Circular economy

ESRS 2 SBM-3

The high demand for raw materials in construction and the large amounts of waste generated through demolition make the building industry one of the most resource-intensive sectors of the economy. Due to the finite availability of resources, the linear economic system – consisting of raw material extraction, use and disposal – is increasingly reaching its limits.

The construction of buildings requires large quantities of non-renewable building materials such as sand, stone, asphalt and concrete. We are also seeing an increasing demand for renewable raw materials, especially wood. Large amounts of waste are generated at the end of the life cycle of the buildings we construct. This waste is often not returned to the economic cycle in the same way but is instead recycled or reused at a lower quality. In the worst case, these raw materials are completely removed from the economic cycle through waste incineration or landfill disposal. A problem with landfill sites is that they are no longer available as habitable or cultivable land. Hazardous waste poses an additional risk to human health and the environment and involves higher disposal costs. These considerations show that the material negative impacts and risks extend across the entire value chain, from in-house building material producers and/or external suppliers to waste disposal companies.

These developments also offer opportunities, however. The reuse and recycling of raw materials not only reduces costs in procurement and disposal but also opens up new business areas, for example in the production and use of sustainable building materials and the renovation of existing buildings. An extensive in-house building materials network enables a high level of value creation within the Group. In this way, STRABAG counteracts scarcity risks, meets customer requirements and can minimise disposal costs. When developing strategies and business models, STRABAG aligns itself with the 9R framework of the circular economy: rethink, reduce, reuse, repair, refurbish, remanufacture, repurpose, recycle and recover.

The circular economy model is firmly anchored as one of six key strategic topics in our Strategy 2030. We want to expand our expertise in the procurement and handling of building materials, as well as in selective demolition and recycling, in order to continuously increase our resource efficiency. Within the key topic of circular economy, the following additional topics are being addressed at Group level as prioritised action areas: value stream management competence; reconstruction, conversion and refurbishment; and building materials production / sustainable building materials.

Policies

ESRS E5-1

This strategic framework gives rise to a series of principles and objectives, which are outlined in our overarching sustainability policy and in our environmental and energy policy. These principles and strategic goals currently represent non-binding guiding principles that will serve to align STRABAG’s business activities in the future. The measurability of the principles will be possible as soon as time-bound, measurable targets have been developed and sufficient data become available.

Our environmental and energy policy is especially important in defining the goal of a circular economy:

• We consider buildings over their entire life cycle. Using building-specific life cycle assessments and the evaluation of circularity, we identify potential for improvement and demonstrate the ecological added value of building variants to our clients. Analyses of circularity reveal opportunities for improvement in saving raw materials, increasing efficiency, making greater use of secondary or renewable raw materials, and avoiding waste.
• We develop end-to-end material and waste concepts and are introducing a Group-wide waste management system that also includes the handling of hazardous waste. Material and waste concepts during the planning and design stage can minimise raw material consumption. Opportunities for waste reduction should be identified through waste management.

• We are continuously increasing the percentage of recycled materials in our products and are investigating the use of alternative, renewable building materials. In doing so, we reduce the consumption of primary and non-renewable raw materials and promote the circular economy model by increasing the use of secondary raw materials.
• During the design and build phases of our projects, we consider not only the origin of the materials used, but also their possible uses at the end of their service life. The materials and components used should be removable, separable and reusable or recyclable. Keeping our raw materials and building materials in the economic cycle for as long as possible helps to strengthen the circular economy.

The environmental and energy policy has Group-wide validity and applies to both STRABAG and our upstream and downstream supply chain. The policy has been signed by the STRABAG SE Management Board; responsibility for its implementation lies with the CEO.

Actions and projects

ESRS E5-2

STRABAG has launched a variety of actions and projects to establish the principles of circular economy as a key factor in the company’s sustainable transformation. The allocation of financial resources to the initiatives listed below is not possible as they form part of the overarching transformation of the Group, which involves making lasting changes to our day-to-day business and regular operations.

In 2024, STRABAG expanded its service and product portfolio with BESTAND BEYOND and Naporo, positioning its reconstruction, conversion and refurbishment activities and renewable raw materials as material components of the circular economy.

Reconstruction, conversion and refurbishment

Using buildings for as long as possible, refurbishing or modernising them, is the resource-saving alternative to demolition and new builds. Reconstruction, conversion and refurbishment are therefore part of a functioning circular economy and can help minimise raw material consumption and waste volumes.

To support our customers in the transformation and adaptive reuse of their existing buildings, we are taking a long-term approach in everything having to do with reconstruction, conversion and refurbishment. Our new BESTAND BEYOND brand, offering a modular service portfolio, was created for just this purpose in 2024. BESTAND BEYOND delivers an integrated offering from a single source that covers all project phases from site assessment and planning to design, construction and operation to selective demolition. To help achieve our goals, we set up special staff divisions at various operating and central organisational entities that are working together to implement circular projects for our customers.

Sustainable building materials

We are also expanding our product portfolio to reduce primary raw materials and increase the use of secondary and renewable raw materials that can be reintroduced into the (biological) cycle. With the acquisition of Naporo Klima Dämmstoff GmbH, STRABAG expanded its product range in 2024 to include sustainable insulation materials, especially natural insulation materials made from hemp and flax straw. These materials have a low environmental footprint and can sequester CO₂e. The hemp fibre insulation boards, which bear the Austrian Ecolabel, are manufactured in Lower Austria and can be used in a variety of applications: insulation boards, acoustic elements, noise absorbers and green roofs. In addition to the Austrian Ecolabel, Naporo was also awarded the Austrian Climate Protection Prize.

The results of the NaWaRo project, which was launched in 2023, are being incorporated into the ongoing expansion of STRABAG’s portfolio of sustainable building materials. The focus of the project is on renewable raw materials (nachwachsende Rohstoffe, NaWaRo) and their use in the production of construction materials that contain as little embodied energy as possible, are easy to recycle, or can be returned to the natural environment. An internal needs assessment was used to identify those renewable raw materials and building materials with the highest materiality for the Group and to evaluate them in terms of environmental, economic, technical and legal criteria. This provided the basis for determining the key topics for the coming years, including, for example, the use of biochar or the purchase and processing of raw materials from restored peatlands. The following achievements were made in the 2024 financial year: Project members advocated on behalf of STRABAG at the Alliance of Pioneers for the active use of renewable, regional raw materials and the utilisation of paludiculture biomass, represented the topic of sustainable building materials at Alpbach Forum, and gave a presentation at the GreenTech Days organised by the Austrian Federal Economic Chamber. In the middle of the year, the topic of renewable raw materials was permanently integrated into a newly created subdivision dedicated to sustainable building materials.

Actions to optimise value stream management

Robust data on current raw material consumption and waste amounts enables us to fully exploit any potential for improvement in order to keep the value streams at STRABAG in continuous circulation.

We are working on obtaining information about the waste from our downstream supply chain and are continuing to develop a digital platform for tracking waste amounts. This involved surveying the requirements with respect to a possible software solution among our operating entities in Austria and Germany. Until the tool is deployed across the Group, the waste amounts are tracked using STRABAG’s accounting system. A standardised methodology for tracking waste amounts was developed in the 2023 financial year and introduced company-wide in January 2024. The new system should help improve the data foundation so we can better manage our recyclable material flows. As this is a long-term development spanning several years, it is not possible to provide a project completion date at this time.

A GIS-based site map was also developed during the financial year as part of the value stream management competence action area. The map shows the location of construction sites with relevant material flows as well as stationary production and disposal sites belonging to the company and to third parties in the field of transportation infrastructures in Germany. The map serves as a key information tool for value stream managers at the various subdivisions to manage their incoming and outgoing material flows, making it an important tool for utilising recyclable materials across construction sites and so increasing their own value creation.

The third component involves expanding the network of STRABAG-owned sites to include value stream management, for example in the form of recycling and storage facilities. This should enable more materials to be processed at our own sites and more recyclable materials to be kept in circulation within the Group. Several operating divisions are currently analysing the sites they operate to determine their potential. Additional sites also form part of the strategic considerations.

Targets

ESRS E5-3

There are no measurable time-bound outcome-oriented targets related to resource use and circular economy at this time. These are currently under development and will be set as soon as sufficient data become available.

STRABAG is working to develop its IT infrastructure and to capture the necessary data for the production and use of raw materials along the value chain. This will enable us to set quantifiable targets and to measure progress in the future. The data strategy is being revised, a data catalogue is being prepared, and technologies and the architecture for data storage and data provisioning are being developed. A data governance framework is being set up as well. Concepts and pilots are to be completed by 2025 so that scaling can begin in 2026.

When defining the targets, consideration must be given to the fact that both the use of building materials and the generation of waste in the construction industry are project-dependent. A revolution in resource use will therefore require a new mindset among our clients as well. We see one of our key tasks as winning over clients through sustainable and economically attractive offers in circular construction.

Metrics

Resource inflows

ESRS E5-4

STRABAG’s main activities involve construction projects in the fields of transportation infrastructures, building construction and civil engineering. The following building materials are essential in our construction work: stone, gravel, concrete, cement, asphalt, bitumen, steel and wood. We not only purchase stone, gravel, concrete and asphalt, but also produce these materials in large quantities ourselves. Cement for the production of concrete and bitumen for the production of asphalt are important materials in our upstream supply chain. We also use water at various points in our in-house production of building materials, for example as a primary component of concrete.

A wide range of construction equipment and machinery is needed in our work, including cranes, roller-compactors, excavators and wheel loaders. Packaging plays a relatively minor role in STRABAG’s resource use, as our most important materials are not delivered in conventional packaging but are shipped in substantial quantities as dry bulk or in mixtures directly by heavy goods vehicles. Weight and packaging are therefore not included in our parameters.

We report on the six largest material flows in terms of quantity of material used to produce our products and provide our services. Wood was selected as the most important biological building material. Taken together, these building materials account for around 72% of the costs of all building materials. The data for asphalt, bitumen, cement, concrete, steel and wood only include materials that have been purchased externally, not those that were produced in-house. The reported purchase quantities end up, among other places, in our building material production (bitumen and stone/gravel in asphalt, cement and stone/gravel in concrete). The amounts from our own production are therefore not included in the metrics in order to avoid double counting. The reported amount of stone and gravel, in addition to materials purchased externally, also includes the quantities extracted from our own quarries and gravel operations as well as the recycled aggregates that end up in our asphalt and concrete mixing plants. To determine the partial amount from own extraction, it was assumed that the sales volumes correspond to the quantities that were extracted. We also assume that the extraction inventory can be neglected, as these quantities remain approximately the same.

The quantities for stone/gravel, asphalt, concrete and wood were calculated on the basis of euro values and average prices. The euro values were taken from STRABAG’s accounting system. Data from ZÜBLIN Timber’s purchasing department were used for the average price of wood. Data from the in-house production of these materials were used to determine the average prices of stone/gravel, asphalt and concrete. One exception is the amount of recycled aggregates as a percentage of the total amount of stone/gravel. These data are not euro-based. Instead, the quantities are recorded directly at the production plants.

The quantities for bitumen, cement and structural steel were taken from STRABAG’s accounting system. Country-specific average prices were calculated based on the quantities and costs. A price range was then determined based on the average price. Transactions within the price range were included in the calculation of the metrics with their quantity value. Transactions outside the price range were included in the calculation of the metrics with their respective average price and the amount of the costs. This results in a total amount for each building material and country, which was used to calculate the metrics.

Materials used

Wood is the most important biological building material for the production of STRABAG’s products and the provision of its services. Despite the significantly smaller amount of wood used compared to other building materials, we therefore report the percentage of sustainably sourced wood in the total weight of materials used. For the calculation, we use volume data calculated on the basis of average prices.

To show the percentage of wood purchased from sustainable sources, we assume that this corresponds to the percentage of PEFC- or FSC-certified forest areas in the countries from which our wood is purchased. No information can be provided on how the purchased wood is handled at the end of its useful life nor can we make any statements as to whether the cascade principle is applied. Based on the information on the handling of waste wood provided by the German Federal Environment Agency, it can be assumed that most of the wood is incinerated at the end of its useful life.

Percentage of biological materials

We report the weight and percentage of secondary reused or recycled components, products or materials from the largest material flows and of wood, as wood is our most important biological building material. Information on the percentage of secondary raw materials for cement and bitumen cannot be provided as these are used as binders in the building materials concrete and asphalt. The current recycling processes therefore only allow the recycling of the building materials and do not allow the building materials to be separated into their original components.

The percentage of secondary raw materials used to produce the building materials purchased externally is based on the percentage of secondary raw materials used to produce the building materials in-house (stone/gravel, asphalt and concrete). These data are recorded in the ERP systems of the production plants throughout the year. It is assumed that building materials purchased from third parties have the same percentage of secondary raw materials as building materials produced by STRABAG itself.

Secondary raw materials

Resource outflows

ESRS E5-5

Structures are increasingly being designed and built according to circular principles. The application of circular economy methods, however, is project-dependent and is significantly influenced by our clients’ requirements. In the in-house production of building materials, we strive to make these more circular all the time. Our central division TPA and our production facilities develop and test building materials with higher percentages of secondary raw materials. The addition of so-called rejuvenators is intended to restore the original properties to bitumen from old asphalt as a way of preparing old asphalt for use in new mixtures. The development of alternative binders should also help to ensure that more renewable raw materials are used in construction and that building materials can be better reused or recycled in the future.

For construction materials, the durability and reparability of our products depends on their exact use within a building. Every building is unique and can consist of thousands of different components. At present, there is no industry-specific assessment scheme. Information on durability, reparability or even the percentage of recyclable content is therefore difficult to compare and offers little meaningful insight.

When it comes to the recyclable percentage of our products, the situation is different. The most important building materials produced in-house by STRABAG (stone/gravel, asphalt and concrete) are all 100% recyclable. In practice, however, this recycling rate cannot be met due to legal restrictions and standards. If the aforementioned research and development work on building materials progresses, the construction industry will be able to make a significant contribution to the transition to a circular economy.

We report on waste streams that are diverted from disposal or directed to disposal by external disposal companies. The data are collected over the course of the year as part of the accounting process. Country-specific average prices were calculated for each waste fraction based on the quantities and costs. A price range was then determined based on the average price. Waste transactions within the price range were included in the calculation of the metrics with their quantity value. Waste transactions outside the price range were included in the calculation of the metrics with their respective average price and the amount of the costs. This results in a total amount for each waste fraction and country, which was used to calculate the metrics.

Each waste fraction is assigned to one of the following premises: preparation for reuse, recycling or other recovery operations for waste diverted from disposal; and incineration or landfill for waste directed to disposal. The assignment to these premises is based on the experience of disposal experts at STRABAG and on current information from professional associations in the construction industry.

We assume that our waste is not treated in any other way and that each waste fraction is 100% diverted from disposal or directed to disposal in one of the ways mentioned.

Waste generated

Waste diverted from disposal

Waste directed to disposal

Non-recycled waste

The waste streams relevant to STRABAG are construction and demolition waste. The most important waste fractions that are generated in the course of our business activities are: excavation waste (soil, stones, dredged material and track ballast), concrete waste, construction rubble (concrete, bricks, tiles, ceramic), asphalt waste, bitumen mixtures and mixed construction waste (wood, glass, plastic, metals, insulation and plaster). Radioactive waste is generated in only isolated cases, for example in the decommissioning of nuclear power plants. We will only report on this in years when we carry out these kinds of projects.

Sources – Circular Economy

Deutsches Umweltbundesamt [German Federal Environment Agency]. (2019). Altholz [Waste Wood]. Retrieved 19 February 2025.