As a technology leader in electrification products, robotics and motion, industrial automation and power grids, operating in over 100 countries with approximately 135,000 employees, ABB works closely with its suppliers to make sure its sustainability expectations, ambitions and targets are understood and met. Tweet This!
This case study is based on the 2017 Sustainability Report by ABB published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
ABB has embedded its sustainability policies into all relevant procedures and, as such, pays close attention to the sustainability performance of its suppliers. In order to promote sustainability across its supply chain ABB took action to:
- develop a Supplier Code of Conduct
- implement a Supplier Sustainability Development Programme
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With this case study you will see:
- Which are the most important impacts (material issues) ABB has identified;
- How ABB proceeded with stakeholder engagement, and
- What actions were taken by ABB to advance labour-management relations
What are the material issues the company has identified?
In its 2017 Sustainability Report ABB identified a range of material issues, such as products, services and solutions, energy efficiency and climate change, integrity, human rights. Among these, promoting sustainability across its supply chain stands out as a key material issue for ABB.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups ABB engages with:
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics ABB created a sustainability report review panel, comprising key external stakeholders. The panel reviewed ABB’s most material topics, providing feedback and making recommendations.
In its 2017 Sustainability Report ABB reports that it took the following actions for promoting sustainability across its supply chain:
- Developing a Supplier Code of Conduct
- ABB’s mandatory Supplier Code of Conduct (SCoC) is published in 16 different languages and communicates ABB’s expectations, ambitions and performance targets to existing and potential business partners. All new suppliers are required to complete ABB’s supplier qualification process, through which ABB assesses, along with other business parameters, the sustainability performance of potential business partners at the initial selection stage. To become qualified to do business with ABB, new suppliers must certify their compliance with the SCoC.
- Implementing a Supplier Sustainability Development Programme
- ABB implements a rigorous Supplier Sustainability Development Programme (SSDP), to proactively identify and resolve sustainability risks with high-risk suppliers. This targeted intervention programme includes training and on-site assessments, to identify areas for improvement and ensure continuous monitoring. The SSDP assesses the sustainability performance of high- risk suppliers on 42 parameters, linked to ABB’s SCoC. These parameters cover general management, working conditions, health, safety and environment and related key local regulatory requirements. In addition, ABB developed special training to strengthen suppliers’ knowledge of local regulatory requirements and ABB’s parameters. Accordingly, every year ABB trains, coaches and assesses hundreds of suppliers on sustainability topics, closing old risks and identifying new ones. In 2017, ABB expanded the SSDP’s footprint to three more countries: Bulgaria, Saudi Arabia and the United Arab Emirates. ABB assessed 243 suppliers, identified 833 risks and mitigated 702 of them. In other activities to promote responsible sourcing, ABB trained 533 employees and 327 suppliers during the year. After analysing the data collected during ABB’s supplier assessments, the most frequent serious issues identified were a lack of understanding of the environmental and occupational health and safety (OHS) risk assessments, and a failure to comprehend statutory requirements and legal frameworks. To address this, ABB continued to raise awareness through initiatives such as its specially designed OHS workshops, and also developed and implemented a special workshop in India on statutory and legal frameworks.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.
Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:
- Sustainable Development Goal (SDG) 5: Achieve gender equality and empower all women and girls
- Business theme: Workplace violence and harassment
- Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
- Business theme: Labor practices in the supply chain
- Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
- Business theme: Workplace violence and harassment
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1) This case study is based on published information by ABB, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:
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