ESG REPORT
Implenia AG
Industry:
Construction &
Marketcap.
509 mm. USD
Employees
8,867
Domicile:
Switzerland
Ticker:
SWX:IMPN
ESG Summary
Overall Performance
84
Overall ESG Score
Leader
Outperformer
Average Performer
Underperformer
Laggard
1
out of
66
Relative Position
Leader
100
th
Percentile
Leader
87
Environment
Leader
83
Social
Leader
81
Governance
Leader
Relative Performance
1
out of
66
Relative Position
Leader
Top 5 Companies
Score
1.
Implenia AG
84
2.
Arcadis NV
78
3.
Hochtief AG
77
4.
ACS Servicios Comunicaciones y
75
5.
Veidekke ASA
75
Peers (Market cap $0-$1bn)
Score
Implenia AG
84
ACS Servicios Comunicaciones y
75
PORR AG
68
Service Stream Ltd
57
NRW Holdings Ltd.
52
Historical Performance
Leader
Company Score
Average
0
20
40
60
80
100
 
 
 
 
 
 
 
 
 
2020
 
 
 
 
 
 
 
 
 
 
 
2019
 
 
 
 
 
 
 
 
 
 
 
2018
 
 
Score
0
20
40
60
80
100
 
 
 
 
 
 
 
 
 
2020
 
 
 
 
 
 
 
 
 
 
 
2019
 
 
 
 
 
 
 
 
 
 
 
2018
 
 
0
20
40
60
80
100
 
 
 
 
 
 
 
 
 
2020
 
 
 
 
 
 
 
 
 
 
 
2019
 
 
 
 
 
 
 
 
 
 
 
2018
 
 
0
20
40
60
80
100
 
 
 
 
 
 
 
 
 
2020
 
 
 
 
 
 
 
 
 
 
 
2019
 
 
 
 
 
 
 
 
 
 
 
2018
 
 
Score
Environment
Social
Governance
Qualitative Performance - Controversies
1
Highest Controversy
Customer Incidents
Quality and Safety
1
Low
2
Moderate
3
Significant
4
High
5
Severe
Customer
Incidents
Quality and Safety
None
None
None
None
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Analyst View -| Industry Lead Analyst
Overview of ESG Issues - Non-Residential Construction
The Materiality Matrix presents, from the perspective of the industry, the most material ESG issues from a business impact and/or
environmental/social impact perspective. ESG issues can be interpreted as the most important management areas, i.e. the issues that could
cause the most significant business and/or environmental/social impacts if not managed well. The location on the matrix indicates the relative
importance of the ESG issue, with those located in the top right corners being the most material for the industry as a whole. The graph also
highlights the 2-3 ESG issues that, for the company under consideration, our analysts have identified as the most relevant to comment on in
more detail. This selection takes into account company specific factors such as business model, geographic presence, product offering, as well
as important recent developments and trends (e.g. incidents, announcements of new initiatives, management changes). Analyst commentary on
the latter ESG issues is provided in relevant sections further below.
High
Medium
Low
Low
Medium
High
Sustainability Impact
Business Impact
A
C
G
I
F
H
E
B
D
A Human Rights
B Product Governance
C Business Ethics
D Community Relations
E Occupational Health and Safety
F E&S Impact of Products and Services
G Carbon - Own Operations
H Bribery and Corruption
I Human Capital
= Key ESG Issues (with Analyst Commentary)
Analyst Commentary
The company is considered a leader on ESG issues compared to its industry peers. This stems from its leading position on environmental, social and governance
issues. The company has been implicated in no significant ESG-related controversies.
Based in Switzerland, Implenia AG primarily engages in construction activities. The company is organized in four divisions: Buildings (around 47% of FY2020
external revenue), Civil Engineering (46%), Specialties (5%) and Real Estate (2%). In FY2020, 79% of Implenia’s  external revenue was derived from Switzerland
and Germany. Sweden, Norway and France, among other countries, accounted for the remainder.
 Implenia develops and constructs large-scale infrastructure projects that require bidding for public contracts. Potential involvement in unethical business acts such
as kickbacks may lead to investigations, fines and indictment of company executives. Moreover, Implenia’s success relies on a vast (8,701 FTEs as of year-end
2020) and diversely skilled workforce, with employees ranging from architects and engineers, to construction workers. Failure to attract and retain qualified
personnel could lead to skill shortages, delays in fulfilling contractual agreements and customer losses. In addition, Implenia operates in Europe, where customers
demonstrate increasing concern for the carbon footprint of the projects they commission. An inability to include sustainable materials and green buildings in its
offering may result in loss of business opportunities and reduction of market share. Based on its operations, we consider Bribery and Corruption, Human Capital and
E&S Impact of Products and Services to be the company's notable ESG issues.
Implenia publishes a Sustainability Report written in accordance with the GRI Standards, Core option, every other year, demonstrating adequate accountability to
investors and the public with respect to ESG issues. The company's board is responsible for its sustainability strategy, suggesting that ESG matters are integrated
in core business strategy.
 The company's overall management of ESG issues is strong.
Bribery and Corruption
Implenia operates in countries such as Germany, Norway, Sweden and Austria, where construction spending is primarily fuelled by
public sector investment. Implenia’s multiple interactions with government officials during the contract bidding and the permitting phases
may expose the company to bribery and corruption risks. Misconduct could result in investigations, lawsuits, penalties and increased
regulatory scrutiny.
Implenia has a very strong bribery and corruption policy that is aligned with best practice. For example, the policy includes clear
definitions of bribery, corruption, conflict of interest and facilitation payments. In addition, the company’s Audit Committee monitors its
compliance management system; employees are provided with guidelines of what is considered acceptable behaviour and compliance
training sessions are organized on a regular basis. To detect and address ethical misconduct, Implenia provides its employees,
customers and other third parties with the possibility to anonymously report violations via its hotline or on the Implenia Intranet.
Employees can make inquiries and reports anonymously, while also being protected against any form of retaliation. Considering its
preparedness measures and involvement in controversies, we view the company as having Strong management of Bribery and
Corruption.
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Human Capital
Implenia’s competitiveness relies greatly on its employees’ expertise in various areas such as architecture, engineering or field
management (8,701 FTEs as of year-end 2020). As competition for qualified manpower in the construction industry is high, the company
might face difficulties in attracting and retaining such professionals. Labour shortages could lead to project delays and associated
financial losses for Implenia. In addition, strained labour relations could lead to strikes, derailing project schedules and potentially leading
to penalties for failure to deliver on contract deadlines.
Based on available disclosure, in FY2020, around 80% of Implenia’s employees were covered by collective bargaining agreements. In
order to foster the professional development of its employees, in 2020, Implenia launched the digital eCampus in Switzerland and
Germany. Moreover, the company conducts regular performance reviews for its employees. However, Implenia discloses limited
initiatives addressing discrimination and diversity in the workplace. In addition, its employee turnover rate is assessed as high,
suggesting there is room for improvement in Implenia’s management of Human Capital issues.
Considering its preparedness measures and involvement in controversies, we view the company as having Strong management of
Human Capital.
E&S Impact of Products and Services
There is an increased customer demand for sustainable, high-performance buildings that are designed and constructed to reduce
adverse impacts on the environment and human health throughout the building’s life cycle. In addition, many countries, especially in
Europe where Implenia operates, have implemented regulations to achieve GHG reduction targets. Failure to respond to these trends
and focus on green building design and technologies could lead to a loss of contracts and of market share for Implenia. In FY2020,
Implenia had 65 major projects with sustainability labels under way, while also reporting that between 10% and 25% of its annual
revenue was generated from green buildings. In addition, Implenia is a founding member of the Sustainable Construction Network
Switzerland that promotes the sustainable construction of buildings, civil engineering and infrastructure. Furthermore, in its code of
conduct, Implenia states that it prefers subcontractors who are certified in accordance with ISO 9001/14001/OHSAS 18001 or similar,
suggesting strong green procurement initiatives. Moreover, the company engages with its business partners when minimum
requirements related to the environment, working conditions or health and safety at work are not fulfilled. Considering its preparedness
measures and involvement in controversies, we view the company as having Strong management of E&S Impact of Products and
Services.
Key ESG Issues For This
Key ESG Issue
Indicator Name
Company Score
(out of 100)
Peer Group
Average
Leading
Practice
Average
Leading
Practice Gap
Bribery and
Corruption
Bribery & Corruption Policy
100
38
87
Bribery & Corruption Programmes
75
42
85
Whistleblower Programmes
50
42
79
Bribery and Corruption Events
Category 0
Category 0
Category 0
Human Capital
Discrimination Policy
25
45
79
Diversity Programmes
25
31
56
Labour Relations Events
Category 0
Category 0
Category 0
E&S Impact of
Products and
Services
Green Procurement Policy
100
44
88
Sustainable Products & Services
100
37
81
Green Building Memberships
100
39
100
Environmental Impact of Products Events
Category 0
Category 0
Category 0
Social Impact of Products Events
Category 0
Category 0
Category 0
A negative to +25 point gap or Event Category 0-2
A 26-74 point gap or Event Category 3
A 75+ point gap or Event Category 4-5
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Report Parameters
Settings
The relative performance data in this report is based on the following settings:
Weight Matrix:
Default Weight Matrix
Comparative group:
Peer Group
Reference Universe:
Default
Company type:
Public
Company type selection:
Combined
Template type:
Type B
Template type selection:
Combined
Profile Log
Annual Report:
2020
CSR Report:
2020
Latest Feedback Request:
Mar 2021
Company Response:
Apr 2021
Last Analyst Review:
Apr 2021
Glossary of Terms
Business Impact
The magnitude of the potential impact that a key ESG issue may have on the financial performance of companies within an industry.
Controversy
An event or aggregation of events relating to an environmental, social and governance topic.
Disclosure
A company’s transparency on its ESG preparedness and performance via sustainability reporting and its utilization of key reporting and
verification standards.
Event
A series of incidents which pertain to a common theme. An event assessment is based on the highest impact or risk score assigned to
the related incidents, alongside a broader assessment of event trend and company preparedness and response.
Category 5 – Severe (raw score of 0):
The event has a severe impact on the environment and society, posing serious risks to the
company. This category represents the most egregious corporate behavior.
Category 4 – High (raw score of 20):
The event has a high impact on the environment and society, posing significant risks to
the company. This category often reflects structural problems in the company.
Category 3 – Significant (raw score of 50):
The event has a significant impact on the environment and society, posing moderate risks
to the company.
Category 2 – Moderate (raw score of 80):
The event has a moderate impact on the environment and society, posing minimal risks to
the company.
Category 1 – Low (raw score of 99):
The event has a low impact on the environment and society, posing negligible risks to the
company.
Historical ESG Performance
Historical scoring data over a rolling 36-month period. Note that the industry leader and industry average are based on Sustainalytics’ full
research universe and default weight matrix rather than customized portfolio settings or weights.
Incident
Company operations and/or products and services that have a negative impact on the environment, society and external stakeholders.
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Indicator Performance
How a company performs on the indicators on which it has been assessed.
Key Indicator
Indicators that relate to an industry key ESG issue, provide considerable insight into a
company’s ESG preparedness/performance, and/or distinguish between leaders and
laggards.
Raw Score
A score out of 100 assigned to an indicator based on a set of internal criteria.
Indicator Weight
The percentage of weight assigned to each indicator in an industry.
Note: weight matrices are customizable.
Weighted score
The raw score multiplied by the weight assigned per indicator.
Trend Icons
Indicates if the raw score of an indicator improved, declined or remained unchanged over
the last 12 months.
Key ESG issue
Key ESG issues identify the most important areas in which a company has potential to cause significant sustainability impacts or
experience significant ESG-related business impacts, and that must therefore be managed effectively. To determine the most relevant
ESG issues per industry, lead analysts assessed potential of each industry to cause significant sustainability impacts and, separately,
the potential for these to impact corporate financial performance.
Bribery and Corruption
Bribery and Corruption focuses on the management of risks related to alleged or actual
illicit payments, such as kickbacks, bribes and facilitation payments to government officers,
suppliers or other business partners, as well as the receipt of those payments from
suppliers or business partners. If these are not material in their own right for a subindustry,
these issues are handled within MEI.4 Business Ethics.
Human Capital
Human Capital focuses on the management of human resources. It includes the
management of risks related to scarcity of skilled labour through retention and recruitment
programmes, and includes career development measures such as training programmes.
Additionally, it includes labour relations issues, such as the management of freedom of
association and diversity issues, as well as working hours and minimum wages.
E&S Impact of Products and Services
E&S Impact of Products and Services refers to the management of environmental or social
impacts of products or services, including: inherent characteristics of input materials, both
positive and negative, and impacts during use, disposal and recycling. E&S Impact of
Products and Services may include carbon impacts if MEI.8.PS Carbon – Products and
Services is not regarded as a material ESG issue for the subindustry.
Leader
The score of the best performing company in the industry or any selected subset of companies.
Leading Practice
Leading Practice Average: For each indicator, the Leading Practice Average is the top quartile mean score among industry peers.
Leading Practice Gap: The Leading Practice Gap is the difference between the Leading Practice Average and the company’s score for
that particular indicator. The size of the gap is indicated by a colored dot.
Outlook
A forecast of how a controversy rating will change over the next 12 months.
Negative
The event is likely to deteriorate within 12 months, leading to a downgraded rating of the
corresponding indicator.
Positive
The event is likely to improve within the next 12 months, leading to an upgraded rating of
the corresponding indicator.
Neutral
The event is unlikely to change significantly within the next 12 months, and is not expected
to undergo a change in rating of the corresponding indicator.
Overall ESG Score
Assessment of a company’s overall ESG preparedness and performance. These scores are dynamic, depending on the weight matrix,
comparison group and reference universe selected.
Percentile
The company’s percentile rank within its industry or within another client-selected reference group.
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Preparedness
A company’s systems and policies to manage potential ESG impacts and risks. Key indicators of a company’s ESG preparedness
include policies, management systems, programs and targets.
Qualitative Performance
A company’s ESG performance based on qualitative information relating to events and incidents that have resulted in negative ESG
impacts.
Category 5 – Severe (raw score of 0):
The event has a severe impact on the environment and society, posing serious risks to the
company. This category represents the most egregious corporate behavior.
Category 4 – High (raw score of 20):
The event has a high impact on the environment and society, posing significant risks to
the company. This category often reflects structural problems in the company.
Category 3 – Significant (raw score of 50):
The event has a significant impact on the environment and society, posing moderate risks
to the company.
Category 2 – Moderate (raw score of 80):
The event has a moderate impact on the environment and society, posing minimal risks to
the company.
Category 1 – Low (raw score of 99):
The event has a low impact on the environment and society, posing negligible risks to the
company.
Quantitative Performance
A company’s ESG performance based on quantitative social and environmental metrics such as carbon intensity, number of fatalities,
etc.
Relative Position
The company's performance classification is relative to its global industry peers, based on the company's absolute ESG score. Each
industry has a fixed band of scores that links to a relative position range. Companies can fall in five categories: laggards,
underperformers, average performers, outperformers and leaders. The industry specific bands are based on the rating scores of
approximately 4,000 companies that are assessed under the Sustainalytics comprehensive ESG Ratings framework. The bands are
reviewed and updated annually.
Sustainability Impact
The magnitude of potential sustainability impacts (measured in terms of depth, breadth, and duration) that may be caused by an
industry’s activities if not managed effectively.
Tag
A key word associated with a key ESG issue and linked to incidences to facilitate search functionalities.
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