Energy efficiency and reduced pollutant emissions: construction industry can become greener

The sustainability and energy efficiency aspects play a more and more dominant role in the operations of companies, so also in the construction industry. However, there are plenty of grounds for development: on the one hand, the industry is responsible for 30 to 50 per cent of water and waste management and consumption of raw materials and energy. On the other hand, judgment of the construction industry is rather bad in this respect: according to a survey, the overwhelming majority of Hungarian people think that the industry fails to pay the necessary attention to this issue. In order to improve the situation, KÉSZ Group established an overall and long-term sustainability strategy complying with ESG aspects in which it makes numerical commitments - among others - for example to reduce emissions but it involves also its suppliers and partners in achieving the goals set. The company's sustainability report will be published next year, including - in addition to environmental aspects - corporate governance and social themes as well.

Only 3 per cent of Hungarian people think that construction companies are environmentally responsible and operate in a sustainable way – turned out from the representative research carried out by KÉSZ Group at the end of 2021. Also, very few people, only 8 per cent of them agreed with the fact that there are more and more sustainable solutions in the construction industry and not only the buildings but also the construction works are more environmentally friendly. The construction industry's environmental footprint is significant: according to KPMG's data, the industry is responsible for 33 per cent of water and waste management and for the half of raw materials and energy consumption.

The expectations for environment-friendly, ethic and transparent operation of the economic operators, so the construction companies, are increasing also because of the regulatory, investment and market effects. KÉSZ Group, a technology-controlled company group with one of the widest portfolios of Hungary, focusing on construction industry, launched a large-scale sustainability program complying also with ESG aspects. The purpose of the program called KÉSZ Next is to achieve that sustainability is integrated in the company's business strategy and becomes a part of corporate culture and, as a result, contributes to the change of attitude also on an individual basis. Last but not least, the purpose is to improve the judgment of the industry.

Alliance in the industry is needed
We, at KÉSZ Group are constantly work for improving our operation and processes using innovative solutions and technologies. The purpose of our sustainability strategy lasting until 2030, extending far beyond compulsory requirements is to create value on the long run, so we have set specific goals on all the three ESG pillars firstly in the industry and organized campaigns to achieve this. Our strategy includes more than 30 member companies and strategic partners and our overall, very detailed and consolidated ESG report will be prepared with similar care. Owing to our wide portfolio, several other industries are affected in addition to the construction industry, such as energy, industrial technologies or electrical industry. Besides, we consider important to involve our subcontractors in the individual commitments. We welcome that several large operators of the industry handle sustainability as a priority and believe that we also inspire many operators on our way. In particular, achieving of a real change requires collaboration in the industry" - said Tamás Vida, CEO of KÉSZ Group.

Strategy formulation was preceded by an ESG situation analysis, benchmark analysis, materiality assessment and carbon footprint calculation that were supported by KPMG as an external consultant.

"ESG is one of the three most important global priorities for KPMG, so until 2023 we will invest one and a half billion dollars in development in order to serve our customers with an ESG-service portfolio of the highest standard and of the widest scope and with the best specialists. We were glad to participate in formulation of the professionally well-founded and forward-looking sustainability strategy, encouraging and promoting so the company's medium and long term national and international competitiveness, and the green economic transition of the next period in the domestic construction industry and the related sectors" - said Ágnes Radó, KPMG's ESG partner.

Emission reduction, energy efficiency, subcontractors In the course of determining the directions of the sustainability strategy, the Group was committed to following of environmental trends, as well as to market leading social and corporate governance goals.

Environmental goals:

• To reduce carbon dioxide emission by 50 per cent by 2030 in the field of direct and indirect greenhouse gas emissions compared to the 2019 level
• To increase energy efficiency by 25 per cent by 2030
• To supply electric energy to meet the demands fully (100 per cent) from renewable energy sources
• To replace two-third of the vehicles to hybrid ones increasing the proportion of electric cars and to reduce carbon dioxide emissions from fuels by 50 per cent
• To build a new, carbon neutral office building
• To achieve an at least BREEAM Excellent/LEED Gold/WELL Platinum rating of domestic office buildings of own development and to comply with the EU Taxonomy
• To increase the recovery rate of non-hazardous wastes to 75 per cent in the spirit of change-over to circular economy.

Social goals:

• To achieve zero accidents, extended also to subcontractors
• To transmit corporate values transparently and to integrate them into daily operation, to strengthen the CSR activity
• To become the most attractive working place of the building construction sector of the construction industry
• To provide succession for the construction industry by stronger support of education and vocational training

Corporate governance goals:

• To publish the first sustainability report prepared according to the GRI Standard in 2023
• To formulate and implement the ESG strategy and to integrate it in the rules and regulations
• To set up an ESG Committee
• To strengthen risk approach, to improve risk-based design and control processes
• To develop partner qualification, to select partners complying with ESG criteria

The next step of professional work is continued by preparation of a comprehensive sustainability report complying with ESG criteria for KÉSZ Group, implementation of the strategy and a supportive attitude formation.