18. Corporate Citizenship

The company discloses how it contributes to corporate citizenship in the regions in which it conducts its core business activities.

Value creation 2018

Value added analysis shows how HOCHTIEF generates added value while quantifying how the various public and private stakeholder groups benefit as a result.

In the 2018 reporting year, HOCHTIEF continued to rigorously pursue its strategic path in order to further increase profitability and liquidity. Sustainability in our activities resulted in a renewed listing in the Dow Jones Sustainability Index (DJSI). This commitment to sustainability further enhances our attractiveness to customers as well as on the capital and labor markets.

Net value added as a percentage of Group performance was 22.1% in 2018, above the prior-year level. The HOCHTIEF Group once again distributed the lion’s share of net value added in 2018 to employees, as in past years. This large proportion of value added means that we can continue offering attractive employment on fair terms. Distributions to minority shareholders accounted for EUR 177.5 million of value added in 2018. The increase relative to the prior year relates to the higher dividend.

At 4.9% (EUR 259.9 million), the proportion of value added distributed to public authorities in 2018 was slightly higher than in the prior year (4.7%).

See also Value creation 2018.

HOCHTIEF implements comprehensive risk management in all its divisions and operative units. Group-wide directives and standardized processes as for risk reporting are the basis to minimize risks in advance. Ecological and social risks are part of risk management as well. Through continuous monitoring and foresighted planning we are able to evaluate the short- and long-term effects of our project work and develop appropriate measures to avoid them. In 2018, no significant risks in relation to enviromental, social or employee-related issues have been identified, neither have there been any negative impacts on human rights or the fight against corruption from our company. Likewise we do not expect any risks due to negative deviations from the expectations of our key stakeholders.

Corporate citizenship at HOCHTIEF

As an international infrastructure group, HOCHTIEF shapes living spaces around the world and interacts closely with many people. We work with and for them and impact their daily lives. While the effects are usually positive, sometimes challenges are involved. We see ourselves as corporate citizens, and we embrace social and environmental responsibility wherever we work.

In this regard, the Group Directive on Donations and Sponsoring provided by Corporate Communications clearly defines focal areas for these activities, facilitates the efficient use of financial resources, and regulates responsibilities and reporting processes and secondly, designing and preserving living spaces. Corporate Communications, the department responsible, works with the Executive Board to define the strategic direction and is in charge of coordination. We support these causes through monetary donations, donations in kind, by contributing expertise, corporate volunteering, and personally committing time and effort to practical projects. No specific targets are set for these activities because we take our cues from immediate conditions and needs on the ground.

In 2018, the Group’s budget for donations and sponsorship totaled around EUR 5.1 million (2017: EUR 4.98 million).

We also promote the business locations of our construction projects. We prefer to work with local subcontractors and suppliers to secure jobs and sustainably strengthen economic development in the regions in which we operate. In 2018, we have awarded about 64.52 percent of our purchasing volume to contract partners from the regional catchment area throughout the Group.

We attach great importance to coordination among all parties involved. It is very important for HOCHTIEF that residents and commuters, clients, politicians, subcontractors, later users and other interested parties are always informed at an early stage. "Via Solutions Nord", led by HOCHTIEF, works closely with the Ministry of Transport. The site managers are in direct contact with journalists, residents and commuters and answer all questions.

Bridges to Prosperity

As part of the sponsorship focus “design and preservation of living spaces,” we support projects run by the NGO Bridges to Prosperity (B2P). > This collaboration revolves around the construction of pedestrian bridges in remote regions. The bridges give local residents a safe way to access education, health facilities, and markets—especially during the rainy season, when rivers often rise so dramatically that crossing them poses a serious danger. HOCHTIEF and its Group companies have been working with B2P since 2010. As regards the B2P projects, we intentionally get involved in regions
where we do not actively work. By helping to improve people’s connections to other areas, we enable them to participate in economic development on both national and local levels. Improved access to educational institutions is especially important in boosting the potential for economic success—and it translates into better prospects for young people. According to B2P estimates, household incomes in areas that gain regular access to markets rise by an average of 30%.

Further information can be found in the Group Report starting on page 134.