A clear vision for the future

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A clear vision for the future
Schneider Sustainability Report
2017 – 2018

                                  A clear vision for the future

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A clear vision for the future
CONTENTS

3 • INTRODUCTION: OUR MISSION
The digital transformation of energy management and automation is
our mission. As our CEO, Jean-Pascal Tricoire says, “When it comes to
climate change, I’m neither an optimist nor a pessimist. I’m an activist.”

9 • SUSTAINABLE SOLUTIONS
We believe meaningful action is the only path to a sustainable world.
Discover how we use EcoStruxure™ innovation and open collaboration
to create efficient, effective, green solutions for our customers.

17 • OUR CUSTOMERS
Across buildings, data centers, industry, and infrastructure, we’re equipping
the world with connected solutions that increase operational and energy
efficiency — and make sustainability a reality. See the results.

22 • OUR PEOPLE
It takes great people to power our sustainability efforts and our company.
We offer a learning-focused, inclusive workplace that fosters innovation
and fuels professional development. Learn more about our shared,
meaningful purpose.

28 • OUTREACH AND INITIATIVES
Today, 1.1 billion people lack access to electricity. As we work to reduce
the energy gap and address fuel poverty, we must do so responsibly.
Learn how we’re innovating to solve this energy paradox.

36 • COMPANY PERFORMANCE
We launched more than 100 new products, continued to optimize
our portfolio, and delivered growth for shareholders. See how
Schneider Electric performed in 2017.

44 • LOOKING AHEAD
We’re taking proactive steps toward co-creating a sustainable future with
immediate and short- and long-term sustainability targets. See what’s next.     ON THE COVER: Sustainability is driving growth in Shenzhen, China's greenest city.

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A clear vision for the future
CHAPTER 1

INTRODUCTION:
OUR MISSION
                 Welcome from the CEO

                 At Schneider Electric, sustainability is part of everything we do — every decision, every innovation, and every
                 initiative. For us, sustainability extends far beyond a vague hope for a cleaner planet. We believe that access to
                 energy is a fundamental right, and therefore a truly relevant vision for sustainability must take into account human
                 rights, ethics, and health and equity concerns.

                 The challenge of our time
                 As we once again provide this report on our sustainability efforts, we’re reminded of the urgency of the climate
                 crisis and inspired by those who, together, are rising to meet the challenge head on. Two years ago, the Paris
                 Climate Agreement gave us all a clearer understanding of what’s at stake. Limiting global temperature rise
                 this century to less than 2 °C above pre-industrial levels is essential if we are to avoid widespread, disastrous
                 ecological problems.

                 The path to a healthier planet
                 We believe that concrete, meaningful action is the only successful path to address climate change and create
                 a heathier world. That is what this report is about. Each year, our Schneider Sustainability Report shows how
                 we’re taking steps to ensure our own sustainability; how we’re empowering our people; how we’re delivering
                 sustainable innovations to the world; and how we’re supporting the sustainable development of others through                 We believe climate change can
                 outreach and initiatives.                                                                                                    be overcome through innovation
                                                                                                                                              and collaboration. But the world
                 Co-creating a sustainable future
                                                                                                                                              must be proactive. We must
                 We also believe that sustainability is business — a core pillar for any successful company. This is because,
                                                                                                                                              act now. We must co-create a
                 in working for a more sustainable world, we not only ensure a healthier planet for future generations, we also
                 promote innovation and prosperity here and now. Because Life Is On™ when life is powered and digital, we are                 sustainable future.
                 empowering our partners and customers to accelerate the transition to a sustainable future in buildings, industry,
                 data centers, and the grid. As I have said before, when it comes to the climate, I’m neither an optimist nor a
                 pessimist. I’m an activist. At Schneider, we’ll continue to actively participate in all useful initiatives to increase the               JEAN-PASCAL TRICOIRE,
                 low-carbon approach to the world’s economy.                                                                                                    CHAIRMAN & CEO,
Follow us on:                                                                                                                                               SCHNEIDER ELECTRIC

@schneiderelec

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INTRODUCTION: OUR MISSION

                                                                                       The energy paradox
                                                                                        The energy equation exists
                                                                                        alongside a surprising reality,
                                                                                        what we call “the energy
                                                                                        paradox:”

Two global megatrends                                                                   We believe access to energy is
                                                                                        a basic human right, yet we all
                                                                                        must be mindful of the effects
Electrification and digitization are presenting the world with
                                                                                        of energy consumption on the
the opportunity to make energy more decarbonized and more
                                                                                        environment.
decentralized. The question is if we all will harness these
opportunities to create a healthier, sustainable world.                                 The world must find a way to
                                                                                        bring energy-poor populations
ELECTRIFICATION                       DIGITIZATION                                      access to energy while
                                                                                        simultaneously fighting climate
By 2040, consumption                                                                                                                           By 2050, energy consumption will increase by 50%.3
of electricity will increase          30 billion                                        change. Here, again, initiative
                                                                                        and proactive innovation are
                                                                                                                                               But 1.1 billion people currently lack access to electricity.4
by              1                     devices will be
   60%          .                     connected by 20202.                               the answer.

The energy
equation
Energy consumption and CO2
emissions will continue to increase
over the coming decades. The
                                       1.5x                                              ÷2                                            3x                                          1
                                                                                                                                                                                     IEA, World Energy Outlook 2016
solution is efficiency. We must          energy consumption                              CO2 emissions worldwide                        the world must become                      2
                                                                                                                                                                                     IHS, March 2016
leverage technological innovation        will grow by 50 percent.                        must be cut in half.                           3 times more efficient.                    3
                                                                                                                                                                                     Increase of global energy consumption 2014 –
                                                                                                                                                                                     2040 in New Policy Scenario extrapolated to 2050.
to use less energy, and to use the                                                                                                                                                   IEA, World Energy Outlook 2016
                                                                                                                                                                                   4
energy that we do consume more                                                                                                                                                       International Energy Agency, Energy Access
                                                                                                                                                                                     Outlook 2017 https://www.iea.org/publications/
intelligently.                                                                                                                                                                       freepublications/publication/weo-2017-special-re-
                                                                                                                                                                                     port-energy-access-outlook.html

                                      Note: Forecast for 2050 compared to 2009 levels
                                      Source: Intergovernmental Panel on Climate Change (IPCC); IEA 2014 – 2015, Schneider Internal Analysis

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INTRODUCTION: OUR MISSION

Sustainability at
Schneider Electric
With the challenges of climate change and the global megatrends made clear, the next steps also
become apparent: we must act; we must take responsibility; and we must begin with ourselves.
We are committed to providing innovative solutions that empower our own sustainability journey
and help the world to overcome the energy paradox. Together, we can balance our planet’s carbon
footprint with the irrefutable human right to quality energy.

In 2017, Schneider Electric was one of 120 companies placed on the Climate A List of CDP (formerly
Climate Disclosure Project) and is the only company in its industry to achieve an A rating for the
seventh year in a row. Looking forward, our climate-related goals include:

                    Reach the 21 new commitments of the 2018 – 2020 Schneider
                    Sustainability Impact statement; define a precise trajectory
                    respecting the 2 °C scenarios up to 2050; validate it via the
                                                                                                                                               100%                               2x
                    Science Based Targets initiative to which the company has                                                                   We will shift to 100%             We will double our
                    been a signatory since 2016; and increase the impact of the                                                                 renewable electricity.            energy productivity.
                    Schneider Electric internal carbon price.

                    Achieve carbon neutrality by reducing the carbon emissions of our
                    sites and those of our industrial ecosystem, including suppliers and
                    customers; quantify the CO2 emissions avoided by our customers                                                            2015 – 2017 Planet & Society
                    thanks to our offers; aim for 100% renewable electricity, 100%
                                                                                                                                              barometer achievements
                    recycled or certified packaging, and 100% recycled waste; and
                    double our energy productivity compared to 2005.
                                                                                                                                                                                CLIMATE & DEVELOPMENT
                                                                                                                                              CLIMATE                           (SUSTAINABILITY OFFERS)
                    On Scopes 1 and 2, reduce by more than 50% our CO2 emissions
                    in absolute value compared to 2015, in line with the guidelines of
                    the Science Based Targets1.
                                                                                                                                              10.3%                             168,400 tons
                                                                                                                                              CO2 savings from transportation    of CO2 avoided through maintenance,
                    1
                        Scope 1 are also referred to as Direct Green House Gases (GHG) and are defined as emissions from sources that                                            retrofit, and end-of-life services
                        are owned or controlled by the organization. Scope 2 are also referred to as Energy Indirect GHG and are defined as
                        emissions from consumption of purchased sources of energy generated upstream from the organization.

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INTRODUCTION: OUR MISSION

10 commitments for a sustainable future
At COP21 in 2015 we unveiled our 10 sustainability commitments. The goal of these pledges       UN Sustainable Development Goals
is to ensure that Schneider Electric’s entire ecosystem — from our own operations to those of
our suppliers, customers, and partners — becomes carbon neutral by 2030. With this in mind,     Schneider Electric aligns with the United Nation’s Sustainable
we have now renewed and strengthened our 10 sustainability commitments.                         Development Goals (SDGs), a universal call to action to end
                                                                                                poverty, protect the planet, and ensure that all people enjoy peace
                                                                                                and prosperity by 2030.
      Avoid the emission of 100               Reach 200 sites labeled
 01                                      06
      million metric tons of CO2              Toward Zero Waste to Landfill                      We’re committed to accomplish the 17 SDGs through our core
      on our customers’ end, thanks           by 2020 (2015 – 2020) and                         business and five sustainability megatrends: Climate, Circular
      to our offers (2018 – 2020).            recover 100% of                                   Economy, Ethics, Health & Equity, and Development.
                                              our industrial waste by
      Use 80% renewable                       2030 (2015 – 2030).
 02
      electricity by 2020 and
      100% by 2030; and continue              Reduce CO2 emissions from
                                         07
      to drive energy efficiency              the transport of our goods
      toward doubling our energy              by 3.5% per year (annually
      productivity in our sites over          since 2012).
      2005 – 2030 period.
                                         08
                                              Facilitate access to lighting
      Achieve 75% of our                      and communication with
 03
      turnover under the new                  low-carbon solutions for
      Green Premium™ program                  50 million underprivileged
      (2018 – 2020).                          people by 2025 (2009 – 2025).

      Avoid 100,000 metric                    Propose alternatives to the
 04                                      09
      tons of primary resource                use of SF6 gas by 2020
      consumption through                     (2015 – 2020) and eliminate
      ECOFIT,™ product recycling,             SF6 from our products by 2025
      and take-back programs                  (2015 – 2025).
      (2018 – 2020).
                                              Invest €10 billion in
                                        10
      Use 100% cardboard and                  innovation and R&D for
 05
      pallets for transport packing           sustainability in 10 years
      from recycled or certified               (2015 – 2025).
      sources by 2020 (Q4).

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INTRODUCTION: OUR MISSION

                                                       The Schneider Sustainability Impact guides our sustainability
                                                       efforts by making our goals clear. Formerly known as the Planet
                                                       & Society barometer, it reflects our holistic view of sustainability
                                                                                                                                                Environmental strategy
                                                       and how our efforts affect the planet, its people, our profit, and                        Decades ago, sustainability and environmental concerns emerged as
                                                       that of our customers. The Schneider Sustainability Impact is                            scientific studies began to uncover the harm being done to the planet
                                                       audited by a third party and our progress is published quarterly                         by development and industry. Some corporations reacted to this trend
                                                       at: schneider-electric.com                                                               by trying to demonstrate how they were working to use fewer resources
                                                                                                                                                or to offset their carbon footprint. Some organizations still operate in this
                                                                                                                                                manner, with sustainability and environmental responsibility viewed as
        CLIMATE             CIRCULAR ECONOMY             HEALTH & EQUITY                     ETHICS                   DEVELOPMENT
                                                                                                                                                “nice to haves” instead of the what they truly are: an engine for innovation.
                                                          medical incident per
                            200        sites labeled
                            toward zero waste
                                                       1  million hours worked      300        suppliers
                                                                                    under Human Rights &
                                                                                                                                                The reality is, good environmental strategy is good business strategy.
                            to landfill
                                                       95%        of employees
                                                                                    Environment vigilance
                                                                                    received specfic

                            100,000                    covered in the gender pay
                                                       equity commitment
                                                                                    on-site assessment

                            metric tons
                            of avoided primary
                                                                                    100%          of sales,
                                                                                    procurement, and finance
                                                                                                                                                  We value collaboration and partnership
                            resource consumption                                    employees trained every                                       because we believe that, together, we can
                                                                                    year on anti-corruption                                       transform the world’s buildings, industries,
                                                                                                                  350,000                         infrastructure, and data centers.
                                                                                                                  underprivileged people

100 million                                            100%          of countries
                                                                                                                  trained in energy
                                                                                                                  management
metric tons                                            have fully deployed our                                                                                                   XAVIER HOUOT,
avoided CO2 on our                                     Family Leave policy                                                                                               SENIOR VICE PRESIDENT,
customers’ end through
our offers
                                                                                                                  x4    turnover of out
                                                                                                                  Access to Energy program
                                                                                                                                                      GLOBAL SAFETY, ENVIRONMENT, REAL ESTATE,
                                                                                                                                                                           SCHNEIDER ELECTRIC
                                                       90%       of white-collar

80%                         100%                       workers have an individual
                                                       development plan                                           12K       volunteering
                            recycled packaging
renewable electricity                                                                                             days thanks to our

                                                       90%                          5 pts / 100                   VolunteerIn global platform
                                                                                                                                                 2015 – 2017
25%        increase in      75%                                   of employees
                                                       have access to a             increase in average score                                                         CLIMATE & DEVELOPMENT
turnover for our Energy &   of sales under our         comprehensive well-being     of ISO 26000 assessment                                      Planet &             (SUSTAINABILITY OFFERS)    CIRCULAR ECONOMY
                            new Green Premium          at work program              for our strategic suppliers
Sustainability Services
                            program                                                                                                              Society
10%        CO2 effciency                               70%      scored in our                                                                    barometer
                                                                                                                                                                      80.1%                      130
in transportation                                      Employee Engagement
                                                       Index
                                                                                                                                                 achievements
                                                                                                                                                                       of product revenue with    industrial sites labeled

                                                       100%           of workers
                                                       received 12 hours of
                                                                                                                                                                       Green Premium ecoLabel™    Towards Zero Waste to
                                                                                                                                                                                                  Landfill

                                                       learning in the year

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INTRODUCTION: OUR MISSION

Sustainability: the new pillar                                        Our six pillars of environmental strategy
of business growth                                                    At Schneider Electric, our environmental strategy extends our vision for
                                                                      sustainability into six principles that guide our operations and transform
Business growth and sustainability are not at odds. Quite the         our entire supply chain.
opposite — sustainability drives business growth. Leading
companies have recognized that environmental responsibility is a

                                                                                                                    02
boon to the bottom line. Renewable energy is now cheaper in many
areas than traditional brown power. The economy of the future
is low carbon, and companies that prepare for that future gain a
competitive advantage.
                                                                        01
                                                                        Deploying low-CO2,                          Building an
                                                                                                                                                   03
                                                                                                                                                   Considering
Becoming more sustainable makes good business sense, helping to         efficient strategies                        increasingly green             waste as worth
ensure long-term market viability, competitiveness, and resiliency.     for a planet-compatible                     supply chain
                                                                        growth path

                                                                        04                                          05                             06
                                                                        Promoting green                             Implementing a                 Strengthening
                                                                        attributes and                              circular economy               our environmental
                                                                        value-adds                                                                 governance

    Schneider Electric is among the more than 400 companies           #MoveTheDate
    working with the Science Based Targets initiative. We’re
                                                                      When it comes to environmental responsibility, incremental gains are no longer enough. We already consume
    currently at the second step of their four-step process —
                                                                      1.7 planets’ worth of resources per year1. And if we do nothing, we are bound to a 4 °C increase in global
    Commit, Develop, Submit, Announce — and look forward to
                                                                      temperature by 2100.
    sharing our targets publicly and doing our part to achieve the
    goals of the Paris Climate Agreement.                             In 2017, August 2 was Earth Overshoot Day. This means that in 2017, all of us who call Earth home used more
                                                                      from nature than our planet can renew in the whole year — and we did so in less than eight months. Overshoot
                                                                      happens through overfishing, overharvesting forests, and emitting more carbon dioxide into the atmosphere
                                                                      than forests can recycle into oxygen. We must #MoveTheDate.

                                                                      1 According to the Global Footprint Network
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CHAPTER 2

SUSTAINABLE                            Data is the new oil. It’s a new currency.

SOLUTIONS                              It’s a new way to monetize and create
                                       value in our businesses.

                                                                  EMMANUEL LAGARRIGUE,
                                                      EXECUTIVE VICE PRESIDENT, STRATEGY,
                                                                      SCHNEIDER ELECTRIC

                                       Data-driven sustainability                                                                                              T U R N DATA I N TO AC T I O N

                                       If the world is going to become more sustainable, we all need to know                                                             Connect
                                       how much energy we’re using and how to use energy more intelligently.                                                             Connect everything
                                       The convergence of the “internet of things” (IoT) and energy gives us a                                                           from the shop floor
                                                                                                                                                                         to the top floor.
                                       tremendous opportunity to tap the value of data to advance sustainability
                                       across buildings, data centers, industry, and infrastructure.                                                                     Collect
                                                                                                                                                                         Capture critical data
                                       Just as oil has delivered the economy of today, data is driving the
                                                                                                                                                                         at every level, from
                                       sustainable, low-carbon economy of tomorrow.                                                                                      sensor to cloud.

             90%                       Schneider Electric brings together energy management, automation,
                                       and software in one interoperable IoT architecture: EcoStruxure. We also
                                       partner with clients to help them buy energy more strategically, reduce
                                                                                                                                                                         Analyze
                                                                                                                                                                         Convert data into
                                                                                                                                                                         meaningful analytics.
                                       energy use, and operate more sustainably through our EcoStruxure
                                       Energy & Sustainability Services                                                                                                  Take action
                                                                                                                                                                         Drive action through
            of the data in the world   With these innovations, we empower our customers’ bold ideas — to both                                                            real-time information
            today was created over     achieve their sustainability goals and compete in today’s digital economy.                                                        and business logic.
            the past two years.1

                                       1
                                           IEA, Digitization & Energy 2017 http://www.iea.org/publications/freepublications/publication/DigitalizationandEnergy3.pdf

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SUSTAINABLE SOLUTIONS

EcoStruxure Innovations                                                                                                    Digitization is at the core of Schneider’s
                                                                                                                           DNA. We connect people and assets to
                                                                                                                           drive efficiency, safety, and reliability.
The EcoStruxure platform and architecture is our IoT-enabled solution that increases operational
and energy efficiency. EcoStruxure solutions have been deployed in 480,000+ sites, with the
support of 20,000+ system integrators and developers, connecting over 1.6 million assets under
                                                                                                                                                       HERVÉ COUREIL,
management through 40+ digital services.                                                                                EXECUTIVE VICE PRESIDENT, INFORMATION SYSTEMS,
                                                                                                                                                    SCHNEIDER ELECTRIC

EcoStruxure provides Innovation At Every Level:
                                         Level 3: Apps, Analytics & Services
                                        EcoStruxure leverages the cloud for computing power, aggregation of
                                        data and one data pool, machine learning models / new functionalities,
                                        and digital services. Thanks to analytics and artificial intelligence, data
                                        can take on meaning across a business (from shop floor to top floor),

                                                                                                                               and/or on premise
                                        allowing a company to scrutinize energy use, for example, and to make
                                        more targeted decisions about how to prioritize energy projects.

                                         Level 2: Edge Control
                                        Mission-critical environments need local control of devices at the edge
                                        and reliable access to data from operational technology (OT) devices.
                                        Advancements such as artificial intelligence enable analytics close to
                                        the source of data, reducing latency while protecting safety, productivity,
                                        and uptime.

                                                                                                                                                   IT
                                         Level 1: Connected Products
                                        The “internet of things” starts with the best things. EcoStruxure is based on
                                        smart, connected products with open integration to third-party products.
                                        Embedding sensors in devices opens a vast window to what’s happening
                                        both inside that product — from its energy efficiency to its performance
                                        and within its environment, too. Through internet connectivity, IoT enables
                                        all these connected “things” to talk to each other.

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SUSTAINABLE SOLUTIONS

Through six domains of expertise:
                                                                                                        The benefits of EcoStruxure solutions:
                     EcoStruxure Power
                     Safe, highly available, and energy-efficient electrical distribution systems       • Maximize energy efficiency and sustainability through
                     for low- and medium-voltage architectures to enhance connectivity,                   smarter systems and real-time, data-driven decisions
                     real-time operational reliability, and smart analytics.
                                                                                                        • Optimize asset availability and performance
                                                                                                          through predictive analytics and proactive maintenance
                     EcoStruxure Building
                     From design, through integration, to commissioning, EcoStruxure Building           • Enable smart, productive, and profitable operations
                     brings best-in-class engineering efficiency to buildings, combined with              through the reduction of waste and downtime
                     asset and energy performance services.
                                                                                                        • Leverage mobile insights and proactive risk-mitigation
                                                                                                          through simulation, situational awareness, and digitization
                     EcoStruxure Grid
                     Seamless local production of distributed energy resources and integration          • Lower CapEx and OpEx across the digital life cycle by
                     at the grid edge, bridging demand and supply via energy flexibility based             using “digital twin” capabilities to design, build, operate,
                     on analytics and increasing grid efficiency for sustainable networks.                and maintain systems and infrastructure

                     EcoStruxure IT
                     Connected products and remote, digital services to ensure that data center
                                                                                                    Discover how EcoStruxure delivers efficiency and sustainability for our customers
                     physical infrastructure can adapt quickly to support both future demand
                                                                                                    (See Page 17.).
                     driven by IoT and growth — in the cloud and at the edge — without ever
                     compromising availability or operational efficiency.

                     EcoStruxure Machine
                     Innovative machine solutions and smart automation technologies for safer,              A transformative platform that changes the core way
                     connected, flexible, and more efficient machines.                                       that data centers are monitored and managed.

                                                                                                                                —INTERNATIONAL DATA CORPORATION, 2017
                     EcoStruxure Plant
                     IoT-enabled, future-proof solutions for improved operational profitability in
                     a measurable, safe, and sustainable way.

                                                                                                                                                                       sdreport.se.com • 11
SUSTAINABLE SOLUTIONS

     ES S AT A G L A N C E
                                                                                                                                                         • Strategic sourcing

     $30 billion                                          EcoStruxure Energy &                                                             BUY ENERGY
                                                                                                                                           SMARTER
                                                                                                                                                         • Risk-management
                                                                                                                                                         • Rate analysis
     managed energy spend
                                                          Sustainability Services                                                                        • Market intelligence
                                                                                                                                                         • Energy budgets
     650,000                                              Through EcoStruxure Energy & Sustainability Services (ESS),
     utility invoices collected                                                                                                                          • Energy efficiency consulting
     and reviewed monthly                                 Schneider Electric helps clients design a strategy, deliver efficiency           REDUCE        • Remote energy monitoring
                                                          in their facilities, and sustain results over time through long-term             ENERGY USE
                                                                                                                                                         • Data collection
     40 million                                           partnerships.                                                                                    and management
     metric tons of CO2 managed                           As an unbiased, independent consultant, we work with clients in more
                                                          than 100 countries — from regional companies to the world’s largest                            • Sustainability strategy

     2,000+                                               corporations.
                                                                                                                                           OPERATE
                                                                                                                                                         • Climate change compliance
                                                                                                                                                         • Sustainability reporting
     megawatts                                                                                                                             SUSTAINABLY
                                                                                                                                                         • Sustainable operations
     in renewable energy
                                                                                                                                                         • Water and waste optimization
     transactions (power purchase
     agreements) in 2017                                                                                                                                 • Renewables and cleantech

                                                          ESS’s impact for our customers
                                                                                                  AEG                                                                      Whirlpool
                                                                                                  The right tools and data make AEG®                                       Data and expert support are
                 55%                                                                              a more profitable and sustainable
                                                                                                  company.
                                                                                                                                                                           helping Whirlpool® achieve its
                                                                                                                                                                           sustainability strategy.

                                                                                                  Results:                                                                 Results:
                                                                                                  • Visibility to 53 different types of                                    • Three plants achieved
of companies rank “lack of                                                                          data streams across 59 facilities in                                     zero-waste-to-landfill
organizational alignment” as
                                                                                                    one central platform                                                   • Projected to save more than
the top factor preventing them
                                                                                                  • $3 million+ savings since                                                $1 million over the next three
from reaching their energy and
sustainability goals.1                                                                              implementation                                                           years through corrugated
                                                                                                  • 53% of worldwide waste                                                   cardboard recycling
1
                                                                                                    diverted from landfill
    Based on a recent internal survey of clients at the
    Energy & Sustainability Perspectives Summit.                                                  • 14% reduction in GHG
                                                                                                    emissions from 2010 baseline

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SUSTAINABLE SOLUTIONS

                                                                                                                                                         H I G H LI G H T S:
                                                                                                                                                         S C H N EI D ER EL EC T R I C
Research & Development                                                                                                                                   R& D I N 2017

                                                                                                                                                         16,250          patents
Digital innovation is really about solving real                                                                                                          or patent applications
customer problems. To do so, you need
to have an open ecosystem of technology
partners, system integrators, customers,
                                                                                                                                                         670 new patent
                                                                                                                                                         assets in 2017
startups, and universities to accelerate and
scale innovation.
                                                                                                                                                         20+ digital services
                                                                                                                                                         in development for 2018
                                  CYRIL PERDUCAT,
                        EXECUTIVE VICE PRESIDENT,
                   IoT & DIGITAL TRANSFORMATION,
                              SCHNEIDER ELECTRIC
                                                                                                                                                         5% of sales
                                                                                                                                                         devoted to R&D

Empowered by more than 8,000 research and development engineers
worldwide, we bring bold ideas to life by developing connected, efficient,
                                                                              Six digital foundations are driving
and sustainable products and solutions.                                       our success in the digital space:
Working together is the only way to fuel and advance digital innovation, so   1. One IoT-ready architecture and platform, EcoStruxure
we’ve built an ecosystem that comprises customers, system integrators,
                                                                                                                                                         2015 – 2017
                                                                              2. Historical leadership at the edge, where operational technology
startups, and technology partners.                                               and IT can converge securely to deliver fast, accurate intelligence
                                                                                                                                                         Planet & Society
                                                                                 at the edge                                                             barometer achievements
                                                                              3. Digital life-cycle management, meaning that we apply IoT
                                                                                                                                                         CIRCULAR ECONOMY
The Aster Capital Fund                                                           advancements to drive down cost and complexity across both
                                                                                                                                                                          of products in
                                                                                 CapEx and OpEx stages
                                                                                                                                                                          R&D designed
We invest in innovative startups through the Aster Capital Fund, a leading    4. Deep domain and segment expertise, which enables us to
venture capital firm that specializes in the energy, mobility, and industry
fields. This venture capital activity has supported over 55 early-stage
                                                                                 advance technology that solves specific customer problems
                                                                              5. A robust, active digital services portfolio, which amplifies the value
                                                                                                                                                         100%             with Schneider
                                                                                                                                                                          ecoDesign Way™

companies since its inception.                                                   we offer customers through services such as Resource Advisor
                                                                                 and Asset Advisor
In 2017, Aster supported the design and activation of a business incubation   6. An open partner ecosystem, which allows us to scale and
model to bring additional innovation and growth to Schneider Electric. This      accelerate each customer’s digital journey quickly
allows employees to propose new ideas, setting the foundation for growth
in new and critical areas.
                                                                                                                                                                      sdreport.se.com • 13
SUSTAINABLE SOLUTIONS

                                                                  H I G H LI G H T: ST R AT EG I C
It’s amazing to see the solution [WaterForce                      D I G I TA L A L LI A N C ES
SCADAfarm] that Schneider has built and
what it can do for us as a society.

                                                                  Microsoft ® and Schneider create
                                                                  commercial IoT solutions in the
                                SATYA NADELLA,                    areas of energy management
                               CEO, MICROSOFT,
                                                                  and automation, marrying
     AT THE 2017 MICROSOFT INSPIRE CONFERENCE
                                                                  Microsoft’s secure, trusted cloud
                                                                  capabilities and Schneider’s OT
                                                                  domain expertise.

                                                                  Schneider and Cisco® develop
                                                                  advanced automation architectures
                                                                  across end-markets, merging          Digital Services Factory:
                                                                  Schneider’s operational technology
                                                                  leadership and Cisco’s world-class   speeding up innovation
                                                                  knowledge of networking and
                                                                                                       An accelerated development life cycle is essential for helping customers
                                                                  communication solutions.
                                                                                                       become more sustainable in today’s digital economy. That’s the goal
                                                                                                       of our Digital Services Factory. The DSF is organized to accelerate the
                                                                                                       creation of new digital services and connected products within
                                                                                                       Schneider Electric™ businesses.
Co-innovating with digital alliance partners                      With funding from the U.S.
                                                                  Department of Energy, Schneider      DSF capitalizes on the following expertise of our IoT & Digital Offers
                                                                  and Intel™ research, develop,        organization:
With our network of digital technology leaders, we co-innovate    and commercialize silicon-based
solutions that:                                                   cyber security solutions for the     • Pervasive sensing
                                                                  electrical grid.                     • Cyber security
• Respond effectively and quickly to market trends and customer                                        • Device intelligence
  needs                                                                                                • Analytics
• Innovate in a way that benefits the bottom line for business                                          • Digital services
• Leverage technology advancements such as sensing, mobility,     We’re working with Accenture to
                                                                  cut development time to market by    • Mission-critical control at the edge
  cloud, analytics, and cyber security
                                                                  80%, so customers gain improved
                                                                  efficiency, sustainability, and
                                                                  productivity.

14 • sdreport.se.com
SUSTAINABLE SOLUTIONS

Energy University                                                       Supply Chain
Energy University™ is an online training program that offers more       Schneider Electric works with            • 5 pts / 100 increase in average
than 200 free, vendor-neutral e-learning courses in 13 languages.       sectors that account for the majority      score of ISO 26000 assessments    S U PP LY C H A I N
Its purpose is to improve careers and help companies improve            of global energy consumption and           for our strategic suppliers       AT A G L A N C E
efficiency and sustainability.                                          CO2. Therefore, we are especially        • 300 suppliers under Human
                                                                        committed to making sure our own           Rights & Environment vigilance
                                                                        solutions help reduce energy use
                                                                        and CO2 emissions — from design
                                                                                                                   received specific on-site
                                                                                                                   assessment
                                                                                                                                                     207 factories in
                                                                        to manufacturing to shipping and         • 100% of sales, procurement, and   44 countries
                                                                        deployment to products’ end-of-life.       finance employees trained every
                                                                                                                   year on anti-corruption                  distribution
                                                                        Our new Schneider Sustainability                                             98     centers
                                                                        Impact for 2018 – 2020 includes the
                                                                        following goals:
                                                                                                                                                     86,000           employees

                                                                        We hold really high standards … not                                          24,000 suppliers
                                                                        only for ourselves, but also our suppliers.

                                                       Professional
                                                                        We think of our suppliers as an
                                                                                                                                                     €11 B in purchases
73,077                  115,242                28      Energy Manager
                                                                        extension of our supply chain.
total registrations      courses taken         certifications awarded
                                               in 2017                                           ANNETTE CLAYTON,
                                                                                                                                                     150,000
                                                                             EXECUTIVE VICE PRESIDENT, SUPPLY CHAIN                                  order lines per day
Top countries for       Top countries for      Top countries for                   AND NORTH AMERICA OPERATIONS,
registrations:          completions:           Professional Energy
                                                                                                SCHNEIDER ELECTRIC
1. United States        1. United States       Manager certifications:                                                                                       of the Gartner ®
2. Brazil               2. Egypt               1. United States                                                                                      #7     Top 10 Supply Chain
3. Egypt                3. India               2. Saudi Arabia                                                                                              Organizations for 2017
4. Mexico               4. Mexico              3. United Kingdom          2015 – 2017
                                                                                                   CLIMATE                  ETHICS
5. India                5. Brazil              4. Australia               Planet & Society                                                                                  ®
                                                                                                                                                         of the Gartner
                                               5. Lebanon
                                                                          barometer
                                                                                                  10.3%                     87.9%                    #17 Supply  Chain
                                                                          achievements                                                                        Top 25 of 2017
675,000                 1 million                                                                  CO2 savings from
                                                                                                   transportation
                                                                                                                            of our strategic
                                                                                                                            suppliers embrace
registered users        courses completed                                                                                   ISO 26000 guidelines
since inception         since inception

                                                                                                                                                                   sdreport.se.com • 15
SUSTAINABLE SOLUTIONS

 2 017 S U P P LY C H A I N
                                                                                                         Social, environmental, and ethical responsibility
 H I G H LI G H T S
                                                                                                         for our upstream supply has been one of our
                                                                                                         key initiatives. Over the last several years, we
 358 on-site audits that                                                                                 have led efforts such as ISO 26000 and conflict
                                                                                                         minerals tracking and contributed to Green
 included sustainability criteria
                                                                                                         Premium and hazardous material compliance.

 2,400       kilotons of
                                                                                                                                                        DK SINGH,
 goods shipped                                                                                                                         CHIEF PROCUREMENT OFFICER,
                                                                                                                                               SCHNEIDER ELECTRIC

 88% of the strategic
 suppliers passed the
 third-party evaluation for
 sustainable development,
 2015 – 2017

 10% reduction                      Tailored Supply Chain 4.0
 of CO2 emissions from
 transportation over                In this digital economy, Schneider Electric’s global supply chain
 2015-2017 period                   is evolving to become even more tailored, sustainable, and
                                    connected with our Tailored Supply Chain 4.0 strategy, powered by
                                    EcoStruxure solutions.                                               Congratulations to Le Vaudreuil plant for its new prize: “Showcase for Industry of the Future”

 74% goods shipped                  Tailored: We are passionate about our customers’ success,
 by road (23% by ocean,
 3% by air)                         always seeking to provide what they value while leveraging scale     Industry of the future
                                    and efficiency.
                                                                                                         In February 2018, our Le Vaudreuil plant received the “Showcase for
                                    Sustainable: Sustainability is a priority across our supply chain,   Industry of the Future” award from the Alliance pour l’Industrie du Futur.
 70% of relevant                    exemplifying our concern for people and the planet. We optimize
 purchases confirmed as                                                                                   Le Vaudreuil has developed and implemented many changes in several
                                    resources by developing a circular supply chain with clean and
 conflict-free under the Conflict                                                                          areas leveraging our own EcoStruxure solutions such as:
                                    safe facilities powered by renewable energy.
 Minerals rule of 2012
                                                                                                         • Cybers ecurity and the integration of a data bunker
                                    Connected: Our supply chain is digital and smart, powered by
                                                                                                         • Energy management with the use of our building management system
                                    EcoStruxure products and solutions. We provide visibility to
                                                                                                         • Addition of sensors to allow predictive maintenance
                                    customers, optimizing end-to-end efficiency and asset reliability.
                                                                                                         • Combination of EcoStruxure with startup solutions so employees
                                                                                                           benefit from continuous training

16 • sdreport.se.com
CHAPTER 3

OUR                                        2017 Highlights

CUSTOMERS                                  Our deep domain expertise fuels our customers’ sustainable results.
                                           We partner with customers across segments and around the world to
                                           innovate, improve performance, and bring their bold ideas to life. The
                                           four key markets that we serve are:

                                                    Building                Data Center                   Industry          Infrastructure        2015 – 2017 Planet
                                                                                                                                                  & Society barometer
                                                                                                                                                  achievements
                                           We redefine value for our customers through unprecedented connectivity,
                                           sustainability, efficiency, reliability, and safety, and help companies                                 CLIMATE & DEVELOPMENT
                                           become more efficient in how they buy and consume energy. We are                                        (SUSTAINABILITY OFFERS)

                                           leading the digital transformation of energy management and automation                                                    of new large
                                           with EcoStruxure — our IoT-enabled architecture with connected                                                            customer projects

               70%                         products; edge control; and apps, analytics, and services.                                              100%              have a CO2 impact
                                                                                                                                                                     quantification

            of the world’s energy               2 017 – 2 018 R EC O G N I T I O N S
            consumption comes from
            the building, data center,          Leader in Green Quadrant ®                              European regional finalist, Most          “Integrated Thinking” award
            industry, and infrastructure        Facility Optimization                                   Admired Knowledge Enterprises            By the Institut du Capitalisme
                                                Software report                                         (MAKE) research program                  Responsable [Responsible Capitalism
            end markets.1
                                                Comparing 14 facility optimization                      Selected from a list of 48 nominated     Institute] in the “large companies”
                                                software applications by independent                    companies in various sectors             category
                                                analyst Verdantix
                                                                                                        Engineers’ Choice for best               Leader in Gartner ®’s Magic
                                                Ranked in Gartner ® 2017 Supply                         Motion Control                           Quadrant for Advanced
                                                Chain Top 15 for Europe                                 Altivar Process 900 honored by Control   Distribution Management
                                                Number 7 supply chain, ranking among                    Engineering for optimizing performance   Systems
                                                the top 10 for third consecutive year                   across sectors                           Highest scores in all three use cases
                                                                                                                                                 in the Critical Capabilities for fifth
                                                Ranked in Gartner ®’s Supply                            “Customer Innovation of the Year”        consecutive year
                                                Chain Top 25 for 2017                                   Supply Chain Breakthrough award
                                                Number 17 supply chain, advancing                       in SCM World’s 2018 Power of the
                                                one place from 2016 rankings                            Profession Awards

                                           1
                                               World Energy Outlook 2012, OECD/IEA, Internal analysis

                                                                                                                                                                  sdreport.se.com • 17
OUR CUSTOMERS

Building
HIGHLIGHTS: EcoStruxure for Building                                  Marriott’s sustainability journey
Delivering the buildings of tomorrow, today
                                                                      Marriott® had a bold vision to
                                                                      reduce energy consumption while
                                                                                                              Marriott hotels, China
                                                                      meeting the rising demand for
                                                                      hotels in China. So, they turned
                                                                      to EcoStruxure Building to create       10% to 15%
                                                                      a sustainable, comfortable
                                                                      environment for their guests to         energy savings
                                                                      offer a world-class experience
  Pharmacia Corporation, USA                                          while achieving 10 to 15 percent

  $2M                                                                 energy savings.

  avoided                            University of Mississippi, USA

  in new                             25 to 30%                        Marriott and Schneider share
  equipment                          reduction in                     the same vision and … that's
  costs                              energy costs                     why it becomes much easier
                                                                      for us to reach the same
                                                                      goal, and partner toward that          SUSTAINABLE                          RECORDED BENEFITS
                                                                      sustainability and energy              SOLUTIONS:                           TO DATE INCLUDE:
                                                                      efficiency for all of our hotels.
                                                                                                             • EcoStruxure Resource Advisor       • 10 – 15% energy savings
   Cinnamon Grand Hotel, Sri Lanka                                                                           • EcoStruxure Building Operation,    • Close collaboration ensuring
                                                                                                               EcoStruxure Lighting Expert,         scalable, repeatable hotel
   $1M guaranteed savings                                                                  MICHAEL WANG,
                                                                                          CONTINENT HEAD,
                                                                                                               EcoStruxure Power Monitoring
                                                                                                               Expert
                                                                                                                                                    technology solutions that meet
                                                                                                                                                    Marriott brand standards
   over 3.7 years                                                              GLOBAL DESIGN ASIA PACIFIC,
                                                                               MARRIOTT HOTEL & RESORTS      • Automation servers, network        • Sustainability reporting that will
                                                                             AND THE RITZ-CARLTON HOTELS       controllers, room controllers,       further drive energy and carbon
                                                                                                               LV / MV switchgear,                  savings across Marriott’s global
                                                                                                               transformers, power meters,          portfolio of hotels
                                                                                                               circuit breakers, variable speed
                                                                                                               drives, UPS, and wiring devices

18 • sdreport.se.com
OUR CUSTOMERS

Data Center
Telefónica’s sustainability journey                                                                    HIGHLIGHTS: EcoStruxure IT

                                                                                                       Simplifying the data center in the cloud and at the edge
Telefónica had a bold
vision to become a digital
telecommunications company,
creating a data center to meet                                                                          ITS Telecommunications Systems, USA
customer demand while reducing
energy costs. EcoStruxure for Data
                                     Telefónica, Spain
                                                                                                        3-year
Center allows Telefónica’s Alcalá
data center to process 14 kW per     60% reduction                                                      projected ROI on $1.5M
rack — reducing energy costs by      in energy costs
60 percent.

We created a project I'm very
proud of, and specifically,
we reduced energy costs by
60 percent compared to a
traditional data center.             SUSTAINABLE                    RECORDED BENEFITS
                                     SOLUTIONS:                     TO DATE INCLUDE:                    IronGate Data Centers, USA

                      FRAN MUÑA,
                                     • Remote Monitoring Services
                                     • LV Electric Box, Building
                                                                    • A 60% reduction in energy
                                                                      costs compared to both
                                                                                                        15 – 20 kW
              DIRECTOR OF CRITICAL
                  INFRASTRUCTURE,
                                       Lighting, UPS                  traditional DCIM and the Gold     per rack with
                       TELEFÓNICA                                     Tier IV® certification             hot aisle containment
                                                                    • Ability to connect new servers    and InRow™ cooling
                                                                      in running mode, with no                                           Zhiguli Valley Technopark, Russia
                                                                      need to stop to reconfigure or
                                                                      redesign systems
                                                                    • A BMS that collects data from
                                                                                                                                         ~$54K
                                                                      some 45,000 elements
                                                                                                                                         per year estimated
                                                                                                                                         energy savings

                                                                                                                                                     sdreport.se.com • 19
OUR CUSTOMERS

Industry
HIGHLIGHTS: EcoStruxure for Industry                  WaterForce’s sustainability journey
Pioneering IIoT — from shop floor to top floor
                                                      WaterForce had a bold vision
                                   Dow Corning, USA   for efficient agricultural irrigation    WaterForce, New Zealand
                                                      using IoT technology to change
                                   50% reduction      the farming paradigm. Powered by
                                                      the Microsoft® Azure platform and
                                                                                               Up to 50% energy
                                   in CapEx           Schneider’s EcoStruxure Industry         savings reported by farmers
                                                      IoT architecture, SCADAfarm is
                                                      an integrated automation and
Fonterra, New Zealand                                 information management solution

    4.4
Up to
                                                      developed for WaterForce. In the
                                                      first season alone, farmers report
                                                      more visibility into operations,
million liters                                        with up to 50 percent in energy
                                                      savings.
of milk per day

                                                      By leveraging our relationship
                                                                                              SUSTAINABLE                    RECORDED BENEFITS
                                                      with Schneider Electric, we can
                                                                                              SOLUTIONS:                     TO DATE INCLUDE:
                                                      focus on our core business —
                                                      effective water management,             • SCADAfarm, an integrated     • Improved operational
                                                      knowing that the information              automation and information     performance and crop yields
                                                      management, analytics, and                management platform          • Enhanced safety procedures
ArcelorMittal, France                                                                         • Scalability                  • Significant energy savings by
                                                      automation side is covered.
                                                                                              • Complete water management      taking advantage of off-peak

24/7 nonstop                                                            RON MCFETRIDGE,
                                                                                                portal
                                                                                              • Business opportunities
                                                                                                                               energy rates
                                                                                                                             • Better management of water,
steel production                                                 DIRECTOR OF WATERFORCE,                                       and easier compliance with
                                                                            NEW ZEALAND                                        regulatory requirements

20 • sdreport.se.com
OUR CUSTOMERS

Infrastructure
South Australia Power Networks’ sustainability journey                                                HIGHLIGHTS: EcoStruxure Grid

                                                                                                      Enabling the new energy world
South Australia Power Networks
had a bold vision to keep             South Australia Power Networks
electricity flowing for 1.5 million
households through the most
extreme storms. They trust
                                      1.5 million homes
                                      receiving reliable electricity
                                                                                                       Enel, Italy

                                                                                                       144 GWh
EcoStruxure Grid for reliable
monitoring and management of                                                                           energy savings per year
their extensive network, helping
keep the people of South Australia
safe — and powered — through
extreme environmental conditions.

We have over 1.5 million
customers. To be able to
restore power to the majority of
customers on a feeder in under
                                     SUSTAINABLE                       RECORDED BENEFITS
a minute is something that has
                                     SOLUTIONS:                        TO DATE INCLUDE:                Salt River Project, USA
never been done in our history.
Without Schneider Electric, we
probably wouldn’t have been
                                     • Advanced distribution
                                       management system (ADMS)
                                                                       • Fault location, isolation,
                                                                         and service restoration
                                                                                                       44%
able to progress as fast as we
have.
                                     • Decentralized feeder
                                       automation systems
                                                                       • Network monitoring
                                                                       • Load-flow analysis             reduction                     Tata Power, India
                                     • RM6 medium-voltage              • Real-time control and         of configured
            TASNIM ABDEL-RAZAQ,
                                       switchgear                        optimization
                                                                       • Operational planning
                                                                       • Training and simulation
                                                                                                       alarms
CHAPTER 4

OUR                    Everything we do in this company is meant

PEOPLE                 to create a better world. But beyond the
                       business mission, we want to be extremely
                       progressive, very inclusive, and want to
                       create an environment where every
                       single employee will have the same chance
                       of success.

                                                           OLIVIER BLUM,
                                               EXECUTIVE VICE PRESIDENT,
                                              GLOBAL HUMAN RESOURCES,
                                                    SCHNEIDER ELECTRIC

                       At Schneider Electric, we believe great people make us a great company.
                       That’s why when we talk about sustainability and energy management, we
                       aren’t just talking about preserving energy as a resource; we are equally
                       focused on sustaining the energy of our workforce.

                       We invest in the energy of our people in numerous ways, including a
                       company-wide focus on Health & Equity. A key measurement for progress
                       is the Schneider Sustainability Impact. In fact, one-third of our barometer
                       concerns health-related topics. We also prioritize diversity and inclusion
                       on a global scale, advancing initiatives including gender pay equity and a
                       Global Family Leave Policy.

                       Additionally, we keep our eye on the upcoming talent pool of tomorrow.          2015 – 2017
     Great
  people make          We fostered this talent in 2017 with opportunities including Schneider Go       Planet & Society
                       Green in the City — an international student competition to find innovative      barometer achievements
SCHNEIDER ELECTRIC     energy solutions for smart cities, and showcasing the talent of the
                       workforce of the future. Participants include teams of two, of which at least
     a great                                                                                           HEALTH & EQUITY
                       one team member is female, confirming our commitment to diversity and
    company                                                                                                        was our score
                       inclusion.

                       Our ambition is that our employees everywhere have equal opportunities,
                                                                                                       65%         in the Employee
                                                                                                                   Engagement Index

                       while feeling uniquely valued.

22 • sdreport.se.com
OUR PEOPLE

                                                                         Why working here matters                                               Our voice is
                                                                         Our Employer Value Proposition is our way of telling the world         OneVoice
                                                                         what it means to be part of this organization. We believe it is our
                                                                                                                                                We don’t assume we know what
                                                                         responsibility to set up each employee for success. This is outlined
                                                                                                                                                our employees are thinking, or
                                                                         in our cornerstone: “Great people make Schneider Electric a great
                                                                                                                                                what’s best for them — we ask
                                                                         company.” It includes four key attributes that evolve annually along
                                                                                                                                                them, twice a year, every year.
                                                                         with us.
                                                                                                                                                We can’t expect them to thrive
                                                                                                                                                without their honest input, and that
                                                                                                                                                is where the OneVoice satisfaction
                                                                         Great people make Schneider Electric a great company                   survey comes in.

                                                                                                  Our belief is that access to energy is a
                                                                                                  basic human right.
                                                                                                  We are committed to a sustainable future       O N E VO I C E S U RV E Y
Company Values                                                                                    by solving the energy paradox.                 I N N U M B ERS BY
                                                                                                                                                 EN D O F 2017:

Ensuring access to energy for everyone around the world motivates and
energizes every single employee. As such, we share a set of values as                             We provide equal opportunities to everyone     100%         of employees
part of an ongoing effort to change the status quo.                                               everywhere.                                    surveyed twice a year

• STRAIGHTFORWARD: We do what we say and we communicate in                                        We ensure all employees feel uniquely
  simple ways. We behave with integrity.                                                          valued and safe to contribute their best.
                                                                                                                                                 179,000 emails sent
• CHALLENGE: We challenge ourselves and others to rethink what is
  expected. We are agile and move at the speed of change.                                          We lead the digital transformation.           78,000 people
                                                                                                                                                 reached via “kiosks” on
• OPEN: We value differences. We listen. We learn, connect, and                                    We collaborate with the largest partner,      271 production sites
  collaborate with others.                                                                         integrator, and developer ecosystem on
                                                                                                   our open platform.
• PASSIONATE: We are passionate about our customers, our people,
  our business, and our technology. We are positive in our approach to
                                                                                                                                                 3,300 managers
                                                                                                                                                 received a dedicated report
  finding solutions that improve lives.
                                                                                                   We are ambitious for customers, and our
• EFFECTIVE: We deliver on promises. We are pragmatic and fast, and                                business growth.                              80%        participation rate
  we compete to win.                                                                                                                             in 2017, improved from 62%
                                                                                                   We like to win as a team, we empower
                                                                                                                                                 in 2011
                                                                                                   and trust our people to stay agile.

                                                                                                                                                               sdreport.se.com • 23
OUR PEOPLE

Company Programs
Innovative strategy helps Schneider Electric sustain a workforce that
is competitive and highly engaged. The past year was one of great
progress in terms of company programs, which include the following           Stepping up
customer-centric initiatives:                                                in 2017
                                                                             Step Up is known as the
                                                                             people transformation
                                        Do more by creating more             of the company. It’s about
        Do More                         opportunities for our customers,
                                                                             team-building, talent
                                        and for ourselves.
                                                                             management, and cultural
                                                                             transformation. It helps
                                                                             us sustain a world-class
                                        Digitize to support our growth       workforce. Step Up will
        Digitize                        and make our customers’ lives        continue to be a company-wide        G LO B A L R EC O G N I T I O N
                                        simpler and better.
                                                                             priority in the year ahead.
                                                                                                                  Forbes®                           Fortune® ’s
                                                                                                                  World’s Best                      “World’s Most
                                        Innovate our people to grow
                                        talents and foster strong                                                 Employers                         Admired Companies”
        Innovate                        employee engagements.                                                                                       for 2018
                                                                           Policies and
                                                                                                                  LinkedIn                          2018 “World’s Most
                                                                           progress
                                                                                                                  Top Companies 2017,               Ethical Companies®”
                                                                           The past year brought with it an       second year in a row
                                        Step up our operations for                                                                                  by the Ethisphere® Institute
        Step Up                         increased efficiency.
                                                                           emphasis on well-being and our
                                                                           commitment toward Diversity and
                                                                                                                  2017 European                     2018 Bloomberg           SM
                                                                           Inclusion, including:
                                                                                                                  Most Admired                      Gender-Equality
                                                                           • The global launch of our inclusive   Knowledge
                                                                             Global Family Leave Policy
                                                                                                                                                    Index Listing:
                                        Simplify for our customers,
        Simplify                        and simplicity.                    • Putting pay equity high on our
                                                                                                                  Enterprises                       104 companies with strong
                                                                                                                                                    commitments to gender diversity
                                                                             agenda for the betterment of our     (MAKE) Award
                                                                             employees

24 • sdreport.se.com
OUR PEOPLE

                                                                        Worldwide Learning Week                                                    L E A R N I N G W EE K
                                                                                                                                                   AT A G L A N C E:
                                                                        Marking its fourth year, Learning Week is a major contributor to our
                                                                        learning culture strategy. It gives employees the chance to train,
                                                                                                                                                   More than
                                                                        and share knowledge through educational events including:

                                                                        • Webinars and workshops on key subjects
                                                                                                                                                   >50,000 employees
                                                                                                                                                   participated
                                                                        • Collective e-learning
                                                                        • Roundtables with leaders
                                                                                                                                                   75% of respondents
                                                                                                                                                   were satisfied with
                                                                        Global Learning Days                                                       Learning Week

                                                                        In addition to Worldwide Learning Week, we also introduced the
                                                                        first-ever global Learning Days in 2017, with learning offered on           78%        are likely to
                                                                                                                                                   recommend Learning Week
                                                                        specific business topics:
                                                                                                                                                   to a colleague
                                                                        1. Schneider Electric: Our products and services
                                                                        2. Customer centricity
                                                                        3. Digitization and IoT
                                                                                                                                                   95% believe Learning
                                                                                                                                                   Week should continue to be
                                                                                                                                                   organized in the future
                                                                        Learning initiatives will continue to be offered in 2018 to maintain the
Our Investment                                                          focus on lifelong learning at Schneider Electric.

for Growth
The spirit of lifelong learning is powerful at Schneider Electric.
                                                                                                                                                   2015 – 2017
Employees are tasked with completing seven hours of logged training
annually. Through academies, Leadership Development Centers,                                                                                       Planet & Society
internal learning tools, and more, employees can sharpen their skills                                                                              barometer achievements
and broaden their horizons. We emphasize proactive thinking about
career development, beyond entities and across geographies.                                                                                        HEALTH & EQUITY

                                                                                                                                                                  one-day training

                                                                                                                                                   92%            for every employee,
                                                                                                                                                                  every year

                                                                                                                                                                   sdreport.se.com • 25
OUR PEOPLE

Go Green in the City                                                                                                                                    Diversity
We foster tomorrow’s workforce through Go Green in the City — an                                                                                        means value
annual international business case challenge for students around
                                                                                                                                                        At Schneider, diversity means
the world to find innovative solutions for energy management
                                                                                                                                                        value. Through our Diversity and
and automation. Participants include teams of two, of which at
                                                                                                                                                        Inclusion Policy, we prioritize
least one team member is female, confirming Schneider Electric’s
                                                                                                                                                        tolerance, dignity, and respect,
commitment to diversity and inclusion.
                                                                                                                                                        as well as gender equality. We
                                                                                                                                                        understand that it takes diverse
                                                                                                                                                        teams to handle the diverse
                                                                                                                                                        markets we serve.

                                                                                                                                                        Diversity
                                                                                                                                                        and Inclusion
                                                                                                                                                        Advisory Board
                                                                                                                                                        In its second year, the Diversity
 More than

 19,772
                                                                              We Live Our Lives Better                                                  and Inclusion Advisory Board
                                                                                                                                                        came together to effect positive
 participants in 2017                                                                                                                                   change for the entire company.
                                                                              Well-being isn’t just something we                                        The group continued to work
                                                                              strive for; it’s part of who we are.                                      diligently to advance gender
 60,000+                                                                      External pressures make it difficult                                      diversity and foster a culture
 participants in total
 (2011 – 2017)
                                                                              to strike a balance between            1,000 Well-Being Labs              of inclusion within Schneider
                                                                              personal and professional life. We     across 50 countries in 2017,       Electric. As thought leaders and
                                                                              aim to counteract that by creating     compared to 500 labs in            innovators in their respective
 180       countries
                                                                              an environment to help employees
                                                                              better manage their energy by
                                                                                                                     43 countries per 2016              areas of expertise, they help
 in 2017, expanded from                                                                                                                                 create a unified voice for a more
 8 countries in 2011               2017 winners: Raja Jain and Nimisha
                                   Gupta from the Indian Institute of
                                                                              empowering our individual parts,
                                                                              and the company becomes a
                                                                                                                     75     well-being trainings and
                                                                                                                                                        progressive Schneider.

                                   Technology Roorkee won Go Green in
                                                                                                                     learnings available to employees
                                                                              stronger whole.
 58%        of 2017
                                   the City 2017, for the idea of using the
                                   ancient Indian technology of earthen
 participants were female          pots to develop a modern-day cooling
                                   system.

26 • sdreport.se.com
OUR PEOPLE

It’s great to see Schneider show, in concrete                              Measuring                         What HeForShe means here
ways, its commitment to Diversity and
Inclusion, and anchor it in a very pragmatic
                                                                           pay equity                        As part of its public commitment
and personal policy that impacts lives.                                                                      to gender equality, Schneider
                                                                           As part of our Diversity and
                                                                                                             Electric participates in the U.N.’s
                                                                           Inclusion ambition, gender
                                                                                                             HeForShe solidarity movement
                                                                           pay equity was one of the top
                                                                                                             to promote gender equality.
                                    TINA MYLON,                            priorities for 2017. It touches
                                                                                                             Schneider recently became a
     SENIOR VICE PRESIDENT TALENT AND DIVERSITY,                           every single employee, every
                             SCHNEIDER ELECTRIC                                                              HeForShe IMPACT 10x10x10
                                                                           single day. We’re holding
                                                                                                             Champion, signifying that it is
                                                                           ourselves accountable to make
                                                                                                             one of 10 corporate champions
                                                                           sure we have equal pay for
                                                                           equal work. Beyond equal pay,
                                                                                                             for the HeForShe global solidarity          38,000+
                                                                                                             movement.                                   Schneider Electric
                                                                           we’re making sure we have the
Global family leave                                                        right data and processes to
                                                                                                                                                         employees have joined
                                                                                                                                                         the HeForShe Movement
                                                                                                             Initiated by U.N. Women, the
We understand that each of us                                              avoid disparity in pay across     campaign engages men and
                                                                           equal roles, throughout the       boys — including Schneider
has a unique situation. Regardless
of the details, our policies help                                          company.                          Chairman and CEO Jean-                      23,000           women
                                                                                                                                                         recruited over the past
support employees to manage                                                                                  Pascal Tricoire — as advocates
                                                                                                                                                         three years
their situation. That’s why we took                                                                          and agents of change for the
an “all in” approach to our Global                                                                           achievement of gender equality.
Family Leave Policy that launched
                                                                           Racing toward
in September 2017.                                                         gender equality
Schneider Electric provides paid                                           As the title sponsor of the
parental, care, and bereavement                                            Paris Marathon for the fifth
leave in all countries. We define                                           year, Schneider Electric was
“leave” and “family” in an inclusive                                       proud to make great strides
way, recognizing that definition of                                         toward a greener and more         2015 – 2017
                                                                           gender-diverse event in 2017.                              HEALTH & EQUITY            HEALTH & EQUITY
family, life, and work are changing                                                                          Planet &
every day. The policy includes key     an equal amount of parental leave   The world’s second-largest
                                                                                                             Society
life stages of welcoming a new
baby, taking care of sick or elderly
                                       to a parent by natural birth or
                                       adoption. The policy demonstrates
                                                                           marathon, the Schneider
                                                                           Electric Paris Marathon
                                                                                                             barometer                85%                        38%
family members, and mourning           a commitment to diversity and       welcomed 57,000 runners           achievements             of employees work in       reduction in the Medical
                                                                                                                                      countries with gender      Incident Rate (MIR)
the loss of a family member.           inclusion to generate greater       this year, 25% of whom were                                pay equity plans in
It also assumes an inclusive           engagement, performance, and        women.                                                     place
definition of family by extending       innovation.

                                                                                                                                                                      sdreport.se.com • 27
CHAPTER 5

OUTREACH AND           We want everyone on our planet to have                                                                             2015 – 2017

INITIATIVES            access to safe, reliable, efficient, and
                       sustainable energy, and we are committed
                       to developing the innovations that will make
                                                                                                                                          Planet & Society
                                                                                                                                          barometer achievements

                       this happen.                                                                                                        CLIMATE & DEVELOPMENT
                                                                                                                                           (SUSTAINABILITY OFFERS)

                                                     GILLES VERMOT DESROCHES,                                                                                      increase in turnover
                                                    CHIEF SUSTAINABILITY OFFICER,
                                                             SCHNEIDER ELECTRIC                                                            x2.21                   of Access to Energy
                                                                                                                                                                   program

                           Innovation and
                           engagement
                           We believe that access to energy
                           is a fundamental right. Today,
                           approximately 1.1 billion people
                           lack access to electricity1. But,
                           as we expand access to energy,
                           we all must be mindful of the
                           effects of its consumption on the
                           environment.
         1.1               At Schneider Electric, our solution
   BILLION                 to this energy paradox is twofold:
                           innovation and engagement.
   PEOPLE                  Through our outreach and
                           initiatives, we further support the
                           U.N.’s Sustainable Development
                           Goals by deploying innovative
 LACK ACCESS
                           business models and energy
 TO ELECTRICITY            solutions to the world’s
                           energy-poor communities.

                       1
                       International Energy Agency, Energy Access Outlook 2017 https://www.iea.org/publications/freepublications/publication/weo-2017-special-report-energy-access-outlook.html
28 • sdreport.se.com
O U T R E A C H A N D I N I T I AT I V E S

   T H E B E N E FI T S O F E L EC T R I C I T Y                                         By joining the Sustainable Energy for All
                                                                                         partnership network, Schneider Electric is
   • Improved health, most significantly for women and children                           bringing their leadership to a movement that
   • Reduced poverty and raised living standards                                         is focused on going farther, faster — together
   • Enhanced educational opportunities                                                  — in closing the energy access gap.
   • Strengthened environmental sustainability
   • Improved security and feeling of safety                                                                                 RACHEL KYTE,
                                                                                                                                     CEO,
   • Increased productivity                                                                                    SUSTAINABLE ENERGY FOR ALL

Worldwide electricity deficit: 2016
(in millions of people)
                                                                                                                0      CHINA

                                                                 NORTH
                                                                 AFRICA
O U T R E A C H A N D I N I T I AT I V E S

                                                                           2017 Access to Energy highlights:
                                                                           OFFERS AND BUSINESS MODELS

                                                                           Congo                           Nepal                                   Bangladesh
                                                                           Proton and Schneider Electric   Saral Urja partnered                    We brought solar-powered
                                                                           provided solar solutions        with us to provide                      portable lamps to a remote
                                                                           to remote villages in the       electricity to a remote,                island village, where 100
                                                                           Democratic Republic of the      off-grid village using                  households now have electricity
                                                                           Congo.                          a solar-powered                         for basic needs.
                                                                                                           microgrid.

Access to Energy
In 2017, we expanded our range of products, solutions, and services
for communities that lack access to energy — from individual lighting to
community services and collective electrification.
                                                                                                                   India
                                                                                                                   Schneider Electric and the             Cambodia
The Access to Energy program actively involves local stakeholders,
                                                                                                                   Schneider Electric India               Installed in Bavet city of
including residents and customers, to bring safe, clean, sustainable                                                                                      the Svay Rieng province,
                                                                                                                   Foundation led two rural
electricity to communities all over the world. The Access to Energy                                                                                       a 10 kW solar power plant
                                                                                                                   electrification projects in
program operates in three ways:                                                                                                                           from Schneider Electric
                                                                                                                   Arunachal Pradesh, providing
                                                                                                                   energy access to 375                   now provides safe, reliable,
• OFFERS AND BUSINESS MODELS, to address local electricity                                                                                                modern energy for the
                                                                                                                   households with our Mobiya
  access shortages, we design electrical distribution offers via                                                   solar lanterns.                        surrounding villages.
  renewable off-grid products and solutions.                               Cameroon
• IMPACT INVESTING, to address local funding shortages, we invest in       The microfinancing group
                                                                                                                                                   Myanmar
  innovative, local access to energy ventures and subject matter experts   Pamiga partnered with us
                                                                                                           Kenya                                   We worked with our local
  through impact investing funds.                                          to bring more than 3,200
                                                                                                           Our new Villaya Microgrid solution      partners, Mandalay Yoma,
• TRAINING AND ENTREPRENEURSHIP, to address local skill                    households access to
                                                                                                           is designed, manufactured, and          Talent and Technology, and
  shortages, we support the creation of training courses in electricity    energy with our Mobiya and
                                                                                                           tested in Nairobi. It provides access   Techno Hill Engineering, to
                                                                           Homaya solar solutions.
  trades.                                                                                                  to energy and socio-economic            build microgrids that bring
                                                                                                           development to homes, health            energy to more than 1,000
With the support of the Schneider Electric Foundation, we partner with                                     clinics, schools, and businesses.       households across five
local and global not-for-profit education organizations.                                                                                            villages.

30 • sdreport.se.com
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