
  • Communities’ economic, social and cultural rights 

Topic description

ABB’s activities impact communities along its value chain. Negative impacts can arise through pollution or noise from operations or transportation. Positive impacts include creating local employment opportunities, infrastructure development and economic value. Forming partnerships with aligned companies and stakeholders enables us to grow as a company. 

Sub-topics

  • Information-related impacts for consumers and/or end-users
  • Personal safety of consumers and/or end-users 

Topic description

At ABB, we prioritize our customers’ and end-users’ privacy, fostering trust and security by protecting personal information and respecting individual rights with a transparent, ethical approach to data handling. Access to quality information for our customers empowers informed decisions, promoting transparency and confidence in our products. While safety incidents can occur with product misuse, especially among vulnerable users, our strong safety measures and clear usage instructions aim to mitigate risks, ensuring the wellbeing of all our consumers and end-users.

Sub-topics

  • Corporate culture
  • Corruption and bribery
  • Management of relationships with suppliers including payment practices
  • Protection of whistleblowers

Topic description

The impact of ABB’s business conduct is vital for our social license to operate and sustainable growth. Ethical business conduct, transparency, prevention of corruption and bribery, a strong whistleblower system, and regulatory compliance are key. Lapses can lead to legal risks, financial penalties, and brand damage. Engagement and training on business conduct helps attract quality employees and enhance our culture. Integrity lapses, on the other hand, can cause financial and reputational harm. Our transparency and ethics build trust, combat corruption and limit financial risks.

For further details please refer our Sustainability Statement 2024.

 

 

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