Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability
• Efficiency
• Digitalization
• Climate goals
• Transparency
• Collaboration
• Openness
• Safety
• Employee development
• Environmental awareness

Environmental Achievements

• Reduced carbon emissions in asphalt concrete production (carbon intensity ratio improved from 22.8 to 17.7)
• Successful switch from shale oil to natural gas at Harku asphalt plant, resulting in cleaner production and lower emission charges
• 13 buildings delivered meeting higher than usual environmental standards (8 with energy label A, 4 with energy label B, 1 with LEED certificate)
• Use of cross laminated timber (CLT) in large-scale projects like Saue Municipal Office and Estonian Academy of Security Sciences Learning Centre

Social Achievements

• Maintained a high customer satisfaction score despite COVID-19 challenges
• Ranked as the highest-rated employer among technology students
• Received the family-friendly employer label
• Organized events for young people to promote careers in construction
• Implemented a new electronic environment for evaluating subcontractors' work
• Donation to MTÜ Peaasjad, a non-profit organization promoting mental health

Governance Achievements

• Observed the Corporate Governance Code (CGC) promulgated by the Nasdaq Tallinn Stock Exchange
• No incidents of corruption reported in 2020 or 2019
• Implemented an anonymous hotline for reporting concerns about corruption and unethical behavior
• Maintained good relations with local communities

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting profitability and operations (supply chain disruptions, travel restrictions, weaker demand, increased competition)
• Shortage of skilled labor in the construction sector
• Stiff competition in the construction market, putting pressure on bid prices and profit margins
• Seasonality of infrastructure construction
• Economic uncertainty in Ukraine affecting real estate development projects

Mitigation Strategies

• Internal streamlining and cost-cutting measures
• Digitalization of activities to improve efficiency and competitiveness
• Securing road maintenance contracts for year-round business
• Maintaining a balanced portfolio of building and infrastructure projects
• Conservative approach to contract signing in Ukraine, minimizing risks

Supply Chain Management

Supplier Audits: Annual rating of business partners in asphalt production and quarrying

Responsible Procurement

• Selection of partners based on background, track record, quality, technical capabilities, financial position, security of supply, adherence to deadlines, and prices

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 9001, ISO 14001, OHSAS 18001/ISO 45001

Third-party Assurance: KPMG Baltics OÜ

Awards & Recognition

• Cultural Endowment of Estonia Grand Prize in Architecture
• Wood Building of the Year 2020
• Deed of the Year 2020 (Digital Construction Cluster)
• Nominee for Best Digital Innovation Project 2020
• Nominee for Construction Project of the Year 2020
• Second place among most competitive construction companies in Estonia

Environmental Metrics

ESG Focus Areas

• Sustainability
• Efficiency
• Digitalisation
• Climate goals
• Transparency
• Collaboration
• Openness
• Safety
• Employee development
• Environmental awareness

Environmental Achievements

• Transition of Tariston’s asphalt concrete plant in Harku from oil shale-based energy to natural gas.
• 17 buildings meeting higher than usual environmental standards delivered during the year.

Social Achievements

• 0 accidents/fatal injuries at work (incl. subcontractors)
• 0 environmental pollution, discrimination and corruption incidents
• €0.2m Donations to community projects and charities
• Engineering students rated Nordecon AS as the second most attractive employer in Estonia.

Governance Achievements

• Compliance with the Corporate Governance Code (CGC) promulgated by the Nasdaq Tallinn Stock Exchange.
• 0 incidents of corruption in 2021 and 2020

Climate Goals & Targets

Environmental Challenges

• Rapidly rising input prices
• Supply chain disruptions
• Shortage of skilled and qualified labour
• Stiff competition in the infrastructure segment
• One-off losses in the Swedish market
• War in Ukraine causing market strain and supply chain disruptions

Mitigation Strategies

• Improving profitability through more precise planning of design and construction operations
• Increasing design and digitalisation capabilities
• Simplifying and automating work and decision-making processes
• Monitoring the balance between the contract portfolios of different business segments
• Flexible resource allocation aimed at finding more profitable contracts
• Investments in digital solutions
• Signing cost-plus contracts with private sector customers
• Focus on cost control and pre-construction and design activities
• Conservative approach in Ukraine, signing contracts only when risks are reasonable
• Seeking opportunities to exit or sign new contracts for real estate projects in Ukraine

Supply Chain Management

Responsible Procurement

• Selection of partners based on background, track record, quality of work, technical capabilities, financial position, security of supply, adherence to deadlines and prices.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 9001, ISO 14001, ISO 45001

Third-party Assurance: KPMG Baltics OÜ

Awards & Recognition

• Construction Project of the Year 2021 (Ajamaja office building)
• Builder of the Year 2021 (Ahti Kala)
• Young Civil Engineer of the Year 2021 (Martin Talvik)
• Wood Building of the Year 2021 finalists (Saaremaa Upper Secondary School, Ehituse Mäemaja)
• Estonian Association of Interior Architects Award of the Year 2021 (Ehituse Mäemaja)
• Concrete Building of the Year 2020 Special Award (Estonian Academy of Security Sciences Learning Centre, University of Tartu Narva College)
• Deed of the Year 2021 nominee (Nordecon AS and CLT element producer)
• Attractive Employer of the Year 2021 (second place)

Environmental Metrics

ESG Focus Areas

• Quality, customer experience and the safety of constructed buildings
• Financial results
• Fair business practices – legal and regulatory compliance, transparency and ethics
• Management competencies and employee development
• Cooperation with subcontractors and suppliers
• Direct impact of construction activities on local communities
• Innovation, digital construction and technological solutions
• Occupational health and safety
• Employee satisfaction and engagement
• Availability of workforce and new talent
• Environmental impact of constructed buildings
• Giving back to society and support activities
• Direct environmental impact of activities
• Diversity and fair treatment

Environmental Achievements

• Completion of a green building unique in Europe (Alma Tomingas office building, LEED Gold certified)
• Transition to green electricity for all group entities until the end of 2030
• Tallinn City Government recognised the construction site of the Roseni office building as the cleanest and most orderly construction site in 2022.

Social Achievements

• Attractive Employer of the Year 2022
• Silver Badge of a family-friendly employer
• Lae end (Charge Yourself) education program awarded first prize in the Positive Change category at the TULIMUST marketing competition
• Customer satisfaction rate of 90% or higher at all subsidiaries

Governance Achievements

• Zero environmental pollution, discrimination and corruption incidents
• Compliance with ISO 9001, ISO 14001, and ISO 45001 standards

Climate Goals & Targets

Environmental Challenges

• Rampantly rising input prices
• Persisting difficulties with the supply of materials
• Cutbacks in investments by the Transport Administration
• Stiff competition for employees
• High inflation increasing pressure for wage increases
• Shortage of skilled and qualified labor
• Economic slowdown and decline in investments in the construction sector

Mitigation Strategies

• Reorganisation of road construction operations to eliminate duplication of activities
• Implementation of digital solutions for more precise process management and cost-saving
• Collaboration with educational institutions to attract and retain employees
• More frequent salary reviews to address high inflation
• Outsourcing of design and surveying services
• Flexible resource allocation aimed at finding more profitable contracts

Supply Chain Management

Responsible Procurement

• Selection of partners based on background, track record, technical capabilities, quality of work, security of supply, adherence to deadlines and prices
• Consistent checking of all materials and products to avoid risks

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 9001, ISO 14001, ISO 45001

Third-party Assurance: DNV

Awards & Recognition

• Attractive Employer of the Year 2022
• Silver Badge of a family-friendly employer
• Recognition by the Estonian Centre for Defence Investment
• Cleanest and most orderly construction site in Tallinn
• Deed of the Year 2022
• Nominees for Construction Project of the Year 2022 and Innovation Project of the Year 2022

Environmental Metrics

ESG Focus Areas

• Quality, customer experience and safety
• Financial performance
• Fair business practices
• Management capabilities and employee development
• Working with subcontractors and suppliers
• Direct impact of construction activities on local communities
• Innovation, digital construction and technological solutions
• Occupational health and safety
• Employee satisfaction and engagement
• Availability of workforce and new talent
• Environmental impact of delivered buildings and infrastructure assets
• Giving back to society and supporting communities
• Direct environmental impacts of operations
• Diversity and fair treatment

Environmental Achievements

• Reduced carbon intensity ratio of asphalt concrete production by 27%
• Delivered 36 buildings meeting higher than usual environmental standards

Social Achievements

• Zero accidents/fatal injuries at work (incl. subcontractors)
• Zero environmental pollution, discrimination and corruption incidents
• €0.3m Donations to community projects and charities
• Ranked in the TOP 3 attractive employers by engineering students
• Received Friend of Education of the Year 2023 award

Governance Achievements

• Zero corruption incidents
• Compliance with Nasdaq Tallinn Stock Exchange Corporate Governance Code

Climate Goals & Targets

Environmental Challenges

• Declining demand in infrastructure construction
• Increasing competition
• Shortage of skilled and qualified staff
• Low productivity
• High construction prices
• High interest rates
• Long pre-construction processes
• Economic downturn

Mitigation Strategies

• Adaptability in budgeting
• Use of innovation and IT solutions
• Accurate resource planning
• Efficient scheduling
• Adherence to quality standards
• Application of artificial intelligence
• Consolidation of infrastructure segment
• Investment in digital solutions
• Focus on cost control and pre-construction activities
• Work with educational institutions
• Continuous employee development

Supply Chain Management

Responsible Procurement

• Selection of partners based on background, track record, technical capabilities, quality of work, security of supply, adherence to deadlines, and prices
• Rigorous checks of all materials and products

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 9001, ISO 14001, ISO 45001

Third-party Assurance: DNV (for ISO standards), KPMG Baltics OÜ (for financial statements)

Awards & Recognition

• Young Civil Engineer of the Year 2023
• Innovation Project of the Year 2023
• Best Company in Tartu of the Year 2023
• Silver Badge of the Ministry of Defence
• Builder of the Year 2022
• Innovation Partner of the Year 2022
• Best Heartfelt Deed
• Friend of Education of the Year 2023