The HOCHTIEF sustainability strategy is derived from the Group's corporate strategy. We regard sustainability as a consistent agreement of economy, ecology and social issues in the entire business activity - in breadth and depth - with the aim of securing the future viability of the company. By taking a holistic view, we ensure a continuous exchange and further develop topics together with central specialist departments and the operating units. The view of the company and its environment from the outside to the inside as well as from the inside to the outside plays an important role.

The strategy is deduced from the development of current sustainability fields with material aspects and targets as well as the introduction of the Sustainable Development Goals. HOCHTIEF’s core activities with regard to the demand caused by megatrends introduce main chances and potential for the Group. (cf. Group Report 2018, p.32)

As an international construction group, we exert direct influence on the environment and society through our activities. Against this background, we view profitability and responsibility in equal measure: Our concept of results-oriented work includes integrity, fair and safe working conditions as well as climate and resource protection while at the same time achieving maximum success for our clients and HOCHTIEF. We want to create, maintain and increase value. This understanding is firmly anchored in our Group vision "HOCHTIEF is building the world of tomorrow" and in the Group's principles, which explicitly include sustainability as a principle.

Our goal is to further effectively deepen and anchor corporate responsibility (CR) issues throughout the Group. We are striving to fully integrate CR into financial reporting and are working to achieve high data quality. Sound sustainability controlling should enable improved CR management in the long term. Our responsible conduct is aligned with HOCHTIEF's business model. With our expertise, we contribute to solving global challenges - for example in climate and resource protection, sustainable buildings and infrastructure. We support the Sustainable Development Goals (SDG) of the United Nations. In the year under review, we evaluated the 17 targets taking into account our business model and our areas of sustainability and assigned selected targets to our six existing areas (more on this here).

We process the SDGs that are important for HOCHTIEF within our CR program. A detailed overview of the concrete measures can be found under criterion 3 "Objectives".

CR organization

Detailed information on CR organization at HOCHTIEF can be found under criterion 5 "Responsibility".

Stakeholder involvement

For further Information on stakeholder involvement please refer to criterion 9 "Stakeholder Engagement".

Further information can be found in our Group Report 2017 starting on page 132.

Thematic areas and understanding of materiality

The definition of key areas of sustainability is subject to an annual internal and external review and evaluation with regard to business relevance, effects and stakeholder interests. Within the framework of our CR program, we derive concrete objectives for each of our six thematic areas. The thematic areas are

1. Compliance (goal: we aim to set standards)

2. Attractive working environment (goal: We aim to further strengthen our position as a sought-after employer and, over the long term, make a name for ourselves among the most attractive employers in the industry)

3. Procurement (goal: As a partner to subcontractors, we aim to redouble our efforts to ensure fair, transparent procurement processes and further step up purchases of sustainable products and materials)

4. Sustainable products and services (goal: We aim to develop sustainable products and services for transportation infrastructure, energy infrastructure, social and urban infrastructure, and mining. For this reason, we take an integrated approach to our projects and ensure top quality from end to end)

5. Active climate and resource protection (goal: We aim to conserve natural resources and enhance resource protection. We work actively to save CO2 emissions ourselves and jointly with our clients and business partners)

6. Corporate Citizenship (goal: We aim to get involved in the community wherever our company is at work or can offer added value by virtue of its capabilities.)

2018 materiality analysis

In 2018, 1,655 contributions from external and internal stakeholders were evaluated using a web dialog. We established a relevance assessment and prioritized the focus areas for HOCHTIEF. Occupational safety and health, green building, resource conservation, and respect of human rights are highly relevant in terms of both their importance to HOCHTIEF and their impacts. 

The results of the materiality analysis are presented in a matrix. Further information can be found here.


Regulatory environment





Our business success is inextricably linked to environmental conditions. Construction projects in particular can be hindered by exceptional weather conditions. In this context, HOCHTIEF provides ongoing training and uses modern work tools and methods to ensure occupational safety. HOCHTIEF prevents long-term environmental and social risks through ongoing monitoring and consideration of possible effects.

The increasing number of legal requirements, for example with regard to emission values and energy efficiency, can lead to rising operating costs for HOCHTIEF. Given our resources and knowledge, which enable us to meet the increased requirements, we do not see any significant risk for HOCHTIEF here.

Climate risks are treated at HOCHTIEF as part of project risks, as they can arise from environmental influences during project work. These risks are evaluated and dealt with by the project teams in cooperation with experts from the OSHEP Center and, if necessary, with external specialists during the process.

Environmental incidents are recorded and evaluated via a reporting system. This analysis provides important information about risks and enables us to adopt suitable countermeasures in order to prevent potential environmental damage.

Social and ecological opportunities result from the consistent continuation of our sustainability strategy. This potential, which is further enhanced by the sustainability debate and the public focus on it, offers HOCHTIEF great opportunities that should have a positive effect on our key figures in the medium term.

Our CR program presents the aspects and goals that we associate with the six thematic areas of sustainability. For each topic area, we have derived an overarching goal (see also 2. Materiality), defined focus areas on key and developing topics and adopted long-term goals and measures.

Here you will find the targets set until 2030 together with the status as of December 31, 2018. You will find an overview in table form on page 144 ff. of the HOCHTIEF Group Report 2018.

HOCHTIEF's general goals for sustainable corporate management and CR management:

• Complete integration of CR into financial reporting:
  • --> Currently 76 users of the sustainability software SoFi (2017: 46 users)
• Installation of a sustainability controlling/management system:
  
  • --> Retrieval of key data on construction contract consumption via HOCHTIEF Europe project controlling (Start: 1st quarter 2019)
• Establishment as a leading provider of sustainable construction solutions:
  • --> Active networking of internal and external partners for the development of sustainable infrastructure

Compliance

• Ensuring compliance training for each employee:
  • --> Group-wide training of 38,735 employees (2017: 27,172)
• Safety in dealing with competitors:
  • --> Antitrust law training implemented at HOCHTIEF Europe

Attractive working environment

• Reduction of the accident frequency rate "Lost Time Injury Frequency Rate" (LTIFR) Group-wide to 0.9:
  • --> LTIFR: 1.37 (2017: 1.23)
• Retention of the average number of training hours per employee (reference value 2015: 13 hours):
  • --> Training hours per employee: 20.5 (2017: 24)
• To meet the Group-wide demand for skilled workers:
  • --> Hiring 70 young engineers (16 women, 54 men) in Germany (2017: 69)

Procurement

• Defining the CR performance of subcontractors as a benchmark and establishing it as a selection criterion for prequalification:
  • --> Integration of EcoVadis assessments in addition to prequalification process at HOCHTIEF Europe
• Increase the number of evaluations of subcontractors, suppliers and partners and implement corrective action plans:
  
  • --> Systematic supplier and subcontractor evaluations at HOCHTIEF Europe: 1,056 (2017: 735); this includes corrective action plans

Sustainable products and services

• Group-wide expansion of the portfolio of sustainable projects:
  • --> Accumulated values until 31.12.2018: Certified Green Buildings (LEED, DGNB, Green Star, BREEAM, other certificates): 789 (2017: 749) Certified and registered sustainable infrastructure projects (ISCA, CEEQUAL, Greenroads): 33 (2017: 27)
  • --> Accredited auditors in the HOCHTIEF Group (December 31, 2018): 1,418
• Use of BIM in all major projects:
  • --> Current focus of innovation; BIM projects completed in the HOCHTIEF Group by December 31, 2018: 2,300 (2017: 2,025)
  • --> BIM training 2018: 1,179 employees trained (2017: 819)

Active climate and resource protection

• Define reduction targets/target ratios based on a base year (by 2020):
  • --> Improve data quality through increased SoFi usage with 76 users
• A rating CDP in Climate Change Disclosure:
  • --> CDP rating Climate Change Disclosure: B (2017: B)
  • --> CDP-participation Water Disclosure
• recycling rate remains constant at ≥ 85%:
  • --> Recycling rate 2018: 87.1% (2017: 90.6%)

Corporate Citizenship

• Group commitment to NGO Bridges to Prosperity:
  • --> 2 projects (1 in Nicaragua, 1 in Rwanda) (2017: 3 projects)
• We will continue our commitment to the Hex House project of the NGO Architects for Society:
  • --> Support of the completion of the first prototype in Hamburg

Our continuous data collection enables us to monitor and evaluate specific targets such as LTIFR and the targets we have formulated.

HOCHTIEF and its subsidiaries play a pioneering role in the construction industry, which is why innovation will be a particular focus in the coming years.

A web-based data collection system is used to record and evaluate the key performance indicators and non-financial performance indicators in the Group. Responsibility for and monitoring of the targets lies with the respective Group departments.

The product life cycle of a construction can be divided into
1) Provision of raw materials
2) Pre-production
3) Transport/Distribution
4) Construction process
5) Use
6) Revitalisation/recycling or disposal/demolition.

In most cases, our field of activity is the construction process, which is why we act as a link between the subcontractors/suppliers and the operators/clients of our buildings.

Each project is unique with individual conditions. The possibilities of influencing sustainable construction diminish as the process progresses. The greatest leverage effect is created by comprehensive project life cycle management. Whenever we accompany the entire cycle, such as public-private partnership projects, we manage all the resulting or potential effects.

The client usually decides on the construction procedure and thus has a decisive influence on the environmental impact. If HOCHTIEF is to take on the role of construction contractor, we examine the possibility of positively influencing the effects on the environment with special proposals for construction work during the bidding phase. With "PreFair" we offer a suitable business model.

In addition, fair working conditions on our construction sites, occupational safety and health protection play an overriding role. Overall, we consider the interaction of economy, ecology and social issues in all project and decision-making phases. This is particularly evident in our certified, sustainably implemented projects - HOCHTIEF builds green buildings and infrastructure projects.

HOCHTIEF also expects its clients, business partners and suppliers to comply with Group standards, and demands this in a binding manner. The Code of Conduct for contractors summarizes the rules for responsible conduct. The HOCHTIEF Code of Conduct and the HOCHTIEF Code of Conduct for contractors can be found here.

A key success factor for HOCHTIEF is the selection of the "right" partners in terms of quality, deadlines and costs. To this end, all divisions pursue uniform purchasing targets.

HOCHTIEF minimizes procurement risks through various targeted measures coordinated in purchasing. Possible risks include:

• Quality (material, product or service quality)
• price (among other things due to increased claims for payment, currency risks or raw material risks)
• supply (for example, by delivering incorrect or missing quantities)
• supplier losses (for example, losses due to insolvencies, force majeure or legal/political market changes)

In 2018, HOCHTIEF took part in the CDP climate ranking's supplier engagement rating (result: A-).

To further strengthen sustainability and transparency in our supply chain, we initiated a project with the rating company EcoVadis in the year under review: EcoVadis analysts will evaluate our strategic partners with regard to various sustainability criteria. The focus is on environmental protection, labor and human rights, fair business practices and the supply chain.

If risks are identified, we work with the subcontractor or supplier concerned to develop specific measures (referred to internally as “corrective action plans”). In this way, we aim to further enhance sustainability and transparency in our supply chain.

HOCHTIEF wants to promote the business locations of its construction projects. We prefer to work with local subcontractors and suppliers located in the vicinity of our project sites. This secures jobs and sustainably strengthens economic development in the regions in which we operate.