Recently sustainability is going about a mantra for a batch of companies. Over the past decades authorities, society, houses and nongovernmental organisations have increased their involvement and attempts in environmental friendly production. Sustainability as bombilation word is being used in every context every bit shortly as environmental issues are raised. However, sustainability does non connote merely environmental issues, but besides refers to societal and economic facets when used in organisations ( Epstein, 2008 ) . With the debut of criterions and policies, houses have to pull off and mensurate corporate societal, environmental and economic impact.
Aim and method
This study will lucubrate on the sustainable public presentation of ABB. The overall purpose is to analyze the concern scheme in relation to the sustainability direction of the company and whether there is room for betterment sing ABB ‘s sustainability direction.
Information on ABBs direction public presentation will be collected by turn toing the undermentioned issues:
- The drive forces behind the sustainability public presentation ABB ;
- ABB ‘s most important environmental facets ;
- ABB ‘s sustainability policies ;
- ABB ‘s sustainability tools, prosodies and methods and the possibility for extra tools, prosodies and methods ;
- ABB ‘s force per unit area on providers.
Information on ABB ‘s sustainability will chiefly be gathered by utilizing the information supplied in their sustainability study. In instance necessary information of ABB ‘s web site will be used. In order to understand the information and support unfavorable judgment scientific documents will be used as an information beginning.
Before reexamining and lucubrating on ABB ‘s environmental direction public presentation, some definitions have to be introduced to increase understandability.
Environmental Management System ( EMS )
The portion of the overall direction system that includes organisational construction, be aftering activities, duties, patterns, processs, procedures and resources for developing, implementing, accomplishing, reexamining and keeping the environmental policy. ( ISO 14001 )
Measurable consequences of the environmental direction system, related to an organisation ‘s control of its environmental facets, based upon its environmental policy, nonsubjective and marks. ( ISO 14001 )
ABB is a taking company in regard to power and mechanization engineerings. ABB merchandises and services are designed to assist its clients to better their public presentation and diminish the related environmental impacts. These merchandises and services are categorized in five subdivisions as follows:
Power merchandises:these merchandises are cardinal constituents to pass through and administer electricity including transformers, switchgear, etc. ABB alongside with these merchandises offers all the needed services to verify merchandises ‘ public presentation.
Power systems: ABB offers “turnkey systems and services for power transmittal and distribution grids” .
Discrete mechanization and gesture: This subdivision has been designed to supply merchandises, services and solutions in order to raise energy efficiency industrial productiveness.
Low electromotive force merchandises: Includes production of low electromotive force surfs, switches, etc with the purpose of protecting people and equipment from electrical overload.
Procedure mechanization: Provides clients with merchandises and services for “instrumentation, mechanization and optimisation of industrial process” ( the ABB group, 2010 ) .
2.1. ABBs most important environmental facets
ABB has divided their position on environmental issues into two classs: environmental public presentation and sustainability. The environmental public presentation largely focuses on mensurating different sorts of emanations from the ABB group. The providers and clients ‘ impact on the environment are excluded from the figures. The sustainability subject includes more visions and ends, including ABB ‘s “seven priorities” which covers different angles of ABB ‘s work with sustainability. These seven precedences are ( ABB, 2010 ) :
- Energy efficiency – ABB invariably tries to minimise the energy use while maintaining productiveness and end product integral. This is made by advancing fabrication techniques, working methods and behaviour that are less energy devouring. ABB ‘s ain operations today emit 1.7 million dozenss of CO2 and a undertaking to cut down CO2-emissions with 5 % is presently being conducted within the company.
- Climate alteration – Today ABB focuses on three facets: Helping clients to be more energy-efficient, to cut ABB ‘s ain emanations from fabrication and addition usage of renewable and emission-free energy beginnings ( like air current power ) .
- Pull offing environmental impact – Much attempt is put into the planing procedure of new merchandises where design applied scientists are utilizing tools like LCA to measure the environmental impact of the merchandise designed. All fabrication subdivisions within ABB are utilizing ISO 14001 and OHSAS 18001. ABB besides tries to hold a close cooperation with sustainability organisations and universities.
- Seeking improved safety for workers – Training and instruction for workers are important for maintaining the working accidents ratio low. In 2007, 22 people were killed during working hours ; in 2008 this figure had been cut to 10. Main attempts are being taken in India, were all deceases in 2008 happened.
- Corporate attempt to seek higher criterions – ABB wants to be a good citizen corporation with high criterions in environmental, societal and ethical inquiries. This is conducted by affecting both the company and its workers into different sort of undertakings. These undertakings can be voluntary work, implementing electricity grids into Tanzania or back uping different sort of clime councils with electricity-efficient merchandises.
- Sustainable merchandise development – As told before, big attempts are put into the design stage of a new merchandise. During all the stairss of the merchandise realisation procedure sustainability ends and visions are included and followed. This can include following the LCA process, utilizing the precautional rule for chemicals and stuffs and holding checklists that guarantee no safety hazards or risky substances are embedded into the merchandise.
- Sustainability in the supply concatenation: Promoting best pattern – Alongside cost, quality and punctual bringing, ABB demands that all chief providers make some sort of appraisal of their sustainability public presentation and favours providers that use an established method for appraisal ( like the ISO 14001 ) .
While Sweden ‘s environmental ends are instead focused on the consequence of different emanations and pollutants ( Clean air aim, a non toxic environment, zero eutrophication, good quality groundwater ) ABB tends to hold their focal point on energy economy, wellness issues and merchandise development ( Swedish Environmental Objectives Council, 2009 ) .
Some aims are instead similar though, particularly cut downing impact on the clime. It is of class really likely that all the attempts ABB are carry oning will be needed to fulfill the environmental ends of Sweden. Still, about everything that includes worker duty and societal activities are left out in Sweden ‘s environmental ends. ABB does mensurate all emanations and includes these figures into both sustainability studies and have these figures displayed at their web site. The emanations are of class more of import on a national degree than on corporate degree but it is still a small spot unusual that ABB does non include decreased emanations of different pollutants into their sustainability marks. Even though ABB province that emanations are low compared to other industries it is still really of import to endeavor against betterment! This is even more of import when no impact of their providers and users are included in the consequence as chief environmental impact of ABB ‘s merchandises likely emerges in the usage stage.
2.1.1. Demands on the supply concatenation
All providers that are hired by ABB have to transport out a questionnaire constituted by ABB themselves. This questionnaire focuses on environmental public presentation and wellness & A ; safety issues. ABB states that providers that use ISO 14001 or any other sort of widely known managing system are preferred. If the provider does non carry through the environmental, safety and/or wellness standards so ABB have developing plans that ensures that providers can reply to the ends of ABB. When contracted the providers are continuously audited and revised to do certain that committednesss are being executed decently ( ABB, 2010 ) .
2.1.2. Global heating
2.2. ABB ‘s environmental direction public presentation
For ABB, sustainability is about equilibrating economic success, environmental stewardship and societal advancement to profit all their stakeholders ( ABB group, 2008 ) . Actually this is the first sentence of their sustainability study and might encapsulate already some drive forces behind the environmental public presentation of the company. For direction, environmental public presentation is non the lone index that affairs. So, sustainable public presentation might be a more suited term, since it encapsulates besides the paradox of at the same time bettering, besides environmental public presentation, besides societal and fiscal public presentation ( Epstein, 2008 ) .
In literature several internal and external factors are mentioned which are the drift for implementing a corporate scheme sing sustainable public presentation. Epstein indicates the undermentioned drive factors:
- Internal factors:
- Management committedness to sustainability as a nucleus value ;
- Management acknowledgment that sustainability new wave create fiscal value.
- External factors:
- Government ordinance ;
- Marketplace demands ;
- Rivals ‘ actions ;
- Pressures from non-governmental organisations ( NGOs ) .
These drive forces are more or less consistent with the factors indicated by Zhang et Al. in their article “why do houses prosecute in environmental direction? ” They addressed that force per unit area form the supply concatenation, the clients, and the community drive the company to prosecute in environmental direction ( Zhang, 2008 ) .
Harmonizing to the above mentioned internal and external factors, ABB ‘s drive forces will be indicated and reviewed.
As ABB is one of the leaders in power and mechanization engineerings, it is inevitable that they will non disregard the environmental studies of last decade. In their sustainability study ABB promotes itself as a company where sustainability is portion of its concern and is embedded in their day-to-day operations. Furthermore, ABB is affecting in the public treatment about environmental direction concerns as they give seminars. These factors indicate the committedness of ABB ‘s direction to sustainability.
Besides committedness, ABB ‘s direction recognizes the fiscal benefits of sustainability every bit good. Hence ABB is involved in energy and mechanization engineerings, so advancing sustainability in times of planetary acknowledgment of planetary heating and depletion of fossil fuels is ought to make fiscal value every bit good. This indicates besides an external drive force, market place demands, which might be one of the most of import drive forces of ABB ‘s drift for implementing a corporate scheme sing sustainable public presentation.
The relation between the drive factors is interesting, since it is difficult to find whether ABB is taking action because of market topographic point demands or for illustration rivals actions. For illustration Siemens, possibly one of the biggest rivals of ABB, cites in their environmental study “In fact our Environmental Portfolio – the largest of any company in the universe – already generates a one-fourth of our gross, and we have a planetary environmental direction system in topographic point to guarantee that our merchandises and solutions along the full value concatenation run into high criterions of environmental performance” ( Siemens, 2008 ) . It is apparent that when a rival promotes itself like this, with regard to the concern they are involved in, it is for ABB non ponderable to pretermit sustainability/environmental measurings.
Information and literature on force per unit areas from non-governmental organisations is non mostly available. ABB informs in their sustainability report the stakeholders about a coaction with a NGO and province governments on a solar power undertaking for a desert community. Furthermore ABB is sharing ideas with NGOs which might an index of some force per unit areas.
3. Environmental & A ; Sustainability Management ( ESM ) at ABB
Sustainable development has been integrated to all the concern facets at ABB through company ‘s environmental & A ; sustainability direction plan. This plan has been developed through 3 stages since 1991 forward. The chief facets of each stage have been described briefly as follows ( Karlson, 2003 ) :
- Get downing of ABBs environmental direction plan officially in 1991 after subscribing ICC Business Charter for Sustainable Development
- Establishing an environmental scheme in 1994 following with environmental audits of company ‘s fabrication activities in 35 states
- Developing Life Cycle Assessment ( LCA ) as a direction tool and its cardinal function in merchandise development
- Developing a enchiridion including guidelines for design and material choice activities in order to fulfill the company ‘s environmental ends ( Karlson, 2003 )
- Get downing in 1994 by presenting a LCA package tool and the enchiridion in ABBs merchandise development sections globally aboard with the related preparations
- Execution the environmental direction system at 98 % of all ABB sites by 2001 ( Karlson, 2003 )
- Get downing in 1998 by execution of some communicating tools like Environmental Product Declaration ( EPD ) in order to pass on the merchandise information to its stakeholders particularly clients
- Get downing a stronger focal point on environmental public presentation of merchandises through LCA ( Karlson, 2003 )
3.1. Current ESM tools & A ; methods
In order to fulfill the environmental and sustainability development, ABB uses some direction tools and methods. Below the most of import 1s have been described.
Life rhythm Assessment ( LCA )
LCA is a tool used to place and analyse the possible environmental impacts of a merchandise, system or service within its life rhythm from cradle to sculpt. LCA has been used within ABB from 1990s as a utile environmental direction tool. The restriction of this method is that LCA is excessively much scientific discipline driven and complicated and is non made to be used easy. It besides needs adequate fiscal and human resources in order to be implemented efficaciously. So expertness and support are two most of import restrictions of utilizing this method particularly in little graduated table companies with limited resources and experts ( UNEP, 2005 ) .
Design for Environment Information ( DFE )
ABB started a DFE site on company ‘s intranet within twelvemonth 2000. This tool has enabled all ABB employees, at all determination devising degrees, to hold entree to the environmental cognition developed in ABB. This information is included but non limited to ABBs list of restricted substances, LCA showing tools, practical guidelines to carry on environmental tools, ABB environmental experience and developing stuff on product-related environmental issues. ( Karlson & A ; Wisen, 2002 ) .
Environmental Product Declaration ( EPD )
ABB uses EPDs in order to supply clients with information on merchandises ‘environmental impacts. The barriers of utilizing this tool are the cost of EPDs development and the demand for high degree of environmental competency which most ABBs employees lack. The high cost of implementing this method has caused that ABB develops EPDs merely for “core products” or high volume merchandises which is a booby trap for this method which end is supplying equal information for all merchandises. On the other manus EPDs are complicated and difficult to understand for some of ABB clients ( Karlson, 2003 ) .
The Global Reporting Initiative Guidelines ( GRI )
GRI is a network-based organisation that aims to develop a sustainability coverage model. Sustainability studies based on GRI model are used to mensurate organisation public presentation sing Torahs, codifications, criterions, etc, present organisation ‘s sustainable development and show organisational public presentation over clip. ABB follows GRI guidelines in order to describe its economic, societal and environmental public presentation. Each point in ABBs fabrication system is labeled with the relevant GRI public presentation index figure. ABB has continuously met GRI recommendations and added more indexs. Within GRI system, ABB has besides included its non-manufacturing organisations by specifying indexs to gauge the used electricity and H2O & A ; heat ingestion per individual. The restriction of such a big organisation as ABB to utilize GRI is that some GRI indexs are impossible to reply due to the broad scope of ABB merchandises in many divergent sites ( ABB Group, 2003 ) .
3.2. ISO criterions and guidelines
ABB has adopted different guidelines and ISO criterions for its ESM intents. Table 1 below shows adopted criterions with their application country at ABB ( ABB Group, 2008 ) .
Adopted Guidelines and ISO criterions
Application Area at ABB
O ICC Business Charter for Sustainable Development
O ISO 14000 criterions
O ISO 14001
O ISO/TR 14025
Environmental Product Declarations ( EPD )
O ISO 14040-49
Life Cycle Assessments ( LCA )
O ISO 19011
O ISO 14010-15
Environmental Auditing of Organizations
O rules of OHSAS 18001
O the International Labor Organization ( ILO ) guidelines on occupational wellness and safety direction systems
O the ILO Code of Practice on Recording and Notification of Occupational Accidents and Diseases
Health and Safety plan
O ISO 14020-25
Table 1: Adopted guidelines and ISO criterions at ABB
3.3. Other prosodies
In order to supply a holistic position on other prosodies suited for ABB, qualitative and quantitative information on other prosodies and tools is necessary. Furthermore, the recommendations should bespeak an betterment in sustainable public presentation, so prosodies which effects are rather similar to bing prosodies should be avoided. Remember that sustainable public presentation includes environmental, societal and fiscal public presentation. ABB already achieved a batch of environmental public presentation by implementing tools and prosodies on reductionistic degree. Now, ABB has to unite its cognition in order to better on holistic degree, which means combine tools and prosodies for societal, fiscal and environmental public presentation on corporate degree, but besides on supply concatenation degree. In this paragraph the undermentioned prosodies and tools will be elaborated on its sustainable public presentation increasing value sing ABB ; Balanced scorecards for sustainable public presentation ; corporate sustainability theoretical account and the ternary underside line attack.
3.2.2. Balanced scorecard for sustainable public presentation
The balanced scorecard is a strategic direction system that links public presentation measuring to scheme utilizing a multidimensional set of fiscal and nonfinancial public presentation prosodies ( Epstein, 2008 ) . As ABB already implemented a batch of environmental public presentation prosodies ( LCA, EPD, ISO etc. ) , fiscal prosodies and societal prosodies ( GRA, ISO etc. ) it is suited to associate these public presentation prosodies in a balanced scorecard which will associate the operational and non-financial corporate activities with its long term scheme. The most common balanced scorecard consist of four different positions, fiscal, client, internal concern procedures and larning and growing position ( Figge, F, et al. , 2002 ) . Figge et Al. give three ways of incorporating societal and environmental facets into the balanced mark card:
- Integration of environmental and societal facets in the four balanced scorecard positions ;
- Introduction of an extra non-market position in the balanced scorecard ;
- Tax write-off of a derived environmental and societal scorecard.
For ABB the balanced scorecard will supply a strong tool for incorporate sustainability direction. The societal, fiscal and environmental prosodies will therefore be integrated into a metric which will associate operational activities with its long term scheme.
3.2.3. Corporate sustainability theoretical account
Epstein elaborates in his book doing sustainability work on the Corporate Sustainability Model. This theoretical account offers counsel to directors seeking to do the concern instance for sustainability enterprises ( Epstein, 2008 ) . The Corporate Sustainability theoretical account is another manner of associating all the low degree single prosodies into a holistic theoretical account to advance sustainable public presentation and digesting value for stakeholders. Since the theoretical account identifies and communicates causal relationships throughout the organisation it is possible to steer the integrating of the different prosodies ( environmental, fiscal and societal ) . ABB will in this manner be able to do determinations by utilizing for illustration a combination of its LCA, GRI and fiscal drivers. Furthermore the system will help sustainability and environmental directors as they evaluate the trade -offs and make up one’s mind which sustainability undertakings provide the largest net benefit to both sustainability and fiscal public presentation ( Epstein, 2008 ) .
3.2.4 Triple underside line attack
Another tool to associate the three elements, economical, societal and environmental public presentation, together is by utilizing the so called three-base hit underside line attack. ABB should non utilize sustainability merely as a bombilation word for lone operational agencies. By utilizing the ternary underside line attack, ABB is able to develop corporate sustainability sing the three dimensions simultanioulsy ( Dyllick and Hockerts, 2002 ) .
Is it truly to take duty to demand / prefer providers that already use ISO 14001 and OHSAS? Would it non be better if a company like ABB, that tries to be a good corporate citizen, uses and contracts providers that non are utilizing these systems? Would non that be to take more duty for wellness, safety and environmental issues?
ABB presently integrates sustainable development in all stages. Remember for illustration the usage of EPDs for a great bulk of their merchandises. This indicates the great attempt on taking at a high sustainable public presentation. However, betterments sing communicating of guidelines and new tools and prosodies are still possible.
As already stated, clients still have troubles understanding the EPDs as it is a new manner of documenting environmental concerns and pass oning them. However, with the attempt presently being put in, this method will surely being really assuring. Harmonizing to Karlson, in order to successfully implement this tool ABB should:
- Increase cost efficiency in developing EPDs ;
- Supporting tools for reading and ease the usage of EPDs should be developed ;
- A wider usage of the EPD method should be adopted in order to acquire a planetary apprehension of it.
Although Karlson ‘s study stems from 2003, back uping tools and a wider of usage of the EPD method still needs considerable attending. As published on their web site, it seems that ABB has succeeded in cutting costs as a great sum of merchandises have obtained a EPD. Besides ABB should cognize that it is non ever possible to apportion environmental impacts straight to single merchandises ( Allander, 2001 ) .