SCH2017_DRF_EN_Livre.indb

2 Sustainable development

Schneider Electric’s commitment to environmental performance

REACH Regulation Since 2008, Schneider Electric has anticipated and modified the design of its products in order to comply with and go beyond REACH Regulation (EC 1907/2006). Schneider Electric has expanded the scope of application of this regulation to all its production in all countries in which the products are marketed. The REACH Schneider electric program is intended to: E ensure that substances used by Schneider Electric and its subsidiaries are registered and authorized for the applications in question, in accordance with regulations; E specify the information to be provided to customers about the presence and level of Substances of Very High Concern (SVHC) in Schneider Electric products; E perform the substitutions of SVHC that are listed in Annex XIV (marketing of these substances only with the authorization of the European Commission); even if those substances could be used in Schneider Electric products, the Group eco-design policy declares them as substances for substitution; E adapt the Safety Data Sheet management process based on REACH requirements. In 2017, Schneider Electric delivered new simplified and rationalized REACH tools and declaration processes to implement the European Court of Justice decision of September 10, 2015 in case C-106/14. Teams have been trained to implement the new REACH declaration process. The complete deployment is expected to address the full Schneider Product portfolio (350,000+ references) within 2 years. In addition in 2017, Schneider Electric continued its vast substitution plan to replace substances under the REACH authorization process. At the end of 2017, almost the entire Schneider Electric portfolio declared no substance above thresholds, and substitution plan is monitored monthly. The Substance Management programs are supported by a proactive collection of environmental declarations from material and component suppliers. In 2017, Schneider Electric collected c.90,000 environmental declarations from its suppliers. 3.3 Eco-efficient manufacturing Description of risks and opportunities In the context of Schneider Electric’s environmental strategy, the eco- efficient manufacturing of the products and solutions the Group offers to its customers is a major element in participating in the fight against climate change, reducing the growing scarcity of raw materials, and ensuring respect for and the protection of the health of those manufacturing its products and solutions. Environmental risks related to manufacturing include soil, water, and air contaminations. For instance, release of hazardous substances in natural ecosystems or public infrastructure can be harmful for health, disrupt continuity of operations, or tarnish reputations. On the other hand, resource intensive processes increase the cost of goods sold (COGS), and decrease competitiveness. In a nutshell, lean and clean operations help avoid risks. Positive opportunities or strong eco-efficient manufacturing practices are many, based on lean, agile, efficient processes, as for

Schneider Electric new REACH declaration process has been audited and validated by UL against EN 50 581 standard. RoHS Directive Since 2008, Schneider Electric has anticipated and modified the design of its products in order to comply with and go beyond RoHS Directive (2011/65/EU). Schneider Electric has expanded the scope of application of this directive to all its production in all countries in which the products are marketed. The RoHS Directive is intended to eliminate the use of certain hazardous substances in electrical and electronic equipment. By deciding to eliminate these substances from all its products, whether or not affected by the directive or sold on the European market, Schneider Electric has exceeded the directive’s requirements. New substances (4 phthalates) have now been incorporated in the RoHS regulation (entry into force in 2019) and modifications in our IT systems and processes have been carried out in order to take this evolution into account. In 2017, over 88% of Green Premium eligible turnover is made with RoHS compliant products. A special effort was made on products that entered the legal scope in mid-2017. In 2017 as well, 99,99% of RoHS China’s eligible turnover is made in compliance with this regulation. In 2017, as for REACH, the Schneider Electric RoHS declaration process has been audited and validated by UL against EN 50 581 standard. WEEE Directive Schneider Electric has for a long time been engaged in a process that protects the environment and the health of people in the treatment and recycling of its products at the end of the life cycle. In the context of the application of the Waste Electric and Electronic Equipment (WEEE) directive, Schneider Electric is implementing product identification and selection actions, establishing recycling streams and pricing the taxes to be applied in compliance with the regulations of each country in which products are sold. any industrial company. Leveraging our own energy management and resource efficient technologies is also a great opportunity for Schneider Electric to showcase the value addition of its offering in a real industrial context. Group policy We have a number of policies related to eco-efficiency, one of them is our overall Group environment policy, which encapsulates our key guiding principles in the field of environment, resource efficiency, climate change, etc. Regarding eco-efficient manufacturing, it is the Group’s goal to: E minimize the environmental impact of our facilities, especially by reducing the consumption of natural resources and the generation of waste and emissions related to Company activities;

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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