Sustainable throughout the entire chain

Knowledge and monitoring foster good ethics

Peab has zero tolerance to any and all forms of corruption and ethical violations. Our industry is full of risks with its decentralized operations and complex value chain, which in of itself increases the risk for ethical violations and corruption. Peab works preventively through long-range and systematic measures, in particular by ensuring our employees’ knowledge concerning ethics, anti-­corruption and competition law.

Our ability to hinder ethical violations is augmented by the fact that our operations and next to all our employees are in the Nordic region. In 2021 we trained 2,064 (4,434) employees in ethics where our policies and procedures regarding anti-corruption are a significant part of the education. Expectations, support and consequences must be obvious to everyone at Peab’s workplaces and anyone collaborating with us, as is also made clear in our Code of Conduct. Every violation has consequences.

Incidences are reported, dealt with and followed up

An ethically sustainable business is built on transparency. Peab encourages all employees and partners to report any possible law infringements, violations against our Code of Conduct or any other kind of infringement. We encourage open reporting but this is complemented by an external web-­based whistle­blower system that guarantees the anonymity of the reporter, whether or not the reporter is in Peab or external. Read more about our whistleblower function under Steering. When Peab is made aware of an incident the matter is sent to the Ethical Council which ensures that all incidents in the Group are dealt with consistently.

During 2021 (0) 0 incidents of anti-competitive activities, breaches of the competition law or monopolistic behavior leading to legal action were discovered. Peab has not been involved in any legal process during the year nor was there any ongoing legal process at the end of 2021.

In 2021 Peab discovered 1 (2) case of suspected corruption and 0 (1) internal incidents of suspected financial irregularity. The responsible manager handled the matter with support from the Ethical Council and the incident was reported to the police by Peab. During the year we have worked to make our regulations and reporting requirements more explicit in regards to employees’ side occupations. We have also worked on revamping our procedures regarding recruitment checks and this process will continue in 2022.

Nordic collaboration against corruption

Peab’s engagement for an ethical industry stretches outside our own business and we work together with our industry to fight corruption. In Sweden 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 development sector and in Finland Peab is a member of the interest group Rakennusteollisuus (RT), where we sit on its board and support the organization’s ethical principles.

Complete respect for human rights

Respect for human rights are a given in every part of Peab’s business and throughout the entire value chain. This commitment is explicitly expressed in our Code of Conduct and permeates our sustainability work. The risk of violating human rights exists in all our areas of operation, internally and externally. Read more in the section on risks. These risks are particularly prominent in the various parts of the supply chain. Therefore at Peab we work with risk analysis, and to rectify faults in our own operations and quality-ensure our supply chain to reduce the risk of disrespect for human rights.

Risk management in the supply chain

The production chain in the construction and civil engineering industry is complex and consists of a large number of actors. Analyzing, preventing and managing risks is key to our ability to foster a sustainable supply chain where neither ethics, the environment nor human rights are at risk. Making demands and checks, and then following up is just as crucial to sustainable business.

At Peab we manage 57,000 suppliers annually. Around 1,500 suppliers make up 80 percent of the Group’s total purchase volume, of which 60 are internal suppliers. We are major buyers in the Nordic region which means we have a good platform for promoting secure and sustainable procurement. This requires good purchasing steering, which Peab has prioritized for quite some time. The process begins when a supplier is first assessed and then continues via risk analysis, requirements, checks and follow-up. Processes and procedures are important but they must also be complemented by a reliable system support. We have digitalized checks in our supplier register, which gives a good overview of our suppliers. The system flags various risks which can then be handled based on the specific area that needs to be checked. We classify suppliers into three different levels depending on what their relationship to Peab is: safe workplace, secure payment and secure supplier.

We are major buyers in the Nordic region which means we have a good platform for promoting secure and sustainable procurement.

During the year we also introduced the new measurement: secure procurement. In short, the definition of a secure procurement is that it has been made from an approved supplier, is covered by a written agreement and is digitally traceable. A secure supplier meets the requirements of the decision matrix and their social obligations such as regular payments of employer contributions. We also check that suppliers have collective bargaining agreements. Peab’s purchasing behavior is systematically monitored and documented quarterly.

Peab’s total purchasing volume is divided up into purchase categories. We currently have round 300 different purchase categories, of which frameworks and facades, installations and site transportation, and construction equipment services are the largest. Each category has a contact person responsible for it. The point of a category-steered purchasing system is to gather Peab’s total purchase volume into a specific category in order to sign contracts for the entire category with advantageous prices and the right requirements. This way we can steer our purchase volumes to certain framework contract suppliers, making it easier for production since only call-off orders from approved suppliers with predefined terms are made, instead of signing contracts for each project.

Every year we conduct an analysis of our purchase categories and select several prioritized ones. We choose these categories based on a number of parameters, in particular issues related to human rights such as the work environment, child labor and discrimination. We then monitor our prioritized categories throughout the year and a cross-functional audit team consisting of category heads and QEW responsible supervisors conduct a supplier audit. An example of a category-steered process is how we work with risk categories. A risk category is earmarked by a special or high level of risk concerning the work environment, labor conditions and other human rights. The risk categories Peab has identified are staffing, piercing, demolition, cleaning, scaffolding construction and decontamination.

As part of our continuous improvement work several years ago we began increasing checks on our subcontractors and suppliers. As a result of this more and more subcontractors apply the industry-wide requirements in “UE 2021 (Subcontractor 2021)”, which is a framework continually developing through cooperation in the industry, especially through tougher sustainability demands. This entails a responsibility for ensuring that all subcontractors in the supply chain have collective bargaining agreements and a F-tax certificate, and that they are not involved in disputes regarding back wages or other remuneration to employees. The primary purpose is to rid the industry of unscrupulous actors, get control over the subcontractor chain and create safe workplaces. This is right in line with Peab’s ambition to strive for a healthy construction industry that safeguards good business ethics, quality, the work environment and environmental consideration.

Peab also takes advantage of the opportunities for exchanging experiences over national borders. In the purchasing function , for example, there is a team that assesses suppliers from a Nordic perspective.

Supplier audits for a secure production chain

In 2021 Peab’s cross-functional audit team continued to conduct onsite audits at our prioritized suppliers which have been identified based on volumes and the analyzed level of risk. Our Code of Conduct is the basis of our requirements and consequent follow-up, and our method is always the learning dialogue. Our goal is to promote improvement and create a sustainable, secure production chain by working on it together. In 2021 we conducted 15 (6) supplier audits. In 2022 we plan to increase the number of audits and the scope of them through additional questions about quality.

Business benefits from local initiatives with customers

One of the areas our customers emphasize more and more is the importance of working together in shared social responsibility for the local community. For Peab, with our extensive local presence all over the Nordic region, this is a positive development and key to our business model. It might be a matter of providing internships and jobs for newly arrived immigrants or for people with disabilities, creating safe residential areas or aiding youths in their development and education. See the section Social for more details.

Stakeholder collaboration for a more sustainable industry

As the Nordic Community Builder it’s a given for Peab to contribute to developing our industry, not only through collaboration with customers but other stakeholders as well. In 2021 we continued to engage in, for instance, the industry’s work on Maintain Zero and a more secure ID06, the National Board of Housing, Building and Planning’s initiative for a safe project culture and the work for healthy competition. The current national and global challenges we face require all the actors in society to work together. Therefore collaboration is a prioritized part of our locally produced community building.