Sustainability And Business Ethics

1. Sustainability and business ethics - ABB’s experiences Björn Edlund Senior Vice President UN Global Compact Learning Forum ABB Ltd Berlin, December 2002 © ABB Ltd.…
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  • 1. Sustainability and business ethics - ABB’s experiences Björn Edlund Senior Vice President UN Global Compact Learning Forum ABB Ltd Berlin, December 2002 © ABB Ltd.
  • 2. General observations – checks and balances Globalization debate highlights downsides Will unregulated competition lead to wide social unrest? Will exploitation worsen of countries dependent on natural resources or commodities? Will “unfettered capitalism” create greater divide and tensions? Global market forces alone cannot and will not improve social conditions Free flow of trade, capital, technology and information raise living standards and create greater expectations New demands on business behavior – in both developed and developing world Greater transparency needed to promote “virtuous circles” Sorely missing - agreed covenants beyond existing legal frameworks Global businesses recognize their role is changing Market forces/large corporations have big impact Greater influence of companies is creating wider corporate responsibilities Greater public scrutiny of businesses everywhere – transparency starts here © ABB Ltd.
  • 3. Facts about ABB Two core divisions: Automation Orders in 2001: US$ 23.8 billion Technologies, Power Technologies Orders 9 Months 2002: US$ 16.2 billion Oil Gas and Petrochemicals and Building Systems to be divested in Revenues in 2001: US$ 23.7 billion 2003 Revenues 9 Months 2002: US$ 16 About 146,000 employees in billion more than 100 countries (Q3, 2002) Headquarters: Zurich, Switzerland ABB supplies power and automation technologies ABB supplies power and automation technologies that enable utility and industry customers to improve that enable utility and industry customers to improve performance while lowering impact performance while lowering impact © ABB Ltd.
  • 4. ABB’s social policyIntroductio Stakeholder dialogue Human rights Employees Occupational health and safety Suppliers Community involvement Business ethics ABB is committed to corporate social responsibility Social performance is as important as our environmental performance © ABB Ltd.
  • 5. ABB Business Ethics Business Ethics is part of ABB‘s way of doing business – part of our approach to sustainability For ABB, sustainability involves working on three levels – environmental, economic and social The right balance will improve our customers’ performance ensure ABB’s prosperity raise quality of life where we operate safeguard our “license to operate“ Being ethical is doing the right thing Being ethical is doing the right thing when no one is watching when no one is watching © ABB Ltd.
  • 6. Sustainability is sound business strategy Enlightened self interest - from compliance to involvement Economic performance depends on access to markets and technologies Environmental performance means competitiveness through lower costs and improved quality Demonstrable social performance creates space for the business makes it easier to hire talent makes it easier obtain good financing makes it easier to gain regulatory consent and support from authorities © ABB Ltd.
  • 7. In an open world, we all win or lose together Practical, local corporate responsibility projects are key – and underway But … wide gap between international behavior norms and reality Companies can bolster the UN’s integrating and normative role in global governance by working within the UN Global Compact framework Participation in UNGC helps define civic role for global corporations Human rights Labor rights The environment Transparency and business ethics norms integral to success of UNGC’s principles © ABB Ltd.
  • 8. © ABB Ltd.
  • 9. We tell our managers ... time won‘t cure the ills 3 years later The action will be realized Public prosecutor „bomb explodes“ starts investigation 4 years later 2 years later They can take YOU The court decides They bring YOU to court in custody YOUR sentence It can take 12 years from a misdirected action © ABB Ltd. until court sentence
  • 10. ABB Business Ethics We subscribe to ICC Rules of Conduct, 1999 OECD Convention, 1997 US Foreign Corrupt Practices Act, 1977 Strict business ethics - an important part of “our license to operate” © ABB Ltd.
  • 11. Our way? Definitely not! 1990-2002 Political Contrib. Political party payments, Italy 1990 Intermediary Hydro electric power station, Lesotho Bribery Volkswagen, Germany Bribery Incinerating plants, Germany Antitrust District heating, Denmark Antitrust MEA water projects, Egypt Insider Trading Elsag Bailey, The Netherlands Corp. Governance CEOs’ pension payments 2002 © ABB Ltd. Just a few examples
  • 12. Waste water system project...(WSJ) Apr 27 ’01 © ABB Ltd.
  • 13. ABB Business Ethics Guidelines Business ethics guidelines Apply “zero tolerance” in assuring strict adherence to local and international laws / regulations as well as ABB Group standards on Business Ethics ABB business transactions fully / fairly recorded Continuous employee training and awareness Regularly monitor ethical conduct and ensure simple, effective systems are in place for reporting violations © ABB Ltd.
  • 14. ABB Business Ethics Standards Business Ethics standards Antitrust Compliance Conflict of Interest Disclosure and Records Confidentiality and Protection Lender’s and Export Credit of Assets Compliance Insider Trading Violations of Corporate Bribery and Corruption Policies Intermediaries Responsibility and Political Contributions Implementation © ABB Ltd.
  • 15. ABB Business Ethics Education and training On-going process in all countries driven by Executive endorsement Local / regional compliance counselors Internal training is a top-down process! Internal training is a top-down process! © ABB Ltd.
  • 16. ABB compliance set-up HQ ABB Group Function Legal & Compliance Country Staff Business Division Chief Legal & Compliance Compliance Officer Division Region Compliance Compliance Coordinators Counselors Compliance Network Selected BA/BU Major Countries Compliance Compliance Coordinators Counselors* Export Credit Agency © ABB Ltd. Compliance Officers *in 63 Countries
  • 17. Compliance accomplished up to 2000 ABB compliance program developed and promoted yearly Established ABB Business Ethics standards covering Bribery and Corruption, Intermediaries and Facilitation Payments Nominated and established compliance counselor network Implemented Priority I : major ABB countries and “high risk” groups Implemented Priority II: all ABB countries and all ABB employees world-wide © ABB Ltd.
  • 18. Compliance 2001 follow-up Progressing Complete Basic Program ☯ Bribery & Corruption ☯ Antitrust ☯ Pro-active “high risk” management program ☯ Compliance reports and audits ☯ Special projects Supplement ☯ Divisional compliance coordinators ☯ Education / certification on-line © ABB Ltd.
  • 19. Compliance programs in 2002 On-going “High risk” agenda Bribery & Corruption Antitrust “Control” agenda Intermediaries Under development Lender’s and export credit compliance policy Divisional support program Counselor network activities On-line information / education / certification Appointments Export credit agency compliance officers © ABB Ltd.
  • 20. ABB Business ethics Intranet Our Profile Strategy Business Ethics © ABB Ltd.
  • 21. Business ethics – a practical checklist Long-term perspective of our own business set in our social context A culture that encourages dissent and non-financial thinking We act as “whole persons” - using our emotional, social and moral intelligence as well as our business intelligence We remain open to the world - respecting other views We keep a sound balance in our business commitments - no single outcome is more important than the whole Senior management shows the way - corporate social responsibility cannot be delegated to external institutions or company individuals Implementation - methodologies, metrics and reward systems Industry-wide standards to create corruption-free zones © ABB Ltd.
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