Adam Roscoe has been head of sustainability for engineering giant ABB Group since 2006 and in the pilot seat steering the company on its sustainability journey.
Roscoe, who is based at the company’s headquarters in Zürich, Switzerland, has global responsibility for sustainability, including environmental management, climate change, corporate responsibility, human rights, occupational health and safety and crisis management and security. He is a frequent visitor to countries in Asia and in particular Singapore.
He joined ABB in 2001 and was involved in managing communications around many of ABB’s corporate, management, financial and environmental issues prior to his current position. He trained as a journalist and spent seven years in newspaper and broadcast journalism.
In this exclusive interview with Eco-Business, he shares how sustainability has changed the way corporates approach businesses and what drives ABB to want to be one of the world’s leading organisations on sustainability.
You’ve been head of sustainability since 2006, and at ABB since 2001 so you’ve seen the company through more than a decade. Can you share with us how the concept of sustainability has evolved since those early days?
If I look back at sustainability in corporations, in the mid to late 90s it was quite clear that the NGOs were successful in holding bigger companies to account on their environmental performance. So for many MNCs like ABB, one of our priorities then was to get our house in order, get our processes cleaner, more efficient. We looked at reducing impact when we deployed various projects; it was a process of understanding our environment impact and about environmental sustainability.
As we crossed over the millennium into the 21st century, we started looking more at the social aspect. So we focused on human rights and labour issues. We also looked at the other part of the triple bottom line (of people, planet and profit) – which included the financial aspect.
How so? Can you elaborate?
Today, it’s quite clear when you look at ABB’s portfolio that a large proportion of our revenues come from products that help customers reduce their environmental impact. We’re making money from helping people help the environment, and we’ve been able to embed sustainability into all aspects of our business.
At the heart of this is some dedicated hard work by our research and development colleagues who have undertaken Life Cycle Analyses of more than 100 product groups, which result in us being able to communicate solid and reliable Environmental Product Declarations that itemize the environmental impact of every aspect of a product’s life-cycle – from extracting the raw material, manufacture, in use and recycling or disposal.
How has ABB’s approach to sustainability changed over this past decade?
About 10 years ago, for example, sustainability issues in the supply chain were not on our agenda. But slowly, it was creeping up the agenda for the power industry, and was even affecting industries such as sports manufacturing. It was something that ABB didn’t think applied to it in a critical way, but it became quite clear that what happened in the consumer industry will at some stage hit the capital goods market.
“
One area we are perhaps lacking is being recognised for our contributions to a better world. We have lots of opportunities to do this and base our story on solid data and evidence. I would never greenwash. My intention is that ABB’s stories are backed by solid data.
So we began to convince colleagues who headed supply chain that we should have some sort of oversight. Over the last three years, we’ve been working with the head of supply chain and his team to implement a supplier sustainability programme and that trains our key suppliers, particularly in India and China, on the expectations we have.
This involves addressing issues such as how we expect them to behave on social, health, safety and basic things like labour rights, like paying people the right amount of money for the work they did. We started auditing and found that they were not complying in some areas, so we decided we would go higher up the chain and we implemented a training programme to ensure suppliers understood our expectations. So it’s still a work in progress.
Sustainability is a journey and not a destination. As long as we have some milestones on our route, and we have a positive direction, then we can make some progress. I would never claim that we’ve arrived at any of our objectives or KPIs – it’s an improvement process.
One of ABB’s objectives, as stated publicly, is to become recognised as one of the world’s leading organisations in sustainability – where is ABB on that journey? What are some challenges you forsee in fulfilling this vision?
Yes of course it’s a very ambitious target to be recognised as the world’s leading companies in sustainable practices. We certainly have pockets of excellence, and we are focused on minimizing and reducing our impact. I think our health and safety performance is probably not as mature as we expected and we will double our efforts in that area.
In areas such as supply chain sustainability, I think we are making good progress. For example, we are looking at suppliers in Malaysia in the coming year and adding to India, China and Mexico, we will also include the Middle East and Saudi Arabia.
In terms of community and local stakeholder engagement, we have set some minimum activity level and standards for that engagement. For example, we have developed a standard way to engage stakeholders in a formal dialogue so we can capture their inputs from a standardised process across different countries.
In addition, while we think we make some good contributions to local communities, we have developed a tool to help us identify appropriate causes to support and to measure the positive impact of that support. One area we are perhaps lacking is being recognised for our contributions to a better world. We have lots of opportunities to do this and base our story on solid data and evidence. I would never greenwash. My intention is that ABB’s stories are backed by solid data.
What motivates ABB? Not all engineering companies have this focus.
I’ll use a hackneyed anology. We’re pushing at an open door with regards to ABB and sustainability. There are inherent qualities and benefits in reducing energy use, optimising resource use, helping customers get more bangs for their buck… this addresses all three aspects – social, economic and environmental.
So for me, it’s not that ABB has to step outside normal business activities and think about being sustainable, it’s increasingly how we do things in ABB as a mainstream activity – a business imperative.
Have there been instances where ABB has had to make a tough decision between bottom line performance and sustainability environmental considerations?
Yes, there are some examples. Sustainability is a major consideration whenever we review projects. We have a seat at the table when major projects are being discussed, and we’ve looked at it from the technical, financial and sustainability point of view.
We have walked away from bidding on projects on the basis of concerns about human rights impact. If we are not necessarily going to be able to manage the risks, then we must consider the impact it will have on our reputation.
For instance, there was a small customer project where we were concerned about forced labour issues and we declined to supply products in the end. We have such a multitude of customers across the globe, and we are held to account to our most demanding of customers even if they’re not buying from us at the moment.
If we’re highlighted in the press as helping others abuse communities and human rights, others will start asking us what we’re doing, and we don’t want to have those conversations with our customers. Avoiding the hazard – instead of managing the risk – is the better option. But we are in the business to make money, so managing the risk – if it is not a ‘deal-breaker’- is very often something that we might end up having to do.
We are also very thorough, open and honest in identifying the risks, and we have a plan on how best to mitigate them and that can involve social, environment, health and safety, or security aspects as well.
In Asia, where the awareness of sustainability is minimal in some developing countries, do you face difficulties talking about these issues to your suppliers and clients? How do you approach this?
In Asia, it’s extremely varied. The awareness level ranges from absolute zero to 100 per cent. It’s something that is relatively new in business anyway, but the awareness is growing. To me, it demonstrates how exceptionally fast companies in the region are in terms of learning these so-called ‘non-financial ’issues.
“
It’s a win-win. We tell them (suppliers): look after your people, be a good corporate citizen, and they also end up doing more business because other global companies will buy from them.
They are concerned not because they want to be at the forefront of human rights development, but they understand that if you want to win a project, you must do it with considerations for human rights. That’s a “permission to do business” issue and a profitability issue. If you get projects wrong in countries like in India, for example, you can expect the local community to let you know in a direct way that they don’t like it. Some have been known to barricade your roads, and these disruptions cost money. It’s better if you assess what the critical issues are early and manage them with a plan.
With regards to our contractors and suppliers, we had a wake-up call about two years ago. We thought we would do a simple audit and address some non-compliance issues and get suppliers to fix it. But in some cases, you have to explain in very simple and basic terms what you expect them to do, such as it’s not okay to put polluted water into a drain or chuck your waste in a backyard where children can get injured.
But once you start talking to them about these topics, they are very fast to appreciate the value they bring to the business. We had one supplier in India who didn’t want to come to training, and didn’t want anything to do with our audit programmes. Eventually, we got them involved and a year later, they came back saying they were 20 per cent more productive. It’s a win-win. We tell them: look after your people, be a good corporate citizen, and they also end up doing more business because other global companies will buy from them.
We’re not on a crusade to correct all the ills in the global supply chain, but within our remit, we certainly want to improve capacity and performance.
Does ABB’s sustainability efforts help it win customers? How about in Asia?
I think it certainly does. We conducted a brand perception survey here and one of the things ABB was recognised for was corporate citizenship, so sustainability is linked to our brand as well as to power and innovation.
There’s much more we can do on the sustainability side. There are many on-going discussions now about sustainable development, and we have the technology to make it happen today, rather than tomorrow. Our strong credentials also helps us to conduct dialogue on these issues around the world.
How do you view ABB’s role in advancing sustainability in Singapore – and more broadly in Asia- given that it has become more important in this region?
We see it as a tremendous growth opportunity. There’s a lot more we can do in terms of the technologies and projects that we are involved globally, and there huge opportunities for similar projects in the region. Our solutions could help the region’s development tremendously. For example, in Indonesia, almost half the population do not have access to regular electricity so ABB can be quite central to that infrastructural development and we can raise sustainability in a number of ways through our projects.
You were a journalist before, so can you share what stories on ABB’s sustainability journey have stood out for you?
There are a couple – the community impact of ABB has been quite large and global, particularly in Asia. For example, the ABB Juergen Dormann Foundation was set up in 2007 to promote and support engineering education in different parts of the world.
“
Ultimately, the story about sustainability is that every day, when ABB people get up and go to work, they are making a contribution for a more sustainable world… We’re both making money and saving the planet. It’s a pretty good gig.
It was set up to mark Dormann’s contribution in helping ABB turn the corner in early 2000. When he retired, ABB put several million dollars into a fund that would help educate students who come from poorer backgrounds in engineering. In South Asia, for example, we have relationships with three universities in Malaysia, India and Vietnam, and worldwide the foundation has supported 70 to 80 students gain degrees that they wouldn’t have been able to achieve otherwise.
Some of them have even come to work for ABB, so that’s a great closed loop. We make a contribution to educate an individual, and we benefit from a highly-skilled engineer who enters our workforce and makes a contribution. It’s truly heartwarming, and it also illustrates how there are business benefits to such programmes. It’s a win-win situation.
Ultimately, the story about sustainability is that every day, when ABB people get up and go to work, they are making a contribution for a more sustainable world, just through their work, in making products and solutions that are more energy efficient. We’re both making money and saving the planet. It’s a pretty good gig.
