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Sustainable development Green and responsible growth driving economic performance

Due diligence and results Adapted processes

An ethical risk matrix was created in 2015 and deployed in all entities. Results are analyzed in order to support the implementation of action plans via the network of Principles of Responsibility Advisors, depending on the level of exposure which is calculated based on both internal and external risk factors. External risks are based on internationally recognized indexes on corruption, human rights abuses and environmental pollution by countries. Internal risks are based on the level of communication and implementation of the ethics & compliance program, and company policies. The broad risk categories cover business integrity, diversity, harassment, health and safety, the environment, and quality. 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. Driven by Group values, the Responsibility & Ethics Dynamics program forms the basis of common references and processes. Schneider Electric’s mission therefore takes its meaning from engaging with individuals and organizations in order to help them get the most from their energy from the perspective of sustainable and responsible development. Group policy A common frame of reference: Our Principles of Responsibility Our Principles of Responsibility is a 15-page document, published for the first time in 2002 and updated in 2009 and again in 2013, synthesizing the Group’s common commitments to its employees, partners, shareholders, the planet and society. The next update is scheduled for 2018. Our Principles of Responsibility do not claim to cover all ethical dilemmas, but rather serve as general guidelines to be adopted. They are complemented by global and local policies to provide a precise response to the specific legal and local practices, as well as sector policies (procurement, quality, environment, etc.). Our Principles of Responsibility were prepared in compliance with the 10 principles of the Global Compact of the United Nations, the Universal Declaration of Human Rights and standards issued by the International Labor Organization and the Organization for Economic Cooperation and Development. As a result, they address the issues related to respect for human rights, working conditions, protection of the environment and the anti-corruption principles. Today, Our Principles of Responsibility have been translated into 30 languages and sent to all Group employees. They are also accessible on the Group’s official website and intranet. In addition, a clause was added to employment contracts of new employees to ensure that they are aware of this document from the time they join Schneider Electric. Moreover, since 2015, managers have been asked to sign a letter of acknowledgment to comply with and promote Our Principles of Responsibility to their teams. Policies and directives Our Principles of Responsibility are complemented by global and local policies to provide a precise response to the specific legal and local practices, as well as sector policies (procurement, quality, environment, etc.). See p. 79.

The Responsibility & Ethics Dynamics program provides each employee with a method for asking the right questions and seeking out the right people according to 2 approaches: E a detailed questioning process to take the right steps in delicate situations where necessary. This may be broken down into 3 stages: 1. consult the special Intranet site for the program where Our Principles of Responsibility can be found along with all other related policies and directives, 2. contact one’s manager and/or a member of the department concerned (Legal, Financial, Human Resources (HR), Environment, etc.), 3. contact the Principles of Responsibility Advisor or the Compliance Officer for the operational entity or geographical area; E an alert process to guide employees towards the right bodies: 1. contact one’s manager, or 2. use existing internal departments (legal, financial, HR, environment, etc.), or 3. contact the Group Fraud Committee via the professional alert system (accessible via Internet or multilingual telephone line). Four tools accessible to employees for educational and prevention purposes The implementation of Our Principles of Responsibility is accompanied by a compulsory online training module updated in 2015, and training and awareness-raising actions which are organized on a regular basis, particularly for the functions and geographical areas which are the most exposed to ethical risks. E An intranet site accessible to all employees from the global intranet home page, providing all information on the program (process, teams, key contacts) and Our Principles of Responsibility document accompanied by the comprehensive policies that are related to it, as well as news on the program. E Frequently Asked Questions – FAQs. This tool was introduced following a collection of reports written by the managers after the program and Our Principles of Responsibility were presented to their teams. E An online training module, updated in 2015 with the active participation of members of the Executive Committee. Based on the MOOC methodology, this module comprises 4 chapters: 1) introduction to Our Principles of Responsibility and to the R&ED program,

2) integrity in business activities, 3) human rights in the workplace, 4) ethical management.

E Education kits for managers. This tool, first developed in 2014 and upgraded every year, presents ethical dilemma situations, gathered from employees whose professional experience has

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