ABB

Governance hierarchy

Reference: Sustainability at ABB, Governance of sustainability at ABB (pp. 14-22).

Governed through the Board of Directors, the Group Executive Committee (EC), and the Sustainability Council. The Board reviews and approves the Sustainability Agenda and targets. Committees: the Governance and Nomination Committee (GNC) oversees the Agenda and targets; the Finance, Audit and Compliance Committee (FACC) oversees reporting integrity and internal controls; the Compensation Committee (CC) aligns executive pay with the Agenda. "ABB's EC represents the management body, and the Board represents the supervisory body, as these terms are used in ESRS."

Board composition (2025): 10 members, 60% male / 40% female; 100% independent non-executive directors; no employee representatives (Swiss corporate law does not provide for this).

EC composition (2025): 9 members, 78% male / 22% female; Chief Communications and Sustainability Officer sits on the EC and reports, with the Group Head of Sustainability, to the GNC.

Sustainability expertise: the Board's annual competency evaluation, aligned with CSRD, covers all material topics (climate, water, resource use/circularity, own workforce, value chain workers, affected communities, consumers/end-users, business conduct). The Board confirmed both it and the EC "possess the necessary experience to cover all topics identified as material in our DMA."

Information flow to the Board and EC

Reference: Sustainability at ABB, Governance of sustainability at ABB (pp. 18-19).

ABB's Enterprise Risk Management (ERM) process is described as "our holistic approach to identifying risks that could impact our strategic objectives and have a material financial effect," fully embedded in the ABB Way operating model and covering sustainability risks alongside other enterprise risks. The list of identified material IROs is shared with the EC and Board for acknowledgement.

Material impacts and opportunities are reviewed through the annual Strategy Refresh, in which each business area and division reviews its strategy; a portfolio assessment applies a sustainability lens to existing businesses and potential acquisitions. Outcomes are discussed and approved by the EC and Board at their annual strategy retreat.

In 2025, EC discussions covered progress on sustainability KPIs, the updated Climate Transition Plan (including EV100 acceleration and scope 3 upstream emissions-intensity benchmarking), and the status of the voluntary 2030 sustainability commitments, which the EC and Board review quarterly.

Sustainability in incentive schemes

Reference: Sustainability at ABB, Incentives for sustainability (pp. 19-20).

Board members receive guaranteed role-based fees with no variable or sustainability-linked component. EC members have sustainability targets in both the Annual Incentive Plan (AIP, cash) and Long-Term Incentive Plan (LTIP, ABB Performance Share Units).

AIP (2025): all EC members had two mandatory sustainability goals worth a combined 10% of target AIP award. All shared a governance goal tied to the Deferred Prosecution Agreement with the US DOJ (Kusile project). The CEO and two corporate officers had a scope 1&2 GHG reduction target (5% of AIP); business area presidents had a TRIFR safety target; the CHRO had a women-in-senior-management target; the CFO had an internal-controls target.

LTIP: since 2022, one of three performance measures (20% weighting) is a scope 1 and 2 GHG emissions reduction target, granted to roughly 100 executives including EC members and division presidents, vesting over three years with malus/clawback provisions.

Overall: "For 2025, 5.7 percent of the EC's total compensation was linked to climate-related considerations." Base year for sustainability performance measurement is 2019; ABB has met the target of at least one measurable sustainability-related goal for EC variable pay every year since 2020, required through 2030.

Due diligence overview

Reference: Sustainability at ABB, Due diligence (pp. 20-22).

ABB presents due diligence as "a vital, cross-cutting process" embedded across governance, strategy and business model; stakeholder engagement; identification and assessment of negative impacts; taking action; and tracking effectiveness, mapped separately for Environment and People topics.

• Governance embedding: sustainability is defined as a key management topic and integrated into AIP/LTIP.
• Stakeholder engagement: a centrally coordinated stakeholder engagement plan was developed in 2025 for 2026 implementation.
• Identifying negative impacts: environmental impacts assessed via "Climate change as a material topic" and "Water as a material topic"; people impacts via S1/S2/S3 concern channels and consumer-related policies.
• Taking action: climate actions via the Climate Transition Plan and circularity management; social actions via employee-, value-chain-worker-, community- and supplier-related action sections.
• Tracking effectiveness: environmental targets tracked in "Climate change-related targets" and "Targets relating to resource use and circularity"; social targets tracked in own-workforce, value-chain-worker and community target sections, with metrics in the Facts & Figures sections.

Internal controls over sustainability reporting

Reference: Sustainability at ABB, Risks and controls in sustainability reporting (p. 22).

The Board is responsible for the internal control system over financial and sustainability reporting, delegated to the FACC, which oversees reporting integrity, internal/external assurance and data processing. ABB applies the COSO integrated framework via its "Internal controls over reporting" policy, covering all Group reporting processes including sustainability.

ABB conducted an Internal Controls over Sustainability Reporting (ICSR) risk assessment to determine the risk of material misstatement, factoring in datapoint risk profile and reporting process. The assessment identified main risks in "data availability, use of estimations and measurement uncertainty," mainly for scope 3 GHG emissions and avoided emissions; mitigating controls include data validations and management reviews.

ABB runs a quarterly and annual internal controls self-assessment program (including ICSR) overseen by the Corporate Assurance Risk & Internal Controls team, plus an internal assurance certification process under the Assurance and Disclosure Governance policy, with results reviewed regularly by the FACC.

Strategy, business model and value chain

Reference: Sustainability at ABB, Strategic approach to sustainability (pp. 23-24).

ABB is "a global technology leader in electrification and automation," with revenue drawn from industrial, building, transport & infrastructure, and utilities end-markets; approximately half of revenue comes from the industrial segment and half from utilities, buildings and transport & infrastructure combined.

2025 portfolio change: ABB entered an agreement to divest its Robotics division (expected completion H2 2026, subject to approvals); the Machine Automation division was integrated into the renamed "Automation" business area (formerly Process Automation).

Value chain: inputs are raw materials, components and services from a global supplier base, assessed via due diligence and tools such as EcoVadis; upstream spans multiple tiers of suppliers of semi-finished/fabricated products and electronic components; downstream customers span diverse industries via direct sales, partners and distributors, with circular models (repair, reuse, recycling).

Key challenges identified: decarbonization of energy systems and industrial operations; transition to circular business models; supply chain resilience and responsible sourcing; and increasing regulatory demands on data quality and transparency.

Stakeholder engagement

Reference: Sustainability at ABB, Stakeholder engagement (pp. 24-27).

ABB identifies six stakeholder groups: Collaborative partners, Customers, Employees, Governments and civil society, Investment community, and Suppliers and workers in the value chain. In 2025 ABB "initiated a comprehensive review" of stakeholder engagement, to be implemented in 2026.

Engagement mechanisms by group: collaborative partners via academic partnerships, the Energy Efficiency Movement, UN Global Compact, WBCSD, RMI and the SynerLeap innovation program; customers via EPDs, Product Carbon Footprints and EcoSolutions QR codes; employees via the annual Employee Engagement Survey, pulse surveys, collective bargaining and Employee Resource Groups; governments/civil society via volunteering and regulator meetings; the investment community via the AGM, investor roadshows and quarterly sustainability-focused webcasts; suppliers/value-chain workers via the Sustainable Supply Base Management (SSBM) program, Responsible Minerals Program and Supplier Day events.

Strategic amendments: recent changes integrate sustainability metrics into product development, sourcing and performance planning; planned steps include expanding circular offerings and increasing product transparency through life cycle assessments and EPDs.

Material IROs and their interaction with strategy

Reference: Sustainability at ABB, Double materiality assessment, "ABB's material impacts, risks and opportunities (IROs)" (pp. 32-38).

Following the 2024 DMA and its 2025 update, ABB's material ESRS sub-topics are: E1 Climate change (climate change adaptation, climate change mitigation, energy); E3 Water and marine resources (water); E5 Resource use and circular economy (resource inflows, resource outflows, waste); S1 Own employees (working conditions, equal treatment, other work-related rights); S2 Workers in the value chain (same three sub-topics); S3 Affected communities (economic/social/cultural rights, civil/political rights); S4 Consumers and end-users (information-related impacts, personal safety); G1 Business conduct (corporate culture, whistleblower protection, supplier relationships incl. payment practices, corruption and bribery). As part of the 2025 DMA update, pollution-related impacts were re-scored and "E2 (Pollution) is now excluded from the material matters of ABB"; E4 (Biodiversity and ecosystems) does not appear among the material sub-topics.

"For 2025, we have not identified any material current financial effects of our material risks and opportunities." Certain IROs are partially covered by entity-specific disclosures: avoided emissions (E1-PI-01, E1-NI-01, E1-NI-04, E1-O-01, E1-O-02, E1-O-03, E1-O-05) and the SSBM program (S2-O-01, G1-PI-04, S2-NI-01, S2-NI-03).

Double materiality assessment process

Reference: Sustainability at ABB, Double materiality assessment (pp. 28-31).

ABB performed a Group-level DMA in 2024 (all subsidiaries) and updated it in 2025, structured into four phases: Understanding (using the prior Human Rights Risk Assessment to map the value chain: R&D/testing, components manufacturing, transport/logistics, bidding/sales, projects/services, raw material extraction, customer use, end of life); Identification (stakeholder input, internal interviews, industry knowledge); Assessment (negative impacts scored on severity - scale, scope, irremediability - and likelihood; positive impacts on scale, scope, likelihood; risks/opportunities via ABB's ERM process, scored on financial-effect magnitude and likelihood); and Determination (thresholds tested and benchmarked against peers and the 2024 assessment; the 2024 threshold was retained).

The 2024 DMA was reviewed and approved by the ABB Sustainability Reporting Steering Committee. The 2025 update re-evaluated the ongoing relevance of 2024 impacts (via an internal methodology reviewing business changes, due diligence findings and stakeholder input) and risks (via the latest ERM results); it also revised IRO wording for clarity without changing material sub-topics.

Disclosure requirements covered

Reference: Sustainability at ABB, "Disclosure requirements covered by Sustainability Statement" (p. 38); ESRS Content Index (appendix).

ABB determined its final scope of datapoints using the EFRAG datapoint list mapped to material ESRS sub-topics; voluntary datapoints were excluded, ESRS 1 Appendix C phase-in provisions were applied, and ABB "applied the ESRS 'quick-fix' delegated act of July 11, 2025, either in full or partially for the respective topical standards." "In the ESRS index table, we have listed the disclosures on which we have reported."

Reported topical standards: ESRS 2 (full), E1 Climate change, E3 Water (Water sub-topic only; marine resources does not apply), E5 Resource use and circular economy, S1 Own workforce, S2 Workers in the value chain, S3 Affected communities, S4 Consumers and end-users, and G1 Business conduct. Not material: E2 Pollution, E4 Biodiversity and ecosystems. Within material topics, several DRs are absent from the ESRS Content Index and the statement's body altogether (e.g., E3-5, E5-6, several S1 datapoint-level DRs, S4-2, G1-5), consistent with phase-in/quick-fix application or datapoint-level non-materiality. Assurance: limited assurance by KPMG AB over the full statement.

Climate transition plan

Reference: Protecting the climate, "Transition plan for climate change mitigation" (pp. 51-57).

Targets (SBTi absolute contraction method): near-term 2030 - scope 1&2 -80% vs 2019 (1.5°C aligned); scope 3 -25% vs 2022 ("well below 2°C" aligned). Long-term 2050 - scope 1&2 -100% vs 2019 (1.5°C aligned); scope 3 -90% vs 2022 (1.5°C aligned).

Decarbonizing own operations: RE100 (100% renewable electricity by 2030), EV100 (electrify fleet by 2030), Smart Energy Coalition (20% energy productivity improvement by 2030), SF6 leakage reduction (e.g., SF6-free UniSec Air), fossil-fuel/heating replacement. In 2025, scope 1&2 emissions fell 79% vs 2019 (forecast -86% by 2030).

Value chain (99% of scope 3 in categories 1 and 11): low-carbon materials sourcing, supplier PCFs, carbon reduction roadmaps to 2030; use-phase efficiency via grid decarbonization support (e.g., Canary/Balearic Islands grid stabilization) and Marine & Ports electrification (Azipod, DynafinTM, shore power).

Financing: $11.8 million CapEx to climate mitigation in real estate in 2025 (solar $3.2m, HVAC/heat pumps $4.2m, energy efficiency/BEMS $4.4m); scope 3 investments not yet quantified. Plan reviewed by the Board; formally approved by the GNC in 2025. Not excluded from EU Paris-aligned benchmarks.

Climate-related policies

Reference: Sustainability at ABB, Sustainability-related policies (pp. 40-41); Protecting the climate (p. 62).

Climate Procedure: effective December 1, 2025, simplified and superseded prior climate policies; covers near-term (2030) and long-term (2050) net-zero targets, and details roles/responsibilities for fleet electrification (EV100), renewable electricity sourcing (RE100), energy productivity (Smart Energy Coalition), decarbonization of fossil-fueled assets and SF6 management, plus the approach to physical/transition climate risk and adaptation.

Energy Management Requirements: requires all ABB units to set an energy baseline, classify footprint significance, and (for significant footprints) implement a basic energy management system and action plan, supported by an Energy Management ACOP.

Environmental Procedure: effective December 1, 2025, covers waste, water and biodiversity objectives including zero waste to landfill by 2030 and water stewardship in stressed areas, building on the Sustainability Policy and HSE&S Policy. Linked IROs: all E1 opportunities and risks (E1-O-01 to 05, E1-R-01 to 03) and all E1 impacts (E1-PI-01/02, E1-NI-01 to 04).

Climate actions

Reference: Protecting the climate, Management of climate change (pp. 64-66).

Three-fold effort: reduce own-operations emissions, support suppliers' emissions reductions, and help customers reduce/avoid emissions. Scope 1&2 decarbonization levers: fossil fuel reduction, renewable energy shift, fleet electrification, SF6 management.

2025 status of levers (vs 2024):

Actions overview table lists two global, ongoing actions: the Transition Plan (covering all E1 opportunities, two of three risks, and all impacts) and the Resilience Analysis (covering the physical risk E1-R-03), both global in scope. Financial aspects of these actions are addressed under E1-1.

Climate targets

Reference: Protecting the climate, Climate change-related targets (pp. 62-64).

SBTi-validated absolute contraction targets, near-term 2030 and long-term 2050 (see E1-1), plus RE100, EV100 and Smart Energy Coalition commitments. Avoided-emissions ambition: 600 Mt CO2e avoided in customer operations over product lifetimes, 2022-2030 (not part of the scope 3 inventory).

Performance vs. targets:

Location-based scope 1&2: baseline 645 kt (2019) to 374 kt in 2025 (-42%). "For scope 1 and 2, we were on track...and we expect to reach our target ahead of schedule. For scope 3...progress...is slower than originally anticipated due to grid decarbonization having slowed down." No changes to targets or indicators in the reporting year.

Energy consumption and mix

Reference: Protecting the climate, Facts & figures Energy (pp. 66-67).

Total energy consumption (GWh):

Energy intensity: 41.43 MWh per $M revenue (2025) vs 46.57 (2024). Total energy production 68 GWh (2025) vs 55 GWh (2024), of which renewable 22 GWh (2025) vs 13 GWh (2024). ABB's business falls under NACE section C (Manufacturing), a high climate-impact sector per ESRS, so total Group revenue is used as the intensity denominator. Nuclear energy is estimated at under 1% of consumption and not separately tracked.

GHG emissions (Scope 1, 2, 3)

Reference: Protecting the climate, Greenhouse gas emissions (pp. 68-70).

kt CO2e, 2025 vs 2024:

GHG intensity (market- and location-based): 11.97 kt CO2e/$M revenue (2025) vs 11.95 (2024). 97% of scope 3 is downstream Category 11 (Use of sold products). ABB does not participate in any regulated ETS for scope 1. Category 1 emissions use a mix of spend-based, weight-based (EcoInvent factors) and supplier PCF data; 0% of Category 1 is currently based on primary supplier data. Category 14 (franchises) is zero as ABB does not operate franchises; Category 8 (upstream leased assets) is captured in scope 1&2 to avoid double counting.

GHG removals and carbon credits

Reference: Protecting the climate, "GHG removals and GHG mitigation projects financed through carbon credits" (p. 57).

"ABB is a signatory to the Science Based Targets initiative (SBTi). As the SBTi Net Zero standard only allows for Negative Emission Technologies (NETs) to be used for a maximum of 10 percent of residual emissions in 2050, rather than for 2030 targets, we will analyze the respective investment options later." ABB does not currently report use of carbon credits or GHG removals to meet its near-term targets; investment analysis for residual-emissions NETs is deferred to closer to the 2050 target date.

Internal carbon pricing

Reference: Protecting the climate, "Internal carbon pricing" (p. 57).

"ABB does not apply any internal carbon pricing schemes." This is a direct, single-sentence disclosure; no shadow price, investment threshold, or internal levy mechanism is described elsewhere in the statement.

Anticipated financial effects

Reference: Protecting the climate, "Anticipated financial effects" (pp. 75-77).

Physical risks: ~400 sites across 60 countries were screened; "less than 10 percent of the assessed sites could potentially be exposed to a material gross physical climate risk," concentrated in Australia, Brazil, China, Germany, India, Mexico, Switzerland and the US, with flooding the major hazard. The resilience analysis found adequate mitigation (site protections, geographic diversification) reduces net risk "to non-material levels"; results are purely qualitative, with no monetized financial-effect figures disclosed.

Transition risks/opportunities (IEA NZE 1.5°C scenario): most material risk categories are Reputation (litigation over climate-performance shortfalls), Market (raw-material cost increases, tender penalties) and Policy and Legal (bans on climate-potent substances); most material opportunity categories are Products and Services, Resource Efficiency, and Markets (thought leadership in the energy transition). A stranding-risk assessment of the real estate portfolio found asset stranding "does not represent a material risk compared to other transition risks," though a relatively small share of real estate could be at medium-term risk under NZE 1.5°C. No monetized financial-effect figures are disclosed; this is the qualitative assessment permitted in the first year of ESRS application.

Water-related policies

Reference: Water management at ABB, Water-related policies (p. 87).

ABB's Water Management and Conservation Requirements (plus an associated ACOP) require all units to comply with legal requirements on water withdrawal and use, prevent pollution (e.g., only licensed providers for contaminated wastewater treatment), and require sites in water-stressed areas with withdrawals over 10,000 m3/year to hold reduction action plans. A new 2025 Environmental Procedure adds requirements for sites in water-stress areas. These policies follow the World Resources Institute's Aqueduct global water risk tool. "The management standard, ACOP and the Environmental Procedure refer to water management at site level and do not include specific requirements for product design." Marine resources are explicitly out of scope: "the aspect of marine resources does not apply to any of our locations or activities."

Water-related actions

Reference: Water management at ABB, Water-related actions (p. 88).

"Currently, ABB has no ESRS-aligned action plan for sites in areas of water stress. However, our sites take action to reduce the use of water." Under the new Environmental Procedure, ABB aims to strengthen water stewardship at water-stressed sites, requiring them to plan and implement measures based on the Alliance for Water Stewardship framework (self-assessment by end 2026; basic plan features implemented by end 2027, improved annually thereafter). Business areas are accountable, under the decentralized ABB Way model, for coordinating a high-level roadmap with their countries and divisions, reviewed annually.

Water-related targets

Reference: Water management at ABB, Water-related targets (p. 87).

"We have not set an ESRS-aligned target related to water yet as the materiality for our operations is lower than for other topics of our Sustainability Agenda, including Climate and Circularity." Instead, ABB has an ambition, based on the Alliance for Water Stewardship framework, requiring sites in extreme/high water-stress areas to complete a self-assessment and adequate action plan by end 2026, with basic plan features implemented by end 2027 and continual annual improvement thereafter. The level of ambition and any indicators are locally determined by business areas under the ABB Way model, reviewed annually. This DR is reported as a qualitative ambition rather than a quantified ESRS target, per the company's own characterization.

Water consumption

Reference: Water management at ABB, Facts & figures Water (pp. 88-89).

Total water consumption in areas at water risk (including high water stress), calculated as withdrawal minus discharge: 309,545 m3 in 2025 vs. 283,123 m3 in 2024. The increase reflects more sites newly classified as water-risk areas in the Aqueduct Water Risk Atlas. In 2025, 107 sites are located in areas of high water stress, mostly in Europe and the Americas. 100% of water withdrawn and 2% of water discharged were based on direct measurement in 2025; the remainder of discharge is estimated using average rates (26% for manufacturing sites, 13% for non-manufacturing sites). Areas of high water stress are defined per Aqueduct as withdrawing 40-80% of renewable water supply; extremely high stress is over 80%.

Circularity policies

Reference: Committing to circularity, Policy commitments to circular resource management (p. 78); Sustainability-related policies (p. 41).

Managed via the Sustainability Policy, Supplier Code of Conduct, HSE&S Policy, and two specific instruments: the Circularity Approach (an appendix to the Sustainability Policy, managed by the ABB Circularity Working Group, which coordinates initiatives, clarifies the ABB Circularity Framework's eight KPIs and sets assessment guidelines) and the waste-management provisions of the new (December 1, 2025) Environmental Procedure, which targets zero waste to landfill by 2030 (wherever compatible with local conditions), water stewardship, and responsible land use.

Circularity actions

Reference: Committing to circularity, Circularity management (pp. 79-80).

Take-Back and Recycling Program for Motors: operating since 2023 across nine countries for ABB Motion products (motors and other equipment, including non-ABB equipment), ensuring responsible recycling at end of life; globally supported but locally executed.

Waste Optimization and Reduction Programs: site-level programs across ABB operations targeting elimination of landfill disposal by 2030 (hazardous and non-hazardous waste, with formal exclusions e.g. demolition waste), executed by divisions under the ABB Way model.

Actions overview table: both actions are ongoing, cover ABB's direct operations (the Take-Back program also covers the downstream value chain for Motion products' end-of-life management), and map to IROs E5-PI-01, E5-PI-02 and E5-NI-01.

Circularity targets

Reference: Committing to circularity, Targets relating to resource use and circularity (pp. 78-79).

Circularity alignment: ambition to achieve an 80% alignment score for product-based revenues against the eight-KPI ABB Circularity Framework by 2030; base year 2025 (first year of this enhanced scoring methodology, so not comparable to prior years); 2025 status calculated on Q1-Q3 data with 46% of product-based revenues assessed (Robotics division, being divested, excluded).

Zero waste to landfill: base year 2019 (16.8 kt, 8.8% of total waste); target zero waste to landfill by 2030 (max 10% to waste-to-energy), using the UL Solutions framework; 2025 status 10.3 kt (5.8% of total waste) vs. 2024 status 9.3 kt (5.3%) - in 2025 hazardous waste was added to scope, per the UL 2799 standard. "None of our targets are mandatory in the sense of being required by legislation." No additional targets exist for product design or renewable resources.

Resource inflows

Reference: Committing to circularity, Facts & figures Resource use and circular economy (p. 81).

ABB discloses the weight of four main material groups (all "technical materials" under ESRS) representing around 80% of product weight; packaging is excluded due to insufficient data quality.

Materials used, 2025 (kilotons):

2024 figures are not comparable, as they followed the GRI definition rather than the 2025 ESRS-aligned methodology. The weight of secondary reused/recycled materials is not yet reported due to insufficient internal system accuracy. Data related to the E-mobility business is excluded as not financially material for this metric.

Resource outflows

Reference: Committing to circularity, Facts & figures Resource use and circular economy (pp. 82-83).

In 2025, ABB achieved a recyclable content of 78% in its products (based on the weight of the four main purchased material groups; packaging excluded). Circular design portfolios span Motion (Electric Motion: high-efficiency motors/drives; Traction Solutions: propulsion/energy-storage retrofit), Electrification (modular, durable, recyclable low/medium-voltage products with EcoSolutions transparency), and Automation (Energy Industries, Marine & Ports electric propulsion, Measurement & Analytics, Process Industries, Machine Automation), all emphasizing durability, modularity, retrofit/upgrade and end-of-life recovery.

"Due to our highly diversified product portfolio...it is not feasible to provide durability and repairability data at a level of granularity that would be meaningful." Waste-related resource outflows are detailed under the entity-specific Waste section below (E5-5-Waste).

Waste

Reference: Committing to circularity, Facts & figures Resource use and circular economy (pp. 83-84).

Waste generation (kt), 2025 vs 2024:

Overall waste generation rose in 2025 mainly due to larger construction/demolition projects and a refined methodology for several categories. The main tracked waste stream at Group level is scrap metal (ferrous and non-ferrous), reflecting ABB's profile as a motor manufacturer; other streams (plastics, wood, solvents, electronic components) are tracked locally but not aggregated at Group level. Waste is managed per the waste hierarchy under the Environmental Policy; 100% of reporting manufacturing sites hold ISO 14001-aligned certification per the HSE&S framework.

Own workforce policies

Reference: Responsibility for our employees, Employee-related policies (p. 98); Sustainability-related policies (pp. 42-43).

Governed by the ABB Code of Conduct (five integrity principles; 16 focus areas incl. anti-discrimination), Human Rights Policy and Human Rights Due Diligence Framework (aligned with the UNGPs and International Bill of Human Rights), HSE&S Policy (15 general topics, 50 control standards, ISO 14001/45001-aligned), Diversity, Equity and Inclusion Policy, People Development Policy (Employee Engagement, Open Job Market, Learn Connect and Grow), and the Engagement Survey Procedure. The Code of Conduct "frames our approach on discrimination, including preventing harassment, promoting equal opportunities." Remedy processes are covered under S1-3 / G1-1.

Involving employees

Reference: Responsibility for our employees, Involving employees (pp. 98-100).

Engagement runs through the Labor Relations function (with HR and business leaders) and the Employee Council Europe (ECE), the main platform for transnational social dialogue across the EEA, UK and Switzerland, covering restructurings, M&A and organizational change with early, confidential consultation.

ABB Employee Engagement Survey: annual, ~40 languages, voluntary and confidential, run with local works councils/unions. Participation rose from 65% (2019) to 85% (2025, stable vs 2024). The engagement score (tracked against the top 25% of Glint-platform organizations) rose from 71 (2019) to 80 (2025, +2 points vs 2024's 78), meeting the "top-tier" Sustainability Agenda target. "Safety," "integrity" and "role clarity" remained the top-rated areas; no scores declined in 2025.

Channels to raise concerns

Reference: Responsibility for our employees, Channels available to raise concerns (p. 100).

Information on reporting channels for ABB's own workforce is provided by direct cross-reference to the "Good business conduct" chapter, section G1-1 ("Whistleblowing and reporting channels"), which describes the ABB Business Ethics Helpline (24/7, externally hosted, available in 50+ countries by phone or online), manager/HR/Legal & Integrity reporting routes, non-retaliation protections under the Whistleblowing Protection Statement, and remediation via the Integrity Investigations Framework aligned with EU Directive 2019/1937.

Employee-related actions

Reference: Responsibility for our employees, Employee-related actions (pp. 101-104).

D&I Strategy 2030 (Governance, Inclusive Leadership and Culture, Partnership pillars): gender-neutral parental leave, Employee Resource Groups, partnerships with UN Women's Empowerment Principles, Special Olympics, Society of Women Engineers, Workplace Pride. Female senior-management representation reached 22.6% at end-2025 (21.3% in 2024) against a 25%-by-2030 target.

Wellbeing: global Employee Assistance Program with a Rapid Response Critical Incident service; Global Parental Leave Program (minimum 12 weeks primary / 4 weeks secondary caregiver leave, except US and Sweden).

Development: Harvard ManageMentor platforms; Learn Connect and Grow Day engaged over 45,000 participants across 300+ locations in 50+ countries in 2025; mandatory annual performance reviews and goal-setting.

Pay equity: a 2025 global baseline assessment of wage structures ahead of the EU Pay Transparency Directive. "In our current understanding, none of the actions above are financially significant."

Own-workforce targets

Reference: Responsibility for our employees, Own workforce-related targets (pp. 101-102).

In 2025 ABB evolved its safety target from "Zero harm" to "Zero life-changing events," focusing on serious incidents and fatalities; monitored monthly. The women-in-senior-management target excludes 13% of total senior management in jurisdictions where local law does not permit disclosure/target application; reviewed quarterly. The engagement target is benchmarked annually via the Glint platform's rolling top-25% threshold; reviewed annually and achieved in 2025.

Employee characteristics

Reference: Responsibility for our employees, Facts & figures Own employees (pp. 105-106).

Headcount by region, 2025 (2024): Europe 53,407 (53,597); Americas 28,055 (27,210); Asia/Middle East/Africa 32,830 (31,962); Total 114,292 (112,769); average headcount 113,438 (112,280).

By contract type and gender, 2025: male 81,368 total (77,126 permanent, 3,878 temporary, 364 non-guaranteed hours); female 31,806 total (30,122 permanent, 1,521 temporary, 163 non-guaranteed hours); total permanent 108,288, temporary 5,477, non-guaranteed-hours 527.

Turnover: 16,483 employees left in 2025 (15%) vs 15,538 in 2024 (14%). Top countries by headcount (Dec 31, 2025): US 14,907; China 12,737; India 11,422. Headcount is reported per individual regardless of work percentage (differs from FTE-based financial reporting).

Collective bargaining and social dialogue

Reference: Responsibility for our employees, "Collective bargaining coverage and social dialogue" (p. 106).

"52 percent of our employees worldwide are covered by collective bargaining agreements (CBAs)," either at industry level (generally with unions) or company/location level (works councils or unions). The European Works Council (EWC) agreement represents employees on transnational matters across the EEA, UK and Switzerland. For non-CBA employees, ABB "generally aim[s] to offer working conditions that meet or exceed the typical standards in the respective local employment markets." Coverage is reported by region (AMEA, Americas) as of September 30, 2025, based on headcount; ABB has no single EEA country meeting the 50-employee/10%-of-workforce threshold that would trigger country-level EEA disclosure.

Diversity metrics

Reference: Responsibility for our employees, Facts & figures Own employees (p. 107).

Top management gender, Dec 31: 2025 - male 343 (77.4%), female 100 (22.6%); 2024 - male 410 (78.7%), female 111 (21.3%). Top management is defined as Hay grades 1-7 including division presidents; the disclosure excludes 13% of total senior management in jurisdictions where local law does not permit it.

Age distribution (all employees): under 30: 18% (2025) vs 20% (2024); 30-50: 55% (both years); over 50: 27% (2025) vs 25% (2024).

Adequate wages

Reference: Responsibility for our employees, "Adequate wages" (p. 107).

"99.95 percent of our employees globally are paid an adequate wage, in line with ESRS applicable benchmarks." Employees paid below the applicable adequate-wage benchmark: Germany 0.05% (4 employees); United Kingdom 0.14% (2 employees); United States 0.36% (51 employees). ABB plans to review and address these pay gaps over 2026; where minimum wage is set by a CBA, pay is already maintained above the statutory minimum. Benchmark is primarily the CBA or statutory minimum wage; where no local regulatory minimum exists, ABB uses a living-wage benchmark from the WageIndicator Foundation aligned with the Sustainable Trade Initiative.

Health and safety metrics

Reference: Responsibility for our employees, Facts & figures Own employees (pp. 107-109).

Employees, 2025 vs 2024: covered by H&S management, 100% both years; work-related fatalities, 0 (2) ; work-related accidents, 274 (321), rate 1.22 (1.46); recordable ill-health cases, 3,740 (4,121); days lost to injuries/accidents/ill health, 224 (223).

Non-employees, 2025 vs 2024: work-related accidents 20 (19), rate 1.36 (1.54).

Zero life-changing events KPI: fatalities 0 (2025) vs 2 (2024); serious/high-consequence incidents 5 (2025) vs 12 (2024); total life-changing events 5 (2025) vs 14 (2024).

Compensation metrics

Reference: Responsibility for our employees, Facts & figures Own employees, "Remuneration metrics" (p. 109).

"In 2025, ABB's global gender pay gap was 16.30 percent," calculated as the unadjusted difference in average gross hourly pay between male and female employees (Total Base Pay plus AIP awards, active employees excluding interns/apprentices), not adjusted for role, seniority, geography or other factors. "For 2025, ABB's annual total remuneration ratio, as defined in S1-16, was 64.5" (ratio of CEO/highest-paid individual total remuneration to the median employee's, adjusted for purchasing power parity). ABB is transitioning HR systems (to Workday) and plans to expand pay-gap scope to other variable/benefits-in-kind compensation as data becomes available.

Incidents and severe human rights impacts

Reference: Responsibility for our employees, Facts & figures Own employees, "Incidents, complaints and severe human rights impacts" (p. 109).

2025 vs 2024: discrimination and harassment incidents 234 (515); other workplace incidents 944 (n/a comparative, bullying reclassified out of discrimination/harassment into this category in 2025); complaints to OECD National Contact Points 0 (both years); confirmed severe human rights incidents 0 (both years); no fines, penalties or compensation reported for either category in either year. Figures are reported "without regard to level of substantiation." S1-17 104(a) is defined for FY25 as substantiated child labor or modern slavery (incl. trafficking, forced labor) incidents identified via ABB's case management system.

Value chain worker policies

Reference: Social protection in the value chain, Supplier-related policies (pp. 113-114).

Governed by the Code of Conduct, Supplier Code of Conduct (SCoC, aligned with ILO standards; addresses trafficking, forced labor, compulsory labor, child labor, decent work and H&S), Policy on Conflict Minerals, Sustainability Policy, Human Rights Policy and Due Diligence Framework, Manage Vendor Onboarding Procedure, and Sustainable Supply Base Management (SSBM) Requirements & ACOP. The Human Rights Due Diligence Framework references the SSBM Program, which includes worker interviews as an integral engagement mechanism. Policies align with the International Bill of Human Rights, UNGPs, ILO Declaration on Fundamental Principles and Rights at Work, and OECD Guidelines for Multinational Enterprises.

Engaging with value chain workers

Reference: Social protection in the value chain, Engaging with value chain workers (pp. 114-115).

Engagement occurs via the SSBM program (monitoring, on-site evaluations/audits, worker interviews), the Responsible Minerals Program, sourcing activities, training/special projects and Supplier Day events. ABB works directly with Tier 1 and some Tier 2 suppliers; via the Responsible Minerals Initiative it reaches Tier 4-6 suppliers. Worker interviews under SSBM specifically include workers more at risk (women, migrants, workers with disabilities); if discrepancies with the SCoC or local law are found (e.g., excessive overtime, missing PPE), the supplier must create a Corrective and Preventive Action Plan within agreed timelines, with closure rates tracked to gauge SSBM program effectiveness. "A more detailed stakeholder engagement plan is in development."

Remediation and channels for value chain workers

Reference: Social protection in the value chain, Channels available to raise concerns (p. 115).

Primary reference is to G1-1 ("Whistleblowing and reporting channels") for ABB's Business Ethics Helpline, which extends to suppliers and value-chain workers. Supplementary to this: red-flag findings during an SSBM assessment linked to actual material negative impacts require the supplier to sign a red flag cooperation statement and take immediate action/remediation; if the supplier cannot demonstrate closure at follow-up audit, it is blocked from new business, and ultimately the relationship can be terminated (per the SSBM Approved Code of Practice). The SCoC requires suppliers to inform ABB immediately of suspected SCoC violations in their own supply chain; during SSBM worker interviews, workers are reminded of ABB's reporting channels.

Actions for value chain workers

Reference: Social protection in the value chain, Actions for workers in the value chain (pp. 117-120).

SSBM program (part of the wider Third-Party Management program): new suppliers complete a self-assessment; existing high-risk suppliers undergo on-site assessment on a five-year cycle, checking SCoC and local-law adherence; non-conformities trigger a Corrective and Preventive Action (CAPA) Plan verified at CAPA audit. "On average, 97 percent of supplier assessments result in one or more findings." Top 2025 non-compliances: fire license/firefighting equipment (66%), OHS risk documentation (54%), working hours/overtime (54%), emergency preparedness (53%), safe workplace (52%), human rights risk assessment (51%).

Conflict minerals: Responsible Minerals Program (3TG plus cobalt, mica); 2025 supplier response rate 97%, non-listed smelters 0; tin smelter outreach in Indonesia in 2025.

"There have been no substantiated cases of severe human rights issues and incidents reported in 2025."

Value chain worker targets

Reference: Social protection in the value chain, Workers in the value chain-related targets (pp. 115-117).

SSBM program targets, group-wide: mid-term target - 80% of high-risk supply spend in focus countries (Brazil, Bulgaria, China, Egypt, India, Malaysia, Mexico, Peru, Saudi Arabia, South Africa, Thailand, Tunisia, Türkiye) covered by SSBM by 2025; long-term target - 80% of all spend in these countries covered by 2026-2030.

"At the end of 2025, 80% of high-risk supply spending in focus countries was covered by the SSBM program" (vs. 68% at end-2024) - the 2025 target was met. Peru was added as a focus country in 2025 without materially affecting the calculation. "We currently have no targets relating to workers in the downstream value chain." Targets are monitored monthly by SSBM program management.

Community-related policies

Reference: Protecting vulnerable communities, Community-related policies (pp. 121-122).

Managed through the Human Rights Policy and Due Diligence Framework, Code of Conduct and Supplier Code of Conduct (human rights of affected communities); the HSE&S Policy (disruption/health risks from noise, pollution, hazardous materials); and the Policy on Conflict Minerals (communities near supply-chain mining). "Our policies are designed to protect communities broadly, with indigenous peoples recognized as an essential part of those they aim to support, even if not explicitly mentioned." "Our current policies do not include a dedicated engagement process with affected communities" - this is explicitly acknowledged as a gap. Remedy is addressed via G1-1.

Engaging with communities

Reference: Protecting vulnerable communities, Engaging with communities (p. 122).

"ABB has initiated the development of a stakeholder engagement plan during the reporting period," reviewing internal structures and resourcing; initial steps include identifying/profiling stakeholder groups, mapping/prioritizing by relevance and potential impact, and exploring engagement levels and methodologies, with implementation expected to begin in 2026. "At present, ABB does not have a formal community engagement process in place specific to local communities" - explicitly disclosed as a current gap rather than an established process.

Remediation channels for affected communities

Reference: Protecting vulnerable communities, Channels available to raise concerns (p. 123).

Information on reporting channels available to affected communities, including effectiveness assessment, is provided by direct cross-reference to "Good business conduct," section G1-1 ("Whistleblowing and reporting channels") - the ABB Business Ethics Helpline is explicitly available to external stakeholders including potentially affected communities, via online form or an international telephone hotline covering 50+ countries.

Actions for affected communities

Reference: Protecting vulnerable communities, Taking action in communities (pp. 123-124).

The HSE&S management system (self-assessment cycles, independent audits, centralized hazard/incident tracking, emergency preparedness) reduces risk of noise, pollution and hazardous-material impacts on nearby communities. The Responsible Minerals Program (RMI membership, RMAP third-party smelter audits) addresses conflict-mineral-related community risk. Community engagement runs on four focus areas (the "4Es": Education, Emergency and disaster relief, Empowering communities, Environment and conservation), including long-standing partnerships with Junior Achievement (youth education/entrepreneurship) and Special Olympics (inclusive sports, employee volunteering). "Although no specific targets are set for community-related impacts, our systems ensure that any actual issues are addressed."

Community-related targets

Reference: Protecting vulnerable communities, Community-related targets (p. 123).

"Although ABB has not established a specific target related to affected communities, primarily due to the current maturity level of our internal processes, we are committed to expanding our community engagement programs with the ambition of generating measurable impact." 2025 status: launch of a new Community of Practice (CoP) connecting practitioners across functions/countries, with Group-level guidance and sign-off on priorities. 2024 status: release of an internal guideline formalizing the community engagement strategy aligned with the Sustainability Agenda and the Four Focus Areas (4Es). This is a qualitative ambition rather than a quantified ESRS target.

Consumer and end-user policies

Reference: Protecting consumers, Consumer-related policies & processes (p. 126).

Consumer-related policies are described in the general Policies section (Code of Conduct, Human Rights Policy, Data Privacy Corporate Rules, Information & Cyber Security Policy). "ABB is in the process of developing a stakeholder engagement policy to fully cover downstream requirements"; a stakeholder engagement plan was initiated in 2025 (profiling and prioritizing stakeholder groups), with implementation expected to begin in 2026. Product safety and quality governance is described under S4 SBM-3: material IROs correspond to Privacy, Access to (quality) information, and Health/safety/security of a person.

Remediation channels for consumers and end-users

Reference: Protecting consumers, Consumer-related policies & processes (p. 126).

"For processes to remediate negative impacts and channels available to consumers and end-users to raise concerns and have them addressed, please see the description of the Business Ethics Helpline in chapter 'Good business conduct', section 'Whistleblowing and reporting channels'." The Helpline is explicitly open to consumers and end-users globally (online form or telephone hotline covering 50+ countries), with cases triaged into categories including HSE, human rights and security.

Actions on consumer impacts

Reference: Protecting consumers, Consumer-related targets & actions (p. 127).

"ABB has not yet set any consumer-related targets and action plans for fiscal year 2025. We intend to develop and implement targets and action plans, and the results will be included in subsequent reports as they become available." This single combined statement covers both S4-4 (actions) and S4-5 (targets); no dedicated action programs, KPIs, or effectiveness measures are disclosed for consumer/end-user impacts in the FY2025 statement beyond the qualitative product-safety governance and cyber-risk descriptions in S4 SBM-3 and the general references to automation-academy customer training and Net Promoter Score monitoring in the Executive Summary.

Consumer-related targets

Reference: Protecting consumers, Consumer-related targets & actions (p. 127).

"ABB has not yet set any consumer-related targets and action plans for fiscal year 2025. We intend to develop and implement targets and action plans, and the results will be included in subsequent reports as they become available." Consumers and end-users (S4) is the only ABB material topic with no quantified 2025-2030 target in the cross-cutting "Overview of targets" table (which covers E1, E5, S1, S2, S3 and G1); this gap is acknowledged directly by ABB rather than left silent.

Corporate culture and business conduct policies

Reference: Good business conduct, Business conduct-related policies (pp. 129-132).

Culture is built on four values (courage, care, curiosity, collaboration) and the ABB Code of Conduct (CoC), which applies globally including wholly owned affiliates, subsidiaries and controlled joint ventures.

Whistleblowing and reporting channels: manager/HR/Legal & Integrity reporting, plus the externally hosted ABB Business Ethics Helpline (available to employees, contractors, suppliers, consumers, end-users and communities; phone hotlines in 50+ countries), aligned with EU Directive 2019/1937. The Integrity Investigations and Monitoring (IIM) team administers the Helpline and investigates the highest-risk cases, reporting to the Chief Integrity Officer (who reports to the General Counsel, with periodic FACC updates). Non-retaliation is protected via the Whistleblowing Protection Statement and Integrity Investigations Framework; remediation follows the Human Rights Policy's UNGP-aligned commitments.

Training: CoC training via the Integrity Awareness Portal for all new employees; five "functions at-risk" (Sales, Procurement, Finance, Legal, HR) receive additional tailored training.

Management of vendor/supplier relationships

Reference: Good business conduct, Management of supplier relationships (pp. 133-135).

Governed by the Supplier Code of Conduct (SCoC, complementing the ABB CoC), covering human rights/decent work, H&S, climate/environment, material compliance/responsible minerals, business ethics and security; suppliers must disseminate equivalent requirements to their own supply chains. The SSBM program ("Beyond Audit" approach) integrates sustainability into supplier selection and life-cycle monitoring. The Third-Party Management (TPM) program sets minimum integrity requirements for onboarding, engagement, monitoring and termination of third parties. Suppliers are asked to register in EcoVadis for carbon/ESG scorecards, which inform supplier evaluation/selection. All suppliers must sign ABB's General Terms and Conditions (anti-bribery, sanctions/trade control, human rights/anti-modern-slavery obligations). Category management includes single-source risk strategies and local-for-local supply chain setups to reduce disruption risk.

Anti-corruption and anti-bribery program

Reference: Good business conduct, Anti-corruption and anti-bribery (pp. 136-137).

"At ABB, we have zero tolerance for unethical business practices." The Anti-Bribery and Anti-Corruption (ABAC) framework covers vendor/customer/sales-channel engagement, gifts/travel/hospitality, donations/sponsorships, travel and expense compliance, incorporated into financial reporting controls via an ABAC Risk Catalogue; supported by data-driven dashboards for periodic risk assessment and monitoring. Training combines self-guided and role-specific mandatory modules ("Straight Talk" lessons-learned stories, quarterly "Integrity on the Business Agenda" messages); "100 percent of functions deemed most-at-risk of bribery and corruption have access to the learning program." The Chief Integrity Officer reports quarterly to the FACC with periodic updates to the full Board and EC.

Incidents of corruption or bribery

Reference: Good business conduct, Facts & figures Business conduct (pp. 137-138).

"ABB has not been the subject of any convictions or fines for violation of anti-corruption and anti-bribery laws during the reporting period." All reported potential ABAC breaches are investigated, with remedial measures tracked under the Investigations Framework; insights are discussed in division reviews, monthly EC business reviews, and with the FACC, and shared with employees via "Straight Talk" stories. This disclosure should be read alongside GOV-3's reference to the Deferred Prosecution Agreement with the US Department of Justice concerning the historical Kusile project, which continues to inform one of the EC's mandatory AIP governance goals in 2025.

Payment practices

Reference: Good business conduct, Facts & figures Business conduct, "Payment practices" (pp. 138-139).

2025: average payment term (all population) 73 days; SME payment term 70 days; average days to actually pay an invoice 79 days (SMEs: 77 days); payments made on time (against agreed terms) 54% (SMEs 53%); including a 3-working-day internal grace period, on-time share rises to 88% (SMEs 87%). "At the end of fiscal year 2025...ABB had 5 legal proceedings outstanding for late payments to its suppliers, of which 5 have been contested by ABB." SME is defined per Moody's data as under 250 employees and either under $50m turnover or under $43m balance sheet (or under $100k ABB spend in the trailing 12 months if Moody's data is unavailable).