LEGRAND_REGISTRATION_DOCUMENT_2017

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CORPORATE SOCIAL RESPONSIBILITY (CSR)

Acting ethically towards Society

Focus: Legrand is awarded Responsible Supplier Relations certification In 2009, Legrand – through the CNA (French National Purchasing Council) – helped draft the Charter of the Ten Commitments for Sustainable Purchasing. It was one of the first signatories of this charter, which later became the Responsible Supplier Relationships Charter. In 2012, Legrand was one of the first four companies in France to receive this certification, which was renewed in 2015. It confirms Legrand’s commitment to responsible purchasing practices with its suppliers, a process in which it was rated as having a very good level of performance by the firm ASEA, which performed the audit. Since 2015, Legrand has been an ambassador for this certification, sharing best practices at events held in the Nouvelle-Aquitaine region in France. It also takes part in events for the certification holders community. Procedure Formally, the Group manages its responsible purchasing strategy with its suppliers via its Purchasing Quality Management System (QMS), and specifically through: W Purchasing Specifications: a contractual document containing Legrand’s requirements for its suppliers, particularly in terms of compliance with the regulations and standards in force for both environmental and social matters. The document includes the ten Global Compact principles. W General Purchasing Conditions, which include a supplier mediation process in the event of a dispute. For this purpose, an internal ombudsman from outside the Purchasing function has been appointed. 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,visitsandaudits,andriskandincidentmanagement) thus include Group rules on responsible procurement: W approval: 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. This 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 contracting: the rules concerning the drafting and approval of Group and local contracts concern all Group units and are part of the 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 raw materials 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 risks 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, please refer to section 6.1.3 of this Registration Document). This long- established approach has been applied since 2009. In 2017, this analysis was carried out by around 60 entities in 34 countries. In addition, a central report on supplier failures is prepared every six months jointly by the purchasing performance controller and the purchasing quality manager. In 2014, Legrand decided to map its CSR risks in order to deepen its 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 Identification, monitoring and support of suppliers exposed to CSR risks

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REGISTRATION DOCUMENT 2017 - LEGRAND