LEGRAND / 2018 Registration document

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CORPORATE SOCIAL RESPONSIBILITY AND DECLARATION OF EXTRA-FINANCIAL PERFORMANCE

ACTING ETHICALLY TOWARDS SOCIETY

W a supplier selection procedure, the scope of which depends on the issue, the risk, the purchasing group and type of supplier, regardless of location. Each of these stages (approval, contracting, visits and audits, and risk and incident management) thus include Group rules on responsible procurement: W approval ensures that the supplier meets all the required criteria, such as technical capability, quality, logistics, organization, financial assessment, and observance of the Group’s compliance and social responsibility criteria. The approach includes a supplier’s self-assessment questionnaire which contains a section on principles and policies for environmental management, health/safety and fundamental human rights, followed by a documentary audit for the required elements, and an on-site audit (if necessary). Non-negotiable rules are established very early on in the approval process, such as not employing children under the age of 15 (in accordance with ILO conventions), risks to employee safety, and measures to prevent risks of fraud or conflicts of interest. Documentary evidence relating to regulations such as RoHS and REACH, for example, are also required for the approval of suppliers subject to these types of regulations. A document management tool is used to compile the supplier’s documents and certificates thus collected, W contract formation : the rules concerning the drafting and approval of Group and local contracts concern all Group units and form part of financial procedures; in addition, supplier contracts contain a paragraph on the supplier’s corporate social responsibility, W visits and audits : suppliers are visited regularly to review technical questions, to monitor the quality of the manufacturing processes and products, and in the context of partnerships or to examine the environmental, social or logistical aspects according to a predefined matrix. In order to be approved, the Group’s accredited suppliers for rawmaterials and components are systematically audited on site, by corporate buyers and quality professionals based on criteria incorporating aspects relating to the organization, ethics, the environment and social risk management, W a procedure for controlling operational risks : these are mainly the risks of supply disruption, single-source supply, supplier dependence, supplier failure, quality, etc. A comprehensive risk analysis is carried out each year. The analysis grid contains a dozen criteria and is reviewed annually. The action plans are monitored by buyers under the supervision of the purchasing quality manager. The results are presented every six months

to the Group Risk Committee (for more information on the Risk Committee, see section 3.3.2 of this registration document). This long-established approach has been applied since 2009. In 2018, this analysis was carried out by 52 entities in around 30 countries. In addition, a central report on supplier failures is prepared every year jointly by the purchasing performance controller and the purchasing quality manager. Identification, monitoring and support of suppliers exposed to CSR risks In 2014, Legrand decided to map its CSR risks in order to take a more in-depth approach to evaluating and supporting suppliers on CSR aspects. It was initially assumed that the Group’s suppliers posed no CSR risk, largely due to the close and longstanding relationship that Legrand has with them and with indirect suppliers, the aim being to focus on the purchasing categories involved in the manufacture of Legrand’s products. From among the 4,500 suppliers representing this field, accounting for 50% of the Group’s purchases, the purchasing categories or types of suppliers that could pose CSR risks, from an environmental or social perspective, were singled out. It emerged that the risks at this stage mainly lay with suppliers using chemicals (for example, subcontracting surface treatment) and suppliers based in countries exposed to CSR risks (particularly social risks) and economically dependent on Legrand. The suppliers identified are referred to as “higher-risk suppliers” and are systematically managed within the following risk management system: W documentary audit : this takes the form of a detailed questionnaire containing around 20 questions on employee health and safety (including the assessment of occupational risks, the identification of personal and collective protective equipment and their use by employees), the management of environmental issues (e.g. effluent treatment), and respect for human rights and fundamental freedoms (including respect for the eight fundamental conventions of the ILO). Documentary evidence must be provided to substantiate the answers given and state whether CSR audits need to be carried out on site and, if so, their priority; W on-site audit : this is carried out on the basis of evidence provided by the supplier. To consolidate its CSR audit methodology, Legrand prefers the CSR audit to be conducted jointly by the buyer and a QSE expert, following a model questionnaire prepared by the Group. Each country arranges its own CSR audits with local buyers and QSE experts, providing the sustainable purchasing manager with the audit schedule. To calibrate its CSR audit methodology, a pilot initiative was carried out in 2017 with Bureau

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REGISTRATION DOCUMENT 2018