E1 – Climate change

Peab and climate change

Positive impacts / opportunities

Negative impacts / risks

The construction and civil engineering industry’s climate impact is significant. Peab impacts the climate throughout the entire value chain, first through emissions of greenhouse gases generated by the manufacture and transportation of input goods and then by the production processes in our own operations and finally by what we have delivered and built. At the same time the conditions for our business is affected by climate change and the work on climate adaptation is becoming more vital. Streamlining energy consumption is also key to supporting phasing out fossil energy. The driving forces in Peab’s climate transition are the Group’s strategic target to be a leader in social responsibility as well as to comply with legislation and to meet a market with increasingly stringent climate demands from our customers. We have also conducted overarching climate scenario analyses based on the Task Force on Climate-Related Financial Disclosures (TCFD) to identify physical risks and transition risks. In addition, we have assessed Peab’s resilience in relation to them.

The primarily cause of greenhouse gas emissions from Peab’s operations is using various materials in production like concrete, steel and asphalt. Two other major sources of greenhouse gases in production are energy consumption and transportation. So these are the areas we prioritize in our emission reduction activities. As community builders we also have a comprehensive perspective on our climate work and strive to contribute to a sustainable society on the whole by , for example, designing flexible buildings, building solar power plants, wind turbines and railroads or by building in such a way that people can live more sustainably. In addition to specially focusing on reducing emissions in the construction process we take into consideration climate impact from a life cycle perspective. This means taking responsibility for both making and meeting demands in our value chain regarding suppliers and customers in order to step-by-step reduce our climate impact in line with set targets, and transition our communities to the changed climate.

All three sub-topics are material for Peab; climate change adaptation, climate change mitigation and energy.

Regarding Peab’s business and climate change, here are some examples of activities in the value chain that impact or can have an impact:

Upstream: Limestone quarries and cement production, manufacturing input goods like steel, consuming fossil fuel in material production, emissions from transportation

Own operations: Asphalt production, production of slag based binders, transportation and equipment, construction adapted to extreme weather and climate change

Downstream: Energy consumption when running properties, possibilities for people to use mass transit

Climate change is linked to the UN’s 7th and 13th global goals for sustainable development: Affordable and clean energy and Climate action

Process regarding materiality

In order to evaluate Peab’s impacts, risks and opportunities in relation to climate change in our own operations and value chains we have worked in cross-functional teams with employee representation from the entire Group. We have conducted a double materiality assessment for E1 climate change per value chain and country and thereafter consolidated the assessments to Group level. The cross-functional teams have mainly consisted of environmental and climate specialists from the four business areas, financial controllers and category purchasers. In addition a number of employees from Group functions have participated in the work. 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

Taking responsibility for our climate impact is a key part of Peab’s strategy and we measure success in the strategic target “leader in social responsibility”. The most long-term target of Peab’s three comprehensive environmental targets is to be climate neutral no later than 2045, which aligns with the scientifically-based 1.5 degree target in the Paris Agreement. Our targets by 2030 are to reduce carbon dioxide intensity by at least 60 percent (cp. 2015) in our own operations – Scope 1 and 2 – and for input goods and purchased services – Scope 3 – by half (cp. 2015). The targets have been set by executive management and comprise metrics, measurement methods and strategic improvement areas. They are then broken down in sub-targets and concretized in the various operations based on the business areas’ specific circumstances and challenges. Read more about the Group’s transition plan and the program Climate Road Map and strategic input goods below.

Responsibility and policies

The Group’s Head of Environment coordinates and drives joint environmental matters, including climate work, together with business area environmental managers and climate specialists. The Group has a so-called Climate Council to ensure a holistic perspective and efficient management of a country’s and/or Group-wise matters. The Group’s environmental functions support the responsible managers in making decisions about climate matters in order to turn plans into action and generate progress in our climate work.

The majority of Peab’s operations work within the framework of a management system that is environmentally certified according to ISO 14001. The management system contains procedures that describe how we work with mitigating climate change, adapting to it and energy matters. The environmental management system is integrated into our business management system which, among other things, comprises Peab’s Environmental Policy where we state that our goal is to achieve climate neutrality. The four business areas are responsible for implementing and complying with the management system and policies in day-to-day work.

Work method and focus areas

In order to reduce greenhouse gas emissions by the construction and civil engineering industry at the rate required by the Paris agreement – the Swedish National Board of Housing, Building and Planning estimates they are more than 20 percent of Sweden’s total emissions – the industry has to move quickly. We strive to work systematically towards this goal and support the Swedish construction and civil engineering industry’s Road map for fossil free competitiveness. We have an advantage in that we can supply our contract construction operations and the projects we develop ourselves with input goods and raw material through business area Industry, which improves our ability to lower carbon emissions. We contribute to climate transition through different kinds of investments such as improving energy efficiency in our factories and electrification of machines and vehicles. We also work actively in applying for funding to enable transitioning at a quicker pace.

Our ability to be successful in reducing climate impact in our own business as well as upstream and downstream in the value chain is determined to a large degree by making the right decision from the start. This often requires collaboration through early dialogues with customers and other partners and clearly defined project objectives. We work actively together with suppliers and customers to find solutions that reduce greenhouse gases. In addition the development work in the Group regarding products, logistics and methods is important for Peab’ success in reducing climate impact.

Peab’s transition plan

To achieve our established climate targets we produced a Group-wise strategic transition plan during 2023 that we concretized in activities within the framework for the business plan program Climate Road Map and strategic input goods, which is one of Peab’s two development plans during the business plan period 2024-2026. Both the transition plan and the program were adopted by executive management. We are currently working to change our offer and develop products and integrated solutions that contribute to lowering Peab’s climate impact. The transition plan contains investments like electrical vehicles and machines on our construction sites and production facilities. An estimated ten percent of the reduction is dependent on investments while many of the other measures entail higher operative costs.

Around 90 percent of Peab’s climate impact is generated in our industrial operations so we focus the Climate Road Map on areas like more efficient energy, fewer transports and influencing customers to demand renewable fuel, energy efficient equipment and electric/ renewable energy on construction sites as well as using products and material with a lower climate impact. The action plan is reviewed in the program’s steering team every quarter.

Resources for the Climate Road Map identified measures come from both Group and business area levels.

Climate transition and business potential

Peab’s focus on an offer that reduces greenhouse gas emissions strengthens our competitive power and ability to win market shares. We can see that our climate promoting actions and investments give us a competitive edge on the market. This includes fossil free construction sites, productifying excavation soil and circular management of excavation soil as well as products with a lower climate impact like ECO-Betong (ECO-Concrete) and ECO-Asfalt. More and more often we also receive projects aimed at adapting our communities to climate change, for example modernizing water and sewage infrastructure.

Material related emissions

Since material related emissions are the largest source of greenhouse gases in our operations we work hard to reduce these emissions by our choice of material, optimized material use and recycling and reuse. Our ECO-products are essential to this work and we continually develop them.

Concrete

Cement functions as a binder in concrete and represents 90 per­cent of concrete’s climate impact. Therefore we use and develop alternative binders with lower emissions. We produce the slag-­ba­se­d bin­der Merit that, to a certain extent, replaces ce­ment in concrete. Merit lowers carbon emissions by up to 60 per­cent compared to conventional concrete as well as reduces excavation of virgin limestone.

A goal of our construction and civil engineering business is to increase the portion of climate-improved concrete in projects. Business area Civil Engineering always uses climate-improved concrete where it is technically possible and accessible. As of 2024 our Swedish concrete and construction contract operations use ECO-Betong (ECO-Concrete) (stage 1) as their standard concrete which means that every project reduces carbon emissions by at least ten percent in concrete construction elements compared to concrete that only contains cement as a binder.

Both business area Civil Engineering and business area Construction had a goal for 2024 that at least 50 percent of factory concrete would be climate-improved. In 2024 the portion amounted to 76.0 (48.2) percent for Civil Engineering and 72.9 (42.2) percent for Construction.

Considering that the long-term goal is to achieve completely climate neutral concrete we are also investing resources in internal R&D, particularly regarding alternative binders and in binding and storing carbon dioxide. At the same time we are working with external strategic partnerships in R&D. For example, in 2024 we did test castings using new binders from our partner that manufactures binders with considerably less climate impact compared to the current binder in concrete.

In addition to ECO-Betong (ECO-Concrete) we work with several other  ECO-products based on Merit. Subsidiaries Byggelement and Smidmek offer ECO-Prefab and ECO-Stomme (ECO-Frame). During the year we completed Byggelement’s expansion of its production facilities in Ucklum and Hallstahammar. The investment of close to half a billion Swedish kronor has doubled the company’s pro­duc­tion ca­pa­ci­ty in walls and joists while the portion of al­ter­na­ti­ve bin­de­r should amount to at least 50 per­cent. Byggelement offers both double and solid walls along with half sandwich walls in ECO 60, where 60 percent of the cement is replaced by Merit. We report their climate impact in EPDs  and report their environmental impact from a life cycle perspective. All Byggelement’s products exceed by far the industry’s toughest reference values for climate-improved products.

Steel

Through its partnership regarding fossil free steel with the steel manufacturer SSAB, as of 2026 Peab will start using steel produced fossil free in our construction and civil engineering projects. However, already in 2023 Peab together with SSAB, Ruukki Construction and real estate company Wihlborgs presented the first building in the world with steel produced fossil free. It is a 6,000 m2 industry building in Lund where parts of panels in the facade are made with steel produced fossil free. The project shows how together with customers and suppliers we are working to transition operations to constructions with reduced climate footprint.

Peab and SSAB have also expanded our partnership to include deliveries of SSAB Zero, which is steel based on recycled steel manufactured and transported fossil free.

Since 2022 we are also working together in a research project with a grant from the Swedish Construction Industry’s Development Fund (SBUF) where we investigate possible climate savings in the construction and civil engineering industry through the hydrogen gas­ ba­se­d HYBRIT technology.  Among other things, calculations show steel made by SSAB with HYBRIT technology has the potential to reduce the climate impact of built-in material in this kind of building by around 30 percent. A preliminary rough analysis shows that more than 90 per­cent of the steel in a conventional steel frame for an office building can be replaced by fossil free steel, which means a climate reduction of about 70 percent compared to conventionally produced steel. The research project will also make a detailed study of the climate impact from the fos­sil free steel as well as the effect this climate savings can have on the total climate impact of construction and civil engineering projects.

Asphalt

In recent years our paving operations have a number of times test-paved asphalt with lig­nin, the natural binder in wood which is made from residual products from the forest industry and can partially replace the fossil oil-based binder bi­tu­men. During the year we tested paving as­phalt with lig­nin on one stretch of road in Finland and three in Sweden. All in all we have test-paved lig­nin on twelve different stretches in the Nor­dic region. We are also doing other R&D to find more alternative binders for asphalt.

Energy-related emissions

ECO-​Asfalt is an example of how we can save energy and use renewable energy sources in our production to lower climate impact. Our production of ECO-Asfalt is based on replacing fossil fuel oil with biofuel when drying and heating the gravel material, which is the most energy consuming part of the manufacturing process. This halves climate impact without affecting the end product’s properties. Our subsidiary Peab As­falt currently has around 90 as­phalt plants in the Nor­dic area. Of them 21 can offer ECO-​Asfalt in Sweden, four in Denmark, four in Finland and two in Norway.

In Sweden and Finland for the most part operations purchase electricity with a guarantee of origin, which guarantees that the electricity is renewably produced. Peab has a framework contract with Vattenfall for electricity in these countries. Operations in Norway are attempting to do the same through their framework contract with Fjordkraft.

Ener­gy requirements for the construction and civil engineering industry are increasing and there is greater focus on energy consumption in the construction process itself. Subsidiary Lam­berts­son has construction barracks with an energy value that is among the best on the market and they are increasingly used in Peab’s operations. During the year Peab launched the offer ECO-Construction site to reduce the climate impact of construction sites. Through the concept we provide lower energy consumption and climate impact by focusing on better solutions for the environment in the areas construction sites have the most significant climate impact.

Lam­berts­son also offers Lam­berts­son Con­trol, which enables measuring and controlling energy and water consumption in a project. Energy consumption can be reduced 30-40 per­cent by using the measurements to find ways to save energy. In 2023 we started a new round of energy mapping in our business aimed at further identifying energy efficiency improvements. The final report will be presented in 2025.

As part of the ongoing project to develop management of environmental data we launched an energy application that makes it possible for our operations to follow their use of electricity and district heating on a monthly basis all the way down to per project in the form of kWh and CO₂e emissions. Some operations can even analyze their fuel consumption. With this tool we can see trends in consumption and then adjust operations to reduce both climate impacts and costs.

We are in the process of exchanging fossil fuel for renewables in our fleet of vehicles and machines. We are replacing everything from excavators, dump trucks and wheel loaders to company cars and light-duty trucks. Of the company cars we ordered in 2024, 99 (97) percent were hybrid or electric, and all in all more than every third car in the Group today is either a hybrid or electric car.

Transportation-related emissions

When it comes to transportation we first and foremost strive to use the right kind of transportation for each purpose, optimize logistics and handle excavation soil efficiently. For example, Lam­berts­son offers a construction logistic solution that includes lo­gistics ­per­so­nnel, a di­gi­tal delivery ­pla­nning tool, mixed loading and intermediate storage of construction ma­te­ri­al. Pla­nned and mixed load trans­portation flows generate both efficiency and environmental gains.

Activities 2024

• Material: Swerock test-casted ECO-Betong (ECO-Concrete) in an outdoor environment with 60 percent slag. This resulted in less climate impact by raising the concrete’s water to cement ratio and replacing almost 60 percent of the cement by Merit. The new formulas have been previously tested in a lab environment with excellent results and the goal is to use the concrete in actual construction projects.
• Material: Byggelement launched yet more ECO-Prefab products where 60 percent of the cement is replaced by Merit.
• Material: Peab has signed an agreement with Benders to open a new terminal in Uddevalla to store the alternative binder Merit that reduces concrete’s carbon footprint.
• Material: At its factory in Malmö Swerock produced the first casting of ready-mixed concrete with almost zero carbon emissions aided by Cemvision’s circular binder from residual products. The casting in Malmö was preceded by a long period of laboratory tests to find the right concrete formula that, among other things, ensures the concrete’s fresh properties and durability growth over time. Peab is a co-owner of Cemvision.
• Transportation: Swerock took another step in electrification of its fleet of vehicles by adding two new electric trucks to its operations in Gothenburg and Skåne. This reduces noise levels and greenhouse gas emissions. The trucks will transport rental lifts and be charged at night but can also be fast charged as needed during the day.
• Transportation: Lambertsson Kran invested in a 50 ton mobile crane where the crane is run on electricity. It is the first of its kind in Sweden and yet another step in electrifying the company’s fleet of vehicles. The motor used to move the crane runs on HVO and the hydraulic system uses bio oil.
• Energy: Peab launched a new concept for construction workplaces – ECO-Construction site – requiring lower energy consumption and environmental impact. The objective is to reduce the environmental impact of construction sites through instruments and guidelines for energy, waste, water management, logistics and construction machines. ECO-Construction site is an additional service that can be inserted into all Peab’s construction and civil engineering projects in the planning stage. We have calculated that in a standard project we can reduce energy consumption by around 25 percent.

Looking ahead

Our focus moving forward is continuing to implement the activities in the action plan for the Climate Road Map in order to achieve our current and long-term climate targets.

Targets and metrics

Greenhouse gas intensity

Peab will be climate neutral by 2045. As of 2021 Peab has sub-targets for greenhouse gas intensity by 2030 measured as greenhouse gas emissions (CO₂e) in relation to the company’s turnover. The targets for carbon dioxide emissions are divided into Scope 1+2 (fuel and energy consumption in our own production) and Scope 3 (input goods and purchased services).

The target for Scope 1+2 is to reduce carbon dioxide intensity by 60 percent by 2030 compared to base year 2015. The outcome for 2024 was a reduction of 50 percent.

The target for Scope 3 is to reduce carbon dioxide intensity by 50 percent by 2030 compared to 2015. The outcome for 2024 was a reduction of 12 percent.

The outcome after 2024 revealed that developments are going in the right direction although to different degrees. We are well on our way to converting the production we ourselves have control over but the greater challenge is when we are dependent on other parties for a reduction in our carbon footprint. It is therefore vital that we continue to make explicit and stringent demands on our suppliers and subcontractors and that we inform about climate improvement choices in order to reduce emissions. Using more ECO-​products in operations contributed to the reduction although this positive effect is diminished due to the change in Sweden as of 2024 of the reduction obligation. There might also be a certain delay in revision of emission factors as a result of the changed reduction obligation on our fuel-​related products.

We work actively to better the quality of our metrics of greenhouse gases emissions, particularly in Scope 3 reporting, and we have also increased the scope of reported data in 2024.

Energy intensity

As of 2021, Peab has an energy intensity target mea­sured as total en­er­gy con­sump­tion (all types of en­er­gy) in re­la­tion to company turnover (kWh/MSEK). The tar­get for 2021-2023 was to re­duce en­er­gy in­ten­si­ty by 15 percent by 2023 com­pared to the base year 2015. We sharpened the target for the business plan period 2024-2026 to a reduction of 30 percent by 2026 com­pared to the base year 2015. The out­come for 2024 was a re­duc­tion of 22 percent.

We are working to create systematic and digitalized management of the Peab Group’s climate data. The project comprises system support and processes to compile and analyze the da­ta linked to input goods and services. The purpose is to increase the accessibility, transparency and quality of data in order to meet the ever increasing reporting requirements from authorities, customers and financiers. In addition to adopting Peab’s transition plan we call the Climate Road Map in 2023, executive management also adopted the other development program, Quality-ensured and traceable value chain, that comprises the work on digitalizing environmental data.

Greenhouse gas emissions

In order to ensure that our targets for reducing emissions are scientifically based Peab reports the methods and scenarios used to set these targets. We also assess future developments like changes in sales volumes, customer preferences and new technologies as well as how these factors can impact both emissions and the reduction of them.

To measure progress we have established a representative base line metric that includes all the relevant activities and captures the company’s greenhouse gas emissions and energy consumption. The construction and civil engineering industry’s Road map for fossil free competitiveness is based on the reference year 2015, which Peab also uses. As data quality improves and a larger part of the business is included, the base line calculation will be updated so that the relationship to current monitoring continues to remain the same.
Peab’s continued collaboration with suppliers and subcontractors enables a robust base line value, effective progress tracking and informed decision-making in order to achieve the targets set for greenhouse gas emissions.

Peab has drawn up instructions regarding the energy and emission factors to be used in the Group so that energy consumption and greenhouse gas emissions calculations are uniform. The factors are selected according to the prioritization principle which entails primarily using actual factors from suppliers and as the last choice standard factors, which are presented together with source references in a separate document.

To calculate our carbon footprint we use ED apps (Environment Data) and analyze detailed climate information on invoices in Scope 1 and 2. Data not included in ED is produced manually through compilation by suppliers.

For Scope 3 we use estimated amounts that are account-based or manual compilations by suppliers. The data are compiled on the platform Sustainability Manager.

Peab works with digital development where we see the potential to include more in, for example, ED from future electronic despatch advice messages via our invoice system E-handla.

During 2024 Peab has continued to refine the compilation process of data. Changes in energy consumption, which is one of the basic metrics for calculating greenhouse gas emissions are described in the section “Energy consumption”. Supplier specific information has primarily been used to calculate greenhouse gas emissions (CO₂e). If supplier-specific data are not available standard emission factors have been applied.

Scope 1 (fuel consumption):

Greenhouse gas emissions from fuel con­sump­tion have been cal­cu­lat­ed with emis­sion fac­tors from Peab’s fuel sup­pli­ers, na­tion­al sta­tis­tics or data from the en­er­gy trade associations. Calculations of greenhouse gas emissions re­flect the actual emissions for the composition of the fuels Peab has purchased, not the average of the re­duc­tion oblig­a­tion fuel volume. Standard emission factors used are reviewed annually. The greenhouse gas emissions in Scope 1 for 2024 have increased by 1.5 percent compared to 2023 due to the change in the re­duc­tion oblig­a­tion for fuel in Sweden. There might also be a certain delay in revision of emission factors as a result of the changed reduction obligation on our fuel-​related products.

Scope 2 (other energy consumption):

Greenhouse gas emissions according to the Location-​​based method have been cal­cu­lat­ed with emis­sion fac­tors from AIB – Pro­duc­tion mix (2023), na­tion­al sta­tis­tics or data from the en­er­gy trade associations. Greenhouse gas emissions for 2024 according to the Location-​​based method have decreased by 30 percent compared to 2023. This is primarily due to changed emission factors for electricity.

Greenhouse gas emissions according to the Market-​​based method have primarily been cal­cu­lat­ed with emis­sion fac­tors from sup­pli­ers. In cases where emission fac­tors from sup­pli­ers have not been avail­able, fac­tors from AIB – Resid­ual mix (2023) have been used for elec­tric­i­ty and na­tion­al sta­tis­tics or data from the en­er­gy trade associations have been used for dis­trict heat­ing and district cooling. Greenhouse gas emissions for 2024 according to the Market-​​based method have decreased by 2.4 percent compared to 2023.

Scope 3 (input goods and purchased services):

The scope of the data measured and reported in Scope 3 has increased as of 2021. The delimitation of Scope 3 reporting is based on an assessment of both the extent of the environmental impact and the pre-conditions for measuring it. Out of the 15 Greenhouse Gas (GHG) Protocol’s emission categories Peab reports on the following categories with cer­tain limitations that are spec­i­fied below.

1. Pur­chased goods and ser­vices
4. Up­stream trans­porta­tion and dis­tri­b­u­tion
5. Waste man­age­ment ser­vices
6. Busi­ness trav­el

Pur­chased goods and ser­vices refers to material Peab has purchased for its operations and material delivered via sub-contractors, as well as purchased construction equipment services. Upstream transportation and distribution includes transportation services Peab has purchased from a third party. The greenhouse gas emissions generated by purchased goods and services and upstream transportation and distribution have been calculated based on estimated quantities. Emission factors are collected from suppliers and in cases where this information has not been available, emission factors have been based on standards from the Swedish Transport Agency, The Swedish Environmental Protection Agency and DEFRA. The portion of ECO-products has grown but at the same time the reduction has diminished due to the changed re­duc­tion oblig­a­tion for fuel in Sweden.

Greenhouse gas emissions from generated waste have been calculated with a tool developed by the waste industry that takes into consideration the climate footprint of waste transportation. Greenhouse gas emissions from generated waste decreased by 29 percent in 2024 compared to 2023. Changes and variations in generated waste amounts from year to year are largely due to variations in the number of Peab’s ongoing projects as well as their size and design the year the report concerns.

Greenhouse gas emissions from business travel include the trips by train and flights booked through Peab’s travel agents and CO₂e data are collected directly from the suppliers. Emissions from flights were 1,444 tons CO₂e while emissions from train trips were only 0.3 tons CO₂e for 2024. Greenhouse gas emissions from business travel have increased compared to 2023. The number of business trips by plane increased while train trips decreased in 2024.

Energy consumption

During 2024 Peab has continued to refine the process of compiling energy data. The reported data cover all the major suppliers that together represent more than 90 percent of the purchased volumes of electricity, district heating and district cooling. Peab has not used steam in 2024. Data from all fuel suppliers are included. Most of the statistics collected are based on electronic invoices. For suppliers that do not provide electronic invoices statistics have been collected directly from them.

Supplier specific information on the products has primarily been used to calculate the energy from fuel. Conversion factors for fuel have been updated and adjusted to reflect the reduction obligation. If supplier-specific data are not available, standard conversion factors based on national statistics are applied. Standard factors used for making estimates are reviewed annually.

The use of liquid fuel and gas increased by eight percent in 2024 compared to 2023 and the use of renewables increased by seven percent in 2024. The use of electricity, district heating and district cooling was on approximately the same level in 2024 as in 2023. The change in total energy consumption between years is primarily due to changes in the design of projects.

^* Consumption of district cooling was a small portion of total energy consumption.

Environmental certification of buildings

The table shows the number of received certificates allocated per certification type. In the case of Miljöbyggnad and BREEAM the preliminary certification could be shown. The statistics include both our own developed projects where Peab is responsible for the certification and projects Peab has built for customers.

The total number of certificates was 41 (56) in 2024.