LEGRAND_REGISTRATION_DOCUMENT_2017

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Acting ethically towards Society

Focus: Legrand Group compliance program recognized by Les Échos Business The Legrand Group compliance program was hailed by Les Échos Business , the leading French financial newspaper, in 2015 and again in December 2016, when the Group’s Executive VP Legal Affairs was quoted as saying that it is important to “remain focused and responsive in an area that is constantly changing, to keep pace with regulations and technological and societal developments such as transparency and ethics”. Education and communication are the key aspects of this program, which covers all Group employees. It owes much of its success to subsidiaries such as those in Chile with its communications policy and its motto “Transparency is our identity”; in Italy, with its “camera compliance” videos featuring some of the risks that employees may encounter; in Switzerland and New Zealand with compliance quizzes on conflicts of interest, gifts and hospitality; and in Colombia with its external communication campaign “Buzon Etico” about its whistleblowing system.

2014 2015 2016

2017

2018

Target achievement rate*

110% 105% 107% 88%

* Calculated as the average achievement rates observed in Legrand’s two groups of subsidiaries compared with annual targets.

Evaluation of the compliance program This covers the five areas of the compliance programas described at the start of section 4.3.1, in the part on the “Group compliance program”. All of these checks are reviewed annually by the Internal Audit Department. Some of these controls are reviewed annually as part of a self-assessment exercise, and then checked by internal audit. In 2017, 38 subsidiaries were audited, eight of them recent acquisitions. In addition, a specific compliance audit was carried out on the subject of embargos. Together with training, the internal control of these compliance practices is a crucial tool for Legrand’s business ethics. This helps to disseminate and foster a solid understanding of and respect for business ethics.

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For more information on Group ethics, see our website www. legrand.com .

4.3.2 – Ensuring responsible purchasing

Fundamental principles and organization Faced with the internationalization and globalization of its markets, Legrand – a signatory to the Global Compact – is committed to building the principles of sustainable development into its decision-making and its supplier relations, even though suppliers might potentially have wide-ranging social and environmental practices. The Group Purchasing Policy establishes the principles of sustainable, balanced and mutually beneficial relations with suppliers that uphold Legrand’s values. Legrand’s responsible purchasing strategy is based on the principle that the Group’s ethical, environmental and social rules also apply to its suppliers and subcontractors, who are selected and managed in accordance with those rules. Legrand therefore expects its suppliers to subscribe to the same standards of responsibility as it does. For example, because Legrand is a member of the Global Compact, the Group’s suppliers are also encouraged to respect the Global Compact’s principles. Nearly 60% of purchases from the Group’s panel are from suppliers that embrace these principles.

The responsible purchasing policy is overseen by a matrix-type Purchasing Department which is ISO 9001 certified (Quality Management System). A sustainable purchasing manager within the Purchasing Department is responsible for monitoring and implementing responsible purchasing rules. The Group Purchasing Department produces reports on the amounts of purchases by supplier and by purchasing category. Group purchases of raw materials and components represent around 31% of its sales. All purchases are made with two main types of suppliers: W Group suppliers, who, as major players in their market and key Legrand partners, support the Group in its international projects. Corporate buyers, Lead Quality Specialists and users establish a close, privileged and sustainable relationship with them. In 2015, the panel of Group suppliers was altered to reflect the needs of the SBUs. At the end of 2017, the Group was working with 500 Group suppliers satisfying multi-site and multi-country needs and accounting for around 30% of the Group’s total purchases; W local suppliers whomeet the specific needs of a site or Strategic Business Unit (SBU) and are managed by buyers at the sites or in the SBUs concerned.

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REGISTRATION DOCUMENT 2017 - LEGRAND