For business partners

Approximately 76% of the Group’s performance is used for material and subcontractor services. Throughout the Group, we have a standard target in Procurement: With regard to our economic, ecological and social standards, we aspire to always choose the “right” suppliers and subcontractors. Since each of our projects is unique and involves new challenges, we also pursue innovation and sustainability in Procurement. Efficiency and quality of procurement processes are very important for us and represent an important factor in our company’s success.

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Basic principles

This is how we design our supply chain

In procuring materials and services, sustainability and transparency are extremely important for the HOCHTIEF Group and are firmly anchored in our processes. We are aware that we place stringent requirements on the procurement processes and hence on the choice of our business partners. Furthermore, in its supply chain HOCHTIEF also places great value on such aspects as price, functionality, quality and availability of products and companies.

Economic, ecological and social principles form the basis of the HOCHTIEF Group’s business. These principles are defined in our Procurement Directive. With these binding regulations, tried-and-tested and risk-minimizing processes, we describe the most important values, responsibilities and principles of conduct for all HOCHTIEF employees who are integrated into the procurement process.

ESG Supplier Program and Risk Management Process

The process shown corresponds to the risk management process in the division HOCHTIEF Europe. Comparable processes have been established in the divisions HOCHTIEF Americas and HOCHTIEF Asia Pacific.

Joint standards provide quality as well as responsible operations in Procurement and ensure comprehensive prevention. Therefore, we have defined a fundamental and multistage risk management process, which serves as the basis for evaluating our supply chain. In this way, we want to ensure that potential sustainability risks are identified at an early stage in order to consequently minimize these through targeted measures (so-called corrective action plans).

This process includes an extensive prequalification of our contractual partners: We assess suppliers and subcontractors on the basis of multifaceted information obtained from supplier self-assessment.

In the first step, we ask for information on the company structure, general company data and sustainability aspects. In our international project business, we come into contact - directly or indirectly - with many people due to our extensive supply chain. As we owe responsibility to every one of them, safety and health as well as respect for human rights are top priorities at every link in our supply chain. That is why suppliers and subcontractors, including potential partners, from countries with an increased risk with regard to corruption, civil rights and political freedoms as well as human rights violations are examined with special focus in the course of an extended supplier self-disclosure.

In the second step, we check our suppliers and subcontractors against sanctions lists to rule out the possibility that economic and/or legal restrictions have been imposed on individuals or the company.

Subsequently, suppliers and subcontractors are checked with regard to their creditworthiness and financial strength. We work together with the provider Creditreform to obtain up-to-date creditworthiness information.

In fourth place, we check all relevant certificates with regard to their validity and up-to-dateness.

Additionally, for many years now, we have supplemented our prequalification process with an external ESG Risk Assessment by working with rating agencies to obtain transparency and independent information on the sustainability performance of potential business partners. We carry out an abstract risk analysis that includes country-specific risks, sector-specific risks and commodity-specific risks. Additionally, we carry out a concrete risk analysis that is based on the identified risks that result from the abstract risk analysis. The concrete risk analysis consists of information provided by suppliers and subcontractors on matters such as environment protection, employment rights, human rights, anti-corruption and anti-bribery and supply chain responsibility. Wherever risks are identified, we work with the business partner concerned to develop specific action plans to manage those risks (Corrective Action Plans).

As a sixth step in our prequalification process, we also request data regarding occupational safety, health and environmental protection (OSHEP). We have established the lost time injury frequency rate (LTIFR) throughout the Group as a non-financial key performance indicator.

It is of central importance to us that our partners fulfill all contractual agreements and obligations while working with us and additionally that they act in conformity with our sustainability requirements. Our project teams continuously monitor the subcontractors and suppliers operating at HOCHTIEF construction sites, verifying that the contractually agreed performance has been delivered and that supplies of material are up to quality. Compliance with all stipulations and instructions on occupational safety and proper waste disposal or recycling form an essential part of this monitoring process.

Following completion of performance or delivery, our project teams conduct a post-project assessment. Such assessments are also carried out for longstanding suppliers and subcontractors and are performed within projects both with the aid of established IT systems and manually. The assessments include economic as well as ecologic and social aspects. Contractual partners with a positive rating are included in future tender processes. Should contractual partners fall short of our requirements and therefore receive a negative assessment from our project teams, we either provide them with targeted support within our supplier development process or flag with in our system such that they are no longer considered for future contracts (supplier phase-out).

Our prequalification process also includes a training document on human rights and on our Code of Conduct for business partners

HOCHTIEF Code of Conduct for Business Partners and Human Rights - Our requirements to you

PDF (3.2 MB)

Our buyers also receive regular training on topics related to sustainability in the supply chain. For 2023, we have set ourselves the goal of training 100% of our buyers.

The Executive Board is involved in all relevant processes and decisions regarding ESG aspects.

Furthermore, we identify critical suppliers and subcontractors in our supply chain. We define these on the basis of monopolies, particularly high contract volumes, deliveries of fundamentally important components as well as availability of resources. In 2022, HOCHTIEF worked with ca. 47,000 suppliers worldwide. We rated approximately 5,000—and hence about eleven percent of suppliers and subcontractors—as potentially critical. These represent around 70 percent of total procurement volume. In addition, in 2022 HOCHTIEF rated around 50,000 of non-tier 1 suppliers as potentially critical. Indirect contractors are considered as critical if one of the above criteria applies and they have a direct or indirect business relationship with one of our Tier 1 suppliers/subcontractors.

The HOCHTIEF Code of Conduct for Business Partners

Our basis for cooperation

HOCHTIEF not only places high requirements on itself but also on its subcontractors and suppliers. HOCHTIEF only cooperates with partners who comply with these requirements and who, for their own part, enforce and encourage compliance amongst their own subcontractors and suppliers. We have formulated our ecological and social requirements in our HOCHTIEF Code of Conduct for Business Partners.

HOCHTIEF Code of Conduct for Business Partners

PDF (6.3 MB)

The HOCHTIEF Code of Conduct for Business Partners is available in a total of 14 language versions, which you can find here for downloading.

Organization of procurement

Our global network

With our three divisions HOCHTIEF Americas, HOCHTIEF Asia Pacific and HOCHTIEF Europe we are present on all important markets of the world. In 2022, HOCHTIEF spent EUR 20 billion for procurement of material—particularly concrete, steel and wood—as well as subcontractor work, for instance craft enterprises who work for HOCHTIEF. In 2022, HOCHTIEF purchased materials and services worth EUR 20 billion from approximately 47,000 suppliers and subcontractors.

A declared aim of HOCHTIEF is to be present in all important markets of the world via a global network. In order to achieve this, the Procurement units in the individual operating companies act in accordance with the decentralized deployment of the divisions in the respective markets.

The Procurement employees form a professional network. The decentralized Procurement teams, which tend to be rather SME-oriented, operate as an integrative part of our projects and are supported by central Procurement units which overlap across divisions and throughout the Group. The joint target is to select appropriate suppliers and subcontractors with regard to HOCHTIEF’s economic, ecological and social requirements.

Supplier portal

This is how we get to know each other

Suppliers and subcontractors can register in the HOCHTIEF supplier portal and have the opportunity to present their company and hence their services and products. By registering, suppliers and subcontractors become part of the HOCHTIEF network. They receive information about bid invitations and can make applications for these if they are interested.

Documents (multilingual)

Wolfgang Klee

HOCHTIEF
Head of Procurement
Alfredstraße 236
D-45133 Essen
Tel.: +49 201 824-1269
support@hochtief.eu