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Sustainable development Green and responsible growth driving economic performance

Energy efficiency Context

Schneider Electric’s 6 EcoStruxure ™ domains are: E EcoStruxure ™ Building: energy efficiency and security solutions and services for high-performance buildings, smart home energy management systems. Enables users to gain valuable insights from building data to make building environments smarter, more secure and comfortable and up to 30% more efficient; E EcoStruxure ™ Power: safe, highly available, and energy-efficient electrical distribution systems, for low and medium voltage architectures. The IoT-enabled power management solutions enhance connectivity, real-time operational reliability, and smart analytics to provide customers with peace of mind and financial benefits; E EcoStruxure ™ IT: ensures that data centers’ physical infrastructure can adapt quickly to support both future demand driven by IoT and growth – in the cloud and at the edge – without ever compromising availability or operational efficiency; E EcoStruxure ™ Machine: enable smart machines at all levels, combining products and software packages into automation solutions for OEMs and machine builders. Bringing benefits throughout the machine life cycle, EcoStruxure ™ Machine enables to achieve greater operational efficiency; E EcoStruxure ™ Plant: helps turn industrial automation into a profit engine of customers’ businesses. The value-focused IIoT technology and expertise drive profitable efficiency, reliability and safety; E EcoStruxure ™ Grid: provide network operators with the efficiency and flexibility to cope with today’s challenges, including improving reliability, optimizing asset management, managing demand, integrating distributed generation, and meeting environmental goals. Manage the efficiency of the grid during the energy transition Context The smart grid combines electricity and IT infrastructure to integrate and inter-connect all users (producers, operators, marketing specialists, consumers, etc.) to efficiently balance supply and demand in an increasingly complex network. Today’s grid is undergoing rapid change, where the traditional centralized generation model is giving way to a world of distributed resources. Renewable energy sources are enjoying rapid growth, and begin to have a clear impact on the grid. Increasing levels of decentralized and intermittent generation coupled with demand side flexibility and the continued drive for energy efficiency is changing the energy landscape and the digitization of the demand side enables increased levels of flexibility to manage the grid. Microgrids, electric vehicles and energy storage continue their rollout on end-user grids leading to an increasingly decentralized grid management. This situation makes the smart grid more essential than ever, and is driving development of specific applications in every region.

Energy efficiency means using less energy for equivalent performance or service. This reduces energy consumption and carbon emissions and saves money while contributing to energy security and creating jobs. In its World Energy Outlook 2016, the IEA estimates that improved energy efficiency slows down the growth of total final energy consumption, mainly thanks to efficiency gains in industry, but 70% of the world’s energy use still takes place outside of any efficiency performance requirements and, for new buildings, two-thirds of the energy consumption still has no codes or standards applied to it. Digital technologies and IoT are now pervading every aspect of our daily lives and business operations, bringing new levels of productivity, flexibility and energy efficiency. The increasing energy use of the digital economy also requires a reinvented energy system and stresses the need for an integrated energy, efficiency and sustainability strategy. Offerings Schneider Electric promotes “active” energy efficiency, which consists of optimizing the entire energy cycle through active energy control products, systems, services and software. These are mostly used to optimize the energy efficiency of utilities and industrial processes and to improve energy performance and comfort in industrial facilities, commercial buildings and homes – which together represent more than 60% of total energy demand. Since active energy controls can help reduce energy usage by up to 30%, the impact on a country’s energy mix and energy bill is too significant to be ignored. Schneider Electric’s EcoStruxure ™ architecture framework enables the Group, its partners and end-user customers to develop scalable digital solutions that: E maximize energy efficiency and sustainability through smarter systems and real-time, data-driven decisions; E optimize asset availability and performance through predictive analytics and proactive maintenance; E enable smart, productive, and profitable operations through reduction of waste and downtime; E provide mobile insight and proactive risk-mitigation through simulation, situational awareness, and digitization; E foster open innovation and interoperability through development and partnerships with leading standards organizations and best-in-class technology leaders. EcoStruxure ™ is tailored to buildings, data centers, industry, and the grid – where Schneider Electric has decades of deep domain expertise and applied experience. EcoStruxure ™ solutions are deployable both on premise and in the cloud, with built-in cybersecurity in each of the innovation levels: connected products; edge control; and apps, analytics, and services.

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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