S2 Workers in the value chain

At Arcadis, our passion is improving quality of life. We believe that fostering a sustainable value chain is our responsibility as a company and a key enabler of our success. Our value chain includes our upstream supply chains, from which we receive products or services that are used in the production of our own products or services, as well as our downstream projects and clients, which receive services from us.

Arcadis relies on value chain workers to support suppliers and clients across a wide range of activities. We seek to minimize and mitigate human rights risks and avoid negative impacts that may stem from our value chain.

For ESRS S2, health and safety (H&S) for value chain workers has been identified as material.

Impacts, risks and opportunities

Policies related to value chain workers

Human rights

Our Human Rights Policy underpins our commitment to respect all internationally recognized human rights, including rights related to H&S, with specific references to international human rights standards and principles encompassed in the:

• Universal Declaration of Human Rights

• International Labor Organization’s Declaration on Fundamental Principles and Rights at Work

• United Nations Global Compact

• United Nations Guiding Principles on Business and Human Rights.

Our approach to human rights due diligence for the value chain is formalized in both our Human Rights Policy and our Global Sustainability Policy. Our Supplier Code of Conduct outlines Arcadis’ human rights requirements for our supply chain, including H&S expectations, and is aligned with our Human Rights Policy and its underlying international standards and principles. Our Human Rights Policy covers the geographies in which Arcadis operates as well as the geographies in which our value chains operate.

In 2024, our External Integrity Line received no reports of non-compliance with the UN Guiding Principles, ILO Declaration, or OECD Guidelines from value chain workers.

Our Chief Growth Officer is accountable for implementation of the relevant policies in our value chain.

Global commitment to H&S

Our commitment to H&S is embedded within our Global H&S Policy. Our due diligence practice for H&S is detailed within our Global Health, Safety & Wellbeing Management System Standard (GHSMSS), with the aim to cover all value chain workers to prevent work-related ill health, work related ill-health, property damage, and other incidents during Arcadis-related activities, applying the standard of care.

Our Chief Delivery Officer is designated by the Executive Board to have the primary responsibility for H&S within Arcadis.

Our approach - responsible value chain

Upstream value chain – supply chain

Responsible supply chains are essential to Arcadis, and we seek to uphold human rights, including those relating to H&S, throughout our supply chain. An estimated 20-25% of our gross revenues are spent on third parties and subcontractors. In 2024, our project-related suppliers that help deliver projects to our clients accounted for about 2/3rd of our procurement spend. Our project-related suppliers span a wide range of segments including construction, transportation, maintenance and consulting. The other approximately 1/3rd of our procurement spend related to categories such as office supplies, marketing, travel, fleet and technology. 

Arcadis seeks to centralize its human rights due diligence in alignment with the United Nations Guiding Principles on Business and Human Rights and embed it in its existing processes and broader risk management systems, as well as at the different stages of our relationship with suppliers. Our due diligence efforts extend to all internationally recognized human rights (including H&S).

Identifying our high-risk areas

To identify our high-risk areas on human rights (including H&S) and other relevant risk factors within our supply chain, we worked with external human rights experts to design a Sustainability Risk Matrix. Within this matrix, we consider, among other aspects, the supplier’s services and location of operation. Arcadis’ supply chain risk assessment process combines the Sustainability Risk Matrix, our internal expertise, our ESG screening and monitoring tool and publicly available sources. The combination of the matrix and tools allows us to identify our high-risk purchasing categories and countries of our operations, as well as potential vulnerable groups such as migrant workers. The higher-risk regions include, but are not limited to, Latin America, the Middle East and Asia. Our higher-risk categories include construction, IT hardware and materials.

Risk management

Identifying and assessing risks and impacts

Before entering a business relationship with Arcadis, relevant suppliers in high-risk areas undergo a due diligence process that is increasingly centralized via our prequalification questionnaire and screening tools. Commitment to the Supplier Code of Conduct is required in the prequalification questionnaire and our general terms and conditions, which are also referenced in our purchase orders.

Through the Supplier Code of Conduct, suppliers agree to provide appropriate working conditions for supply chain workers, combat child labor, forced labor, human trafficking, precarious practices, and discrimination, as well as H&S requirements. For H&S, this includes:

• Providing clear information on their H&S practices.

• Complying with relevant H&S laws and regulations, and, where applicable, meeting Arcadis’ H&S requirements for contractors.

• Providing the necessary H&S training to enable safe performance of tasks.

• Supplying and ensuring the use of appropriate personal protective equipment.

To facilitate the understanding of our Supplier Code of Conduct, a concise training module for suppliers is provided online.

We seek to collaborate with suppliers with whom we have a contractual relationship (first tier). We expect them to require and enforce the same human rights standards and expectations within their own supply chains, as we do within our own.

To support us in identifying potential and actual negative impacts in our supply chain, we use a digital tool for environment and human rights risk alerts. We continuously screen and monitor our suppliers through this digital tool to identify (human rights) risks, including H&S, focusing on our suppliers active in high-risk areas. We analyze the intelligence received based on our decision tree for prioritization and use it to inform internal stakeholders and follow up on the actions expected.

Based on the results of our ESG screening and monitoring, in 2024 we identified a few working conditions-related human rights issues among our suppliers and in its supply chains issues associated with H&S, freedom of association and forced labor were identified.

Integrate, act and monitor

The recommended follow-up actions for the identified issues included engaging with the supplier on its human rights performance and the intelligence received; and contractual clauses and improvement plans, among other recommended actions intended to prevent and mitigate risks and impacts. For prioritized human rights issues, we continuously monitor the follow-up actions taken and the outcomes.

Downstream value chain – projects and clients

Arcadis seeks to minimize and mitigate H&S risks and avoid any negative impacts that may stem from our delivered services to clients. We focus in this chapter on the client selection processes and on the preventive measures that are put in place to mitigate potential and actual negative impacts from the work done on project sites of the clients.

Client selection

Before accepting a client, we conduct a thorough go/no-go procedure. This involves various checks to ensure that the potential client aligns with our strategy and values. In addition to financial and other assessments, we carry out comprehensive H&S (Health & Safety) checks. These checks include acquiring detailed knowledge about the client's H&S management systems and their track record in H&S.

Once a client is accepted, Arcadis implements several measures to avoid any material negative impacts from our activities. These measures include our H&S policy, Standard Operating Procedures (SOPs), trainings, certifications, and protocols. These apply not only to Arcadis employees but also to the workers of our partners and clients. The 8 fundamental H&S principles outlined in S1 are designed to adhere to legislative requirements, legal frameworks, and other obligatory standards relevant to H&S within design, engineering, and consultancy.

On-site, if the client oversees H&S management, we adhere to their standards while maintaining our own Arcadis principles and standards as an absolute minimum if the client’s management systems should be less stringent. Conversely, if Arcadis is responsible, we implement our standards and procedures. This entails upfront communication of the Arcadis H&S requirements, client requirements, and H&S expectations for all activities to be performed by everyone involved. Partners must be qualified and approved based on H&S criteria before executing contracts, whether for long-term partnerships or project-specific relationships.

Identifying our high-risk clients and projects

Before accepting a client, we assess the reputational risk of working with them, check if the client is active in restricted or excluded countries, ensure they respect privacy, and evaluate how they uphold human rights. These checks help identify high-risk clients. Similarly, ahead of project acceptance, tender boards discuss these aspects at the project level. Once a project begins, project managers must carry out H&S impact assessments. The goal is to identify and communicate the scope of work activities, determine, and mitigate hazards, assess levels of risk, and document the controls applied to each risk. These impact assessment results must be approved by both the project manager’s line manager and the client.

Risk management and monitoring

Continuous monitoring and reporting are obligatory throughout the project, as described in the impact assessment. It's crucial to keep the client, as one of our most important stakeholders, updated on H&S performance, any incidents, any potential extra measures that need to be taken and potential improvements to avoid incidents from happening.

Stakeholder engagement

To learn and develop a global approach for accessible communications channels to engage with value chain workers, we conducted a pilot project in 2024 in Chile. We worked together with a third party to reach out to value chain workers on a project site via an automated survey solution to help collect data at scale directly and anonymously.

As we are enhancing the operational effectiveness of our Stakeholder Engagement Policy, we do not yet have a common global approach to pro-actively engage with our value chain workers, including in which stage(s) engagement occurs and the frequency. The insights and lessons learned from this pilot will be used to inform and guide further operationalization of our Stakeholder Engagement Policy in our value chain.

Overall, as an essential part of our ongoing due diligence process, we will engage with stakeholders about material actual and potential positive and/or negative environmental and human rights impacts, as stated in our Stakeholder Engagement Policy on Sustainable Topics. This will include workers in the downstream and upstream value chain and their legitimate representatives, or credible proxies, as well as other stakeholders.  

These insights will be gathered in a structured and continuous approach that helps us understand and address the concerns, expectations, and priorities of our stakeholders, including the perspectives of value chain workers who may be particularly vulnerable to impacts and/or marginalized. We will capture their perspectives through risk and impact assessments, research, surveys, dialogue, collaboration, and other tools.

The Chief Growth Officer is accountable for stakeholder engagement on sustainability topics, and for incorporating the feedback from the engagement into the company’s strategy. The Global Sustainability team is responsible for shaping and executing stakeholder engagement activities and providing feedback on outcomes to stakeholders within Arcadis. The Procurement team and our Global Business Areas are responsible for implementing stakeholder engagement in their areas.

Grievance mechanism

Arcadis has established mechanisms to allow value chain workers to anonymously raise concerns via our Integrity Line to seek advice, communicate or report issues or concerns related to our business activities, including suspected or actual breaches of Arcadis policies or issues related to human rights (including H&S), with safeguards in place to prevent retaliation.

In cases where individuals do not have access to the digital reporting tools we use, we rely on grievances reported from within the business to ensure that concerns are addressed. H&S issues can also be raised through these channels, with arrangements made at the project level to address concerns and provide remedy.

The Supplier Code of Conduct includes the Seek Advice and Speak Up Policy Statement which outlines Arcadis’ grievance mechanism and non-retaliation approach. This is also included in the online training for suppliers. Monitoring and reporting on Integrity Line and remediation are detailed in the Business Ethics chapter under the Monitoring and Accountability, Integrity Line, Seek Advice, and Speak Up sections.

Targets related to value chain workers

At present, there are no quantitative H&S targets for value chain workers. We are making use of the optional phase-in period specified by the ESRS, so that we can work towards setting specific key performance indicators (KPIs) and targets for S2.

Next steps – actions and resources

Arcadis has implemented a human rights due diligence process for the value chain. In our implementation plan, we have outlined the steps that will be taken to prevent and mitigate human rights (including H&S) risks and impacts in our value chain.

As part of our implementation plan, we will:

• Further strengthen our human rights due diligence process to identify, prevent, mitigate, and account for human rights impacts, as stated in our policies in every stage of our relationship with suppliers, from contract management to development and training.

• Train employees and suppliers to understand the risks that value chain workers can be exposed to.

• Develop KPIs and targets for human rights due diligence.

• Raise awareness of our grievance mechanism within our value chain.

• Facilitate stakeholder dialogue with value chain workers, including workers that may be particularly vulnerable to impacts and (or) marginalized, to inform our due diligence process.

• Explore opportunities for collaboration and develop action plans to enhance human rights topics.

• Modify our reporting structure to track and report H&S metrics separately for different groups of value chain workers.

To enhance our operational effectiveness, we will continue to use our internal tools (including the aforementioned digital tool and our Sustainability Risk Matrix). We will do so with the support of the key teams we have in place, including the Global Sustainability team, Global sustainable procurement team, the Global Health, safety and wellbeing team, the Global human rights team, and other colleagues who support the implementation of and carry out our due diligence processes related to value chain workers.