LEGRAND_REGISTRATION_DOCUMENT_2017

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CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Group’s CSR strategy

R 4.1.2.2 PERFORMANCE MANAGEMENT The implementation and management of the roadmap are handled jointly by the CSR Department with the managers of the SBUs and subsidiaries, and by the functional departments (HR, Purchasing, Occupational Health & Safety, Environment, etc.) with the local representatives concerned. Legrand keeps track of its CSR performance through an organized reporting process for non-financial data. This process involves: W the departments and countries that are directly responsible for producing the data; W the functional departments and SBUs (strategic business units) that analyze these data; W the CSR Department, tasked with consolidating the data and then comparing them against the commitments of the roadmap. Reporting enables the various units to capitalize on best practices and share them within the Group. This deployment is accompanied by different tools: procedural guidelines (definitions and reasons behind the issues and priorities, how each entity contributes, their performance evaluation grid, individual and consolidated dashboards for the Group), communication tools and best practices, available on the Group’s intranet. The progress and evaluation of the 21 priorities of the roadmap are consolidated through 31 indicators. Most of the data used to measure these indicators are derived from the Group’s reporting tools, especially those pertaining to Occupational Health & Safety, Human Resources, Environment and Marketing. For more information on the Group’s reporting tools, see section 4.6.1 of this Registration Document. The 31 indicators mentioned above are deployed at two levels: W locally: for each priority item, the achievements of each entity are ranked on four levels (“Insufficient”, “Deployment”, “Performance”, “Excellence”). Each year they are provided with a CSR dashboard. This allows them to track their performance over time, relative to the Group as a whole; W at Group level: the Group’s overall CSR performance results from the consolidated results of all its entities. Measured on quantitative indicators, performance is compared against a baseline established at the end of 2013.

Approximately 10% of the local CSR performance described above is included in the criteria for measuring the individual performance of the Directors of subsidiaries, regions or SBUs. At the end of 2017, the CSR performance levels of more than 50 reporting scopes (subsidiaries, regions or entities) have been assessed, representing all Group activities (apart from new acquisitions not included in the Group’s report, as per the rules described in section 4.6.1 of this document). Of these reporting scopes: W 83% were ranked at the “Performance” level (rating greater than or equal to 2.5 on a scale of 1 to 4) versus 78% in 2016; W 13% were ranked at the “Deployment” level (rating between 2 and 2.5) versus 20% in 2016; W 4% were ranked at the “Insufficient” level (rating below 2) versus 2% in 2016. Individualized action plans are drawn up and deployed across all of the above reporting scopes so that each can meet the target set by the Group, namely a minimum rating of 3 by the end of 2018. In 2017, 10% of the variable compensation of the majority of Executive Committee members, including the Chief Executive Officer, was indexed to overall CSR performance. Since 2016, one third of the performance criteria for performance shares awarded under a three-year plan to members of the Executive Committee, including the Chief Executive Officer, and to key managers has been indexed to overall CSR performance linked to the roadmap. The performance of certain departments within the Group is also partially assessed on the basis of CSR criteria, including, for example, the rate of completion of individual appraisal reviews for some human resources functions, or the evaluation rate of suppliers according to sustainable development criteria for buyers. Each year, Legrand includes a roadmap progress report in its Registration Document. This is calculated based on intermediate annual targets and the annual achievement rate is calculated on these intermediate targets. The rates of achievement of annual targets for 2017 were the subject of a voluntary audit moderate assurance by one of the auditors, Deloitte & Associés. Please refer to section 4.7 of this Registration Document for more information about this approach and the associated results.

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REGISTRATION DOCUMENT 2017 - LEGRAND