Affected communities

ESRS 2 SBM-3

At STRABAG, we see social responsibility not only as an obligation to society, but also as an opportunity to positively impact local communities. This includes municipalities and local residents but also indigenous peoples. Municipalities or communities are understood to mean groups of people who may be directly or indirectly impacted by our activities. Residents, on the other hand, are people who live in close proximity to a construction site and may be directly affected. Affected indigenous peoples and municipalities may be located in close proximity to a construction project or further away. Additional groups of affected communities could not be identified. Our goal is to maintain and improve the standard of living of these communities. We are aware that our business activities may have an impact on local communities and we are committed to managing this impact responsibly.

The topic of social responsibility, and with it the assumption of responsibility to society and affected communities, was included as a permanent component of our Group-wide sustainability strategy during its expansion. The social aspects of the expanded sustainability strategy are based on the identified risks and material impacts and consist of three focus topics: our employees, human rights throughout the value chain and added value for society. This means that the identified risks and impacts from the risk analysis and the double materiality assessment are incorporated into strategic considerations. The focus topic “added value for society” includes the generation of positive impacts for society and the improved interaction with and inclusion of affected communities as strategic goals. Implementation involves, among other things, conducting a stakeholder dialogue, implementing Group-wide guidelines for the engagement with local communities, and creating added value for society through donations and infrastructure expansion.

Our construction activities can have negative impacts on the health and well-being of the local population. We recognise that any impairment of natural resources, particularly those of local communities, including soil, air and water, risks jeopardising food production, the availability of clean drinking water and access to sanitation. These risks, including the risk of land use conflicts, particularly with regard to indigenous peoples, were identified as material for STRABAG in the double materiality assessment. The impacts listed can be considered systematic, as the impairment of natural resources and conflicts over land use occur above all in countries with low environmental protection standards and inadequate legislation. Potentially negative impacts on STRABAG can arise from forced evictions and land use conflicts, particularly among indigenous peoples. Even if these are not primarily caused by STRABAG’s activities, they can still have a negative impact on our reputation, which could lead to lost revenue and a reduction in brand value in the short, medium and long term. Land use conflicts can in turn lead to restrictions on construction projects in the short, medium and long term as well.

Due to the numerous actions taken, it is currently not possible to quantify the resources provided for the management of material impacts. Insights regarding material negative impacts from the double materiality assessment and associated actions have been incorporated into the revision of the sustainability strategy by adding the focus topic “added value for society” to the strategy. A resilience analysis was not carried out.

Improving infrastructure can create positive added value for local communities. STRABAG’s business activities improve the local infrastructure by creating housing, public buildings and squares, for example, which promote social interaction between local communities and residents, or by repairing and expanding roads, bridges and tunnels.

Policies

ESRS S3-1

We at STRABAG take responsibility for our business activities and for the local communities affected by them. This commitment is outlined in more detail in our Policy on Employment Conditions and Human Rights, our Code of Conduct and our Supplier Code of Conduct. The Policy on Employment Conditions and Human Rights applies to all affected communities and specifically addresses the rights of minorities, indigenous peoples, communities and individuals who may be affected by wrongful land seizure and forced eviction. Our policy commits us to respecting local culture and customary rights. We respect the land tenure and property rights of affected communities and advocate for the prohibition of forced evictions and the unlawful seizure of land, forests and waters.

Processes for engaging with affected communities and providing remedy

ESRS S3-2; ESRS S3-3

The inclusion of affected communities or their representatives into our risk and opportunity management does not currently follow a structured process. Depending on the project, there is a variety of ways in which individual actions are implemented at the project level, either directly with the affected communities, their legitimate representatives, or credible proxies. In most cases, however, the engagement is direct. Engagement with indigenous peoples also takes place in different ways depending on the project. We respect the culture, way of life and customary laws of indigenous peoples and have included this as an obligation in our Policy on Employment Conditions and Human Rights. When engaging and interacting with indigenous peoples, we commit to free, informed and prior consent. This was also included as an obligation in the revision of the Policy on Employment Conditions and Human Rights. In close consultation with the respective client, we strive to take engagement with indigenous peoples into consideration as early as the planning phase. This includes respect for cultural, intellectual, religious and spiritual property, as well as respect for land use rights and relevant legal and administrative regulations. National legislation also determines the engagement with and respect for the special rights of indigenous peoples. Some Group companies, for example in Canada, have a community management programme. Engagement with the affected communities, including indigenous peoples, then takes place within the framework of community management. In principle, all processes and actions for engaging with affected parties within the framework of the respective project also apply to the engagement with indigenous peoples as an affected community.

As part of the risk analysis in accordance with the German Supply Chain Act, affected communities were identified as potentially vulnerable groups. A precise analysis of the affected communities with certain characteristics or a higher damage risk has not been carried out. To enable a structured process for engaging with residents and local communities in the future, the first step is to develop a guideline establishing Group-wide recommendations for this process. Given the diversity of our business activities, however, the effectiveness of a generally applicable procedure is not guaranteed and must be reviewed. Responsibility for incorporating the results of risk and opportunity management into the corporate concept lies with the Corporate Responsibility Office. Responsibility for incorporating them at the operating project level depends on client’s organisation.

A key component for the engagement with local communities is the STRABAG whistleblower system as a way to contact STRABAG and directly report possible violations. The whistleblower system is also included as an action within the revised sustainability strategy. The tips received can be incorporated into strategic considerations for the adaptation of actions to address negative impacts.

The whistleblower tips we have received to date indicate that the system is also utilised by external parties. The whistleblower system can be used to report information and incidents and to provide feedback on the system itself. Feedback on the system can also be provided to the ombudspersons and the Human Rights Officer.

In 2024, 21 tips were received involving affected communities in the categories of “human rights and employment conditions”, “discrimination” and the “environment”.

None of the tips that were received constituted a violation of the law. Whenever we receive a tip, we conduct a review to identify any potential structural or systemic issues that would require further action. A full review of the tips received for possible structural or systemic issues had not yet been completed by the time of the 2024 reporting.

Actions and projects

ESRS S3-4

At the project level, various actions and processes are already in place to help us engage with affected communities. These are designed to minimise negative impacts, such as noise or disturbance of the natural environment, on local residents and communities. We use several different ways to inform residents and affected communities about our construction projects. Information is provided, among other things, in the form of flyers, letters or advertisements in local newspapers. Another widely used method is to affix informational signs or banners at our construction sites. QR codes and posted notices directly at the construction site are used to communicate the contact details for further information. A construction site website is also a common way of providing information. To keep residents and members of the local community informed about our construction activities, STRABAG also participates in community dialogues and informational events. An informal approach that is used is the direct interaction between workers and residents at the construction site. This allows minor problems to be resolved on the spot, without the need to escalate the issue to a higher level.

In Germany, 62 of our construction projects have been certified by the German Sustainable Building Council (DGNB). The certification covers not only environmental sustainability criteria but also social aspects. Upon receiving DGNB certification, construction projects are required to engage with residents, property owners and local businesses through actions including construction site visits, digital display panels, informational events, letterboxes, telephone hotlines or personal meetings.

No Group-wide guidelines exist as to which specific actions are to be implemented for which project size. The selection of actions and engagement opportunities is based on the legal context, the location and size of the project, and the need for engagement with residents and affected individuals. Likewise, the choice of the appropriate engagement format depends on the client’s requirements and organisation. Certain construction projects, such as the construction of an airport, are subject to legal and regulatory requirements, including the completion of an environmental impact assessment (EIA). An EIA is carried out before a building permit is granted. As part of an impact assessment, the affected population must be informed about the project in advance. The assessment, including the dissemination of information to the public, is carried out by the competent authority and is the responsibility of the client. An EIA is conducted during the planning and design phase of a project and must be completed before construction begins. The EIAs do not result in any specific binding actions during the construction phase. The timing of the individual actions described is based on the respective project plan.

No specific Group-wide actions were implemented in 2024, although individual actions were carried out for the duration of the respective construction projects. The implementation of a corporate guideline for engaging with affected communities is planned for 2025.

To prevent material risks such as reputational damage resulting from evictions or land use conflicts, close coordination and cooperation with clients is necessary. Our Policy on Employment Conditions and Human Rights commits us to respecting land use rights and opposing forced evictions across the Group. In the event of a violation, we seek to engage in open dialogue with those affected or with their representatives and, where possible, involve them in a dialogue with our clients.

Problems or complaints can be reported not only to the designated contact persons, but at any time also through the STRABAG whistleblower platform. After receiving tips or reports of violations, we will initiate appropriate, case-related remedy. Every tip is investigated with the aim of resolving conflicts amicably wherever possible. Restitution payments and compensation can also be used to provide remedy, whenever appropriate, and can be reviewed and adapted depending on the incident. The concept of the remedy action plan applies here as well.

One ongoing action for positively impacting local communities is our support for Concordia Social Projects. Through our business activities in Romania, Bulgaria and Austria, STRABAG engages with the communities in those countries, and we want to continue to foster this partnership by supporting local people, especially children, through donations and infrastructure projects. STRABAG Kunstforum, meanwhile, offers a framework for social and cultural engagement. Here we support artists with the presentation of the STRABAG Art Award and showcase their works to the general public through exhibitions in the STRABAG Artlounge. The renovation of the French Hall at Künstlerhaus Wien also created added value for society and art. The new performance and rehearsal venue for the Vienna State Opera is intended especially for young audiences and up-and-coming artists.

Targets

ESRS S3-5

Dialogue with affected communities is essential to fulfilling our social responsibility and mitigating impacts. To promote the engagement with local affected communities or their representatives, we have set ourselves the goal of implementing a corporate guideline for the engagement with local communities and residents at the project level by 2025. The guidelines will serve to present a collection of possible actions and processes, with project-specific decisions made on which actions or processes should be implemented. This should ensure that the appropriate format for engaging with local communities is selected for each construction project and business activity.

The sustainability network, which includes one nominated representative from each division, central division and central staff division, validated the idea of implementing a corporate guideline as an appropriate action and oversaw the joint development of content for an initial draft.

At STRABAG, we strive to continuously expand our social responsibility commitments. With this in mind, we are working on developing additional concepts and targets that will further strengthen our engagement with and positive impact on the communities affected by our business activities.