G1 – Business conduct

Peab and business conduct

Positive impacts / opportunities

Negative impacts / risks

Responsible business conduct is key to Peab’s values and governance. With our extensive operations in the Nordic region and role as community builder we have a responsibility to run a business with high ethical standards and combat corruption. Non-compliance, human rights violations, and corruption are examples of risks that can lead to financial losses, legal consequences and loss of trust from stakeholders. This can be a challenge in an industry of generally decentralized operations and complex value chains since these factors have been known to increase the risk for ethical violations and corruption. The fact that our operations and next to all our employees are in the Nordic region as well as most of our partners positively affects our ability to counteract shortcomings in business conduct.

Peab has made it abundantly clear that we have zero tolerance for any and all forms of corruption, ethical violations are not accepted and that every infringement has consequences. Our shareholders, customers, employees and other stakeholders must be able to trust that our operations rest on an ethical approach, internal regulations and national legislation, and Peab does not compromise on these.

In addition to our own organization we also strive for actors in our value chains upstream and downstream to maintain a high ethical standard in their businesses.

Regarding business conduct Peab’s impact is material for 1) corporate culture, 2) protection of whistleblowers, 3) management of relationships with suppliers, including payment practices and 4) corruption and bribery.

Below are examples of activities regarding business conduct that have or can have an impact:

Upstream:

• Clear demands for responsible business conduct and our Supplier Code of Conduct increase awareness and compliance with ethics guidelines as well as strengthen confidence and transparency in the supply chain.

Own operations

• Corporate culture is promoted by deeply rooted core values, education and clear guidelines concerning ethics and corruption avoidance work.

• A safe and anonymous whistleblower function strengthens employees’ confidence and enables rapid management of suspected irregularities.

• Incidents like corruption or shortcomings in payment procedures can damage our reputation and diminish customers’ and employees’ confidence in us as well as lead to financial and legal consequences.

Downstream:

• Responsible business methods strengthen customer relations and stakeholders’ confidence in the business.

• Peab’s work to counteract corruption and ensure fair payments on time augment business opportunities and contribute positively to the industry.

Process regarding materiality

We have conducted a double materiality assessment for G1, business conduct, on Group level. In order to evaluate Peab’s impacts, risks and opportunities we have incorporated key employees and functions with knowledge and particular insight on the issues and Peab’s business. The function Corporate governance and compliance and a number of employees from other Group functions have participated in the work. This has taken place through meetings and workshops where we have compiled and evaluated Peab’s sustainability matters in all the G1 sustainability topics according to the template we produced. The process has been based on insights from different sources, including internal and external investigations and reports from the whistleblower system, leadership information, the compliance department, internal whistleblower contacts, information from interactive education, through corruption identification programs and investigations by the security department. By analyzing these insights we have reviewed the business ethical risks that can impact the company, in particular how reported incidents can impact the business financially, legally and by damaging confidence and we have identified the impacts, risks and opportunities considered material for Peab. The function non-financial reporting has coordinated the process regarding materiality, which has been conducted as described in the section ESRS 2 on page 49.

This is how we work

Peab’s bottom line is complying with the national laws in the countries where we operate. We and our partners must naturally follow the laws, regulations and ordinances valid for the markets where we operate. In addition we also comply with international guidelines, norms and initiatives such as:

• UN Global Compact since 2012, including compliance with its ten principles
• UN Global Compact (UNCC) concerning counteracting corruption
• UN convention against corruption (UNCAC)
• UN Human Rights Declaration
• UN Guiding Principles on Business and Human Rights (UNGP)
• UN Global Goals for Sustainable Development
• ILO core conventions on fundamental principles and rights at work
• OECD Guidelines for Multinational Enterprises
• The general principles in the international regulations for human rights
• OECD Anti-Bribery Convention and its recommendations
• Agreement  against bribery and corruption (ÖMK) in Sweden
• Rakennusteollisuus ethics principles in Finland

Our policies and guidelines conform to these commitments.

Responsibility and policies

Peab has a Code of Conduct and a Supplier Code of Conduct that clarify Peab’s commitment to social responsibility and human rights, as do the demands we make on our partners. Through these policies and guidelines we ensure that we and our suppliers take responsibility for impacts, risks and opportunities.

In addition to the governance documents, we follow Group policies in areas like the work environment, quality, the environment and information security. We also have several guidelines that are based on our policies like those on anti-corruption.

The Supplier Code of Conduct describes Peab’s expectations and demands on our business partners concerning the work against bribes and corruption. It also makes clear that suppliers should promote a culture that is built on transparency and compliance.

Peab’s Board of Directors is ultimately responsible for Peab’s Code of Conduct and Supplier Code of Conduct as well as central policies. The responsibility is delegated to the CEO and thereafter follows down the line organization through leadership that is responsible for ensuring that the various functions and departments apply the Code of Conduct, including associated policies and guidelines. Every employee is responsible for learning about, and complying with, the Code of Conduct.

The Ethics Council and security department play a key role in ensuring conformity in managing identified risks and impacts. Reports are presented according to the annual calendar every half-year to executive management and annually to the Board of Directors.

The Ethics Council, which consists of the head lawyer, Head of Security and HR managers from all the business areas, meets once a month for a total of eleven times a year. The action plan against corruption that Peab works with is developed through the risk analyses that the Ethics Council regularly performs and includes a comprehensive, target group-oriented training in ethics and anti-corruption to ensure that all our employees have sufficient knowledge to act properly in any given situation.

Work method and focus areas

Running a business responsibly can determine the success of our projects – and our business – and therefore has a direct impact on Peab’s business model and strategy. Our work with ethical matters is based on maintaining a robust ethical culture, reducing risks and integrating responsible business conduct into all Group governance and value chains.

We continually monitor current legislation and evaluate and remedy any shortcomings in operations as well as ensure that both Peab and our suppliers comply with the principles in the Code of Conduct and Supplier Code of Conduct. This is done on both Group level and regional level, close to our suppliers and other stakeholders.

Governance documents are verified annually and updated as needed. We inform and educate our employees about responsible business conduct, for example through our Code of Conduct. We also work to strengthen our value chains through various forms of collaboration and education in order to meet the expectations of responsible business conduct.

Internal matters taken to the security department are thoroughly investigated in order to identify reoccurring patterns and areas with higher risks. Internal control is an essential part of the investigations.

The Group function Corporate governance and compliance, led by the head lawyer, works with managing cases of violations, training in ethics and anti-corruption, risk analyses and measures to counteract corruption as well as matters regarding governance and compliance. This compliance is not restricted to laws and ordinances only but also includes our Code of Conduct, established working methods and other governance documents within the Group.

Corporate culture

Peab’s culture is grounded in our ingrained core values of down-to-earth, developing, personal and reliable that guide us in our actions and decisions. Added to that are our values and principles described in our Code of Conduct. It clarifies what other ethics guidelines are important for employees to comply with. Our governance documents and corporate culture function as an integrated part of governance and reinforce the confidence both internal and external stakeholders have in us.

The Code of Conduct, our policies and regulation compliance specific guidelines are converted into web-based courses that employees take at regular intervals at the same time they are communicated to customers and suppliers and are available in several languages on Peab’s intranet and external websites.

For more information regarding corporate governance policies and guidelines, see the Corporate Governance Report on pages 211-224.

Protection of whistleblowers

Peab encourages employees and external actors – anyone – to report suspicions regarding financial crime and corruption, deficient internal controls, infringement on human rights, environmental breaches, harassment, discrimination, health and safety standard violations and any other issues that can constitute a crime or in some other way damage Peab, our employees or shareholders.

Employees can report directly to their supervisor, their supervisor’s supervisor or:

• Compliance
• The Ethics Council
• Internal whistleblower contacts
• The security department

We have several well-functioning channels for external parties to come into contact with Peab, for example our customer service or our websites.

In order to further reporting and transparency Peab has a channel for whistleblowing accessible to employees and external parties via the intranet and all Peab’s external websites. The whistleblower system guarantees anonymity for the user, regardless of whether they are part of Peab or not. We work transparently, systematically and preventatively through long-term measures, particularly when it comes to remedying problems. We are supported in this by established work methods for incident management.

The Ethics Council is responsible for handling incoming reports in collaboration with the Whistleblower Council that delegates matters for investigation. Those who investigate these matters, including corruption and bribes, are independent from those involved in the cases. Investigations are conducted by the security department according to set procedures, which ensures that incidents that concern business conduct, including corruption and bribes, are handled quickly, independently and objectively.

More information about Peab’s internal whistleblower channels and the measures taken to protect whistleblowers can be found in the guidelines for whistleblowing available at peab.se and peab.com.

Employees are informed in various ways about codes, policies and guidelines and are continuously encouraged to use whistleblower channels through different initiatives. Here are some of the key methods used to promote awareness and engagement:

• Intranet, which is a continuously updated channel where employees can find detailed information about all the company’s codes, policies and guidelines.
• Code of Conduct education, where guidelines are described and employees are made aware of the whistleblower channel’s function and importance.
• Anti-corruption education, given to risk exposed employees, which spotlights the importance of identifying and reporting irregularities along with describing zero tolerance.
• Quarterly management letters remind employees about guidelines, the availability of the whistleblower channels and the importance of reporting suspected incidents without retaliation.
• Through the business management system, which is a key tool for spreading information about the company’s codes, policies and guidelines, employees can learn about current and relevant updates.
• Digital monitors in communal space and bulletin boards that provide important information.

Management of relationships with suppliers, including payment practices

Peab follows the payment terms established according to the EU Directive on late payments (2011/7/EU). Peab strives to balance contractual freedom with compliance with the requirements of the directive, which include fair and transparent payment practices. We work actively to ensure that our payments are fair, transparent and in line with standard terms.

Corruption and bribes

Corruption is a misuse of power for one’s own or another’s gain. It is about situations where someone, within the framework of business operations, offers or receives a gift, loan, reward or some other advantage in order to achieve something that is dishonorable or illegal. This might be instigated by a person or an organization and include actions such as facilitation payments, fraud, blackmail, secret agreements or money laundering. The advantages can consist of money, products, gifts, trips or personal favors which are given in return for undue advantages or to create moral pressure to accept them. Other forms of corruption can be breach of trust, fraud and theft where the crime is directed at Peab and committed by employees. There is a heightened risk for bribes and other forms of corruption in the construction and civil engineering industry, and thereby in Peab, particularly in roles where employees have decision-making authorization and responsibility for procurements, contract negotiations and supplier relations or project management and site management at construction sites, including choosing subcontractors and handling changes in projects and additional work as well as material.

The work to counteract corruption and bribes focuses on maintaining our zero tolerance of corruption, acting immediately if corruption is suspected and strengthening employees’ knowledge through education and tools for counteracting irregularities.

Corruption is a risk we manage through proactive and reactive measures, education and governance documents. Work against corruption is an integrated part of our overall work with business conduct and is based on clear guidelines, structured processes and continual education programs. It is aimed at preventing, discovering and managing corruption risks systematically. In 2024 Peab launched a Nordic tailor-made anti-corruption course for risk exposed employees. The course covers the subjects corruption, outside activities, representation and benefits, gifts externally and internally, contacts with authorities, whistleblowing and competition law.

More information about how Peab handles corruption risks in our business is described in the guidelines on anti-corruption found on Peab’s external websites.

Looking ahead

• Continue with obligatory courses for all employees in ethics, anti-corruption and competition law.
• Reinforce Peab’s guidelines, educate risk exposed employees and further develop the whistleblower system.
• Improve structure in monitoring with checkpoints from policy to compliance.
• Expand monitoring incidents through the Ethics Council and whistleblower system and implement proactive measures.

Targets and metrics

• Number of courses in our Code of Conduct every other year: 4,861 (10,352)
• Number of tailor-made courses: (1,221 employees educated in 2024)
• Number of internally verified corruption cases: 15 (8)
• Confirmed cases of competition crimes: 0 (0)

Definition of corruption crime as of 2024 as decided by those responsible for regulation compliance in Peab AB:

Peab applies a broad definition of the concept corruption crime which includes giving ang taking a bribe, breach of trust and in cases where the crime is against a company in the Peab Group and committed by a Peab employee – fraud and theft.

In the previous definition every person considered guilty of a corruption crime was reckoned as an individual incident. As of this report for the financial year 2024, crimes where several people have acted together and in collusion are reported as one incident. Each of the persons considered guilty in the respective incident are reported separately.

Peab’s payment policy and compliance of the EU Directive on late payments

Payment time and payment terms

In accordance with Peab’s standard contract the contractual payment period is 30 days vis-à-vis suppliers. In 2024 our average payment time was 30 days. Our disputes stem from claims or other issues linked to delivered services and products. We always pay according to contracts when a service is correctly performed and approved. Peab has no ongoing legal disputes linked to late payments.

We know that late payments can have an affect on our suppliers and their liquidity, particularly small businesses. As part of our work to ensure a sustainable supply chain we are developing our routines for managing invoices and attesting as well as strengthening our dialogue with suppliers to lower the number of disputes and claims.

*Peabʼs Anti-corruption Policy is integrated into our Code of Conduct