Business conduct

ESRS SBM-3

STRABAG, having defined the avoidance of corruption and anti-competitive behaviour as a material management task, implemented an Ethics and Business Compliance System in 2008 and has been continuously developing the system ever since.

The great diversity of STRABAG’s activities, of the countries in which it operates, and of its suppliers and business partners is reflected in the wide range of risks to which the company is exposed. A top priority, therefore, is to address and counteract the identifiable risks in order to avoid the potential exclusion of suppliers due to sanctions legislation or compliance violations and to guard against resulting consequences such as fines and reputational damage. A holistic approach is used to identify country risks as measured by the Corruption Perception Index (CPI) on the one hand as well as segment and business partner risks on the other. The results also form the basis for the double materiality assessment that is carried out as part of the sustainability reporting.

Legal violations must be avoided and incidents dealt with in a forward-looking manner to ensure that STRABAG continues to be a reliable business partner, contractor and employer in the future. With this in mind, STRABAG has implemented a comprehensive set of actions to promote ethical and legally compliant behaviour and to develop a corporate culture that is based on trust and partnership. Central to this are a comprehensive training concept and the public whistleblower platform.

Policies

ESRS G1-1

The Ethics and Business Compliance System is firmly embedded within the company as a Group Directive. As such, it has been approved by the STRABAG SE Management Board. The entire Management Board adopts all directives developed by the Corporate Responsibility Office, as well as the Code of Conduct and the Supplier Code of Conduct. Any changes to these basic documents are also decided by the entire Management Board.

The Ethics and Business Compliance System consists of the Business Compliance Management System (BCMS) and the Code of Conduct, which sets out the Group’s fundamental ethical values. The requirements set out in these documents are binding for all Group employees and are available on the intranet in all Group languages. A comprehensive training concept ensures that the content is communicated to all employees. The figure below shows the structure of the Ethics and Business Compliance System.

The Code of Conduct was last updated in 2022 and is addressed equally to all STRABAG employees and business partners and considers the interests of other stakeholders such as regulatory and government authorities as well as shareholders. The document has been approved by the STRABAG SE Management Board. The principles contained in the Code of Conduct are substantiated and regulated in detail by the Business Compliance Management System (BCMS) and the BCMS management directives and are continuously monitored, reviewed and refined by the Corporate Responsibility Office. The Code of Conduct is available on the intranet for all employees in all Group languages and, as far as legally possible, forms part of the employment contracts. New employees are made aware of the contents of the Code of Conduct as part of a mandatory compliance training course. As a code of conduct, compliance with the principles and standards described therein is also confirmed by our suppliers, subcontractors and business partners. The Code of Conduct describes STRABAG’s responsibility as a business partner and the responsibility towards employees and other stakeholders, based on the company values of partnership, trust, solidarity and sustainability. The Code of Conduct also makes reference to the whistleblower platform for reporting violations of the defined principles.

The STRABAG BCMS and its Group-wide implementation fulfil the requirements of ISO 37001 (Anti-Bribery Management Systems) and ISO 37301 (Compliance Management Systems). It also meets the key requirements of the UN Convention against Corruption, which defines best practices for businesses. STRABAG is the first globally active Austrian company to have Group-wide certification to ISO 37001 and ISO 37301.

The STRABAG BCMS is an effective system for avoiding business compliance risks such as corruption and bribery. The most important ongoing actions are described later in this chapter. As these actions are an integral part of our ongoing daily business, it is not possible to say exactly which financial resources are allocated to the actions described in this chapter.

The management directives serve as an annex to the STRABAG BCMS and set out clear rules of conduct for the entire management and all Group employees. For a better overview and more practical use, they are categorised into different topics.

The management directive on the prevention of corruption and white-collar crime defines STRABAG’s policy on invitations and gifts, donations and sponsorships, and how to deal with public officials.

The management directive on business partner due diligence, based on the risk analysis, provides for mandatory standards to screen various business partners and business relationships. Screening measures are also defined that can be carried out independently of the business relationship as a way to meet an increased standard of due diligence in individual cases if necessary. The central staff division Corporate Responsibility Office also takes actions in response to specific events. In the wake of Russia’s attack on Ukraine, the business partner due diligence was further tightened in March 2022 and a memo on sanction list checks of business partners was sent to all operating division and central division managers. The regulation stipulates that every business partner who falls under the parameters must be reviewed by Business Compliance Partners for matches on the sanctions list before a contract is signed.

The management directive on antitrust and competition law governs the correct behaviour required to ensure fair competition as well as the auditing obligations for sensitive business relationships and merger control. It also stipulates the involvement of CML as an independent supervisory body where appropriate.

Dealing with conflicts of interest is regulated in the fourth management directive, which requires all STRABAG employees to disclose potential conflicts of interest that they may have. Besides the avoidance of interest conflicts, the focus is also on dealing transparently with conflicts of interest that cannot be avoided.

ESRS G1-2 

The Supplier Code of Conduct summarises the principles of STRABAG’s business activities, which suppliers and subcontractors are also expected to comply with. These principles cover topics related to business compliance, human rights, employment conditions, social responsibility, environment and responsible procurement. As a rule, the Supplier Code of Conduct is anchored in the General Terms and Conditions. STRABAG is working on the design of a supplier engagement programme to reduce emissions in our upstream value chain together with our suppliers. In the future, social and environmental sustainability criteria are to be embedded in the project-specific and project-independent supplier assessment.

Actions

ESRS G1-3

Close cooperation between individual central staff divisions is required to properly implement and manage the BCMS. The central staff division Internal Audit supports the central staff division Corporate Responsibility Office in enforcing the business compliance rules. Adherence to the provisions laid down by the BCMS is a standing audit component of the regular compliance and object audits. In addition to its regular audit activities, the Internal Audit division also works with the operating entities or the Corporate Responsibility Office to conduct special audits in response to suspected cases of non-compliance.

Conspicuous invoices are submitted to the central staff division Business Compliance by a business compliance monitoring process set up by BRVZ in all countries that it administers.

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.

Independent case workers review all incoming reports. Ombudspersons responsible for dealing with violations related to discrimination or human rights and employment conditions conclude an addendum to their employment contracts confirming that in their function as ombudspersons they are not bound by the instructions of their superiors.

The STRABAG whistleblower system meets the standards defined by the Whistleblower Protection Directive (EU) 2019/1937. Compliance by whistleblowers with the legal standards is specified in the management directive on internal investigations. Whistleblowers are not responsible for providing evidence to substantiate their claims. A detailed description of the whistleblower system, including a set of FAQs, explains how reports are received and handled and how STRABAG ensures the greatest possible level of protection and anonymity of the whistleblowers and of those involved. All information and data entered into the STRABAG whistleblower platform are encrypted and can only be viewed by the respective STRABAG case workers. Case workers are instructed on how to use the system and receive further training as needed to ensure that they protect the anonymity of the persons providing information. Information about reported incidents is only used and shared to the extent necessary for the investigation (need-to-know). Every report or complaint received through the whistleblower system is investigated. Depending on the circumstances, the management representative in charge will take corrective actions or disciplinary measures – from warnings all the way to dismissals – to respond appropriately to identified offences and counteract any future violations.

The final report contains proposals for measures and, if necessary, for improvements, including improvement to the Business Compliance Management System itself. Depending on the severity of the violation, the report is sent to the responsible organisational entity, the Management Board and/or the Supervisory Board.

The members of the Management Board are informed about material reports and cases, with different processes existing for the reporting. This is mainly due to the fact that the whistleblower platform is managed by various departments reporting to different members of the Management Board. Since the whistleblower platform can also be used by local communities as a channel for reporting complaints about a construction site, incoming reports are also handled directly with the management of the operating entities. The Human Rights Officer conducts an annual review of the effectiveness of the human rights complaints procedure, which includes an examination of the functionality and processes of the whistleblower platform.

As STRABAG’s management (at the business unit, subdivision, division, central division and central staff division levels) plays an important role in the prevention of corruption and must observe increased due diligence requirements, members of this group of persons are obliged to participate in special training courses on the prevention of corruption and the avoidance of competition violations. At the level of business unit management and above, the basic training must be completed when taking up the position. In the following years, the material covered in the training is consolidated in-depth through refresher courses. Both the initial training and the refresher courses are divided into a general part and a part covering competition law. The refresher courses must be completed by members of management at three-year intervals. Since this risk is often transferred to group leaders, a more in-depth e-learning training course for group leaders was introduced in August 2024 that must be completed every two years.

The training concept, content and participant groups are decided by the Management Board and reported to the Supervisory Board. The content is based on the policy documents, which are approved and reported on equally. The risk areas and topics of the training courses are audited annually by independent auditors as part of the ISO 37001 and ISO 37301 audits, with the Management Board, as the highest governance body, also subject to the audit. Due to the Management Board’s inherent duty to ensure compliance with both legal and internal standards and to regulate these for all employees, no separate training is planned for the Management Board as a whole.

Training statistics

In addition to the training courses listed above, 31 special training courses were held during the reporting period. Special training courses are offered at the request of local management for all employees who are exposed to an increased risk due to their work. The training courses are held regardless of the employee’s respective level.

The Corporate Responsibility Office also organises numerous internal conferences and events to present general business compliance topics, anonymised incidents and lessons learned.

ESRS G1-4

German competition authorities in two proceedings imposed fines of € 2,790,000 and € 665,000 on a STRABAG SE Group company for anti-competitive collusion. The proceedings were each terminated with legal effect by a settlement in which STRABAG waived its right to appeal.

As a result of these two violations, the Group company was entered in the German Competition Register on 23 October 2024 and 25 November 2024. The Federal Cartel Office, as the government agency responsible for maintaining the register, has granted the requests for early deletion submitted on the basis of self-cleaning measures, whereupon the entries were deleted on 25 November 2024 and 2 December 2024.

ESRS G1-5

STRABAG is active in various organisations to represent the interests of the construction industry in dialogue with stakeholders as a way to contribute to the development of sustainable, innovative and economically viable framework conditions for the industry. This includes membership in major national construction industry associations, such as the Federation of the German Construction Industry (Hauptverband der Deutschen Bauindustrie, HDB) and the Association of Industrial Construction Companies in Austria (Vereinigung Industrieller Bauunternehmungen Österreichs, VIBÖ), as well as regional and/or trade-specific associations.

In 2024, STRABAG was a participant at the European Forum Alpbach. During the multi-day event, STRABAG published a policy paper on the circular economy. STRABAG is a founding member of Stiftung KlimaWirtschaft, a foundation that promotes corporate climate change mitigation. We have been a participating organisation in the UN Global Compact since 2021, committed to its ten principles in the areas of human rights, labour, environment and climate, and anti-corruption.

In accordance with Group Directives, donations and sponsorships with a connection to political parties must be approved by the full Management Board of STRABAG SE with the involvement of the Corporate Responsibility Office. In 2024, STRABAG made no direct political donations or sponsorships. STRABAG SE is registered in the EU Transparency Register under number 472996192561-86.

During the reporting period, no person was appointed to the Management Board or the Supervisory Board who had held a comparable position in public administration or at a regulatory authority within the two years prior to their appointment.

The membership fees paid by STRABAG SE are presented below. Membership contributions paid include both compulsory memberships required by law or professional regulations and voluntary memberships. The contributions paid during the financial year are as follows:

ESRS G1-6

Incoming invoices at STRABAG SE are submitted via an electronic system or, in exceptional cases, in paper form to the respective cost centre manager, who checks the invoices for accuracy, in particular for completeness of the goods and services provided. Following operational approval by at least two persons, the invoice is released for payment with the corresponding due date and is generally settled by BRVZ’s central accounting department in a weekly payment run. Due to the international and heterogeneous nature of the various business fields, no guidelines or processes exist for avoiding late payments. In the material countries of Germany and Austria, payments are usually made before the (net) due date, taking advantage of the cash discount, if available.

The average payment period is 21 days, the median 16.

Due to the large number of suppliers in a wide range of different countries, along with the fragmented and heterogeneous nature of the services received, no standardised payment terms exist. Where STRABAG’s General Terms and Conditions apply to orders, they provide for a payment term of 30 days net. A total of 90% of payments are made within 30 days. There are no notable differences in payment duration and payment behaviour between the type and size of the supplier.

There were no open proceedings for late payment pending as of the reporting date.