Hyvinge Hospital

Hyvinge, Finland

Safe business leads to responsible entrepreneurship

Peab is all about responsible entrepreneurship. This is how we have defined the sustainable business and it means that everything we do, build and construct is done under safe and ethical conditions that take into consideration people and the environment. In order to succeed we must have a high risk awareness, work extensively with prevention and have very good planning, together with innovation, development and cooperation. We know that a sustainable supply chain, good business ethics and healthy work conditions are key factors in the sustainable business.

Continuing to establish our code of conduct

In 2018 we went through Peab’s updated Code of Conduct with our employees and other stakeholders. The Code is based on Peab’s core values, business ethics, business principals, human rights, work conditions and the environment. The Board of Directors establishes Peab’s Code of Conduct. It is applicable to everyone in the Peab Group and contains guidelines for how we ought to behave in different situations and towards each other. We also demand the Code of Conduct be respected and complied with by our business partners.

Peab strives for the most satisfied customers

The purpose of Peab’s annual SCI (Satisfied Customer Index) surveys with external and internal company customers and private housing customers is to provide us with a good understanding of our customers’ differing needs and desires along with fostering long-­term customer relations. In 2018 the total SCI result for the Peab Group was 75 (75) on a scale of 1–100. The average for the industry is 72. Peab’s Finnish business achieved a SCI result of 81 and Peab had the highest rating of all construction companies on the Finnish quality rating EPSI.

Growing demands for corporate social responsibility

At Peab we welcome the rapid increase of our customers’ CSR demands in connection with procurements – demands that include requiring companies to create employment locally for youths, immigrants or people who are physically impaired in connection with doing the procured work. These demands go together well with how we work to facilitate integration and contribute to the education and employment of young people, and we look forward to participating in more projects of this kind. The best situation is when we become part of project early on and can plan together with our customers, for example through partnering.

Quality-ensured supplier chain and responsible purchasing lead to safe business

Quality is a watchword for Peab and the cornerstone of our business concept. However, quality-ensured production requires a sound chain from start to finish – from the first purchase to the last nail in the building. The Group’s four business areas are dependent on a large number of suppliers and subcontractors. Peab’s purchases make up more than 70 percent of net sales and involve more than 40,000 suppliers. The work to guarantee a sustainable supply chain is one of Peab’s most important areas of risk management.

A key factor in safe business is making sure that we only work with quality-ensured suppliers. We have the same high demands on our business partners as we put on ourselves. A crucial part of the quality assurance of our supply chain is guaranteeing human rights in areas like child labor, forced labor and the right to organize. The Code of Conduct is always included in written contracts with suppliers and the Code is rooted in Peab’s core values that guide us in everything we do. Peab has signed the UN Global Compact and our Code of Conduct is based on its ten principles within human rights, labor laws, the environment and anti-corruption. Peab has also been a forerunner and began following the agreement in The Confederation of Swedish Enterprise of 30 day payments to all our suppliers a long time ago. This is an important part of responsible purchasing for us.

All the suppliers in Peab’s supplier register go through a daily systematic control against predefined parameters. These parameters touch financial status and the risk of irregularities but they also check that the supplier has met social obligations like paying taxes and general payroll tax, and follows approved labor law conditions, e.g. SC2015. During 2018 Peab has made it possible to see 67 percent of business area Construction’s purchases via a system support that includes the Code of Conduct. This monitoring work will continue in 2019 with an implementation plan for system support for all the other business areas. In addition, during 2019 Peab will begin the process of screening suppliers based on social and environmental criteria.

Continued development of purchasing

During 2018 Peab began segmentation aimed at steering purchasing within the Group more clearly towards certain selected suppliers. Development of our purchasing work is vital to ensuring cost-efficiency and a sustainable work method. Segmentation consists of three levels; Approved, Prioritized or Strategic Supplier and is based on a category strategy with the dimensions supply risk, size of the deal and sustainability. The purpose is to develop our collaboration with the suppliers that create the most value and to focus on supplier categories with a potential risk. In addition to this Peab’s entire supplier base is checked daily against defined parameters such as financial status, tax debts and collective bargaining agreements. The reviewed supplier base can be seen in the shared supplier register.

During the year we have also reviewed our procedures for ensuring that all our suppliers meet the requirements in Peab’s Code of Conduct. We have drawn up a self-assessment form that underpins reviews on suppliers believed to pose the greatest risks. This follow-up work will continue in 2019.

Persistent work with ethics and anti-corruption leads to results

Peab has for many years explicitly expressed our zero tolerance to corruption. Peab is a partner in the Joint Initiative Against Bribes and Corruption (JIABC) which works to jointly counteract bribes and corruption in the publicly funded construction and real estate sector, and we are also represented on the board of the Community Builder Sector’s Ethical Council. Peab’s work with ethical issues and against corruption is long-range and systematic. We have strict consequences but we also work with education and tools. For example, all employees responsible for business deals are required to take a course through e-­education in ethics and anti-­corruption as well as competition law. We have continued to hold workshops in our operations and our schools where study groups work with ethical cases related to their daily work based on a broad range of ethical issues. In 2018 3,689 (3,380) employees were trained in ethics and/or anti-corruption. This educational work will be expanded in 2019 to include e-education in ethics for all employees, with the opportunity to partake in a follow-up workshop for the individual study groups.

Peab’s Ethical Council ensures that incidents in the Group such as infringement of laws and the Code of Conduct receive the same consequences, regardless of context or position.

Internal and external whistle­blowing function

Transparency and openness are the watchwords for Peab’s development of the business and work climate. Employees have an important role in reporting any law infringements or serious irregular ties. We prefer open reporting but this is complemented by an external web-­based whistle­blower system that guarantees the anonymity of the reporter. In 2018 the whistle­blower system became accessible to external reporters as well.

Events during the year

During 2018 (0) 0 incidents of anti-competitive activities, breaches of the competition law or monopolistic behavior leading to legal action have been discovered. In 2018 Peab discovered 2 (1) cases of suspected corruption and 6 (9) internal incidents of suspected financial irregularities. The responsible manager handled the incidents with support from members of the Ethical Council. All of these incidents led to labor law measures.

We continue to develop the industry through cooperation

As a community builder it is a given for Peab to contribute to developing social conditions in a sound, safe and attractive construction and civil engineering industry through cooperation. In 2018 we engaged in the industry’s work on diversity, a more attractive and inclusive vocational training program and ensuring a healthy industry with healthy competition and explicit rules for all players.

Working together for a more secure ID06

Peab helped develop the ID06 standard and we linked our workplaces to the system early on. The new ID06 card is under development in the industry and is being implemented. This is a necessity if Peab is going to strengthen the tie between employer and employee and make the system more reliable and secure. The standard will give Peab better control over who is at our construction sites and ensure healthy competition and safe workplaces.

Sustainability aspects

  • Customer and supplier cooperation
  • Responsibility in the supply chain
  • Ethics and anti­corruption

Number of employees trained in ethics

Number of employees divided into gender

Statistics for ethics training include e-education in ethics, equal treatment education and Leading Peab.

Communication and education concerning anti-corruption

GRI 205-2

Board and executive management

Informed about anti-corruption policy*
Educated in anti-corruption

all employees

Informed about anti-corruption policy*
Educated in anti-corruption in 2018

*Peab’s anti-corruption policy is integrated into our Code of Conduct.