SCH2017_DRF_EN_Livre.indb

2

Sustainable development Green and responsible growth driving economic performance

Active Energy Management Context

decarbonized and digitized future, this type of integrated thinking and action is essential. It starts at the strategic level, requires tight internal coordination, and needs to be underpinned by enterprise data collection, analysis and sharing. Offerings Schneider Electric delivers end-to-end services and software that enable companies to design forward-thinking energy and sustainability programs, and deliver results – a portfolio built through strong organic and external growth: E Strategic energy procurement; E Energy efficiency consulting; E Energy and sustainability certification and compliance; E Corporate renewable energy programs; E Energy and sustainability strategy development; E EcoStruxure ™ Resource Advisor: Integrated energy and sustainability software platform. Buying energy smarter. Using energy efficiently. Operating more sustainably. All worthy pursuits on their own, but much more effective when combined through Active Energy Management. As resource and climate concerns grow, integrated energy and carbon management gives companies a holistic view of their performance, and access to the data they need to refine their strategies and drive innovation.

Many companies face internal barriers such as siloed departments or expertise that prevent them from reaching their energy and sustainability potential – a notable gap given that businesses spend more than USD450 billion on efficiency and sustainability initiatives each year. In fact, 44% of industry professionals who responded to a recent survey indicated that “lack of coordinated planning” was a challenge. The problem was even more pointed at the C-level, with 80% of executives citing coordination as one of the main obstacles to implementing energy and sustainability projects (1) . To clear these hurdles, organizations are starting to integrate how they buy and use energy with sustainability initiatives, an approach that maximizes investments, delivers greater returns and builds more robust, via ble operations. At Schneider Electric, looking at energy and sustainability as a cohesive strategy is called Active Energy Management. Examples of Active Energy Management include implementing demand response programs based on real-time price or carbon signals; combining distributed energy resources and efficiency technology to cut costs, reach CO2-reduction goals, and increase resiliency; and using utility records to validate compliance with industry standards and regulatory requirements. Given the rapid evolution of the energy landscape, and push to a more decentralized, Duty of vigilance plan In alignment with the Group strategy and vision, and to comply with the 2017-French law concerning the Corporate Duty of Vigilance, Schneider Electric is committed to implementing a vigilance plan containing the reasonable vigilance measures to allow for risk identification and for the prevention of severe violations of human rights and fundamental freedoms, serious bodily injury, environmental damage, or health and safety risks resulting directly or indirectly from the operations of the company and of the companies it controls, as well as from the operations of the subcontractors or suppliers with whom it maintains an established commercial relationship, when such operations derive from this relationship. A dedicated internal governance body has been implemented in May 2017. Called the Duty of Vigilance Committee, it oversees the plan’s monitoring – development and deployment – and meets on a regular basis (monthly basis in 2017 and every 2 months from 2018) to define the measures to take and review those already taken. It is co-chaired by the Sustainability SVP, the Procurement SVP, and the Safety, Environment, and Real Estate SVP. A first introduction to the duty of vigilance plan was given to the French and European employee representative bodies at the end of last year; we plan to repeat this in the coming months to share the finalized plan and the findings of the initiatives launched. 2.3

To be a responsible company all along its value chain, the Schneider Electric plan addresses the following 3 pillars:

E pillar 1: Suppliers & Subcontractors; E pillar 2: Company & Subsidiaries; E pillar 3: Customers.

On the first pillar, Schneider Electric introduced a new program at the end of 2017 to identify and manage its suppliers under vigilance. Targeting both tier 1 and tier 2 suppliers, this new program will enable the Company to identify suppliers that are most exposed to risks in terms of labor practices, health and safety conditions, environment protection, and business integrity, based on their geographic situation and type of activity. To do so, and to step up accountability in its supply chain, particularly in terms of the suppliers most exposed to risks such as human rights abuses or environmental issues, Schneider Electric has joined in January 2018 the Responsible Business Alliance (RBA), a non-profit coalition of more than 120 companies from the electronic, retail, automobile and leisure industries. The alliance’s aim is to promote and guarantee high standards in human rights, safety and security, environmental protection and business ethics. The suppliers risk mapping has been performed early 2018 with a recognized third-party expert mapping tool available through the

(1) Source: The State of Corporate Energy & Sustainability Programs 2018, research report by GreenBiz Research for Schneider Electric.

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

84