—
Sustainability
Report 2023

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Table of contents

01

02

03

Sustainability at ABB

Low-carbon society

Preserving resources

04
06
08
12
14
17

21

33
34
38
41

18

CEO letter
The ABB Way
Sustainability Agenda
Sustainability governanceMateriality
Contributions to the UN
SDGs
ESG ratings

22
28
30

We enable a low-carbon
society
Customer emissions
ABB’s own emissions
Supplier emissions

We preserve resources
Circularity
Waste and water management
Biodiversity and land use

04

05

06

Social progress

Integrity andtransparency

Appendix

43
44
46
50
52
54
56
58
61

We promote social
progress
Health and safety
Human rights and labor
standards
Employee engagement
score
People development
Employee wellbeing
Diversity and inclusion
Stakeholder engagement
Community engagement

65
67
70
71
73

We embed a culture of
integrity and transparency
Integrity and transparency
Executives’ sustainability
incentives
Data privacy & cybersecurity
Responsible sourcing

77
80

81
84
92
94
99
120
143
149
150

Approach to reporting
Swiss Code of Obligations:transparency on non-financial
matters
Assurance statement
Material topic descriptions
Non-material topic descriptions
GRI disclosures table
GRI content index
EU Taxonomy report
TCFD recommendations report
SASB disclosure table
Definitions

01 Sustainability
at ABB

04
06
08
12
14
17
18

CEO letter
The ABB Way
Sustainability Agenda
Sustainability governanceMateriality
Contributions to the UN SDGs
ESG ratings

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Sustainabilit y at ABB—
CEO letter
Dear Stakeholders,
As a technology leader in electrification and automation, in 2023 ABB continued toplay a key role in accelerating the energy transition for a net-zero future.
Our solutions help to optimize, electrify and decarbonize industry, buildings,
power and transport – sectors that together account for the lion’s share of global
energy-related carbon emissions. By doing this, we made the ways we move, produce,
work and live more sustainable.
Over the past year, ABB continued to make good progress towards its sustainability
targets. For instance, we cut emissions in our own operations by an additional 32 percent, putting us well on track to achieve our 2030 target of reducing emissions by 80
percent compared with a 2019 baseline.
These improvements are the result of an organizational transformation that has empowered our businesses with full ownership and accountability for their operations
and performance, as well as a deeper cultural change that has united ABB around ourcommon purpose of enabling a more sustainable and resource-efficient future.
ABB’s 2023 Sustainability Report touches on many of the concrete ways in which weare helping our customers improve their energy efficiency, drive electrification or
integrate renewables into the power grid. The report also explains how we produce
and distribute these technologies and support the people and communities that makeour work possible. We strive to make every aspect of our operations as sustainable
as possible.
In 2023, we strengthened and accelerated our Sustainability Agenda. We updated ourambitions and targets in line with recognized international standards and frameworks, we carried out a double materiality assessment, and we further embedded
sustainability across our businesses.
ABB’s Sustainability Agenda is structured around three pillars: enabling a low-carbon
society, preserving resources and promoting social progress for a net-zero future. All
three pillars support the United Nations’ Sustainable Development Goals (SDGs) andin particular SDG 7 (affordable and clean energy), SDG 8 (decent work and economic
growth), SDG 9 (industry, innovation and infrastructure) and SDG 13 (climate action).
To enable a low-carbon society, we announced new net-zero-aligned targets for 2030
and 2050 at our Capital Markets Day on November 30, 2023. These targets cover our
scope 1 and 2 emissions, which we are aiming to reduce by 80 percent by 2030, without carbon offsets, as well as our scope 3 emissions, covering the rest of our value
chain, which we aim to cut by 25 percent by 2030. By 2050, our goal is to have reachednet-zero in our own operations and to have cut our scope 3 emissions by 90 percent.
These targets are aligned with the Science Based Targets initiative (SBTi) Net-Zero
Standard. We submitted them to the SBTi in 2023 for validation in 2024.
Using the latest guidance published by the World Business Council for Sustainable
Development (WBCSD), we have strengthened the way we track and quantify ourcustomers’ avoided emissions. Under this new methodology, we aim to help our≡

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5customers avoid 600 megatons of greenhouse gas (GHG) emissions through the products we sell from 2022 to 2030.
To preserve resources, we have initiated our Circularity Approach, with the goal of
having 80 percent of ABB’s products and solutions meet circularity requirements by
2030. This includes eliminating waste to landfill from our operations and helping ourcustomers meet their own circularity commitments by offering retrofit, take-back andrecycling services. In 2023, we increased the number of life cycle assessments (LCAs)
for our products and solutions to promote eco-design principles and provide transparency to our customers.
To promote social progress, we strengthened our human rights due diligence along
the value chain in line with the United Nations’ Guiding Principles on Business andHuman Rights. This report describes many other ABB initiatives aimed at creating
safe, fair and inclusive working environments and providing impactful support forcommunity-building initiatives. In this area, we have continued to place a special emphasis on education and upskilling programs in the STEM disciplines, as they will be
key to making a net-zero future a reality.
On the topic of safety, we further reduced our lost-time injury frequency rate (LTIFR)
to industry-leading levels. Despite this achievement and our concerted efforts, I am
saddened to note that there was one fatal incident in 2023 involving one of our contractors, working on a project in Algeria. An investigation is underway. Our thoughts
go out to the family of the deceased. We are continuously reviewing and updating oursafety procedures to try to prevent such incidents.
All three pillars of our Sustainability Agenda are underpinned by our commitment toembedding a culture of integrity and transparency across our value chain. In 2023,
following the release of our updated ABB Code of Conduct, we updated our Human
Rights Policy and Supplier Code of Conduct to reflect our Sustainability Agenda.
Our Supplier Code of Conduct forms an important part of our procurement terms
and conditions.
ABB has considerable cause for pride as we seek to fulfill our purpose of enabling amore sustainable and resource-efficient future. I want to thank our customers, employees, investors, partners and all other stakeholders for your continuing collaboration, support and trust.
Together, we are leading the way to a sustainable future.
Björn Rosengren
CEO, ABB Ltd

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Sustainabilit y at ABB—
The ABB Way
The ABB Way, our operating model, enables us to create superior value for all our
stakeholders. It defines how our business areas, divisions and lean corporate center
approach holistic value creation in our decentralized set-up. By doing so, it serves as
the glue that holds our Group together. Core to the ABB Way is our purpose – to enable
a more sustainable and resource-efficient future with our technology leadership inelectrification and automation.
The ABB Way outlines our business model as well as our approach to developing ourpeople and culture, maintaining good governance, and nurturing our brand. While
our Sustainability Report focuses on the business model, a comprehensive view ofthe other elements of the ABB Way and our value creation model can be found in ourIntegrated Report.

T H E A B B WAY

M• Values• People• Leadership

E
OD

PEO

L

PL

E

&
LT

SIN

CU

ES

S

• Decentralized setup – fulldivision accountability• Performance management• Portfolio management

E

BU

UR

ABB
PURPOSEGO

RN• Code of Conduct• Internal controls &compliance• Risk management• Regulations, processes
and policies

D

VE

A

N

CE

BR

AN

• Positioning• Reputation
management

≡—Business model

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7

ABB’s business model determines how we govern our portfolio of 19 divisions, manage performance, including delivering on our Sustainability Agenda, and drive value
creation for our stakeholders by building on our core competencies.
Decentralized set-up – full division accountability
While the ABB Way provides standardized policies, processes and systems, it also empowers our divisions to take full ownership of and accountability for their respective
strategies, performance and resources. In practice, this means that divisions follow
the Group’s strategic direction and pursue opportunities to collaborate, yet also
define their own course of action to deliver on, e.g., Group financial or sustainability
targets and allocate resources accordingly.
Performance management
Building on our mindset of continuous improvement, ABB translates its strategic
priorities – including financial performance and progress on sustainability – into
short- and long-term targets, which are supported by appropriate incentives. A scorecard system and holistic set of key performance indicators (KPIs) enable us to plan,measure, monitor and review progress against these targets. Incentives enable us tomaintain a strong link between strategy and compensation. This linkage includes ourcommitment to sustainability, which is embedded in both the Long-Term Incentive
Plan (incorporating one sustainability-related measure) and the Annual Incentive Plan(incorporating at least two sustainability-related goals in the individual component
for Executive Committee members).
Portfolio management
ABB actively and systematically manages its business portfolio. Value creation is
focused on both organic and inorganic investments that increase ABB’s exposure to
megatrends such as sustainability and digitalization, fill technology gaps, complement or expand our offering in high-growth segments, provide access to new geographies, and lead to economies of scale through consolidation.
Capital allocation for investments in organic and inorganic growth is based on ourdivisions’ strategic mandates – stability, profitability or growth – and on our portfolio
assessment criteria. Divisions with a growth mandate are expected to deliver organic
growth and to actively pursue value-creating, bolt-on acquisitions; targets must fit
well with ABB’s purpose to enable a sustainable and resource-efficient future and tooperate in attractive markets. To support the achievement of our revised financial andsustainability targets, we further developed our portfolio assessment approach andalso fully embedded sustainability into our methodology through a distinct sustainability lens. Similarly, existing businesses or parts of divisions that may structurally nolonger meet our assessment criteria – i.e., assets for which ABB is no longer the best
owner or can no longer deliver superior value creation – become exit candidates.

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Sustainabilit y at ABB—
Sustainability Agenda
ABB has enabled energy efficiency and electrification on multiple fronts for 140
years. Today, we are focused on leveraging our leading technologies in electrification,
automation and digitalization to drive the ongoing energy transition. By helping ourcustomers in industry, buildings, power and transport – sectors that account for the
majority of the world’s energy-related carbon emissions – to electrify, optimize anddecarbonize, we enable them to remain competitive while reducing their carbon footprints. Delivering on our purpose, ABB’s solutions make the ways we move, produce,
work and live more sustainable.
Based on our purpose to enable a more sustainable and resource-efficient future,
we aim to create holistic value for stakeholders across ABB’s entire value chain. Our
Sustainability Agenda reflects the value we create by enabling a low-carbon society,preserving resources and promoting social progress. It builds on our ABB Way operating model and is underpinned by ABB’s culture of integrity and transparency, extending across our value chain. ABB also creates value in ways beyond the Sustainability
Agenda – through our leading financial performance, world-class technology andculture of integrity and transparency. While the ABB Sustainability Report focuses on
our Sustainability Agenda, our Integrated Report provides a holistic perspective on
our Group’s entire value creation.
To enable a low-carbon society, we are raising our ambitions regarding our existingscience-based targets by setting net-zero targets aligned with the SBTi Net-Zero
Standard. In 2023, we submitted our updated scope 1, 2 and 3 targets for 2030 and
2050 to the Science Based Targets initiative for validation. We are cutting our own
GHG emissions, empowering our customers to avoid emissions and deploy more renewables, and working with our suppliers and partners to expand their efforts.
To preserve resources, we consider the full life cycle of our products and apply our
Circularity Approach, steadily cutting waste and water use while broadening ourcapabilities for reuse and recycling. Our efforts are in line with the latest international standards.
To promote social progress, we seek to help workers and their communities andsocieties to develop and reach their full potential. To achieve this, we aim to cause
zero harm to our people and contractors, increase the proportion of women in senior
management roles, achieve a top-tier employee engagement score, respect andpromote human rights along our value chain and expand our programs for community engagement.
Through our governance approach as defined by the ABB Way, our Sustainability
Agenda is fully embedded across our businesses. Our strong business model, with its
decentralized set-up and sharp focus on performance management, ensures that ourbusiness areas and divisions are fully accountable for their sustainability performance. In 2023, we continued to make progress toward our ambitious sustainability targets.

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Targets→

N E X T CH APTE R

Baseline (baseline year)192023 status

L O W - C A R B O N S O C I E TY

Reduce own scope 1 and 2 CO₂e emissions by at least 636 kilotons CO₂e (adjusted for
80% by 2030 and by 100% by 2050
portfolio changes) 2019

151 kilotons CO₂e

Reduce scope 3 CO₂e emissions by 25% by 2030 andby 90% by 2050

76,8342 kilotons CO₂e (2022) /392,1883 kilotons CO₂e (2022)

76,6652 kilotons CO2e /436,3463 kilotons CO₂e

Ambition to avoid 600 megatons CO₂e emissions
throughout lifetime of products sold from 2022 to20304

65 megatons CO₂e (2022)

74 megatons CO₂e

PRESERVING RESOURCES

Cover at least 80% of ABB’s portfolio of products and n.a.
solutions with our Circularity Approach by 20305

31%6 (share of ABB’s products and solutions
assessed)

Send zero waste to landfill while reducing waste gen- 16.8 kilotons (2019), equivalent 10.1 kilotons, equivalent to 6.3% of total wasteeration by 2030
to 8.8% of total waste (adjusted
for portfolio changes)
SOCIAL PROGRESS

Zero harm to our people and contractors – we aim for 0.24 (2019)7
a gradual reduction in lost time from incidents

0.13

Increase proportion of women in senior management8 11.7% (2019)
roles to 25% by 2030

21.0%

Achieve a top-tier employee engagement score71/100 (2019)77/100

Expand programs for community engagementn.a.

As part of the improvement process started in
2022, in 2023 we assessed our community engagement positioning and revised and expanded thescope of action, now focused on education, emergency and disaster relief, community empowerment, and environment and conservation.

Global framework for assessing and mitigatingn.a.
third-party integrity risks through risk-based due diligence and life cycle monitoring

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

I NT E G R I TY & T R A N S PA R E N C Y

Framework established and operational. Integrity
due diligence and risk management enhancements
for suppliers (buy-side) and sales channels(sell-side) launched globally.
1
2
3
4
5
6
7
8

Where a baseline applies.
Representative scenario: Energy loss used as basis for calculations; see explanation in the “Customer emissions” chapter of this report.
Strict scenario: Energy input used as basis for calculations; see explanation in the “Customer emissions” chapter of this report.
This ambition is not part of the committed targets.
Based on revenues from hardware-based products and solutions, where granularity of financial systems allows. Service revenues are excluded.
The circularity score of the assessed products and solutions is to be calculated once a representative share of the portfolio has been assessed.
2019 baseline excludes the Power Grids business and the Turbocharging division.
At ABB, senior managers are defined as employees in Hay grade 1-7, including Division Presidents.

ABB SUSTA IN A BILIT Y REP ORT 202 3

10

Targets

Sustainabilit y at ABB

Baseline (baseline year)1

Global Integrity Program underpinned by accountabil- n.a.
ity for integrity and an adaptive risk management
strategy gained from insights through targeted learnings, transparent reporting and monitoring2023 status
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 andmonitoring.
1. Trust KPI – the rate of severity level 1 and 2 investigations where the reporter disclosed theiridentity:• Year 1 (January 1, 2021, to December 31, 2021):
57% of reporters.
• Year 1 and 2 (January 1, 2021, to December 31,2022): 60% of reporters.
• Year 1, 2 and 3 (January 1, 2021, to December 31,2023): 60% of reporters.
2. Engagement KPI – the volume of unique visitors
to the Integrity Awareness Portal (IAP) for integrity
learnings:• Year 1 (January 1, 2021, to December 31, 2021):
25% of employees with online access.
• Year 1 and 2 (January 1, 2021, to December 31,2022): 69% of employees with online access.
• Year 1, 2 and 3 (January 1, 2021, to December 31,2023): 80% of employees with online access.

At least 80% of supply spending in focus countries2
covered by Sustainable Supply Base Management(SSBM) by 2030

n.a.

At least 80% of spending on high-risk suppliers in focus countries2 covered by SSBM by 2025
Linking sustainability targets to executives’ variable
pay

Using a risk-based approach, a mid-term 2025 target has been set, focusing on high-risk suppliers infocus countries.2
In 2023, we reached 42% of spending on high-risk
suppliers in focus countries2 covered by SSBM.

Under the Annual Incentive Plan
(AIP), a safety goal was included
within the individual measurefor some member of ABB’s
Executive Committee (EC). The
individual measure had aweighting of 20 percent of theexecutive’s target AIP (2019).

Under the AIP, at least two sustainability-related
performance goals are included within the individual measure for each member of ABB’s EC. The individual measure has a weighting of 20 percent of
the executive’s target AIP.

Under the Long-Term Incentive One of the three performance measures under
Plan (LTIP), two performance
ABB’s LTIP is based on achievement of a corporate
measures with equal weighting sustainability target and carries a weighting of 20
of 50 percent were considered, percent. The LTIP is awarded to around 100 execunamely average earnings pertives, including EC members and division presishare and relative total sharedents. Vesting under the LTIP is subject to theholder return. The LTIP wasachievement of the plan specific targets over a peawarded to around 100 execuriod of three years.
tives, including EC members anddivision presidents. Vesting under the LTIP was subject to theachievement of the plan specifictargets over a period of three
years (2019).
1
2

Where a baseline applies.
Current focus countries are Argentina, Brazil, Bulgaria, China, Colombia, India, Indonesia, Malaysia, Mexico, Peru, Poland, Saudi Arabia, South Africa, Thailand, Türkiye
and Vietnam.

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ABB SUSTA IN A BILIT Y REP ORT 202 3

Sustainabilit y at ABB—
Sustainability governanceIn line with the ABB Way, responsibility for sustainability is clearly defined and covers
all levels of the organization:—
Boardof Directors—
Executive Committee—
Sustainability Council—
Corporate teams—
Workstreams—
Business-level
implementation

ABB’s Board of Directors reviews and approves the Sustainability Agenda and related
targets. In 2023, topics related to the Sustainability Agenda were discussed in every
Board meeting. Board committees also have specific roles in relation to sustainability:
The Governance and Nomination Committee (GNC) is responsible for overseeing ABB’s
Sustainability Agenda (including corporate social responsibility, health, safety and environment). It reviews and proposes to the Board the company’s Sustainability Agenda
and its targets, monitors target progress and achievements, and reports to the Board
at least once per year. The Compensation Committee ensures that ABB’s executive
compensation policies are appropriately aligned with its Sustainability Agenda.
The ABB Group Executive Committee validates the Sustainability Agenda and its
implementation. It is responsible for reviewing sustainability targets in line with our
performance management approach and our business model, as well as for ensuringthat a sustainability culture is embedded in our business decision-making. In every
Executive Committee meeting held in 2023, topics related to the Sustainability
Agenda were discussed. The Chief Communications and Sustainability Officer, who
is a member of the Group Executive Committee, holds functional responsibility for≡

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13sustainability and reports together with the Group Head of Sustainability to the GNC
on topics and progress related to the Sustainability Agenda.
The Sustainability Council is the operational body that oversees implementation of
the Sustainability Agenda, reviews developments and monitors progress toward targets. As of 2023 and in line with the ABB Way, all business areas are represented in the
Sustainability Council by their heads of strategy as well as their respective sustainability leads. This has further strengthened the role of the Sustainability Council.
The Group sustainability team shapes ABB’s Sustainability Agenda based on internaland external stakeholder input, impact assessments and evolving regulatory requirements, and drives sustainability topics on the Group level. To strengthen the quality of
our sustainability data and ensure an accurate assessment of our sustainability performance, responsibility for ABB’s sustainability reporting was moved to the Financefunction in 2023.
In 2023, the Sustainability Council defined and clarified the role of topic-specific workstreams. These workstreams establish targets and roadmaps across business areas
and determine the governance for their respective sustainability topics. Additionally,
they monitor trends and share best practices across business areas. The workstreams include subject-matter experts from our business areas and divisions, aswell as members of the Group sustainability team. The workstreams regularly reportto the Sustainability Council on their progress and receive support from the Council
where needed.
In line with the ABB Way and our decentralized operating model, our four businessareas and their divisions are ultimately responsible for putting action plans in placeand ensuring that appropriate resources are available to implement these plans anddeliver on our targets. To strengthen division-level accountability in line with ourdecentralized operating model, each division appointed a Division Carbon Accounting
Lead in 2023.

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ABB SUSTA IN A BILIT Y REP ORT 202 3

Sustainabilit y at ABB—
Materiality
In 2023, ABB conducted a double materiality assessment. This type of assessment
has proven to be particularly relevant for companies and organizations that are committed to integrating sustainability considerations into their business strategies andreporting practices. The term “double materiality” refers to the two-way relationshipthat exists between a company and the economy, environment and society in which it
operates. In other words, while the business activities of a company can have a varietyof impacts on the economy, environment and society including people (impact materiality), changes that occur within the economy, environment and society can also
impact the activities of the company (financial materiality). ABB’s 2023 double materiality assessment replaces our prior materiality assessment, which was developed in
2020, to provide a more complete picture of this two-way relationship.
The assessment was guided by the following regulatory requirements and reporting standards: the provisions of the amended Swiss Code of Obligations related totransparency on non-financial matters (Art. 964b CO), the European Sustainability
Reporting Standards (ESRS), Global Reporting Initiative (GRI), Integrated Reporting
Framework (IR), IFRS Sustainability Disclosure Standards, SASB Standards and recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

—
ABB’s approach to
double materiality

Over the course of 2023, ABB took a systematic approach to implementing its double
materiality assessment. As we were seeking stakeholder feedback to define ourmaterial topics, we reviewed and updated the overview of the company’s stakeholder
groups. While no major changes were made to the overall group categories, the nameof the “external partners” group was changed to “collaborative partnerships” toemphasize our collaborations with other companies and research and academic institutions on a wide range of societal, environmental and technological activities andtopics. The updated six stakeholder groups are: collaborative partnerships, customers, employees, governments and civil society, investment community and suppliers.
A clear definition was formulated and finalized for each stakeholder group. For more
information, please refer to the “Stakeholder engagement” chapter in this report.
ABB conducted extensive research to consider evolving regulatory and reporting
requirements, industry- and sector-specific topics, and global trends. Positive andnegative impacts were derived from desk research, ABB documentation and industry
knowledge. On this basis, we identified and categorized 24 potentially material
topics for ABB. The list was then validated through the outcome of the internal
stakeholder surveys performed by ABB. ABB’s corporate functions and four businessareas assessed the topics and impacts from multiple perspectives through an online
survey. In total, 59 representatives participated in the survey. In preparation for theexternal stakeholder survey, and in the interest of greater clarity and understanding, ABB elected to simplify the list of topics by clustering them into broader topics.
Definitions for these topics were then developed in close consultation with ABB’s internal subject-matter experts and with detailed cross-referencing to the results fromthe internal survey. The topic descriptions can be found in the Appendix of this report.
Next, ABB invited 1,447 external stakeholders – drawn from among our collaborative
partnerships, customers, employees, governments and civil society, investment community and suppliers – to participate in an online survey addressing ABB’s impacts
related to the proposed topics. Of these, 308 stakeholders submitted a complete
response. The work of engaging with ABB’s key external stakeholders represents anessential aspect of the double materiality assessment process, as these parties are≡TABLE OF CONTE NTS→N E X T CH APTE R

15

well positioned to identify and evaluate many of ABB’s material impacts. The results ofour external stakeholder survey were reviewed during a validation workshop involving
the strategy and sustainability heads from each business area and relevant corporate functions.

Impact of ABB on the economy,
environment and society including people

HighestKey impacts, risks and opportunities related to the proposed topics were used to
identify material topics. The risks related to the material topics were identified
based on the results of our Enterprise Risk Management (ERM) process. In total, we
identified 10 topics that we consider material because they scored particularly highlyin terms of ABB’s impact on the economy, environment and society including people,
and in terms of the impact of these topics on ABB’s success. The 10 material topics
were then mapped on to a matrix; the two axes of which were “Impact of ABB on theeconomy, environment and society including people” and “Impact on ABB’s success.”

Health & safety

Responsible
sourcing

Corporate & sustainability
governance
Human rights &labor standards

ClimateCircularity

Products,
solutionsand services

Employee development &wellbeing
Data privacy &cyber security

LowestBusiness performance & resilience

LowestImpact on ABB's successHighest16

ABB SUSTA IN A BILIT Y REP ORT 202 3

Sustainabilit y at ABB

The 2023 ABB double materiality matrix was reviewed and approved by the Executive Committee
and the Governance and Nomination Committee of ABB’s Board of Directors.
In our pursuit of a sustainable future, it is crucial to acknowledge that sustainability extends
beyond the material considerations of a single company. The double materiality assessment isvital in identifying sustainability topics on which ABB has high impacts and vice versa. Equally, it isimportant to recognize that some of the topics that scored lower and therefore have been deemed
non-material, such as water and waste management, biodiversity and land use, partnerships andcollaboration, and diversity and inclusion are relevant for ABB’s and the world’s collective future.
Embracing these topics is necessary to ensure a more comprehensive and forward-thinking approach to responsible business practices.
Looking ahead, we will continue to engage with our stakeholders to track the ongoing evolutionof material topics in response to global risks and opportunities, new regulations and emerging
trends, among other factors.

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17—
Contributions to the United Nations’Sustainable Development Goals
Adopted by the member states of the United Nations in 2015, the 17 Sustainable
Development Goals (SDGs) and their 169 sub-targets offer a blueprint for achieving
peace and prosperity by 2030. Business has a vital role to play in driving progress if
the SDGs and their sub-targets are to be achieved by the end of this decade.
ABB has always been a strong advocate for the SDGs. Following our double materiality
assessment in 2023, we decided to review our impacts on the SDGs. By canvassing
a wide range of internal and external stakeholders for their perspectives on ABB’s
impacts on the economy, environment and society including people, the double materiality assessment provided us with accurate data for our SDG mapping. We mapped
the topics that we identified in our double materiality assessment against the 169
sub-targets of the SDGs. This process allowed us to identify four SDGs on which wehave the greatest impact. They are as follows:

ABB supports the Sustainable
Development Goals

Ensure accessto affordable, reliable,
sustainable and modern
energy for all.

Promote sustained,
inclusive and sustainableeconomic growth, full andproductive employment
and decent work for all.

Build resilient
infrastructure, promote
inclusive and sustainableindustrializationand foster innovation.

Take urgent action tocombat climate change
and its impacts.

ABB enables access to affordable and sustainableenergy through our portfolio of electrification, automation and energy-efficientsolutions.

ABB contributes to decent
work and economic growthby providing safe and fair
employment, paying taxes
and supporting local
communities.

ABB’s innovative technologies actively contribute tosustainable industrialization and give us, our business partners and our customers the ability to move,work and live moresustainably.

By cutting our own GHG
emissions, empowering
customers to avoid emissions and integrate renewables, and working with
suppliers and partners
to reduce their carbon footprints, ABB is enabling
decarbonization andclimate action.

The selection of these four SDGs is fully aligned with ABB’s purpose of enabling amore sustainable and resource-efficient future with our technology leadership inelectrification and automation. This alignment allows us to focus our efforts on thoseareas where we can generate the greatest impact. While these are the SDGs on which
ABB has the most influence, we also recognize the importance of all other SDGs andendeavor to contribute to their achievement whenever and wherever possible.

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18

Sustainabilit y at ABB—
Environmental, social andgovernance ratings
An environmental, social and governance (ESG) rating is a measure of a company’s
exposure to long-term environmental, social and governance risks. Because theserisks have financial implications, ESG ratings are used by investors to form a broader
understanding of a company’s long-term potential.
At the end of 2021, we identified the most relevant ESG ratings for ABB and its stakeholders on the basis of an internal review. Drawing on the results from the review, theExecutive Committee decided in 2022 to reduce the number of ESG ratings in which
we participate. We reviewed the six rating providers again in 2023 and confirmed thatthey remain the most relevant to ABB.
We were pleased to note that our overall ESG ratings improved in 2023 over 2022.
We attribute this improvement to our robust governance structure and our progress
toward our 2030 sustainability targets, as well as to the work we did to refine thesetargets further.

THE ESG R ATINGSWE PARTICIPATE IN ARE THE FOLLOWING:
Score

Rating

CDP Climate

D-

D

C-

C

B-

B

A-

A

D

C-

C

B-

B

A-

A

C

B-

B

A-

A

CDP WaterD-

CDP Supplier Engagement

D-

D

C-

The 2023 CDP Supplier Engagement score will be available in March 2024.

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Score

Rating

EcoVadis75
BronzeGold

SilverPlatinum

EcoVadis Gold medal, issued on February 17, 2023: 75/100

ISS ESG

D-

D

D+

C-

C

B-

C+

B

B+

A-

A

A+

ISS ESG Corporate Rating, received on July 17, 2023

MSCI

CCC

B

BB

BBB

A

AAA

AA

In 2023, July 21, ABB received a rating of AAA(on a scale of AAA-CCC) in the MSCI ESG Ratings assessment.1

S&P Global CSA ESG Score
ABB Ltd
Electrical Components & Equipment

S&P Global CSA Score 2023
A key component of the S&P Global ESG Score65

065 /100

100

As of November 22, 2023.
The S&P Global Corporate Sustainability Accessibility (CSA) Score is the S&P Global ESG
Score without the inclusion of any modelling approaches. Company scores can be comparedto their peers in the same industry. Learn more at spglobal.com/esg/scores

Sustainable1

Sustainability Yearbook Member 2024, within the top 15% of the industry, based on S&P
Global Corporate Sustainability Assessment (CSA) Score 2023.

Sustainalytics
15.4 (risk exposure)
Severe40+High
40 – 30

Medium30 – 20Low
20 – 10

Negligible
10 – 0

Sustainalytics ESG Risk Rating, October 12, 2023: 15.4 2

1.

DISCLAIMER STATEMENTThe use by ABB of any MSCI ESG Research LLC or its affiliates(“MSCI”) data, and the use of MSCI logos, trademarks, service
marks or index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of ABB by MSCI. MSCI
services and data are the property of MSCI or its information providers, and are provided ‘as-is’ and without warranty. MSCI names
and logos are trademarks or service marks of MSCI.

2.

DISCLAIMER STATEMENT

Copyright ©2023 Morningstar Sustainalytics. All rights reserved. Thispublication contains information developed by Sustainalytics (www.
sustainalytics.com). Such information and data are proprietary of
Sustainalytics and/or its third party suppliers (Third Party Data) andare provided for informational purposes only. They do not constitutean endorsement of any product or project, nor an investment advice
and are not warranted to be complete, timely, accurate or suitable fora particular purpose. Their use is subject to conditions available athttps://www.sustainalytics.com/legal-disclaimers.

02 Low-carbon
society

21
22
28
30

We enable a low-carbon society
Customer emissions
ABB’s own emissions
Supplier emissions

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We enable a low-carbon society
ABB is driving the shift towards a low-carbon economy with its innovative technologies. Our expertise in electrification and automation enables greater energy efficiency and the integration of renewables into the energy mix. We work closely with ourcustomers and suppliers to help them save energy and reduce emissions across theirvalue chains. Our commitment to supporting energy security and the transition to a
low-carbon society is also demonstrated by the work we are doing to increase energy
efficiency and reduce emissions in our own operations.
This area of endeavor is critical to ABB’s approach to creating value for all our stakeholders. Moreover, our 2023 double materiality assessment identified climate as the
topic that is the most material to our business. Under ABB’s Sustainability Agenda,
we have set targets that are aligned with the SBTi Net-Zero Standard for both ouroperations and value chain emissions, including customer and supplier emissions. In
our own operations, our target is to reduce our scope 1 and 2 emissions by at least 80
percent by 2030 from the baseline year of 2019; by 2050, we intend to eliminate 100
percent of these emissions. When it comes to our value chain, our target is to reduce
our scope 3 emissions by 25 percent by 2030 and by 90 percent by 2050, both from thebaseline year of 2022.
In 2023, we updated our 2019 and 2022 baseline to take account of recent businessacquisitions and divestments. We also updated our scope 3 accounting methodology.

1

IEA emission factors, https://www.iea.
org/data-and-statistics/data-product/emissions-factors-2023

Under our strict scenario, in 2023 our scope 3 emissions increased from 2022. The key
reasons behind the increase in emissions were increased sales and IEA grid electricity
emission factors.1 These factors had a significant impact on ABB’s value chain emissions as 96 percent of them are associated with the use phase of our products. The
2023 emissions update highlights the non-linear path to decarbonizing the world’s
grids. For our representative scenario, our scope 3 emissions had a marginal decrease
due to portfolio mix changes offsetting the negative impacts above. The “Customer
emissions” chapter below explains the two scenarios in detail.
By enabling our customers to increase their energy efficiency, to integrate renewables
and electrify their operations, and by working with our suppliers and partners to reduce their carbon footprints, we are committed to delivering on our SBTi targets.
Targets

Baseline (baseline year)

2023 status

Reduce own scope 1 and 2 CO₂e emissions by at least 80% by 2030 and by
100% by 2050

636 kilotons CO₂e (adjusted
for portfolio changes) 2019

151 kilotons CO₂e

Reduce scope 3 CO₂e emissions by 25%
by 2030 and by 90% by 2050

76,8342 kilotons CO₂e (2022) / 76,6652 kilotons CO2e /392,1883 kilotons CO₂e436,3463 kilotons CO₂e(2022)

Ambition to avoid 600 megatons CO₂eemissions throughout lifetime of products sold from 2022 to 20304

65 megatons CO₂e (2022)

L O W - C A R B O N S O C I E TY

23
4

74 megatons CO₂e

Representative scenario: Energy loss used as basis for calculations; see explanation in the “Customer emissions”
chapter of this report.
Strict scenario: Energy input used as basis for calculations; see explanation in the “Customer emissions” chapterof this report.
This ambition is not part of the committed targets.

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ABB SUSTA IN A BILIT Y REP ORT 202 3

Low- carbon societ y—
Customer emissions—
Helping our customers
reduce GHG emissions

Our impact on our customers’ emissions is principally reflected in our scope 3 downstream emissions and our avoided emissions.
ABB’s scope 3 downstream emissions are the largest contributor to our Group’s
GHG footprint. This is because of the substantial electric power consumed by our
products. Our scope 3 downstream emissions are directly linked to the carbon intensity of the energy used by our customers, which is not within our direct control. To
support decarbonization, we are innovating to integrate renewables into the energy
mix, to improve the energy efficiency of our products and to provide customers withsolutions that will enable them to electrify their operations. In addition, we provide
our customers with information about the power consumed and emissions avoided
by our offerings, the outcome of Life Cycle Assessments (LCAs) performed, andthird-party-verified Environmental Product Declarations (EPDs), which are accessible
via QR codes on our products.
Every division at ABB is fully committed to our company’s ambition to make a positive,
meaningful contribution to a low-carbon society. This includes enabling the energy
transition as well as supporting the efforts of hard-to-abate industries to become moresustainable. In the second half of 2023, ABB appointed 19 division carbon accounting
leads. Every ABB division and their business lines compiled detailed downstream scope
3 emissions inventories for 2022 and prepared the 2023 inventory. We used the guidance provided by the GHG Protocol to develop a bottom-up model for the wide range
of offerings across all ABB divisions that allows every business line to gain a complete
view of the emission impacts of its products. Each business line assessed its respective
contributions to customer emissions in a consistent, standardized manner and identified
high-impact areas for improvement in the future. These efforts focused on assessing
GHG emissions resulting from the use of our sold products and solutions (also known as“scope 3, category 11” emissions). This view considers both the technical specifications
and the operating conditions associated with each product and ensures a consistent
approach for calculating scope 3 downstream and avoided emissions.
It is important to note the special challenge presented by the need to assess theenergy consumption of ABB products in use at our customers’ sites around the world.
The emissions accounting guidance contained within the GHG Protocol is insufficient for this purpose. Moreover, our competitors have interpreted the guidance ina number of different ways. As a result, ABB has decided to publish both a “representative scenario” and a “strict scenario.” The representative scenario quantifies
the energy consumption of our products based on measured energy loss; the strict
scenario takes a more conservative approach based on the full energy input to our
products. The 2023 emissions update highlights the non-linear path to decarbonizing the world’s grids, but we are confident that ABB is on the right track as we drive
electrification with our customers over the mid- to long-term. Rising sales of ourofferings support the decarbonization of multiple sectors, with electric motors replacing fossil-fuel combustion technology as a key example. Under both approaches,
ABB increased the precision of its calculations by using real-life data sets. These data
sets were drawn, for example, from an aggregated significant sample of motor-driven
systems monitored by ABB Motion’s smart sensor solutions.
Ninety-six percent of the Group’s emissions are associated with the use phase of our
products as operated by our customers. We simulated how these emissions will evolve
over the coming years. The simulations considered business growth, the scaling of≡

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renewable energy globally and the renewable energy ambitions of our key customers. This process served as the basis for ABB’s submission of SBTi Net-Zero Standardaligned targets in November 2023, with validation by SBTi expected for 2024.
In 2024, ABB will bring the need for more precise guidance to the attention of the SBTiand the authors of the GHG Protocol, which will be updated for the first time after 12
years; the current guidance does not capture the critical contribution that products
and solutions such as electric motors, as part of complex integrated systems, make tothe energy transition.

—
How ABB supports ourcustomers on
avoided emissions
1

https://www.wbcsd.org/Imperatives/
Climate-Action/Resources/
Guidance-on-Avoided-Emissions—
Eligibility assessment
for claiming avoided
emissions

ABB developed its avoided emissions methodology based on the 2023 guidance of the
WBCSD.1 In this section, we explain how we account for avoided emissions by applying
the WBCSD guidance to ensure a transparent and credible approach.
We use the category of avoided emissions to describe the volume of greenhouse gas
emissions that our customers will avoid by using ABB products and solutions throughtheir full service lives.
Avoided emissions are the reduction in GHG emissions that occur because of the useof a product or solution. For both the product or solution and the reference scenario,
we estimate life cycle GHG emissions. We have defined three avoided emissions
scenarios: replacement, retrofit and new installation. Data is collected covering thepercentage of sales and kWh/tCO₂e. The data is drawn from ABB’s sales teams andthe product’s technical specifications. Alongside the three scenarios, several factors
provided by the guidance were reviewed affecting the eligibility of avoided emissions
against our ambition.
Gate 1 (climate action credibility):
ABB transparently reports on 100 percent of its value chain emissions on an annual
basis. This covers 13 of the 15 scope 3 GHG Protocol categories. Using this comprehensive GHG inventory, we have set SBTi Net-Zero Standard aligned targets for thenear- (2030) and long-term (2050). In following the SBTi Net-Zero Standard, we will not
be using avoided emissions to claim net-zero status or carbon neutrality.
Gate 2 (climate science alignment):
We do not consider avoided emissions from product lines or solutions sold to sectors
and applications linked to exploration, extraction, mining, production, distribution orsale of fossil fuels.
Examples of ABB’s climate mitigation options which lead to avoided emissions linked to mitigation
options from the IPCC AR6 Working Group III Summary for Policymakers
Product category

Solution

Recognized mitigation potential

Variable speed
drives (VSD)

Low and medium VSDs added to
motor-driven systems to regulate load ratioof the motor so as to decrease the demandof energy input to the system itself.

Energy efficiency – Direct impact –Reduced demand for energy input ofa motor-driven system.

High-efficiency
low-voltage
motorsHigh-efficiency solution replacing old, inefficient electric motors with an efficiency
rate higher than installed base average.

Energy efficiency – Direct impact –Increased efficiency of a
motor-driven system.

Gearless milldrives (GMD)

Installation of GMDs on grinding mills toeliminate mechanical components such as
ring gears and pinions, leading to increased
efficiency of the application system.

Energy efficiency – Direct impact –Increased efficiency of theapplication.

Electrical marine
propulsion
solutions

Marine propulsion units developed and installed to increase maneuverability of theship/vessel and reduce fuel consumption.

Shipping: efficiency and optimization – Direct impact – Increased efficiency of the application and reduced fuel consumption.

Shaft generators

Generator/alternator used in the marine
Shipping: efficiency and optimizasector to support the main engine of a ship/ tion – Direct impact – Reduced fuelvessel and increase the efficiency of power consumption.
generation.

Shore-to-ship
connections

Integrated systems that connect ships to the Shipping: efficiency and optimizaport’s electricity grid via a shore-to-shiption – Direct impact – Increased effipower connection and reduce consumption, ciency and reduced emissions of apollution and noise while ship is docked.
system.

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ABB SUSTA IN A BILIT Y REP ORT 202 3

Low- carbon societ y

Examples of ABB’s climate mitigation options which lead to avoided emissions linked to mitigation
options from the IPCC AR6 Working Group III Summary for Policymakers
Product category

Solution

Selected modernization service for­electrificationequipment

Replacements, extensions, upgrades andMaterial efficiency – Decarbonizing
retrofits of existing equipment that make it impact – Avoidance of emissions
possible to avoid substituting an application from the production of new
package.
equipment.

Recognized mitigation potential

Gate 3 (contribution legitimacy):
ABB only considers avoided emissions that arise from installations that drive change
within their respective markets. For example, only high-efficiency motors in a higher
energy-efficiency class than the installed base average and used in a retrofit application would be eligible for inclusion. As for general applications like drives, we consider
the retrofit of existing direct-on-line motor-driven systems as their main contribution to avoided emissions. In new installations of motor-driven systems, we exclude
applications where the customer has already decided to install a drive; we only include
sales where the customer has been convinced to install a drive with the motor, thereby
improving the overall efficiency.
Impact of ABB’s avoided emissions:• 74 MtCO₂e GHG emissions avoided by products sold in 2023 and using full life-time
avoided emissions• Products, solutions and systems generating these avoided emissions represent 8
percent of total revenue• Ambition to avoid 600 MtCO₂e by products sold from 2022 to 2030—
Sensitivities—
Limitations

ABB has identified two of the assumptions used as having the greatest influence on
the calculations performed: product lifetime (determined as 10–20 years dependingon the product group and the conditions under which products and solutions areused, based on expert estimates and Product Category Rules where available); and theshare of replacement, retrofit and new installations as a % of sales volume (based on
customer visits and expert judgement). If product lifetimes were to be extended and/or the share of sales volume to change, the calculation of avoided emissions wouldchange accordingly. Other assumptions that influence the calculations are average operating hours per year and efficiency gains, which are based on external data analysis.
As ABB is focusing its innovation efforts on increasing product lifetime and improving
the circularity of its products and solutions, further data sets will become available,
improving the quality of calculations and leading to improving the precision of the
avoided emissions calculations.
Negative side effects:
Increased sales of these solutions may lead to increased demand for natural resources
and rare metals. This can result in negative environmental consequences such as increased land and water use. ABB is fully aware of this risk and has identified circularity
as a key means of mitigating the risk. To this end, we have set a target for at least
80 percent of our products and solutions to be covered by our Circularity Approach by2030. For more detail, please see the “Preserving resources” section of this report.
Rebound effects:
ABB has been conservative in selecting product categories that qualify for avoided
emissions. After assessing potential rebound effects, we do not believe that the lower
GHG emissions impact of our products would lead to increased use of the products
and therefore partly or fully cancel out the initial GHG emissions reduction enabled by
the product.

—
Avoided lifetime
emissions (kgCO₂e)

Avoided lifetime emissions (kgCO₂e) = annual energy saved (MWh) × emission factor(kgCO₂e/MWh) × lifetime (years)• Annual energy saved: Energy saved on a yearly basis when comparing the product orsolution with the relevant reference scenario using the following four elements:(i) power output of the product/solution, (ii) operating hours per year, (iii)≡

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percentage of revenues from eligible avoided emissions scenarios (replacements,
retrofits, new installations), (iv) percentage of efficiency gain in each scenario.
• Emission factor: Weighted average emission factor based on geography of where
the respective product or solution is used, using the International Energy Agency(IEA) and UN Economic Commission for Europe (UNECE) data, multiplied by regional
revenue exposure.
• Lifetime: Average expected lifetime of the product or solution, using ProductCategory Rules data, when available and applicable, used also for product’s or solution’s Life Cycle Assessment, or expert opinion if not available.

—
How ABB’s businessareas are helping theircustomers reduceand avoid emissions

In 2023, ABB’s four business areas actively engaged with their customers to enable
them to reduce or avoid GHG emissions.
ABB Electrification
ABB Electrification is playing a key role in the global energy transition with innovative
products, components and service solutions. It enables customers in industry, infrastructure and transport to reduce their energy consumption and eliminate emissions.
In 2023, Electrification enabled Kemijoki Oy, one of Finland’s largest producers of hydroelectric power and regulating power, to speed up the removal of a harmful greenhouse gas, SF6, from its electrical systems by providing an SF₆-free circuit breaker retrofit solution. Additional cost-effective solutions launched by Electrification included
a generator circuit breaker retrofit and the reintroduction of the Blackburn® Solar
Grounding Lug, which provides contractors with an innovative grounding solution forsolar panel installations.
To support decarbonization in the food and beverage industry, in 2023 we supplieda leading food and beverage company’s UK factory with M 4M 20 network analyzers,
which work with ABB’s energy management system to provide real-time data thathelps save energy and reduce costs. We also provided Nordic Sugar Nykøbing with an
ABB Ability™ Energy Manager solution that enables the customer to collect data, map
electrical consumption and target areas for improvement. In late 2023, we provided
medium-voltage switchgear for the construction of what will be the largest floating
solar power plant in Southeast Asia.
ABB Motion
Thanks to our industry-leading R&D investments, ABB Motion’s state-of-the-art
drives, motors, digital solutions and related services help our customers lower theircarbon emissions while reducing costs and improving productivity, reliability andenergy efficiency.
We are particularly proud of the key role Motion’s advanced power technology is playing in the production of green hydrogen. Our electrolyzer power system minimizes the
production network’s harmonic current content and power consumption while maximizing efficiency and power factor. By reducing the levelized cost of green hydrogenproduction, this technology can support its rapid adoption. Motion’s products, solutions and services have also supported the wind power sector since 1994 with technology and data insights that optimize the performance and longevity of wind farms.
Altogether, we have made key contributions to the operation of 17,645 onshore and1,576 offshore wind converters. Together, these wind converters account for 47.5 GW
of turbine power, an enormous figure considering that 1 GW can power approximately
876,000 households.
As an example of the work we do, ABB Motion enabled Tarkett, a Swedish flooring
manufacturer, to save 800 MWh of electricity per year. Based on data insights gathered from the ABB Ability™ Digital Powertrain Energy Appraisal solution, Motion replaced 10 of Tarkett’s motors with IE 5 SynRM motors, improving efficiency to 95 percent. Also in 2023, Motion’s high-inertia synchronous condensers were combined withflywheels at the Lister Drive Greener Grid Park in the United Kingdom. The first of its
kind in the world, the system compensates for the reduction in spinning inertia available to the UK’s power grid caused by the transition to renewable energy.

26

ABB SUSTA IN A BILIT Y REP ORT 202 3

Low- carbon societ ySpinning inertia, traditionally provided by fossil-fuel-powered generators, is necessary to operate a stable power grid. This innovative, green solution will meet about
1 percent of the UK’s electricity needs.
ABB Process Automation
Technologies and solutions from ABB Process Automation (PA) help our customers address the need to fundamentally transform their processes to meet decarbonizationand other sustainability and efficiency goals. Most of PA’s customers are companies
in energy- and resource-intensive industries operating some of the most complex
and essential infrastructure on the planet. Our solutions enable these customers toincrease efficiency by means of electrification, automation and industrial software, toswitch from fossil-fuel combustion to electric power, and to track their emissions ofCO2, methane and other undesirable byproducts.
Based on our 2023 review of our scope 3 downstream emissions, some PA divisions
began to work with customers to develop new business models that reduce theircarbon footprints. As a result, one of our divisions was central to a 2023 memorandum of understanding signed between ABB and Tata Steel. Together, we will makesystem-level assessments of Tata’s manufacturing plants and production facilities,
evaluating and co-developing short- and long-term options for energy efficiency,
decarbonization and circularity.
In May 2023, PA launched an innovative marine propulsion concept, ABB Dynafin™.
Inspired by the dynamic motions of a whale’s tail, it is the result of over a decade ofresearch, development and testing. The new concept achieves extremely high levelsof energy efficiency and enables ships to maneuver with remarkable precision. Also
announced in May 2023, ABB is collaborating with renewables specialists Lhyfe andSkyborn in the SoutH2Port project, enabling the large-scale integration into theenergy system of renewable hydrogen generated using offshore wind. Powered by
Skyborn’s planned offshore wind farm, the plant in Söderhamn, Sweden, will produce
around 240 tons of hydrogen per day, or the equivalent of around 1.8 million barrels ofoil per year.
ABB Robotics & Discrete Automation
ABB Robotics & Discrete Automation (RA) is enabling customers across a wide range
of industries – automotive, general manufacturing, foundry, food and beverage,
logistics and others – to reduce their emissions by optimizing output and preserving
resources. Our solutions in robotics and AI help customers keep up with trends in the
reshoring of industry and the development of more sustainable supply chains.
In 2023, we performed extensive life cycle assessments of our portfolio of robots,quantifying the up- and downstream scope 3 emissions associated with our products.
The information will be used by RA to identify key areas where we can strengthen our
support for our customers’ ambitions to shrink their carbon footprints.
Over the year, we expanded our offering with four large new robots, which can provide
energy savings of up to 20 percent and greater flexibility for more sustainable production methods. The higher energy efficiency was achieved by making use of ABB’s
OmniCore™ controller and an overall lighter robot design. The new range of robots is
intended to meet the needs of the rapidly growing electric vehicle industry, as manufacturers increase production to meet regulatory targets. Customers in this sector
can choose from a wide range of ABB robots, finding just the right model to handle
batteries of any size, from individual cells to complete packages.

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ABB SUSTA IN A BILIT Y REP ORT 202 3

Low- carbon societ y—
ABB’s own emissions
With respect to our own emissions, we have established science-based,
net-zero-aligned targets for 2030 and 2050, which we submitted to the SBTi for validation. We are aiming to reduce our absolute scope 1 and 2 emissions by at least 80
percent by 2030 and by 100 percent by 2050, versus our 2019 baseline.
As part of our drive to make ABB a net-zero company, we have also committed to three
initiatives of the Climate Group of global companies. By 2030, we will electrify ourvehicle fleet, amounting to more than 10,000 cars (EV100 initiative), source 100 percent of our electricity from renewable energy sources (RE100 initiative), and improveenergy efficiency and productivity across our operations (EP100 initiative). These
actions will help us to reduce our scope 1 and 2 GHG emissions by at least 80 percent
by 2030.

to 94%
in 2023S H A R E O F R E N E WA B L E E L E C T R I C I TY

to 81%
in 2022
to 53%
in 2021
to 34%
in 2020from 25%
in 2019

Figures in the graphs are adjusted for portfolio changes.

percent of ourelectricity fromrenewables

Under the scope of the ABB Way for Health, Safety, Environment, Security andSustainability, we have adopted the following control standards: Energy Management
Requirements, Energy Management ACOP (Approved Code of Practice), Climate
Change Requirements, and Climate Change ACOP. Other relevant sustainability procedures include our Fleet Electrification Procedure and Renewable Electricity Procedure.
To meet our commitments, we are engaged in a wide range of actions to prevent or
mitigate potential negative impacts and risks related to our own emissions. We areswitching to renewable energy – with a particular emphasis on renewable electricity – investing in heat pumps and installing solar power generation systems at our facilities. We are also implementing energy efficiency measures across our operations.
These measures include installing energy-efficient lighting, upgrading our HVAC
systems and implementing building automation systems that enable a high levelof efficiency.
In 2023, all ABB Motion operations in Finland switched to 100-percent green district
heating, powered by renewable energy systems. As part of its nearly $100 million

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investment in its greenfield campus in New Berlin, Wisconsin (USA), ABB Motion
equipped the facilities with state-of-the-art building design features, including solar
power, a geothermal heat pump, modern HVAC systems and advanced building controls. In South Korea, ABB Process Automation installed a solar power system at its
Cheonan-si site. The solar installation is expected to generate enough power to coveras much as 40 percent of the site’s total energy needs.
ABB’s Mission to Zero™ program continued to make its mark, with nine sites joining
the program in 2023. One of these, a facility in Xiamen, China, installed 100,000
square meters of solar panels – the largest such array anywhere at ABB. The energy
system for the Xiamen site is proactively managed by the ABB Ability™ ZEE 600 system for electrification monitoring and control. ABB Robotics & Discrete Automation
also upgraded many sites, installing solar power at its refurbishment center in
Mosnov, Czech Republic, and at its two factories in Shanghai. In Eggelsberg, Austria,
a heat pump installed in 2023 at the facility of Robotics & Discrete Automation’s B&R
subsidiary is expected to replace more than 1,800 MWh of gas consumption per year.
To track the effectiveness of our actions on our scope 1 and 2 emissions, we reporton our GHG reduction efforts on a quarterly basis. In 2023, we made considerable
progress toward our 2030 and 2050 goals. We reduced our total energy consumption
by 21 percent, compared to a 2019 baseline. At the end of 2023, 64 percent of ABB’s
energy consumption and 94 percent of its electricity was sourced from renewables.
Since 2019, we have reduced our GHG emissions by 76 percent. Our shift to renewableelectricity in Mexico, where we have significant operations, was a key driver of ouremissions reductions in the past year.
kilotons CO2e

T O TA L E N E R G Y U S E D A N D T O TA L S CO P E 1 & 2 G H G E M I S S I O N S

800

636
GWh

600

523

2500
2000

1,647

1500

389

1,511

1,481

400

1,413

221

1000

1,298
151

200

500
0

0
2019

2020

Figures in the graphs are adjusted for portfolio changes.

2021

2022

2023

Total energy used (GWh)
Total Scope 1 and 2 GHG emissions (kilotons CO2e)

Additionally, the ABB Real Estate function tracks progress made by its Group-level
Green Real Estate program. As of 2023, the program had achieved savings of 106 GWh
per year and $13.5 million in costs from 2018 to 2023. The savings were derived fromover 450 completed and ongoing energy-saving projects at ABB sites around the world.
Moreover, the program supports the RE100 global commitment by increasing on-site
renewable power generation capacities, with over 70 photovoltaic projects in development or completed worldwide. With over 2,400 electric vehicle chargers strategically
deployed across more than 190 locations, constituting 37 percent of our global sites,
we are actively driving fleet electrification (EV100). This initiative not only transforms
the landscape of our infrastructure but also enables e-mobility for the convenience ofour customers, employees and visitors. We also track the progress of our global program to reduce our direct emissions of SF₆ from losses associated with either handlingor production processes. Last year, the program reduced ABB’s direct emissions of SF₆
by 56 percent. In 2023, we emitted 383 kilograms of SF₆, down from 861 in 2022.
In 2023, 52 percent of our global new vehicle orders were for EVs or plug-in hybrid
vehicles, supporting our EV100 commitment.

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ABB SUSTA IN A BILIT Y REP ORT 202 3

Low- carbon societ y—Supplier emissions
As part of ABB’s Sustainability Agenda, we are committed to working with our maintier-one suppliers to reduce emissions in our supply chain. In line with the submissionof our 2030 and 2050 targets to the Science Based Targets initiative (SBTi), we include
scope 3 emissions associated with our suppliers. Our new net-zero-aligned target isto reduce our scope 3 emissions by 25 percent by 2030 and by 90 percent by 2050. Our
work with suppliers to help them reduce emissions contributes to the achievement of
our new scope 3 emissions target.
In 2023, we continued to engage with suppliers who qualify for our supply chain GHG
emissions reduction program. The focus in 2023 was aimed at reducing supplier
operational emissions. Before starting the collection of supplier emission data, weconducted training sessions for both our employees and suppliers to explain the aimof the program and the basics of the GHG protocol, including the differences between
scope 1, 2 and 3 emissions. We also provided our suppliers with information on different actions they can take to reduce their emissions. Examples were offered from ourown journey to reduce scope 1 and 2 emissions at ABB sites.
To collect supplier emissions data, we work with an external provider. Through thisprovider’s online platform, we make additional training opportunities available to our
suppliers. The platform also offers guidance to our suppliers on possible emissions
reduction action plans.
We held several ABB Supplier Days to engage with our suppliers on emissions reduction programs. For example, at a Robotics Supplier Day in Shanghai, an ABB customer
delivered a speech about its plans to reduce GHG emissions across its value chain andshrink the carbon footprint of its products. This peer-to-peer strategy inspired severalof ABB’s divisions to introduce ABB’s supply chain emissions program at locally organized supplier day events.
Other actions aimed at reducing ABB’s scope 3 emissions include bringing increased
volumes of low-carbon and recycled copper into our production cycles, while also
committing to use more recycled steel. The Process Automation business area, forexample, will use low-carbon copper winding wire from Dahrén, a leading supplier, inthe manufacturing of electromagnetic stirring equipment. Process Automation andMotion have also partnered with Swedish mining company Boliden to source certified
low-carbon and recycled copper. ABB is also participating in Sweden’s HYBRIT initiative, which aims to develop fossil-free steel.
Other examples of how we are working with our suppliers to reduce ABB’s scope
3 emissions can be found in our Electrification business area. One division required
each of its 200 most impactful suppliers to obtain an EcoVadis ESG scorecard; over
90 percent of these suppliers complied with the mandate, and many are now reporting their GHG emissions. Another Electrification division opened a new distribution
center closer to its customers, avoiding more than 4,000 tons of GHG emissions by
reducing its transportation needs by 25,000 miles per week.
In addition to measuring our progress toward our new net-zero-aligned scope
3 emissions targets, we track the impact of our supply chain GHG emissions reduction
program in terms of the number of suppliers we have registered and rated in our
carbon data collection tool and the proportion of suppliers who have attended our
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SBTi and the number who are on track to achieve their targets. We are currently
working toward collecting supplier emissions data from 2022. This process began inAugust 2023 and has provided us with a better understanding of the maturity of our
supplier base and of where we need to focus our engagement to reach our target.
We continue to leverage lessons learned and to engage with our stakeholders to refine
the actions we take to reduce supplier emissions. Our current program is based on
the lessons learned from an ABB 2021-22 pilot project on how to track supplier GHG
emissions. We have also incorporated lessons learned from the supplier emissions
program begun by ABB Electrification’s Distribution Solutions division.

03 Preserving
resources

33
34
38
41

We preserve resources
Circularity
Waste and water management
Biodiversity and land use

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33—
We preserve resources
Preserving resources is a key pillar of ABB’s Sustainability Agenda and core to ABB’svalue creation model. Our 2023 double materiality assessment identified circularity
as a key topic of interest to our stakeholders. Internally, we also consider biodiversity.
land use, water and waste management as topics that are relevant to ensuring that
ABB will be regarded a sustainable company. Our efforts to drive progress on these
topics are part of ABB’s value creation process.

1

The circularity score of the assessed products and solutions is to be calculated oncea representative share of the portfolio has
been assessed.

Our Sustainability Agenda incorporates two targets to support the preservationof resources. The first is to cover at least 80 percent of our products and solutions
with our Circularity Approach by 2030, which means that the requirements of the
ABB Circularity Approach are met for these products and solutions.1 By circularity,
we are referring to increasing the share of sustainable materials in our products andpackaging, reducing waste, maximizing and enabling recyclability and reusability, andextending the lifetime of our products. The ABB Circularity Approach is reshaping andimproving our product portfolio by revealing the impact of our offerings through theircomplete life cycle.
Our second quantitative target is to send zero waste to landfill while reducing waste
generation by 2030. ABB applies a rigorous approach to recycling and limiting waste
generation in our operations and production processes. We are equally committed
to the sustainable management of water, which represents a scarce resource in many
parts of the world.
Biodiversity and land use have been newly identified internally as sustainability topics
that require monitoring and continuous improvement efforts. ABB is aware of the importance of protecting the world’s biological diversity and is doing its part to support
the survival of plant and animal species, and the ecosystems they are a part of.
Targets

Baseline (baseline year)1

2023 status

Cover at least 80% of ABB’s portfolio
of products and solutions with our
Circularity Approach by 20302

n.a.

31%3 (share of ABB’s products and solutions
assessed)

Send zero waste to landfill while reducing waste generation by 2030

16.8 kilotons (2019), equiv- 10.1 kilotons, equivalent toalent to 8.8% of total waste 6.3% of total waste(adjusted for portfolio changes)

PRESERVING RESOURCES

1
2
3

Where a baseline applies.
Based on revenues from hardware-based products and solutions, where granularity of financial systems allows.
Service revenues are excluded.
The circularity score of the assessed products and solutions is to be calculated once a representative share of theportfolio has been assessed.

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Preservi ng resou rces—
Circularity
Circularity was identified by the 2023 ABB double materiality assessment as oneof our company’s 10 material topics. Our Circularity Approach encompasses ourcompany-wide efforts to foster a circular economy. Beginning with the design stage,
we are committed to increasing the reusability and recyclability of our products andto making them more durable by means of our lifetime extension and modernization
services. Within our own operations, we avoid waste by making our processes more
efficient, by increasing the use of sustainable materials in our products and packaging, and by expanding recycling activities at our sites.
Additionally, we are working closely with customers, suppliers and partners to embedcircularity throughout our entire value chain. By assessing the impact of our offerings
through their complete life cycle, our product managers and relevant functions identify ways to improve circularity across our product portfolio. This process encourages
cooperation and partnerships with key stakeholders across industries and sectors
on a wide range of activities – from recovering scrap from production to enabling
take-back schemes in many markets. Our Circularity Approach is managed by the ABB
Circularity Working Group, which coordinates initiatives relating to circularity among
our four business areas, clarifies and updates the Circularity Approach, defines circularity KPIs, and establishes the guidelines by which the KPIs are assessed.
To prevent or limit any potential negative impacts or risks, the ABB Circularity Working
Group annually reviews regulatory changes related to product sustainability andintegrates them into the approach as needed. In 2023, the working group revised our
circularity guidelines to take into consideration the latest regulatory developments(e.g., the 2023 EU Taxonomy Delegated Act) and the key sustainability standards that
address circularity and product performance (e.g., GRI and SASB). The revision also
addressed internal requests for changes submitted by the divisions. To support theongoing evolution of our approach, over the past year we also reinforced our partnerships with relevant external organizations, including the WBCSD. In 2023, the working
group additionally established governance mechanisms for the core processes associated with ABB’s Circularity Approach.
In 2023, all four ABB business areas began assessing their products and settingbaseline circularity scores for their portfolios. Where possible, the results from theseassessments have been linked with our product data to make them easily accessible.
Achieving progress on our product circularity assessments ranks high on our businessagenda and has been tied to clear KPIs.
We will use the resulting data to evaluate our progress toward ABB’s Sustainability
Agenda target of covering at least 80 percent of our products and solutions with our
Circularity Approach by 2030. The baseline circularity scores from the business areas
will underpin the actions we take to reach our 2030 target. At the end of 2023, 31 percent of ABB’s products and solutions had been assessed.

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A B B C I R C U L A R I TY A P P R OAC H

Recycling

Take-Back

DesignCirculardesign &sourcing

Responsible
end-of-life

Sourcing

CIRCUL AR
BUSINESSMODELW H ATWE ENABLE

Circularcustomersolutions

Optimized
use phase
Lifetime

Efficiency—
Circularity in every
phase of a productW H AT
WE DO

Resourceefficient
operations

ABB circular
operations

Manufacturing

Logistics & Packaging

As the Circularity Approach is being rolled out across the Group, the ABB businessareas are implementing initiatives to improve the impact of our product portfolio
across all dimensions of the product life cycle:• In September 2023, we launched the updated ABB Product Development Gate Model,
following a successful pilot phase. The model supports our new Group-wide requirement to consider circularity needs and expectations in the development of every
new product. We also continue to review and modify existing product designs wherever practicable.
• The Electrification Smart Buildings division expanded the implementation of mechanically recycled or bio-circular plastics to its wiring accessories portfolio of junction boxes, socket outlets and light switches. Overall, about 1,000 tons offossil-fuel-derived raw materials per year have been progressively replaced withmore sustainable alternatives. The products are sold under the Busch-art linear
brand in central Europe, Niessen Alba in Spain, and ABB SAGA in Scandinavian
markets.
• ABB Motion’s IE 5 SynRM motor offers a good example of how ABB cooperates withkey suppliers to enable greater sustainability. In a recent project, our R&D teams developed a prototype motor with a stator housing made of 100 percent recycled aluminum alloy. The motor also features low-carbon bearings, with a 70 percent smaller
CO₂e footprint. Taken together, the prototype achieves up to a 20 percent reductionin production-related CO₂e emissions compared to our current offering.
• The Process Automation business area offers digital solutions that can also enable
our clients to extend the lives of their assets through remote operations and36

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preventive maintenance. In 2023, we signed an agreement with SalMar to operate
digital services at the remote-controlled Arctic Offshore Farming facility, located atsea off northern Norway. We will collect real-time and historical operating data fromindividual salmon farms and send it securely to SalMar’s cloud-based database,helping to support decision-making that will improve efficiency and operations.
• ABB’s robot remanufacturing teams, over the course of more than 25 years, havegiven thousands of used robots a second life by refurbishing or upgrading them. The
controllers and manipulators of robots can be refurbished to “like-new” condition at
ABB’s Global Remanufacture & Workshop Repair Centers. By offering this service,
ABB makes it possible for existing customers to sell their redundant robots andequipment back to us rather than scrapping or mothballing them. A life cycle assessment carried out in 2021 indicated that robot refurbishment releases roughly 75 percent fewer GHG emissions than the manufacture of a new robot. For equipment thatcan no longer be refurbished, ABB safely disassembles and sorts the component materials for recycling.

—
Material compliance

To reduce and, where possible, eliminate the use of hazardous materials in our operations, we rely on the ABB List of Prohibited and Restricted Substances. This list
applies to every aspect of our operations, including procurement, product development, production processes, products, packaging materials, service activities andconstruction sites.
Material compliance is a heavily regulated topic, and we update the list twice yearlyin keeping with local and international regulations and legislation. These include theTSCA, Prop 65, REACH, RoHS, POP and other local material compliance legislation,
both within and beyond the European Union. We are also tracking likely future regulatory requirements regarding PFAS in the EU and the United States, DPP in the EU, andthe Ecodesign regulatory requirements that will come into force in 2025.
We have developed a companion guide to the list to help ABB’s suppliers meet their
obligations – which include partnering with us to identify and prevent restricted
substances from entering ABB’s supply chain. In addition, ABB’s Global Terms andConditions for suppliers and our Supplier Code of Conduct both address the subjectof prohibited and restricted substances in the context of regulatory compliance.
ABB’s business areas and divisions have full ownership of their respective productmaterial compliance obligations, which include the EU requirements for chemicals andproducts listed in the Substances of Concern in Products (SCIP) database. In 2023,
ABB’s business areas continued to collect material compliance information on morethan 50,000 articles and end products acquired from their supplier base. This information is securely stored in dedicated business area and/or divisional databases andis used for customer communications and product compliance statements.

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Preservi ng resou rces—
Waste and water management
In 2023, ABB continued to track and report on its waste and water management processes. These include ABB’s water usage and the sustainable management of water,which is a scarce resource in many countries. It also includes recycling and the reduction of waste generation in our operations and production processes. While ABB’s
production processes consume relatively little water, we have prioritized the reuseand conservation of water and all other scarce material resources on a global basis.
ABB has embraced a comprehensive range of waste and water management policies
and commitments, including the ABB Policy on Health, Safety, Environment, Security
and Sustainability. Under ABB’s Sustainability Agenda, we have committed by 2030 tosend zero waste from our own operations to landfill while developing our capability toprevent waste generation. This commitment applies to non-hazardous manufacturing waste that is disposed of via landfill or incineration without energy recovery. At
the same time, our 2030 commitment to apply our Circularity Approach to more ABB
products and solutions also impacts how we manage waste and water.
ABB’s divisions are required to adhere to several control standards related tohealth, safety, the environment, security and sustainability. These include the Water
Management & Conservation Requirements, Water Management & Conservation
Approved Code of Practice (ACOP), Water Inventory and Action Plan, Waste
Management Requirements and Waste Management ACOP. ABB’s sustainability procedures and guidance include our Zero Manufacturing Waste to Landfill Procedure.
These standards impose several processes designed to prevent or mitigate potential
negative impacts. For example, ABB’s water management standard requires sites toperiodically monitor their rates of water withdrawal, use and wastewater discharge
while assessing opportunities to implement new conservation measures. Sites located in areas of water stress or which withdraw more than 10,000 cubic meters ofwater annually are required to implement effective action plans for reducing water
withdrawals. Our waste management standards require all ABB sites to continuously
reduce the amount of waste generated, as well as to minimize waste at the source.
Our sites are presently at varying stages of implementing the procedures for segregating, reducing, reusing and recycling waste. Some are at the beginning of theirjourney while others have reached the end, such as our operations in Bangalore, whichwere externally certified in 2023 as “zero waste to landfill” by Intertek.
We have undertaken several actions to address actual negative impacts and risks
related to our water and waste management. These include our Corporate Water
Inventory, covering all ABB Group companies worldwide. The inventory compiles datafrom 338 ABB sites and offices, covering approximately 94 percent of employees. Data
for remaining employees based at non-manufacturing sites with limited impacts is
estimated on a pro rata basis.
In a related field, we work with customers and suppliers to implement sustainable
practices that address our complete value chain and the full life cycle of our products and solutions. For more information on this area of activity, please refer to the“Circularity” chapter in this report. We also address the environmental performance of
our suppliers through our Sustainable Supply Base Management approach. For more
information, please refer to the “Responsible sourcing” chapter in this report.

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Among the tools we use to monitor and manage water-related risk across our operations is the World Resources Institute’s Aqueduct tool. Aqueduct lets us assess ABB’s
facilities according to the level of baseline water stress of the local watershed. We use
it to track levels of groundwater depletion, flood risk and seasonal variability of water
availability at our sites.
ABB is well equipped to identify and deliver actual and potential positive impacts andopportunities related to waste and water management. After 50-plus years in thewater industry and 130-plus years in the power sector, we are aware of how important
it is for complex businesses to use resources efficiently and sustainably. Our solutions
and expertise across water cycle applications help our customers achieve greater operational efficiency and insight into their plants’ health and conditions, letting themdo more with less.
To track the effectiveness of the actions we take on water usage and waste management, we rely on the management standards described above and on information
drawn from our ISO 14001 management system. Data are reported on a quarterly
basis and aggregated at the corporate level. We have adopted a clear target for waste,
which is to send zero waste to landfill by 2030. While we have not yet set a Group-widetarget for water management, this topic is covered under the scope of the “preserving
resources” pillar of ABB’s Sustainability Agenda.

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40

Preservi ng resou rces

Globally, 50 percent of our 338 sites send zero waste to landfill, while the remaining
50 percent are making progress in the same direction. Over the course of 2023, wereduced the amount of waste that ABB generates by 11 kilotons. We implemented 37
recycling and waste reduction projects in 2023. These projects reduced the waste we
generate annually by an estimated 600 tons. Of these projects, 40 percent have an expected payback period of less than two years. In total, 86 percent of our waste in 2023
was recycled, and 6.3 percent was sent to landfill, down from 6.4 percent in 2022.
N O N - H A Z A R D O U S WA S T E T O L A N D F I L L

8.8%(16.8 kilotons)

8.4%(14.3 kilotons)

7.0%(12.0 kilotons)

2019

2020

2021

6.4%

6.3%

(10.9 kilotons)(10.1 kilotons)

2022

2023

Figures in the graphs are adjusted for portfolio changes.

Of the 338 ABB sites mapped in 2023, 61 face an extremely high level of water stress,
and 55 face a high level of water stress. For all ABB sites in stressed watersheds, total
water withdrawals in 2023 amounted to 1,242 kilotons, representing 49 percent of our
total water withdrawals. There are 12 projects currently under way to improve water
management across ABB, with expected annual savings of 19 kilotons.

D I S T R I B UT I O N O F WAT E R W I T H D R AWA L S 2 0 2 3
Total water withdrawals in stressed watersheds for all ABB sites amounted to 1,242 kilotons. Total water withdrawals for all ABB sites
were 2,545 kilotons

Extremely high 35%
High 14%
Medium to high 20%
Low to medium 11%
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Biodiversity and land use
ABB has identified the topic of biodiversity and land use as an important part of its
efforts to be a more sustainable company. In discussing biodiversity, we are referringto the protection of biological and genetic diversity in the natural world. We believethat the preservation of this diversity is vital to ensuring the survival of plant andanimal species and the conservation of natural ecosystems. At ABB, we are awareof the central role that land use plays in protecting biodiversity. To be sustainable,
human uses of land should be minimized, and deforestation must be strictly limited orcompletely avoided.
ABB’s Policy on Health, Safety, Environment, Security and Sustainability addresses
the topic. We comply with all relevant regulations and legislation on biodiversity, land
use and land contamination. We have also engaged with biodiversity as part of our EU
Taxonomy reporting process, as it falls under the “do no significant harm” assessment. Our internal environmental site reporting questionnaire includes biodiversity,and we have made use of the Natura 2000 protected areas network to carry out further analysis. Notably, ABB in the United States worked with an external consultant in
2023 to assess the proximity of our sites to nature reserves and other protected areas.
With respect to land use, this is not an issue on which we have a large impact, yet weare nonetheless committed to addressing it with proper care.
ABB is still at an early stage of preparing to manage the topic of biodiversity and landuse. We plan to develop and implement a course of action within the next two years.
We have not yet established formal mechanisms for tracking the effectiveness of ouractions related to biodiversity and land use.
We are nonetheless confident that our approach to protecting biodiversity in years
past has been sound, even if it did not represent a priority action item for our Group.
In 2023, 13 of ABB’s sites reported that they were in or near protected areas of highbiodiversity value. Most of these sites are certified under the ISO 14001 standard forenvironmental management systems and the ISO 9001 standard for quality management systems. Globally, 80 percent of our sites are certified according to ISO 14001
and ISO 9001, based on which we identify and manage any significant environmental risks and opportunities. Many of our manufacturing sites operate in line withenvironmental permits issued by local authorities; these authorities regularly assess
our performance.

04 Social
progress

43
44
46
50
52
54
56
58
61

We promote social progress
Health and safety
Human rights and labor standards
Employee engagement score
People development
Employee wellbeing
Diversity and inclusion
Stakeholder engagement
Community engagement

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We promote social progress
Business has a crucial role to play in building a prosperous, healthy and equitablesociety. ABB is proud to be a good corporate citizen and to contribute to the welfareof our employees, customers, other stakeholder groups and communities worldwide.
This section addresses three key topics in this area that our 2023 double materiality
assessment identified as material to our business and how it impacts the outside
world. These are health and safety, human rights and labor standards, and employee
development and wellbeing. This section also addresses two additional topics that
ABB considers to be vital components of its Sustainability Agenda. These are diversity
and inclusion, and partnership and collaboration. Our efforts relating to these five
topics represent a relevant part of how we create value for all our stakeholders.
Four targets have been established under ABB’s Sustainability Agenda to reflect theways we are working to promote social progress. With social progress being core to
our value creation model, these targets also support us to successfully deliver value toall our stakeholders. The first is to achieve a gradual reduction in lost-time incidents –safety is paramount to our operations, and the physical wellbeing of our employees
has always been a top priority. The second target is to increase the proportion of
women in senior management roles to 25 percent by 2030. The third is to achieve a
top-tier employee engagement score in our industry. And the fourth is to expand ourprograms for community engagement.
Business is inseparable from society, and ABB firmly believes that a healthy society
provides the necessary preconditions for any successful enterprise. We are committed to doing our part to enable and support thriving communities and healthysocial conditions.
Targets

Baseline (baseline year)1

2023 status0.24 (2019)2

0.13

SOCIAL PROGRESS

Zero harm to our people andcontractors – we aim for a
gradual reduction in lost timefrom incidents

Increase proportion of women 11.7% (2019)in senior management3 roles to
25% by 2030

21.0%

Achieve a top-tier employee en- 71/100 (2019)
gagement score77/100

Expand programs for community engagement

As part of the improvement
process started in 2022, in
2023 we assessed our community engagement positioning
and revised and expanded thescope of action, now focusedon education, emergency anddisaster relief, community empowerment, and environmentand conservation.

1
2
3

n.a.

Where a baseline applies.
2019 baseline excludes the Power Grids business and the Turbocharging division.
At ABB, senior managers are defined as employees in Hay grade 1-7, including Division Presidents.

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Social progress—
Health and safety
ABB’s 2023 double materiality assessment identified health and safety as one of ourcompany’s 10 material topics. The topic addresses the necessity of health and safetymeasures in the workplace and recognizes the provision of a safe workplace as a fundamental human right. At ABB, it encompasses our efforts to ensure the health andsafety of our employees, contractors and supply chain partners by implementing appropriate standards and procedures and by complying with local laws and regulations.
It also involves developing safe products, solutions and services based on testing andthe incorporation of features to prevent accidents and injuries.
Health and safety are foremost among the standards by which ABB measures its
performance. To underscore this fact, in June 2023, CEO Björn Rosengren signed an
updated HSE & Security Policy that reinforces our commitment to health, safety, theenvironment and security. This commitment encompasses material sourcing, product design, operations and services. The updated policy includes our HSE Guiding
Principles for Resilient Operations.
These principles, which are “lead with care,” “engage and involve” and “learn andimprove,” are aimed at promoting a leadership style and work environment that allow
people to do their best work, talk openly about challenges, ideas and mistakes, andmake meaningful contributions to how their work gets done. We accomplish this byactively involving leaders in HSE processes such as sustainability observation tours(SOTs), self-assessments and incident investigations. Our leaders also work to facilitate a “speak-up” culture by looking beyond the safety numbers and leading with care.
In formulating these principles, we benchmarked ourselves in 2023 against more thana dozen of our customers.
We actively manage health and safety, along with all of their related impacts, risks andopportunities, in several ways. We seek to address hazardous situations as soon as
they are identified, and 77 percent of all reported hazards at ABB were resolved immediately in 2023. Reported incidents are categorized as minor, medium or major and areinvestigated accordingly. The learnings from these investigations create actionable
mitigation measures that are then shared across all of ABB’s business areas.
The divisions of ABB’s four business areas undergo one-, three- or five-year
self-assessment cycles under the HSE&S Management System and submit to an HSE
audit process. Independent HSE auditors at ABB’s business areas are responsible for
auditing the business under our management system and for identifying areas for
improvement and opportunities to implement good practices. As an essential aspectof our Guiding Principles for Resilient Operations, ABB is committed to becoming alearning organization: Instead of only focusing on learning from a limited selection ofincidents, we want to learn from our daily work and proactively identify areas that canbe improved.
We track the effectiveness of our health- and safety-related actions in a range ofways. In terms of processes, our Management Information System allows us togather all relevant data on hazards and incidents and enables us, after thoroughanalysis, to assign actions to managers. Our on-time goal is to close 85 percent of all
non-conformities reported (NCRs) through self-assessments or HSE audits within theallotted timeframe, which ranges from 30 to 90 days depending on the severity of the
non-conformity. We currently have an NCR on-time closure rate of 76 percent for HSE
audits and 66 percent for self-assessments.

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Under the ABB Sustainability Agenda, our ambition is to cause zero harm to ourpeople and contractors, and we aim for a gradual reduction in lost-time incidents. We
achieved our internal sustainability safety target in 2023, as our lost-time injury frequency rate (LTIFR) of 0.13 declined from the 0.24 we recorded as a baseline in 2019,reaching industry-leading levels. LTIFR is defined as work-related injuries that resultin at least one day away from work per 200,000 hours worked (i.e., the total hours
worked by 100 full-time employees per year).

S A F E TY AT A B B
L O S T-T I M E I N J U RY F R E Q U E N C Y R AT E ( LT I F R )

0.30

0.24
0.25

0.20

0.15

0.14

0.15

0.14

0.13

0.10

0.05

0
2019

2020

2021

2022

2023

Excludes the Power Grids business and the Turbocharging division.

1

Where a baseline applies.

In 2023, ABB recorded one workplace-related fatality and zero travel-related fatalities.
An investigation into the fatal incident is currently underway, and we will draw on
the lessons learned to prevent any future recurrence. In spite of this fatality, the total
number of serious and high-potential incidents decreased compared to 2022. We are
not satisfied with this year’s results and will continue to search for ways to better
protect our people. ABB has built a robust safety culture over the past decade, andwe are proud of the downward trend in the total number of serious incidents experienced since 2014. We nonetheless refuse to become complacent about our strong
safety record.
The health aspects of our health and safety efforts are addressed in the “Employee
wellbeing” chapter of this report.

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Social progress—
Human rights andlabor standards
Our double materiality assessment identified human rights and labor standards as
one of ABB’s 10 material topics. This topic addresses ABB’s commitment to complying with internationally recognized standards, laws and regulations, including theelimination of child and forced labor, as well as the right to work under fair and safe
conditions. It encompasses access to fair wages, the right to freedom of associationand collective bargaining, respecting the rights of communities and individuals whenproviding security for our people and assets, and recognizing and respecting communities’ land rights. We also recognize our responsibility to respect and promote humanand labor rights along our value chain. This includes conducting proper due diligenceon our suppliers and contractors to ensure they meet our standards for the environment, health and safety, as well as human rights and labor standards.
ABB is committed to respecting and promoting the dignity and human rights of all
people, as expressed in the International Bill of Human Rights. We adhere to international frameworks to identify human rights risks and potential impacts as well as toimplement appropriate measures to mitigate adverse impacts. These frameworks
and tools include: United Nations’ Guiding Principles on Business and Human Rights(UNGPs), OECD Guidelines for Multinational Enterprises on Responsible BusinessConduct, ILO Core Conventions on Labour Standards, including ILO Convention
No. 138 on minimum age for admission to employment and ILO Convention No. 182 on
the worst forms of child labor, and ILO-IOE Child Labour Guidance Tool for Business.
With respect to child labor, these frameworks and standards include those which the
Swiss Ordinance on Due Diligence and Transparency in relation to Minerals and Metals
from Conflict-Affected Areas and Child Labor (DDTrO) specifies as internationally recognized equivalent regulations. As a result of our compliance with these frameworks
and standards, we are exempted from specific due diligence and reporting obligations under the provisions of the amended Swiss Code of Obligations (Art. 964j–l CO)
and the DDTrO respectively in regard to child labor.
With respect to labor standards, ABB fully honors all its requirements, whether determined by law or collective bargaining agreements. This includes the EU directive on
minimum notice periods regarding operational changes. We are in close and frequentcontact with the European Works Council (EWC), with a voluntary agreement to start
consultation on any planned transnational changes in Europe that affect a large
number of employees before beginning labor relations processes within affected
countries. Whenever possible, we await the EWC statement before concluding any local labor relations process. In this confidential exchange with the EWC about planned
future changes and our business outlook, we also review the effectiveness and efficiency of our consultation processes and adjust our practices when needed. Via our
Global Labor Relations database, we ensure that we comply with local requirements
and properly manage engagement processes for more complex projects.
Our commitment to respect and promote human rights and labor standards is underpinned by the ABB Code of Conduct, the ABB Supplier Code of Conduct and ABB’s≡

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Human Rights Policy. These codes and policies clearly set forth our expectations
for every individual who works for ABB or engages with us as a business partner or
through our supply chain.
ABB’s goal is for human rights to be well understood and managed in all ABB operations. During 2023, we continued our work to strengthen human rights risk management and mitigation processes, with each of our business areas undertaking reviewsof our salient human rights risks and Human Rights Due Diligence (HRDD) Framework.
The reviews involved wide consultations with a range of internal stakeholders andsubject-matter experts, as well as desktop research. The reviews were based on themethodology used for our Group-level review in 2022 and were conducted according
to the requirements of the UNGPs.
The scope of our human rights risk assessment included the 12 salient human rights
issues identified during the 2022 analysis and all internationally recognized humanrights, as per the Universal Declaration of Human Rights. Our four business areas
identified the human rights risks for each element on their full value chains, considering all potentially affected people. Each business area consolidated its findings toassemble a high-level human rights risk map, then prioritized risks according to theirseverity and likelihood, enabling us to define a risk matrix, with salient human rights
issues identified at the business area level. Human rights risks identified by internaland external stakeholders as part of ABB’s double materiality assessment were also
incorporated into the analysis.
As a result of this work, we updated our salient human rights issues as follows:• Child labor• Corruption and bribery• Environmental issues impacting human rights• Fair employment1• Health and safety• Human trafficking and modern slavery• Impact on communities and land rights2• Information security and data privacy
To review our HRDD Framework, business area teams assessed the implementation
status of its six core elements (policy commitment, risk and impact assessment,risk-based measures, embeddedness, tracking and communication, and grievanceand remedy), assigning them scores for 31 criteria.
This work allowed us to update and document a consolidated HRDD Framework for
the Group and to identify opportunities for improvement in our human rights management processes. The resulting group roadmap places a strong focus on setting
the standard for risk identification, communication and capacity building, both within
ABB and along our value chain, to build broader understanding of salient risks andour mitigation actions. Business area roadmaps focus on governance enhancement,
implementation of risk identification and mitigation, stakeholder engagement andawareness programs. We will monitor our performance and conduct annual reviews of
our improvement plans to assess their effectiveness and define new objectives.

1

The definition of fair employment includes
these previously identified salient issues:
freedom of association and collective bargaining, and discrimination and harassment.

2 The definition of impact on communities andland rights includes this previously identified
salient issue: contributing to conflict and useof force.

In December 2023, we published an updated edition of ABB’s Human Rights Policy,
which includes our documented HRDD Framework. The update was drafted concurrently with business area risk and HRDD reviews and incorporates feedback frominternal and external stakeholders and subject-matter experts gathered during 2023,
along with the requirements of the latest relevant international frameworks, standards and legislation governing responsible business practices.
Alongside the business area risk and HRDD reviews, we continued to focus on internal
engagement and capacity-building to better embed human rights considerations
in our day-to-day business processes. We continued to make general human rights

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Social progressawareness training available to all ABB employees and managers, with 4,412 employees completing general human rights e-learning courses, and we provided targetedtrainings for management and roles specifically exposed to human rights risks. We
also trained and qualified a further 43 Human Rights Champions to continue embedding human rights expertise within each business area and division. Human rights andsecurity was an increasing area of focus, with 100 percent of ABB’s security managers
undergoing training on ABB’s HRDD processes and their application to our commitments to the Voluntary Principles on Security and Human Rights.
We also continued our program for conducting human rights self-assessments at selected ABB sites. In total, 78 sites in 39 countries undertook the assessments in 2023,
for a total of 186 assessments in 47 countries in the period 2021–2023.

Number of ABB personnel
receiving human rights
awareness and target
role training
2023
2022
2021
2020

Human rights awareness

108
1,068
1,567
530

Sales & Marketing

162
438
427
185

Operations

172
257
596
120

Procurement

564
312
280
142

Target role
training

1,840

Number of hours
of instructor-led human rights training
delivered to ABB personnel during 2023

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During 2023, we continued to reinforce our risk screening process for major projects.
In the coming year, we plan to simplify this process to enhance effectiveness and topilot human rights risk screening processes for small projects.
To address human rights risks related to our suppliers, we rely on our Sustainable
Supply Base Management system and our conflict minerals management program.
For further information on these two programs, please refer to the “Responsible
sourcing” section of this report.
The majority of ABB’s employees worldwide are covered by collective bargaining agreements (CBAs), either by collective labor agreements at the industry level(generally with unions) or at the company or location level (generally with employee
representative bodies such as works councils or unions). Approximately 55 percent of
employees are covered by internal employee representatives, and approximately 27
percent are estimated to be members of one or more of 90 trade unions around theworld. In addition, the European Works Council represents more than 48,000 ABB employees, covering the majority of employees in countries belonging to the European
Economic Area (EEA), UK or Switzerland.
For employees not covered by collective bargaining agreements, there are different
scenarios regarding the determination of working conditions. In many countries
where not all employees are represented by the CBA, among other factors the conditions in the CBA that go beyond local labor market practices are considered in determining working conditions and terms. Regardless of the application of a CBA, ABB ingeneral aims to offer working conditions that meet or exceed the typical standards inthe respective local employment markets.
ABB’s reporting and allegation management processes are available to internal andexternal stakeholders to address any potential violations of ABB’s Code of Conduct
or other ABB policies, as well as applicable laws, including matters relating to humanrights. In case of any violation of human rights or our Code of Conduct, we take steps
to ensure adequate remediation and consequences in line with applicable contracts
and laws. For further information on ABB’s response to the increase in harassment,
discrimination and workplace respect and fairness cases recorded in 2022, pleaserefer to the “Integrity and transparency” section of this report.
In 2023, we did not receive any reports of child labor or threats to freedom of association with respect to ABB employees. Two cases of attempted forced labor werereported by ABB service employees related to their treatment by customers. These
cases were resolved satisfactorily following intervention by appropriate management
and customer commitments to respect ABB’s policies regarding working conditions.
During the year, we did not receive any reports of concerns regarding indigenous peoples’ rights, nor of negative impacts caused by security staff or third-party security
providers. For further information about reports on these issues within our supply
chain, please refer to the “Responsible sourcing” section of this report.
Our human rights programs are proving effective in several ways. As more employees
are trained in human rights and labor standards, they are sending our Human Rights
Champions specific suggestions for improving human rights considerations and proposing new processes to upgrade due diligence procedures, as well as volunteering topilot those new processes.
Our growing internal awareness of human rights and labor standards has also enabled
us to identify concerns related to temporary laborers. In one case, the ABB training
session we conducted alerted a group of temporary laborers that their employer was
not observing local labor laws with respect to timely payment of wages. In anothercase, our training program resulted in reports of third-party laborers not receiving
appropriate annual leave from their employers. Action is under way to resolve thesecases and ensure appropriate remediation is provided to the workers. These cases
demonstrate how our training and due diligence processes can inform and inspire real
improvements in people’s lives.

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Social progress—
Employee engagement score
In 2023, we conducted our fifth annual ABB Engagement Survey. Separately, we carryout a number of more limited business- or topic-specific pulse surveys, but the ABBEngagement Survey is conducted Group-wide. It provides employees across ourcompany with an opportunity to express their thoughts and opinions about ABB as aworkplace. Since the survey was launched in 2019 to help foster a culture of collaboration and open dialogue at ABB, we have received valuable feedback about what we aredoing well and what we could do better.
Every active ABB employee is invited to participate in the ABB Engagement Survey.
Each year, ABB cooperates with local works councils and union representatives toensure that the survey meets all local consultation requirements. It is available in approximately 40 languages, and participation is entirely voluntary and confidential.
By listening regularly to feedback from our employees, we mitigate the risk of failingto address critical topics at the team level. Failure to deal with such issues could lead
to less motivated employees and to avoidable attrition. Over the last five years, theparticipation rate for the survey has continuously improved, from a response rate of
65 percent in 2019 to 84 percent in 2023.
To be transparent about the effectiveness of our actions, we share all the global
survey results with employees, summarizing our overall engagement score and themost notable strengths and areas for improvement that emerged. Our business areas,
divisions, country organizations and eligible teams share and discuss the feedback received.
It is our experience that the most effective actions take shape at the team level. Local
teams and leaders review the feedback and suggestions before working together
to identify key areas for improvement and to devise action plans to make theirworkplaces better and more successful. Lastly, we share stories and examples about
actions taken across ABB’s teams, markets, divisions and business areas. By doing so,
we learn from each other and help each other meet our targets for improvement.

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The survey tools supplied by our external provider identify the questions that havethe strongest impact on our engagement score. We typically repeat these questions
from year to year so that we can monitor the effectiveness of our actions. In addition,
we carry out an analysis of all the comments provided in the survey. Each comment iscategorized as positive, negative or neutral.
To evaluate our overall progress, we rely on our Sustainability Agenda target: “Achieve
a top-tier employee engagement score.” Since the first ABB Engagement Survey in
2019, ABB’s engagement score has improved from 71 in 2019 to 77 in 2023. This scoreis the key survey metric that we track from year to year. In essence, it reflects the answers given by our employees to two core questions: “How happy are you working at
ABB?” and “Would you recommend ABB as a great place to work?”
In 2023, all topics but one received a more favorable rating than in the previous year.
The highest-scoring topics remained the same as last year: “safety,” “integrity” and“role clarity.” The topics that saw the most progress vs. 2022 were “challenge statusquo,” “wellbeing,” “rewards,” “change adaptation” and “care.” The survey also showed
that, while we have made good progress since 2019 on removing barriers to execution,
there is still room for improvement.

124,808
comments received

84%

response rate(=88,988 employees)
in 2023

is an improvementcompared to82%

in 2022 and65%

response rate in(baseline) 2019

106,046
in 2023 ABB received
a total engagementscore of

77/100

ABB employees invited
to the 2023 Engagement Survey

compared to

76/10071/100in 2019 (baseline)

in 2022

We make use of an external benchmark to determine how our survey scores compare
against a broader set of companies that have posed the same survey questions totheir employees through the same provider we use.
Five years after its launch, the survey has become an indispensable tool that promotes
open conversations about the issues that matter to us, facilitates the sharing of bestpractices and fosters mutual understanding.

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Social progress—
People development
People development is critical to the success of ABB. That is why we strive to give our
employees the skills they need to adapt to change and stay competitive in today’s
constantly evolving business environment. From adapting to new technologies andpivoting in a crisis to handling tectonic shifts in our industry, our workforce must be
prepared to face the future.
Our approach to people development is a key part of ABB’s People 2025 strategy andis underpinned by two core policies.
The first of these is our Corporate People Development Policy, which sets forth thecentral features of the people development practices that apply to all employees in
ABB’s business areas and functions. It outlines mandatory minimum standards foreach of our Human Resources (HR) focus areas: the ABB Leadership Way, Employee
Engagement, the Open Job Market and our Learn, Connect, Grow approach.
Our Learn, Connect, Grow (LCG) approach seeks to create an environment that fosters
the development of all our employees. As part of this approach, we provide online andoffline trainings on interpersonal and leadership skills, career development resources,and opportunities for our people to connect and learn from each other in informal
settings. In 2023, we launched the first edition of our annual LCG day. The event isdesigned to promote a culture of continuous growth. It was hosted in more than 40
countries, engaging senior leaders and over 20,000 people globally. The event was
highly appreciated by our employees and served to showcase opportunities available
for learning and growing, while sharing the company culture across all continents andbusiness areas.
Our Open Job Market framework underlies our commitment to providing transparent
and equal access to job opportunities at ABB. The framework applies to every ABB
business area and function, mandating that all vacant office or non-production positions – including part-time, full-time and senior leadership positions – be posted in
English on ABB’s Internal Career Portal. The framework establishes that ABB employees can apply for any posted job at any time without restrictions. Exceptions to theframework are permitted under certain specified circumstances.
We believe that a culture that consistently allows employees to reflect on their growthobjectives and provides them with the support they need to achieve them – throughan open job market, learning opportunities and human connections – both prepares
our workforce for challenges and safeguards their employability.
We have created a broad array of bespoke leadership courses that address the specificchallenges found at every level of management in our organization. Additional leadership learning resources are made available to our employees through the Harvard
Manage Mentor and Harvard Manage Mentor Spark platforms. Many more training opportunities are provided by our businesses to their respective employee populations.
We continuously refine our learning offerings to ensure they are up to date with thelatest developments and requirements. To this end, we work closely with our internal
stakeholders, involving them from the early design stages of these offerings. We
also maintain an open dialogue with internal stakeholders regarding our existing procedures.

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Social progress—
Employee wellbeing
At ABB, we strive to be an employer of choice, actively seeking to attract new employees and retain current ones. We support our employees’ professional developmentwith training programs and encourage their personal growth with work-life balance
initiatives. We also make sure to keep a close eye on changes in the labor market and
new workforce skills that will be needed for jobs in the future.
This report addresses several aspects of the material topic of employee development and wellbeing. It describes the support we provide for the physical and mental
health of our employees. It details ABB’s annual engagement survey and how ouremployee engagement score informs our efforts to make ABB a great place to work.
It also reviews our approach to supporting personal and professional growth among
our employees.
We encourage the personal growth of ABB’s employees through initiatives that ensure
the right balance between their professional and personal lives. In doing so, we support the wellbeing and mental health of our people around the world.
In providing employee benefits, including wellbeing benefits, our general policy is tostay aligned with local market practices on a country-by-country basis. Due to this approach, there is a risk that local market practices may not support our Sustainability
Agenda or our goal to drive social progress. Thus, there are two wellbeing-relatedareas where we have opted to take a global rather than local approach to benefits: theglobal paid parental leave policy and the global Employee Assistance Program (EAP).

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Under the EAP, our global provider, Workplace Options, provides the same level ofwellbeing support to every ABB employee. All employees can access the EAP throughour Inside+ intranet site or through an external website, as not all eligible participants
have access to Inside+. This is primarily the case for ABB’s production workers and thedependents of our employees.
We also comply with local legislative requirements. For example, in Mexico, all companies are required by law to identify, analyze and prevent psychosocial risks that may
harm employees’ physical, social and mental health, as well as to promote a positive
organizational environment. The EAP has supported ABB Mexico in complying withthese requirements.
The actions we take to protect employee wellbeing are principally conducted on a
local basis. For example, in the United States, our “HSE Week,” held in October 2023,
offered several live sessions on supporting mental health and wellbeing, among othertopics. In Italy, we run a wide range of wellbeing initiatives, from promoting healthyeating habits through subsidized meetings with nutritionists, to health screening
programs for breast and skin cancer. And in China and Taiwan, we provide healthcheckups for all ABB employees. We also run global campaigns on wellbeing topics, forexample, in support of World Mental Health Day. These highlight support available atthe local and business area level (such as the Mental Health Training program provided
by the Process Automation business area).
Our EAP provides a Rapid Response Critical Incident service that addresses urgent
negative impacts and risks related to employee wellbeing. The service supports ABB
employees affected by incidents such as natural disasters, accidents at work or thedeath of a colleague.
Programs and initiatives at both the local and Group levels deliver a range of actualand potential positive impacts and opportunities in the area of wellbeing. In China,
for example, we organize sports events and clubs for employees and host a regular
lecture series on mental and physical health topics.
In the United States, we actively seek feedback from our employees; we believe that
our annual focus groups help us rapidly remediate benefits issues and determine
whether the actions we are taking are effective. The benefits focus groups we heldwith ABB employees in the first quarter of 2022 and 2023 revealed that our people
wanted to understand their benefits better and be able to locate related information
more easily. This resulted in the launch of the www.myBenefitsABB.com website,
providing details of ABB’s US benefits, in October 2023. In keeping with employee
feedback, the website can be accessed from any computer or personal device without
requiring the use of an ABB internal network. This approach specifically addressed
the needs of ABB production employees who faced challenges in accessing the
ABB network.
Our global EAP provider makes it simpler to assess the effectiveness of our employee
wellbeing initiatives. It allows us to track utilization rates and rapidly identify specificareas where early intervention measures would help. It provides us with data on themental health-related seminars and events employees have attended. And it tracks thenumber of hours spent on mental health support and the most popular topics viewed
on the EAP portal. This data directly informs our approach to employee wellbeing.
Additionally, our global EAP provider offers a wide range of resources and training
materials to support the overall wellbeing of our employees. We have set an internalgoal for ABB employees either to meet or exceed the average rate at which thesematerials are accessed by our EAP provider’s other clients. To achieve this goal, we
actively publicize the kinds of support it makes available to our employees. We collectfeedback from employees who use the EAP in the form of a Net Promoter Score andthe ABB Employee Survey. We hope to achieve steady improvements in employee wellbeing over time as indicated by these two metrics.

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Social progress—
Diversity and inclusion
Diversity and inclusion (D&I) at ABB involves developing and supporting workforce diversity across all dimensions (e.g., gender, generations, ethnicity, abilities and sexual
orientation) and providing all with equal opportunities and equal treatment. We seek
to cultivate an inclusive environment that welcomes and respects every individual.
We have implemented unequivocal guidelines to promote D&I across ABB. ABB’s Codeof Conduct additionally sets forth how we expect employees to act in matters ofinclusion, respect and fairness. Under the code, all employees are expected to help
keep our workplace free of harassment and discrimination. Among the commitments
we have made to D&I, we are proud to have signed the CEO statement of support for
the UN Women’s Empowerment Principles (WEPs). ABB also supports the Standardsof Conduct for Business. This UN set of guidelines aims to address discrimination
against lesbian, gay, bi, trans and intersex (LGBTI) people.
In keeping with the ABB Way operating model, our four business areas and theirdivisions are fully empowered and accountable for translating our global D&I strategy
into meaningful actions in all our markets. Collaboration on a monthly basis ensuresconsistency, sharing of best practices and a culture of empowerment aligned withlocal nuances and distinctions.
To ensure a consistent focus on the D&I agenda throughout the year, we have compiled an annual D&I calendar for the third year. The calendar provides transparency
into the scheduled activities and allows for timely planning and broader engagement
across all markets.
Among our Group-wide efforts to drive progress on the topic of gender equity, we
conducted the #ABBsolutelyUNited campaign in honor of International Women’s Day
on March 8. The campaign included a virtual panel discussion in which our businessarea presidents and corporate heads addressed ABB’s commitment to the WEPs.
Unconscious bias training was made available to all employees. The campaign alsoreached out to a broader public, as employees shared their own stories and reflections on gender equity.
In Q2, we launched our Pride Month celebrations with the #ComeAsYouAre campaign,
which drove Group-wide engagement on the topic of LGBTQ+. The lineup of events
included a virtual panel discussion and initiatives covering such topics as inclusive
leadership, inclusive interviewing and LGBTQ+-specific travel safety tips. Additional
activities included an “Ally of the Year” prize and various learning-oriented contests.
Many countries also organized activities at their local sites, with central support.
In 2023, we focused on systemic changes to ensure a fair workplace for all. External
assessments on LGBTQ+ inclusion (Stonewall, HRC, Workplace Pride) were conducted,
we launched the allyship maturity model and app, and the employee benefit policy
review was completed.
In Q3, we focused on the topic of generations and age diversity, raising awareness onageism and how to address it effectively. These efforts were co-led by the Global D&I
team and the Encompass Generations employee resource group (ERG). We also held
a global panel discussion on the subject of mentorship, which stimulated additional
interest in ABB’s existing mentorship opportunities.

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In Q4, we focused on the topic of abilities. The month of October was dedicated toraising awareness on invisible disabilities such as dyslexia, menopause and dealing
with grief and loss. November featured a hackathon during European disability week,
in association with Big Bloom. Employees attended a webinar from the Employee
Assistance Program on the subject of mental health. In December, we released news
about the onboarding of the newest Executive Committee sponsor for this topic,
Karin Lepasoon, Chief Sustainability and Communications Officer at ABB.
Our efforts continue to emphasize fostering an inclusive culture and creatingstrong partnerships with organizations such as Catalyst, WeQual, the Society of
Women Engineers, Stonewall, Open for Business and the Global Summit of Women,among others.

W O M E N I N S E N I O R M A N AG E M E NT

21.0
17.8
16.3
13.5
11.7

2019

2020

2021

2022

2023

At ABB, senior managers are defined as employees in Hay grade 1-7, including Division Presidents.

To track the effectiveness of our actions in support of D&I, we draw from a range ofresources, including the inclusion score in the annual employee Engagement Survey,
data on the growth of ABB-affiliated ERGs, the proportion of employees receiving D&I
training, and our early talent and leadership statistics. We have set four D&I targets toachieve by 2030. One of our 2030 sustainability targets – to increase the proportionof women in senior management roles to 25 percent – is also one of the targets of our
Global Diversity and Inclusion Strategy 2030. In 2023, the proportion of female senior
managers increased to 21.0 percent, up from 17.8 percent in 2022.
Our three additional internal targets for D&I at ABB are as follows:• Achieve 50 percent female early talent hires• Provide all our employees with access to employee resource groups• Achieve yearly improvement on the inclusion scores in the annual employee
Engagement Survey
In 2023, we made progress toward all three of these targets. Over the course of theyear, 39 percent of our early talent hires were female, new ERGs continued to beformed across our Group while the reach of existing ERGs continued to expand, andthe inclusion score in the 2023 Engagement Survey was 77, up from 76 in 2022.

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Social progress—
Stakeholder engagement
At ABB, we engage, interact, partner and co-develop solutions with our most relevant
stakeholder groups, including collaborative partnerships, customers, employees,
governments and civil society, the investment community and suppliers. We actively
engage with governments and the local communities in which our products are manufactured and used, with the aim of fostering technology adoption, sound regulatory
frameworks, job creation and economic growth.
We are engaged in an ongoing dialogue and close cooperation with our key stakeholder groups to ensure that ABB’s policies and positions reflect their perspectives.
This regular communication is crucial to determining which topics are material forboth ABB and our stakeholders.
In the conduct of our daily business, we are in continuous contact with customers,
employees and suppliers, among others. The transparent dialogue we carry on with investors enables them to make informed and timely investment decisions. We regularly
engage with government, civil society and our collaborative partners.
In 2023, as part of the process of conducting ABB’s double materiality assessment, wemade some minor adjustments to how we categorize and define our different stakeholder groups. These changes are reflected here:—
Collaborative
partnerships

We highly value the partnerships ABB maintains with companies and research andacademic institutions in order to collaborate on a wide range of social, environmental
and technological activities and topics. These partnerships serve to foster knowledge
exchange, contribute to innovation, provide access to talent, expand markets andaddress complex challenges in a more effective manner.
How and whom we engage:• Collaborations with research and educational institutions• Global Business Initiative on Human Rights (GBI)• International Committee of the Red Cross (ICRC)• Technology and innovation partnerships with other companies• Technology partnerships with relevant start-ups• UN Global Compact• World Business Council for Sustainable Development (WBCSD)—
Customers

We meet frequently with the many organizations with which ABB has current, future
and past commercial relationships. They are a key driver of ABB’s business success,and meeting their needs and expectations is essential to our business.
How we engage:• Customer requests• Customer service• Customer trade shows• Key account manager relationships• Sustainability partnerships

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We are committed to maintaining an open dialogue with current, former and future
employees of ABB. This group includes formalized and/or elected bodies of employee
representatives that deal with management of labor practices, among other topics.
Employees bring valuable skills, drive productivity, foster innovation and contribute to ABB’s culture and values. They are vital for achieving our goals and staying competitive.
How we engage:• Annual Employee Engagement Survey• Annual performance review• Collective bargaining associations• Dialogue with the ABB Employees Council Europe, the representative body of all ABB
employees in Europe• Global network of employee resource groups promoting diversity & inclusion in
the workplace• Learning and development opportunities—
Governments and civilsociety

We engage with governmental, regulatory, political and economic stakeholders, local
communities, the media, representatives from social and environmental organizations, non-governmental organizations (NGOs), not-for-profit organizations (NPOs)
and charitable organizations, at global, national and local levels. These key stakeholders provide the political and regulatory support, social stability and public trustnecessary for ABB to operate its business and achieve sustainable growth.
How we engage:• Direct dialogue with community representatives to understand local and nationalneeds• Donations and volunteering• Engagement with government agencies and other stakeholders to demonstrate thevalue of our products

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Social progress• Meetings with regulators to understand their priorities and share our views on policy issues• Participation in national and international initiatives to address global issues suchas climate change and sustainability• Strategic corporate partnerships—
Investmentcommunity

The investment community enables ABB’s access to financial capital and includes suchmarket participants as shareholders, debtholders, financial analysts, rating agencies and proxy advisors. We engage with these stakeholders on both financial andnon-financial topics, including sustainability, governance and compensation.
How we engage:• Annual General Meeting• Capital markets days
• Group reporting• Investor relations website• Investor roadshows and conferences• One-on-one meetings• Press releases• Quarterly analyst and investor webcasts—
Suppliers

We rely on trusting and stable relationships with the entities that provide products and services to ABB, including equipment and human resources. They serve a
critical role in the supply chain and can have significant impacts on our operations
and success.
How we engage:• Co-development initiatives• Early engagement during new product development• Monitoring through our Sustainable Supply Base Management program• On-site evaluations and audits• Procurement management• Providing training and engaging in special projects on sustainability performance• Town hall and supplier day events
During 2023, we interacted regularly with our stakeholders and held
sustainability-specific meetings with our investors, customers and suppliers. In
addition to the regular day-to-day discourses we hold with our stakeholders, we also
engaged with them for specific strategic and reporting purposes. We are particularlyinterested in gaining insights into how they perceive value and what matters to them
most in terms of economic, environmental and social issues. The knowledge and understanding we acquire from these interactions inform our strategic decision-making
and the way we manage risks and opportunities. They shape the actions we take andhelp us to communicate these actions in ways that maximize our transparency and accountability. By continuously engaging with our various stakeholders, we ensure that
we are well positioned to identify and anticipate emerging trends, shifting customer
needs and changing market expectations.

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Our community engagement encompasses partnerships, projects, advocacy andphilanthropic initiatives addressing topics such as climate change, education,
employability, digitalization readiness, diversity, poverty alleviation and health. We
also donate to charitable causes and maintain open, trustworthy and transparent
communication and cooperation with all our stakeholders. Within our Sustainability
Agenda, our ambition for community engagement is to provide impactful support forcommunity-building initiatives around the world.
ABB is committed to creating a more prosperous and sustainable future for thecommunities where we operate. To accomplish this, we engage with our stakeholders, periodically measure our impact and promote a range of development initiatives,
including employee volunteer programs. Our activities are focused on ensuring equitable access to education, leveraging technology and innovation, and enabling theenergy transition.
In 2023, we proposed a new community engagement framework that will help us
expand our focus while implementing a more standardized, efficient and quantifiableapproach on a global basis. At the start of this process, we formed a working groupto assess ABB’s performance compared with our peers and other leading companies.
The group drafted a proposal for the new community engagement framework, which
was then revised in a cross-business area and cross-country workshop hosted by ABB
in Italy. At the workshop, representatives from our 10 most active countries in thefield of community engagement discussed the role ABB should play in society and proposed an ideal community engagement strategy and governance model for the Group.
The framework will be revised in 2024.
The output from this workshop laid the foundation for a harmonized approach thatis more capable of identifying community needs and better positioned to implement
effective development initiatives. The new model, which is aligned with the ABB Way
operating model, will provide greater support for cross-border collaboration and synergies, as well as for scaling up our best practices.
Our community engagement initiatives will be expanded around four focus areas(4Es): education, emergency and disaster relief, empowering communities, and theenvironment and conservation. The initiatives are all founded on the needs of thecommunities involved and are managed in close cooperation with local partners toensure a stronger impact.

ABB SUSTA IN A BILIT Y REP ORT 202 3

62

Social progress

ABB’S FOCUS ARE A S

Education
Ensure equitable accessto STEM education andbuild the next generation’s life-long competence and soft skills,­leveraging technology,
sustainability, renewableelectricity innovation.

—
Educational initiatives

Empoweringcommunities
Emergency &disaster relief
Support local communities and employees
impacted by natural disasters and educate
our ABB community on
disaster preparedness.

Create a more prosperous and sustainable future for fragile communities where we operate,
mitigating impacts andoffering new development opportunities.

Environment &conservation
Support communities
in biodiversity conservation, protecting land,marine and freshwater
ecosystems, mitigating impacts and offering new development
opportunities.

Among our many educational initiatives, in 2023 we continued a longstanding partnership with Junior Achievement, a non-profit organization that runs entrepreneurshipand job training programs in Italy. Students in the program get to develop innovative business ideas and work on real projects with the guidance and support of ABB“dream coaches.” Over a 20-year partnership, we have involved 1,000 volunteers andreached out to 224,400 students. Also in Italy, we held the 2023 ABB RoboCup, whichgave 1,000 students from 44 schools hands-on experience in a robotics programming competition.
At the university level, staff at ABB’s Ormond Beach site in the United States began
to mentor their third cohort of students participating in the Federation for Advanced
Manufacturing Education program (FAME). FAME students work part-time with ourOrmond Beach maintenance team, receiving real-world work experience that complements their coursework at Daytona State College. In India, we initiated a school mentoring program for the 2023-24 academic year, involving 94 teachers and 4,673 students. In Finland, we donated €1 million to four universities, supporting world-classresearch, product development and education.
At the end of March 2023, we invited 12 prominent professors to Västerås, Sweden,
for the first of four symposiums on the impact of energy-efficiency solutions in thecontext of climate change. Together with senior researchers from ABB Corporate
Research, they spent two days discussing techniques to improve efficiency in industry, transportation and buildings, examining technology and design processes, and≡

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assessing potential business models. The findings of the symposiums will be compiled and used to provide guidance to research funders and the EU research agenda.
In the United Kingdom, ABB and Imperial College London signed a 10-year contract in
October 2023 to extend their partnership operating a pilot plant for carbon capture.
The plant first opened at Imperial College in 2012 and has built a proven track recordof training the engineers, scientists and other net-zero workers of the future. The only
facility of its kind in the world set in an academic institution, it has given more than
4,500 students hands-on experience with ABB technologies. Imperial is one of theworld’s top universities, with a reputation for excellence in science and engineering.

—
Emergency anddisaster relief efforts—
Community
empowerment—
Environment andconservation
initiatives

In the area of emergency and disaster relief, ABB enhanced its partnerships with theInternational Committee of the Red Cross (ICRC) and the International Federation of
Red Cross and Red Crescent Societies (IFRC) in 2023 to support local communities intimes of crisis. Over the past year, these partnerships allowed us to support communities affected by earthquakes in Türkiye and Syria. Funds from ABB were also used tosupport the ICRC’s relief activities for people affected by the war in Ukraine.
To empower communities in 2023, we actively supported many communities’ efforts
to meet specific basic, local needs. As an example, ABB India partnered with HelpAge
India to launch mobile healthcare units in the states of Karnataka, Gujarat, Nashik andHaryana, providing primary health services to the elderly and other vulnerable populations. Each unit serves around 1,500 individuals monthly; an estimated 70,000 people
will benefit each year from the services. Another initiative we are especially proud of is
our 23-year partnership with the Special Olympics; in 2023 we supported the Special
Olympics World Games, held in Germany. Around 150 ABB employees volunteered at
the games, where more than 7,000 athletes with diverse abilities competed.
The environment and conservation represented a new focus area for our community engagement initiatives in 2023. Among our activities, ABB Robotics supported
conservation organization Junglekeepers in its mission to protect 55,000 acres of
Amazon rainforest in Peru while reversing deforestation. In a first-of-its-kind pilot
program, ABB’s YuMi cobot is being used to automate planting tasks at a jungle base,speeding up the reforestation process and freeing up Junglekeepers’ volunteers tofocus on work such as patrolling the forest to deter illegal logging, educating locals on
the value of conservation and planting saplings. In another initiative, colleagues from
ABB Switzerland used their new “Volunteer Day” to support Pro Natura, an organization dedicated to cleaning up forests and helping native species flourish.
To track the effectiveness of our community engagement actions, we monitor thenumber of countries where we ran engagement programs, the total funds we donated, the number of person-days volunteered by our employees, and the numberof community projects and charities supported. Overall, in 2023, we delivered astrong performance.

CO M M UN I TY E N G AG E M E NT H I G H L I G H T S :O U R E M P L OY E E S A N D O U R B U S I N E S S A R E A S
S U P P O R T E D O U R CO M M UN I T I E S

45

$11.5

4,800

500+

countries

person-days volunteered

million donatedcommunity projects
and charities

05 Integrity andtransparency

65
67
70
71
73

We embed a culture of integrity
and transparency
Integrity and transparency
Executives’ sustainability incentives
Data privacy and cyber security
Responsible sourcing

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We embed a culture of
integrity and transparency
No enterprise can hope to retain its license to operate in today’s world without measuring up to a high standard of integrity and transparency. Customers, employees,
governments and civil society, the investment community, partners, suppliers andother stakeholders rightly expect a culture of integrity and transparency to be firmly
embedded in our Group, and ABB places due weight on their expectations. This section addresses our approach to managing three core material topics related to integrity and transparency. They consist of corporate and sustainability governance, data
privacy and cyber security, and responsible sourcing. Our work in these areas makes
up an important component of our value creation model.
In connection with these topics, we have established four concrete targets, of which
two relate to integrity: The first is to create a global framework for assessing andmitigating third-party integrity risks through risk-based due diligence and life cycle
monitoring by 2030. The second is to build a global integrity program underpinned byaccountability for integrity and an adaptive risk management strategy gained frominsights through targeted learnings, transparent reporting and monitoring by 2030.
The other two targets are associated with transparency: The first of these is forat least 80 percent of our supply spending in focus countries to be covered by our
Sustainable Supply Base Management (SSBM) approach by 2030. The 2025 mid-termtarget is to cover at least 80 percent of our high-risk supply spending in these focus
countries by SSBM. This approach includes regular assessments of environmental,social and governance performance. The other target is for ABB to link sustainability
targets to executives’ variable pay.

Targets

Baseline (baseline year)1

2023 status

I NT E G R I TY & T R A N S PA R E N C Y

Global framework for asn.a.
sessing and mitigating
third-party integrity risks
through risk-based due diligence and life cycle
monitoring

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 strengthens how we onboard and manage
the life cycle of our relationships with suppliers, sales channels and customers.

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

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 and 2 (January 1, 2021, to December 31, 2022): 60% of reporters.
• Year 1, 2 and 3 (January 1, 2021, to December 31, 2023): 60% of reporters.

n.a.

Framework established and operational. Integrity due diligence and risk management enhancements for suppliers (buy-side) and sales channels (sell-side)launched globally.

2. Engagement KPI – the volume of unique visitors to the Integrity AwarenessPortal (IAP) for integrity learnings:• Year 1 (January 1, 2021, to December 31, 2021): 25% of employees with online access.
• Year 1 and 2 (January 1, 2021, to December 31, 2022): 69% of employeeswith online access.
• Year 1, 2 and 3 (January 1, 2021, to December 31, 2023): 80% of employeeswith online access.
1

Where a baseline applies.

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ABB SUSTA IN A BILIT Y REP ORT 202 3

Targets

Baseline (baseline year)1

2023 status

At least 80% of supply
spending in focus countries2 covered by
Sustainable Supply BaseManagement (SSBM) by
2030

n.a.

Using a risk-based approach, a mid-term 2025 target has been set, focusing
on high-risk suppliers in focus countries.2

At least 80% of spending on
high-risk suppliers in focus
countries2 covered by
SSBM by 2025

Integrit y and tra nspare ncy

In 2023, we reached 42% of spending on high-risk suppliers in focus countries2 covered by SSBM.

Linking sustainability tarUnder the Annual Incentive Plan Under the AIP, at least two sustainability-related performance goals are ingets to executives’ variable (AIP), a safety goal was included cluded within the individual measure for each member of ABB’s EC. The indipay
within the individual measurevidual measure has a weighting of 20 percent of the executive’s target AIP.
for some member of ABB’s
Executive Committee (EC). The
individual measure had aweighting of 20 percent of theexecutive’s target AIP (2019).
Under the Long-Term Incentive One of the three performance measures under ABB’s LTIP is based on achievePlan (LTIP), two performancement of a corporate sustainability target and carries a weighting of 20 permeasures with equal weighting cent. The LTIP is awarded to around 100 executives, including EC membersof 50 percent were considered, and division presidents. Vesting under the LTIP is subject to the achievement
namely average earnings perof the plan specific targets over a period of three years.
share and relative total shareholder return. The LTIP wasawarded to around 100 executives, including EC members
and division presidents. Vestingunder the LTIP was subject tothe achievement of the plan
specific targets over a period of
three years (2019).
1
2

Where a baseline applies.
Current focus countries are Argentina, Brazil, Bulgaria, China, Colombia, India, Indonesia, Malaysia, Mexico, Peru, Poland, Saudi Arabia, South Africa, Thailand, Türkiye
and Vietnam.

At ABB, we are raising the bar for corporate and sustainability governance by working to maintain ethical business practices and systematic risk management that
addresses environmental, social and legal risks. For us, ethical business behavior andgood governance as well as transparency and integrity, are critical in our commitment
to anti-corruption, fair competition and compliance with legal obligations within ABB
and towards all stakeholders. Another vital component of our approach to corporate
and sustainability governance is our regular review of the relevant processes as well as
thorough due diligence. We take care to disclose our tax practices and corresponding
payments and to design responsible and fair remuneration practices. We are always
seeking new ways to enhance our sustainability governance structure so that sustainability is given appropriate consideration at all levels, from the Board of Directors to
the operating departments.
The following two chapters – “Integrity and transparency” and “Executives’ sustainability incentives” – address two different components of our approach to managing
the critical topic of corporate and sustainability governance, which was identified
by our stakeholders as a material topic. The third component of our approach to thismaterial topic is addressed in the “Sustainability governance” chapter, which can befound in the first section of this report.

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Integrity and transparency
Integrity and transparency are core to our operating model. Having evolved wellbeyond the limits of legal compliance, we aim to embed integrity and transparency ineverything we do.
Our culture of integrity and transparency is anchored in the ABB Code of Conduct andis strengthened by a range of other ABB policies and procedures. These include the
ABB Supplier Code of Conduct and our five core Integrity & Regulatory Affairs (I&RA)
procedures. These procedures cover I&RA oversight and responsibilities, third-party
management, data privacy, conflicts of interest and global trade.
The I&RA team, which is part of the Legal & Integrity function, is responsible for driving integrity enhancements that apply to all ABB functions and business areas. The
team oversees a comprehensive integrity program that can adapt to risk in real timeand is fully fit-for-purpose. The result of more than 20 years of development, the program has in recent years been significantly transformed and expanded. While the I&RA
program covers a variety of risk areas, below we specifically address two key operational risks which were also highlighted in the 2022 Sustainability Report: workplace
behavior, and bribery and corruption.

—
Cases reported
in 2023

In 2023, allegations reported internally were structured into the following categories(as well as more detailed subcategories within each of these) to ensure appropriate
attention, resourcing and internal escalation:• Antitrust & Fair Competition• Bribery benefiting ABB• Commercial Integrity & Regulatory• Fraud: Non-Self-Dealing• Fraud: Self-Dealing• HSE & Security• Human Resources• Non-Integrity Issue• Other Integrity Issue
The following table provides an overview of the number of allegations related tointegrity concerns and employment actions – in addition to myriad, non-disciplinary
remedial actions – resulting from integrity violations pursuant to ABB’s root-cause
analysis and accountability processes:
Integrity concerns

In 2023

Allegations reported

1894

Allegations closed

1187

Allegations substantiated341

Verbal warnings

35

Written warnings

107

Employment separations

100

Demotions, suspensions or other financial penalties

11

We have seen an increase in total allegations reported to our business ethics helpline
since 2022. We attribute this to an increased confidence in our reporting and allegation management processes coupled with more in-person interactions in the wake of68

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Integrit y and tra nspare ncy

the pandemic. We have taken steps in 2023 to address these issues with appropriate
policies, processes and training.
For example, we have updated our country policies for anti-bullying, anti-discriminationand grievances in all our key jurisdictions to reflect current legal standards and ourcommitment to a fair and respectful workplace that encourages a “speak-up” culture.
In recognition of the return of in-person interactions since the end of the pandemic,
we have also introduced new guidance for social events, designed to help our people
adhere to behavioral norms in both the workplace and informal settings.
We have strengthened our investigation and remediation processes to ensure consistent and effective case management as well as consequence management. These
processes enforce a zero-tolerance approach to discrimination and harassment.
Additional resources have been provided to the Human Resources (HR) teams tasked
with investigating and responding to complaints about poor workplace behaviors.
These resources include our new HR Investigations Framework, HR Investigations
Playbook and a new Disciplinary Committee Framework.

—
Anti-bribery &Corruption Program

At ABB, we have zero tolerance for unethical business practices. Any abuse of poweror trust for private gain is a breach of our ethical standards and Code of Conduct, andhas no place at ABB. We know that having an adaptive anti-bribery and corruption(ABAC) program, which anticipates and meets risks head-on, is critical for ABB’s organizational success. During 2023, we built on the extensive and ongoing enhancements
to our ABAC program and developed ABB’s new ABAC framework. It is a conceptual
overview of existing key ABAC policies, procedures and controls that have been designed and implemented across our operations to prevent, detect and respond to key
ABAC risks that we face as a global organization.
To inform how we continuously develop our ABAC program, we leveraged established processes – and developed some new ones – to perform targeted monitoring and testing activities throughout the year. This included testing risk scenarios
in key jurisdictions, assessing the extent of implementation of enhanced policies,
procedures and controls, and developing and monitoring data-driven dashboards
fed by primary enterprise tools used for day-to-day business. Through this, we haveidentified key ABAC risks in our operations, which we are addressing through variousorganization-wide initiatives, including targeted face-to-face and online training of
our most at-risk employees.
Our global framework for managing third-party integrity risk, which was launchedin 2022, is a key pillar of our ABAC program. In 2023, the framework saw theorganization-wide roll-out of enhanced mandatory integrity requirements andprocesses designed to identify, manage and mitigate third-party integrity risks.
In 2024, the focus is to continue extending this global framework to our existing
third-party population.
Among the actions we took in 2023 to mitigate specific negative impacts involving
ABB’s ABAC risks, we activated our Deferred Prosecution Agreement (DPA) workplan
to conduct and report on the initial review of our integrity program and remediation
efforts. The workplan was developed to meet the requirements of a DPA that ABBentered into as part of a settlement with the United States Department of Justice andthe Securities and Exchange Commission, announced on December 2, 2022. In 2024,
we are activating and working under our first follow-up workplan for year two of thethree-year DPA. The workplan is characterized by appropriate governance, a clear PMO
structure, project and change management tools, and resourcing. It places ownershipand accountability for its activities with ABB’s business areas and divisions, in keeping with the ABB Way operating model.

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We refreshed and relaunched our Code of Conduct, promoting it through a global
communications campaign led by our Executive Committee and supported bymanager-led discussions which drive understanding of our global policies on
anti-bribery and corruption and respect in the workplace. Almost 85 percent of ourteams have participated in these discussions. The new code was rolled out globally
under the tagline: “We speak the same code,” which was aimed at creating heightenedcompany-wide interest in and awareness about the Code and its enhancements.
We created a series of mandatory training modules in 2023 that bring to life our
expectations under the Code of Conduct. They cover the workplace behavior topics“bullying and harassment,” “equality and discrimination” and “speaking up.”
Our integrity training programs and the ABB Code of Conduct have been translated
into 17 languages and provided in different formats to make them accessible to officeand production staff alike. The programs have been completed by 83 percent of ourpeople, almost 82,300 to date, and all new hires must complete our training programs
as part of the onboarding process.
According to our people, these training programs help them live ABB’s values ofcourage, care, curiosity and collaboration. Of those who have been trained, 85 percent
find the programs “effective” or “very effective.” After completing the programs, ourteams make a pledge to commit to our values. The top three pledges chosen in 2023
were “speaking up if they see something that goes against our Code of Conduct,” “reporting concerns” and “becoming more familiar with the Code of Conduct.”
ABB’s integrity training program takes a hybrid approach to instruction, combining
self-guided learning with bespoke, role-specific mandatory training, thereby encouraging individual ownership and accountability. It centers on the upskilling of employees in gatekeeper functions and customer-facing roles across ABB. The ABAC training
program aims to enhance core ABAC competencies while highlighting the critical rolethese individuals play in upholding our integrity culture and compliance obligations.
In 2023, integrity-related incentives were introduced for Executive Committee members and division presidents. In addition, to improve our management of third-party
risks, we expanded the application of our Third Party Management program and processes to the full third-party population in 2023. This built on our enhancement of the
program in 2022, which focused initially on suppliers and sales channels. The program
has strengthened our risk-based approach to choosing third parties and enabledmore effective oversight and monitoring of their activities and overall performance.
Straight Talk, an internal platform for sharing real-life integrity successes and failuresat ABB, serves as a strong complement to our training program and has continued to
be well received throughout ABB. This transparent communications tool consolidates
lessons learned and supports our speak-up culture with regular messaging about ourreporting channels. It also provides key leaders with comprehensive data on our investigation portfolio, helping them set the tone from the top in their team meetings.

—
Integrity analytics

To track the effectiveness of our integrity-related initiatives, we utilize data analytics
and conduct transaction monitoring. Our continuous monitoring platform is designed
to detect ABAC and fraud risks by applying risk algorithms to data drawn from multiple company systems.
Our Integrity Analytics Report, a live dashboard available throughout ABB via our
integrity web portal, provides insights into three key metrics: trust, engagement
and transparency. To offer insight into ongoing and closed cases, a number ofreal-time and quarterly investigation dashboards are made available to the appropriate stakeholders.

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Integrit y and tra nspare ncy—
Executives’ sustainability
incentives
ABB promotes alignment between its executives and its Sustainability Agenda byincorporating sustainability measures into its Annual Incentive Plan (AIP) and its
Long-Term Incentive Plan (LTIP).
Under the AIP, at least two sustainability-related performance goals are included
within the individual measure for each member of ABB’s Executive Committee (EC).
The individual measure has a weighting of 20 percent of the executive’s target AIP.
One of the three performance measures under the LTIP is based on the achievementof a corporate sustainability target and carries a weighting of 20 percent. The LTIP isawarded to around 100 executives, including EC members and division presidents.
Vesting under the LTIP is subject to the achievement of the plan’s specific targets overa period of three years.
For further information, please refer to ABB’s Compensation Report 2023.

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Data privacy and cyber security
The topic of data privacy and cyber security was identified as material by ABB’s 2023
double materiality assessment. This topic encompasses ABB’s preventive measuresin data security and privacy, cyber security, and compliance with applicable data privacy laws, such as GDPR. We ensure the protection of customer, employee and otherindividual privacy and personal data, and implement robust measures to protect theirrights and safeguard against cyber threats. Our commitment to data security andprivacy underscores our determination to maintain compliance and earn the trust ofcustomers and stakeholders.
More details can be found at ABB’s external data privacy portal: https://new.abb.
com/privacy. Respecting the right to data protection is a priority for us, and wehave adopted global data protection standards to ensure a high, standardized levelof protection for personal data. We monitor and review compliance with ABB’s dataprotection policies and applicable data protection laws by means of data protection
audits, assessments and other controls. We have produced several Group-level guidelines and supporting materials for the internal use of our businesses to help themmeet data privacy compliance requirements. These include the ABB Binding Corporate
Rules. All ABB Group companies are committed to meeting the data privacy principles
contained within the rules whenever these companies are the data controller for the
personal data involved. For a summary of the ABB Binding Corporate Rules, which
cover all relevant policies and commitments, please visit the data privacy portal.
To manage the topic of data privacy and cyber security, ABB has put comprehensive and robust programs in place. ABB maintains a global privacy team staffedby full-time data privacy professionals. The team is headed by the Group’s Data
Protection Officer, who is based in the European Union. The global privacy teamsupports our robust network of business and country representatives and provides
various resources, including software, web portals and other support tools. All ABB
employees are made aware of the basics of data privacy, and specialized training isprovided for selected job functions. Training sessions cover data privacy awareness,
controller versus processor responsibilities, ABB compliance tools, data transfers,
privacy notices, privacy by design and contractual requirements. Employees are
expected to comply with our internal policies and procedures regarding privacy andinformation security. External suppliers must meet comparable requirements.
Privacy by design is incorporated as an important feature of our products, projects
and initiatives. Our Group has created and implemented an in-house privacy management system, which, among other tasks, handles data-related requests fromindividuals, maintains records of processing activities, and conducts privacy risk
assessments. ABB maintains privacy and security controls across its operations,subjecting them to monitoring as well as periodic evaluations and assessments.
Physical, technical and administrative controls have been implemented across ourGroup. Furthermore, we engage with our stakeholders and other members of society
at large with the goal of understanding their perspectives and mitigating any potential problem areas. We review our systems and procedures to ensure they meet data
privacy compliance requirements. These reviews form a part of our overall compliance activities.

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To address specific negative impacts and risks, we have instituted comprehensive
incident response and complaint handling mechanisms. And in order to manage andbuild on the positive effects of this work, we engage with our internal and external
stakeholders to identify opportunities for growth and to achieve greater excellencein privacy and cyber security in our own supply chain, as well as in those of our customers. In general, we endeavor to promote a secure and privacy-friendly approach
among our employees, suppliers and customers.
In order to monitor the effectiveness of our actions to manage data privacy andcyber security, we apply metrics to our projects and processes; we define, document
and track key indicators; and we take follow-up action where appropriate. The goals,
targets and indicators we use to evaluate progress are specific to each program orprocess. We continuously integrate feedback and seek to improve our practices in thefields of cyber security, data privacy, incident management, data subject requests
and transparency, among others.

I T S E C U R I TY I N C I D E NT I N M AY

In May 2023, ABB became aware of an IT security incident impacting certain company IT systems. As a result of the incident, ABB
started an investigation, notified certain law enforcement and data protection authorities, and worked with leading experts todetermine the nature and scope of the incident. ABB also took steps to contain the incident and further enhance the securityof its systems. Based on its investigation, ABB determined that an unauthorized third-party accessed certain ABB systems andexfiltrated certain data. Following a review of the data, where necessary ABB has provided notifications to individuals and organizations. To date, ABB has no evidence to suggest that any information has been misused as a result of this incident. ABB willcontinue to monitor this.

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Responsible sourcing
ABB’s 2023 double materiality assessment identified responsible sourcing as oneof ABB’s 10 material topics. This topic addresses the sustainable and responsible
sourcing of materials, products and services. It covers the social and environmental
performance of suppliers, as well as their adherence to ABB’s requirements involving
material compliance and conflict minerals. To ensure sustainable sourcing, ABB has
implemented a Supplier Code of Conduct (SCoC), which complements the comprehensive and binding ABB Code of Conduct. The SCoC sets forth our requirements for
suppliers in clear terms.
In November 2023, we published an updated edition of the SCoC. The update is inline with the latest relevant international frameworks, standards and legislation governing ethical and sustainable business practices. It was drafted following rigorous
consultation with both internal and external subject-matter experts and was informedby our previous experiences with supplier audits, as well as by our many discussions
with suppliers. We have also issued an updated implementation guide, with hands-on
advice on how our suppliers can meet the requirements of the SCoC.
To prevent human rights violations in our supply chain, we substantially revised the
SCoC’s section on “Human rights and decent work.” Among other revisions, we added
more specific requirements regarding modern slavery, discrimination and diversity,
as well as the rights of local communities and vulnerable groups. To reflect our intensifying efforts to mitigate climate change, we also created a separate section entitled“Climate and environment” and expanded the list of potential environmental impacts
to include topics of growing interest to our stakeholders, such as GHG emissions,circularity, biodiversity and deforestation. To ensure that ABB’s requirements are
met along our full value chain, we updated the SCoC to explicitly require suppliers todisseminate and enforce these requirements across their own supply chains and toreport any suspected violations. In 2023, we provided ABB personnel with training
sessions on the updated SCoC and implementation guide. Training for our supplierson these updates will start in Q1 2024. In-depth training on modern slavery, child laborand other SCoC-related topics will be provided to both ABB personnel and suppliersin 2024.
Our Sustainable Supply Base Management (SSBM) program, which addresses sustainability topics and performance at each stage of the supplier life cycle, forms part ofour “Beyond Audit” initiative. The SSBM program integrates sustainability principles
comprehensively into ABB’s supplier selection and qualification processes. Throughthe SSBM program, we address issues in six main categories: general management,labor rights, social benefits, health, safety and the environment. The approach isbacked by risk-based monitoring that covers a broad range of suppliers and incorporates Group-wide standards and targets. The management and implementation of the
SSBM program is handled by ABB’s four business areas. The program is governed bya steering committee comprised of representatives from our business areas and thecorporate sustainability team and a working group comprised of representatives fromall our divisions.
Under the SSBM program, new suppliers must complete a self-assessment that incorporates questions on how they manage issues such as labor and human rights, theenvironment, health and safety, and integrity, as well as how they manage their own
supply chains. Depending on the results, further due diligence is carried out. In 2023,
we simplified the overall supplier onboarding process, resulting in reduced lead times.

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Integrit y and tra nspare ncy

As part of this work, we reformulated several self-assessment questions on sustainability to offer greater clarity and prompt more meaningful responses.
Also in 2023, we updated our risk management review process and implemented a
new tool that assesses country risk for a range of issues such as child labor, forcedlabor, freedom of association, adverse effects due to environmental changes, land
rights and abuse of force by private or public security forces, among others. We also
reviewed our portfolio of sourced materials and parts and have updated our commodity risk matrix.
To prevent or further mitigate potential negative impacts and risks related to our
supply chain, in 2023 we continued to enhance the SSBM program and updated our
audit procedures to include temporary labor providers. Upon carrying out audits
in one pilot country in 2023, we found evidence that local labor laws were not being
observed. Resolution of these cases is still pending as we work with the suppliers toremediate the problems. In 2024, we plan to expand these assessments of temporary
labor providers to other countries that form part of our list of focus countries.1

2023 HIGHLIGHTS IN RESPONSIBLE SOURCING

42%
88%

of high-risk supply spending
in focus countries1 wascovered by SSBM

of identified risks
were closed

1

Current focus countries
are Argentina, Brazil,
Bulgaria, China, Colombia,
India, Indonesia, Malaysia,
Mexico, Peru, Poland,
Saudi Arabia, South
Africa, Thailand, Türkiye
and Vietnam.

118
suppliers
assessed
on-site7959
95suppliers with which business
was terminated due tounsatisfactory progress on theirrespective corrective action plans

ABB employees andsupplier teams trainedin responsible sourcing
during the year

In 2023, our engagement with stakeholders at internal awareness training sessions
on human rights and labor rights brought to light additional concerns related to temporary laborers at certain ABB sites. We are still working to resolve these cases. For
further details, please refer to the “Human rights” chapter in this report.
Among the positive impacts and opportunities connected with sourcing at ABB in
2023, we saw a strong response to the updated sustainability self-assessment questionnaire that forms part of the SSBM program. Many of our internal training sessions
focused on the role of the questionnaire and its importance to new suppliers in oursimplified onboarding process. At the local level, we organized several supplier day
events that spotlighted the importance of responsible sourcing and provided suppliers with an opportunity to share good practices with each other.

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To track the effectiveness of the SSBM program, we report on the reduction of risk
using a KPI for “percentage of identified risks closed.” We evaluate our progress usinga range of internal and external metrics. Under ABB’s Sustainability Agenda, we areaiming to cover at least 80 percent of our high-risk supply spending in focus countries
with the SSBM program by 2025. This includes monitoring of environmental, socialand governance performance. By 2030, we are aiming to cover 80 percent of all ABB
supply spending in focus countries with the SSBM program. Our main internal target
is to close 75 percent yearly of all identified risks. At the end of 2023, 42 percent ofhigh-risk supply spending in focus countries was covered by the SSBM, and 88 percent
of identified risks were closed.
Other KPIs that we use to evaluate the program include the number of supplier assessments carried out, the number of ABB employees and supplier teams trained, and thenumber of suppliers who have been de-sourced and removed from the approved list.

—
Conflict minerals andother minerals ofinterest

Responsibly sourcing conflict minerals and other minerals of interest is part ofour responsible sourcing commitment. This is also reflected in the ABB Policy on
Conflict Minerals. We have established a “Conflict Minerals Program” based on
the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from
Conflict Affected and High-Risk Areas, and other international standards. Within thisprogram, ABB continues its work to understand and limit its exposure to conflictminerals (tantalum, tin, tungsten and gold, or “3TG”), as defined by Section 1502 of
the Dodd-Frank Wall Street Reform and Consumer Protection Act and EU Directive
2017/821. We request information from our suppliers on the source of these minerals
and work with them to avoid sourcing from smelters or refiners (SORs) in the covered
countries (the Democratic Republic of the Congo and neighboring countries) andconflict-affected and high-risk areas (CAHRAs), other than those that have implemented OECD-aligned programs.
We continue to participate in smelter and refinery outreach efforts through the
Responsible Minerals Initiative (RMI) and its member companies. The RMI, of
which ABB is a member, is an organization working to address responsible mineralsourcing issues in the supply chain. In 2023, ABB led the RMI outreach to tin smelters in Indonesia to have them undergo the RMI’s Responsible Minerals Assurance
Process (RMAP).
In addition to carefully tracking our sources for tantalum, tin, tungsten and gold, in
2023, we expanded our survey to cover the use of other minerals in ABB products.
Using the Extended Minerals Reporting Template developed by the RMI, we identified
pinch points and conducted due diligence on our cobalt supply chains. As we continue
to expand our due diligence on other minerals, we will begin to survey our suppliers’
use of mica in 2024.
In response to the new requirements established by the provisions of the amended
Swiss Code of Obligations (Art. 964j–l CO) and the Swiss Ordinance on Due Diligence
and Transparency in relation to Minerals and Metals from Conflict Affected Areas andChild Labour (DDTrO), we have assessed our respective risk exposure and reached thefollowing conclusions: The quantities of minerals and metals in scope of the aforementioned regulations which ABB imported into or processed in Switzerland in 2023
are substantially below applicable thresholds. Hence, ABB is exempted from specificdue diligence and reporting obligations under the provisions of the amended Swiss
Code of Obligations and the DDTrO respectively in regard to conflict minerals.

06 Appendix

77
Approach to reporting80	Swiss Code of Obligations: transparency
on non-financial matters
81
Assurance statement
84
Material topic descriptions
92
Non-material topic descriptions
94
GRI disclosures table
99
GRI content index
120
EU Taxonomy report
143
TCFD recommendations report
149
SASB disclosure table
150
Definitions

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77—
Approach to reporting
This report was compiled as of February 22, 2024. We prepared the report inaccordance with the provisions of the amended Swiss Code of Obligations (Art.
964a ss.) and the GRI Standards (2021). The GRI content index is available in the
Appendix to this report and covers all topics deemed as material as per the materiality assessment conducted in 2023. In addition to the GRI Standards, theframework for our Sustainability Report and Integrated Report is based on the EU
Non-Financial Reporting Directive (NFRD), the Sustainability Accounting Standards
Board (SASB), the European Union’s common classification system for sustainableeconomic activities, known as the EU Taxonomy, the Task Force for Climate-related
Financial Disclosures (TCFD) recommendations, and the 10 principles of the UN
Global Compact.
We aim to maintain alignment with best practices in our sustainability reporting and
we closely follow all pertinent developments in international sustainability reporting.
This includes applicable regulations such as the provisions of the amended Swiss
Code of Obligations (Art. 964a ss.), the Corporate Sustainability Reporting Directive(CSRD) and the European Sustainability Reporting Standards (ESRS) in the European
Union, as well as developments in voluntary reporting standards such as the IFRS
Sustainability Standards.
Our Sustainability Report covers ABB’s material economic, environmental, and social
impacts and how we manage them. Omission from the material issues addressed inour report does not mean that an issue is not managed. In addition to our annual sustainability reporting, ABB reports quarterly on a selection of our strategic sustainability KPIs.

—
Reporting boundaries—
Data collection
processes

This report was prepared for the reporting period January 1 to December 31, 2023. Ourformal sustainability reporting system covers all ABB Group companies worldwide,
including wholly owned subsidiaries, majority-owned joint ventures and direct andindirect participations (for a list of significant subsidiaries please see the Appendix to
the ABB Corporate Governance Report 2023). Newly acquired businesses are typicallyreflected in annual sustainability reporting in the subsequent year. Businesses thatare divested in the first half of the year are typically excluded from annual sustainability reporting. For a list of acquisitions and divestments in 2023, please refer to the
ABB Integrated Report 2023, page 45.
We rely on a global, online data reporting system to measure and gather data fromacross ABB. The system is used to file reports on hazards, incidents, sustainability
observation tours and environmental performance at every production and service
site, as well as most of our office locations. It is also used to collect annual social datafrom every country. This centralized reporting system simplifies data collection andfacilitates greater transparency.
The data in this report relating to health, safety and our social performance covers
100 percent of ABB employees. Data relating to our environmental performance(including energy, emissions, water and waste) was sourced from 338 ABB sites andoffices, covering approximately 94 percent of employees. Data on the environmental
performance of the remaining employees, who are located at non-manufacturing
sites with limited impacts, is generated by estimating energy, water and waste parameters pro rata.

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ABB SUSTA IN A BILIT Y REP ORT 202 3—
Calculation of energy
and GHG data

A ppe ndix

All GHG emission factors for fuels used at our sites are sourced from the GHG
Protocol’s “Emission Factors from Cross-Sector Tools” (March 2017). They include
the emissions of CO₂, CH₄ and N₂O. Biogenic emissions from biofuels include only
CH₄ and N₂O emission factors. Global warming potential (GWP) factors for CH₄, N₂O
and SF6 follow the IPCC’s AR 5 report. Emissions from ABB’s vehicle fleet are based onlease contract distances and tank-to-wheel gCO₂/pkm (grams of CO₂ per passenger
kilometer). We applied lab-to-road uplift factors from the International Council on
Clean Transportation Europe to better reflect our vehicles’ real emissions on the roadvs. the laboratory. ABB uses the market-based method to calculate and report scope 2
GHG emissions. For purchased electricity and district heating, we have obtained local
emission factors from utilities. Scope 2 GHG emissions for electricity have also been
calculated using the location-based method; for these calculations we sourced ourdata from the International Energy Agency (2023). In our 2030 Sustainability Agenda,
launched in 2020, we measure our progress on scope 1 and 2 against a 2019 baseline,
which is adjusted to portfolio changes. The adjusted 2019 baseline is 636 kilotons.
The results are provided for comparison below:
Scope 2 GHG emissions from electricity

Kilotons CO₂e

Market-based:

12.9

Location-based:

285

Scope 3 GHG emissions are calculated using average emission factors together withinhouse data on, e.g., product performance, sales volumes, average lifetimes, andother data required to calculate emissions in the 13 out of 15 scope 3 categories thatare relevant for ABB. For example, the category “Purchased goods and services”
includes all upstream (cradle-to-gate) emissions for the extraction, production andtransportation of goods and services purchased or acquired by ABB in the reporting
year, not included in other categories. Our calculation uses secondary data, applying spend data (covering 100% of ABB’s procurement) and global industry average
emission factors per material consumed from life cycle inventory databases. In the
category “business travel,” emissions from air travel are calculated using emission factors, with radiative forcing (RF). For the category “use of sold products,” we calculated
the emissions due to losses in equipment such as drives, switches, switchgear andbreakers during conduction, conversion, and transformation of electricity through our
products. For products with a direct energy use, like motors and industrial robots, we
calculated the emissions due to the electricity-use during the product’s service life.
For motors we have also calculated and presented numbers associated with energy
loss rather than energy input, this we call the “representative” emissions. The GHG
Protocol does not provide clear guidance on how to account for electrical motors aspart of integrated systems. As a result, two different interpretations can be adopted:
one that reflects energy loss and another that reflects energy input. To ensure transparency, ABB reports both numbers using the terms “representative” and “strict.” We
are working with WBCSD and WRI to formalize a standardized approach to accounting
for these emissions.

—
Estimates—
Changes in 2023

Whenever estimates are used, the estimation method is explained in the footnotes.

The Sustainability Report fulfills the provisions of the amended Swiss Code ofObligations (Art. 964a ss.).
Material topics covered in the GRI disclosures were amended as per the materiality
assessment conducted in 2023.
Where possible, comparable information for the previous year is provided.
This report contains information for 2023 and comparable information for theprevious year. Certain amounts previously reported for 2022 have been adjusted toconform to the way data is presented in the 2023 report and, in some cases, have beencorrected for misstatement.

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TABLE OF CONTE NTS—
Independent
assurance—
Certified ABB
management system
information←

PR E VIOUS CH APTE R

79

KPMG AG has been engaged by ABB to provide independent assurance for selected
GRI KPIs disclosed in the Sustainability Report, for reported progress against the 2023
sustainability targets and for compliance with the provisions of the amended Swiss
Code of Obligations related to transparency on non-financial matters (Art. 964b CO).
KPMG AG’s full Assurance Statement, including opinion and basis of opinion, is available in the “Assurance statement” section on this report.

ISO management system standards enable organizations to improve performanceby specifying repeatable steps that the organizations can implement to achieve theirgoals and objectives.

ISO 14001 sets forth the criteria for an effective environmental management system
and maps out a framework for the implementation of such a system. ISO 50001 sets
energy management standards, providing organizations with a clear way to improveenergy use through the development of an energy management system. ISO 45001 is
the international standard for occupational health and safety management systems.
It is aimed at mitigating any factors that could harm the mental or physical wellbeingof workers:• 79 percent of our manufacturing and service sites are covered by a certified environmental management system (ISO 14001 or equivalent)• 81 percent of our employees at manufacturing or service sites are covered by a certified occupational health and safety management system (ISO 45001 or equivalent)• 36 percent of our energy use at manufacturing or service sites is covered by a certified energy management system (ISO 50001 or equivalent).

—
Additional disclosures

All of ABB’s policies, procedures and declarations related to the topic of sustainability
can be found on our Group website.

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ABB SUSTA IN A BILIT Y REP ORT 202 3

A ppe ndix—
Swiss Code of Obligations:transparency on nonfinancial matters
This Sustainability Report also covers the reporting requirements as defined by theprovisions of the amended Swiss Code of Obligations related to transparency on
non-financial matters. For easy reference, please find below a table with links to therelevant sections:
Swiss CO – Art. 964b paragraph 2
1. Description of the business model

ReferencePage

The ABB Way

6

2. Description of policies adopted in relation to:• CO₂e goals• Social issues• Employee-related issues

Low-carbon society

21

Social Progress

43

Health and safety

44

Employee engagement score

50

People development

52

Employee wellbeing54• Respect for human rights

Human rights and labor standards

46• Combatting corruption

Anti-bribery & Corruption Program68

3. Presentation of the measures taken to implement
these policies and an assessment of the effectiveness of these measures

See above sections

4. Description of the main risks related to the matters referred to above and how ABB is dealing withthese risks, in particular:a. Risks that arise from ABB’s own business operations, andMaterial topic descriptions

84

b. Risks that arise from ABB’s business relationships, products or services (to the extent relevant and proportionate)

Material topic descriptions

84

5. The main performance indicators for ABB’s activities in relation the matters referred to above

Material topic descriptions

84

Swiss CO – Art. 964j

Reference

Page

Conflict Minerals

Responsible sourcing

73

Child labor

Responsible sourcing

73

Human rights and labor standards

46

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Independent limited assurance report on selectedsustainability information in ABB Ltd’s Sustainability
Report 2023
To the Board of Directors of ABB Ltd, Zurich
We have undertaken a limited assurance engagement on ABB Ltd’s (hereinafter «ABB») following selectedSustainability Information in the Sustainability Report for the year ended December 31, 2023 (hereinafter“Sustainability Information”).
-

Global Reporting Initiative (GRI) related KPIs (which are marked as ‘Limited assurance 2023’)
301-1 Materials used by weight and volume302-1 Energy consumption within the organization
302-3 Energy intensity
305-1 Scope 1 GHG emissions
305-2 Scope 2 GHG emissions
305-3 Scope 3 GHG emissions
305-4 GHG emissions intensity
403-9 Occupational health and safety-

Avoided Emissions
The 2023 status on avoided emissions ambition reported in the ABB sustainability targets table on
pages 9 and 10 of the Sustainability Report.
ABB sustainability targets--

The 2023 status for the ABB sustainability 2030 targets within the tables presented on pages 9 and
10 of the Sustainability Report.

Non-financial disclosures-

Non-financial disclosures, prepared in accordance with article 964b of the Swiss Code of Obligation,
as included in the index table on page 80 of the Sustainability Report.

Our assurance engagement does not extend to information in respect of earlier periods or to any other information
included in the Sustainability Report or within the ABB Annual Reporting Suite (consisting of the Integrated Report, theFinancial Report, the Corporate Governance Report, and the Compensation Report) or any other information linked tofrom the Sustainability Information or from the Sustainability Report, including any images, audio files or embedded
videos.
Understanding how ABB has Prepared the Sustainability Information
ABB prepared the Sustainability Information using the following criteria (hereinafter referred to as the "Sustainability
Reporting Criteria”):--

For Global Reporting Initiative (GRI) related KPIs - GRI Standards;
For avoided emissions - internally developed criteria and methodology based on Guidance on Avoided
Emissions, issued by the World Business Council for Sustainable Development (WBCSD), as included on
pages 23 to 25 of the Sustainability Report;
For ABB sustainability targets – GRI Standards for Environmental and Zero harm target, and ABB selfdeveloped criteria for the remaining of the ABB sustainability targets;
For the non-financial disclosures referenced in the index table on page 80 of the Sustainability Report –article 964b of the Swiss Code of Obligation.

Consequently, the Sustainability Information needs to be read and understood together with the Sustainability Reporting
Criteria, including the self-developed criteria. We believe that these criteria are a suitable basis for our limited assurance
engagement.

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ABB SUSTA IN A BILIT Y REP ORT 202 3

82

A ppe ndix

Our Limited Assurance Conclusion
Based on the procedures we have performed as described under the ‘Summary of the work we performed as the basis
for our assurance conclusion’ and the evidence we have obtained, nothing has come to our attention that causes us tobelieve that the Sustainability Information is not prepared, in all material respects, in accordance with the Sustainability
Reporting Criteria.
We do not express an assurance conclusion on information in respect of earlier periods or to any other information
included in the Sustainability Report, Annual Reporting Suite or any other Report, including any images, audio files or
embedded videos. Our conclusion does not extend to the requirements of Swiss Code of Obligation article 964 (d-l).
Inherent Limitations in Preparing the Sustainability Information
Due to the inherent limitations of any internal control structure, it is possible that errors or irregularities may occur indisclosures of the Sustainability Information and not be detected. Our engagement is not designed to detect all internal
control weaknesses in the preparation of the Sustainability Information because the engagement was not performed
on a continuous basis throughout the period and the audit procedures performed were on a test basis.
The calculation of avoided emissions described on pages 23 to 25 of the Sustainability report includes several
inherently judgmental assumptions derived from internal ABB sources and analyses and external data for comparison
purposes is limited or not available. In time, as the external guidance in the sector evolves and data precision
improves, the determination of avoided emissions will be subject to less judgement and less estimation uncertainty.
ABB’s Responsibilities
The Board of Directors of ABB is responsible for:-

Selecting or establishing suitable criteria for preparing the Sustainability Information, taking into accountapplicable law and regulations related to reporting the Sustainability Information;-

The preparation of the Sustainability Information in accordance with the Sustainability Reporting Criteria;-

Designing, implementing and maintaining internal control over information relevant to the preparation of the
Sustainability Information that is free from material misstatement, whether due to fraud or error.

Our Responsibilities
We are responsible for:-Planning and performing the engagement to obtain limited assurance about whether the Sustainability
Information is free from material misstatement, whether due to fraud or error;-

Forming an independent conclusion, based on the procedures we have performed and the evidence we haveobtained; and-Reporting our independent conclusion to the Board of Directors of ABB.

As we are engaged to form an independent conclusion on the Sustainability Information as prepared by the Board of
Directors, we are not permitted to be involved in the preparation of the Sustainability Information as doing so may
compromise our independence.
Professional Standards Applied
We performed a limited assurance engagement in accordance with International Standard on Assurance
Engagements 3000 (Revised) Assurance Engagements other than Audits or Reviews of Historical Financial
Information, issued by the International Auditing and Assurance Standards Board (IAASB) and in respect ofgreenhouse gas emissions, with the International Standard on Assurance Engagements (ISAE 3410) Assurance
Engagements on Greenhouse Gas Statements, issued by the International Auditing and Assurance Standards Board.

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Our Independence and Quality Control
We have complied with the independence and other ethical requirements of the International Code of Ethics forProfessional Accountants (including International Independence Standards) issued by the International Ethics
Standards Board for Accountants (IESBA Code), which is founded on fundamental principles of integrity, objectivity,
professional competence and due care, confidentiality, and professional behavior.
Our firm applies International Standard on Quality Management 1, which requires the firm to design, implement andoperate a system of quality management including policies or procedures regarding compliance with ethicalrequirements, professional standards and applicable legal and regulatory requirements.
Our work was carried out by an independent and multidisciplinary team including assurance practitioners andsustainability experts. We remain solely responsible for our assurance conclusion.
Summary of the Work we Performed as the Basis for our Assurance Conclusion
We are required to plan and perform our work to address the areas where we have identified that a material
misstatement of the Sustainability Information is likely to arise. The procedures we performed were based on our
professional judgment. Carrying out our limited assurance engagement on the Sustainability Information included,
among others:-

Assessment of the design and implementation of systems, processes and internal controls for determining,processing and monitoring sustainability performance data, including the consolidation of data;-

Inquiries of employees responsible for the determination and consolidation as well as the implementation ofinternal control procedures regarding the selected disclosures;-

Inspection of selected internal and external documents to determine whether quantitative and qualitative
information is supported by sufficient evidence and presented in an accurate and balanced manner;-

Assessment of the data collection, validation and reporting processes as well as the reliability of the reported
data on a test basis and through testing of selected calculations;-

Analytical assessment of the data and trends of the quantitative disclosures included in the scope of the limited
assurance engagement;-

With respect to the avoided emissions calculated by ABB, we reviewed the internally developed methodology
based on the World Business Council for Sustainable Development (WBCSD) guidance, inquired
management about the assumptions applied and the sources behind them and reviewed whether the
calculation was performed in line with the methodology;-

Checking that the Sustainability Report contains the information required by article 964b(1) and (2) tounderstand the business performance, the business results, the state of the undertaking and the effects of its
activity on environmental matters, social matters, employee-related matters, respect for human rights andcombating bribery and corruption;-

Assessment of the consistency of the disclosures applicable to ABB with the other disclosures and key figuresand of the overall presentation of the disclosures through critical reading of the Sustainability Report.

The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent
than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance
engagement is substantially lower than the assurance that would have been obtained had we performed a reasonableassurance engagement.
KPMG AG

Achim Wolper
Licensed audit expert
Zurich, February 22, 2024

Mohamad Midani© 2024 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member firm of the
KPMG global organization of independent member firms affiliated with KPMG International Limited, a private
English company limited by guarantee. All rights reserved.

83

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ABB SUSTA IN A BILIT Y REP ORT 202 3

A ppe ndix—
Material topic descriptions
2023 ABB double materiality assessment – material topic, impact andrisk descriptions:—
Business performanceand resilience

TOPIC DESCRIPTIONThis topic refers to ABB’s financial performance and the effective management ofbusiness risks. Its focus is on our ability to adapt and succeed in challenging conditions while ensuring sustainable operations and delivering desired results. It refers
not only to achieving results in terms of growth, profitability and capital efficiency
that ensure financial stability, but also to the way we manage and protect our people,
especially in crises such as pandemics. The topic extends to ensuring that our customers receive the products and services they need in the way that they want them.
IMPACT MATERIALITY
Through our activities and management of business risks, we ensure that ABB isstable and able to create financial value and stability for customers, shareholders,
employees and other stakeholders. Furthermore, we ensure the delivery of product offerings that positively impact the environment and enable the energy transition, suchas our energy-efficient products and solutions. Additionally, we can have positive
impacts on the economy by providing employment opportunities and sourcing materials locally, thereby supporting local businesses sustainably and over the long term. It
should be noted that projects in high-risk areas could have negative impacts not only
on local communities but also on the environment.
FINANCIAL MATERIALITY
Having a resilient and financially stable business positively impacts the long-term
success of ABB and protects our company’s financial and legal security as well as its
reputation. It also enables us to overcome challenges, reinvest in operations and takeadvantage of new opportunities. This in turn has positive impacts on ABB’s business
continuity, builds stakeholder confidence and guides strategic decisions. Without aresilient business plan and strategy, a company’s ability to perform, retain employees
and maintain business continuity could be compromised.
PRINCIPAL RISK: ECONOMIC SLOWDOWN
Risk description

Example of risk responses

Effectiveness of the risk
response

Potential recessions across lead- • Identification of growth areas, Financial targets (Financial
ing economies, increase in inflarevenue opportunities and cost report).
tion and interest rates globally
reduction measures.
and a deterioration of macroeco- • Assessment of short-, mid- andnomic factors in China could all
long-term economic developlead to a drop in demand and rements to identifiy market andduced financial performance.
demand shifts.

—
Circularity

TOPIC DESCRIPTIONThis refers to ABB’s company-wide efforts to invest in the circular economy. We aim
to cut waste, increase recyclability and reusability and make our products more durable. Additionally, we work closely with customers and suppliers to embed circularity
across our value chain. Within our own operations, we strive to avoid waste by making
our products and processes more efficient and maximizing the use of sustainable
materials for packaging.

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IMPACT MATERIALITY
We can support economic growth by developing innovative and “retrofitted” products
and services that promote the circular economy. We aim to help protect the environment by reducing waste through our products and services, which in turn lowers environmental impacts such as air and water pollution. We are well aware that we need to
pay attention to water usage in water-scarce areas. We can also have a positive impact
on human rights in our value chain and encourage customers and suppliers to adopt
responsible and sustainable practices. At the same time, cost-efficient sourcing ofmaterials or transitioning to alternative raw materials could lead to sourcing fromregions where social and environmental standards are lower, thereby negatively impacting the environment and society. Lack of understanding of the broader impactsof circularity can lead to unintended negative impacts on people and the environment,such as loss of income for those employed in the informal waste sector.
FINANCIAL MATERIALITY
Our efforts to increase recyclability and reusability can reduce waste and conserve
resources, while also reducing costs. Furthermore, by demonstrating our commitment
to the circular economy, we can differentiate ourselves from competitors, positively
impacting our business and brand reputation while opening up new opportunities for
growth and innovation. When it comes to take-back systems, which are increasingly
in demand from customers, there is a risk of missing out on a business opportunity
because these offerings are not yet mature. Finally, being less dependent on scarce
raw materials would improve the resilience of our supply chain.
PRINCIPAL RISK: MISSED MARKET OPPORTUNITIES—ClimateRisk description

Example of risk responses

Effectiveness of the risk
response

Not increasing our circularity
may lead to missed market
opportunities.

Increasing the company's
circularity

Circularity targets (Sustainability
Report 2023: Preserving resources, Circularity).

TOPIC DESCRIPTIONThis refers to ABB’s role as a global technology company that is driving the shift
towards a low-carbon economy. Through our expertise in electrification and automation, we enhance energy efficiency throughout the life cycle of our products
and enable the integration of renewable energy. Also covered in this topic is energy
efficiency in our own operations as well as the procurement of renewable energy andthe handling of the potent greenhouse gas, SF6. We actively work with customers andsuppliers to offer energy-efficient solutions and reduce emissions across the supply
chain, demonstrating our commitment to reducing greenhouse gas emissions andsupporting the transition to a low-carbon society.
IMPACT MATERIALITY
We actively work to reduce the carbon footprint of our own operations and implement sustainable practices. By focusing on energy and carbon footprint reductions, we enable our customers and suppliers to reduce their environmental impact.
Additionally, our commitment to supporting sustainable solutions not only benefits
the environment but also contributes to job creation and supports clean energy generation. Through our products, services and solutions, we set an example for othercompanies and demonstrate the importance of corporate responsibility in addressing
climate change and promoting a low-carbon economy. The transition to a low-carbon
economy can have a negative impact on individuals or communities through local job
losses or lack of access to affordable technology. The energy transition also will require significantly increased extraction of certain minerals, many of which are minedin regions with low enforcement of basic environmental and labor standards.
FINANCIAL MATERIALITY
We have a unique opportunity to drive the transition to low-carbon technologies,
boosting brand equity and revenue. By focusing on renewable energy, market

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A ppe ndix

expansion and new product development, we can enhance ABB’s reputation, attract
investors and capture new revenue streams. However, risks such as non-compliancewith possible climate regulations, reputation damage and market challenges need tobe managed. We must mitigate climate risks, manage emissions, invest in low-carbon
technologies and ensure regulatory compliance to maintain competitiveness andseize new opportunities.
PRINCIPAL RISK: REFER TO TCFD REPORT—
Corporate andsustainability
governanceRisk description

Example of risk responses

Effectiveness of the risk
response

Refer to TCFD Report

Refer to TCFD Report

Climate targets (Sustainability
Report 2023: Low-carbon
society).

TOPIC DESCRIPTIONThis topic refers to ABB’s ethical business practices, corporate compliance andsystematic risk management, including environmental, social and legal risks. Ethicalbusiness behavior, good governance as well as transparency and integrity ensure astrict commitment to anti-corruption, fair competition and compliance with legal
obligations within ABB and towards customers and suppliers. Another importantcomponent is the regular review of the relevant processes as well as thorough due
diligence. This topic also includes the disclosure of our tax practice and corresponding payments as well as the design of responsible and fair remuneration practices. In
addition, it addresses our sustainability governance structure, which ensures that sustainability is given appropriate consideration at all levels, from the Board of Directors
to the operating departments.
IMPACT MATERIALITY
Through ABB’s values and zero-tolerance policy towards bribery, corruption and otherinappropriate business behavior, we can prevent negative socioeconomic and environmental impacts of such activities, bring about a change in business ethics both
upstream and downstream and raise standards in the industry. If we do not adhere to
ethical principles, we could not only harm our own business but also our stakeholders
by damaging our reputation or losing the right to operate in certain markets. This
would result in negative social and economic impacts on ABB employees, local communities and our suppliers.
FINANCIAL MATERIALITY
Ethical business practices foster trust in ABB among customers, investors and otherstakeholders, which help us to be perceived as a reliable, sustainable and trustworthy business partner. This trust in the company’s integrity can translate into
long-term business relationships and increased revenues for ABB while at the sametime having a positive impact on the environment and society. Unethical conduct andnon-compliance with applicable laws can lead to fines, damage to our reputation andlegal and financial consequences. Failure to manage risk systematically can lead tofinancial turmoil and reputational damage, undermining long-term sustainability andshareholder confidence.
PRINCIPAL RISK: INTEGRITY BRE ACHES
Risk description

Example of risk responses

Effectiveness of the risk
response

Failure to act with integrity andmeet our high ethical standards
in line with our purpose, values
and code of conduct leading toadverse reputational impact,fines and litigations.

• Zero tolerance policy towards Integrity targets (Sustainability
bribery, corruption and inapReport 2023: Integrity andpropriate business behavior.
transparency).
• Company-wide Code of
Conduct policy and associatedtraining.
• Compliance monitoring program and controls.

≡—
Data privacy andcyber security

TABLE OF CONTE NTS←PR E VIOUS CH APTE R

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TOPIC DESCRIPTIONThis refers to ABB’s preventive measures in data security and privacy, cyber security
and compliance with applicable data privacy laws, such as GDPR. We ensure theprotection of customer, employee and other individual privacy and personal data,
implementing robust measures to protect their rights and safeguard against cyberthreats. Our commitment to data security and privacy underscores our determination
to maintain compliance, earn the trust of customers and stakeholders, and comply
with existing and upcoming laws and regulations. More information can be found at
our external data privacy portal https://new.abb.com/privacy.
IMPACT MATERIALITYABB has a positive impact on data security and cyber security by proactively managing risks and increasing awareness. We deliver secure solutions to customers and protect their data. We also recognize that there are risks resulting from cyber incidents,
such as data breaches, which can result in negative impacts on individuals’ right toprivacy. We work to implement safeguards to protect personal and business data andstrive to be a role model in data privacy. We aim to minimize negative impacts andcontribute to a safer digital environment.
FINANCIAL MATERIALITYABB has opportunities to gain operational efficiencies, competitive advantage andstakeholder trust by enhancing technology and being recognized as a trustworthy
market player. Leveraging our focus on privacy and security can provide customers
with products and services that mitigate relevant risks and meet their expectations.
Risks to ABB’s business include data and cyber security breaches and the subsequentrisk of personal data or business data being disclosed and/or misused, which can
result in fines, operational disruptions, reputational damage and loss of stakeholder
trust. Protecting personal and business data is crucial to retaining the trust of stakeholders and avoiding negative financial impacts.
PRINCIPAL RISK: CYBER SECURITY INCIDENTS
Risk description

Example of risk responses

Effectiveness of the risk
response

Potential cyber incidents involv- • Cyber security assessments & Cyber security targets
ing ABB or third parties due to afindings remediations and(Sustainability Report 2023: Data
global increase in sophisticatedtools to identify and prevent
privacy and cyber security).
cyber attacks, high interconneccyber attacks.
tivity & cyber dependency across • Onboarding of IT assests tothe supply chain and increasing
global security solutions &process digitalization combined
business continuity and disaswith a complex IS landscape.
ter recovery planning.

—
Employeedevelopment
and wellbeing

TOPIC DESCRIPTIONThis topic refers to being an employer of choice by actively seeking to attract new
employees and retain current ones. We actively support not only professional development, career opportunities and growth by offering training, but also encourage
the personal growth of our employees through specific initiatives to ensure the rightbalance between employees’ professional and personal lives. In doing so, we support
the wellbeing and mental health of our employees around the world. This topic also
covers changes in the labor market, the mix of occupations and workforce skills thatwill be needed for jobs in the future.
IMPACT MATERIALITY
By recruiting and developing talent, ABB can have a positive impact on employee satisfaction, work-life balance and performance. Thus, we can contribute to an inclusive
culture in the communities in which we operate, as well as in society overall. Ensuring
the wellbeing of our (future) employees can positively impact equal growth and development opportunities. Furthermore, digitalization and automatization of labor canpositively impact society by enabling more equal access of learning and employment
opportunities. If we did not engage in people management and ensure employee
wellbeing, this could have negative impacts on the (mental) health, motivation and88

ABB SUSTA IN A BILIT Y REP ORT 202 3

A ppe ndix

learning potential of our employees, with a commensurate negative effect on customer satisfaction and equality of opportunity in the communities in which we operate. Digitalization and automation of labor can potentially result in local job losses
with negative economic impacts on individuals and communities.
FINANCIAL MATERIALITY
By attracting new talents and supporting the development, health and wellbeingof our employees, we can ensure that ABB has the human capital to develop moreresource-efficient and sustainable products. This in turn can lead to higher employee
engagement with positive impacts on ABB’s long-term business success. Additionally,
digitalization and automatization of labor could positively impact our business resilience as we adapt to new trends and increase the technological knowledge of ouremployees. Neglecting development and wellbeing could have negative impacts on
ABB’s brand reputation and would put the company at risk of losing talent, knowledge
and thereby competitive advantage.
PRINCIPAL RISK: L ACK OF QUALIFIED/AVAIL ABLE HUMAN RESOURCES
Risk description

Example of risk responses

Effectiveness of the risk
response

Potential shortage of the right• Agile manpower planning with Employee engagement score andskilled resources or inability to
the use of talent agencies and Net Promoter Score
retain those skilled resources due
external service providers.
(Sustainability Report 2023:
to fierce global market competi- • Development of people strate- Social progress, Employee ention for talent, aging workforces,
gies, early talent programs and gagement score, People developtechnical expertise erosion andrecognition of key individuals. ment, Employee wellbeing).
fast-changing skill sets.

—
Health and safety

TOPIC DESCRIPTIONThis topic addresses the importance of health and safety measures in the workplace, recognizing that having a safe place to work is a fundamental human right. It
refers to our efforts to ensure the health and safety of employees, contractors andsupply-chain partners by implementing standards and procedures to promote a safe
work environment and comply with local laws and regulations. It also involves developing safe products, solutions and services through safety testing and implementing
safety features in products and services to prevent accidents and injuries.
IMPACT MATERIALITY
Health and safety measures can help prevent workplace injuries and illnesses, leading
to safer, more productive and sustainable working environments for our employees,
contractors and supply-chain partners. By prioritizing health and safety, we can createa culture of safety in our own operations and throughout our supply chain. This canlead to higher employee engagement and productivity, as well as lower absenteeism
and turnover rates. Neglecting health and safety measures in the workplace or in our
products can result in injuries and illnesses, which can also have negative economic
impacts for people and communities.
FINANCIAL MATERIALITY
Safe and healthy working conditions for employees are the basis of functioning
business operations. Effective health and safety measures can increase employee engagement and raise our profile as an attractive employer. By focusing on developing
safe products, solutions and services, we can differentiate ABB from competitors andimprove our value proposition to customers. This can lead to long-term sustainablegrowth for the company. Conversely, neglecting health and safety can lead to penalties, fines and claims for compensation, negatively impacting the company’s financial
performance and reputation.

≡

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PRINCIPAL RISK: OCCUPATIONAL HE ALTH AND SAFETY MANAGEMENT
Risk description

Example of risk responses

Failure to manage health and• Health and Safety policies andsafety across operations and locompany-wide Code of
cations resulting in workplace acConduct policy.
cidents, injuries or occupational • Company-wide Health andillnesses leading to human sufSafety Management system.
fering, compensation costs, legal • Ongoing monitoring and reliabilities and reputational
porting of key Health anddamage.
Safety compliance metrics.
• Independent Health and Safety
audits.

—Human rights andHlabor standards

Effectiveness of the risk
response
Health and safety targets(Sustainability Report 2023:
Social progress, Healthand safety).

TOPIC DESCRIPTIONThis topic refers to ABB’s commitment to comply with internationally recognized
standards, laws and regulations. This includes the elimination of child and forced labor, and the right to work under fair and safe conditions, including access to fair wages
and the right to freedom of association and collective bargaining. It also includes
respecting the rights of communities and individuals when providing security for ourpeople and assets, as well as recognizing and respecting communities’ land rights. We
also recognize that we have a responsibility to respect and promote human and laborrights along our value chain. This includes conducting proper due diligence on our
suppliers and contractors to ensure they meet our standards for environment, healthand safety, as well as human rights and labor standards.
IMPACT MATERIALITY
Promoting and respecting human rights and labor standards can have a positive
impact on communities and society as a whole. By creating and maintaining safeand fair working conditions, we can help to improve the wellbeing and quality of life
for our employees, as well as those of our contractors and supply-chain partners. By
ensuring that all employees and stakeholders are treated fairly, we can also help tocreate a more equitable society and a stable economy. Not respecting human rights
and labor standards can potentially result in negative impacts on people and communities. Negative impacts can include injuries or illnesses in workplaces, inadequate
standards of living for workers due to poor wages, denial of workers’ rights to leave
their employers and employment of children, thus depriving them of their childhoodand education. Not recognizing communities’ land rights can result in negative economic or cultural impacts on those communities and not respecting human rights inproviding security can escalate conflicts, potentially resulting physical and economic
harm to people and communities.
FINANCIAL MATERIALITY
Respect for human rights and labor standards is a fundamental requirement for ourcontractors, suppliers and other business partners. By promoting human rights andlabor standards, we can enhance ABB’s reputation as a responsible business partner,
attract and retain top talent, and foster a positive work environment. Furthermore,ensuring compliance with these standards can also help mitigate risks associatedwith legal and reputational harm.
PRINCIPAL RISK: INTEGRITY BRE ACHES
Risk description

Example of risk responses

Effectiveness of the risk
response

Failure to act with integrity andmeet our high ethical standards
in line with our purpose, values
and code of conduct leading toadverse reputational impact,fines and litigations.

• Dedicated Supplier Code of
Conduct policy• Due diligence processes in all
our business relationships.
• Company-wide Code of
Conduct policy

Human Rights targets(Sustainability Report 2023:
Social Progress, Human rights
and labor standards).

90

ABB SUSTA IN A BILIT Y REP ORT 202 3—
Products, solutions
and services

A ppe ndix

TOPIC DESCRIPTIONThis topic refers to ABB’s ability to provide a diverse range of products, solutions andservices that meet customer needs, with a focus on quality, safety and eco-efficiency.
We are also committed to investing in responsible and innovative product development, including the careful consideration of AI and cooperations with start-ups, aswell as leveraging digital technologies and sustainable raw materials to meet current
and future customer demands.
IMPACT MATERIALITY
Our existing products, solutions and services, as well as our investments in responsible and innovative technologies and digitalization, can increase our customers’ efficiency and productivity and improve safety conditions for their workers. Sustainableproducts, solutions and services can also positively impact the environment by
increasing energy and resource efficiency, leading to a reduction in greenhouse gas
emissions. Potential negative impacts of the implementation of innovative technologies and digitalization can be local job losses with consequent impacts on communities, lack of access to affordable technologies resulting in further economic disadvantage for certain communities.
FINANCIAL MATERIALITY
By providing high-quality products, solutions and services, we enhance customer
satisfaction and strengthen ABB’s market position. By investing in research anddevelopment as well as in cooperations with innovative start-ups regarding AI
solutions, we can offer innovative products and services that help us maintain acompetitive advantage, attract and retain customers and improve sustainability. Thiscan lead to increased revenue and profitability, as well as improved brand recognition
and reputation.
PRINCIPAL RISK: GEOPOLITICAL INSTABILITY
Risk description

Example of risk responses

Increased geopolitical tensions• Evaluation and quantification
resulting in global targeted techof exposure to andnology decoupling, protectiondependency on leading geoism, trade restrictions, “friendgraphical markets.
shoring,” new regulations and• Design of a balanced supplieremployee security implications.
base across geographies andfurther shift to local supplier
strategy.

—
Responsible
sourcing

Effectiveness of the risk
response
The effectiveness of these measures is considered as part of theannual strategy refresh process,where mitigation actions are reflected in the strategic decisions.

TOPIC DESCRIPTIONThis refers to the sustainable and responsible sourcing of materials, products andservices. It covers the social and environmental performance of suppliers and their adherence to ABB’s requirements regarding material compliance and conflict minerals.
In order to ensure sustainable sourcing, ABB has a Supplier Code of Conduct, which
is based on relevant international frameworks, standards and legislation governing
ethical and sustainable business practices. It complements the company’s internal
Code of Conduct, which is binding for all employees. Additionally, we are referring toour efforts to optimize logistics and transportation regarding, e.g. the packaging ofour products.
IMPACT MATERIALITY
By actively and responsibly managing our supply chain, we can have a positive impact
on local economies, the environment and people, including human rights. Additionally,
we aim to set a positive example to our suppliers via our efforts to source minerals responsibly and to avoid using hazardous substances in our own operations.
Furthermore, minimizing logistics can positively impact the environment by reducing
emissions. Not applying standards in our supply chain can have negative impacts on
the environment, people and communities. Negative impacts can include injuries orillnesses in supplier workplaces, inadequate standards of living for workers due to≡

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91

poor wages, denial of workers’ rights to leave their employers and the employment ofchildren, thus depriving them of their childhood and education.
FINANCIAL MATERIALITY
Sustainable sourcing can make ABB’s supply chain more resilient, which in turn would
support our business stability, growth and future success of ABB. This would also
mitigate the negative impacts of reputational loss or a loss of business opportunities.
Finally, optimized logistics can lead to cost savings and improved quality.
PRINCIPAL RISK: AVAIL ABILITY OF COMPONENTS AND R AW MATERIALS
Risk description

Example of risk responses

Effectiveness of the risk
response

Possible shortages of compo• Development of alternative ma- Responsible sourcing targets
nents and raw materials due toterials with the support of R&D (Sustainability Report 2023:
high dependency on few suppli- • Extensive activity to minimize Integrity and transparency,
ers, supply chain shortages or insingle source components."
Responsible sourcing).
ability to adapt or comply withchanges in import regulations.

92

ABB SUSTA IN A BILIT Y REP ORT 202 3

A ppe ndix—
Non-material topic descriptions—
Biodiversity andland use

TOPIC DESCRIPTION
Biodiversity refers to the protection of biological and genetic diversity in the natural
world. Protecting this diversity is critical to ensuring the survival of plant and animal
species and the preservation of natural ecosystems. Land use refers to ABB’s work to
remediate contaminated soil and water at legacy sites, as well as to its work to protect
biodiversity by minimizing land use and reducing or avoiding deforestation.
IMPACT MATERIALITY
With proper biodiversity and land-use management, ABB can have a positive impact
on the environment by protecting flora and fauna and implementing legacy site remediation projects. The use of flora/fauna assessments and smart design would enable
our operations to avoid harm to the environment. However, improper management
could have significant impacts in the form of noise, air, soil or water pollution, as wellas potential social and economic impacts on affected communities.
FINANCIAL MATERIALITY
In cases where not enough attention is paid to biodiversity protection and responsible
land use, the outcome could result in negative media coverage, leading to reputational
damage and even fines which could harm our business in the long run.

—
Diversity andinclusion

TOPIC DESCRIPTIONThis refers to embracing a diverse workforce across all dimensions (e.g., gender, age,
ethnicity, abilities, sexual orientation, etc.). It also refers to ensuring equal opportunities and equal treatment at the workplace by providing an inclusive environment thatwelcomes and respects every individual. This enables a healthy and balanced work
environment with employees who can bring their full selves to work and have a strong
sense of belonging.
IMPACT MATERIALITY
ABB’s focus on diversity and inclusion (D&I) has a positive impact on society bypromoting systemic changes, fostering diverse leadership and improving working
conditions and employment access for all. Our commitment to D&I creates betterworking environments, benefits families and communities, and sets an example forother companies. With our local presence and approach, we bring career opportunities to local communities, contributing to social progress and equal opportunities.
Lack of inclusion and violations of human rights can negatively impact the wellbeingof individuals and hinder societal progress in ABB’s operating locations.
FINANCIAL MATERIALITY
We have the opportunity to enhance workforce diversity, attract top talent and drive
innovation, leading to improved reputation, customer relationships and overall business performance. Embracing diversity of thought enables better decision-making
and access to a wider range of ideas. However, neglecting diversity and inclusion
policies can lead to risks such as reputational damage, talent loss, missed growth
opportunities and poorer business decisions due to a lack of diverse perspectives.
Non-compliance with regulations and insufficient gender diversity in leadership canalso hinder our business success.

≡—Partnerships andcollaboration

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TOPIC DESCRIPTIONThis refers to ABB’s engagement, interaction, partnerships and co-development of solutions with its most relevant stakeholder groups, including: employees, customers, suppliers,
investors, governments and civil society. We actively engage with governments and local
communities in which our products are manufactured and used with the aim of remediating
impacts and fostering technology adoption, sound regulatory frameworks, job creationand economic growth. Our community engagement encompasses partnerships, projects,
advocacy and philanthropic initiatives addressing areas such as climate change, biodiversity
conservation, education to foster employability and digitalization readiness, diversity andpoverty alleviation, and disaster and emergency relief. Our support to communities includes
in-kind and financial donations, as well as corporate volunteering. We maintain open, trustworthy and transparent communication and cooperation with all our stakeholders.
IMPACT MATERIALITY
By engaging with stakeholders, we can create value for them and strengthen our relationships. We can use these partnerships through a multiplier effect to positively impact not
only our direct stakeholders but also the supply chain beyond. This also holds true for oursocial activities such as our support for equal access to education or contributions toresearch programs, through which we can have positive impacts on society. Not engaging
with our stakeholders could result in projects or programs that have unintended negativesocial or economic impacts on individuals or local communities due to lack of understanding of local needs or sensitivities.
FINANCIAL MATERIALITY
Through frequent and effective stakeholder engagement, we can maintain ABB’s reputation,
consolidate its license to operate and ensure its long-term business success. Close stakeholder cooperation and community engagement initiatives oriented toward impact management and development opportunities can also benefit society, help the environment, support sustainable growth and encourage new revenue streams. An increase in partnerships
can lead to new sustainable business models in the industry. Community engagement can
attract investors and talent, enhance employee engagement, reinforce company values, build
trust and foster cross-societal relationships. If we were not to engage with our stakeholders,
this could have a negative impact on our reputation and on the company, e.g., through litigation or boycotts by civil society, or our investors could decide to invest elsewhere.

—
Water and waste
management

TOPIC DESCRIPTIONThis refers to ABB’s water usage as well as its sustainable and proper management of water, which is a dwindling resource in many countries. Even though we use relatively little
water in our production processes, proper water management as well as recycling andthe reduction of waste generation in our own operations as well as during production
processes are priorities for ABB. This also includes our efforts to reuse materials.
IMPACT MATERIALITY
Proper (waste) water and waste management can minimize the impact of our operations on
the environment. By managing water sustainably, we can contribute to protecting scarce
resources, even though our production processes use relatively little water. Additionally,
we can reduce or eliminate the pollution of soil, water and air as well as the amount ofwaste we send to landfill. By acting as a role model with regard to waste management, we
can contribute to an improved circular economy and encourage stakeholders follow suit,
thereby increasing our positive impact in our supply chain. Improper water management
can lead to increased soil, water and air pollution as well as wasting of scarce resources,
which can have negative impacts on the health and livelihoods of people and communities.
FINANCIAL MATERIALITY
Sustainable water management and reuse as well as the recycling of waste can reduce
costs for ABB. This helps to ensure business continuity and improves our reputation. If
we did not engage in recycling, we would likely have higher manufacturing costs, which
would negatively impact our business. Additionally, if water and waste are not managed
properly, it could have a negative impact on our reputation and lead to fines.

ABB SUSTA IN A BILIT Y REP ORT 202 3

94

A ppe ndix—
GRI disclosures table—
Environmental
GRI ref.

Indicator description

301-1

M AT E R I A L S U S E D BY W E I G H T O R V O L U M E ( K I L O T O N S ) 1

Limitedassurance
2023

Metals

1,168

1,190

84

93

Aluminum

83

82

1,000

1,015

136

173

Biofuels

3.1

2.03

Oil (11.63 MWh/ton)

7.4

7.1

Diesel (11.75 MWh/ton)

3.9

4.6

Steel (incl. iron casting)
E N E R G Y C O N S U M P T I O N W I T H I N T H E O R G A N I Z AT I O N (G I G AWATT- H O U R S – G W H ) 3

Coal (7.56 MWh/ton)
Gas

0

0

332

388

District heat consumption

101

107

Electricity consumption

850

909

1,298

1,413

Total energy used

302-3

2022

CopperPlastics
302-1

2023

Electricity sold

3.2

1.7

Total energy consumption within the organization from renewable sources

830

741

Total energy consumption within the organization from non-renewable sources

467

676

E N E R G Y I N T E N S I T Y ( M W H/ R E V E N U E $ ) 4

40

48

G R E E N H O U S E G A S (G H G ) E M I S S I O N S 5 ( K I L O T O N S C O 2 E )305-1

DIR ECT (SCOPE 1) G HG E MISS IONS6
Use of fuels

70

81

Coolants

4.3

5.1

SF6 7

9

20

Transport by own fleet

44

48

Total scope 1 GHG emissions

128

155

0.86

0.72

OTHER
Biogenic CO2 emissions8≡

TABLE OF CONTE NTS←PR E VIOUS CH APTE R

GRI ref.

Indicator description

305-2

E NE RGY INDIR ECT (SCOPE 2) G HG E MISS IONS6

305-3

95

Limitedassurance
2023

2023

District heat consumption

10

15

Electricity consumption

13

52

Total scope 2 GHG emissions

23

66

Total scope 1 and 2 GHG emissions9

151

221

OTHE R INDIR ECT (SCOPE 3) G HG E MISS IONS6
Purchased goods and services10

16,485

16,068

Capital goods

94

90

Fuel and energy-related activities

65

75

Upstream transportation and distribution

699

584

Waste generated in operations

15

16

Business travel11

154

82

Employee commuting

175

190

Upstream leased assets

n.a.

n.a.

Downstream transportation and distribution

62

52

Processing of sold products

00

Use of sold products - Energy loss

58,63859,405Use of sold products - Energy input

418,318

374,759

264

263

End-of-life treatment of sold products
Downstream leased assets
Franchises
Investments
Total scope 3 GHG emissions9 (representative12/ strict13)
305-4

2

3

1

n.a.

n.a.

11

10

76,66512 /
436,34613

76,83412/
392,18813

G H G E M I S S I O N S I NT E N S I TY ( T O N S C O 2 E / M I L L I O N $ )Tons CO2 equivalent per million $ sales, Scope 1+2
Tons CO2 equivalent per million $ sales, Scope 1+2+3 (representative12)
Tons CO2 equivalent per million $ sales, Scope 1+2+3 (strict13)

305-7

2022

4.7

7.6

2,617

2,383

13,541

13,326

N I T R O G E N O X I D E S ( N O x ), S U L F U R O X I D E S ( S O x ), A N D O T H E R S I G N I F I C A NT A I R E M I S S I O N S ( T O N S )Volatile organic compounds (VOC)

421

481

Emissions of NOx and SOx (tons SO2 and NO2)
SOx from burning coal

0

0

9.3

10

NOx from burning coal00

NOx from burning oil and biofuels

7

7

NOx from burning gas

72

84

Oil spills

1

2

Chemical spills

00

Emissions to air

01

Others00

Total number of significant spills

1

3

SOx from burning oil and biofuels306-3(2016)S I G N I F I C A NT S P I L L S ( T O TA L NU M B E R ) 1 4

ABB SUSTA IN A BILIT Y REP ORT 202 3

96

A ppe ndix—
SocialGRI ref.

Indicator description

2 -7

NU M B E R O F E M P L OY E E S ( R E F L E C T E D I N H E A D C O UNT ) 1 5

Limitedassurance
2023

2023

2022

T O TA L NU M B E R O F E M P L OY E E S BY R E G I O NEurope52,72351,360The Americas

26,43725,950Asia, Middle East and Africa

31,28229,540Female30,64429,900Male

79,79876,950Total number of employees

110,442

106,850

Europe48,224n.a.

The Americas

26,184n.a.

Asia, Middle East and Africa

29,618n.a.

Female28,825n.a.

Male

75,201n.a.

Total number of permanent employees

104,026

n.a.

4,499

n.a.

253

n.a.

1,664

n.a.

Female

1,819

n.a.

Male

4,597

n.a.

Total number of temporary employees

6,416

n.a.

Europe47,837n.a.

The Americas

25,858n.a.

Asia, Middle East and Africa

31,155n.a.

Female27,886n.a.

Male

76,964n.a.

Total number of full-time employees

104,850n.a.

T O TA L NU M B E R O F E M P L OY E E S BY G E N D E R

NU M B E R O F P E R M A N E NT E M P L OY E E S
T O TA L NU M B E R O F P E R M A N E NT E M P L OY E E S BY R E G I O N 1 6

T O TA L NU M B E R O F P E R M A N E NT E M P L OY E E S BY G E N D E R 1 6

NU M B E R O F T E M P O R A R Y E M P L OY E E S
T O TA L NU M B E R O F T E M P O R A R Y E M P L OY E E S BY R E G I O N 1 6
EuropeThe Americas
Asia, Middle East and Africa
T O TA L NU M B E R O F T E M P O R A R Y E M P L OY E E S BY G E N D E R 1 6

NU M B E R O F F U L L -T I M E E M P L OY E E S
T O TA L NU M B E R O F F U L L -T I M E E M P L OY E E S BY R E G I O N 1 6

T O TA L NU M B E R O F F U L L -T I M E E M P L OY E E S BY G E N D E R 1 6

NU M B E R O F PA R T-T I M E E M P L OY E E S
T O TA L NU M B E R O F PA R T-T I M E E M P L OY E E S BY R E G I O N 1 6
Europe

4,886

n.a.

The Americas

579

n.a.

Asia, Middle East and Africa

127

n.a.

Female

2,758

n.a.

Male

2,834

n.a.

Total number of part-time employees

5,592

n.a.

T O TA L NU M B E R O F PA R T-T I M E E M P L OY E E S BY G E N D E R 1 6

≡

TABLE OF CONTE NTS←PR E VIOUS CH APTE R

GRI ref.

Indicator description

401-1

E M P L OY E E TU R N O V E R ( R E F L E C T E D I N H E A D C O UNT )97

Limitedassurance
2023

2023

2022

TU R N O V E R O F A L L E M P L OY E E S BY R E G I O N 17
Europe6,852 (13%)

7,032 (14%)

The Americas

5,107 (19%)

5,726 (22%)

Asia, Middle East and Africa

4,472 (14%)

4,438 (15%)

TU R N O V E R O F A L L E M P L OY E E S BY G E N D E R 17
Female4,817 (16%)

5,375 (18%)

Male

11,614 (15%)

11,821 (15%)

Total employee turnover: ABB Group

16,431 (15%)

17,196 (16%)

Europe7,909 (15%)

6,068 (12%)

The Americas

6,543 (25%)

4,466 (17%)

Asia, Middle East and Africa

5,783 (18%)

5,087 (17%)

E M P L OY E E H I R E S ( R E F L E C T E D I N H E A D C O UNT )E M P L OY E E H I R E S BY R E G I O

E M P L OY E E H I R E S BY G E N D E R

403 -9Female6,047 (20%)

4,983 (17%)

Male

14,188 (18%)

10,638 (14%)

Total employee hires: ABB Group

20,235 (18%)

15,621 (15%)

Employee work-related fatalities18,19

0

0Incident rate19

00Employee business travel fatalities18, 21

0

1Incident rate20

0

0.001

Contractor work-related fatalities19

1

0Contractor business travel fatalities18,21

00Members of the public fatalities18

00Employee total recordable incident number19, 20

312

358

Injury rate20

0.27

0.31

W O R K- R E L AT E D I N J U R I E S

Contractor total recordable incident number19,22
Injury rate20

73

0.31

0.41

Employee lost time incident number19

142

165

Injury rate20

0.12

0.14

Contractor lost time incident number19
Injury rate20

32

30

0.16

0.17

Combined lost time incident number

174

182

Combined lost time injury rate

0.13

0.14

Employee lost days due to industrial incidents23

2,503

2,981

2.2

2.6

Days lost rate20
Employee occupational health illnesses19
Employee occupational health illness rate19, 20
Sustainability Observation Tours (SOT) conducted24
SOT rate24,25
Hazards reported19
Hazards reporting rate26
404 -1

63

7

11

0.01

0.01

69,131

65,6875.34

5.28

256,513250,741

2.23

2.18

AV E R A G E H O U R S O F T R A I N I N G P E R Y E A R P E R E M P L OY E E
T R A I N I N G P E R Y E A R P E R E M P L OY E E ( AV E R A G E H O U R S ) BY E M P L OY E E C AT E G O R Y 2 7 , 2 8 , 2 9
Top and senior managers

11.2

4.7

Middle and lower managers

15.1

8.6

Other employees

5.7

4Female

6

4

Male

7

4

6.8

4.5

T R A I N I N G P E R Y E A R P E R E M P L OY E E ( AV E R A G E H O U R S ) BY G E N D E R 2 7

Total workforce

ABB SUSTA IN A BILIT Y REP ORT 202 3

98

A ppe ndix

GRI ref.

Indicator description

Limitedassurance
2023

2023

404 -3

P E R C E NTA G E O F E M P L OY E E S R E C E I V I N G R E G U L A R P E R F O R M A N C E A N D C A R E E R D E V E L O P M E NT R E V I E W S 2 6 , 3 0

2022

P E R C E NTA G E O F E M P L OY E E S R E C E I V I N G R E G U L A R P E R F O R M A N C E A N D C A R E E R D E V E L O P M E NT R E V I E W S BY
E M P L OY E E C AT E G O R Y
Top and senior managers

100%

Middle and lower managers

99%

98%
95%

Other employees

98%

85%

P E R C E NTA G E O F E M P L OY E E S R E C E I V I N G R E G U L A R P E R F O R M A N C E A N D C A R E E R D E V E L O P M E NT R E V I E W S BY
GENDER16

406 -1415 -1

Female

64%

n.a.

Male

69%

n.a.

Total workforce

68%

92%

I N C I D E NT S O F D I S C R I M I N AT I O N A N D C O R R E C T I V E A C T I O N S TA K E N 3 1
Total number of incidents of discrimination

17

10

Total number of incidents of harassment

72

64

0

0

P O L I T I C A L C O NT R I B UT I O N S
Financial and in-kind political contributions

1
2
3
4
5
6
7
8
9
10
11
12
13
14

15
16
17

18
19
20

21
22
23
24
25
26
27
28
29

30

31

Note: Due to rounding, numbers presented in the GRI table may not add to the totals provided.
Estimated with calculation model based on $ spend. Numbers include materials sourced both as raw material and part of components.
Limited assurance extends to 2022 amounts, see limited assurance report (contained in this report) for details.
The energy use of our fleet of leased vehicles is not included in these data.
Includes all types of energy used within the organization, except the energy use of our fleet of leased vehicles.
See “Approach to reporting” for more details on GHG emission calculation.
GHG data for 2022 have been adjusted for portfolio changes.
In 2019, we updated the factor used to convert SF6 emissions to CO2 equivalent to 23,500 kg CO2e/kg SF6, as recommended by the IPCC 2013 (Fifth Assessment Report).
In our scope 1, ABB only considers methane and N2O emissions of biogenic emissions, following SBTi guidance, amounting to 2 tons of CO2e in 2023.
In 2023, we updated our methodology for determining Scope 1, 2 and 3 SBTi targets, as well as expanding it to incorporate recent business acquisitions, andaccordingly have recast prior year information, including the initial 2019 baseline, to conform with the current year’s presentation.
Purchased goods and services emissions cover 100% of procurement spend.
Includes air travel and rented vehicles.
Representative scenario: Energy loss used as basis for calculations.
Strict scenario: Energy input used as basis for calculations.
An environmental incident is regarded as significant if at least one of the following criteria applies to the incident: obligation to inform local authorities or agovernmental agency about the incident and/or regulatory violation; inspection by an environmental agency results in a formal complaint; environmental Notice of
Violation, a Consent Order or a Potential Responsible Party (PRP) notification; imposition of a penalty or fine; significant impact on an ecosystem; costs related to theincident exceed, or may exceed, $10,000.
This was previously mistakenly displayed as part of GRI 401-1, hence this new 2-7 section this year.
As we are disclosing these KPIs for the first time this year, there is no value available for year 2022.
Turnover rate calculated as number of ABB employees (full- and part-time) leaving during the year/total number of ABB employees (full- and part-time) as at
December 31. For the purpose of this calculation, employees who leave the organization voluntarily or involuntarily whether due to dismissal, retirement, end of
fixed-term contract or death in service or any other reason, are included. However, involuntary turnover arising out of divestments is excluded from the definition.
Fatalities include deaths occurring within one year as a result of injuries sustained and commuting is excluded.
Data covers incidents that happened at the workplace (ABB facility, customer site, project site) and excludes incidents that occurred during business travel.
Rates are per 100 employees or per 200,000 contractor hours worked. Employees in the rates are defined as persons who are permanent or temporary employees,
working full time or part time, in the employment of an ABB Group Company (ABBGC). Persons hired via work agencies where ABB provides supervision, defines work
to be done, and provides training are also included in this category.
Includes incidents during business travel by road. Air and rail travels are excluded.
Recordable incidents include fatal incidents, lost time incidents, serious injury incidents, medical treatment injuries, occupational diseases and restricted workday cases.
Days lost are calendar days and are counted from the day after the incident.
SOTs are typically conducted by all line managers at all levels.
Rate per manager.
Rate is calculated per employee.
Scope includes centrally managed tools such as My learning, Harvard Spark, Harvard Manager Mentor, LinkedIn Learning. It covers both leadership and functional/
technical learnings. Data are based on the extractions from the respective tools for internal employees (office workers and factory ones).
Top and senior managers are defined as employees in Hay grade 1-7, including Division President. Middle and lower managers: Other line managers; Other employees:
Individual contributors not considered as managers.
Learning hours reported in 2022 were affected by a an error in the data extracted from the LinkedIn learning platform. The error in the dashboard calculation was
spotted during 2023, when comparing this year’s data with last year’s data and while analyzing the delta between the two years. It generated an overestimation ofhours from the LinkedIn learning platform, which has been now corrected. The restated data are now corrected and shown in the table below (or above based on thegraphics).
The calculation of performance review data is based on the population that is included in the global people performance management system (HR Group Tools). 100%of top and senior managers and of middle and low managers are covered in the HR Group Tools system and 66% of other employees. This is the only centralized
reporting of performance management data that can be quantified and verified and is deemed the ‘eligible population.
According to our case categorization structure in place for 2023, data presented relates to number of cases logged in Integrity case management system with an issue
subcategory of “Discrimination”, “Sexual Harassment” or “Harassment/Bullying”.

ABB SUSTA IN A BILIT Y REP ORT 202 3

Appe n dix≡

TABLE OF CONTE NTS←PR E VIOUS CH APTE R

99—
GRI content index
Statement of use: ABB Ltd has reported in accordance with the GRI Standards for the period from 1 January 2023 to 31 December 2023.
GRI 1 used: GRI 1: Foundation 2021
Applicable GRI Sector Standard(s): Not applicable
Disclosure

Location

ABB omission statements
Requirement(s) omitted

ReasonExplanationb. report the total number of:iii. non-guaranteed hours employees, and a breakdown by gender and by region;

Information unavailable/
incomplete

Every country has its own definitionof non-guaranteed hours employees,
this data is therefore not collected at
the global level for now.

GENER AL DISCLOSURES
2-1

Organizational details

a. Financial Report 2023: History of ABB Groupb. Financial Report 2023: History of ABB Groupc. Financial Report 2023: Organizational Structured. Form 20-F: Exhibit 8.1

2-2

Entities included in the organization’s sustainability
reporting• Sustainability Report 2023: Appendix, Approach to reporting

2-3

Reporting period, frequency
and contact point• Sustainability Report 2023: Appendix, Approach to reporting

2-4

Restatements of information

Where necessary, adjustments are described as footnotes to therelevant indicators.

2-5

External assurance• Sustainability Report 2023: Appendix, Assurance Statement

2-6

Activities, value chain andother business relationships• Financial Report 2023: Businesses, Our Markets• Financial Report 2023: Businesses (By Business Area)• Financial Report 2023: Businesses, Suppliers and raw materials• Financial Report 2023: Organizational Structure / Note 4 Acquisitions, divestments and equity-accounted companies /Note 15 - Commitments and contingencies (Related party
transactions)• Integrated Report 2023: Value creation• Sustainability Report 2023: Appendix, Approach to reporting,
Changes in 2023

2-7

Employees• Sustainability Report 2023: Appendix, GRI Disclosures table

ABB SUSTA IN A BILIT Y REP ORT 202 3

Disclosure

Appe n dix≡

TABLE OF CONTE NTS

Location←

PR E VIOUS CH APTE R

ABB omission statements
Requirement(s) omitted

2-8Workers who are not
employees

2-9

Governance structure andcomposition• Corporate Governance Report 2023

2-10

Nomination and selection of
the highest governance body

• Corporate Governance Report 2023
• ABB Ltd Board Governance Rules

2-11

Chair of the highest governance body

• Corporate Governance Report 2023

2-12

Role of the highest governance body in overseeing themanagement of impacts

a. Corporate Governance Report 2023
ABB Ltd Board Governance Rules
b. Sustainability Report 2023: Sustainability at ABB, Sustainability
governancec. Sustainability Report 2023: Sustainability at ABB, Sustainability
governance

2-13

Delegation of responsibility
for managing impacts• Corporate Governance Report 2023
• ABB Ltd Board Governance Rules• Sustainability Report 2023: Sustainability at ABB, Sustainability
governance

2-14

Role of the highest governance body in sustainability
reporting

ABB Ltd Board Governance Rules define review and approval competences for ABB's reporting; Board is in charge

2-15

Conflicts of interest

a. ABB Ltd Board Governances Rules (incl. ABB Ltd's Related Party
Transaction Policy)b. Corporate Governance Report 2023

2-16

Communication of criticalconcerns• ABB Ltd Board Governances Rules• Corporate Governance Report 2023

2-17Collective knowledge of thehighest governance body

• Corporate Governance Report 2023

2-18

Evaluation of the performance • Corporate Governance Report 2023: Chairman's Letterof the highest governance
body

2-19

Remuneration policies

Reasona. report the total number of workers who are not em- Information unavailable/
ployees and whose work is controlled by the organi- incomplete
zation and describe:i. the most common types of worker and their contractual relationship with the organization;
ii. the type of work they perform;b. describe the methodologies and assumptions used
to compile the data, including whether the numberof workers who are not employees is reported:i. in head count, full-time equivalent (FTE), or using another methodology;
ii. at the end of the reporting period, as an average
across the reporting period, or using anothermethodology;
c. describe significant fluctuations in the number ofworkers who are not employees during the reporting period and between reporting periods.

• Compensation Report 2023

100

vi. underrepresented social groups

We are not collecting this information
at a global level, this is managed at a
local level.

Information unavailable/
incomplete

b. if the chair is also a senior executive, explain theirNot applicable
function within the organization’s management, thereasons for this arrangement, and how conflicts ofinterest are prevented and mitigated.

b. report the total number and the nature of criticalconcerns that were communicated to the highest
governance body during the reporting period.

Explanation

The chair of the highest governancebody is non-executive andindependent.

Confidentiality constraints Due to sensitivity such information
cannot be disclosed.

ABB SUSTA IN A BILIT Y REP ORT 202 3

Disclosure

Appe n dix≡

TABLE OF CONTE NTS

Location

Process to determine
remuneration• Compensation Report 2023

2-21

Annual total compensation
ratio• Compensation Report 2023

2-22Statement on sustainable de- • Sustainability Report 2023: Sustainability at ABB, CEO lettervelopment strategy

2-23

Policy commitments• Sustainability Report 2023: Integrity and transparency, We embed a culture of integrity and transparency• Sustainability Report 2023: Integrity and transparency• Sustainability Report 2023: Appendix, Approach to reporting• Sustainability Report 2023: Social progress, Human rights andlabor standards• Sustainability Report 2023: Social progress, Diversity andinclusion
Group website:• https://global.abb/group/en/about/integrity• https://global.abb/group/en/sustainability/
social-progress#humanrights• https://global.abb/group/en/sustainability/policies--statements-and-declarations/human-rights-policy-and-statement• https://global.abb/group/en/sustainability/policies--statements-and-declarations/modern-slavery-and-human-trafficking-statement• https://global.abb/group/en/about/supplying/code-of-conduct• https://global.abb/group/en/about/supplying/
responsible-minerals• https://global.abb/group/en/about/supplying/
responsible-sourcing

PR E VIOUS CH APTE R

101

ABB omission statements
Requirement(s) omitted

2-20

←

Reasonb. report the ratio of the percentage increase in annual Information unavailable/
total compensation for the organization’s highincomplete
est-paid individual to the median percentage increase in annual total compensation for all employees (excluding the highest-paid individual)

Explanation

We didn’t calculate the ratio prior to
the disclosure in the 2023 report,
therefore we can not report on thepercentage increase of the ratio.
Since the ratio will be calculated anddisclosed for the first time this year,
we will only be able to disclose thepercentage increase of the ratio in the2024 Compensation Report.

ABB SUSTA IN A BILIT Y REP ORT 202 3

Disclosure

Appe n dix≡

TABLE OF CONTE NTS

Location

Embedding policy
commitments• Sustainability Report 2023: Sustainability at ABB, Sustainability
governance• Sustainability Report 2023: Integrity and transparency, We embed a culture of integrity and transparency• Sustainability Report 2023: Integrity and transparency• Sustainability Report 2023: Appendix, Approach to reporting• Sustainability Report 2023: Social progress, Human rights andlabor standards• Sustainability Report 2023: Social progress, Diversity andinclusion• Integrated Report 2023
Group website:• https://global.abb/group/en/about/integrity• https://global.abb/group/en/about/integrity/commitment• https://global.abb/group/en/about/integrity/
training-and-communications• https://global.abb/group/en/sustainability/policies--statements-and-declarations/human-rights-policy-and-statement• https://global.abb/group/en/sustainability/policies--statements-and-declarations/modern-slavery-and-human-trafficking-statement• https://global.abb/group/en/about/supplying/code-of-conduct• https://global.abb/group/en/about/supplying/
responsible-minerals• https://global.abb/group/en/about/supplying/
responsible-sourcing

2-25

Processes to remediate nega- • Sustainability Report 2023: Sustainability at ABB, Sustainability
tive impacts
governance• Sustainability Report 2023: Integrity and transparency, We embed a culture of integrity and transparency• Sustainability Report 2023: Integrity and transparency• Sustainability Report 2023: Integrity and transparency,
Responsible sourcing• Sustainability Report 2023: Appendix, Approach to reporting• Sustainability Report 2023: Social progress, Human rights andlabor standards• Sustainability Report 2023: Social progress, Diversity and inclusion
Group website:• https://global.abb/group/en/about/integrity• https://global.abb/group/en/about/integrity/resolving-issues• https://global.abb/group/en/about/integrity/
reporting-channels

PR E VIOUS CH APTE R

102

ABB omission statements
Requirement(s) omitted

2-24

←

ReasonExplanation

ABB SUSTA IN A BILIT Y REP ORT 202 3

Disclosure

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TABLE OF CONTE NTS

Location

Mechanisms for seeking advice and raising concerns

PR E VIOUS CH APTE R

103

ABB omission statements
Requirement(s) omitted

2-26

←

ReasonExplanation• Integrated Report 2023
• Sustainability Report 2023: Sustainability at ABB, Sustainability
Governance• Sustainability Report 2023: Social progress, Human rights andlabor standards
Group website:• https://global.abb/group/en/about/integrity/
training-and-communications• https://global.abb/group/en/about/integrity/faq

2-27

Compliance with laws andregulations

No significant instances of non-compliance with laws and regulations to report for 2023.

2-28

Membership associations

2-29

Approach to stakeholder
engagement• Sustainability Report 2023: Sustainability at ABB, Materiality• Sustainability report 2023: Social progress, We promote social
progress, Stakeholder engagement

2-30

Collective bargaining
agreements• Sustainability report 2023: Social progress, Human rights andlabor standards

a. report industry associations, other membership as- Information unavailable/sociations, and national or international advocacy
incomplete
organizations in which it participates in a significant role.

M AT E R I A L T O P I C S
3-1

Process to determine material • Sustainability Report 2023: Sustainability at ABB, Materiality
topics• Sustainability Report 2023: Social progress, Human rights andlabor standards

3-2

List of material topics• Sustainability Report 2023: Sustainability at ABB, Materiality• Sustainability Report 2023: Social progress, Human rights andlabor standards• Sustainability Report 2023: Appendix, Material topic and impact
descriptions

ECONOMIC PERFORMANCE
3-3

Management of material
topics• Sustainability Report 2023: Sustainability at ABB, Materiality• Sustainability Report 2023: Appendix, Material topic and impact
descriptions

Currently under review.

ABB SUSTA IN A BILIT Y REP ORT 202 3

Disclosure

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TABLE OF CONTE NTS

Location←

PR E VIOUS CH APTE R

ABB omission statements
Requirement(s) omitted

201-1

Direct economic value generated and distributed

a. We do not disclose or explicitly state the term ‘EVG&D.’ The below refers to the metrics defined in each section:i) Revenue - 29,363 (2311A)
b. See above.

Financial implications andother risks and opportunities
due to climate change• Sustainability Report 2023: TCFD recommendations report• Sustainability Report 2023: EU Taxonomy report

201-3

Defined benefit plan obligations and other retirement
plans• Financial Report 2023: Note 17

Reasona. Direct economic value generated and distributed
Information unavailable/(EVG&D) on an accruals basis, including the basic com- incomplete
ponents for the organization’s global operations aslisted below. If data are presented on a cash basis, report the justification for this decision in addition toreporting the following basic components:
ii. Economic value distributed: operating costs, employee wages and benefits, payments to providers ofcapital, payments to government by country, andcommunity investments;
iii. Economic value retained: ‘direct economic value
generated’ less ‘economic value distributed’.
b. Where significant, report EVG&D separately atcountry, regional, or market levels, and the criteria
used for defining significance.

201-2

104

Explanationa) We do not disclose or explicitly
state the term “EVG&D”.
a. ii: We don’t present any of the components as stated. Operating costs
could be the combination of certain
financial statement line items.
Employee wages and benefits arecomponents of several separate financial statement line items, payments to providers of capital (debt/
dividends) would be on the cash flow
statement, and then payments togovernment by country and community investments are not disclosed or
tracked at that level.
a. iii: Not disclosed in financial
statementsb: see abovec. If a fund set up to pay the plan’s pension liabilities is Confidentiality constraints c. Funding strategy will vary by plan,
not fully covered, explain the strategy, if any, adinfluenced by the legislative frameopted by the employer to work towards full coverwork in each country. Funding
age, and the timescale, if any, by which the employer
strategy is often negotiated withhopes to achieve full coverage.
plan fiduciaries and the company
d. Percentage of salary contributed by employee ordoes not want to publish any stateemployer.
ment on strategy which might influe. Level of participation in retirement plans, such asence those negotiations. This inforparticipation in mandatory or voluntary schemes,
mation will therefore not be
regional, or country-based schemes, or those withdisclosed on confidentialfinancial impact.
ity grounds.
d. The percentage of salary contributed by employee and employer willvary for each plan. Disclosing an average figure would be meaninglesswithout a full breakdown of employees by country and seniority.
Disclosing details on a plan by planbasis would disclose details of
ABB’s overall remuneration which
we wish to keep confidential.
e. Disclosing this information at an
aggregate level would be meaningless without a full breakdown of
employees by country and employment status. Disclosing details on aplan by plan basis would disclosedetails of ABB’s overall remuneration which we wish to keep
confidential.

ABB SUSTA IN A BILIT Y REP ORT 202 3

Disclosure

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TABLE OF CONTE NTS

Location

Financial assistance received
from governmentc. Financial Report 2023: Organizational Structure

PR E VIOUS CH APTE R

105

ABB omission statements
Requirement(s) omitted

201-4

←

Reasona. Total monetary value of financial assistance reNot applicable
ceived by the organization from any government
during the reporting period, including:i. tax relief and tax credits;
ii. subsidies;iii. investment grants, research and development
grants, and other relevant types of grant;
iv. awards;
v. royalty holidays;
vi. financial assistance from Export Credit Agencies(ECAs);
vii. financial incentives;
viii.other financial benefits received or receivablefrom any government for any operation.
b. The information in 201-4-a by country.

Explanation
a. Government assistance is a required disclosure, if material. As it
is not material to ABB, there is nodisclosure related to government
assistance.
b. We are not required to disclose thisby country.

MARKET PRESENCE
3-3

Management of material
topics• Financial Report 2023: Management overview

202-1

Ratios of standard entry level
wage by gender compared to
local minimum wage

ABB's 100k population spans 90+ countries with a significant
a. When a significant proportion of employees are
Information unavailable/
population in the majority of the countries. Minimum wage rules
compensated based on wages subject to minimum incomplete
are defined by the local CBA agreements and/or local legislation
wage rules, report the relevant ratio of the entryof the 90+ counties in which ABB has employees. ABB is compliant
level wage by gender at significant locations of opwith the standards set-fourth in the CBA agreements and/or comeration to the minimum wage.
pliant to local legislation with regard to minimum wage rules.
b. When a significant proportion of other workers (excluding employees) performing the organization’s
activities are compensated based on wages subject
to minimum wage rules, describe the actions taken
to determine whether these workers are paid above
the minimum wage.
c. Whether a local minimum wage is absent or variable
at significant locations of operation, by gender. In
circumstances in which different minimums can beused as a reference, report which minimum wage isbeing used.
d. The definition used for ‘significant locations ofoperation’.

In order to operate in over 90 countries, ABB must adhere to the local
employment laws, regulations, and reporting standards of each country.
These local country requirements are
the responsibility of the applicablecountry HR, HR Services, employment
law and compliance groups to ensurethat ABB is compliant with each country’s regulatory and employment law
requirements. Unless required by law,
ABB does not require all local country
reporting to be stored or aggregatedat Global Corporate level given thethousands of requirements that are
maintained at a local level.

202-2

Proportion of senior management hired from the local
community

a. Percentage of senior management at significant lo- Information unavailable/
cations of operation that are hired from the local
incomplete
community.
b. The definition used for ‘senior management’.
c. The organization’s geographical definition of ‘local’.
d. The definition used for ‘significant locations ofoperation’.

We do not collect data regarding thisdisclosure at the global level but weare investigating the feasibility of doing this in the future.

ABB SUSTA IN A BILIT Y REP ORT 202 3

Disclosure

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TABLE OF CONTE NTS

Location←

PR E VIOUS CH APTE R

106

ABB omission statements
Requirement(s) omitted

ReasonExplanation

P R O C U R E M E NT P R A C T I C E S
3-3

Management of material
topicsFor disclosures:• Sustainability Report 2023: Preserving resources, We preserve
resources• Sustainability Report 2023: Integrity and transparency,
Responsible sourcing• Sustainability Report 2023: Integrity and transparency, We embed a culture of integrity and transparency
For policies:• ABB Supplier Code of Conduct• ABB Code of Conduct: Working with suppliers• ABB General Terms and Conditions• ABB Conflict Minerals Policy• ABB Human rights Policy and Due Diligence Framework

204-1

Proportion of spending on local supplierse. Percentage of the procurement budget used for sig- Information unavailable/
nificant locations of operation that is spent on sup- incomplete
pliers local to that operation (such as percentage of
products and services purchased locally).
f. The organization’s geographical definition of“local.”g. The definition used for “significant locations ofoperation.”

This is managed locally and data is
not consolidated at Group level. Data
reported at Group level will show thebudget split between the different regions (Europe, AMEA, AMC), but is notdifferentiated between local andnon-local spend.

A NT I - C O R R U P T I O N
3-3

Management of material
topics• Sustainability Report 2023: Integrity and transparency• Integrated Report 2023: We embed a culture of integrity andtransparency along the extended value chain, Anti-Bribery andAnti-Corruption

205-1

Operations assessed for risks
related to corruption

a. Total number and percentage of operations assessed for risks related to corruption.

Information unavailable/
incomplete

We do not consider this for reporting
as of 2023.

205-2

Communication and training a. 100% - governance body members = EC
about anti-corruption policies
and procedures

b. Total number and percentage of employees that the Information unavailable/organization’s anti-corruption policies and proceincompletedures have been communicated to, broken down by
employee category and region.
c. Total number and percentage of business partners
that the organization’s anti-corruption policies andprocedures have been communicated to, broken
down by type of business partner and region.
Describe if the organization’s anti-corruption policies and procedures have been communicated toany other persons or organizations.
d. Total number and percentage of governance bodymembers that have received training on anti-corruption, broken down by region.
e. Total number and percentage of employees thathave received training on anti-corruption, broken
down by employee category and region.

We do not consider this for reporting
as of 2023.

ABB SUSTA IN A BILIT Y REP ORT 202 3

Disclosure205-3

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TABLE OF CONTE NTS

Location

Confirmed incidents of corruption and actions taken←

PR E VIOUS CH APTE R

107

ABB omission statements
Requirement(s) omitted

Reasona. Total number and nature of confirmed incidents ofcorruption.

Confidentiality constraints Not reported publicly on the basis ofconfidentiality/legal privilege, unlessrequired by authorities/regulators.

Explanationb. Total number of confirmed incidents in which employees were dismissed or disciplined for corruption.
c. Total number of confirmed incidents when contracts with business partners were terminated or not
renewed due to violations related to corruption.
d. Public legal cases regarding corruption brought
against the organization or its employees during thereporting period and the outcomes of such cases.
A NT I - C O M P E T I T I V E B E H AV I O R
3-3

Management of material
topics206-1

Legal actions foranti-competitive behavior,anti-trust, and monopoly
practices• Integrated Report 2023: We embed a culture of integrity andtransparency along the extended value chain
a. Number of legal actions pending or completed
Confidentiality constraints Not reported publicly on the basis ofduring the reporting period regarding anti-competconfidentiality/legal privilege, unlessitive behavior and violations of anti-trust and morequired by authorities/regulators.
nopoly legislation in which the organization has
been identified as a participant.
b. Main outcomes of completed legal actions, including any decisions or judgements.

TA X
3-3

Management of material
topics• ABB Tax Policy

207-1

Approach to tax• ABB Tax Policy

207-2

Tax governance, control, andrisk management• ABB Tax Policy

207-3

Stakeholder engagement and • ABB Tax Policy
management of concerns related to tax

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PR E VIOUS CH APTE R

ABB omission statements
Requirement(s) omitted

207-4

Country-by-country reporting108

ReasonExplanationa. All tax jurisdictions where the entities included in
Confidentiality constraints ABB discloses consolidated tax inforthe organization’s audited consolidated financial
mation for ABB Group covering all opstatements, or in the financial information filed on
erations worldwide, as required. ABB
public record, are resident for tax purposes.
also submits statutory financial stateb. For each tax jurisdiction reported in Disclosurements locally, inclusive of tax bal207-4-a:ances and disclosures, as required.
i. Names of the resident entities;
Data per Country-by-Country report
ii. Primary activities of the organization;
are commercially sensitive. Our comiii. Number of employees, and the basis for the calpetitors generally do not publish
culation of this number;them. ABB must balance its responsiiv. Revenues from third-party sales;bilities as a compliant taxpayer inv. Revenues from intra-group transactions witheach and every country in which it opother tax jurisdictions;erates with the need to support comvi. Profit/loss before tax;
petitive business growth.
vii. Tangible assets other than cash and cash
equivalents;
viii.Corporate income tax paid on a cash basis;ix. Corporate income tax accrued on profit/loss;
x. Reasons for the difference between corporate
income tax accrued on profit/loss and the tax
due if the statutory tax rate is applied to profit/
loss before tax.
c. The time period covered by the information reported in Disclosure 207-4.

M AT E R I A L S
3-3

Management of material
topics• Sustainability Report 2023: Preserving resources, We preserve
resources• Sustainability Report 2023: Preserving resources, Circularity• Sustainability Report 2023: Preserving resources, Waste andwater management

301-1

Materials used by weight orvolume• Sustainability Report 2023: Appendix, GRI disclosures table

Breakdown of materials used by weight and volume
into non-renewable materials and renewablematerials.

Information unavailable/
incomplete

We publish the weight of the fourmain material groups which make up
the main share of our products’
weight. Other materials are omitted
due to their insignificance in weight.
The requirement to distinguish thematerials into renewable/
non-renewable was reviewed; as the
ABB Circularity framework requires us
to report data on material flows at ahigher level, it was agreed not to integrate such a distinction into theframework, and we therefore reportaccordingly. In light of upcoming regulations with similar requirements,
we will evaluate this decision again
when needed and based on these requirements’ materiality to ABB.

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109

ABB omission statements
Requirement(s) omitted

ReasonExplanation

301-2

Recycled input materials used

a. Percentage of recycled input materials used to man- Information unavailable/
ufacture the organization's primary products andincomplete
services.

A review of this indicator for integration into the ABB Circularity framework has been conducted. As the ABB
Circularity framework requires us toreport data on material flows at ahigher level, it was agreed not to integrate such a distinction into theframework, and we therefore reportaccordingly. In light of upcoming regulations with similar requirements,
we will evaluate this decision again
when needed and based on these requirements’ materiality to ABB.

301-3

Reclaimed products and theirpackaging materials

a. Percentage of reclaimed products and their packag- Information unavailable/
ing materials for each product category.
incompleteb. How the data for this disclosure have beencollected.

A review of this indicator for integration into the ABB Circularity framework has been conducted. As the ABB
Circularity framework requires us toreport data on material flows at ahigher level, it was agreed not to integrate such a distinction into theframework, and we therefore reportaccordingly. In light of upcoming regulations with similar requirements,
we will evaluate this decision again
when needed and based on these requirements’ materiality to ABB.

Non-renewable fuel sources can include fuel for vehi- Information unavailable/cles that are owned or controlled by the organization. incompletec. Total fuel consumption within the organizationfrom non-renewable sources, in joules or multiples,and including fuel types used.
d. Total fuel consumption within the organizationfrom renewable sources, in joules or multiples, andincluding fuel types used.
e. In joules, watt-hours or multiples, the total:
iv. iv. steam consumption
f. In joules, watt-hours or multiples, the total:
ii. heating soldiii. cooling soldiv. steam soldMeasuring the energy use of our own
fleet of leased vehicles is underreview.
Instead of disclosing total fuel consumption split by non-renewable andrenewable sources, we report totalenergy consumption. Total consumption per fuel is covered in total energy
consumption.
To the best of our knowledge, nosteam is used.
To the best of our knowledge, we donot sell heating, cooling or steam.

ENERGY
3-3

Management of material
topics• Sustainability Report 2023: Low-carbon society, We enable a
low-carbon society• Sustainability Report 2023: Low-carbon society, Customer
emissions• Sustainability Report 2023: Low-carbon society, ABB’s own
emissions• Sustainability Report 2023: Low-carbon society, Supplieremissions• Sustainability Report 2023: Appendix, Approach to reporting• Sustainability Report 2023: Appendix, SASB Disclosure table

302-1

Energy consumption within
the organization• Sustainability Report 2023: Appendix, GRI disclosures table

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Energy consumption outsideof the organization

302-3

Energy intensity

302-4

302-5

PR E VIOUS CH APTE R

110

ABB omission statements
Requirement(s) omitted

302-2

←

ReasonExplanationa. Energy consumption outside of the organization, in Information unavailable/
joules or multiples.
incompleteb. Standards, methodologies, assumptions, and/or
calculation tools used.
c. Source of the conversion factors used.

We calculate our scope 3 emissions indisclosure 305-3. Some categories ofthe scope 3 emissions are based on
the energy consumption outside theorganization. We do not report on thisenergy consumption yet. However, weare reviewing the option to extract
this information from our scope 3
emissions calculation.

Reduction of energy
consumption

a. Amount of reductions in energy consumption
Information unavailable/
achieved as a direct result of conservation and effi- incomplete
ciency initiatives, in joules or multiples.
b. Types of energy included in the reductions; whether
fuel, electricity, heating, cooling, steam, or all.
c. Basis for calculating reductions in energy consumption, such as base year or baseline, including the rationale for choosing it.
d. Standards, methodologies, assumptions, and/or
calculation tools used.

Reported locally in a
non-standardized way, which makes it
difficult to aggregate. Method is under review.

Reductions in energy requirements of products andservices

a. Reductions in energy requirements of sold products Information unavailable/
and services achieved during the reporting period, incompletein joules or multiples.
b. Basis for calculating reductions in energy consumption, such as base year or baseline, including the rationale for choosing it.
c. Standards, methodologies, assumptions, and/or
calculation tools used.

This information is currently not collected at Group level due to the sizeand complexity of ABB’s portfolio of
products, system and services.

• Sustainability Report 2023: Appendix, GRI disclosures table

EMISSIONS
3-3

Management of material
topics• Sustainability Report 2023: Low-carbon society, We enable a
low-carbon society• Sustainability Report 2023: Low-carbon society, Customer
emissions• Sustainability Report 2023: Low-carbon society, ABB’s own
emissions• Sustainability Report 2023: Low-carbon society, Supplieremissions• Sustainability Report 2023: Appendix, Approach to reporting

305-1

Direct (Scope 1) GHG
emissions• Sustainability Report 2023: Appendix, GRI Disclosures table

305-2

Energy indirect (Scope 2) GHG • Sustainability Report 2023: Appendix, GRI disclosures tableemissions305-3

Other indirect (Scope 3) GHG
emissions• Sustainability Report 2023: Appendix, GRI disclosures table305-4

GHG emissions intensity• Sustainability Report 2023: Appendix, GRI disclosures table

305-5

Reduction of GHG emissions• Sustainability Report 2023: Appendix, GRI disclosures table

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111

ABB omission statements
Requirement(s) omitted

ReasonExplanation

305-6

Emissions of ozone-depleting
substances (ODS)

d. Production, imports, and exports of ODS in metric Information unavailable/
tons of CFC-11 (trichlorofluoromethane) equivalent. incompletee. Substances included in the calculation.
f. Source of the emission factors used.
g. Standards, methodologies, assumptions, and/or
calculation tools used.

This indicator is being reviewed. We
expect to disclose data next year.
Ozone-depleting substances (ODS)
are included in the ABB List ofProhibited and Restricted
Substances. We measure the leakageof refrigerants from cooling systems.

305-7

Nitrogen oxides (NOx), sulfur • Sustainability Report 2023: Appendix, GRI disclosures table
oxides (Sox), and other significant air emissions

h. Significant air emissions, in kilograms or multiples, Not applicablefor each of the following:iii. Persistent organic pollutants (POP)v. Hazardous air pollutants (HAP)vi. Particulate matter (PM)c. Standards, methodologies, assumptions, and/or
calculation tools used.

We do not report air emissions from
POP, HAP and PM at Group level, sincesuch emissions are not material to
ABB. Where they may occur, they are
managed in accordance with local legislation and environmental permits.

S U P P L I E R E N V I R O N M E NTA L A S S E S S M E NT
3-3

Management of material
topics• ABB Supplier Code of Conduct308-1

New suppliers that were
All new suppliers must follow a registration and qualification proscreened using environmental cess before being able to become a supplier to ABB. Suppliers folcriteria
lowing the full qualification process are screened on environmental criteria. This is 54 percent of all suppliers.

308-2

Negative environmental impacts in the supply chain andactions taken

Number of suppliers assessed for environmental impacts is 3104. b. Number of suppliers identified as having significant Information unavailable/
actual and potential negative environmental
incomplete
impacts.
c. Significant actual and potential negative environmental impacts identified in the supply chain.
d. Percentage of suppliers identified as having significant actual and potential negative environmental
impacts with which improvements were agreed
upon as a result of assessment.
e. Percentage of suppliers identified as having significant actual and potential negative environmental
impacts with which relationships were terminatedas a result of assessment, and why.

As part of SSBM we have on-site assessment and review adherence toregulatory and ABB requirements. We
request our suppliers to implement a
corrective action plan and follow up
on its progress. Due to sensitivity we
do not report externally on findings
related to this topic. We only provide
an overall overview of suppliers assessed and risks mitigated, and thenumber of suppliers with who we haveterminated our business relationship.

E M P L OY M E NT
3-3

Management of material
topics• Sustainability Report 2023: Social progress, Diversity andinclusion

401-1

New employee hires and employee turnover• Sustainability Report 2023: Social progress, Diversity andinclusion

Breakdowns by age group

Information unavailable/
incomplete

We are adapting the global age groupmapping to enable reporting against
this indicator and it will be available
in 2024.

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PR E VIOUS CH APTE R112

ABB omission statements
Requirement(s) omitted

ReasonExplanation

401-2

Benefits provided to full-time
employees that are not provided to temporary or
part-time employees

The opportunity for stock ownership is offered by participation in f. Benefits which are standard for full-time employees Confidentiality constraints Due to sensitivity, such information iseither the Employee Share Acquisition Program (ESAP), or theof the organization but are not provided to temponot disclosed. ABB meets all local regLong-Term Incentive Plan (LTIP in form of a Performance Sharerary or part-time employees, by significant locaulatory requirements in terms of proPlan or Restricted Share Plan). The opportunity for stock ownertions of operation. These include, as a minimum:
viding access to benefits to tempoship is the same for permanent full-time and permanent part-time i. life insurance;
rary or part time workers.
employees at ABB. This is the case in all ABB locations where ESAPii. health care;
is offered.
iii. disability and invalidity coverage;
In terms of “vi. stock ownership” anyiv. parental leave;stock program at ABB is equally ofv. retirement provision;
fered to permanent full-time and pervi. others.
manent part-time employees in theg. The definition used for ‘significant locations ofsame way, while they are not offered
operation’.
to temporary employees.

401-3

Parental leave

100% of our employees are entitled to parental leave.

L A B O R / M A N A G E M E N T R E L AT I O N S
3-3

Management of material
topics

ABB’s relationship with its employee representatives is governedby law and regulations. In line with ABB’s culture, we are overall
maintaining a transparent and trust-based relationship, which allows for early engagement and valuable discussions. Our policy
respects the right of all personnel to form and join trade unions of
their choice and to bargain collectively.

402-1

Minimum notice periods regarding operational changes

a. ABB is following the respective legal and regulatory requirements for the engagement of employee representatives in relevant planned organizational changes, which affect employees.
In general, affected employees are informed at the beginning of
any such processes.
b. In most of the collective bargaining agreements this is the case.

b. Total number of employees that took parental leave, Information unavailable/
by gender.
incompletec. Total number of employees that returned to work in
the reporting period after parental leave ended, bygenderd. Total number of employees that returned to work
after parental leave ended that were still employed
12 months after their return to work, by gender.
e. Return to work and retention rates of employeesthat took parental leave, by gender."Currently, we are not able to globally
report on the requested parental
leave-related data items, since related
processes are managed locally. As it is
the case for other time management
and absence management items, dataprocesses are managed locally due tothe various practices and legal constraints specific to each country.
Considering the sum of local characteristics and specificities, we have yet
not been able to align a global reporting that allows us to provide comprehensive date for requirements underb./c./d./e. We are reviewing the requirements to enable reporting
against the all requirements of the
GRI indicator in the future.

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3-3Management of material
topicsFor disclosures:• Sustainability Report 2023: Social progress, Health and safety
For policies:• ABB Supplier Code of Conduct• ABB General Terms and Conditions• ABB Code of Conduct, Health and safety• ABB Policy on Health, Safety, Environment, Security andSustainability

403-1

Occupational health andsafety management system

For disclosures:• Sustainability Report 2023, Appendix, Approach to reporting• Sustainability Report 2023, Social progress, Health and safety
For policies:• ABB Supplier Code of Conduct• ABB General Terms and Conditions• ABB Code of Conduct, Health and safety• ABB Policy on Health, Safety, Environment, Security andSustainability

403-2

Hazard identification, risk as- • Sustainability Report 2023, Appendix, Approach to reporting
sessment, and incident• Sustainability Report 2023, Social progress, Health and safety
investigation• ABB Code of Conduct403-3

Occupational health services

403-4

Worker participation, consul- • Sustainability Report 2023: Social progress, Health and safety
tation, and communication on
occupational health andsafety403-5

Worker training on occupational health and safety• Sustainability Report 2023: Social progress, Health and safety

403-6

Promotion of worker health• Sustainability Report 2023: Social progress, Health and safety

403-7

Prevention and mitigation of • Sustainability Report 2023: Social progress, Health and safety
occupational health andsafety impacts directly linked
by business relationships

403-8

Workers covered by an occupational health and safety
management system

Where required by law and regulations ABB has the necessary occupational health services, that are certified by local regulations.

a. i: 100%b. ii: 100%c. iii: 100%d. No workers have been excluded.
e. The management system is mandatory for all employees andcontractors. The total coverage is estimated to be 99% as there
will be theoretically new acquisitions that have not yet implemented the Management System.

PR E VIOUS CH APTE R

113

ABB omission statements
Requirement(s) omitted

O C C U PAT I O N A L H E A LT H A N D S A F E TY←

ReasonExplanation

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Work-related injuries

PR E VIOUS CH APTE R

114

ABB omission statements
Requirement(s) omitted

403-9

←

ReasonExplanationa. Sustainability Report 2023: Appendix, GRI disclosures tableb. Sustainability Report 2023: Appendix, GRI disclosures tablec. Sustainability Report 2023: Appendix, GRI disclosures table
d. Sustainability Report 2023: Appendix, GRI disclosures tablee. Rates calculated based on 200,000 hours worked.
f. No workers have been excluded from this disclosure.
g. For the LTIFR calculation we use the total workforce, which is acombined number of ABB employees and embedded contractors (not employees but their work and/or workplace is controlled by the organization). The employee numbers we receivefrom ABACUS as FTE. The contractor hours are collected at thesite-level and each month reported. LTIFR includes lost time injuries and illnesses, and serious injuries, but excludes fatalities.
All hazards and incidents are being investigated and action plans
are formulated and executed after investigations.
As a result of mergers and acquisitions, there may always be apercentage of employees not yet covered by the HSE programsand therefore by this disclosure.

403-10 Work-related ill healthh. For all employees:
Information unavailable/
i. The number of fatalities as a result of work-reincomplete
lated ill health;ii. The number of cases of recordable work-related
ill health;iii. The main types of work-related ill health.
i. For all workers who are not employees but whose
work and/or workplace is controlled by theorganization:
i. The number of fatalities as a result of work-related ill health;ii. The number of cases of recordable work-related
ill health;iii. The main types of work-related ill health.
j. The work-related hazards that pose a risk of ill
health, including:i. how these hazards have been determined;
ii. which of these hazards have caused or contributed to cases of ill health during the reporting
period;iii. actions taken or underway to eliminate thesehazards and minimize risks using the hierarchyof controls.
k. Whether and, if so, why any workers have been excluded from this disclosure, including the types ofworker excluded.
l. Any contextual information necessary to understand how the data have been compiled, such as any
standards, methodologies, and assumptions used.

Data is not qualitatively sufficient.
Process to capture data underdevelopment.

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115

ABB omission statements
Requirement(s) omitted

ReasonExplanation

T R A I N I N G A N D E D U C AT I O N
3-3

Management of material
topics• ABB Human Rights policy and due diligence statement• ABB Code of Conduct, Fair employment, diversity & inclusion• Sustainability Report 2023: Social progress, Diversity andinclusion• Integrated Report 2023: Performance, We promote social progress, Diversity & inclusion and employee engagement• ABB Group website: Diversity and Inclusion• ABB Group website: Sustainability Agenda

404-1

Average hours of training peryear per employee• Sustainability Report 2023: Appendix, GRI disclosures table

404-2

Programs for upgrading employee skills and transition assistance programs

404-3

Percentage of employees receiving regular performanceand career development
reviews

m. Type and scope of programs implemented and as- Information unavailable/sistance provided to upgrade employee skills.
incompleten. Transition assistance programs provided to facilitate continued employability and the managementof career endings resulting from retirement or termination of employment.

Data are fragmented in local systems.
There will be an analysis in the upcoming periods to check the feasibility ofcollecting and reporting on this data.

• Sustainability Report 2023: Appendix, GRI disclosures table

N O N - D I S C R I M I N AT I O N
3-3

Management of material
topicsFor disclosures:• Sustainability Report 2023: Social progress, Human rights andlabor standards• Sustainability Report 2023: Social progress, Diversity andinclusion• Sustainability Report 2023: Integrity and transparency
For policies:• ABB Code of Conduct• ABB Human Rights Policy and Due Diligence Framework• ABB Ltd Modern Slavery Statement• ABB Supplier Code of Conduct406-1

Incidents of discriminationand corrective actions taken• Sustainability Report 2023: Appendix, GRI disclosures table

F R E E D O M O F A S S O C I AT I O N A N D C O L L E C T I V E B A R G A I N I N G
3-3

Management of material
topics• ABB Human Rights Policy and Due Diligence Frameworkb. Status of the incidents and actions taken with refer- Confidentiality constraints The information is confidential andence to the following:
subject to legal privilege, and not beii. Remediation plans being implemented;
ing reported as of 2023.
iii. Remediation plans that have been implemented,
with results reviewed through routine internalmanagement review processes;

ABB SUSTA IN A BILIT Y REP ORT 202 3

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Location

Operations and suppliers in
ABB has a rigorous approach to identify countries and commodiwhich the right to freedom of ties where amongst other risks, risk to workers' rights to exercise
association and collective bar- freedom of association or collective bargaining is at risk. This has
gaining may be at risk
resulted in a list of focus countries and high-risk commodities.
Type of operations: suppliers of direct and raw materials.
Focus countries: Argentina, Brazil, Bulgaria, China, Colombia,
India, Indonesia, Malaysia, Mexico, Peru, Poland, Saudi Arabia,
South Africa, Thailand, Türkiye, Vietnam
We conduct on-site assessments. If suppliers are not following requirements on freedom of association and collective bargaining,
we request our suppliers to implement a corrective action planand follow-up on the progress.
Regarding our operations, we conduct human rights site assessments as part of our annual internal governance and assurance
program. The human rights element includes labor rights and ispart of regular assessment within the HSE/Sustainability assessment procedures. If any elements do not meet the required standards, the responsible manager has to identify OFI (opportunity
for improvement) or NC (non conformity) requiring specific actionplans to manage the NC.

CHILD LABOR
3-3

Management of material
topics• Sustainability Report 2023: Social progress, Human rights andlabor standards• Sustainability Report 2023: Integrity and transparency,
Responsible sourcing
Regarding our operations, we conduct human rights site assessments as part of our annual internal governance and assurance
program. The human rights element includes child labor and ispart of regular assessment within the HSE/Sustainability assessment procedures. If any elements do not meet the required standards, the responsible manager has to identify OFI (opportunity
for improvement) or NC (non-conformity) requiring specific action plans to manage the NC.

PR E VIOUS CH APTE R

116

ABB omission statements
Requirement(s) omitted

407-1

←

ReasonExplanation

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ABB omission statements
Requirement(s) omitted

408-1

Operations and suppliers at
significant risk for incidents
of child labor

117

Reasonc. Operations and suppliers considered to have signif- Information unavailable/
icant risk for incidents of:incomplete
i. child labor;
ii. young workers exposed to hazardous work.
b. Operations and suppliers considered to have significant risk for incidents of child labor either interms of:i. type of operation (such as manufacturing plant)
and supplier;ii. countries or geographic areas with operations
and suppliers considered at risk.
c. Measures taken by the organization in the reporting
period intended to contribute to the effective abolition of child labor.

Explanation
During 2023 we undertook
business-specific reviews of our salient human rights issues and analyses of our human rights due diligenceprocesses, and validated our conclusions through internal and external
stakeholder engagement.
This work confirmed child labor as asalient human rights issue for ABB, focused on our extended supply chain,rather than as a significant risk in ourown operations.
In the supply chain, we continued ourwork to ensure the responsible sourcing of conflict minerals and other minerals of interest.

FORCE D OR COMPU L SORY L ABOR
3-3

Management of material
topics• Sustainability Report 2023: Social progress, Human rights andlabor standards• Sustainability Report 2023: Integrity and transparency,
Responsible sourcing

409-1

Operations and suppliers at• Sustainability Report 2023: Social progress, Human rights andsignificant risk for incidents
labor standardsof forced or compulsory labor • Sustainability Report 2023: Integrity and transparency,
Responsible sourcing

S E C U R I TY P R A C T I C E S
3-3

Management of material
topics

ABB has a group of internal security managers globally, who provide expertise to the business management in the areas of travel
risk, security risk and crisis response. The management of
third-party private security companies is the responsibility of local site management teams.

410-1

Security personnel trained inhuman rights policies orprocedures

All internal security managers have received internal training in
the organization's human rights policies and their application tosecurity.

RIGHTS OF INDIGENOUS PEOPLES
3-3

Management of material
topics• Sustainability Report 2023: Social progress, Human rights andlabor standards

b. Whether training requirements also apply to thirdparty organizations providing security personnel.

Information unavailable/
incomplete

ABB internal security personnel havebeen trained on security and humanrights principles. All contracts withthird-party security personnel carry aclause to confirm that the third-party
abides by the voluntary principle on
security and human rights. Due to the
management of third-party private
security companies on a local level,
detailed information is currently notavailable on Group level.

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Incidents of violations involving rights of indigenous
peoples

PR E VIOUS CH APTE R

118

ABB omission statements
Requirement(s) omitted

411-1

←

ReasonExplanation• Sustainability Report 2023: Social progress, Human rights andlabor standards

L O C A L C O M M UN I T I E S
3-3

Management of material
topics• Sustainability Report 2023: Social progress, Community
engagement

413-1

Operations with local community engagement, impact assessments, and development
programs

c. Percentage of operations with implemented local
Information unavailable/community engagement, impact assessments, and/ incomplete
or development programs, including the use of:i. social impact assessments, including gender impact assessments, based on participatory
processes;
ii. environmental impact assessments and ongoing
monitoring;iii. public disclosure of results of environmental andsocial impact assessments;
iv. local community development programs basedon local communities’ needs;
v. stakeholder engagement plans based on stakeholder mapping;vi. broad-based local community consultation committees and processes that include vulnerable groups;vii. works councils, occupational health and safetycommittees and other worker representation
bodies to deal with impacts;
viii.formal local community grievance processes

Managed locally, global and coordinated process not available. Somequestions are included in annual social reporting but not systematicallyreleased. We have a high-level focus
and are not able to release data at local level. Because we report on morethan 400 projects, it is not possible toprovide a collective assessment of the
impact of diverse projects run in morethan 40 countries.

413-2

Operations with significant
actual and potential negative
impacts on local communities

a. Operations with significant actual and potential
Information unavailable/
negative impacts on local communities, including:incomplete
i. the location of the operations;ii. the significant actual and potential negative impacts of operations

Managed locally, global and coordinated process not available. While thequestion is included in annual social
reporting, it is not answered in ameaningful fashion. No process andsystematic impact analysis (impacts
including social and environment)

S U P P L I E R S O C I A L A S S E S S M E NT
3-3

Management of material
topics• Sustainability Report 2023: Integrity and transparency,
Responsible sourcing

414-1

New suppliers that were
All new suppliers must follow a registration and qualification proscreened using social criteria cess before being able to become a supplier to ABB. Suppliers following the full qualification process are screened on social criteria. This is 54 percent of all new suppliers.

ABB SUSTA IN A BILIT Y REP ORT 202 3

Disclosure

Appe n dix≡

TABLE OF CONTE NTS

Location←

PR E VIOUS CH APTE R

ABB omission statements
Requirement(s) omitted

414-2

Negative social impacts in the Number of suppliers assessed for social impacts is 3014.
supply chain and actions
taken

119

ReasonExplanationb. Number of suppliers assessed for social impacts.
Number of suppliers identified as having significant
actual and potential negative social impacts.
c. Significant actual and potential negative social impacts identified in the supply chain.
d. Percentage of suppliers identified as having significant actual and potential negative social impacts
with which improvements were agreed upon as a result of assessment.
e. Percentage of suppliers identified as having significant actual and potential negative social impacts
with which relationships were terminated as a resultof assessment, and why.

As part of SSBM we have on-site assessment and review adherence toregulatory and ABB requirements. We
request to our suppliers to implement
an corrective action plan andfollow-up on the progress. Due to sensitivity we do not report externally onfindings related to this topic. We only
provide an overall overview of suppliers assessed and risks mitigated, andthe number of suppliers with who wehave terminated our business
relationship.

b. If applicable, how the monetary value of in-kind con- Not applicable
tributions was estimated.

ABB funds, property or services mustnot be used to make political donations or support any candidate for political office,or political party, official
or committee anywhere in the world.

PUBLIC POLICY
3-3

Management of material
topics• ABB Code of Conduct: Working with governments

415-1

Political contributions• Sustainability Report 2023: Appendix, GRI Disclosures tableC U S T O M E R P R I VA C Y
3-3

Management of material
topics418-1

Substantiated complaints
concerning breaches of customer privacy and losses ofcustomer data

• ABB Code of Conduct: Privacy and personal dataa. Total number of substantiated complaints received Confidentiality constraints Confidentiality constraints: Further toconcerning breaches of customer privacy, categothis, we deem this information confirized by:dential, hence it is not disclosed ati. complaints received from outside parties andthis time.
substantiated by the organization;ii. complaints from regulatory bodies.
b. Total number of identified leaks, thefts, or losses ofcustomer data.
c. If the organization has not identified any substantiated complaints, a brief statement of this fact issufficient.

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A ppe ndix—
EU Taxonomy: Disclosures
for the financial year 2023—
EU Taxonomy:
Background andobjectives

At ABB, we are determined to shape our future in an environmentally sustainable way
by investing in environmentally sustainable activities. The pursuit of environmentally
sustainable business is not only important to the public – but it also represents theparamount challenge of our times. To help address this challenge, the European Union(EU) has taken the lead in standardizing sustainability-related data and defining environmentally sustainable criteria and objectives.
As part of the European Green Deal, the EU aims to become climate-neutral and to
reduce GHG emissions generated within its borders to net zero by 2050. With the
Action Plan on Financing Sustainable Growth, the European Commission intends toreorient the European economic and financial system towards more sustainable technologies and businesses. The EU Taxonomy is the cornerstone of the EU’s Green Dealand Sustainable Finance Action Plan, as it aims to direct capital flows specifically into
sustainable projects and companies. The Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment and amending Regulation(EU) 2019/2099 and the supplementing Delegated Acts, hereafter referred to as theTaxonomy Regulation, serve as a standardized and binding classification system todetermine which economic activities in the EU are considered as “environmentally
sustainable.” The EU Taxonomy defines “environmentally sustainable” business activities, based on the six pre-defined environmental objectives1.
By providing companies, investors, and policymakers with explicit definitions, the EU
Taxonomy seeks to identify and scale up green investments, inhibit “greenwashing”
and promote greater transparency regarding the true environmental sustainability of
economic activities.
The Taxonomy Regulation distinguishes between “taxonomy-eligible” and“taxonomy-aligned” economic activities.
An economic activity is considered “eligible” if it is described in the adopted
Delegated Acts, irrespective of whether that economic activity meets any of theestablished technical screening criteria. Consequently, economic activities are considered “non-eligible” under the EU Taxonomy when they are not specifically described in
the Delegated Acts.
From financial year 2022, the Taxonomy Regulation requires affected companies todisclose their environmentally sustainable activities (i.e., taxonomy-aligned activities). An eligible activity is only considered environmentally sustainable, and thus
taxonomy-aligned, if it meets the technical screening criteria (TSC):

1 Climate change mitigation, climate change
adaptation, sustainable use and protectionof water and marine resources, transition toa circular economy, pollution prevention andcontrol, and protection and restoration of
biodiversity and ecosystem.
2 Regulation (EU) 2020/852 of the European
Parliament and of the Council of 18 June 2020
on the establishment of a framework to facilitate sustainable investment and amending
Regulation (EU) 2019/2088.

• Makes a substantial contribution to one of the environmental objectives by complying with the substantial contribution (SC) criteria defined for the activity (e.g., levelof carbon emissions),• Meets the “do no significant harm” (DNSH) criteria, having no negative effect on anyof the other five environmental objectives (e.g., from the asset, process, or product),and• Complies with the minimum safeguards (MS) related primarily to human rights andsocial and labor standards.

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TABLE OF CONTE NTS

3 Commission Delegated Regulation (EU)2021/2139 of 4 June 2021 supplementing
Regulation (EU) 2020/852.
4 Commission Delegated Regulation (EU)2023/2485 of 27 June 2023 amending
Delegated Regulation (EU) 2021/2139.
5 Commission Delegated Regulation (EU)2021/2178 of 6 July 2021 supplementing
Regulation (EU) 2020/852.
6 Commission Delegated Regulation (EU)2023/2486 of 27 June 2023 amending
Commission Delegated Regulation (EU)2021/2178.

7 Commission Delegated Regulation (EU)2022/1214 of 9 March 2022 amending
Delegated Regulation (EU) 2021/2139.
8 Commission Delegated Regulation (EU)2023/2486 of 27 June 2023 supplementing
Regulation (EU) 2020/852.
9 According to Article 16 of Regulation (EU)2020/852, an economic activity shall qualify
as contributing substantially to one or moreof the environmental objectives “by directly
enabling other activities to make a substantial contribution to one or more of thoseobjectives, provided that such economic activity: (a) does not lead to a lock-in of assetsthat undermine long-term environmental
goals, considering the economic lifetimeof those assets; and (b) has a substantial
positive environmental impact, on the basisof life-cycle considerations.”—
How ABB adopted the
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For the first year of reporting, on financial year 2021, disclosures were limited to the
proportions of Taxonomy-eligible and Taxonomy-non-eligible turnover, capital expenditure (Capex) and operating expenditure (Opex), as well as qualitative information,
for the objectives of climate change mitigation and adaptation.
For the second year of reporting, on financial year 2022, the disclosure requirements
were expanded. In addition to the previous disclosures, companies also needed todisclose the proportions of “Taxonomy-aligned” turnover, Capex and Opex, along withsupporting qualitative information, still only for the two climate objectives.
For the third year of reporting, on financial year 2023, the number of activities andcorresponding disclosures were further enlarged. In addition to the 2022 disclosureson Taxonomy-aligned turnover, Capex and Opex, companies now need to report on
Taxonomy-eligibility of additional economic activities covered under the amended
Climate Delegated Act, as well as for the four remaining environmental objectives
introduced by the Environmental Delegated Act.
Taxonomy related disclosures should be prepared in line with the Taxonomy
Regulation Article 8, and the related Delegated Acts. The legal framework for the
EU Taxonomy reporting and disclosure obligations was further expanded in 2023.
It currently consists of the following elements: the Taxonomy Regulation2, theClimate Delegated Act3 (as amended in June 20234), the Disclosures Delegated Act5
(as amended in June 20236), the Complementary Climate Delegated Act7, and theEnvironmental Delegated Act8, including their various Annexes. In addition, theTaxonomy FAQs and Notices published by the European Commission have been taken
into consideration in our disclosures, where relevant.
The Taxonomy Regulation is a living legislation, dynamic in its development; the formulations and terms contained in these pieces of legislation are sometimes subject
to uncertainty in interpretation and require further clarification. Therefore, the following disclosures rely on our own interpretation; the approach applied for this year’s
reporting is updated in comparison to last year and may not apply in the same way inthe future.
In 2021, following the release of the Climate Delegated Act, we conducted a first eligibility analysis of our products, sites and activities and reviewed them against the economic activities defined by the Taxonomy in all the countries in which we operate. We
opted for a decentralized approach, involving the expertise of our product managers,
real estate managers, sustainability managers, financial controllers, R&D controllers,and environmental managers across all levels of our organization and solicited advice
from external consultants.
In 2022, relevant Taxonomy-aligned activities were identified across the Group, withalignment results published for the first time.
In 2023, a thorough review was conducted to accommodate the changes introducedby the Environmental Delegated Act and changes to the Disclosures and Climate
Delegated Acts (e.g. additions of new activities, changes in technical screening criteria, or changes of the description of activities).
To assess eligibility, we reviewed the ABB Global product offering and matched it
to the economic activities defined by the Taxonomy Delegated Acts. Most of oureligible products and services are considered “enabling activities” as defined by the
Taxonomy9, meaning economic activities that “directly enable other activities to makea substantial contribution” to one of the environmental objectives. ABB businessactivities, products, and solutions that are not described in the Taxonomy DelegatedActs are deemed “non-eligible” and thus are not in scope of the Taxonomy reporting.
To identify the relevant activities, we referred to the descriptions of the activities,
the relevant Nomenclature of Economic Activities (NACE) codes and, if necessary,
the substantial contribution criteria, thereby assessing whether a business activity

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carried out by ABB matches an activity description. Each ABB business division thenbroke down their offerings or economic activities to the level of granularity required
to identify and cross check with the eligibility and alignment criteria.

10 The terms turnover and revenue are usedinterchangeably throughout this document.

The mapping of ABB’s real estate initiatives at country level, the EU Taxonomy datacollection as well as the reporting was coordinated centrally. Capex was identified either centrally, at the division level (e.g., large investments), or at the country level (e.g.,real estate) and then mapped to the relevant activity or allocated to activities basedon the percentage of eligible and/or aligned revenue. Opex activities were analyzed
for the purpose of Taxonomy reporting under a twofold approach:
1. R&D activities identified based on the product mapping, and2. other Opex allocated based on the percentage of eligible and aligned turnover10.
ABB’s Sustainability Board and the Finance, Audit and Compliance Committee of theBoard were kept informed of progress, possible risks and obstacles, as well as current
developments regarding the Taxonomy reporting.

—Economic activities of
ABB in the context of
the EU Taxonomy

As a technology leader in electrification and automation, ABB plays a key role inaccelerating the energy transition to a net-zero future. Our solutions help optimize,electrify and decarbonize the industry, buildings, power, and transport sectors thattogether account for a significant share of global environmental impacts. As a result,
ABB enables a more sustainable and resource-efficient future through all our businessactivities. ABB’s strategy is deeply rooted in our purpose and is designed to accelerate
profitable growth by capitalizing on key global trends.
Our purpose is the cornerstone of ABB’s direction and strategy. Through our technologies and responsible business practices, we aim to make our stakeholders and society
more sustainable. We achieve this by addressing the world’s energy challenges, transforming industries and embedding sustainability in all our activities and processes
across our value chain. Our purpose is based on five themes that capture the essenceof what ABB stands for, what we aspire to, and how we make a permanent sustainable
impact: creating success, leading with technology, addressing the world’s energy challenges, transforming industries, and embedding sustainability. With these themes inmind, we enable a more sustainable and resource-efficient future with our technology
leadership in all our key markets.
More information about ABB divisions and activities can be found in the chapter“Businesses” of the Consolidated Financial Statements 2023.
Eligibility and substantial contribution assessments
A selection of our activities in the Electrification, Motion, Process Automation andRobotics & Discrete Automation business areas, together with our Real Estate activities, are eligible under the EU Taxonomy to contribute to the environmental objectiveof climate change mitigation. In addition, some of our activities are eligible under theenvironmental objective of transitioning to a circular economy.
On the basis of the analysis of the economic activities, our main contribution remains
in climate change mitigation.
The table below presents the allocation of our activities to the economic activities
listed in the EU Taxonomy under the environmental objectives of climate change mitigation and transition to a circular economy. Changes may be made to this list of economic activities in the future as new economic activities that better fit ABB’s portfolio
could be further released by the European Commission. In addition, a more detailed
assessment of the technical screening criteria (TSC) for the activities introduced in
2023 is still underway.

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ABB Group Economic activities 2023 in accordance with the EU Taxonomy (“Taxonomy-eligible”)
Economic activity under
the EU Taxonomy

Description of economic
activity

Application to ABBGroup business areas
and functions

E N V I R O N M E NTA L O B J E C T I V E : C L I M AT E C H A N G E M I T I G AT I O N
3 . M A NU FA C TU R I N G
3.1 Manufacture of renewable en- • Manufacture of renewable energy tech- • Electrification
ergy technologies
nologies, as renewable energy is defined • Motion
in Article 2(1) of Directive (EU)• Process Automation
2018/2001
3.2 Manufacture of equipment
for the production and use ofhydrogen• Manufacture of equipment for the production and use of hydrogen

3.3 Manufacture of low-carbon
technologies for transport• Manufacture, repair, maintenance, retro- • Electrification
fitting, repurposing and upgrading of• Motion
low-carbon vehicles, rolling stock and• Process Automation
vessels

3.4 Manufacture of batteries• Manufacture of rechargeable batteries,
battery packs and accumulators fortransport, stationary and off-grid energy storage, and other industrial
applications.
• Manufacture of respective components

3.5 Manufacture of energy efficiency equipment for buildings• Manufacture of energy efficiency equip- • Electrification
ment for buildings• Motion• Robotics & Discrete
Automation

3.6 Manufacture of otherlow-carbon technologies• Manufacture of technologies aimed at
substantial GHG emission reductions inother sectors of the economy, where
those technologies are not covered by
activities 3.1 to 3.5

3.19 Manufacture of rail rollingstock constituents (newly added
in 2023)• Manufacture, installation, technical con- • Electrification
sulting, retrofitting, upgrade, repair,maintenance, and repurposing of products, equipment, systems, and software
related to the rail constituents detailedin Point 2.7 of Annex II to Directive (EU)2016/797

3.20 Manufacture, installation,• The economic activity develops, manuand servicing of high, medium
factures, installs, maintains or services
and low voltage electrical equipelectrical products, equipment or sysment for electrical transmission
tems, or software aimed at substantial
and distribution that result in or
GHG emission reductions in high, meenable a substantial contribution
dium and low voltage electrical transto climate change mitigation
mission and distribution systems(newly added in 2023)
through electrification, energy efficiency, integration of renewable energy
or efficient power conversion.

• Motion• Motion• Process Automation• Electrification• Motion• Process Automation

4. ENERGY
4.9 Transmission and distribution • Construction and operation of transmis- • Motionof electricity
sion systems that transport the electricity on the extra high-voltage andhigh-voltage interconnected system.
• Construction and operation of distribution systems that transport electricity
on high-voltage, medium-voltage andlow-voltage distribution systems
6. TR ANSPORT
6.5 Transport by motorbikes,
passenger cars and light commercial vehicles• Purchase, financing, renting, leasing andoperation of vehicles designated as category M 1 (232), N 1 (233), both fallingunder the scope of Regulation (EC) No
715/2007 of the European Parliamentand of the Council, or L (2- and 3-wheel
vehicles and quadricycles).

• Electrification• Motion• Process Automation• Robotics & Discrete
Automation

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Economic activity under
the EU Taxonomy

Description of economic
activity

Application to ABBGroup business areas
and functions

6.14 Infrastructure for railtransport• Construction, modernization, operation • Electrificationand maintenance of railways and subways as well as bridges and tunnels, stations, terminals, rail service facilities,
safety and traffic management systems
including the provision of architectural
services, engineering services, drafting
services, building inspection services andsurveying and mapping services and thelike as well as the performance of physical, chemical and other analytical testingof all types of materials and products.

6.15 Infrastructure en• Construction, modernization, mainte• Electrification
abling low-carbon road transport
nance and operation of infrastructure• Process Automationand public transportthat is required for zero tailpipe CO2e
operation of zero-emissions road transport, as well as infrastructure dedicatedto transshipment and infrastructure required for operating urban transport
6.16 Infrastructure enabling
low-carbon water transport• Construction, modernization, operation • Electrificationand maintenance of infrastructure that • Process Automationis required for zero tailpipe CO2e operation of vessels or the port’s own operations, as well as infrastructure dedicatedto transshipment

7. C O N S T R U C T I O N A N D R E A L E S TAT E
7.2 Renovation of existingbuildings• Construction and civil engineering works • Real Estateor preparation thereof

7.3 Installation, maintenance and • Individual renovation measures consist- • Real Estate
repair of energy efficiency
ing of installation, maintenance or repair
equipmentof energy efficiency equipment
7.4 Installation, maintenance and • Installation, maintenance and repair ofrepair of charging stations forcharging stations for electric vehicles inelectric vehicles in buildings (andbuildings and parking spaces attachedparking spaces attached toto buildings
buildings)• Real Estate

7.5 Installation, maintenance and • Installation, maintenance and repair ofrepair of instruments and devices
instruments and devices for measuring,for measuring, regulation andregulation and controlling energy percontrolling energy performance
formance of buildingsof buildings• Process Automation• Real Estate

7.6 Installation, maintenance, and • Installation, maintenance and repair ofrepair of renewable energy
renewable energy technologies, on-site
technologies• Electrification• Real Estate

7.7 Acquisition and ownership ofbuildings• Buying real estate and exercising owner- • Real Estate
ship of that real estate

8 . I N F O R M AT I O N & C O M M UN I C AT I O N
8.2 Data-driven solutions for
GHG emissions reductions• Development or use of ICT solutions that • Process Automation
are aimed at collecting, transmitting,storing data and at its modelling and use
where those activities are predominantly aimed at the provision of data andanalytics enabling GHG emission reductions; such ICT solutions may include, inter alia, the use of decentralized technologies (i.e., distributed ledger
technologies), Internet of Things (IoT),
5G and artificial intelligence

9 . P R O F E S S I O N A L , S C I E NT I F I C A N D T E C H N I C A L A C T I V I T I E S
9.1 Close to market research, de- • Research, applied research and experi• R&D
velopment and innovation
mental development of solutions, processes, technologies, business models
and other products dedicated to the reduction, avoidance or removal of GHG
emissions (RD&I) for which the ability to
reduce, remove or avoid GHG emissions
in the target economic activities has atleast been demonstrated in a relevant
environment, corresponding to at least
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Economic activity under
the EU Taxonomy

Description of economic
activity

125

Application to ABBGroup business areas
and functions

E N V I R O N M E NTA L O B J E C T I V E : T R A N S I T I O N T O A C I R C U L A R E C O N O M Y ( N E W LY A D D E D
IN 2023)
1 . M A NU FA C TU R I N G
1.2 Manufacture of electrical and • Manufacturing of electrical and elecelectronic equipment
tronic equipment for industrial, professional and consumer use• Motion• Process Automation

4 . I N F O R M AT I O N & C O M M UN I C AT I O N
4.1 Provision of IT/OT
data-driven solutions• The activity manufactures, develops, in- • Electrification
stalls, deploys, maintains, repairs or pro- • Motion
vides professional services, including• Process Automation
technical consulting for design or moni- • Robotics & Discrete
toring of specific software systems
Automation

5. SERVICES
5.1 Repair, refurbishment andremanufacturing• Repair, refurbishment and remanufactur- • Electrification
ing of goods that have been used for• Motion
their intended purpose before by a cus- • Process Automation
tomer (physical person or legal person) • Robotics & Discrete
Automation

5.2 Sale of spare parts• Sale of spare parts

5.3 Preparation for re-use of• Preparation for re-use of products andend-of-life products and productcomponents at the end of life
components
5.4 Sale of second-hand goods• Electrification• Motion• Robotics & Discrete
Automation• Motion• Sale of second-hand goods that have
• Motion
been used for their intended purpose
before by a customer (physical person orlegal person), possibly after repair, refurbishment or remanufacturing

ABB’s activities were mapped following the ABB product tree by business area, division, product group, product line and industry usage. Financial data was extracted
from various management reporting tools and reconciled to our consolidated figures
at the division or product group level, with the highest appropriate degree of granularity to subsequently assess the Substantial Contribution criteria.
In 2023 we reviewed and partially reassessed our 2022 eligible activity mapping basedon the developments of the Taxonomy. Overall, the list of eligible activities is more
extensive compared to 2022, as more activities relevant for ABB became covered by
the amended Climate Delegated Act and the Environmental Delegated Act. In particular, the newly added activity 3.20 “Manufacture, installation, and servicing of high,medium and low voltage electrical equipment for electrical transmission and distribution” under the climate change mitigation objective had a direct relevance for ABB
business activities and entailed a re-mapping of related activities.
Following the eligibility assessment, the alignment of all qualifying activities with theSubstantial Contribution (SC) criteria specified in the respective Delegated Acts wasanalyzed. This assessment was completed for our products, our real estate, our fleet
and R&D activities at the Group, business area, business division, and site levels.
The eligible activities that were newly released in 2023 will be assessed for alignment
in FY 2024, as foreseen by the EU Taxonomy Regulation.
In 2023, ABB made a substantial contribution to climate change mitigation to thefollowing activities:• 3.1 Manufacture of renewable energy technologies,• 3.3 Manufacture of low-carbon technologies for transport,• 3.4 Manufacture of batteries,• 3.5 Manufacture of energy efficiency equipment for buildings,• 4.9 Transmission and distribution of electricity,• 6.5 Transport by motorbikes, passenger cars and light commercial vehicles,• 6.14 Infrastructure for rail transport,

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• 6.15 Infrastructure enabling low-carbon road transport and public transport,• 6.16 Infrastructure enabling low-carbon water transport,• 7.2 Renovation of existing buildings,• 7.3 Installation, maintenance and repair of energy efficiency equipment,• 7.4 Installation, maintenance and repair of charging stations for electric vehicles inbuildings,• 7.5 Installation, maintenance and repair of instruments and devices for measuring,
regulation and controlling energy performance of buildings,• 7.6 Installation, maintenance and repair of renewable energy technologies, and• 7.7 Acquisition and ownership of buildings.
Do no significant harm (DNSH)
The DNSH criteria were analyzed for economic activities where ABB meets theSubstantial Contribution condition as listed above. Depending on the relevant environmental objective under which a certain activity is reported, ABB used a structured
assessment to document its compliance with the DNSH criteria for the other fiveenvironmental objectives. Based on the DNSH criteria for the relevant economic activities, our assessment was carried out at the activity, company, and site levels. For
site-specific criteria, we focused our analysis on sites that produce products meetingthe substantial contribution criteria.
Compared to last year, several generic and activity-specific DNSH criteria wereexpanded or amended by the new Delegated Acts, which we took into account in
our assessment.
Below, we set out our interpretation and describe the main analyses conducted. The
assessments confirm that we meet the requirements of the DNSH criteria.
1. Climate change adaptation
We conducted a screening of the relevant physical climate risks and performed an
initial climate risk and vulnerability assessment to identify which manufacturing
sites may be affected by physical climate risks during their expected lifetimes. The
climate risk and vulnerability analyses were based on Representative Concentration
Pathway (RCP) scenarios 4.5 and 8.5 up to the year 2052. Furthermore, we assessed
the relevance of identified climate risks on the economic activity and potential adaptation solutions that could reduce identified risks.
2. Sustainable use and protection of water and marine resources
We assessed our activities for relevant sites regarding the sustainable use and protection of water and marine resources by measuring the fulfillment of requirements
for water quality preservation, water stress avoidance and water impact assessment. Furthermore, the generic criteria were expanded in 2023 to include potential
impacts on marine waters. Our sites within this scope are certified according to ISO
14001 Environmental Management Systems and ISO 9001 Quality Management
Systems or provided other documentation which served as a basis for our assessment, supplemented by additional external data sources.
Where activity-specific DNSH criteria exist, we have assessed compliance on an activity basis. For example, the amended Climate Delegated Act has broadened water
protection criteria for the Activity 6.16 Infrastructure enabling low-carbon watertransport. Applicability of these criteria was assessed based on the nature of ABB’s
activities and products and associated impacts.
3. Transition to a circular economy
To help preserve the Earth’s resources for future generations, ABB takes acompany-wide approach to circularity.
We leverage the ABB Circularity Approach to meet the requirements of DNSH. By
2030, at least 80 percent of our products and solutions will be covered by our
Circularity Approach and evaluated against a clear set of KPIs, corresponding toeach stage of the product life cycle.

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Certain requirements for construction and demolition waste specific for activities
6.14 and 6.16 are deemed not applicable to relevant ABB products, since this is notpart of ABB operations.
4. Pollution prevention and control
The DNSH criteria require that the economic activity does not lead to the production, placing on the market or use of chemical substances listed in a variety of EU
chemical regulations and directives, such as EU Regulation 2019/1021 on Persistent
Organic Pollutants, EU Directive 2011/65 on the Restriction of the Use of Certain
Hazardous Substances in Electrical and Electronic Equipment (RoHS) or the EU
Regulation 1907/2006 concerning the Registration, Evaluation, Authorization andRestriction of Chemicals (REACH). ABB has robust company-wide processes in place
to ensure compliance with all applicable regulations.
With respect to the REACH-related requirements, we have noted new specifications
concerning a minimum concentration limit for substances of very high concern, except if “no other suitable alternative substances” are available on the market. The
relevant additional assessment and documentation required is not currently available, which for now prevents ABB from claiming compliance with these DNSH criteria for some of its products. ABB is committed to taking further steps to make thenecessary documentation available.
Furthermore, in our assessment, we assume that the approved exemptions to the
EU Directive on Restriction of Hazardous Substances in Electrical and Electronic
Equipment (RoHS) are valid also in the context of the DNSH. We understand that
there are different positions in the industry on interpretation of this point, as theTaxonomy legal text leaves some unclarity. We have therefore opted for an approach
adapted to business realities, as long as no official guidance to the opposite has
been released.
5. Protection and restoration of biodiversity and ecosystems
In order to verify adherence to the requirements for biodiversity and ecosystems,
the relevant sites in or near biodiversity-sensitive or -protected areas were identified and analyzed in a structured screening process. The EU Natura 2000 network,
UNESCO World Heritage sites, Key Biodiversity Areas, as well as other protected areas were considered. Most of our sites within this scope are certified according to
ISO 14001 Environmental Management Systems and ISO 9001 Quality Management
Systems, which provided the basis for our assessment, supplemented by additional
external data sources.
Furthermore, our manufacturing sites operate strictly in line with valid permits. Our
EU sites are already subject to relevant EU regulatory requirements relating to flora,
fauna, and habitats, whereas the non-EU sites underwent a case-by-case evaluation, which considered relevant national legislation related to the conservation of
habitats and species, as well as external environmental assessments.
Minimum safeguards
The minimum safeguards are based on Article 18 of the Taxonomy Regulation anddrawn from principles expressed by the OECD, the UN, the Fundamental Conventionsof the International Labour Organization and the International Bill of Human Rights.
ABB used a structured assessment to document its compliance with the minimum
safeguards. The assessment considered the recommendations for the operationalization of the minimum safeguards as set forth in the Final Report on Minimum
Safeguards from the EU Platform on Sustainable Finance (2022). Our assessment
was carried out separately for nine guiding principles: policies, due diligence and risk
assessment, addressing impacts and tracking remediation effectiveness, communication, grievance mechanisms, consumer interests, anti-corruption, competition,and taxation.
For further information, please refer to the chapters on Human rights and labor standards of this Sustainability Report.

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ABB financial and non-financial reporting
ABB prepares its consolidated financial statements in accordance with U.S. GAAP.
The EU Taxonomy Regulation references the KPI disclosure in accordance with
International Financial Reporting Standards (IFRS). For the accounting treatment of financial data required for the KPI disclosures, the two standards are largely converged,
with the following exceptions:• Non-order related research and development is expensed as incurred under U.S.
GAAP and therefore has been reported as part of the Opex KPI, and• Leases with a term of one year or less are expensed as incurred under U.S. GAAP and
not capitalized; therefore, these have also been reported as part of our Opex KPI.
The remaining differences between revenue recognition, tangible and intangible
assets, and leases are largely converged, and no material differences impacting thecomparability of data would be expected.
The results of our assessment of the Taxonomy eligibility and alignment of our offerings are summarized below. As our Taxonomy alignment is being reported for thesecond time, figures and comparable information from 2022 are also provided.
The calculation of the KPIs for year-end 2023 was based on financial data as available
on December 31, 2023.

—
Taxonomy KPI
disclosures

Turnover KPI
The proportion of Taxonomy-eligible and/or -aligned turnover has been calculated
as the part of net turnover derived from products and services associated with
Taxonomy-eligible and/or -aligned economic activities (numerator) divided by net
turnover (denominator) for the financial year ended December 31, 2023.
The denominator is the Group’s net turnover as presented in the Consolidated Income
Statements under the line item “Total revenues,” in accordance with U.S. GAAP. To calculate the numerator, we used the activity mapping described above and identified all
third-party revenues associated with the Taxonomy-eligible and/or -aligned activities.
For the year ended December 31, 2023, 46% of ABB revenues were Taxonomy-eligible,and 6% of ABB revenues were Taxonomy-aligned under the objective of climatechange mitigation (CCM), while 9% of ABB revenues were Taxonomy-eligible under theobjective of transition to a circular economy (CE). In some instances, we disaggregated revenues by product as well as industry usage to identify the Taxonomy-eligible
and aligned turnover. To avoid double-counting of those business activities that were
mapped to several activities, we calculated and reported their contribution to only
one economic activity.
In comparison, in 2022, 37% of ABB revenues were Taxonomy-eligible, and 10% of ABBrevenues were Taxonomy-aligned.
Large parts of ABB’s business activities are not directly covered by the Taxonomy’s
activities, although the new version of the Climate Delegated Act did extend more
to our sector. In addition, the alignment assessment for the activities under theEnvironmental Delegated Act is still ongoing and will be finalized in 2024.
Against this background, the majority of our Taxonomy-eligible turnover is reported under:(i) Manufacture, installation, and servicing of high, medium, and low voltage electrical equipment for electrical transmission and distribution (CCM 3.20),(ii) Manufacture of electrical and electronic equipment (CE 1.2), and(iii) Other low-carbon technologies (CCM 3.6).
While the majority of our Taxonomy-aligned turnover is reported under:(i) Renewable energy technologies (CCM 3.1),(ii) Manufacture of low carbon technologies for transport (CCM 3.3), and(iii) Energy efficiency equipment for buildings (CCM 3.5).

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Activities CCM 3.20 and CE 1.2 were newly released in 2023 and only eligibility isrequired for reporting in financial year 2023, explaining why no alignment is reported
this year.
Activity CCM 3.6 requires that the contribution to GHG emission reductions bemeasured using a life cycle GHG emission savings calculation that demonstrates thesavings “compared to the best-performing alternative technology, product or solution
available on the market”. For many of our significant electrical and industrial automation solutions, it was unclear how to define “the best-performing alternative” on themarket, as such products are not widely available. The Substantial Contribution (SC)criteria need further clarification to determine what part of our electrical and industrial automation solutions can fulfill them. For now, this Activity CCM 3.6 was deemed
not-aligned.
The increase of our Taxonomy-eligible turnover in 2023 compared to 2022 is reflecting
the expansion of newly added activities and environmental objectives that match
better our business focus.
The decrease in Taxonomy-aligned turnover between 2023 and 2022 is mainly due tothe following reasons:(i) Reclassification of some our 2022 aligned business activities to newly released
activities for which alignment is not required this year (for example, e-mobility),(ii) A decrease in the relative share of the turnover of business divisions and productgroups that contribute to Taxonomy-aligned activities compared to ABB’s overall
global turnover, and(iii) A change in the mix of industry applications of our product portfolio, which impacts our ability to meet certain alignment criteria (for example, the relative shareof transport and buildings has declined in 2023).
The details of the turnover KPI and breakdowns are provided on pages 133-135 of
the report.
Capital expenditure (Capex) KPIThe Capex KPI is defined as Taxonomy-eligible and/or -aligned Capex (numerator)
divided by total Capex (denominator) for the financial year ended December 31, 2023.
The total Capex used for the denominator includes total additions to tangible andintangible assets before depreciation, amortization and revaluations and impairments, as presented in Note 23 “Operating segment and geographic data” of theConsolidated Financial Statements, and from leases (finance and operating), as
presented in Note 14 “Leases,” as well as assets acquired as part of business combinations, as presented in Note 4 “Acquisitions, divestments and equity-accounted companies.” Taxonomy-eligible and/or -aligned Capex used for the numerator includes
Capex related to assets or processes that are associated with eligible or aligned
activities, and Capex related to the purchase of output for eligible or aligned activities and individual measures. No “Capex plans” in line with the Taxonomy regulation
were considered.
Within ABB, real estate initiatives and large investments are identified and analyzed
on a case-by-case basis and mapped to the relevant activities at the business areaand divisional levels. Capex KPI data collection is coordinated centrally. Investments
have been reported under the activity with which the Capex is associated.
For the year ended December 31, 2023, 64% of ABB Capex are Taxonomy-eligible, and
8% of ABB Capex are Taxonomy-aligned under the objective of climate change mitigation. In comparison, in 2022, 64% of ABB Capex were Taxonomy-eligible, and 14% of
ABB Capex were Taxonomy-aligned.
For all remaining expenditures we allocated Capex according to a factor based on thepercentage of eligible and aligned revenue per business division. For example, if 10%of the division’s revenues were eligible, 10% of the remaining Capex not specifically
mapped could be allocated to the activity associated with that revenue. By initially

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ABB SUSTA IN A BILIT Y REP ORT 202 3

A ppe ndix

mapping large projects and subsequently allocating the remaining Capex, we ensured
there was no double counting of Capex KPIs.
Against this background, the majority of our Taxonomy-eligible Capex is reported under:(i) Acquisition and ownership of buildings (CCM 7.7),(ii) Manufacture, installation, and servicing of high, medium and low voltage electrical equipment for electrical transmission and distribution (CCM 3.20), and(iii) Transport by motorbikes, passenger cars and light commercial vehicles (CCM 6.5).
While the majority of our Taxonomy-aligned Capex is reported under:(i) Transport by motorbikes, passenger cars and light commercial vehicles (CCM 6.5),(ii) Acquisition and ownership of buildings (CCM 7.7), and(iii) Installation, maintenance and repair of energy efficiency equipment (CCM 7.3).
Acquisition and ownership of buildings (CCM 7.7) of ABB’s real estate portfolio accounts for the biggest portion of Capex eligibility, with the share further increased asa result of reallocation from Activity 7.1. The main difference between Taxonomy- eligible and aligned Capex is mainly due to the following reasons:(i) Challenges in applying EU Energy Performance of Buildings Directive to ABB’s
global real estate portfolio outside of the EU,(ii) Limited availability of information on Energy Performance Certificates for our
global assets, and(iii) Energy certificates not meeting the Substantial Contribution criteria for energy
efficiency of buildings.
The real estate function carried out technical screenings on the largest investments
within EU. As a result of this activity, the investments related to the new ABB campus
in Mannheim proved to be Taxonomy-aligned thanks to the high energy performanceof the building, which is designed for minimizing energy use and GHG emissions.
The difference between Taxonomy-aligned Capex 2023 and Taxonomy-aligned Capex
2022 is mainly driven by the decrease of aligned Business combination. We could not
fully evaluate the Technical Screening Criteria of the business activities newly acquired in the last months of the year. The assessment of these new portfolio activities
will be completed during 2024 and reflected in our Taxonomy Turnover, Capex andOpex for 2024.
The details of the Capex KPI and breakdowns are provided on pages 136-139 of
the report.
Operating expenditure (Opex) KPIThe Opex KPI is defined as Taxonomy-eligible and/or -aligned Opex (numerator) divided by total Opex (denominator) for the financial year ended December 31, 2023.
Total Opex used for the denominator consists of direct non-capitalized costs related
to R&D, short-term leases (less than 1 year), repairs and maintenance, building renovation projects, and any other direct expenditures associated with the day-to-day
servicing of assets including property, plants and equipment. Direct costs for training
and other human resource needs are not included in either the denominator or the numerator. R&D is based on the line item “Non-Order related Research & Development”
in the Consolidated Income Statements. Other corresponding values can be derived
from our internal reporting systems but are not directly reconcilable with the figures
presented in the Consolidated Income Statements.
For the year ended December 31, 2023, 45% of Opex are Taxonomy-eligible and 6% of
ABB’s Opex are Taxonomy-aligned under the objective of climate change mitigation.
In comparison, in 2022, 40% of Opex were Taxonomy-eligible and 11% of ABB’s Opex
were Taxonomy-aligned.

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The Opex data aggregation was broken into two distinct processes. R&D wasallocated to Taxonomy-eligible activities identified in the activity mapping
phase described above. R&D managers working on projects not associated with
Taxonomy-eligible activities but intended to substantially reduce GHG emissions assessed their eligibility using the criteria under Activity 9.1 “Close to market research,development and innovation” where appropriate. For the remaining Opex, allocation
factors were applied to building renovation projects, maintenance and repair, andany other direct expenditures relating to the day-to-day servicing of real property
assets, as well as short-term leases. These expenses were considered for each divisionand multiplied by the percentage of eligible and aligned revenue in that division. Thisapproach was necessary due to a lack of more granular data on the same basis as
described above for the Capex KPI. With this process, we ensured there was no double
counting for the Opex KPI.
The majority of our Taxonomy-eligible Opex is reported under:(i) Manufacture, installation, and servicing of high, medium and low voltage electrical equipment for electrical transmission and distribution (CCM 3.20),(ii) Manufacture of electrical and electronic equipment (CE 1.2), and(iii) Energy efficiency equipment for buildings (CCM 3.5).
While the majority of our Taxonomy-aligned Opex is reported under:(i) Renewable energy technologies (CCM 3.1),(ii) Manufacture of low carbon technologies for transport (CCM 3.3), and(iii) Energy efficiency equipment for buildings (CCM 3.5).
The variation and difference of Taxonomy-eligible and aligned Opex between 2023
and 2022 are correlated with the Taxonomy-eligible and aligned turnover as Opex ismainly driven by the applied product group revenue allocation.
The details of the Opex KPI and breakdowns are provided on pages 140-142 of
the report.

2 0 2 3 A B B A S S E S S M E NT R E S U LT S UN D E R T H E E U TA XO N O M Y:
TU R N OV E R , C A P E X , O P E X K P I S

Capitalexpenditures

Operatingexpenditures

46% eligible

64% eligible

45% eligible

54% non-eligible

36% non-eligible

55% non-eligible

6% aligned

8% aligned

6% aligned

94% non-aligned

92% non-aligned

94% non-aligned

Turnover132—
Next steps

ABB SUSTA IN A BILIT Y REP ORT 202 3

A ppe ndix

This year was marked by the inclusion of new activities that can make a substantial
contribution to climate change mitigation and adaptation and by the official adoptionof the Environmental Delegated Act that focuses on the other four environmental
objectives.
Following these latest Taxonomy developments, we have already carried out aneligibility assessment for the newly released activities. In 2024, we will focus on implementing the required processes and expertise to assess our compliance with thetechnical screening criteria, to fulfill alignment requirements for these activities.
Looking ahead, the financial year 2024 will mark the beginning of mandatory compliance with the Corporate Sustainability Reporting Directive (CSRD) and the European
Sustainability Reporting Standards (ESRS). The CSRD and ESRS aim to standardize
sustainability reporting and further increase linkages between financial and sustainability information, and the mandatory assurance for the ABB Group’s sustainability reporting.
Recommendations and way forward
To be effective, the EU Taxonomy needs to take account of all economic activities thatplay an important role in the transition to net zero. We therefore welcome the factthat the EU Taxonomy now takes more account of many critical technologies, such as
electrical equipment, that are needed to enable a renewable energy system.
Nonetheless, we also see that there is still potential for a more consistent treatment
and inclusion of major readily available technologies which can contribute to a more
efficient management of electricity consumption, especially given that electrification
lies at the core of the EU decarbonization strategy. In our view, equipment aimed atenergy efficiency optimization and automation in industrial processes should be elevated to the level of a distinct enabling economic activity under the climate mitigation
objective. We also believe that the role of maintenance activities should be betterreflected in the context of circular economy, not only climate change mitigation.
We also believe that the existing EU legal framework is already well placed to set highquality standards for manufacturing processes. We therefore see no need for the EU
Taxonomy to go beyond existing legal obligations for manufacturers.
In summary, we view the EU Taxonomy as a significant step forward in developing acommon classification system for sustainable economic activities. We also understand how challenging this task is and that it remains a work in progress for sometime in the future. At ABB, we are determined to further support the development of
the EU Taxonomy, including through participation in the EU Taxonomy Stakeholder
Request Mechanism, as every year of Taxonomy implementation brings a better
understanding of this crucial legislation. Climate change is a global challenge that
requires a global approach. The end goal should be a common global classification
system for sustainable activities that is comprehensive, credible and relevant to theentire world. If the gaps in the EU Taxonomy are addressed, we believe that it has thepotential to serve as a model for such a system, as well as an important driver of truly
sustainable investments.

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ABB Group Economic activities 2023 in accordance with the EU Taxonomy
EU Taxonomy – Turnover

Climate Change
Adaptation

Water

Pollution

Circular Economy

Biodiversity

Minimum Safeguards

Proportion of
Taxonomy aligned(A.1.) or eligible (A.2.)
Turnover, 2022

Category enabling
activity

Category transitional
activity% Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL

Y;N;N/
EL

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

%

E

T

Biodiversity

Circular Economy

Pollution

Water

Climate Change
Adaptation

Climate Change
Mitigation

DNSH criteria (Does Not Significantly Harm)

Climate Change
Mitigation$million

Proportion of Turnover,2023

Substantial contribution criteria

TurnoverEconomic activities

2023

Code(s)Financial year 2023

A . TA X O N O M Y– E L I G I B L E A C T I V I T I E S
A . 1 . E N V I R O N M E NTA L LY S U S TA I N A B L E A C T I V I T I E S ( TA X O N O M Y- A L I G N E D)
3.1 Manufacture of renewableenergy technologies

CCM 3.1

717

2%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

4%

E

3.3 Manufacture of
low-carbon technologies fortransport

CCM 3.3

491

2%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

2%

E

3.4 Manufacture of batteries

CCM 3.4

88

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

3.5 Manufacture of energy efficiency equipment forbuildings

CCM 3.5

277

1%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

1%

E

4.9 Transmission and distribution of electricity

CCM 4.9

<0.5

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

6.14 Infrastructure for railtransport

CCM 6.14

162

1%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

6.15 Infrastructure enabling
low-carbon road transportand public transport

CCM 6.15

33

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

2%

E

6.16 Infrastructure enabling
low-carbon water transport

CCM 6.16

225

1%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

1%

E

7.6 Installation, maintenanceand repair of renewable energy technologies

CCM 7.6

<0.5

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

Turnover of environmentally sustainable activities (Taxonomy-aligned)
(A.1)

1 994

6%

6%

0%

0%

0%

0%

0%

Y

Y

Y

Y

Y

Y

Y

10%

Of which Enabling

1 832

6%

6%

0%

0%

0%

0%

0%

Y

Y

Y

Y

Y

Y

Y

10%

0

0%

0%

Y

Y

Y

Y

Y

Y

Y

0%

Of which TransitionalE
TAppe n dix

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Water

Pollution

Circular Economy

Biodiversity

Minimum Safeguards

Proportion of
Taxonomy aligned(A.1.) or eligible (A.2.)
Turnover, 2022

Category enabling
activity

Category transitional
activity

Y;N;N/EL

Climate Change
Adaptation% Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL

Biodiversity

DNSH criteria (Does Not Significantly Harm)

Circular Economy

Pollution

Water

Climate Change
Mitigation←

Climate Change
Mitigation$million

Proportion of Turnover,2023

Substantial contribution criteria

TurnoverEconomic activities

2023

Code(s)Financial year 2023≡

Climate Change
Adaptation

ABB SUSTA IN A BILIT Y REP ORT 202 3

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

%

E

T

A . 2 . TA XO N O M Y- E L I G I B L E B UT N O T E N V I R O N M E NTA L LY S U S TA I N A B L E A C T I V I T I E S ( N O T TA XO N O M Y- A L I G N E D A C T I V I T I E S )EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL
3.1 Manufacture of renewableenergy technologies

CCM 3.1

43

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

3.2 Equipment for the production and use of hydrogen

CCM 3.2

3

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

3.3 Manufacture of
low-carbon technologies fortransport

CCM 3.3

93

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

3%

3.6 Manufacture of otherlow-carbon technologies

CCM 3.6

942

3%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

24%

3.19 Manufacture of rail
constituentsCCM 3.19

<0.5

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

3.20 Manufacture, installation, and servicing of high,medium and low voltage electrical equipment for electricaltransmission and distribution

CCM 3.20

8 755

27%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

6.16 Infrastructure enabling
low-carbon water transport

CCM 6.16

8

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

8.2 Data-driven solutions for
GHG emissions reductions

CCM 8.2

115

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

1.2 Manufacture of electricaland electronic equipment

CE 1.2

1 692

5%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

4.1 Provision of IT/OT
data-driven solutions andsoftwareCE 4.1

35

0%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

5.1 Repair, refurbishment andremanufacturing

CE 5.1

464

1%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

5.2 Sale of spare-parts

CE 5.2

767

2%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

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Pollution

Circular Economy

Biodiversity

Minimum Safeguards

Proportion of
Taxonomy aligned(A.1.) or eligible (A.2.)
Turnover, 2022

Category enabling
activity

Category transitional
activity

Y;N;N/EL

Water

Biodiversity% Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL

Climate Change
Adaptation

DNSH criteria (Does Not Significantly Harm)

Circular Economy

Pollution

Water

Climate Change
Mitigation←

Climate Change
Mitigation$million

Proportion of Turnover,2023

Substantial contribution criteria

TurnoverEconomic activities

2023

Code(s)Financial year 2023≡

Climate Change
Adaptation

ABB SUSTA IN A BILIT Y REP ORT 202 3

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

%

E

T

5.3 Preparation of re-use of
end-of-life products andproduct components

CE 5.3

<0.5

0%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

5.4 Sale of second-hand
goods

CE 5.4

<0.5

0%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

Turnover of Taxonomy-eligible but
not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2)

12 919

40%

31%

0%

0%

0%

9%

0%

27%

Total of Taxonomy eligible activities(A.1+A.2)

14 913

46%

37%

0%

0%

0%

9%

0%

37%

B . TA XO N O M Y- N O N - E L I G I B L E A C T I V I T I E S
Turnover of
Taxonomy-non-eligible activities (B)17 322

54%

Total (A+B)

32 235100%

Due to rounding, numbers presented may not add to the totals provided.

Substantial Contribution Criteria
Y – Yes, Taxonomy eligible and Taxonomy-aligned activity with the relevant environmental objective
N – No, Taxonomy eligible but not Taxonomy-aligned
activity with the relevant environmental objective
N/EL – not eligible, Taxonomy non-eligible activity forthe relevant environmental objective
EL – eligible, Taxonomy eligible activity for the relevant
objective
DNSH criteria
Y – DNSH criteria are met
N – DSNH criteria are not met

Minimum Safeguards
Y – Minimum safeguards are met
N – Minimum safeguards are not met

CCM: Climate Change Mitigation
CCA: Climate Change Adaptation
WTR: Water and Marine Resources
CE:
Circular Economy
PPC: Pollution Prevention and Control
BIO: Biodiversity and ecosystems

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ABB Group Economic activities 2023 in accordance with the EU Taxonomy
EU Taxonomy – CAPEXClimate Change
Adaptation

Water

Pollution

Circular Economy

Biodiversity

Minimum safeguards

Proportion of
Taxonomy aligned(A.1.) or eligible (A.2.)
CapEx, 2022

Category enabling
activity

Category transitional
activity% Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL

Y;N;N/
EL

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

%

E

T

Biodiversity

Circular Economy

Pollution

Water

Climate Change
Adaptation

Climate Change
Mitigation

DNSH criteria (Does Not Significantly Harm)

Climate Change
Mitigation$million

Proportion of CapEx,
2023

Substantial contribution criteria

CapEx

Economic activities

2023

Code(s)Financial year 2023

A . TA X O N O M Y- E L I G I B L E A C T I V I T I E S
A . 1 . E N V I R O N M E NTA L LY S U S TA I N A B L E A C T I V I T I E S ( TA X O N O M Y- A L I G N E D)
3.1 Manufacture of renewableenergy technologies

CCM 3.1

1

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

3.3 Manufacture of
low-carbon technologies fortransport

CCM 3.3

9

1%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

1%

E

3.4 Manufacture of batteries

CCM 3.4

<0.5

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

3.5 Manufacture of energy efficiency equipment forbuildings

CCM 3.5

1

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

4.9 Transmission and distribution of electricity

CCM 4.9

<0.5

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

6.5 Transport by motorbikes,
passenger cars and light commercial vehicles

CCM 6.5

36

3%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

2%

6.14 Infrastructure for railtransport

CCM 6.14

<0.5

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

6.15 Infrastructure enabling
low-carbon road transportand public transport

CCM 6.15

<0.5

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

10%

E

6.16 Infrastructure enabling
low-carbon water transport

CCM 6.16

<0.5

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

7.2 Renovation of Existing
Buildings

CCM 7.2

1

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

7.3 Installation, maintenanceand repair of energy efficiency
equipment

CCM 7.3

11

1%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

7.4 Installation, maintenanceand repair of charging stations for electric vehicles inbuildings (and parking spaces
attached to buildings)

CCM 7.4

2

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

T

T

Appe n dix

PR E VIOUS CH APTE R

137

Pollution

Circular Economy

Biodiversity

Minimum safeguards

Proportion of
Taxonomy aligned(A.1.) or eligible (A.2.)
CapEx, 2022

Category enabling
activity

Category transitional
activity

Y;N;N/
EL

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

%

E

T

Biodiversity

Water% Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL

Climate Change
Adaptation

DNSH criteria (Does Not Significantly Harm)

Circular Economy

Pollution

Water

Climate Change
Mitigation←

Climate Change
Mitigation$million

Proportion of CapEx,
2023

Economic activities

TABLE OF CONTE NTS

Substantial contribution criteria

CapEx

2023

Code(s)Financial year 2023≡

Climate Change
Adaptation

ABB SUSTA IN A BILIT Y REP ORT 202 3

7.5 Installation, maintenanceand repair of instruments anddevices for measuring, regulation and controlling energy
performance of buildings

CCM 7.5

4

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

7.6 Installation, maintenanceand repair of renewable energy technologies

CCM 7.6

7

1%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

7.7 Acquisition and ownershipof buildings

CCM 7.7

21

2%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

8.2 Data-driven solutions for
GHG emissions reductions

CCM 8.2

0

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

CapEx of environmentally sustainable activities (Taxonomy-aligned)
(A.1)

92

8%

8%

0%

0%

0%

0%

0%

Y

Y

Y

Y

Y

Y

Y

14%

Of which Enabling

34

3%

3%

0%

0%

0%

0%

0%

Y

Y

Y

Y

Y

Y

Y

12%

Of which Transitional

36

3%

3%

Y

Y

Y

Y

Y

Y

Y

2%

A . 2 . TA XO N O M Y- E L I G I B L E B UT N O T E N V I R O N M E NTA L LY S U S TA I N A B L E A C T I V I T I E S ( N O T TA XO N O M Y- A L I G N E D A C T I V I T I E S )EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL
3.1 Manufacture of renewableenergy technologies

CCM 3.1

13

1%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

2%

3.2 Equipment for the production and use of hydrogen

CCM 3.2

<0.5

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

3.3 Manufacture of
low-carbon technologies fortransport

CCM 3.3

4

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

2%

3.4 Manufacture of batteries

CCM 3.4

2

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

3.5 Manufacture of energy efficiency equipment forbuildings

CCM 3.5

23

2%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

1%

3.6 Manufacture of otherlow-carbon technologies

CCM 3.6

7

1%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

9%

3.19 Manufacture of rail
constituentsCCM 3.19

<0.5

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

3.20 Manufacture, installation, and servicing of high,medium and low voltage electrical equipment for electricaltransmission and distribution

CCM 3.20

243

20%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

E

E
T

Appe n dix

TABLE OF CONTE NTSPR E VIOUS CH APTE R

138

Water

Pollution

Circular Economy

Biodiversity

Minimum safeguards

Proportion of
Taxonomy aligned(A.1.) or eligible (A.2.)
CapEx, 2022

Category enabling
activity

Category transitional
activity

Y;N;N/EL

Climate Change
Adaptation% Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL

Biodiversity

DNSH criteria (Does Not Significantly Harm)

Circular Economy

Pollution

Water

Climate Change
Mitigation←

Climate Change
Mitigation$million

Proportion of CapEx,
2023

Substantial contribution criteria

CapEx

Economic activities

2023

Code(s)Financial year 2023≡

Climate Change
Adaptation

ABB SUSTA IN A BILIT Y REP ORT 202 3

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

%

E

T

4.9 Transmission and distribution of electricity

CCM 4.9

<0.5

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

6.5 Transport by motorbikes,
passenger cars and light commercial vehicles

CCM 6.5

44

4%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

2%

6.14 Infrastructure for railtransport

CCM 6.14

3

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

6.15 Infrastructure enabling
low-carbon road transportand public transport

CCM 6.15

<0.5

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

6.16 Infrastructure enabling
low-carbon water transport

CCM 6.16

2

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

7.1 Construction of newbuildings

CCM 7.1

0

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

7%

7.2 Renovation of Existing
Buildings

CCM 7.2

24

2%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

1%

7.3 Installation, maintenanceand repair of energy efficiency
equipment

CCM 7.3

3

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

1%

7.4 Installation, maintenanceand repair of charging stations for electric vehicles inbuildings

CCM 7.4

1

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

7.5 Installation, maintenanceand repair of instruments anddevices for measuring, regulation and controlling energy
performance of buildings

CCM 7.5

<0.5

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

7.6 Installation, maintenanceand repair of renewable energy technologies

CCM 7.6

2

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

7.7 Acquisition and ownershipof buildings

CCM 7.7

267

22%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

23%

8.2 Data-driven solutions for
GHG emissions reductions

CCM 8.2

1

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

1.2 Manufacture of electricaland electronic equipment

CE 1.2

26

2%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

Appe n dix

TABLE OF CONTE NTSPR E VIOUS CH APTE R

139

Water

Pollution

Circular Economy

Biodiversity

Minimum safeguards

Proportion of
Taxonomy aligned(A.1.) or eligible (A.2.)
CapEx, 2022

Category enabling
activity

Category transitional
activity

Y;N;N/EL

Climate Change
Adaptation% Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL

Biodiversity

DNSH criteria (Does Not Significantly Harm)

Circular Economy

Pollution

Water

Climate Change
Mitigation←

Climate Change
Mitigation$million

Proportion of CapEx,
2023

Substantial contribution criteria

CapEx

Economic activities

2023

Code(s)Financial year 2023≡

Climate Change
Adaptation

ABB SUSTA IN A BILIT Y REP ORT 202 3

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

%

E

T

4.1 Provision of IT/OT
data-driven solutions andsoftwareCE 4.1

<0.5

0%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

5.1 Repair, refurbishment andremanufacturing

CE 5.1

5

0%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

5.2 Sale of spare-parts

CE 5.2

8

1%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

5.3 Preparation of re-use of
end-of-life products andproduct components

CE 5.3

<0.5

0%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

5.4 Sale of second-hand
goods

CE 5.4

<0.5

0%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

CapEx of Taxonomy-eligible but notenvironmentally sustainable activities (not Taxonomy-aligned activities) (A.2)

680

56%

53%

0%

0%

0%

3%

0%

50%

Total CapEx of Taxonomy eligible activities (A.1+A.2)

772

64%

61%

0%

0%

0%

3%

0%

64%

B . TA XO N O M Y- N O N - E L I G I B L E A C T I V I T I E S
CapEx of
Taxonomy-non-eligible activities (B)Total (A+B)

436

36%

1 208

100%

Due to rounding, numbers presented may not add to the totals provided.

ABB SUSTA IN A BILIT Y REP ORT 202 3

Appe n dix≡

TABLE OF CONTE NTS←PR E VIOUS CH APTE R

140

ABB Group Economic activities 2023 in accordance with the EU Taxonomy
EU Taxonomy – OPEX
Financial year 2023

2023

Substantial contribution criteria

DNSH criteria (Does Not Significantly Harm)

Climate Change
Adaptation

Water

Pollution

Circular Economy

Biodiversity

Minimum Safeguards

Proportion of
Taxonomy aligned(A.1.) or eligible (A.2.)
OpEx, 2022

Category enabling
activity

Category transitional
activity

Y;N;N/
EL

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

%

E

T

Biodiversity

Circular Economy

Pollution

Water

Climate Change
Adaptation

Climate Change
Mitigation% Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL

Climate Change
Mitigation$million

Proportion of OpEx,
2023

OpEx

Code(s)Economic activities

A . TA X O N O M Y- E L I G I B L E A C T I V I T I E S
A . 1 . E N V I R O N M E NTA L LY S U S TA I N A B L E A C T I V I T I E S ( TA X O N O M Y- A L I G N E D)
3.1 Manufacture of renewableenergy technologies

CCM 3.1

39

2%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

4%

E

3.3 Manufacture of
low-carbon technologies fortransport

CCM 3.3

25

1%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

3.4 Manufacture of batteries

CCM 3.4

10

1%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

3.5 Manufacture of energy efficiency equipment forbuildings

CCM 3.5

15

1%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

2%

E

4.9 Transmission and distribution of electricity

CCM 4.9

<0.5

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

6.14 Infrastructure for railtransport

CCM 6.14

10

1%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

6.15 Infrastructure enabling
low-carbon road transportand public transport

CCM 6.15

1

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

5%

E

6.16 Infrastructure enabling
low-carbon water transport

CCM 6.16

3

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

7.6 Installation, maintenanceand repair of renewable energy technologies

CCM 7.6

<0.5

0%

Y

N/EL

N/EL

N/EL

N/EL

N/EL

Y

Y

Y

Y

Y

Y

Y

0%

E

OpEx of environmental sustainable
activities (Taxonomy-aligned activities) (A.1)

103

6%

6%

0%

0%

0%

0%

0%

Y

Y

Y

Y

Y

Y

Y

11%

Of which Enabling

94

5%

5%

0%

0%

0%

0%

0%

Y

Y

Y

Y

Y

Y

Y

11%

Of which Transitional

0

0%

0%

Y

Y

Y

Y

Y

Y

Y

0%

E
T

ABB SUSTA IN A BILIT Y REP ORT 202 3

Appe n dix

Financial year 2023

≡

2023

TABLE OF CONTE NTS

Substantial contribution criteria←

PR E VIOUS CH APTE R

141

DNSH criteria (Does Not Significantly Harm)

Water

Pollution

Circular Economy

Biodiversity

Minimum Safeguards

Proportion of
Taxonomy aligned(A.1.) or eligible (A.2.)
OpEx, 2022

Category enabling
activity

Category transitional
activity

Y;N;N/EL

Climate Change
Adaptation

Biodiversity

Circular Economy

Pollution

Water

Climate Change
Adaptation

Climate Change
Mitigation% Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL

Climate Change
Mitigation$million

Proportion of OpEx,
2023

OpEx

Code(s)Economic activities

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

%

E

T

A . 2 . TA XO N O M Y- E L I G I B L E B UT N O T E N V I R O N M E NTA L LY S U S TA I N A B L E A C T I V I T I E S ( N O T TA XO N O M Y- A L I G N E D A C T I V I T I E S )EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL
3.1 Manufacture of renewableenergy technologies

CCM 3.1

11

1%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

3.2 Equipment for the production and use of hydrogen

CCM 3.2

3

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

3.3 Manufacture of low carbon
technologies for transport

CCM 3.3

10

1%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

2%

3.5 Manufacture of energy efficiency equipment forbuildings

CCM 3.5

38

2%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

1%

3.6 Manufacture of otherlow-carbon technologies

CCM 3.6

21

1%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

22%

3.19 Manufacture of rail
constituentsCCM 3.19

<0.5

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

3.20 Manufacture, installation, and servicing of high,medium and low voltage electrical equipment for electricaltransmission and distribution

CCM 3.20

469

26%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

N/A

6.14 Infrastructure for railtransport

CCM 6.14

<0.5

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

6.15 Infrastructure enabling
low-carbon road transportand public transport

CCM 6.15

0

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

1%

6.16 Infrastructure enabling
low-carbon water transport

CCM 6.16

<0.5

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

7.7 Acquisition and ownershipof buildings

CCM 7.7

2

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

0%

8.2 Data-driven solutions for
GHG emissions reductions

CCM 8.2

16

1%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

1%

9.1 Close to market research,development and innovation

CCM 9.1

2

0%

EL

N/EL

N/EL

N/EL

N/EL

N/EL

1%

1.2 Manufacture of electricaland electronic equipment

CE 1.2

99

5%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

4.1 Provision of IT/OT
data-driven solutions andsoftwareCE 4.1

34

2%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

ABB SUSTA IN A BILIT Y REP ORT 202 3

Appe n dix

Financial year 2023

≡

2023

TABLE OF CONTE NTS

Substantial contribution criteria←

PR E VIOUS CH APTE R

142

DNSH criteria (Does Not Significantly Harm)

5.1 Repair, refurbishment andremanufacturing

CE 5.1

5.2 Sale of spare-parts
5.3 Preparation of re-use of
end-of-life products andproduct components
5.4 Sale of second-hand
goods

Water

Pollution

Circular Economy

Biodiversity

Minimum Safeguards

Proportion of
Taxonomy aligned(A.1.) or eligible (A.2.)
OpEx, 2022

Category enabling
activity

Category transitional
activity

Y;N;N/EL

Climate Change
Adaptation

Biodiversity

Circular Economy

Pollution

Water

Climate Change
Adaptation

Climate Change
Mitigation% Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL Y;N;N/EL

Climate Change
Mitigation$million

Proportion of OpEx,
2023

OpEx

Code(s)Economic activities

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

%

E

T

13

1%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

CE 5.2

9

0%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

CE 5.3

<0.5

0%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

CE 5.4

<0.5

0%

N/EL

N/EL

N/EL

N/EL

EL

N/EL

N/A

OpEx of Taxonomy-eligible but notenvironmentally sustainable activities (not Taxonomy-aligned activities) (A.2)

725

39%

31%

0%

0%

0%

8%

0%

29%

Total OpEx of Taxonomy eligible activities (A.1+A.2)

829

45%

37%

0%

0%

0%

8%

0%

40%

B . TA XO N O M Y- N O N - E L I G I B L E A C T I V I T I E SOpEx of
Taxonomy-non-eligible activities (B)

1 011

55%

Total (A+B)

1 839

100%

Due to rounding, numbers presented may not add to the totals provided.

≡

TABLE OF CONTE NTS←PR E VIOUS CH APTE R

143—
TCFD recommendations report—
Climate-related
governance

ABB’s Board of Directors reviews and approves the Sustainability Agenda and related
targets, including climate targets. The Governance and Nomination Committee (GNC)
is responsible for overseeing ABB’s Sustainability Agenda (including corporate social
responsibility, health, safety, and environment). The Compensation Committee ensures that ABB’s executive compensation policies are appropriately aligned with its
Sustainability Agenda. The business and sustainability expertise and experience of
our Board members enables them to apply the right judgement and make informed
decisions about sustainability and climate matters (see also competence matrix in thechapter “Corporate Governance summary”).
The ABB Group Executive Committee validates the Sustainability Agenda andits implementation. It is responsible for reviewing strategic targets, including
climate-related targets as well as for ensuring that a sustainability culture is embedded in our business decision making. This includes both assessing and managing climate-related risks and opportunities. Topics related to the Sustainability
Agenda were discussed in each Executive Committee meeting held in 2023 . The
Chief Communications and Sustainability Officer, who is a member of the Executive
Committee, holds functional responsibility for sustainability and reports together
with the Group Head of Sustainability to the GNC on topics and progress related to
the Sustainability Agenda.
The Sustainability Council is the operational body that oversees implementation of
the Sustainability Agenda, reviews developments and monitors progress towardtargets, including climate targets. As of 2023, all business areas are represented in the
Sustainability Council by their heads of strategy as well as by their respective sustainability leads. This has further strengthened the role of the Sustainability Council.
For more details on ABB’s sustainability governance, please refer to the chapter“Sustainability governance”.

—
Climate-related
strategy

We continuously identify, monitor, and manage climate-related risks and opportunities over the short-term (1 year), medium-term (2–5 years), and long-term (5–30
years). They fall into two major categories: risks related to the physical impacts ofclimate change, and risks related to the transition toward a low-carbon economy,
which are already present to some extent. As global temperatures rise, acute physicalrisks are more likely to occur and may become more severe. Additionally, new risks
may emerge. Long-term climate risks and opportunities are assessed in our analysesof science-based climate and emissions scenarios. These analyses help us understand how our global emissions in our value chain must progress in the period up to
2050. They serve as a basis for assessing options and costs, as well as for setting
long-term targets.
Physical risks
Physical risks are direct effects from climate change and can result in extreme
weather events, such as hurricanes or floods or in long-term chronic climate conditions like sustained higher temperatures leading to rising sea levels or more severe
heat waves. These risks can have financial implications through damage to assets,
reduced availability of resources or disruption of operations and supply chains.
For example, ABB sites around the world are vulnerable to water-related incidents
caused by extreme weather events, such as flooding from heavy rain, storms, or14 4

ABB SUSTA IN A BILIT Y REP ORT 202 3

A ppe ndix

hurricanes. These events may result in disturbances or interrupt production forseveral months at a time and can also affect our supply chain. If the production of
key suppliers is interrupted, as has happened in the past due to severe flooding inSouth-East Asia, our own production and revenues may be impacted. Upstream risks
related to climate change are business continuity risks that are typically part of theongoing dialogue that ABB has with its suppliers.
Transitional risks
As the world endeavors to transition towards a lower-carbon economy, the growing
challenge of climate change may result in significant changes to the external environment in which we operate. Measures taken to mitigate and adapt to climate change
could lead to substantial policy, legal, technological, and market changes that may
impact our financial position, strategic decisions, and the way we operate.
An example of emerging regulation would be carbon pricing mechanisms. Currently,
ABB is already paying carbon taxes in several countries, particularly in Europe, andcarbon tax legislation, as well as the carbon price, are likely to increase in the coming
years. The higher our scope 1 emissions, the more carbon tax we pay. Therefore,
reducing our GHG emissions is not only good for the environment, but also for
our business.
Climate-related opportunities
Climate change can also represent opportunities for growth, improvements, and value
creation. With our purpose, strategy and operating model, we believe that ABB is best
positioned to help the world mitigate and adapt to climate change and create financial value at the same time. By increasing energy efficiency, switching to renewableenergy sources and moving toward circular business models, we are able to reduce
costs and improve resilience even in times of crisis. With our leading technologies, we
can make an even bigger impact in our customers’ operations. By helping them reduceenergy and resource consumption and avoid emissions, we make them more sustainable while driving further demand for our products, solutions and services.
To help our customers reduce GHG emissions, we have identified products andsolutions from our portfolio that deliver emissions reductions. These include
energy-efficient electric motors and drives and advanced automation, digitaland electrification solutions for energy-intensive industries. As many customers
lack expertise in energy management, ABB offers an end-to-end approach and aone-stop-shop for building automation and smart energy management solutions.
These include the ABB Ability™ Building Ecosystem, NeoGear low-voltage switchgear
solutions and the ABB Ability™ Energy and Asset Manager. Crucially, we also support
the energy transition with technologies that integrate power from intermittent renewable sources into the electricity grid. For ABB, this represents a significant opportunity in both the short and medium terms.
We assess the impact of climate-related risks on ABB and its value chain and what
they could mean in terms of financial costs, as well as how we can mitigate them.
At the same time, we also consider the opportunities that such risks create for us
as a business to drive value creation. The identification of climate- related business
impacts and effects are also part of our strategic planning process, as ABB has clearly
identified climate change as a long-term, global challenge that requires low-carbon,
high efficiency solutions. Our business strategy is supported by our long-term commitment to innovation and technology leadership in areas such as high-efficiency
electrification, automation and control systems, robotics and motion solutions,and technologies to capture the full potential of renewable energies. Through our
Sustainability Agenda and by joining the “Business Ambition for 1.5°C” pledge, we arecommitted to achieving net-zero value chain GHG emissions by 2050 in line with the
SBTi Net-Zero Standard.
We can significantly contribute towards a low-carbon society through our products,
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market opportunities, which include smart building solutions, urban infrastructure,clean energy, energy efficiency and mobility systems, are projected to be worth morethan $4.7 trillion in 2030 (IEA World Energy Outlook 2023).
The following table provides an overview of some of the main risks and opportunities that we have identified through our risk management processes (see more
under “Risk and opportunity management”), what they mean for us and how we deal
with them:Category

Where it impacts
our value chainTimehorizonLikelihood Severity1(Potential) Impact

Measures taken

LikelyFlooding can damage
ABB’s physical infrastructure, disrupt logistics and the supply
chain, and decreased
production capacity, resulting in reduced
revenue.

Comprehensive emergency response plan including contingencies for potential flood and storm
events, regular maintenance of critical infrastructure, investment in resilient infrastructure andequipment, awareness measures for employees.

RISKS
PHYS IC AL
Acute
Flood, Storms

Direct operations Near-term

MediumChronic
Increasing heatand precipitation Stresses

Direct operations Long-term More
Medium(emerging) Likely thannotThis could result in
While the majority of our manufacturing prohigher water risks, pro- cesses are not water- intensive, we work on imduction capacity disrup- proving water management practices to reducetions, and increased ex- water consumption, minimize water risks, andposure to extreme
maintain business continuity as well as enhancing
weather events caused resilience by diversifying suppliers and identifyby rainfall variability and ing alternative transportation routes.
water scarcity in certain
regions.

TR ANS ITION AL
Policy and legal risk
Carbon pricing

Direct operations MediumLikely
term(emerging)

MediumIncreased direct costs

Investments in energy efficiency and emission
reduction

Direct operations/ MediumLikely
Upstreamterm(emerging)

MediumBased on the geoWe proactively identify, assess and address susgraphic location of
tainability issues at our high-risk suppliers
our suppliers, comthrough our SSBM.
modify risk exists, which
can result in a limited
supply of products or increased purchase prices.

Direct operations MediumLow
term(emerging)

MediumLoss of reputation
if we fail to meetclimate-related regulations or stakeholder
expectations.

Market risk
Supply chain
disruption

Reputation risk
Stakeholder
expectations

Our Purpose, strategy and operating model help
us build a sustainable business. We directly engage with our stakeholders, build partnerships
and actively support and disclose transparently
according to climate related initiatives, such as
TCFD and CDP.

O P P O R TUN I T I E S
Products and services
Low emission
goods andservices

Downstream

MediumCertain
term(­current/
emerging)

High

Increased revenues
R&D investments in offerings that help customers
resulting from increased reduce GHG emissions
demand for products
and services

Carbon pricing

Downstream

MediumLikely
term(emerging)High

Customers facing inR&D investments in offerings that help customers
creased costs due toreduce GHG emissions
carbon pricing are keen
to reduce their GHG
emissions by buying andusing our offering.

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146

Category

Where it impacts
our value chainTimehorizonLikelihood Severity1

A ppe ndix

(Potential) Impact

Measures taken

Reduced direct costs

Investments in energy efficiency measures in ourown operations (e.g., HVAC systems, energy efficient lighting, compressed air systems, building
improvements, specific manufacturing process
improvements).

Resource efficiency
Energy andemissions
reduction

Direct operations Short-term Certain(current)

MediumDirect operations Mediumterm(current)

MediumReduced costs stability
costs,
in energy supply
increased

Investments in onsite Solar PV will lead to cost reductions. Renewable sourcing will reduce
emissions.

High

Technology development related to climatechange is a big opportunity for ABB. Examples areelectric motors and drives for the highest energy
efficiency in line with Ecodesign Regulation (EU2019/1781) or the rapid development ofEV-charging for electric vehicles, as the roadtransport sector is shifting away from fossil fuels.

Energy source
Shifting towards renewable energy
sourcesCertainvolatility

Markets and technology
Transition to alower-carbon
economy1

Direct operations Short toCertainlong-term(current/
emerging)

Matching our customer
offering with market
and technology trends

Scale: low, medium, high.

In addition to the assessment of our current exposure to natural hazards, we
reviewed 3 RCP (Representative Concentration Pathway) scenarios of the IPCC
(Intergovernmental Panel on Climate Change) to inform our understanding of physicalrisks linked to our operations and to our 2030 sustainability strategy. In particular,
RCP 2.6, 4.5 and 8.5 were reviewed for a time horizon of up to 30 years. We used ahigh-resolution risk tool of a major reinsurer to assess 328 sites that are considered of critical importance to our worldwide operations. The sites in scope cover
the four main business areas in varying proportions and are located in 59 countries
represented by manufacturing and non-manufacturing sites distributed over all
the continents.
The tool provides data modeling and analysis at location level covering 19 sub-perils.
The risk is identified based on physics-based hazard modelling, historical events insurance claims, geographical conditions, and climatic parameters, in addition to factoring the potential climate change influence on the increasing frequency and severityof natural hazards in future scenarios.
The table above depicts the results of the assessment based on the RCP 4.5 scenario,
in which we can expect a moderate increase in global temperatures, changes in precipitation patterns, and a rise in sea levels, which may still cause significant impacts
to our business. However, the impacts are likely to be less severe than under scenariosof higher greenhouse gas emissions, such as RCP 8.5.
The findings in the above table illustrated a consistent pattern of increased risk under
different scenarios, such as floods and storms in the short-term. Long-term risks
included rising temperatures and precipitation. Our analysis indicates that the hazards identified are expected to have a “Medium” impact under the RCP 4.5 scenario.
However, it is important to note that the severity of these hazards may increase underthe more extreme RCP 8.5 scenario.

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At ABB, these risks could lead to infrastructure damage, logistical disruptions, andsupply chain interruptions, resulting in decreased production capacity and reduced
revenue in the short and medium-term. In the long-term, higher water risks, production capacity disruptions, and increased exposure to extreme weather events, causedby rainfall variability and water scarcity, may also impact revenue streams.
To safeguard our operations against flood and storm damage for short- andmedium-term risks, we conducted a thorough risk assessment to identify vulnerable
facilities and developed a comprehensive emergency response plan that includes contingencies for potential events. We invest in resilient infrastructure and perform regular maintenance of critical equipment. To ensure employee safety, we educate themon the risks of flood and storm damage and how to respond in emergency situations.
These measures guarantee business continuity and minimize the impact of flood andstorms on our operations.
Our sites are prepared for emergencies to keep our people safe and maintain business
continuity. These analyses feed into our business continuity plans and preparations.
For example, we use the World Resources Institute’s (WRI) Aqueduct global waterrisk tool to assess our facilities according to the level of baseline water stress of thelocal watershed. Of the 338 ABB locations mapped in 2023, 61 face an extremely highlevel of water stress, 55 face a high level and 47 face a medium-to-high level of water
stress. The tool not only helps us assess water stress at our sites, but also the levels ofgroundwater depletion, flood risk and seasonal variability of water availability at oursites, which is extremely useful for our work in managing water risk.
ABB has also used different scenarios to understand the speed at which we need todecarbonize our own operations to be in line with scientific estimates. This helped
us set science-based targets in line with the 1.5°C trajectory of the Paris Agreement,
in which ABB commits to reduce absolute scope 1 and 2 GHG emissions by at least
80 percent between 2019 and 2030 and a 90% Scope 1, 2 and 3 reductions by 2050
versus 2022.
Many of ABB’s technologies directly address the causes of climate change, and ourmarket opportunity and value proposition assessments and product/systems development roadmaps rely directly or indirectly on climate-related scenario analyses
and expectations linked to climate-related policy and standards development. For
longer-term trends, the analysis shows that ABB is well positioned in very attractive
markets. We will further intensify our work on climate risk modelling in the coming
year to be able to provide an even more comprehensive analysis including financial
quantification of risks and opportunities.

—
Climate risk
management

ABB includes climate-related risks in its company-wide Enterprise Risk Management(ERM) process. This holistic risk management process supports the identification,assessment and mitigation of climate-related risks and considers their potential negative impact for us in achieving our business objectives and creating value. Climate
risks are also considered in terms of their potential effects on our suppliers and customers across the value chain.
ABB has well-developed emergency response programs to manage potential impacts
from climate change, such as storms, floods or threats to the water supply. These
include, for example, ABB’s facility and workplace emergency preparedness, protocols
for unexpected emergencies and ABB’s mandatory business continuity plans for oursites. Our Insurance Risk Management function works closely with our global insurance providers to identify risks to our assets and operations. Reviews of facilities are
conducted annually or biennially, depending on the value of the asset. Incentive andpenalty programs are in place to promote the implementation of best practices andrisk mitigation and avoidance recommendations. All facilities are required to develop,
implement, and test business continuity plans.
Our risk management approach also covers upstream business continuity risks related to climate change, such as extreme weather conditions affecting our suppliers.

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A ppe ndix

This includes comprehensive monitoring and development of our supply base to ensure sustainability, both in terms of materials and processes used and is typically partof the ongoing dialogue that ABB has with its suppliers.
We operate a worldwide supply chain management network with employees dedicated to this function in our business areas, divisions and in key countries. Upstream
climate change risks and opportunities are also considered and analyzed in ourassessment of upstream scope 3 emissions, where we identify the climate impact of
all relevant scope 3 categories. With our Sustainable Supply Base Management (SSBM)
program, we have a comprehensive approach in place, which includes surveillance ofthe sustainability performance of our suppliers. It involves supplier screening, training, on-site assessment, monitoring, and follow-up until all identified non- conformities are closed. We aim to address sustainability topics and performance at each stageof supplier life cycle management as part of our “beyond audit” approach and have atleast 80 percent of our supply spend in focus countries covered by SSBM by 2030.
For mitigating transitional risks linked to our exposure to current and potential carbon taxes, as well as realizing opportunities linked to cost savings, we invest in energy
efficiency and emissions reductions throughout our operations. We have committed
to electrifying our fleet of more than 10,000 vehicles by 2030 and to continue deploying energy management systems at the company’s sites.
Our substantial annual investments in energy efficiency and emissions reduction
projects frequently come along with favorable break-even times. This includes
investments in low-carbon energy sources, compressed air systems, heating, ventilation and cooling systems. The largest part of the investment has been made inenergy-efficient lighting.

—
Climate-related
metrics and targets

We are raising our ambitions regarding our existing science-based targets by setting
net-zero targets aligned with the SBTi Net-Zero Standard. In 2023, we submitted our
updated scope 1, 2 and 3 targets for 2030 and 2050 to the Science Based Targets
initiative for validation.
By 2030, we will reduce our own emissions by at least 80 percent and work with ourcustomers and suppliers to reduce our scope 3 emissions by 25%. By 2050 we will
reduce scope 1 and 2 emissions by 100% (versus 2019), and scope 3 emissions by 90%(versus 2022).
By 2030, we aim to cover at least 80 percent of ABB’s portfolio of products andsolutions with a Circularity Approach and send zero waste to landfill, while taking
measures to prevent waste generation.
We track our scope 1, 2 and 3 emissions, as well as waste generation and water withdrawal, especially from water-stressed areas.

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SASB disclosure table
SASB – Electrical & Electronic Equipment
Topic

MetricUnit of Measure

Code

ABB answer 2023

EnergyManagementa. Total Energy Consumed

Gigajoules (GJ),
Percentage (%)

RT-EE-130a.1

4672043 GJ

b. Percentage Grid Electricity

63.5%

c. Percentage Renewable

64%

Hazardous
Waste
Managementa. Amount of hazardous waste generated,
percentage recycled

Metric tons (t),Percentage (%)

RT-EE-150a.1

5,321 metric tons; 40%

b. Number and aggregate quantity of reportable spills, quantity recovered

Number,
Kilogrammes (kg)

RT-EE-150a.2

1 spill, 350 liters of oil, not recovered.

Product
Safetya. Number of recalls issued, total units
recalled

Number

RT-EE-250a.1

As of 2023, this number is not available on an aggregated level at ABB.

b. Total amount of monetary losses as a re- Presentation
sult of legal proceedings associatedcurrencywith product safety

RT-EE-250a.2

Not applicable. Due to NDA agreements with third
parties, we are unable to disclose monetary values
resulting from legal proceedings with these third
parties.

a. Percentage of products by revenue that Percentage (%) bycontain IEC 62474 declarable substances revenue

RT-EE-410a.1

As of 2023, we are unable to respond to this question. Please refer to the section “Circularity” in the
Sustainability Report 2023.

b. Percentage of eligible products, by revenue, certified to an energy efficiency
certification

Percentage (%) byrevenue

RT-EE-410a.2

Only applicable to North America products. All ABB
products are included in point c.

c. Revenue from renewable energy related
and energy efficiency related products

Presentation
currency

RT-EE-410a.3

Using the EU taxonomy as reference: In 2023, ABB
reached a 6% Taxonomy-aligned revenue under the
Climate Change Mitigation environmental objective that covers partially this requirement. For further details please refer to ABB's EU Taxonomy disclosures in the Sustainability Report 2023.

Materials
sourcing

a. Description of the management risks
associated with the use of criticalmaterials

N/A

RT-EE-440a.1

Please refer to the sections “Circularity” and“Responsible sourcing” in the Sustainability
Report 2023.

Business
ethicsDescription of policies and practices forprevention of:
N/A

RT-EE-510a.1

Please refer to the section “Integrity and transparency” in the Sustainability and Integrated Reports
2023.

b. Total amount of monetary losses as a re- Presentation
sult of legal proceedings associatedcurrencywith bribery or corruption

RT-EE-510a.2

Nil in 2023 (subject to any pending resolution withGerman authorities and the meaning of thisquestion).

c. Total amount of monetary losses as a re- Presentation
sult of legal proceedings associatedcurrencywith anti-competitive behaviour
regulations

RT-EE-510a.3

We are unable to disclose monetary values resulting from legal proceedings associated with
anti-competitive behavior regulations.

a. Number of units produced (Production
should be disclosed as number of units
produced by product category, where
relevant product categories include energy generation, energy delivery, andlighting and indoor climate control
electronics.)

Number

RT-EE-000.A

Please refer to the section “Analysis of results ofoperations” in the Financial Report 2023.

b. Number of Employees

Number

RT-EE-000.B

110,442

Product
Lifecycle
Managementa. Corruption and bribery and anti-competitive behaviour

Activity
Metrics

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A ppe ndix—
Definitions—
Greenhouse gas emissions
GHG emissions refer to all emissions that have a warming effect on the earth’s surface
by trapping heat in the atmosphere. Carbon dioxide (CO2) makes up the vast majorityof GHG emissions, but other gases, including methane (CH4), nitrous oxide (N2O) andsulfur hexafluoride (SF6), also have a warming effect. CO2, methane and nitrous oxide
are released during the combustion of fossil fuels, such as coal, oil and natural gas, toproduce energy. At ABB, we use the metric of CO2-equivalent (CO2e) to calculate our
GHG emissions and to measure progress toward our emissions reduction targets.

—
Scope 1 GHG emissions
Direct emissions from company-owned and controlled resources, for example, emissions from combustion in owned or controlled boilers, furnaces, vehicles.

—
Scope 2 GHG emissions
Indirect emissions from the generation of purchased energy (electricity, steam, heat,cooling) from a utility provider.

—
Scope 3 GHG emissions
All other indirect emissions not included in scope 1 and 2 that occur in the value chain,both upstream and downstream. According to the GHG protocol, scope 3 emissions
are separated into 15 categories and include, for example, purchased goods and services, business travel and commuting, and use of sold products.

—
Science Based Targets initiative (SBTi)
The SBTi is a global collaboration that enables businesses to set ambitious emissions
reduction targets in line with the latest climate science. It independently assesses andapproves companies’ targets based on strict criteria.

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Caution concerning forward-looking statements
The ABB Sustainability Report 2023 includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. We have based these forward-looking statements
largely on current expectations, estimates and projections about the factors that
may affect our future performance, including global economic conditions as well as
the economic conditions of the regions and the industries that are major markets for
ABB. The words “believe,” “may,” “will,” “estimate,” “continue,” “target,” “anticipate,”“intend,” “expect,” “plan” and similar words and the express or implied discussion ofstrategy, plans or intentions are intended to identify forward-looking statements.
These forward- looking statements are subject to risks, uncertainties and assumptions, including among other things, the following: (i) business risks related to theglobal volatile economic environment; (ii) costs associated with compliance activities;(iii) difficulties encountered in operating in emerging markets; (iv) risks inherent inlarge, long term projects served by parts of our business; (v) the timely developmentof new products, technologies and services that are useful for our customers; (vi) our
ability to anticipate and react to technological change and evolving industry standards in the markets in which we operate; (vii) changes in interest rates and fluctuations in currency exchange rates; (viii) changes in raw materials prices or limitationsof supplies of raw materials; (ix) the weakening or unavailability of our intellectual
property rights; (x) industry consolidation resulting in more powerful competitors
and fewer customers; (xi) effects of competition and changes in economic andmarket conditions in the product markets and geographic areas in which we operate;(xii) effects of, and changes in, laws, regulations, governmental policies, taxation or
accounting standards and practices, and (xiii) other factors described in documents that we may furnish from time to time with the US Securities and Exchange
Commission, including our Annual Reports on Form 20-F. Although we believe that the
expectations reflected in any such forward-looking statements are based on reasonable assumptions, we can give no assurance that they will be achieved. We undertakeno obligation to update publicly or revise any forward-looking statements because of
new information, future events or otherwise. In light of these risks and uncertainties,
the forward-looking information, events and circumstances might not occur. Our actual results and performance could differ substantially from those anticipated in ourforward-looking statements.

—
ABB Ltd
Corporate Sustainability
Affolternstrasse 44
8050 Zurich
Switzerland
Tel: +41 (0)43 317 71 11

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