Sustainability And Business Ethics
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Transcript of Sustainability And Business Ethics
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BB L
td.
Sustainability and business ethics- ABB’s experiences UN Global Compact Learning ForumBerlin, December 2002
Björn EdlundSenior Vice President
ABB Ltd
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General observations – checks and balancesGlobalization 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 conditionsFree flow of trade, capital, technology and information raise living standards and create greater expectationsNew demands on business behavior – in both developed and developing worldGreater transparency needed to promote “virtuous circles”Sorely missing - agreed covenants beyond existing legal frameworks
Global businesses recognize their role is changingMarket forces/large corporations have big impactGreater influence of companies is creating wider corporate responsibilitiesGreater public scrutiny of businesses everywhere – transparency starts here
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Facts about ABB
Two core divisions: Automation Technologies, Power TechnologiesOil Gas and Petrochemicals and Building Systems to be divested in 2003About 146,000 employees in more than 100 countries (Q3, 2002)Headquarters: Zurich, Switzerland
Orders in 2001: US$ 23.8 billionOrders 9 Months 2002: US$ 16.2 billion
Revenues in 2001: US$ 23.7 billionRevenues 9 Months 2002: US$ 16 billion
ABB supplies power and automation technologiesthat enable utility and industry customers to improve
performance while lowering impact
ABB supplies power and automation technologiesthat enable utility and industry customers to improve
performance while lowering impact
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ABB’s social policyIntroductio
Stakeholder dialogueHuman rightsEmployeesOccupational health and safety SuppliersCommunity involvementBusiness ethics
ABB is committed to corporate socialresponsibility
Social performance is as important as our environmental performance
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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 threelevels – environmental, economic and social
The right balance will improve our customers’ performanceensure ABB’s prosperity raise quality of life where we operatesafeguard our “license to operate“
Being ethical is doing the right thing when no one is watching
Being ethical is doing the right thing when no one is watching
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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 businessmakes it easier to hire talentmakes it easier obtain good financingmakes it easier to gain regulatory consent and support from authorities
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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 corporationsHuman rightsLabor rightsThe environment
Transparency and business ethics norms integral to success of UNGC’s principles
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We tell our managers ... time won‘t cure the ills
3 years later
The action will be realized„bomb explodes“
Public prosecutorstarts investigation
4 years later2 years later
They can take YOU in custody
The court decidesYOUR sentence
They bring YOU to court
It can take 12 yearsfrom a misdirected action
until court sentence
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ABB Business EthicsWe subscribe to
ICC Rules of Conduct, 1999OECD Convention, 1997US Foreign Corrupt Practices Act, 1977
Strict business ethics - an important part of “our license to operate”
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Our way? Definitely not! 1990-2002
Hydro electric power station, Lesotho
Volkswagen, Germany
Political party payments, Italy
MEA water projects, Egypt
Incinerating plants, Germany
District heating, Denmark
Elsag Bailey, The Netherlands
CEOs’ pension payments2002
1990 Political Contrib.
Intermediary
Bribery
Bribery
Antitrust
Antitrust
Insider Trading
Corp. Governance
Just a few examples
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Waste water system project...(WSJ) Apr 27 ’01
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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
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ABB Business Ethics Standards
Business Ethics standards
Conflict of InterestConfidentiality and Protection of AssetsInsider TradingBribery and CorruptionIntermediariesPolitical Contributions
Antitrust ComplianceDisclosure and RecordsLender’s and Export Credit ComplianceViolations of Corporate PoliciesResponsibility and Implementation
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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!
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ABB compliance set-up HQ ABB
Group FunctionLegal & Compliance
ChiefCompliance
Officer
Compliance Network
Export Credit Agency
ComplianceOfficers *in 63 Countries
Country Staff Legal & Compliance
Business Division
Division Compliance
Coordinators
RegionComplianceCounselors
Selected BA/BUCompliance
Coordinators
Major CountriesComplianceCounselors*
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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 employeesworld-wide
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Compliance 2001 follow-upProgressing Complete
Basic ProgramBribery & Corruption ☯Antitrust ☯Pro-active “high risk” ☯
management programCompliance reports and audits ☯Special projects ☯
SupplementDivisional compliance coordinators ☯Education / certification on-line ☯
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Compliance programs in 2002On-going
“High risk” agendaBribery & CorruptionAntitrust
“Control” agendaIntermediaries
Under developmentLender’s and export credit compliance policyDivisional support programCounselor network activitiesOn-line information / education / certification
AppointmentsExport credit agency compliance officers
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ABB Business ethics Intranet
Our Profile
Strategy
Business Ethics
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Business ethics – a practical checklist
Long-term perspective of our own business set in our social contextA culture that encourages dissent and non-financial thinkingWe act as “whole persons” - using our emotional, social and moral intelligence as well as our business intelligenceWe remain open to the world - respecting other viewsWe keep a sound balance in our business commitments - no single outcome is more important than the wholeSenior management shows the way - corporate social responsibility cannot be delegated to external institutions or company individualsImplementation - methodologies, metrics and reward systemsIndustry-wide standards to create corruption-free zones