Identify stakeholder – seven major categories of stakeholders
Based on the 5 principles of the AA1000 Stakeholder Engagement Standard (2015) and the experience of various departments and industry peers, the promotion team under the ESG Committee of Kedge Construction has identified 7 categories of stakeholders, including: media, government agencies, shareholders/investors, community/non-governmental organizations, suppliers, employees, and customers.
Understand the context : collect ESG issues – 20 ESG issues
Referring to international sustainability norms and standards (GRI Standards, SASB, SDGs, ISO 26000, TCFD), domestic and international construction and building industry peer cases, the Company’s risk assessment review reports, and stakeholder communication processes, the promotion groups compiled and listed 20 sustainability topics (topic names were substantially adjusted and reorganized, differing from 2023). To ensure the objectivity, completeness, and inclusiveness of material topics, we also reviewed the material topics from the previous report.
Identify the actual and potential impacts:
At the internal meetings the functional teams invited 35 department heads to discuss the 20 issues that are collected and identify the actual or potential negative/positive impacts as well as the influence that the impacts may cause in various aspects including finance, business reputation, environment, and human rights.
Evaluate the significance of impacts: 320 external questionnaires and 35 internal questionnaires
The promotion groups conducted the “Kedge Construction Stakeholder ESG Questionnaire” survey with 7 categories of stakeholders to assess the degree of positive impacts and negative impacts (low/medium-low/medium/medium- high/high) brought by the Company’s management of 20 sustainability topics, receiving a total of 320 valid responses. The impact degree can be comprehensively assessed by the level of impact on you, probability or frequency of occurrence, scope of this impact, and whether negative impacts can be remediated.
Simultaneously, internal questionnaires were distributed to 35 department supervisors to assess the degree of positive impacts and negative impacts (low/medium-low/medium/medium-high/high) that current behaviors regarding various sustainability topics have on the Company. The impact degree can be comprehensively assessed by the level of impact on the Company, probability or frequency of occurrence, scope of this impact, and whether negative impacts can be remediated.
Sort material issues by significance: 12 material issues
After reviewing stakeholder and internal questionnaires, and based on materiality thresholds, 12 highly concerned sustainability topics were identified as this year’s material topics, creating a materiality matrix and reporting to the ESG Committee and Board of Directors.
Material issues and the meaning of the value chain
Kedge Construction conducts a survey on material topics every two years. This year’s report builds on the analysis from the 2024 survey, identifying a total of 12 material topics. The analysis of the results shows that the issues of concern to stakeholders are diverse and evolve over time; compared to previous years, five topics have become material: “Construction Automation and AI Development” (newly added for the first time), “A Friendly and Happy Workplace Environment,” “Career Development and Training,” “Brand Management,” and “Customer Relationship Management.” In addition to these 12 material topics, the remaining 8 topics―though not classified as material―have been disclosed in previous annual reports. To ensure continuity in reporting and to track long-term trends, this year’s report continues to detail the latest management initiatives and performance metrics for these topics. Furthermore, while no material topics emerged within the environmental dimension this period, we will update our TCFD (Task Force on Climate-related Financial Disclosures) report and debut our inaugural TNFD (Taskforce on Nature-related Financial Disclosures) alignment this year. This proactive step underscores Kedge’s unwavering focus on climate change mitigation and adaptation, alongside our steadfast commitment to safeguarding biodiversity and vital natural resources. The significance of each material topic, including positive and negative impacts directly caused by Kedge or indirectly promoted through upstream and downstream industries, as well as specific targets and actions for each topic, will be explained in corresponding chapters of this report. The GRI Standards disclosure items corresponding to each material topic can be referenced in the GRI Standards Content Index appendix of this report.
