SCH2017_DRF_EN_Livre.indb

2 Sustainable development

Schneider Electric’s commitment to environmental performance

Other risks and opportunities from a relevant environmental strategy could also be detailed, such as Employer Value Proposition and attractiveness, reputation with analysts, governments, investors, NGO circles, and overall brand image. Environment strategy 2020 and its pillars Schneider Electric has defined a clear 2020 environmental strategy defining 15 priority initiatives and related goals across 6 environmental domains, fully aligned and supporting our company program and our sustainable growth strategy. At Schneider Electric, environmental considerations go far beyond our efforts towards the sustained reduction of our footprint on the planet, as they embed everything we do, from strategy, R&D, to the value propositions to customers. The 2020 Schneider Electric environmental strategy was defined in 2015, introduced in previous annual reports, and is structured around 6 main pillars: CO 2 neutrality strategy in our extended supply chain, resource efficient supply chain, “Waste as Worth” mindset, environmental performance delivered to customers, circular business models and innovations, increasingly stronger environmental governance (suppliers, compliance, products, etc.) Briefly introducing the 6 domains of our environmental strategy, our 2017 achievements and key aspirations: 1) CO 2 and resources strategy towards a climate-compatible and planet-compatible growth path. We have defined a CO 2 strategy and roadmap (with 2035 and 2050 time horizons), towards “COP21 and +2°C compatibility” with a sustained and step-by-step decoupling of our growth journey and supply chain transformations from climate implications. We have committed to set Science-Based Targets. Furthermore, through our efforts in R&D and eco-design, we have designed a broad range of products, services, and solutions bringing significant CO 2 gains to our customers, thus avoiding millions of tons of CO 2 emissions at their ends, in addition to our own supply chain efforts. As part of our 2030 commitment to carbon neutrality in our extended supply chain, we became RE100 members in 2017 and committed to work towards 100% renewable electricity in our mix by 2030. Last, we quantified CO 2 avoided by our offers at our customers’ end, which allows us to take 2018-2020 commitments of 100 million tons CO 2 avoided in the period; 2) building an increasingly Greener Supply Chain. Resource efficiency and productivity are our mottos. In 2017 we updated the mapping of our end-to-end resource footprint (copper and other metals, plastics, packaging, wood, gases, other resources), and have an up-to-date understanding of the major impacts and stakes, and areas for further resource decoupling are prioritized. The present report contains specific sections about our initiatives and achievements towards energy efficiency, reduction of transportation and manufacturing externalities, adoption of green Best Available Techniques in

our plants and distribution centers. Additionally, key Schneider Electric processes embed environmental considerations, making environmental performance and resource productivity key dimensions of major decisions ( e.g. through our SPS/ Schneider Production System framework). On the energy front, leveraging our own solutions and expertise, our sites delivered a 10.3% improvement in their energy efficiency compared to 2014, which is in line with our ambitions set for the 3 year period, and follows many years of prior energy efficiency improvements (42% since 2005); 3) considering Waste as Worth. We drive an “obsession towards zero waste” across our facilities globally, focusing on the largest waste-emitting sites. Waste minimization, reuse, recycling, and landfill avoidance have become an integral part of our plants and distribution centers’ performance scorecards, and we see constant progress. This year, we are proud to have 130 plants receiving the “Towards Zero Waste to Landfill” designation. We are successfully diverting thousands of tons of waste from landfill, year after year, and since 2014, have seen a strong increase (+7 pt) in our waste recovery ratio globally, now at 94%. Our efforts in the areas of eco-design and industrialization also add to our ability to generate less waste and be smarter with our resource use; 4) promoting Green attributes and value-addition to our customers, and our Green Premium ™ eco-label. A growing share of our customers is increasingly valuing our offers’ environmental credentials, and keen to quantify their environmental ( e.g. kWh, CO 2 , water) benefits at their end. Towards this goal, Schneider Electric has been investing significant resources for many years to design and implement an innovative eco-label, Green Premium ™ , which by end 2017 covered more than EUR11,1 billion (which is 80.1%) of our product-based turnover. This label benefited in 2017 from a further set of innovations, such as new features of our MySchneiderApp with increasingly easy 24/7 access to digitized environmental information (REACH, RoHS, Product Environment Profile/PEP, End-of-Life Instructions/EoLI). We also achieved UL (Underwriters Laboratories) certification of our underlying eco- design processes against relevant ISO norms. Quantification of CO 2 gains for large projects met the target of 100% set in 2017; 5) implementing a Circular Economy in a variety of ways for our customers’ satisfaction. Schneider Electric circularity expresses itself in many ways. We again grew our field services and retrofit (EcoFit ™ ) revenues in 2017. Such services help prolong our products’ lifetime, and this helps our customers enjoy energy management and automation services using fewer resources, ‘Doing more with less’. We also grow our services towards the management of our products’ end-of-life, for low and medium-voltage equipment, or UPS (Uninterrupted Power Supply) systems, for instance. We see circularity as based on common sense, like an extraordinary magnifying

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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