Workers in the value chain

ESRS 2 SBM-3

STRABAG supports, respects and is committed to the protection of internationally recognised fundamental human rights. As our corporate responsibility extends to all workers in our upstream and downstream value chain, the same principles apply accordingly. STRABAG’s value chain is highly complex and characterised by a great diversity of different projects. With construction projects around the world, along with the global sourcing of building materials, our value chain includes a large number of different business partners, suppliers and their workers.

The topic of social responsibility, and with it the assumption of responsibility for human rights throughout the value chain, is an integral part of the Group-wide sustainability strategy. The risks, impacts and opportunities identified through the risk analysis and the double materiality assessment feed into strategic considerations. They form a central basis for the strategic direction and the prioritisation of our key action areas from which we derive the three focus topics of our sustainability strategy:

Our employees
Human rights along the value chain
Added value for society

In addition, stakeholder dialogue formats in which we participate or which we organise provide valuable insights and suggestions that may feed into our strategic decisions. The specific influence of individual dialogue formats is difficult to determine, however, as they usually represent only one of several aspects in the decision-making process. Through this approach, new information was obtained in 2025 and contact was established with additional stakeholders. In the coming year, the dialogue with our business partners regarding responsibility along the supply chain will be further strengthened; the effectiveness of exchange formats will be improved and – where possible – made measurable.

For the focus topic “Human rights along the value chain”, the Group-wide implementation of the Social Compliance Management System (SCMS), compliance with human rights and the fulfilment of our corporate due diligence obligations have been defined as strategic objectives. To implement these objectives, an action cluster has been developed which includes, among other things, the expansion of the risk analysis to additional Group companies.

Implementation of our due diligence obligations

STRABAG’s Social Compliance Management System (SCMS) applies along the entire value chain and is overseen by the Group-wide Human Rights Officer. Cooperation with various Group entities is essential for the implementation and Group-wide roll-out of the SCMS. Purchasing is particularly important in this context. Within the purchasing process, supplier management plays a key role in implementing human rights standards along the supply chain and integrating them into the procurement strategy. The definition and subsequent implementation of sustainability requirements and criteria for the purchasing and procurement process are being driven forward within the Group through corresponding projects and the involvement of the purchasing organisation.

As part of our due diligence obligations, we identify and assess actual and potential adverse impacts arising from our business activities along the value chain and commit to preventing, mitigating, minimising, remedying and monitoring them. During identification of the material impacts, we consider both the upstream and downstream supply chain as well as different groups of workers along the value chain. This includes, for example, workers employed by other companies who work at our sites as well as workers who are particularly vulnerable to certain risks. As part of the risk assessment, country indices are used in particular to identify workers further down the value chain (tier-n) who work in countries where human rights are not protected by law.

If the risk analysis identifies an increased human rights risk at a supplier or other business partner, the first step is to verify the risk using questionnaires sent to the business partners for self-disclosure concerning the identified risks and through supplier audits. If the deficiencies are not remedied and the risk is not reduced, the final step is to terminate the business relationship.

The double materiality assessment identified the following topics as impacts that STRABAG has on workers in the supply chain: working hours, adequate wages, health and safety (including fatal workplace accidents), child labour and forced labour. No material positive impacts on workers in the value chain were identified. All identified impacts are to be understood as systemic. They occur particularly in countries with inadequate regulations, standards or laws – or, in the case of child and forced labour, primarily in certain industries. Supplier impact on the natural basis for life occurs only in certain cases.

Our risk assessment by country and sector indicates the extent to which the impacts affect the groups of persons listed below. The following groups of affected workers are considered particularly relevant:

employees and workers of subcontractors
workers engaged on construction sites through recruitment agencies or subcontractors
workers active in the upstream value chain for STRABAG, especially in the deeper upstream value chain, for example in raw material extraction

Given the wide variety of projects and business areas, a uniform and at the same time precise description of the affected workers is not possible. Our understanding of which groups of persons are exposed to higher risks of harm is to be continuously improved. It is, however, possible to identify which impacts are particularly relevant for these types of workers.

Workers on construction sites who are not employed by STRABAG may potentially be affected by forced labour, inadequate remuneration or violations of occupational safety standards – particularly low-income individuals or workers of subcontractors performing manual and hazardous tasks and facing language barriers. In the upstream supply chain, there are risks of child labour and forced labour, especially in raw material extraction. Such working conditions may have long-term physical, psychological or financial consequences.

In the course of the risk analysis conducted in accordance with the German Supply Chain Due Diligence Act (LkSG), which is based on external, internationally recognised indices and sources, certain regions were identified as having an elevated abstract risk of forced labour. In isolated cases, STRABAG’s upstream value chain has touchpoints with these risk-exposed regions and sectors. For example, the abstract risk of forced labour is elevated in certain sectors in Russia, Serbia and Turkey. With regard to the abstract risk of child labour, the analysis indicates an increased risk in one sector in China. For the risk assessment, data from direct suppliers were included beyond the scope of the LkSG. This approach will be gradually expanded in the coming years.

Violations of the prohibition of forced labour may pose a financial risk, for example due to the need to terminate business relationships immediately, which could lead to disruptions in the supply chain. In 2025, there were no indications or incidents relating to forced labour, so there are currently no financial effects for STRABAG. However, the risk remains.

The financial risk associated with child labour is no longer assessed as material in 2025. The likelihood of occurrence of both forced and child labour risks is continuously reviewed in the analysis. Due to the significantly lower likelihood of child labour occurring in our supply chains, the potential financial risk is considered not material.

Policies

ESRS S2-1

In addition to its Policy on Employment Conditions and Human Rights, STRABAG has a Supplier Code of Conduct and a Supply Chain Management Policy. These apply to the entire value chain and to the workers engaged within it.

The STRABAG Supplier Code of Conduct serves to communicate our ethical principles to our business partners and, through their signature, to commit them to compliance. In principle, the Supplier Code of Conduct applies to all suppliers and is generally embedded in the General Terms and Conditions. The contents of the Code also form part of sustainability audits. The Supplier Code is part of the Group-wide Ethics and Business Compliance System and as such is subject to control by the Corporate Responsibility Office (Business Compliance Group).

The ethical principles addressed in the Supplier Code of Conduct include respect for universal human rights, ensuring fair working conditions and assuming social responsibility. The Supplier Code of Conduct also makes reference to the whistleblower platform for reporting violations of the defined principles.

This includes compliance with the prohibition of:

slavery and human trafficking
child labour
discrimination and harassment
violence by security personnel

It also includes compliance with the following topics:

universal human rights
freedom of assembly
rules on occupational safety and health
fair working hours
fair pay and benefits
land-use rights and respect for the rights of local communities
consideration and avoidance of impacts on consumers and end users
climate change mitigation
promotion of a circular economy
environmental protection and biodiversity
responsible procurement

The purpose of the Supply Chain Management Policy is to disclose STRABAG’s procurement and purchasing strategy and to outline the sustainability requirements for the procurement process. The document applies across the entire Group. Procurement is the responsibility of the operational entities, supported by central procurement management. At Group level, committees have also been established to develop and revise (further) standards and strategies – including the contents of the Supply Chain Management Policy – on behalf of the Management Board of STRABAG SE and to plan their implementation. In contrast to the Supplier Code of Conduct, the Supply Chain Management Policy is not communicated to our suppliers, subcontractors or business partners but serves as a framework policy for our purchasing and procurement process. The Supply Chain Management Policy was revised in 2025 to incorporate additional human rights and environmental risks and obligations. These include climate change mitigation, the promotion of a circular economy, environmental protection and biodiversity, and the promotion of responsible procurement. The policy requires compliance with international human rights standards such as the Core Conventions of the International Labour Organization (ILO) and the UN Universal Declaration of Human Rights, as well as the prohibition of forced labour along the supply chain – whether in procurement or in the manufacture of products. Through this revision, sustainability has been fully integrated into the calculation and purchasing process Minimum requirements and sustainability criteria are defined and embedded in the policy. The overarching objective is to create greater transparency along our supply chain.

Processes for engaging with workers in the value chain and providing remedy

ESRS S2-2, ESRS S2-3

Information about possible incidents and complaints is essential for STRABAG to implement appropriate preventive measures and remedies. The STRABAG whistleblower system is available to all internal employees and external third parties, including external workers, and is anchored as an action within the sustainability strategy. The reports received may feed into strategic considerations for the adaptation of actions to address negative impacts. Annual effectiveness reviews by the Human Rights Officer, along with reviews of all incoming reports, are used to identify possible structural or systemic problems to be addressed strategically over the long term through countermeasures. Use of the system by external whistleblowers is confirmation of its reach. The whistleblower system can be used to report information and incidents and to provide feedback on the system itself. Whistleblower notifications, as well as feedback on the system, can also be sent directly to the ombudspersons and the Human Rights Officer.

In 2025, five tips were received involving workers in the value chain in the categories of “human rights and employment conditions” and “discrimination”.

None of the tips received constituted a serious violation of the law. All reports are also examined for potential structural or systemic problems requiring appropriate action. The full review of reports received in 2025 did not indicate any structural or systemic problems.

Actions and projects

ESRS S2-3; ESRS S2-4

Once we have identified risks, we implement targeted preventive actions and remedies as part of our Social Compliance Management System. The aim is to reduce, prevent and remedy human rights violations to ensure compliance with our Group directives. It is not possible to quantify the financial resources required to implement the individual actions, as these activities are usually ongoing and cross-departmental and are not assigned to a fixed project budget or similar.

The preventive actions include, among other things, appropriate contractual provisions as well as questionnaires, training measures and sustainability audits along the supply chain at suppliers, subcontractors and business partners to reduce and prevent negative impacts and risks related to human rights and the environment. This also reduces the likelihood of financial risks occurring – from lost revenue and a decline in brand value to potential criminal consequences.

The selection of suppliers to be audited is risk-based. In 2025, the Social Responsibility Group accompanied audits of direct STRABAG suppliers in Germany and Poland. No serious violations were identified. Recommendations for improvement – primarily proposals for updating or optimising documentation and processes – were communicated to the suppliers. Based on the risk analysis, new risk-based audits are planned. The audits serve to identify possible deficiencies or negative impacts, such as violations of occupational safety and health standards, and to implement or further develop appropriate remedies. Due to the risk-based approach, no specific target has been defined regarding the number of suppliers to be audited. Audits are carried out following the identification of risks or in the event of violations. The objective is therefore not a specific number of audits but a high level of effectiveness and improvements resulting from the audits.

The overarching topic of human rights is addressed in various training courses, which cover general as well as job-specific content. Training and awareness-raising actions are aimed primarily at employees in purchasing, as they play a key role in deciding on business relationships with suppliers. Buyers from numerous organisational entities and countries are trained through an e-learning course on human rights due diligence obligations – specifically on human rights topics along the supply chain – and are required to complete this training annually. The training content includes legal requirements, information on the Social Compliance Management System and on due diligence obligations, and how to carry out plausibility checks. The e-learning programme is open to all employees throughout the Group in German and English and, since 2025, also in Spanish. A revision is also planned to adapt the e-learning course for employees in cost estimation.

We provide remedy where a violation has occurred and assess each case individually. The remedy action plan provides for an immediate process that offers guidance in the event of a violation. Remedies include, first and foremost, putting a stop to the violation, planning the necessary actions and initiatives on a case-by-case basis and, if no other solution can be found, taking further consequences such as disciplinary action and the suspension or termination of the business relationship. Compensation can also be provided. Restitution payments are used on a case-by-case basis, with the amount and scope reviewed and adjusted depending on the incident. A structured, Group-wide documentation of the implemented remedies and compensation payments made does not exist. A full survey is planned for the future.

To ensure the effectiveness of our preventive measures, they are implemented on a risk-related basis. Remedies, on the other hand, are carried out independently of the regions and stakeholder groups affected.

The number of reports received through the STRABAG whistleblowing system serves as an initial indicator of whether the system is being used and whether certain actions may not have had the intended effect. To assess the actual effectiveness of the actions, an annual effectiveness review within the scope of the LkSG is carried out, which also includes the consideration of Group-wide actions. In this review, all relevant actions are qualitatively or quantitatively assessed according to the key elements of the management system (culture, targets, organisation, etc.). This includes examining the type of action involved (e.g. prevention or remedy), the impact target it supports, how the KPI – where applicable – has changed compared with the previous year, whether rights holders were involved, whether sufficient data are available for assessment, whether new responsibilities need to be assigned and whether additional resources are required. Depending on the evaluation, recommendations are subsequently made for adapting the action itself and – where necessary – for improving the evaluation of the action in the future (e.g. through sample checks).

By organising and participating in regular stakeholder dialogue formats, we aim to actively involve actors from our value chain. These include stakeholders from our own business operations as well as from the value chain and representatives of the public. Through dialogue, we aim to promote active exchange with actors in the value chain such as suppliers, business partners and employee representatives. In 2025, within the framework of a stakeholder format, we obtained feedback from experts and representatives of rights holders on planned actions intended to improve the identification of human rights risks on construction sites. Specifically, the aim is to raise awareness and provide information on indicators of possible human rights violations through various communication tools (e.g. posters) and to communicate recommendations for action on how to deal with them. The objective is that employees on construction sites and affected persons will use reporting channels more frequently, enabling remedy to be provided and increasing transparency regarding human rights risks on construction sites. Feedback was sought in particular on whether the selected indicators are representative, whether the language and approach are suitable for the target group and which additional communication methods could be used to convey the messages. The next stakeholder dialogue will take place in 2026. The views and feedback of participating stakeholders feed into the further consideration and development of the actions.

Another objective that was successfully implemented was maintaining relationships and establishing new contacts with actors along the value chain. In 2025, we participated in several stakeholder dialogues focusing on human rights due diligence obligations in the supply chain. In these informative exchange formats – such as conferences, dialogue series or networking meetings – experiences, approaches, challenges and best practices were shared. The contribution of a wide range of actors – suppliers, clients as well as NGOs and business partners – helped us to improve our understanding of effective actions and the needs of affected persons. Discussions within this group on topics such as the implementation of due diligence obligations in specific sectors (e.g. mining, logistics) or specific contexts (e.g. deeper supply chains, high-risk regions) enabled us to gain additional insights. This was achieved, among other things, through methodological approaches such as the evaluation of audit case studies or workshops on questions such as: “How can communication barriers between companies and suppliers be reduced and partnership-based solutions be found?” The insights gained support the further development of actions in the future. However, no specific actions or changes to our approach that can be attributed to a specific dialogue format have yet been derived.

Targets

ESRS S2-5

For 2025, STRABAG has set itself the target of implementing the Social Compliance Management System (SCMS) throughout the Group. To date, the system is being used for a number of companies representing 58% of revenue. At present, the system has not yet been implemented across the entire Group. However, the necessary basis has already been established through the draft of a corresponding Group directive, the adoption of which is planned for 2026. The objective of implementing the Social Compliance Management System across the Group therefore remains in place. After adoption of the Group directive, further steps for programme-level implementation – such as awareness-raising measures – will follow. The precise timetable has yet to be determined.

Through the comprehensive implementation of the Social Compliance Management System, existing Group-wide risk assessments will be deepened in order to identify human rights risks for workers of Tier-1 suppliers and to implement appropriate preventive actions and remedies. In addition, risks in our deeper supply chain are examined on an event-driven basis and preventive actions are implemented on a risk-based basis, with remedies carried out whenever necessary. Cooperation with various Group units ensures implementation in the operational entities of the Group.

The development of the targets lies within the responsibility of the Social Responsibility Group. After development, the targets are communicated to the Steering Committee Sustainability and the Management Board before final approval by the Management Board of STRABAG SE. As these are Group-wide, overarching targets for the implementation of a management system and not for defining its content, workers in the value chain or their representatives were not involved in setting the targets. The Group-wide Human Rights Officer reviews the effectiveness and monitors the achievement of the targets.