1. Jörgen Centerman President and CEO
Sustainability media briefing
London, June 5, 2002
Jörgen Centerman
President and CEO

2. Overview ABB in the market Commitment to sustainability
Examples of sustainable products
Way forward and priorities

3. Every single customer of ours needs power and automation technologies
ABB’s focus
We focus on power and automation technologies …
… enabling utility and industry customers to improve performance while lowering environmental impacts
Every single customer of ours needs
both
power and automation technologies

4. The customer-centric structure
ABB in the market
The customer-centric structure
C U S T O M E R S
Industry-specific power and automation
products, solutions and services
Oil, Gas
and
Petrochem
External
Channel
Partners
External
Channel
Partners
Utilities
Industries
G r o u p P r o c e s s e s
Generic power and automation products
Power Technology Products
Automation Technology Products 2

5. IndustrialIT key element in our sustainability
ABB in the market
IndustrialIT key element in our sustainability
IndustrialIT – one architecture – common approach
Plug and produce for all power and automation offerings
Lower cost, higher quality, ease of use and integration
Environmental performance part of product offering
Four levels of IndustrialIT certification
Optimization
Integration
Connectivity
Information
Almost 10,000 products and product groups certified All relevant (40,000) by year-end

6. IndustrialIT drives sustainability benefits
ABB in the market
IndustrialIT drives sustainability benefits
Less energy consumption
Less raw materials use
Lower environmental impact
Lower costs

7. Overview ABB in the market Commitment to sustainability
Examples of sustainable products
Way forward and priorities

8. A triple bottom line focus on people, planet and profit
Commitment
to sustainability
Our triple bottom line approach
ABB’s pursuit of sustainability is to balance and continuously improve the three elements of our performance
Economic
A triple bottom line focus on people, planet and profit
Sustain-
ability
Social
Environmental
(speach note: And now I’ll take you through the 3Ps

9. Commitment
to sustainability
Economic performance
To ensure ABB’s sustainability, our economic performance is the top priority
n EBIT 1.2% in 2001; 4.5% in Q1 2002;
aiming for 4-5% in 2002
n Net debt US$2 billion reduction in Q4, 2001;
cut by another US$1.5 billion in 2002
n Revenues 8% in 2001 (local currencies)
maintain 6% average growth per year

10. A life cycle focus Environmental performance 10-30 years Weeks
Commitment
to sustainability
Environmental performance
Customers
Gate 3
Recycling
10-30 years
Grave
A life cycle focus
Suppliers
ABB
Weeks
Environ-
mental
impact
ABB
Gate 1
Gate 2
Cradle

11. Environmental performance
Commitment
to sustainability
Environmental performance
Suppliers and ABB
n Environmental requirements communicated to all major suppliers, SQR (Suppliers’ Qualification Requirements)
n Environmental Management Systems implemented in almost all manufacturing sites (531 in 50 countries)
n Over 1,000 continual improvement projects at any point in time
n Environmental Product Declarations for core products
Pioneering environmental performance

12. Commitment
to sustainability
Implementation of ISO 14001
600
500
400
300
200
100
(98%)
ABB’s manufacturing sites ISO 14001

13. Reducing hazardous waste in ABB Shanghai Transformer Co. Ltd, China
Commitment
to sustainability
Environmental performance - Manufacturing
Reducing hazardous waste in ABB Shanghai Transformer Co. Ltd, China
(tons)
50% reduction in three years

14. Environmental performance - Manufacturing
Commitment
to sustainability
Environmental performance - Manufacturing
Reducing the consumption of electricity (MWh) for manufacturing of electrical machines at ABB Motors, Sweden
1994
1995
1996
1997
year
1998
1999
2000
2001
0,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
9,00
10,00
MWh of electricity per MW of machine size
Target Result

15. Environmental performance
Commitment
to sustainability
Environmental performance
Customers and ABB
By continuously increasing the environmental performance of our products and services, we have even bigger impact on our customers’ performance
n Increased capacity
n Increased efficiency of industrial processes
n Increased product performance
n Less energy consumption

16. Environmental performance
Commitment
to sustainability
Environmental performance
Improved efficiency of LV AC motors
Further improved by using electrical drives
100 95 90 85 80 75
Motor
Total
Drive*
* Frequency converter & electronics
efficiency %
Industry uses 50% of all electricity
- of which 65% for electrical motors

17. Social performance detailed in in our new Sustainability Report
Commitment
to sustainability
Social performance
New ABB social policy launched last year
Policy tested through stakeholder engagement (45 dialogues in 34 countries)
We acknowledge the social impacts of ABB’s transformation
Social performance detailed in in our new Sustainability Report

18. Social policy focus Employees Occupational health and safety Suppliers
Commitment
to sustainability
Social policy focus
Employees
Occupational health and safety
Suppliers
Community involvement
Business ethics
ABB is committed to corporate social responsibility Social performance as important as environmental

19. Overview ABB in the market Commitment to sustainability
Examples of sustainable products
Way forward and priorities

20. ABB a key integrator and component supplier
Examples of
sustainable
products
Integrated energy systems
ABB a key integrator and component supplier
Small-scale, distributed and renewable sources of electricity are key additions

21. Examples of
sustainable
products
Windpower
n ABB is world’s largest supplier of components for wind technology, e.g. generators, transformers, control systems, cables, substations
n HVDC Light technology transmits power to the grid with low losses
n ABB’s business for wind power has increased by 25% per year over the past few years

22. Quick and simple installation
Examples of
sustainable
products
Microturbines
n Demand for small-size power plants particulary where there is no grid
n A microturbine comprises a high-speed gas turbine and a direct-driven generator
n Hot gas from the turbine can be used as a resource for heating or cooling (co-generation)
n 80% efficiency (50% for heat 30% for electricity)
Speach notes
Quick and simple installation
Short payback times

23. Motorformer - significant savings
Examples of
sustainable
products
Motorformer - significant savings
Connects directly to the grid, eliminating ancillary components
Produces reactive power to support the network, i.e. less losses
Replacing a 20 MW conventional machine would reduce CO emission by 7,500 tons over 20 years (equals 3,000 households for one year)

24. Examples of
sustainable
products
Drives
n Within industry, electrical motors consume 65% of all electricity
n Conventional motors always run at their maximum capacity
n 70% of the energy can be saved by varying the motor speed to the actual need for energy
n ABB drives reduce global CO2 emissions by 50 million tons every year (equal to annual emission of a city of six million people)

25. Overview ABB in the market Commitment to sustainability
Examples of sustainable products
Way forward and priorities

26. Way forward and priorities
Improve our economic performance
n Deliver average revenue growth 6% per year
n Increase EBIT to 9 – 10% by 2005
n Improve our balance sheet
n Reduce and reschedule our net debt (2/3 long term; 1/3 short term)
n Increase productivity, reduce costs

27. Way forward and priorities
Improve our environmental performance
n Go beyond manufacturing and apply Environmental Management Systems to our non-manufacturing organizations
n Continually improve our performance, e.g. by less use of hazardous material, less use of energy
n Create more value for our customers by offering more sustainable solutions
(in speach note: give examples,life-cycle approach)

28. Way forward and priorities
Improve our social performance
Implement our social policy worldwide with special emphasis on local needs
Measure continuous improvement by developing relevant indicators (guided by GRI triple bottom line reporting)
Increase focus on business ethics (”zero” tolerance for unethical behaviour)
Pursue high health and safety performance (”zero” target for serious accidents)
Apply our policy to suppliers (urge same standards as ABB)

29. Common efforts priorities
Way forward
and priorities
Common efforts priorities
ABB advocates fair trade conditions and good development opportunities for everyone
n World Energy Council CO2 emission reduction program, an ABB initiative
n China Energy Technology Program, led by ABB
n UN Global Compact, ABB an active, early supporter
n “Access to Electricity” to provide electricity and enable development in poor communities

30. Transform sustainability into customer value

32. Asbestos – uncertain, but well-managed
Operational priorities
Asbestos – uncertain, but well-managed
Q Q Q Q Q *
New claims
Settled claims
Pending claims
Cash paid (pre insurance)***
13, , , , ,300
8, , , , ,300 * *
71, , , , ,500
$37,400 $29,000 $ 36,100 $ 33, $ 51,500
* Combustion Engineering considers that the full-year trends for 2002 as
regards new claim filings, claims settled and cash settlement cannot be estimated
reliably based on first quarter outcome
* * Over 50% settled without payment
* * * Thousand dollars