SCH2017_DRF_EN_Livre.indb

2 Sustainable development

Schneider Electric’s commitment to environmental performance

E for the other functions: environmental managers or correspondents, in functions such as: Procurement, Finance, Insurance, Marketing, Industrialization, Security, Mergers and Acquisitions, Sustainable Development. Various governance bodies enable these communities of experts and leaders within the Environmental function to meet every month or every quarter, depending on the topics and entities, to ensure consistent adoption of Environment policies and standards throughout the Group. To implement these policies, Environment leaders coordinate a network of more than 600 managers responsible for the environmental management of sites, countries, product design and marketing. This network has access to a wide range of resources including directives, standards, policies, best practices, benchmarks, implementation guides, all of which are shared in dedicated intranet site and databases. Leading experts in various environmental fields (eco-design, Energy Efficiency, Circular Economy, CO 2 , etc.) are identified globally and annually a process recognizes those individuals who own a specific expertise the company is keen to maintain and grow. Such experts are named Edisons, and there are 8 specific domains where such Edisons were identified, one of them being Environment. Each year, an Edison Environment is expected to dedicate 10% of his/her time to lead a global initiative related to his/her expertise, such as development of an e-learning, a new standard, or an innovation. Over 2017, Schneider Electric has developed and reinforced its initiatives related to environmental excellence in offer eco-design, not only to comply with the latest changes in regulations ( e.g. new REACH article 33 interpretation) but also to support our businesses to match raising expectations from a sustainable perspective ( e.g. Green Building Certification such as LEED or BREEAM, Living Building Challenge). Schneider Electric therefore redesigned its Green Premium eco-label in 2017 to firstly better spell-out clear customer benefits, secondly better differentiate environmental value propositions per market segment (food & beverages, oil & gas, etc.), leveraging its complete offer portfolio with products, services and solutions for dedicated applications. This new program, designed and tested in 2017, is ready for roll-out. Description of risks and opportunities The Schneider Electric eco-design approach participates in reaching the UN Sustainable Development Goals (SDGs). It contributes to SDG 12 “Responsible consumption and production” through ‘beyond regulations’ requirements dealing with the health profile of our products, the optimization of resource consumption, superior serviceability (preventive maintenance, real-time tracking of consumption, etc.) thus enabling a more circular economy. It also supports SDG 9 “Industry, Innovation and Infrastructure” and SDG 13 “Climate action” by setting clear and quantifiable environmental 3.2

To educate all employees on environmental issues, and to give them the necessary skills, e-learning modules have been developed on topics such as the circular economy, CO 2 and eco-design. Additionally, an Environment Intranet site is accessible by all employees to inform them about our ongoing programs, best practices, results, goals and upcoming deadlines. On June 5 th ,2017 on UN World Environment Day, as each year for last 5 years, Schneider Electric organized its annual ‘Global Environment Day’ event involving tens of thousands of Group employees across hundreds of sites, inviting them to celebrate and to share innovations in the areas of CO 2 and the circular economy, both internal to the Group and external in association with local communities. The tagline of our Global Environment Day was “A Passion for Green Growth”, which summarizes how we see the environment at Schneider Electric. In 2017, environmental performance was also reported and discussed in various other instances: E quarterly reviews with Global Supply Chain leadership; E quarterly steering committees with Business Units, discussing progress on eco-design, the Green Premium eco-label and product environment stewardship initiatives; E bi-yearly review with Finance of climate bond progress, and of environmental provisions; E multiple ad hoc sessions and presentations in the Group Audit Committee, board of directors, Executive Committee, Human Resources committee, Sustainability Committee. targets at the early stage of each new product development project. Our eco-design approach is mandatory for all new offer development. It has been certified by UL Environment in compliance with IEC 62430. This enables risk avoidance, applying and even anticipating the strictest regulations and standards, making our offers already comply with numerous regulations and standards under development in Europe, the US or China. Throughout the life cycle of our offers, most constraints are integrated at the earliest stage of the design and development process to avoid disruption or trade-off to non-sustainable solutions. Such an approach opens opportunities to boost innovation and enable the circular economy. The systematic and systemic approach allows capitalization and continuous improvement of environmental performance. New alternatives are identified to reach the environmental targets by leveraging the IoT, challenging materials selection or manufacturing processes, optimizing logistics and providing new services throughout the product lifetime. It allows us, as leader in our sector, to push for more transparency and challenge the end-to-end supply chain of our industry. Technological opportunities: regulatory watch and anticipation of the restrictions on the use of certain substances stimulate a substitution program through the research and development of new materials (recycled, bio-sourced, compostable) or new technologies (more energy efficient, easier maintenance, easier to dismantle, etc.) to lower CO 2 impacts overall.

Environmental excellence in offer design and for customers

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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