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Sustainable development Schneider Electric’s commitment to environmental performance

For Schneider Electric customers, Green Premium is a pledge of transparency, environmental responsibility, and reduced toxicity, in relation to stringent regulations such as RoHS and REACH. We surveyed more than 1,500 Customers over 8 countries and their feedback helped us identify strengths as much as areas for further development of the eco-label, which were defined in 2017 and are ready for roll-out. End of 2017, Schneider Electric has delivered 80.1% of product revenue with the Green Premium label, exceeding the target of 75%. This represents EUR11.1 billion in product sales. Product ecoDesign Way Since early 2015, the design teams working on new products and solutions have been committed to Schneider Electric’s systematic approach of eco-design called ecoDesign Way. This method is intended to measure the improvement in the environmental footprint of the products in all its offers over the entire life cycle of the products at the earliest stage. Dimensions considered at each new offer development, through ecoDesign Way, cover CO 2 , resource footprint, circularity, chemical substances, energy efficiency, etc. Schneider Electric’s climate bond of EUR300 million (issued in 2015) has been spent over the 2015-2017 period as per commitments, financing Research & Development projects to develop products with either lower-CO 2 content, longer lifespan, better energy efficiency performance, more ‘circular’, each contributing to fight climate change. In 2017, 100% of our new offers (> EUR300,000 budget) were designed according to our ecoDesign Way process. This achievement benefits our customers by helping them enjoy superior products, and achieve their own commitments of carbon neutrality, energy efficiency, circular economy or other . Materials and Substances Directive The Schneider Electric strategy for materials and substances used in products is reflected in a Schneider Electric internal directive, deployed globally, and based on the REACH regulation (EC 1907/2006), the RoHS Directive (2011/65/EU), the regulation on substances that weaken the ozone layer (EC 1005/2009), the fluorinated gases regulation (EC 517/2014), the ban on halogenated flame retardants in plastics and, finally, the increased use of recycled or bio-sources plastics and, more generally, the promotion of the use of non-fossil and recycled materials when pertinent. The ambition is to be closer to the market expectations, to comply with the most stringent regulations and directives in terms of human and environment protection, and finally, to anticipate the obsolescence of materials or components to secure the supply chain. The Schneider Electric Materials and Substances Directive sustains and grows innovation in plastics and new materials in connection with the Ellen McArthur Foundation, and a number of other multi-stakeholder materials innovation initiatives. At the earliest stage of the ecoDesign Way, targets for recycled, reground and bio-sourced contents are specified accordingly.

Manufacturing process efficiency opportunities: for instance, integration of regrind or recycled products or by-products, optimization of transport packing. New solutions and business model opportunities: working closely with all players across the value chain from suppliers to customers to co-develop shared solutions to tackle waste allows innovations to support the circular economy. Services such as retrofit offers are good examples of new business models: Schneider Electric collects equipment containing SF 6 to process it responsibly and replace it with alternatives. Group policy The Schneider Electric policy on eco-design is organized around the following components: Green Premium eco-label, Product ecoDesign Way, Materials and Substances Directive, REACH Regulation, RoHS Directive, WEEE Directive. These policies and their applications in Schneider Electric, as much as their 2017 results, are summarized in the next section. In order to sustain and strengthen its commitment to transparency, strong product environmental credentials, and the proactive provision of full environmental information in a digital manner, for several years Schneider Electric has been developing Green Premium, a unique eco-label, based on clearly defined criteria, either in terms of environmental regulations or international standards. These criteria include ad hoc environmental information on its products that can be accessed online. A product is declared Green Premium if it meets the following 4 criteria: E it complies with the European RoHS directive; E it has information concerning the presence of Substances of Very High Concern (SVHC) under the European REACH regulation and refers to the most recent list; E it has a Product Environmental Profile (PEP) providing a material assessment, a recyclability rate and the calculation of environmental impacts including the consumption of raw materials and energy, the carbon footprint and damage to the ozone layer; this environmental profile is established over the entire product life cycle, from manufacture to the end-of-life, against 27 dimensions; E it has a guide that identifies and locates the sub-assemblies or components that require a particular recycling process, referred to as the “End-of-Life Instruction” (EoLI). Green Premium is an integral part of the design and development process of new Schneider Electric offers. Green Premium is the visible arm of Schneider Electric’s eco-design approach. Through knowledge of the substances in its offerings and evaluation of environmental impacts, Green Premium allows Schneider Electric to target and engage improvements in the environmental footprint of its future offerings. Due diligence and results Green Premium eco-label

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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