SCH2017_DRF_EN_Livre.indb

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Sustainable development Committed to and on behalf of employees

Planet & Society Barometer targets also apply to all the Leaders of Schneider Electric including the main zone and Country Presidents and to the heads of central functions ( e.g. : Finance, HR and Business Development). Since December 2011, a portion of the award under the annual long- term incentive plan that is granted at the time of vesting is subject to the achievement of the annual Planet & Society Barometer target. As a reminder, the Planet & Society Barometer is published externally and its components are audited. Since 2012, the profit-sharing incentive plan for the French entities Schneider Electric Industries and Schneider Electric France includes achieving the annual targets of the Planet & Society Barometer. The reduction in the occupational accidents Severity Rate is also considered in the profit-sharing incentive plans of 17 other French entities. Employee shareholding Schneider Electric believes that employee share ownership is instrumental in strengthening the company’s capital (both financial and human), and that employee shareholders are long-term partners. The Group has been building an international employee shareholder base since 1995 that is representative of the Group’s diversity. Employees of about 60 countries have already benefited from a share ownership plan over the years. The employee shareholding as of December 31, 2017 represented 4.1% of Schneider Electric SE’s capital and 7.4% of the voting rights. Social dialog and relations Description of risks and opportunities Social dialog and freedom of association must be seen within the wider context of Ethics & Responsibility. As a global company, Schneider Electric is convinced that its responsibility goes beyond compliance with local and international regulations and is committed to conducting its business ethically, sustainably and responsibly. The Company is constantly interacting with all the stakeholders throughout the world: its borders are expanding, its environment is changing ever faster, its activities are becoming globalized and its social responsibilities are growing. The challenge is to gain and maintain the highest confidence of its stakeholders. To support each employee in this approach, the Group emphasizes the importance of placing responsibility at the heart of its corporate governance. The Group currently has around 142,000 employees worldwide. Following the Group’s various acquisitions, it has been able to integrate this exceptional professional and cultural diversity. Group policy Schneider Electric considers freedom of association and collective bargaining as fundamental rights that must be respected everywhere and therefore in its Principles of Responsibility commits to complying with local laws in every country where it operates. In its Human Rights policy, Schneider Electric confirms that it considers freedom of association as the basis of a regular dialog between a 4.7

72% of the Group employee shareholders were located outside of France, of which 13% in China, 10% in USA, and 10% in India. Employee share ownership plan 2017 Schneider Electric has ramped up its in-house communication to employees to ensure that they have a clear understanding of the challenges facing the company, its policy and its financial results. The 2017 employee share ownership program offered in 32 countries was an unprecedented success with significantly higher international subscription rate than before. More than 46,000 employees subscribed amounting to a total of EUR143 million. In view of the dynamism of the employee share ownership program, the Group expects to launch a new global Plan which will cover circa 115,000 employees. Socially responsible investment fund In November 2009, Schneider Electric created the “Fonds Schneider Énergie Solidaire” (a dedicated mutual fund). Information sessions on this social welfare fund have been held on a regular basis, providing the opportunity for employees in France to learn about and contribute to the ideas and actions of Schneider Electric outlined in its Access to Energy program. Investment in this fund has reached EUR16.8 million, thereby enabling 5,300 employees to take part in social welfare projects in France and abroad which have been developed as part of the Access to Energy program. company and its employees. To that purpose, Schneider Electric respects the individual right of its employees to freely join, participate in or quit labor organizations to assert and defend their interests. Subsequently, Schneider Electric guarantees that any employee wishing to do so shall be protected against any internal measure limiting his or her freedom of association such as discrimination of any kind, pay loss or dismissal. Schneider Electric also recognizes the importance of dialog with freely appointed employee representatives, employee representative bodies (such as Works Councils or employee forums) or organizations (like trade unions), and supports collective bargaining. Due diligence and results Social dialog is managed at country level by the HR leaders with the employee representative bodies and unions, and at transnational level with the European Works Council which covers most of geographical Europe. Social dialog is also taken into consideration by our social reporting system, where local HR teams report on the presence of trade unions, works councils and Health and Safety Committees every year. In 2014, while changing the corporate form of its parent company, Schneider Electric SA, into a European Company ( Société européenne ), Schneider Electric negotiated an agreement with employee representatives of European countries about the involvement of these countries’ employees in the company’s decision- making processes, thus reaffirming its commitment to promoting social dialog at international level.

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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