Our sustainability management

Sustainability Management, a separate entity established in 2020, manages and coordinates the central sustainability activities at STRABAG.

The key factor to becoming climate neutral by 2040 and to achieving the subgoals on our path to zero emissions is to anchor sustainability in STRABAG’s core business. Given the STRABAG Group’s decentralised structure and the international dimension of its business activities, this is a complex task. This chapter describes our corporate-wide sustainability management as well as the most important methodological pillars on which our activities are based: the Group-wide governance structure, our stakeholder management and the materiality analysis.

Sustainability Management reports directly to the CEO as a hub for all Group stakeholders. In 2023, Sustainability Management oversaw the pursuit of the following priority issues:

establishment and continued development of a social compliance management system
implementation of all preparatory work to fulfil the requirements of the EU’s CSR Directive (Directive (EU) 2022/2464 on corporate sustainability reporting), essentially comprising the establishment and ongoing development of ESG risk management and structural data collection
initiation and implementation of strategic projects to become climate neutral by 2040, including but not limited to the establishment of a project with Management Board involvement to advance the energy transition across the Group
development of a Group-wide funding model for innovative and sustainable projects

STRABAG is an active participant in sustainability ratings and is assessed by various rating agencies.

CDP (Disclosure. Insight. Action., formerly known as the Carbon Disclosure Project) awarded STRABAG SE a score of B in the category of Climate Change. The progress made in our governance structure and in our initiatives to reduce emissions were decisive factors in the decision to raise our score from a B- in the previous year to a B in the year under report. With this score, the Group remains in Management level (B/B-) on CDP’s rating scale.

In the year under review, STRABAG received its first BBB rating from Morgan Stanley Capital International (MSCI). MSCI rates companies based on their exposure to industry-specific ESG risks and their ability to manage these risks in comparison to other companies. MSCI uses a scale ranging from leader (AAA) to laggard (CCC).

STRABAG also participated in the EcoVadis ratings during the reporting year, achieving an overall score of 67 out of a possible 100 points.

The last assessment by Sustainalytics took place in 2022. STRABAG continues to actively participate in ratings to confirm its sustainability performance.

As a participating organisation in the United Nations Global Compact, STRABAG also reports on its progress with respect to the Ten Principles of the UN Global Compact in the areas of human rights, labour, environment and climate, and anti-corruption in an annual Communication on Progress (CoP).

Our ESG commitment

Our ESG ratings

Governance-Struktur

Governance structure

The inclusion of representatives from different areas of the company creates a participatory and active working environment that promotes the strategic orientation of the Group towards sustainable business practices. Involving the Management Board, the middle management and the operating entities results in a corporate-wide governance structure which

creates a clear organisational framework for the implementation of the sustainability strategy
establishes short communication and decision-making paths, and
involves representatives with key competencies for achieving the strategic goals

Four-tier governance structure

The members of these four groups meet regularly to discuss their respective activities and establish the next steps. At the same time, the exchange enables any potential negative impacts to be identified in the early phases. Among other things, these committees determine which issues and decisions are to be passed on to other committees or decision-making bodies for the purpose of involvement, cooperation or further decision-making. This promotes interdepartmental work, helps to develop measures for dealing with identified impacts, and ultimately strengthens cooperation across the Group to achieve the sustainability goals. Experts regularly inform the Management Board of current relevant aspects of sustainability during board presentations, project presentations and events with internal and external stakeholders. In addition, we are also actively anchoring and expanding the sustainability management within the Group in order to identify and avoid at an early stage any actual or potential negative impacts of our business activities on the economy, environment and people.

Stakeholder-Einbindung

Stakeholder engagement

In addition to engaging our internal stakeholders via the governance structure described above, we also seek an active dialogue with other stakeholder groups. These are above all our employees, clients, investors and suppliers. We also maintain contact with universities, the media and political institutions, and with the people living in direct proximity to our projects. Various engagement formats are used to promote the dialogue between STRABAG and our stakeholder groups.

At our Strategic Update 2030, held in Vienna in September 2023, Sustainability Management outlined our strategic goals to STRABAG’s investors and analysts. The presentations provided updates on both the Group strategy and on STRABAG’s ongoing sustainability endeavours. A particular focus was the increased use of renewable energies along the value chain in order to achieve the target of becoming climate neutral. An outlook on future strategic sustainability goals was also provided.

STRABAG informed analysts and investors about the Group strategy and its sustainability endeavours at the Strategic Update 2030 presentation in Vienna.

STRABAG is not only an organiser of but also a participant in events that offer a platform for debate for people interested in sustainability. These include specialist conferences and trade fairs as a way to engage with peers and experts. Special mention should be made here of Stiftung KlimaWirtschaft, a German non-profit climate and economy alliance that STRABAG joined as a sponsor in early 2023. At the foundation’s 8th annual conference in November 2023, titled “Giant Leaps/Small Steps”, STRABAG CEO Klemens Haselsteiner pointed out the urgency and the potential of circularity for the construction sector. Participants at the conference included representatives from business, politics and society.

With regard to strategic human resource development, our participation in career fairs and university events offers a valuable opportunity to position STRABAG as an attractive employer while learning more about how young people see the future.

With the launch of our Work On Progress mission, sustainability and innovation were prioritised as two strategic pillars of STRABAG’s core business. A campaign was started on social media, in the traditional press and on billboards in public spaces in September 2022 to ensure a wide reach. Detailed information about the sustainability strategy and selected lighthouse projects along with goals and measures of the mission are provided on a dedicated website. Enquiries, comments and criticism are received and processed by experts within the Group in order to reflect the strong interest in maintaining an active exchange of information.

sozialesengagement

We are aware of and strive to fulfil our responsibility to society. For this reason, we support selected initiatives on a long-term basis in order to make a lasting and effective contribution. One of the indicators we use to measure our commitment is the amount we spend on these initiatives. In 2023, this amounted to € 6.16 million (2022: € 4.86 million).

kundenzufriedenheit

Clients as key stakeholders

To ensure STRABAG’s long-term, sustainable success, the demands and expectations of our clients are at the heart of each and every project.

The satisfaction of our clients has a decisive influence on our opportunities and is ultimately reflected in our order backlog. We systematically counter risks – such as those arising from nonfulfillment of our clients’ expectations – within the framework of our STRABAG Management System and its measures for quality assurance, environmental protection and project risk management. This enables us to prevent potentially negative impacts from our business activities.

The aim of our TEAMCONCEPT partnering model is for client and contractor to form a team already during the design and planning phase. The scheme incorporates the interests of all project participants right from the start and establishes a clear framework for project realisation. This creates security for everyone involved in the project, promotes a spirit of trust and cooperation, and facilitates the joint control of costs.

Following completion of a construction project, it is important to systematically measure and evaluate client satisfaction. The process for measuring client satisfaction is laid out in STRABAG’s internal common project standards for construction projects. The officers for the management system coordinate the uniform measuring and reporting at the Group level. At country level, implementation is monitored by the officers as part of internal audits. Additional procedures for measuring client satisfaction can be implemented by the operating units.

Client satisfaction is measured using a uniform corporate standard. An online questionnaire is sent to clients in all Group countries asking them to rate the following aspects on a project-specific or contract-related basis:

organisational efficiency and technical realisation
professional competence as well as communication and collaboration in and with our team
responsible and sustainable handling of people and resources

The online survey with 18 questions on these aspects also takes into account issues of occupational safety, the environment and energy, and the clients’ perceptions of STRABAG’s core values.

Results of the client survey

Aspects	Index 2023
Organisational efficiency and technical realisation	4.3
Responsible and sustainable handling of people and resources	4.3
Team: professional competence as well as communication and cooperation	4.6
Total	4.4

Degree of fulfilment of expectations according to clients’ assessment: 0 = not fulfilled; 1 = barely fulfilled; 2 = partly fulfilled; 3 = mostly fulfilled; 4 = fulfilled; 5 = exceeded

With an average response rate of 41%, the survey can be considered highly representative. There is still potential with regard to the number of mailings, however, which amounted to 1,564 in 2023. A higher number of mailings would further improve the data situation.

In addition to managing the client survey process, the Group’s in-house STRAthek application provides comprehensive information on client feedback at the project level, along with a dashboard that paints a meaningful picture of current client satisfaction at any organisational level as a way to identify potential for improvement in the process.

Another important way for us to engage with our stakeholders is the Stakeholder Dialogue, which STRABAG has hosted twice to date. The aim of the event is to bring together representatives of our most important external stakeholder groups with our Management Board in order to discuss and prioritise issues of strategic relevance to STRABAG. The dialogue opens up new perspectives, which we then incorporate into our strategic considerations in order to add to our list of the most pressing topics for the future. A third Stakeholder Dialogue is already being planned.

Wesentlichkeitsanalyse

Materiality analysis

We use the materiality analysis to systematically identify the most important sustainability topics for our business activities. We then work on these topics and present them in our reporting. The materiality analysis thus forms the basis of our sound sustainability management.

The materiality analysis is updated every year in order to identify and prioritise the impacts associated with our business activities. For the 2023 financial year, we aligned ourselves with the ESRS principles (European Sustainability Reporting Standards), subjecting additional topics to a materiality analysis. Besides STRABAG’s impact on the environment, society and the economy, we also identified impacts that affect STRABAG itself. The materiality analysis was coordinated by Sustainability Management and carried out together with experts within the Group. The results were shared and discussed at several internal events and finally approved by the Management Board.

The figure below shows the various topics that were considered for the materiality analysis in 2023. By prioritising and aggregating the impacts, we arrive at our material topics.

Results of the 2023 materiality analysis

In the 2022 financial year, the topics “Contribution to the local economy”, “Capital market appeal” and “Building design” were analysed for materiality as well. In 2023, these three areas were incorporated into the topics listed above and were therefore not assessed for materiality as separate topics.

The innermost ring lists those topics that are material for STRABAG and which are prioritised both in the sustainability reporting and within the Group. The results of the materiality analysis have shown that there are some especially relevant impacts relating to these topics – in terms of both risk and opportunity. For these seven material topics, the Management Board has appointed experts responsible for reporting on each topic. The reporting clarifies our approach to the material topics and shows how we determine responsibilities and fulfil our due diligence obligations. It also sets out key figures and targets as well as measures and activities to be taken. The material topic of digitalisation and innovation serves as an enabler for topics in the three sustainability dimensions of environment, social and governance, with particular potential available for tackling environmental challenges.

The middle ring contains those topics that that were not recognised as material by the materiality analysis but were recognised as important for the 2023 reporting year. There currently is no comprehensive reporting on these material topics in line with the GRI standards, but information on them can be found in the following paragraphs. Looking ahead, new challenges addressed during the year under report in particular included biodiversity and the closely related dimension of land use and impervious cover, human rights risks in our own business activities and in the supply chain, and diversity.

The Management Board of STRABAG SE last year adopted a position paper on biodiversity that sets out our understanding of biodiversity and presents possible measures for its conservation and promotion. Appropriate competences and resources are being built up at STRABAG to strategically deal with this issue at the Group level and to ensure comprehensive reporting in the future.

With the gradual extension of the social compliance management system, the Group took a more differentiated view of human rights in the reporting year in order to avoid social risks in our own business activities and in the supply chain and to develop suitable preventive and remedial measures.

The topic of diversity was also assigned new Group-wide relevance with the appointment of a Group EDI coordinator (equality, diversity, inclusion) and the publication of an EDI strategy.

Information on the important topics of client satisfaction, project risk management and social engagement can also be found in this report.

The outer ring in the figure shows those topics that are not currently of material relevance to STRABAG, which is why the 2023 Annual and Sustainability Report does not contain any reporting on these topics. In the course of our reporting, these topics are reviewed annually for their materiality and an appropriate approach is derived accordingly. This is also necessary because the climate crisis causes and exacerbates other environmental and social challenges.

Presentation of the material topics in the report

The Sustainability Report includes a separate chapter for each of the seven material topics while taking into account the GRI standards. The annual report also provides information on topics with medium priority.

More information on STRABAG’s performance with regard to the respective topics can be found in the “Sustainability Progress” section and in the Data Appendix. In addition, we comply with the reporting requirements laid down in the EU Taxonomy Regulation and publish the required information in a separate chapter.

Material topics and concerns specified by the Sustainability and Diversity Improvement Act (NaDiVeG)

Outlook

The key activities described will remain relevant beyond the 2023 reporting year, as they entail structural and permanent changes for the Group.

The CSR Directive and other disclosure requirements demand increased transparency from companies, which we will fulfil. The continued expansion of the data basis plays a crucial role here, as it forms the foundation for ESG risk management, the setting of ambitious targets and ultimately the development of measures to achieve these targets. Climate change will also mean that issues such as biodiversity and water will become increasingly relevant. STRABAG is aware of these developments and has proactively drawn up an initial position paper on biodiversity that expresses the relevance of this topic.

STRABAG also faces numerous new areas of action in terms of social issues. The global upstream supply chains add additional complexity to these action areas.

Dealing with these topics over the long term and in a lasting manner requires a strong governance structure and the continuous development of expertise and knowledge. For this reason, an already piloted basic training programme on sustainability is now to be rolled out across the Group.