E1 Climate change

Transition plan for climate change mitigation  

Addressing climate change is the paramount challenge of our era – and driving change in the built environment is particularly critical, because the construction and operation of buildings accounts for almost 40% of energy use-related carbon emissions worldwide. This underlines the need to pursue climate change mitigation and adaptation across the sector, such as by decarbonizing and fortifying against extreme environmental events.

At Arcadis, we recognize and embrace the role we can play as active participants in the climate transition, both today and in the future. This encompasses how we work with our clients to mitigate their climate change impacts and help them adapt to the challenges of a changing climate. Our role also includes efforts to reduce greenhouse gas (GHG) emissions across our value chain in pursuit of our ‘net zero by 2035’ target, and efforts to meet interim targets approved in 2024 by the Science-Based Targets initiative (SBTi).

As a major player in this industry, we are well-placed to positively affect the built environment today and help drive sustainable progress for tomorrow.

Emissions sources, key reduction measures, and performance

Our Climate Transition Plan (CTP) demonstrates our commitment and plan for action and outlines our approach to meeting the climate goals we have set to accelerate a planet positive future supported by sustainable project choices. The plan was reviewed and approved by the Executive Leadership Team member responsible for Sustainability and by the Chief Executive Officer, in accordance with Arcadis’ internal policy approval process. No additional approvals of the CTP by administrative, management, or supervisory bodies are required by Arcadis’ policy approval processes.

Arcadis published its CTP due to evolving market demands, stakeholder interests, and the current regulatory landscape, including the European Union Corporate Sustainability Reporting Directive (CSRD). To develop this plan, we conducted a maturity assessment based on the CDP technical guidance on Climate Transition Plans and the Assessing low-Carbon Transition (ACT) guidance. We are also aware of the European Financial Reporting Advisory Group’s (EFRAG) transition plan guidance published in November 2024 and plan to incorporate any new elements or information from that guidance in future iterations of the CTP. Connections with EU taxonomy insights are made on several places to enrich our Climate Transition Plan, via e.g. performing a joint Climate risk assessment and a joint adherence of the minimum safeguards, amongst others.

As part of our CTP, we will continue to reduce our emissions through initiatives such as renewable energy procurement, fleet electrification, purposeful business travel policies, and employee commuting initiatives. We also commit to serving our clients by helping them combat their carbon reduction challenges through the adoption of digital innovation and other cutting-edge technology. We do this by continuously improving our capabilities and proprietary tools.

Quick facts: Arcadis' 2024 carbon footprint

Note that our Capital Markets Day target for 2026 for scope 1+2 emissions is a 70% reduction compared to 2019, while our SBTi-approved target for 2029 is a 71% reduction compared to 2019.

In 2022, we conducted a qualitative and quantitative assessment of the potential impacts on Arcadis from four climate-related transition risks and opportunities under two climate scenarios and three time horizons to align with the Task Force for Climate-Related Financial Disclosure (TCFD) guidance. Following this analysis, we also evaluated physical climate risks that could potentially impact our business. This analysis included the largest Arcadis offices by number of full-time equivalents (FTEs) (124 offices), the then recently acquired IBI offices (44 offices) as well as 86 of the largest project sites by net revenue generated. In 2023, we expanded the assessment to include the offices of newly acquired companies DPS and Giftge. These analyses were previously described in our Annual Integrated Reports for the year in which they were performed. In 2024, Arcadis analysed another 82 of its office sites and performed a physical climate risk check on 75 of its largest active project sites.

To explore potential transition risks and opportunities from climate change we used two scenarios, “Net Zero 2050” and “Current Policies”, from the Network for Greening the Financial System (NGFS) climate scenarios framework. The NGFS framework provides a set of harmonized transition pathways and includes metrics that provided us with greater understanding of the prolonged impacts of climate change on Arcadis’ regions of operation.

In this analysis, Arcadis picked two scenarios: Net Zero 2050 from the Orderly category, and Current Policies from the Hot house world category. The Orderly scenarios assume that climate policies are introduced early and become gradually more stringent, and that both physical and transition risks are relatively subdued. The Hot house world scenarios assume that some climate policies are implemented in some jurisdictions, but that global efforts are insufficient to halt significant global warming. The Hot house scenarios result in severe physical risk impacts, including irreversible impacts such as sea-level rise.

We identified three main risks related to climate change. The first risk concerns the price of energy and carbon. Implementing external carbon pricing policies – such as taxes on aviation, energy, or fuel suppliers to drive the low-carbon transition, or the elimination of fuel subsidies – could impact Arcadis’ expenses. Quantifying these risks helps Arcadis make better informed investment decisions and enhances our management of financial and regulatory risks. The potential financial impact is associated with the costs of carbon price exposure and a shift in energy prices. Outside of energy-intensive sectors, economies are not directly exposed to carbon tax or market-based carbon prices. This analysis assumes all emitters become subject to the same exposure to carbon taxes or market-based carbon prices as energy-intensive sectors are presently.

The second risk concerns growth drivers. Given current and prospective clients’ increased focused on projects and solutions with clear sustainability benefits, sustainability is integrated into client pursuits through our five sustainability lenses: carbon and energy, social value, water stewardship, nature and biodiversity, and circularity. This includes our solutions that support growth in both technical advisory and digitally empowered management. Potential client loss risk is possible due to client association with high-emitting sectors, client inability to adapt to a rapid transition associated with a net zero scenario, and client infrastructure facing harmful impacts from acute and chronic physical risks.

The third and final risk concerns brand reputation. Reputational risks related to not achieving our climate actions and commitments could impact our relationship with clients, investors, shareholders, communities, and employees and affect our ability to attract talent. As our ability to deliver our sustainability and climate services depends on attracting the right talent, failure to do so will result in further operational costs to our business. This connection underscores the interplay between brand reputational risk and the growth driver risk, as a strong, positive brand reputation is essential for attracting and retaining the talented employees needed to support clients in their transition to a low-carbon economy.

Our strategy has been influenced by the climate scenario analysis, which played an integral part in shaping our CTP. The insights drawn from this process influence our business in the following ways:

• Products and services: Opportunities for revenue growth from increased demand for services that support a low carbon economy and climate resilience. This focuses on the impact on revenue from a shift in demand for products and services. We are growing our global Sustainability Advisory and Energy Transition practices to accelerate our clients’ ambitions and cater to clients’ needs resulting from climate change. To accelerate a planet positive future, our Sustainable Project Choices strategic focus area embodies:

• • A deliberate focus on projects that contribute to our strategic ambition. We have committed to increasing the robustness of our project selection process by selecting projects that align with planet positive, sustainability, and economic criteria.

  • An enhanced, next-generation Key Client Program. By growing our share of wallet within key clients, we’re aiming to increase cross collaboration between GBAs. Arcadis also intends to expand this program to target a broader group of clients and drive success in our growth markets, which anchor our sustainable project choice ambitions. As we introduce a more tailored and target-driven approach, we can address the needs of our clients more effectively, including through increased advisory-led client engagements.

  • An evolution of our commercial models. We are committed to helping our clients achieve their sustainability goals and making their assets more resilient against climate change risks. By embracing value-based pricing and incentive-based models, we aim to provide advisory services that support our clients' sustainability ambitions. Our approach includes developing solutions that engage our Intelligence GBA, our Resilience GBA (which regularly conducts climate risk assessments for clients), our Places GBA (which works on Net Zero buildings, and our Mobility GBA (which focuses on lower carbon means of transportation).

• Supply chain and/or value chain: Responsible and sustainable procurement has been recognized as a key area for further development for Arcadis. We are incrementally growing our Sustainable Procurement Program and building an impact-based approach while continuing to assess our operational readiness from a supply chain perspective to address our scope 3 emissions reduction target. Core principles that guide Arcadis’ sustainable procurement practices are represented in our publicly available Arcadis Global Procurement Policy Statement and the Arcadis Global Supplier Code of Conduct, which outline the collaborative approach we aim to facilitate with our supply base. These also detail Arcadis’ expectations that suppliers need to meet regarding ESG topics.

• Investment in R&D: To drive sustainability innovation in the services we deliver, we have invested in market research, client interviews, industry-wide network organizations, internal teams and capability development, business development, and digital and innovation. One way that we encourage R&D is though the Imagine Awards, an annual opportunity for individual employees and teams of employees to submit their innovative ideas and win an opportunity to develop these into reality, making use of prize money awarded by the Lovinklaan Foundation. Seven out of eight of our finalists in the 2024 Imagine Awards are developing solutions focused on climate risks, climate mitigation, renewable energy, and ESG due diligence. Furthermore, in partnership with the Lovinklaan Foundation, Arcadis launched a program, Ignite, that is dedicated to enhancing the skills of both seasoned innovators as well as budding talents within Arcadis. This program includes a virtual training experience focused on developing value propositions, designing business models, and testing business ideas. A smaller group of employees who complete the virtual training will be invited to an in-person innovation masterclass experience, facilitated by Arcadis’ Global Innovation and Ecosystems team.

• Operations: Climate-related risk management is embedded in our Environmental Management System (EMS) Policy. The EMS monitors and tracks identified environmental risks or opportunities. In particular, physical risks identified through physical climate risk assessment have been incorporated into our Business Continuity Plans, as appropriate, at the country level.

The main uncertainties associated with our scenario analysis, which informs our strategy and business model, include:

• Regional conflicts in Europe and elsewhere leading to market uncertainty and supply chain disruption

• Changing political dynamics and governmental policy directions, which also lead to market uncertainty and, potentially, supply chain disruption

• The use of third-party supplied data in calculating our scope 3 emissions, which although is the recommended method per the GHG Protocol and is widely adopted, does have inherent limitations

Impacts, risks and opportunities 

Processes to identify and assess material climate-related impacts, risks and opportunities

In 2022, we conducted a qualitative and quantitative assessment of the potential impacts on Arcadis from four climate-related transition risks and opportunities under two climate scenarios and three time horizons to align with the TCFD guidance.

Key risks and opportunities were assessed based on their estimated financial impact on Earnings Before Interest, Taxes, and Amortization (EBITA) from 2021. The scope of this analysis included Arcadis’ operations in Germany, the United States, the Netherlands, the United Kingdom, and Australia, our top five earning countries at the time of the analysis. Impact ratings were then combined with probability assessments for each risk or opportunity to derive probability-adjusted estimated impacts, which were used to prioritize key risks and mitigation strategies.

In 2024, we again reviewed Arcadis’ impacts, risks, and opportunities. The step-by-step process applied for this review is detailed in the Impact, Risk and Opportunity management section of the ESRS 2 General Disclosures chapter in this Sustainability Statement.

Policies related to climate change mitigation and adaptation

Arcadis has a dedicated policy for Climate Change Mitigation and Adaptation which outlines our approach to climate change. This policy establishes design effectiveness across Arcadis’ value chain. Our double materiality assessment identified all three sub-topics within ESRS E1 – climate change adaptation, climate change mitigation, and energy – as material. These issues are addressed in our Climate Change Mitigation and Adaptation Policy.

Arcadis’ goals regarding climate change adaptation and mitigation, as per this policy, are to:

• Identify how Arcadis affects climate change, in terms of material positive and negative actual and potential impacts.

• Describe Arcadis’ current and future mitigation efforts to stakeholders in our annual Sustainability Statement, sharing how these efforts are in line with the Paris Agreement and compatible with limiting global warming to 1.5°C.

• Outline our plans and capacity to adapt our strategy and business model in line with the transition to a sustainable economy, and our plans and capacity to contribute to limiting global warming to 1.5°C.

• Describe in our Sustainability Statement any other actions taken by Arcadis, and the result of such actions to prevent, mitigate or remediate actual or potential negative impacts, and to address risks and opportunities.

• Explain to stakeholders the nature, type and extent of Arcadis’ material risks and opportunities arising from our impacts and dependencies on climate change, and how we manage them.

• Provide stakeholders within insight into the financial effects on Arcadis, over the short-, medium- and long-term, of the risks and opportunities arising from our impacts and dependencies related to climate change.

We will track the effectiveness of our policies and actions in relation to our material impacts on climate change through the further implementation of our Environmental Management System Policy, our procurement processes, and the Climate Transition Plan itself. Our defined level of ambition is to achieve operational effectiveness for our full value chain by the year 2027. Quantitative indicators to evaluate progress will be the reduction of our absolute market-based carbon footprint.

Stakeholders affected by our Climate Transition Plan include our employees, suppliers, clients and investors.

The Chief Growth Officer is the member of the Executive Leadership Team who is responsible for sustainability, including accountability for the implementation of the Climate Change Mitigation and Adaptation Policy.

The Climate Change Mitigation and Adaptation Policy's scope applies to Arcadis’ office-based activities globally, including the spaces leased by Arcadis in multi-tenant buildings with shared common facilities. It also applies to our project-related activities for our clients and with suppliers in our upstream and downstream value chain.

Climate change actions and resources

Arcadis commits to reaching net-zero greenhouse gas emissions across the value chain by 2035. We are actively reducing our carbon footprint through a series of strategic emissions reduction initiatives based on our climate-related risks and opportunities.

Because our scope 3 emissions make up the majority of our total global carbon footprint, a significant portion of our emissions reduction initiatives are focused on reducing scope 3 emissions. To enable our net zero transition, we are prioritizing our approach to target the key sources of emissions within areas such as purchased goods and services, enabled by improving data quality.

For each emissions scope, Arcadis is implementing specific emissions reduction levers. For scope 1 and 2 emissions, this includes transitioning our fleet to electric vehicles; incorporating energy sources, consumption, and availability of electric vehicle charging infrastructure in our leasing decisions; and purchasing renewable electricity for our operations globally. We incorporate sustainability-related clauses in our leases and, where possible, we give preference to sustainably rated office properties accredited by third parties (e.g., LEED, BREAM). These levers will contribute to achieving our 2035 net zero target to varying degrees. The three primary levers for scope 1 and 2 emissions are as follows:

1. Transitioning our fleet to electric vehicles is expected to significantly reduce our current fleet emissions, bringing them close to zero. This transition alone will result in a reduction of approximately 6,400 tCO₂e, which accounts for around 71% of our combined scope 1 and scope 2 (market-based) emissions.

2. Shifting from natural gas to electricity or biogas for heating purposes will further help in reducing emissions. This transition is estimated to decrease our emissions by approximately 2,200 tCO₂e, which currently represents about 25% of our combined scope 1 and scope 2 (market-based) emissions.

3. We will continue to purchase Renewable Energy Certificates (RECs) to cover 100% of the electricity consumed by our offices and electric vehicle fleet. This proactive approach will enable us to maintain our progress in reducing scope 2 emissions. Currently, this strategy already leads to a reduction of approximately 9,000 tCO₂e in our 2024 market-based scope 2 emissions. Continuing this measure will help us keep our scope 1 and scope 2 (market-based) emissions 97% lower than scope 1 and scope 2 (location-based) emissions (based on 2024 emissions).

For scope 3 emissions, we have deployed travel carbon budgets and are implementing more globally consistent waste reduction and recycling measures, as well as working with suppliers via a third-party supply chain program to report emissions.

One initiative that has been key to reducing our scope 3 emissions is in the business travel category. In May 2021, we implemented a travel policy with a “virtual first” approach. Covid restrictions on travel taught us that virtual working and collaborative technology can be effective and are a very time- and cost-efficient solution for us and those with whom we are meeting. We want to use this experience to reduce emissions in the long term, as we work toward our net zero target. The policy states: “Employees are advised to take a ‘virtual first’ approach to travel planning. Start with an assumption that all meetings will be virtual requiring no travel and then challenge yourself to justify which types of meetings need to be or should be in-person necessitating travel.”

An overview of Arcadis’ decarbonization measures, as described in our Climate Transition Plan, is presented on the next page.

Arcadis' decarbonization measures

Our activities related to addressing climate change are part of our business-as-usual operations and resources to carry out these activities are included in our annual business plan. As we are a consultancy firm, the resources needed to carry out these activities do not require significant CapEx and the associated OpEx is also not significant since our activities are integrated into our business-as-usual expenses and procurement decisions.

Targets related to climate change

Our climate change targets align with our policy ambition to support the Paris Agreement and Glasgow Accords, including the target to limit global warming to beneath the 1.5°C threshold. In our 2024-2026 strategy we shared our updated near-term and long-term targets which were developed per the Science Based Targets initiative (SBTi) Net-Zero Framework. These targets were validated by SBTi in August 2024. Senior management was involved in the target setting process as a stakeholder as we developed our Climate Transition Plan. Our absolute targets cover scope 1 and scope 2 (market-based) GHG emissions combined, and scope 3 GHG emissions separately.

The detail of our SBTi-approved targets are as follows:

• Near-term: Arcadis commits to reduce absolute scope 1 and 2 GHG emissions 71% by 2029 from a 2019 base year. Arcadis also commits to reduce absolute scope 3 GHG emissions 45% within the same timeframe.

• Long-term: Arcadis commits to reduce absolute scope 1 and 2 GHG emissions 90% by 2035 from a 2019 base year. Arcadis also commits to reduce absolute scope 3 GHG emissions 90% within the same timeframe.

Our targets are based on our 2019 baseline GHG emissions. We kept our baseline year as 2019, before the COVID-19 pandemic, to avoid pandemic travel restriction effects from influencing our carbon footprint baseline. We have chosen to set and disclose 2029 targets to align with our next company strategy cycle which will be 2027-2029 and have therefore aligned our SBT-approved targets to 2029 as well. Because we have set our net zero target for 2035, we are able to extrapolate target values for 2030. Our 2030 extrapolated target values are:

• A reduction in scope 1 and 2 GHG emissions of 74% by 2030 from a 2019 base year.

• A reduction in scope 3 GHG emissions of 52% by 2030 from a 2019 base year.

Between 2035 and 2050, our goal is to maintain our 2035 emissions level every year.

Calculating our emissions requires us to make professional judgements and use estimates and assumptions that are critical for the data we report. When disclosing our targets, we acknowledge there are inherent uncertainties and indicate that our information is subject to change, as actual data may differ from previous estimations. We disclose the assumptions and approximations we have used to provide context for and support understanding of the information we present. Further details regarding specific estimates used in calculating our emissions are available in the Glossary.

To support our net zero goal, by the end of 2024, we had transitioned 35% of our fleet to electric vehicles. To reduce electricity-related emissions, we have been purchasing renewable electricity certificates for each office that does not yet have direct green electricity contracts. We purchase renewable electricity certificates approximately equivalent to 100% of our office electricity consumption and the electricity consumption of our electric company-owned/leased vehicles, electric private vehicles used for business travel and commuting, as well as for the electricity for working from home (workstations and lighting). Arcadis also joined a third-party supply chain management platform in 2023 to begin collecting and using supplier emissions data in our scope 3 emissions calculations. In 2024, we expanded the number of our suppliers whose emissions are captured in that platform.

Energy consumption

Arcadis does not have operations in high climate impact sectors. The table below presents Arcadis’ energy consumption and mix in 2024. To calculate our energy mix, we collected primary data from all our offices (electricity consumption and production, natural gas, district heating) and fuel consumptions of our fleet vehicles in our NFR reporting platform. See more details on our methodology and assumptions in the Glossary.

Energy consumption and mix

Total GHG emissions

Arcadis’ global carbon footprint numbers presented in Table gross scopes 1, 2, 3 and total GHG emissions contain some estimates which would be replaced with actual data if the changes are greater than our threshold of 5% of our total GHG emissions. Additional details regarding our carbon footprint methodology are available in the Glossary.

Arcadis has determined that emissions from scope 3 categories 8 to 15 are not relevant or not material and are therefore excluded from our footprint, see more details in the Glossary. Emissions from cloud computing and data center services are immaterial, hence are not disclosed separately.

Our combined scope 1 and 2 emissions (own operations) were 17% lower compared to the previous year, and 66% lower when compared to our base year, 2019. This was due, in part, to reducing our company fleet emissions. We also decreased the use of natural gas for heating, in part due to consolidation of offices and closure of some that used natural gas. The reduction of fleet emissions is mainly an effect of the progress of our transition to electric vehicles (EVs), which at the end of 2024 made up 35% of our company-owned vehicles versus 23% at the end of 2023.

Biogenic scope 1 emissions of CO₂ from the combustion of biofuels which are not included in scope 1 are disclosed but not material (around 1 tCO₂e).

Scope 2 (location-based) emissions decreased slightly (-3%) compared to 2023 and are 46% lower than our base year. Scope 2 (market-based) emissions decreased significantly when compared to 2023 and to our base year (-98%). This can be attributed to our purchase of unbundled contracted renewable electricity certificates (I-RECs, US-RECs, GOs, REGOs and TIGRs) for 100% of our offices’ and fleet vehicles’ electricity consumption.

Our total scope 3 emissions (upstream relevant categories) were 8% higher than in 2023, but remained approximately 6% lower than our base year. The increase versus last year is mostly due to an increase in our category 1 emissions (purchased goods and services) of 11% due to an increase in spend on purchased goods and services. Our employee commuting emissions decreased slightly due to less employees in certain geographies, consolidating offices in the US and some German offices which were temporarily closed during renovation. We updated our methodology for calculating our business travel emissions (see Glossary); however, the resulting change to our 2019 and 2023 values was less than our 5% threshold for total GHG emissions and therefore did not trigger a restatement of prior year values. As a result, our business travel emissions did not change significantly compared to last year. The decrease in category 5 (waste generated in operations) is due to a methodology change: since 2024 we were able to collect actual waste data (see Glossary) and therefore have improved the data quality of the emissions calculations. The resulting change to our 2019 and 2023 numbers was less than our 5% threshold in total emission and therefore didn’t trigger a restatement of prior year values.

Outside of the scope of our science-based net zero target, we also report the estimated emissions related to colleagues working from home as we think this is an important aspect to monitor. We also have measures in place to reduce these emissions, such as purchasing renewable electricity certificates for the estimated electricity consumption associated with working from home.

To make the baseline value against which the progress towards the target is measured is as representative in terms of the activities covered as possible, we use the same scope and apply the same methodology of data collection where possible. For example, we are collecting data from the same software systems (e.g. Oracle) for the same scope of activities. In cases where e.g., invoices haven't been available for the baseline year, we've used our approved estimation methodologies (see glossary for more details). SBTi reviewed and approved our baseline year emissions in 2024. Since SBTi's approval, we have adjusted our emissions for scope 3 purchased goods and services. This adjustment was <5% for 2019 and did not trigger a need to update our SBTi net zero target.

Gross scopes 1, 2, 3 and total GHG emissions

Scope 3 emissions categories

GHG emissions intensity per net revenue

Beyond value chain

Beyond our value chain, we purchase carbon offsetting credits for our scope 1, scope 2 and select scope 3 categories (category 2 to 7). The majority of the credits we purchased and retired in 2024 came from the “Nii Kaniti” project in Peru, which is a forest conservation (REDD) project. The project is located in seven communities belonging to the Shipibo Conibo and Cacataibo ethnicity, which, when grouped, occupy an area of 127,004 hectares of forest. Our offsets purchase supports a portion of this project. The purpose of the project is to conserve the forests of these communities against the advance of deforestation and degradation. The project reduces the pressure to change land use in the project area by four means: proper use of communal land, capacity building for the management of natural resources, project finance and market linkages, and finally, strategic alliances. The project has been verified under the VERRA standards VCS and CCB by AENOR. More information and assumptions made can be found on the Verra Search Page for project number 1360.

The carbon offsetting credits listed below in the table Purchased carbon credits are not used to claim lower emissions, meaning that these GHG emission reductions are not subtracted from our published GHG emissions in Table gross scopes 1, 2, 3 and total GHG emissions. For the carbon credits planned to be cancelled in 2025 (for our 2024 emissions), we have an existing contract with our partner Fair Climate Fund. We purchase these credits to help accelerate a planet positive future and improve quality of life for people around the world.

Purchased carbon credits

To reach our net zero target in 2035, we plan to neutralize our residual GHG emissions (after an approximately 90-95% GHG emissions reduction) and therefore in early 2023 started investing in and supporting a reforestation project in India that will generate carbon removal credits with our partners from Fair Climate Fund and Prasari.

The carbon credits will be verified under the PLAN VIVO framework and its methodologies are described in their publicly available standard, “Methodology Requirements, Version 1.0”.