Climate change

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As an energy- and resource-intensive industry, the construction sector has a key role to play in and exerts considerable influence on the transition to a low-carbon economy. Fossil fuels are used along the entire value chain in construction, from the operation of the production facilities and the construction machinery to the actual operation of our buildings. This makes the construction industry a source of process- and energy-related emissions. To become climate neutral by 2040, STRABAG aims to continuously reduce greenhouse gas emissions along the entire value chain and, in the year under review, has adopted a climate transition plan to achieve this goal. The company joined the Science Based Targets initiative (SBTi) in 2024, committing itself to climate change mitigation in line with the 1.5 °C target. The following chapter describes the reduction pathway with science-based targets that was developed in this respect.

Despite all the actions aimed at climate change mitigation, its impacts are still being felt. This makes adaptation processes necessary. Construction companies have a decisive role to play here. On the one hand, actions must be taken today to adapt to climate change, for example by building the necessary protective structures. On the other hand, sustainable, climate-resilient construction methods can help make buildings and cities more resistant to extreme weather events.

Buildings today are designed to provide a long service life, with an environmentally efficient operating phase and the ability to be converted for reuse or selectively dismantled at the end of their life cycle. We expect this trend to continue to gain strength, with circular construction and expertise in the energy sector playing a key role in this development. STRABAG has defined these areas as key strategic topics and will continue to expand the relevant business models. With our services, we seek to play an important role in the transition to climate-neutral buildings and infrastructure.

Our transition plan

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In 2024, the Management Board of STRABAG SE approved a climate transition plan centred on a greenhouse gas reduction pathway with science-based targets and corresponding monitoring tools. As the transition plan influences the strategic direction of the Group, the Supervisory Board was also informed of this undertaking by the Management Board.

The EU Paris-Aligned Benchmark Regulation (EU PAB) is not applicable to STRABAG.

The following eight action areas were identified with regard to Group-wide energy consumption. Material actions were defined for each of these action areas in order to avoid or reduce the consumption of fossil fuels. Specifically, these are:

Targets

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STRABAG is convinced that credible climate targets must follow a uniform standard and be externally validated. That is why we committed ourselves to participation in SBTi during the reporting year. Our commitment to the short-term goal (2030) of Scope 1, Scope 2 and Scope 3 emissions was officially confirmed in October 2024. SBTi is expected to validate the targets by the fourth quarter of 2026 at the latest.

Our transition plan makes use of the methodological specifications of SBTi as the basis for a science-based reduction pathway by 2040. This was developed by an internal working group on energy transition headed by a member of the Management Board with the involvement of the relevant divisions, central divisions and central staff divisions. No comprehensive progress measurement currently exists, as the transition plan was first adopted during the year under review. Due to STRABAG’s diversified business model, the cross-sector standard was adopted.

The chosen base year was 2023 with a baseline value of 927,472 t CO₂e for Scope 1 and Scope 2 emissions. The base year and the data for the reduction pathway are based on the energy demand data from the 2023 financial year. STRABAG has been using new conversion factors for calculating greenhouse gas emissions since 2024. As a result, the Scope 1 and Scope 2 emissions for 2023 have also been recalculated, which means that the base value differs from the values in the 2023 Annual Report. Due to a system change in the database, changes to the report boundaries cannot be ruled out. Adjustments are also possible as SBTi has not yet completed its validation of the targets and the base year. There were no special capacity utilisations or other special occurrences in the base year that would have led to a distortion of the emissions figures. An annual increase in output was taken into consideration in the target-setting and assigned a 50% increase in emissions. Our target for Scope 1 and Scope 2 emissions corresponds to an ambition level that is necessary from a scientific perspective to limit global warming to 1.5 °C.

Targets for Scope 3 emissions are currently being developed in line with the WB2C scenario (well below 2 °C) using 2023 as the base year. The baseline value for Scope 3 emissions cannot be reported at this time because complete and externally audited data (including downstream Scope 3 emissions) for the 2023 base year are not yet available.

The reporting boundaries of the greenhouse gas emissions that were considered in the reduction targets are consistent with the boundaries of the other greenhouse gases reported. We distinguish in accordance with the categories of the Greenhouse Gas Protocol (GHG Protocol):

• Scope 1 & Scope 2: Compared to our 2023 base year, we are aiming to reduce our Scope 1 and Scope 2 emissions by 42% by 2030 and to achieve climate neutrality by 2040 in line with the 1.5 °C scenario.
• Scope 3: Starting from 2023 as the base year, targets for the upstream and downstream Scope 3 emissions are being developed in accordance with the WB2C scenario by 2030. The reduction targets through 2040 are also based on the continuation of the reduction pathway.

Our long-term goal, as approved by the STRABAG SE Management Board, is to achieve climate neutrality by 2040. We understand climate neutrality as defined by the United Nations Framework Convention on Climate Change (UNFCCC, 2021) as the endeavour to minimise greenhouse gas emissions as much as possible and to offset unavoidable emissions through systematic offsetting measures. This concept is in line with the 1.5 °C target and represents a consistent continuation of our science-based pathway based on quantitative targets for 2030.

We have identified specific action areas and defined specific actions for achieving our targets for Scope 1 and Scope 2 emissions. In summary, eight action areas can be distinguished. The action areas and the actions for achieving the Scope 3 targets are currently being developed. The following table shows their respective contribution to achieving the targets.

Contributions to achieving emissions reduction targets

Policies

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The environmental and energy policy signed by the STRABAG SE Management Board sets out fundamental principles on the topics of energy, circular economy and sustainable supply chains to reduce negative impacts on the environment along the value chain. The document describes a series of targets and commitments for the entire Group, including the replacement of fossil fuels in all company processes – as a way of reducing greenhouse gas emissions and contributing to climate change mitigation – and the use of sustainable and resource-efficient materials and parts in construction. With the additional goal of collecting more data on the subject and through the establishment of effective management systems, the company aims to improve the way it manages identified negative impacts, which ultimately relate to the high consumption of energy and resources in the construction industry. The policy does not address targets for climate change adaptation. Responsibility for implementing the defined environmental and energy targets lies with the CEO. As part of the management review of the environmental and energy management system, the environmental and energy policy is evaluated at regular intervals in terms of its suitability and effectiveness.

Actions and projects

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To achieve the stated reduction targets, key actions linked to targets for 2030 and 2040 have been defined for each action area. The following table shows the planned actions and the short- and long-term climate targets for each action area.

Decarbonisation actions

A set of specific metrics was defined during the reporting year to help monitor implementation and effectiveness of the planned actions and to determine their CO₂e savings potential. We are currently developing the process and software basis for monitoring and reporting these metrics. An annual target/actual comparison of the metric is to be reported to the Steering Committee Sustainability and the Management Board starting in 2025.

The technical implementation options for the key actions and their financial evaluation are currently being worked out. This process should be completed and the corresponding CapEx and OpEx plans defined in the 2025 financial year.

STRABAG is continuously implementing actions to help mitigate the impacts of the climate-related physical and transition risks that have been identified. Climate change is already having a noticeable impact today, prompting STRABAG to respond with actions and to assess these for their effectiveness. A Group-wide analysis of climate-related physical and transition risks was conducted for the first time during the reporting year. Meanwhile, STRABAG continues to advance the management of its impacts, risks and opportunities. Further actions and targets for mitigating the significant risks and impacts and for exploiting opportunities will be developed and disclosed over the coming years.

The allocation of financial resources to the actions listed below is not possible as they are not necessarily carried out as independent, project-based activities and are therefore not subject to specific budgeting. Instead, they are an integral part of our day-to-day business that are seamlessly incorporated into our regular operations.

Metrics

The energy and CO₂e data for the Group are systematically captured and analysed using the Carbon Tracker software developed by STRABAG in-house in 2012. The software solution, which is regularly updated and refined, was fundamentally revised in the 2024 financial year to meet the new reporting requirements under the CSRD Directive and the Group’s commitment to improving data quality. The underlying calculation of the energy data published here is largely carried out by our internal ERP system. The energy expenditures recorded are converted into corresponding calorific values using a financial calculation basis. The calorific values determined are then linked to the appropriate CO₂e emission factors and mapped in Carbon Tracker down to the smallest organisational entity. Due to the complexity of compiling energy and greenhouse gas data, particularly in a diversified group of our size, minor deviations may occur.

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The updated software allows for more detailed evaluations, particularly with regard to Group-wide energy consumption. The data shows, for example, that approx. 4% of the total energy consumption of 3,390,866 MWh already comes from renewable sources. Of particular note here is that 2,197 MWh of this amount is attributable to our own production (solar energy). A further 918 MWh is fed into the grid.

Own energy production

Fuel (diesel and petrol) is the Group’s most important energy source, accounting for 1,948,736 MWh (57%) of its total energy consumption. By analysing the data in more detail, 10,037 MWh of the total fuel consumption can be shown as coming from renewable sources.

Energy consumption and energy mix

STRABAG’s business activities are categorised under NACE Section F. The energy intensity per thousand € revenue is 0,19. The net revenue used to determine the metric corresponds to the revenue presented in the consolidated income statement.

Energy intensity per net revenue

Greenhouse gas emissions

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The CO₂e footprint for the 2024 financial year refers to the Group’s full scope of consolidation and includes the CO₂e emissions generated in 72 countries. The emissions are reported in Scope 1, Scope 2 and Scope 3 as defined by the GHG Protocol and in accordance with the CSRD Directive.

Notes on Scope 1 and Scope 2 emissions

Scope 1 and Scope 2 emissions are calculated adopting a spend-based methodology using the Group-wide energy consumption as recorded in the Carbon Tracker software. For the calculation of market-based Scope 2 emissions from electricity consumption in Germany and Austria, it is assumed that the electricity used in regions with a green power supply contract is emission-free.

Energy values are converted using emission factors, most of which are provided by the database operator Climatiq. Climatiq is a certified database operator that collects emission factors from various sources, processes them in accordance with the GHG Protocol and updates them regularly. Biogenic CO₂ emissions are reported separately amount to 8,524 t CO₂ (market-based) and 14,140 t CO₂ (location-based). Scope 1 accounts for 2,721 t CO₂, Scope 2 for 5,803 t CO₂ (market-based) or 11,419 t CO₂ (location-based), and Scope 3 for 0.10 t CO₂. For pulverised lignite, factors from the local suppliers were also used.

Scope 2 emissions from purchased heat and electricity are reported using market-based and location-based methodologies. The location-based calculation is based on the latest version (2024) of the International Energy Agency’s (IEA) emission factors database, which takes into account not only CO₂ but the greenhouse gases CH₄ and N₂O as well. The database is also used for country-specific district heating emission factors. For the market-based calculation, CO₂e emission factors of concluded green power rates, substantiated by a corresponding guarantee of origin (certificate), are applied where used. The percentage of bundled contractual instruments in market-based Scope 2 emissions thus amounts to 26%. If no rate-specific emission factors are available, a country-specific residual mix that shows CO₂e is used. Since this residual mix is not available for all countries in which the Group operates, the IEA emission factors database is used for the remaining countries. This approach takes into account otherwise contractually secured shares of green electricity that are excluded from the overall mix.

Notes on Scope 3 emissions

STRABAG began estimating upstream Scope 3 emissions in 2022. For the 2024 reporting year, these are now being verified for the first time and – with a few exceptions – automatically calculated in the new version of Carbon Tracker. For the categories 3.2 “Capital Goods” and 3.7 “Employee Commuting/Remote Work”, for example, the data are currently still being collected outside of the Carbon Tracker environment. Integration into Carbon Tracker is planned for the coming financial year.

The cost-based methodology is used for most of the upstream Scope 3 emissions and for some of the downstream Scope 3 categories (e.g. 3.13 “Downstream Leased Assets” and 3.15 “Investments”). Emission values are then determined in combination with cost-based, country-specific emission factors. The Group’s six most important building materials – asphalt, bitumen, stone/gravel, steel, concrete and cement – are an exception. For these building materials, the internal prices are first determined and then converted into CO₂e quantities using suitable quantity-based emission factors. The emissions from employee commuting are also not calculated using the cost-based methodology, but rather represent an estimate based on average commuting distances and representative internal surveys among white-collar (salaried) employees and blue-collar (wage-earning) workers. Category 3.3. is shown in the table below using the market-based calculation approach.

Group-specific data were used to determine the product-related emissions. At STRABAG, “products” refers to building materials and prefabricated parts manufactured within the Group as well as construction projects implemented by the Group as a general contractor in relevant business areas. The latter were considered under Category 3.11. To calculate the CO₂e emissions from the third-party transport of building materials and prefabricated parts (Category 3.9) and from the further processing (Category 3.10) and disposal phase (Category 3.12), data from internal sources, average transport distances and various EPD values were also used. When considering the construction projects, the extensive experience of STRABAG experts in a wide range of business areas, but particularly in sustainable construction, was drawn upon. Category 3.14 “Franchises” was identified as irrelevant for STRABAG as it relates to activities that are not part of the STRABAG business model.

The calculation of downstream Scope 3 emissions took place for the first time this year. A primary data share of 2% was used for the Scope 3 emissions. As a result, a complete CO₂e footprint for the entire Group was calculated for the first time in 2024.

The first-time calculation of Scope 3 emissions and performance of a transition risk assessment in this reporting year did not yet take into consideration any overlaps in detail. Nevertheless, the results of the risk analyses to date show that the main transition impacts largely correspond to the largest Scope 3 categories (see “rising raw material and energy costs” upstream and “demand for low-carbon products and services” downstream). As the transition risk analyses develop, the Scope 3 data will be included in the long term to gain a more comprehensive understanding of the Group’s climate-related transition risks.

The greenhouse gas intensity per thousand € revenue is 0,58 (location-based) or 0,57 (market-based). The net revenue used to determine the metric corresponds to the revenue presented in the consolidated income statement.

Greenhouse gas intensity per net revenue

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STRABAG’s plants and facilities are not currently obliged to participate in the European Union Emissions Trading System. Despite all efficiency and substitution measures, it is to be assumed that a base level of difficult-to-avoid greenhouse gas emissions will remain in the medium term that will have to be offset. To achieve the climate targets, an internal offsetting guideline has therefore been created to regulate the future purchase of carbon credits across the Group. The guideline stipulates that investments may only be made in Gold Standard–certified projects. Alternatively, it is also possible to purchase EU Carbon Allowances from the EU Emissions Trading System in accordance with the internal requirements. Carbon credits or EU Carbon Allowances are not currently purchased to offset STRABAG’s own emissions. Such measures are carried out exclusively on behalf of customers who wish to optimise their own carbon footprint. STRABAG acts within the agreed project requirements and ensures that only Gold Standard–certified projects or EU Carbon Allowances are considered, as required by the internal offsetting guideline. To date, no own projects have been realised in the voluntary carbon market.

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STRABAG currently does not use internal carbon pricing.

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The financial assessment of the material physical and transition risks was carried out only qualitatively for the 2024 reporting year. The qualitative assessment of the material physical and transition risks is described in the mandatory disclosures in the section Impacts, risks and opportunities. The methodology for monetary quantification is being developed to meet future mandatory reporting requirements.

Sources – Climate Change

United Nations Framework Convention on Climate Change (UNFCCC). (2021). A Beginner’s Guide to Climate Neutrality. Retrieved 19 February 2025.