Introduction and General Disclosures

Sustainability strategy

We are delighted to present Arcadis’ first Sustainability Statement. We start this statement by outlining our ESG ambitions.

Our 2024-2026 Strategy - Accelerating a Planet Positive Future - sets our course to further excel in sustainability by integrating sustainability into how we run our own operations and into how we approach the projects we undertake for our clients. This strategy provides our people and our business with a clear purpose, as well as guiding us towards achieving our commitment to investors.

Based upon our company mission, ‘improving quality of life’, we find solutions to today’s most pressing challenges, from the impact of climate change to increasing urbanization and digital transformation – all with the ultimate goal of improving quality of life for people around the world. This can be seen in the work we do for our clients, the opportunities we create for our people, and in our efforts to enhance the communities in which we live and work. The new strategy was defined with our core values – People First, Client success, Integrity, Collaboration and Sustainability – as strong foundation.

Increasingly, sustainability is key to getting projects funded, to securing acceptance by society and to winning work. Incorporating sustainability into our work can bring benefits like pricing power, cost reductions, a stronger labor market position, business opportunities for new products and services, as well as a reduction in risk and better access to capital. Sustainability is a key design principle when we work with our clients. Through our solutions, we are committed to contributing to the sustainable development agenda and having a positive impact on society, the people, and communities where we operate.

In support of mitigating climate change and improving equity, we intend that our Sustainability Statement provides relevant information that enables investors to make informed sustainability-related investment choices. Overall, the Sustainability Statement will serve to inform and involve them in our stakeholders in our ESG implementation journey.

Arcadis will partner with clients on sustainable project choices that benefit their business and communities, and that support the Paris Agreement ambitions to hold the increase in the global average temperature to well below 2°C above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels by 2050. To this end, we will sharpen our pursuits and business selection criteria to deliberately focus on projects that accelerate a planet positive future and add the most value. We commit to achieving net zero across Arcadis’ global operations by 2035.

Our commitment for 2024-2026 is to empower our people to shape their own future and advance their careers. We want them to develop new opportunities, to help them make choices based on their capabilities. This will allow us to continuously upskill and align expertise to the needs of our clients and their projects around the world. In 2024, we became a Skills Powered Organization, aiming to expand towards over 2,500 skilled energy transition professionals in our teams, and grow numerous capabilities in our GECs. These investments will ensure the long-term resilience of our people while enabling us to future-proof our business.

Sustainable Development Goals as strategic guiding principles

In previous years, the United Nations (UN) Sustainable Development Goals (SDGs) served as strategic guiding principles for Arcadis. With the introduction of CSRD, we have reviewed the selection of our ‘focus SDGs’ and ‘special impact SDGs’. This review was based on the double materiality analysis (DMA) we carried out in preparation for CSRD implementation and compliance. Following this review, we have connected and integrated several SDGs into our CSRD implementation approach. Arcadis had previously developed five key sustainability lenses based on the UN SDGs. These lenses are: Energy & Carbon, Circularity, Nature & Biodiversity, Water Stewardship, and Societal Impact. Below, we have outlined how each of these key sustainability lenses relates to the European Sustainability Reporting Standards (ESRS), which form the backbone of our Sustainability Statement. 

Energy & Carbon

Our effort to mitigate future climate change impacts by taking the whole life approach to reduce carbon and cost in client projects through more sustainable design, construction and use. This lens reflects SDG 7 (Affordable and Clean Energy), as well as SDG 13 (Climate Action). All detailed information on these topics can be found in our ESRS E1 Climate change chapter.

Water Stewardship

A holistic approach to water resources that engages stakeholders comprehensively to achieve environmentally sustainable, socially equitable and economically beneficial water use for all, while ensuring the long-term health of water resources and the communities that depend on them. SDG 6 (Clean Water and Sanitation) aligns with this lens, and via ESRS E3 Water and marine resources chapter we report our detailed approach to this topic.

Circularity

A whole lifecycle approach to resource planning and efficiency with an aim to reduce waste, recycle, and move towards biobased and circular materials. Although the focus is on how materials can be reused or repurposed at the end of their initial useful life, planning for this starts at the earliest phases of a project. This lens is connected to SDG 9 (Industry, Innovation and Infrastructure). Detailed reporting is found within ESRS E5 Resource use and circular economy chapter.

Nature & Biodiversity

A project approach that recognizes the financial and non-financial values that can be delivered by incorporating nature and biodiversity positive elements into designs and aims to maximize the benefit to the project owners and habitats/ecosystems. This lens connects to SDG 15 (Life on Land) and reporting can be found via the chapters ESRS E2 Pollution and ESRS E4 Biodiversity and ecosystems.

Societal Impact

Recognition that the projects we deliver have an impact that extends far beyond the project owner. An effort to ensure that all stakeholders are considered and the impact of our projects is positive and just, while respecting human rights and promoting health and wellbeing. SDG 3 (Good health and well-being), 4 (Quality education), 5 (Gender equality) and 8 (Decent work and economic growth) fall within the scope of this lens, and reporting can be found in the ESRS S1 Own workforce and ESRS S2 Workers in the value Chain chapters, as well as the social impact program “Local Sparks”, covered in our strategy update.

For further details on Arcadis’ products offering, headcount details and revenues per each of the areas in which Arcadis is active, see also the Executive Board Report, within the updates on our Global Business Areas and the ‘At a glance’ pages.

Benchmarks

Arcadis measures, monitors, and communicates its sustainability performance in a manner that is transparent and responsive to the needs of stakeholders. Our ESG performance is reflected in several third party assessed ESG performance benchmarks and assessments, including Sustainalytics, CDP, MSCI, ISS and EcoVadis. We take a pro-active approach in disclosing our policies, programs, actions, and results. We welcome feedback from these ESG rating agencies on our journey to continuously improve and maximize our positive impact to society, through the projects we undertake for our clients, in our own business operations and through the way we engage with people and communities.

The table below shows our scores for several key ESG-related rating agencies over the last two years.

CSRD - General disclosures

Statement of compliance

The Sustainability Statement for the financial year ended 31 December 2024 has been prepared in accordance with the European Sustainability Reporting Standards (ESRS) as adopted by the European Commission and is compliant with the reporting requirements provided for in Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation). We draw your attention to the fact that this Directive has not yet been transposed to the Dutch national law, which might lead to different interpretations in future. 

In line with the requirement in ESRS 1, we have included the prescribed disclosures pursuant to the EU Taxonomy regulation (Article 8 of Regulation (EU) 2020/852 and the accompanying delegated acts) as a separately identifiable chapter within the Sustainability Statement. The publication of the detailed tables required by the Taxonomy Regulation can be found in the annex.

Arcadis remains committed to the Sustainable Development Goals (SDGs) and the Task Force on Nature-related Financial Disclosures (TNFD), albeit with a lighter emphasis than in previous years. The Global Reporting Initiative (GRI), the Task Force on Climate-related Financial Disclosures (TCFD), and United Nations Global Compact (UNGC) are fully incorporated into the ESRS.

Regarding the reporting framework, Arcadis seeks compliance with the ESRS and utilizes the EFRAG GRI-ESRS interoperability index for cross-referencing with the GRI standards. ESRS E1 fully incorporates the TCFD guidelines according to the EFRAG reconciliation. Lastly, Arcadis has been a member of the United Nations Global Compact (UNGC) since 2009 and supports the Ten Principles regarding four areas: human rights, labor standards, environmental stewardship and anti-corruption. Our operations and strategy reflect the UNGC principles and our membership of UNGC is a testament to our commitment and our ambition to be a sustainability leader. Our UNGC Communication of Progress (CoP) is available on our website.  

Basis of preparation

Scope

The Sustainability Statement incorporates information about Arcadis N.V., encompassing its controlled entities in scope of consolidation in the Consolidated Financial Statements (as included in Note 1 to the Consolidated Financial Statements). Where applicable, information presented contains information about own operations and value chain, including products, services in business relationships and its supply chain. This Sustainability Statement represents the consolidated sustainability statement of the Group. Henceforth, any reference to a sustainability statement will pertain to the consolidated sustainability statement. Arcadis is applying the option to omit specific information related to intellectual property, know-how, or innovation results.

Arcadis has a global business model, which is applied throughout all our departments and the countries and jurisdictions we work in; no exceptions are made to this global approach. Similarly, the implementation of CSRD has one approach without differentiations: we have global standards, global policies, global targets and a global way of working. Potential regional differences in Impacts, Risks and Opportunities are addressed in this global approach. For illustrative purposes some local examples have been added into the Sustainability Statement.

Value chain

The term “own operations” refers to our workforce, and the elements of our operations over which we have direct operational control.
In our upstream and downstream value chain, we recognize participants as follows:

• Upstream: The actors in our upstream that provide products or services that are used in the development of Arcadis products or services, including procurement activities linked to our project execution and ongoing business operations.

• Downstream: The actors that receive products or services from Arcadis, including clients and the assessment of (outcomes from) our projects. We report on certain aspects of the value chain by presenting detailed strategic information in a qualitative manner rather than quantitative, due to the sensitivity of this market information. This approach is primarily reflected in the required quantifications when addressing value chain-related risks and opportunities.

From a value chain perspective, we expect our suppliers to conduct their operations in an environmentally, socially, and economically responsible way and to use their influence to help ensure the same happens within their own supply chains. We also carefully select the clients we want to work with, and we subsequently vet the projects we want to engage in. This is enacted via client due diligence as well as via “making sustainable project choices”, one of the three strategic focus areas of our 2024-2026 Strategy, as outlined in our Executive Board Report. Within our service delivery we adhere to the applicable standards as defined by local legislation and regulation and align with standards set by our clients, as applicable. When a project is closed out, Arcadis hands over responsibility for the project to the client. Upon acceptance by the client, our involvement stops. If a product or service provided by Arcadis proves defective, we may become re-involved in a project. Reporting on value chain-related matters will be established throughout the allowed phase-in period of three years. These three years of extra time are granted by the European Commission to prepare reporting on the most challenging and hard-to-obtain data.

Double Materiality Analysis

An important cornerstone of ESRS disclosures is the double materiality assessment (DMA). This assessment determines the material sustainability matters (and their associated impacts, risks and opportunities) about which a company must disclose. The double materiality process and outcomes are described in the “impact, risk and opportunity management” section of this chapter, with additional details provided in each ESRS chapter. Based on the material topics and the identification of material IROs, we have determined which data points are considered material and fall within the scope of this Sustainability Statement. The data point list was formed in accordance with EFRAG’s Implementation Guidance 3 – List of ESRS Data Points. We then assessed each data point at the data point level to confirm its materiality. The outcome of the DMA serves as the starting point for our topical disclosures, as outlined in the Environmental, Social, and Governance chapters. Where applicable, Arcadis makes use of the possibility to phase-in certain disclosure requirements during the transitional period. 

The double materiality assessment process may be impacted in time by sector-specific standards to be adopted. The sustainability statement may therefore not include every impact, risk and opportunity or additional entity-specific disclosure that each individual stakeholder may consider important in its own assessment.

Time horizons

In general, Arcadis assesses material impacts, risks and opportunities (IROs) over the short, medium and long term. For forward-looking information on Arcadis’ material IROs in the Sustainability Statement, Arcadis defines:

• One year as short term;

• Between one year and three years as medium term; and

• More than three years as long term.

The time horizons are aligned with the annual financial reporting period and the three-year strategic cycle adopted at Arcadis. An exception is made for the climate-related risks and opportunities identified under ESRS E1, which were aligned with the time horizons applied for Arcadis' TCFD 2023 submission and which have therefore not been updated for 2024. For these disclosures, the time horizons are: short term (0-3 years, from 2023 to 2026), medium term (3-8 years, from 2023 to 2031), and long term (10-30 years, from 2023 to 2050).

Sources of estimation, outcome uncertainty and comparative data

The preparation of the Sustainability Statement requires management to make judgements, estimates and assumptions that may affect the reported information. The estimates and assumptions are based on industry standards, experience and various other factors that are believed to be reasonable under the circumstances. The use of estimates as well as the use of indirect sources such as sector-average data or proxies is explained in each topical standard chapter where applied, and is detailed in the Glossary. The most significant estimations are made within the carbon footprint measurement and within the calculations of the metrics regarding payment practices, followed by calculations for metrics in the Water and Waste paragraph. Indirect sources of data are used in the carbon emission scope 3 category 1 reporting, for which we used inputs from CDP (see the E1 chapter and Glossary comments on Estimates). Where feasible, the quantitative data in this report is presented alongside comparative data from the previous financial year for context and clarity. In case of changed definitions, we have restated the comparative data if the change is greater than our threshold of 5% change in the total corporate-wide GHG emission inventory relative to the previously reported value.

Changes in preparation or presentation of sustainability information and prior period errors

Arcadis' GHG inventory has been adjusted for the year 2023 due to an update in our calculation methodology for the estimated part of our purchased goods and services. The published value for the year 2019 doesn’t change because the calculation methodology resulted in a difference that is below our threshold of 5% change in the total corporate-wide GHG emission inventory relative to the previously reported value. The 2023 reported value for scope 3 category 1 changed from 181,000 to 202,000 (tCO₂eq). Additional details are presented in chapter E1. 

EU taxonomy results have been adjusted retrospectively for the year of 2023 after additional analysis in 2024. Eligibility for 2023 went up from originally reported 17.7% to 34.8% following the addition of the revenues of most of the Environmental Restauration solution. Alignment went down from 13% to 0% as the ongoing effectiveness tracking of our adherence to UN Global Principles on Human Rights is on several ways already in place, but not yet on all aspects, and by that is not meeting all alignment criteria. Any other changes in underlying calculation methodologies are explained in each topical standard chapter where applied.

Incorporation by reference

Some ESRS are closely linked to requirements that Arcadis is already subject to, for example the requirements prescribed in the Dutch Corporate Governance Code to describe our governance structure. These requirements are therefore not included in the Sustainability Statement, but in other relevant chapters of the Arcadis Annual Integrated Report, and we incorporate information by reference to those chapters.

• Information of strategy, business model, headcount and revenue per GBA, and the relevance of material sustainability matters: as included in Executive Board Report (Accelerating a planet positive future, Our current strategic context, Strategy progress update, The Global Business Areas).

• Information related to the administrative, management, and supervisory bodies: as included in Governance & Compliance Chapter (Introduction to the Executive Board and the Executive Leadership Team, Composition of the Executive Board, Composition of the Executive Leadership Team, Introduction to the Supervisory Board, Composition of the Supervisory Board, Supervisory Board Report, Other Governance information).

• Sustainability-related performance in incentive schemes: as included in Remuneration report (Short-term Variable Remuneration, Long-term variable remuneration: performance shared).

• Information related to the Arcadis Risk and Control framework: as included in the Enterprise Risk Management chapter.

• Information on compliance and governance regarding business conduct in supplier relationships and payment practices as included in the Governance section within the Business Ethics chapter.

• Specific monitoring details of AGBP and the Grievance System as included in the Business Ethics chapter under Monitoring and Accountability, Integrity Line, Seek Advice, and Speak Up.

• Information related to current financial effects of the entity’s material risks on its financial position as included in Enterprise Risk Management section in the Governance and Compliance chapter.

Governance of sustainability matters

Below, we set out the governance structure and processes, controls and procedures put in place to monitor and manage sustainability or ESG matters, focusing primarily on the Executive Board and the Supervisory Board. The composition of these management bodies is listed in the respective chapters of the Arcadis Annual Integrated Report (Composition of the Executive Board, Composition of the Executive Leadership Team, Composition of the Supervisory Board).

Roles and responsibilities

For the governance on CSRD implementation, the roles are defined as follows:

• The Supervisory Board Sustainability Committee (SusCo): assists and advises the Supervisory Board on sustainability matters. The SusCo prepares plenary discussion and decision-making for the Supervisory Board on items within the remit of sustainability. The SusCo composition is further specified in the Supervisory Board Report.

• Executive Leadership Team (ELT), including Executive Board members: responsible for the final review and approval of progress and direction, facilitating leadership endorsement and accountability, and enabling the integration of internal stakeholders' views into strategic decisions. The ELT receives consolidated inputs on a quarterly base to evaluate, and gives final approval on the solutions' design effectiveness. Where required, further implementation across the business, along with performance monitoring, is assigned to Global Business Areas (GBAs) and respective departments to ensure operational effectiveness.

• NFR Steering Committee: monthly discusses the progress overview, delivers strategic guidance, approves methodologies, and creates alignment with the company's goals. The Steering Committee also discussed the identification of relevant metrics and guided target setting where applicable. The Steerco consists of the Chief Financial Officer, Chief Growth Officer, Global General Counsel, Global Accounting Officer, one of the two Global Sustainability Directors, the ESG Relations & Public Affairs Director and the Global Managing Director of Sustainability Advisory.

• NFR Team: manages the coordination of the various work streams, creates and shares monthly reports on the implementation of all CSRD requirements. The team aligns with all contributing departments as well as with those that also have an oversight. 

While the NFR team and NFR Steering Committee focus on the specific reporting requirements from CSRD, the content and implementation side of sustainability is driven by other teams. The Arcadis Global Sustainability team is responsible for the global Sustainability Program, and its Global Sustainability Directors report directly to the ELT member accountable for Sustainability, while ELT and the SusCo provide guidance and direction.

Employee representation in governance

Besides the direct governance around sustainability, it is important to stress the valuable role of our employees.
As the largest shareholder of Arcadis, with 18% of the company’s shares, the Lovinklaan Foundation holds a significant role in shaping Arcadis’ future. What sets Lovinklaan Foundation apart is its composition: the entire Board of the Lovinklaan Foundation consists of Arcadis employees from diverse backgrounds and countries across the globe. Guided by the Articles of Association established in 1981, the Foundation’s purpose is to promote the continuity of Arcadis and advance the interests of Arcadis workforce worldwide. It achieves this by reinvesting its dividends directly into Arcadis’ people, funding programs that empower employees of Arcadis to develop their skills and contribute meaningfully to Arcadis’ success.

Employee representation in governance can also be seen via the Bellevue Foundation, which consists of ten Arcadis employees, and is the holder of 600 priority shares in the capital of Arcadis. Members of the Bellevue Foundation form half of the members of the Board of the Priority Foundation. The remaining members of the Priority Foundation Board consist of representatives from the Arcadis Supervisory Board, the Executive Board, and one member from the ELT. All priority shares that have been issued since 1987 are held by the Priority Foundation Board.

Employee feedback on ESG-related matters is actively sought through a variety of informal channels. These include engaging platforms such as Communities of Practice , interactive webcasts, specialized training sessions, regular dialogues between employees and managers, and Your Voice surveys. This diverse range of channels not only provides continuous feedback collection but also demonstrates a deep commitment to valuing and integrating employee perspectives on essential ESG issues.

Integration of sustainability-related performance in incentive schemes

Goals related to ESG aspects are included in the long-term incentive (LTI) performance targets for the Executive Board and ELT. These goals are also cascaded down to the senior leadership levels. A detailed breakdown of the targets, including the 2024 performance, is also included in the Remuneration report (Short-term Variable Remuneration, Long-term variable remuneration: performance shares). The remuneration of Supervisory Board members is not dependent on company results.

Due diligence statement

In 2024, we established the design of our due diligence processes by integrating human rights and environmental due diligence into both our overarching Sustainability Policy and our Third-Party Due Diligence Policy . As part of our continuous improvement process, our near-term objective is to develop procedures that further operationalize these policies. In the annex a table is added with all required references to due diligence.

Risk management and internal controls over sustainability reporting

Arcadis has implemented a system of risk management and internal control to mitigate and manage risks around sustainability reporting. The main risks identified are listed below, with the mitigating strategy for these risks represented by the system of risk management and internal control over sustainability reporting:

• The risk of material misstatement due to omissions, errors or incomplete data in our sustainability reporting.

• The risk of non-compliance with regulatory requirements and standards.

Our system of risk management and internal control over sustainability reporting is aligned to the proven principles of the Committee Of Sponsoring Organizations (COSO) Integrated Framework. The key features and components are described in the table below:

Developments in sustainability reporting will be monitored going forward and our system of risk management and internal control will evolve accordingly.

Integrating sustainability in our way of working and culture

Training and development

Acquiring and maintaining knowledge on sustainability matters is of critical importance to Arcadis. Our commitment to sustainability has enabled us to develop expertise among our employees and board members. Arcadis is determined to share and leverage this knowledge on behalf of our clients and to continuously improve our sustainability-related knowledge and capabilities. Through training programs, Arcadis seeks to further equip its people with tools to address the sustainability needs of its clients.

Arcadis developed an online training program, Sustain Abilities, supported by the Lovinklaan Foundation. Sustain Abilities consists of a series of e-learning modules developed by Arcadis experts for all Arcadis employees. Since the way we understand and talk about sustainability is different across the globe, our first objective was to create a common language and understanding of sustainability and basic sustainability concepts.

Sustain Abilities has significantly grown in scope since its 2023 launch. New modules have been added, covering topics such as low-carbon energy transition, water resource management amid climate change, sustainable procurement, circular economy integration, and societal value creation in Arcadis projects. To broaden the program’s reach, we have made the initial five modules available in six additional languages. Further, we have increased the frequency of live training sessions for four of the modules fostering global engagement and knowledge sharing among employees. More live sessions in English and local languages are planned for 2025.

All ELT and Supervisory Board members are expected to have a sufficient level of knowledge and understanding of sustainability. When assessing candidates to join the ELT or Supervisory Board, we consider each candidate’s knowledge and experience of ESG matters, so that the ELT and Supervisory Board will be equipped with the appropriate ESG-related skills and expertise, on both an individual and collective level, in order to understand and steer on the relevant ESG related matters.

Interests and views from stakeholders

In line with the Dutch Corporate Governance Code 2022, we have published an Arcadis Stakeholder Engagement Policy on Sustainable Topics. As detailed in the policy, we engage with a broad range of stakeholders, including employees, shareholders and potential investors, clients, suppliers and subcontractors, business partners and non-governmental organizations as well as – where necessary – with people impacted by the projects Arcadis undertakes on behalf of its clients. By following this Stakeholder Engagement Policy, we aim to build trust, foster collaboration, and integrate stakeholder perspectives into our decision-making processes and strategy. Throughout the year, the Executive board and Supervisory board are regularly updated with insights from our client experience program, employee engagement initiatives, and investor feedback. As part of our DMA, we also consulted with representatives from these key stakeholder groups to assess the materiality of sustainability topics. The outcomes, representing all stakeholder perspectives, were reviewed and approved by the ELT and Executive Board, and were shared with the Supervisory Board.

Stakeholder channels

See below a table of the key stakeholders, engagement methods and considerations:

Material IRO’s and their interaction with strategy and business model

As part of our DMA, we assessed the impacts, risks, and opportunities (IROs) related to ESG issues and how they align with our strategy and business model. This evaluation involved engaging with internal and external stakeholders to assess both impact and financial materiality across the topics identified as material for Arcadis. The outcome is an outline of the material potential and actual IROs across our own operations and value chain.

We actively embed sustainability in our strategy, business model and decision making (see also the Strategy section of this Annual Integrated Report). We are in the process of progressively building the ability to evaluate when appropriate the current and expected financial effects of sustainability-related topics. Our 2024-2026 strategy, Accelerating a Planet Positive Future, has been designed with sustainability at its core, and its underlying financial framework is resilient to incorporate the identified sustainability related financial risks and opportunities. Continuous tracking of the overarching progress of the CSRD implementation will be continued by the NFR team and others, and deviations of the plans to address the material IROs will be reported via the monthly Steering committee sessions to ELT and others.

Material IROs have been identified and included in the 2025 planning process in accordance with the guidance/regulation provided by CSRD. Regarding the material IROs related to our own operations, we are now defining roadmaps that integrate our policies, actions and targets where required, which will be then implemented in day-to-day management processes. Tracking of the effectiveness of these policies, actions and targets, as well as the identification of any new risks and opportunities via the annual process of the DMA update, will follow throughout 2025 and later years. The NFR team will organize this and revert the findings to the NFR Steering Committee, and if necessary other governance bodies. For the material IROs that are related to impact within the value chain, Arcadis will take a phased approach and disclose progress at a later date.

For more detailed information on the identified material IROs, please see the dedicated disclosures in the Environmental, Social, and Governance chapters. Further details on the steps taken in the DMA are provided in the following paragraph.

Process to identify and assess material impacts, risks and opportunities

We adopted a two-phase approach to identify the materiality of topics (phase 1) and further material IROs (phase 2) , based on the thresholds that were defined. Four steps are outlined in the following visual to illustrate our process as well as the resulting material topics and IROs across Environment, Social, and Governance.

Phase 1

During the initial stage of the DMA, we conducted background research on potentially material topics for Arcadis. This involved examining various sources, including:

• ESG rating agencies for insights on material topics within our broader and specific sectors, along with those of our suppliers and their industries;

• Sustainability reports from peers;

• Impact materiality assessments from previous years;

• Sustainability matters listed in ESRS.

This information shaped our understanding of potentially material ESG topics for Arcadis.

We conducted stakeholder engagement sessions, both internally and externally, to assess the material topics for Arcadis. Internally, we engaged with various departments, including Growth, People, Compliance, Sustainable Procurement, Global Sustainability, Risk, and the client-facing Sustainability Advisory group. A random selection of employees was also invited to represent employees' views. Externally, we obtained input from clients, NGOs, experts, investors and suppliers using a consistent virtual format consisting of a presentation and discussion.

Phase 2

We conducted a series of workshops involving internal subject matter experts to evaluate and calibrate both potential and actual IROs across all identified material topics. These workshops assessed IROs based on CSRD requirements and Arcadis' thresholds, considering factors such as severity (scale, scope, and irreversibility) and likelihood. This evaluation was segmented by value chain area (upstream, own operations, downstream). Impact was considered from an individual project perspective, as well as from framework contracts and overarching client perspectives. Impact was identified as either global or local, and we identified which GBA(s) could be impacted.

Financial materiality scaling was internally determined based on relevant financial metrics and in close cooperation with senior financial management. The dependencies Arcadis has on natural and human resources, and how these dependencies result in both risks and opportunities, were considered. Arcadis' business primarily relies on human capital, with dependencies on our staff, contractors, value chain workers in terms of our ability to serve our clients. Such considerations are reflected in the financial materiality assessment.

For all IROs, both financial (risk and opportunity) and environmental and social impact (positive and negative) were evaluated using five-point scales from 1 (very low) to 5 (very high). Items with a very high score were classified as material based on the materiality thresholds. If no material IRO was identified for a topic, that topic was removed from the shortlist of material topics.

Within the DMA, a global approach was adopted where participants were requested to consider both global perspectives and potential local and/or entity-specific perspectives.

Finally, we generated a shortlist of material topics and their associated IROs. This was informed by the outcomes of the workshops.

The shortlist underwent validation by internal stakeholders, specifically the NFR Steering Committee, the internal audit team, and management teams of subject matter experts who had been involved in the DMA process. The ELT endorsed the results after a final management review.

We commit to an annual review of the DMA so that we can update our material IROs, starting in 2025. Once every three years, we will carry out a more extensive review, and in other years we will take a lighter approach. This will enable us to maintain continuation and multi-year focus on our goals.

Double materiality results

The results of the scoring indicated that the most material impacts are found within our value chain, specifically in our projects and with our clients. These impacts are more positive than negative. The combined stakeholder view is that the developments in many of these areas create opportunities not only for Arcadis, but also for our clients and value chain partners to realize positive social and environmental impacts.

Most of the material impacts are captured and monitored at the global level, in line with our global business model. However, we have not yet established a comprehensive view and process to monitor material risks and opportunities that have or may have financial effects on material sustainability matters. We will ascertain this via detailed future investigations. For each of the ESRS the main material topics are explained in short.

E1 – Climate change: All three sub-topics in this standard - 'climate adaptation’, ‘climate mitigation’, and ‘energy’ - offer opportunities for Arcadis for positive financial and environmental impact. As key provider of climate adaptation and resilience services, we are well-positioned to support clients’ adaptation to current and future climate change risks. Arcadis supports clients and communities in enhancing climate resilience and nature-positive services around climate adaptation, water optimization, smart sustainable buildings, sustainable operations, new mobility and transportation hubs, architecture and urbanism, among other aspects. Our own role also includes efforts to reduce GHG emissions across our own operations and value chain partners in pursuit of our ‘net zero by 2035’ target, by e.g. purchasing renewable energy for our offices, reduce business travel and transition the Arcadis fleet to electric vehicles. Risks were also identified on e.g. carbon credit price developments and the impact of purchased goods and services on our carbon footprint.

E2 – Pollution: Only the sub-topic ‘pollution of soil’ was identified as material within this standard, given the positive financial and environmental impacts we can generate from our environmental restoration and PFAS consulting activities. Across the markets in which we operate, we see growing demand for soil restoration projects, soil remediation, PFAS consulting activities, among other aspects.

E3 – Water and marine: The material sub-topics in this standard are ‘water withdrawal’, ‘water consumption’ and ‘discharges in water’. They stem from the opportunities we have identified to support clients with water management, water supply and wastewater treatment solutions. Many possibilities for positive financial and environmental impacts were identified during the IRO sessions, alongside risks of missing market opportunities due to a potentially too slow pace of internal innovation. Additionally, potentially high water consumption in areas facing shortages could hinder project development.

E4 – Biodiversity and ecosystems: ‘Climate change’, ‘land use change’, ‘pollution’, ‘biodiversity loss’, ‘land degradation’ and ‘desertification’ have been identified as material due to the positive financial and environmental impact Arcadis may bring through our biodiversity consulting, environmental impact assessments and environmental restauration. These topics were specified to a wide range of positive environmental impacts and financial opportunities via our project delivery to clients. The potential positive impacts go hand in hand with potential negative impacts stemming from ineffective execution of projects, which could potentially lead to negative environmental impact, including e.g., habitat destruction and pollution due to ineffective waste management.

E5 – Resource use and circular economy: Materiality for this standard relates to the sub-topic ‘waste’. Arcadis assists clients with responsible management of assets and with identifying opportunities to increase the circularity of material and resource choices, and waste disposal after product end of life . Also, optimization of waste management in Arcadis' own operations was identified with material positive impact to the environment.

S1 Own workforce and S2 Workers in the value chain: As the own workforce is our most important asset, many S1 topics were deemed relevant, but the IRO scoring led to the following material topics: ‘health and & Safety’ (for both S1 and S2), ‘worklife balance’ and ‘training and skills development’. Both the potential positive social impact connected to these topics in case of successful steering on these topics, as well the potential negative side of them if not given sufficient attention, were scored high.

G1 – Business conduct: Corporate culture, whistleblower treatment, lobbying, and bribery and corruption touch our basic principles of doing business, and Arcadis has an established governance framework for these areas, supported by policies, processes, and compliance with the Dutch Corporate Governance Code. The materiality within G1 was set on the sub-topic ‘management of relationships with suppliers and payment practices’, given the significant role of third-party suppliers and contingent workers in our project delivery and in our value chain. We seek to further improve these relationships and the way we conduct business with these partners.

The table on the next page presents the materiality of each ESRS sub-topic and sub-sub-topic identified as material through our DMA. It also shows the number of material IROs received, split between our own operations and the value chain. The five-point scale used here reflects the assessment of these IROs. Material IROs are those that received the highest score (5 out of 5). For more information on material IROs, see the respective topical chapters.

Design effectiveness and operational effectiveness

Arcadis has approached CSRD conformance at two levels: design effectiveness, which focuses on establishing policies and governance frameworks for material topics; and operational effectiveness, where implementation, including action plans, metrics, and target setting, is carried out and monitored to meet objectives.

Policies adopted to manage material sustainability matters

In adherence to ESRS, Arcadis has formulated and updated a series of policies to address material topics, outlining actions and establishing measurable metrics and targets. These policies were approved by the Executive Board before being internally disseminated through our intranet and global website. Unless otherwise specified in the topical standards, all policies are available on our website for relevant stakeholders and on our intranet, where they are accessible to Arcadis employees responsible for their implementation. Crafted in a standardized format, these policies encompass all essential information to ensure CSRD compliance.

These policies, collectively termed ‘design effectiveness’, are accompanied by an implementation roadmap delineating the trajectory from policy creation to the installation of tracking and tracing mechanisms, as well as assigning ownership and defining processes, procedures, and responsibilities. Notably, for some IROs affecting own operations, both design and operational effectiveness have already been reached. As we progress in planning for operational effectiveness in our full value chain, we will update the relevant policies to include additional information on actions and targets specific to our full value chain.

For ease of reference to stakeholders, Arcadis has developed an overarching Global Sustainability Policy, which outlines how Arcadis governs its material environmental, social and governance (ESG) topics, aimed at minimizing or remediating the negative impacts of our business, and maximizing our positive contributions to the improvement of environmental and social conditions touched by our business and volunteering activities. This policy establishes the framework for our ESG efforts moving forward and serves as an overarching policy for topical ESG policies. Activities covered by this policy framework include, but are not limited to reporting, disclosures, business practices, policies, procedures, investments, board activities, stakeholder engagement, and investor relations, in alignment with the CSRD. Final responsibility of the implementation of this policy is with the Chief Growth officer.

Through this approach to policy development, action planning, and target setting Arcadis, is positioned to meet CSRD requirements and drive sustainable practices and long-term compliance in the realm of sustainability management.

Resources and actions

Current CSRD implementation is supported by a small, dedicated core team, supplemented by contributions from subject matter experts across various specialist teams and active engagement from senior management, representing both business operations and enabling functions. Additionally, targeted internal and external consultancy is utilized for specific CSRD topics and quality assurance. It is important to note that most individuals referenced in this paragraph are not exclusively allocated to CSRD activities. Resources specifically linked to material sustainability matters, where relevant, are outlined within the respective ESRS chapters.

In the 2025 business planning process, resources are considered through the implementation plans developed to facilitate the integration of new policies. These plans outline actions, expected outcomes, alignment with policies and targets, pertinent scope considerations, and specific timeframes for completion. Long-term action plans are set up for the value chain related material topics in the Environmental remit with the focus on setting up consistent methodology for measuring the impacts that our projects deliver. An example of this is Project Carbon, which is our program to measure carbon in our client projects, thus providing information about a portion of Arcadis’ value chain impacts. The action plans also detail the resource requirements for each initiative. Arcadis annual budget planning is carried out on a higher level and only implicitly includes the requirements for each action plan and initiative. Through day-to-day business steering prioritization and realization of the actions is carried out. Value chain-linked (financial) prospects are considered in the planning; in some cases, value chain elements are indirectly incorporated and will be refined gradually.

Metrics and targets

Policies will be integrated into daily operations. In 2024, Arcadis focused on achieving design effectiveness for IROs impacting the value chain. Where readiness is not yet attained, the allowed three-year transition period will be utilized to attain operational effectiveness and further establish monitoring performance.

Our primary formal ESG targets, announced during Capital Markets Day, focus on material sustainability matters and include:

• Related to E1 Climate change: reducing our carbon footprint by achieving a 70% decrease in scope 1 and 2 GHG emissions by 2026 from the 2019 baseline, as well as a 45% reduction in scope 3 GHG emissions by 2029 compared to 2019 levels.

• Related to S1 Own workforce: in terms of employee engagement, we aim to maintain our eNPS ranking in the top 25% of the professional services.

For E4 (Biodiversity), Although not part of the 3-year strategic targets, a biodiversity commitment has been set for our own operations.

No additional targets are disclosed in this Statement for other material sustainability matters. In 2024, Arcadis focused on design effectiveness and undertook efforts to investigate and better understand the broader landscape of material topics. This included collecting data and assessing IROs. For material IROs impacting value chain, Arcadis has adopted a three-year phase-in. Once that assessment is completed, Arcadis can further establish measures to track policy effectiveness and consider setting relevant targets. The Executive board, Executive Leadership team and Supervisory Board will be involved in any decision-making about the target setting via the NFR Steering Committee and the Supervisory Board SusCo.

Arcadis has set a range of metrics to monitor progress. For detailed information on performance monitoring, please refer to each ESRS chapter and the Glossary for methodologies. It is important to note that these metrics have not been externally validated except for the limited assurance provided to this Statement.