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Enabling a
sustainable future
2021 Universal Registration Document
Financial and Sustainable Development Report
table of
Strategic Report
Integrated report
Our purpose and mission
At a glance
A statement from Chairman and CEO, Jean-Pascal Tricoire
An interview with Chief Financial Officer, Hilary Maxson
2021 Financial Performance Highlights
Key Achievements of 2021
Proud of 2021’s Sustainability Achievements
Market trends – All electric, all digital
What we do
Our Business Model
A future worth investing in
A changemaker for sustainability
2022 outlook and target
2022-2024 targets and long-term ambitions
Governance
Our Stakeholders
Chapter 1 – Group strategy & sustainability
1.1 Trends and opportunities
1.2 Schneider Electric’s unique operating model
1.3 Schneider Electric’s priorities for sustainable growth
1.4 Customer focus
Chapter 2 – Sustainable development
An introduction by Chief Strategy & Sustainability Officer, Olivier Blum
2.1 Sustainability at the heart of our strategy
2.2 Driving responsible business with Trust
2.3 Acting for a Climate positive world
2.4 Being efficient with Resources
2.5 Great People making Schneider Electric a great company
2.6 Delivering Social Impact for a just transition
2.7 Methodology and audit of indicators
2.8
Indicators
Chapter 3 – How we manage risk at Schneider Electric
3.1 Definition and objectives of internal control and risk management
3.2 Organization and management
3.3 Risk management mechanism
3.4 Key risks
Insurance
3.5
Corporate Governance Report
Chapter 4 – Corporate governance report RFA
4.1 Governance Report
4.2 Compensation Report
126
144
164
188
206
226
244
244
249
254
265
268
311
Financial Statements
Chapter 5 – Consolidated financial statements RFA
344
5.1 Consolidated statement of income
346
5.2 Consolidated statement of cash flows
347
5.3 Consolidated balance sheet
349
5.4 Consolidated statement of changes in equity
5.5 Notes to the consolidated financial statements
350
5.6 Statutory Auditors’ report on the consolidated financial statements 397
5.7 Extract of the management report for the year ended
December 31, 2021
402
2
4
6
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9
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12
14
15
20
22
24
26
27
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32
44
46
50
56
60
61
92
RFA Annual Financial Report elements are clearly identified in this table of contents with the sign RFA.
Integrated report
Integrated report
Strategic Report
Chapter 8 – Annual Shareholders’ Meeting RFA
8.1 Explanatory comments & draft resolutions submitted
to the Annual Shareholders’ Meeting
8.2 Statutory Auditors’ special reports
448
468
Chapter 9 – Persons responsible for the Universal Registration
Document and audit of the financial statements
Persons responsible for the Universal Registration Document
Persons responsible for the audit of the financial statements
Universal Registration Document cross-reference table
Annual Financial Report cross-reference table
Cross-reference table referring to the elements of the
Management Report
Cross-reference table referring to the elements of the
Corporate Governance Report
Cross-reference table pursuant to Articles L. 225-102-1, L. 22-10-36
and R. 225-105 (disclosure on extra-financial performance), and
Article L. 225-102-4 (vigilance plan) of the French Commercial Code
474
475
476
479
482
481
480
Chapter 6 – Parent company financial statements RFA
6.1 Balance sheet
6.2 Statement of income
6.3 Notes to the financial statements
6.4 Statutory auditors’ report on the annual financial statements
6.5 List of securities held at December 31, 2021
6.6 Subsidiaries and affiliates
6.7 The company’s financial results over the last 5 years
6.8 Extract of the management report for the year ended
December 31, 2021
Shareholder Information
Chapter 7 – Information on the Company and its capital
7.1 Shareholding
7.2 Capital
7.3 General information on the Company
7.4 Shareholders’ rights and obligations
7.5 Stock market data
Investor relations
7.6
412
414
415
424
427
428
430
431
434
436
439
440
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445
The Universal Registration Document was filed on March 29, 2022 with the Autorité des Marchés Financiers (AMF), as the competent authority under Commission regulation
1129/2017/EU, without prior approval in compliance with Article 9 of this regulation.
The Universal Registration Document may be used for purposes of a public offer of securities or admission of securities to trading on a regulated market if completed by
a securities note and, if applicable, a summary and any amendments to the Universal Registration Document. The whole is then approved by the AMF in accordance with
Regulation (EU) 2017/1129.
This Universal Registration Document is a free translation into English of the official version of the Universal Registration Document which has been prepared in French
and in ESEF format (European Single Electronic Format) and which includes the Annual Financial Report for the fiscal year ended December 31, 2021 and is available
on the AMF’s website (www.amf-france.org) and on the Company’s website (www.se.com).
www.se.com
Life Is On | Schneider Electric
1
Integrated report
Our purpose is to empower all to make
the most of our energy and resources,
bridging progress and sustainability for all.
At Schneider,
we call this
2
Schneider Electric Universal Registration Document 2021
www.se.com
Integrated report
Strategic Report
Strategic Report
Our mission is to be
your digital partner for
Sustainability and Efficiency.
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Life Is On | Schneider Electric
3
Integrated report
At a glance
Our performance
2021 was a record year, setting the foundation for
ongoing sustainable growth. In addition, the Group
continued to raise the bar in launching new and
ambitious sustainability commitments, covering
2021-25.
Adjusted EBITA margin
+140 bps organic
€3.2B
Net Income (Group share)
+51%
Financial KPIs
€28.9B
Revenues
17.3%
€2.8B
Free Cash Flow
€6.13
Extra-financial KPIs
#1
+12.7% organic
World’s Most Sustainable Corporation in 2021
3.92/10
Schneider Sustainability Impact score,
outperforming 2021 3.75/10 target
347 million
Tonnes of saved and avoided CO2 emissions
to our customers since 2018
1,000
87% conversion rate
Suppliers committed to the Zero Carbon Project
+4 million
Adjusted Earnings per Share
+30%
People have access to green electricity in 2021
€2.90
71%
Proposed Dividend per Share
+12%
Highest Employee Engagement Index of all time
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Schneider Electric Universal Registration Document 2021
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Strategic Report
Our business
Total employees by geography in 2021
Revenue by geography in 2021
North America
Western Europe
26%
29%
27%
26%
Rest of the World
Asia Pacific
16% 14%
31%
31%
128,000+
Employees in over 100 countries
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5
Integrated report
A statement from Chairman
and CEO, Jean-Pascal Tricoire
The past two years have seen challenges, changes
and uncertainties that few of us could have imagined
back in 2019. The COVID-19 pandemic, the multiple
and diverse responses to it, the rapid restart of the
economy, a host of climate change-linked disasters,
and numerous other disruptions have shaken up
supply chains and unsettled business plans the
world over.
Many of these developments will stay with us in 2022, and
even beyond.
But the world has also had time to learn, to change, and to adapt.
Climate action, efficiency, sustainability, digital innovation, and
resilience to disruption, uncertainty and change are now top of
the agenda for policy makers, businesses and even households
around the globe, in a way that was simply not the case just two
or three years ago.
Of course, Schneider Electric hasn’t been immune to these
upheavals. But our efforts, over the past 15 years, to embrace
sustainability, digitization and electrification, and to empower all
to make the most of our energy and resources, have stood us in
good stead.
In fact, if anything, our corporate purpose and positioning have
been reinforced and vindicated by what the world has experienced
since late 2019. It’s never been more important to bridge progress
and sustainability for all.
A business model built to support a
sustainable future
Schneider Electric received welcome, high-profile external
recognition in January 2021, when Corporate Knights ranked us the
world’s most sustainable corporation for the year. The recognition
is a testament to the commitment of our people, our customers,
partners and suppliers, who have, year after year, raised the bar,
to make a positive impact on our organization, our business and
community ecosystem, and on the entire world.
Still, the science is clear: humanity is not acting fast enough to
avert climate catastrophe. We all need to do more, and much faster,
to leverage the technologies that already exist, and develop new
ones for the future.
That’s why, also in January 2021, we announced the most ambitious
set of sustainability commitments in our history, spanning 2021-2025:
to show that even companies that are already sustainability leaders
have a responsibility to do even more.
In late 2021, we also committed to being an Impact Company.
We define that as a company that embraces environmental, social
and governance (ESG) values into every dimension of its business.
A company that aligns its mission to contribute these values, and
that operates with a model that creates local impact, close to the
communities it’s supporting.
One of the guiding principles of this model is that acting on
these principles, and on our purpose, also cements our financial
performance. And that’s what makes us confident in our long-term
sustainable growth.
Accelerating core markets, and new
pillars of growth
Two technologies underpin the global economy’s transition to a
sustainable, more resilient and lower-carbon future: digitization
and electrification.
It’s in these areas that we’ve built our expertise and leadership
over the past years – and we’re feeling the accelerating demand
for these technologies across end-markets ranging from buildings
and industry, to data centers and infrastructure.
In addition, to support future growth, we’ve supplemented this with
three incremental growth drivers.
Our services offer allows us to provide more value on our installed
base, and to better serve our customers across the entire lifecycle.
Our software portfolio provides unmatched capabilities in
bridging the physical and digital world, allowing customers to reap
the benefits of efficiency. Most recently, 2021 saw the finalization of
our strategic acquisition of ETAP, as well as the closure of AVEVA’s
acquisition of OSIsoft. Our next step is the development of a new
category of software, through integrating our full portfolio across
two core dimensions: the lifecycle and the operational domains.
This is the first offer of its kind and has huge potential to support
our customers by removing common operational frictions.
6
Schneider Electric Universal Registration Document 2021
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“ Two technologies underpin the
global economy’s transition to
a sustainable, more resilient
and lower-carbon future:
digitization and electrification”
Jean-Pascal Tricoire
Chairman and CEO
A sustainable future built on trust
Inevitably, many of the challenges of 2020 and 2021 will continue
in 2022. But our strategic positioning, our operating model, and
our guiding principles make us confident in our future.
Around the globe, companies, governments and people have
realized that humanity needs to act fast to make the world both
fairer and cleaner – that we need to avert the worst effects of the
looming climate crisis. The tools to do so exist: digitization and
electrification can help us get towards net-zero. What we need
to do now is act. Fast.
Jean-Pascal Tricoire,
Chairman and CEO
Read more about our strategy on page 22
And then there’s our sustainability business. Companies all
over the world are increasingly eager to become more sustainable,
and to reduce their carbon footprints. Our expertise on these fronts
has allowed us to develop a full-service offering, spanning ESG
consulting services, right through to digital technologies that can
bolster energy and operational efficiency, to support customers
at all stages of their journey.
Unique operating model to support
the transition
All of these growth opportunities are supported by our
operating model.
We’ve strategically built and scaled this around four distinct
characteristics: the integration of all aspects of our business
operations, from sales, to supply chain, to marketing and software;
the nurturing of the largest, open ecosystem of partners; the
principle of having ESG values at the heart of everything we do –
both by being leaders in our own ecosystem, and by helping our
customers along their ESG journeys.
And lastly, our multi-hub model. With four regional hubs around
the world (North America, Europe, China and India), our local
teams can adapt and respond quickly to changing circumstances.
It also helps us to attract the best talent anywhere in the world.
Of course, none of this would be possible without our SE Great
People, who participate and believe in our purpose and mission.
Throughout 2021, our 128,000 colleagues demonstrated their
adaptability, and their openness to collaboration and innovation,
as we all learned and grew in this new, hybrid-working world.
They’re also central to the trust we’ve built with our entire
ecosystem. This trust has ensured our resilience through tough
times, and strengthened our relationships for the future. Trust
is our highest value, reinforced by the establishment of our
Trust Charter in 2021.
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7
Integrated report
An interview with
Chief Financial Officer,
Hilary Maxson
Schneider Electric delivered a strong
performance in 2021, what were the
highlights?
In 2021 the key theme was growth, driven both by strong market
dynamics and our strategic choices and positioning. Our revenues
of EUR 28.9 billion were an all-time high, up +12.7% organically.
We delivered a strong improvement in our adjusted EBITA margin
which increased by +1.4pts organically, reaching 17.3%, a new
record, and surpassing our target of ‘around 17%’ one year early.
We achieved this through good leverage on the higher volumes of
2021, a strong focus on price in the face of inflationary pressures,
and continued progress on our operational efficiency plans.
The strong operational performance coupled with a reduction in
restructuring costs resulted in net income of EUR 3.2 billion, an
increase of +51% over 2020.
We delivered Free Cash Flow of EUR 2.8 billion, reflecting
strong operational cash flow but also increased working capital
requirements at the end of the year due to the strong external
demand environment and some supply chain shortages. We
retain a strong focus on shareholder returns, and we continue our
track-record of progressive dividends for a 12th year, increasing our
proposed dividend by +12% to EUR 2.90 per share.
What were the biggest challenges you faced
in 2021 and what do you expect in 2022?
Global supply chains came under pressure in 2021, impacting not
just Schneider, but across multiple industries and geographies.
While the heightened external demand is supportive of future
growth, it did present some temporal challenges in customer
deliveries for the year and came with associated higher costs both
in freight and the sourcing of some components. Our unique global
supply chain set-up helped us to navigate these challenges with
agility, using lessons learned from 2020, and leveraging our multi-
hub model. We also faced the ongoing challenge of a global health
crisis, which limited our ability to access customer sites, impacting
our Services organization. I want to take the opportunity to thank
our customer facing teams, and those working in our factories and
distribution centers, for all they did in putting our customers first in
these challenging times.
For 2022, we expect these challenges to persist, with cost inflation
the new reality and pressures on global supply chains not yet over.
We endeavor to meet these challenges with agility, always putting
customers at the forefront of our thinking.
What is the outlook for Schneider Electric
in 2022?
In 2022, we start-out on the scalable growth journey outlined in
our Capital Markets Day. We expect 2022 Adjusted EBITA growth
of between +9% and +13% organic. This strong and sustainable
performance would be achieved through a combination of topline
organic growth, targeted at between +7% and +9%, and Adjusted
EBITA margin up +30 bps to +60 bps organic. This implies
Adjusted EBITA margin of around 17.6% to 17.9% for 2022.
You held a Capital Markets Day in 2021.
What will drive shareholder value in the
coming years?
At the CMD, we set our 2022-2024 targets and longer-term
ambitions. Between 2022 and 2024 we expect organic revenue
growth of between +5% to +8%, on average, and a continued
improvement of our adjusted EBITA margin of between +30bps to
+70bps organic, annually. We expect this to translate into a step-up
in our Free Cash Flow, over-time, to around EUR 4 billion by 2024.
We upgraded our longer-term ambitions to at least 5% organic
growth in revenues on average across the economic cycle with an
opportunity to further expand adjusted EBITA margin and
Free Cash Flow beyond 2024.
These ambitions represent a step-change in performance from past
years, driven by long-term trends of digitization for efficiency, and
electrification for sustainability that are pervasive across the end-
markets we serve. We expect opportunities in these end-markets
to remain dynamic, and for growth to be augmented by our focus
on Software, Services and Sustainability. As we move into a period
of scalable and sustainable growth, our revenue profile is shifting;
becoming more digital and more resilient. We expect an evolution
in contribution from our Digital Flywheel, moving towards c.60% of
Group revenues by 2025, from c.50% today. Within this, our strategic
focus on more Software & Services is expected to drive an increase
of +5pts on these elements, to c.23% of Group revenues by 2025.
Software & Services also presents an opportunity for revenues to
be more sticky, more resilient and with a greater proportion to be
recurring in nature, increasing by +15pts to c.45% recurring by 2025.
As CFO, I am excited with the opportunities that lie ahead of us, we
have the portfolio, the technologies and the great people required
to enable sustainable growth for years to come, as we remain
committed to generating further value for all of our stakeholders.
Hilary Maxson,
Chief Financial Officer
8
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2021 Financial Performance Highlights
2021 was a record year setting the foundation for ongoing sustainable growth. The Group generated
all-time high revenues, adjusted EBITA margin and Net Income. Free Cash Flow was impacted by
working capital requirements, while operating cash flows remained strong.
Demand for the Group’s products, systems, software and services remained at high levels throughout 2021. As with all companies,
the Group faced pressure from tightness in global supply chains, but responded with agility, leveraging its unique, digitized model
for the benefit of customers.
Adjusted EBITA margin
In % of Group revenues
Net Income (Group share)
In millions of euros
Revenue
In billions of euros
€28.9B
17.3%
7
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.
5
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€3,204M
4
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6
2
1
,
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2017
2018
2019
2020
2021
2017
2018
2019
2020
2021
2017
2018
2019
2020
2021
Revenues were up +12.7% organic
(+14.9% reported) with strong growth
from both businesses and across all four
regions. There was strong demand across
the Group’s four end-markets, as revenues
rebounded to above 2019 levels on an
organic basis. FX impacts were negative
-1.3% due to the strengthening of the EUR
against the USD. There was positive scope
impact of +3.5% from recent acquisitions.
Adjusted EBITA reached EUR 5.0 billion, a
margin of 17.3%, expanding organically by
+140 basis points. The margin expansion
was driven through a combination
of pricing actions to compensate for
inflationary costs, industrial productivity,
and execution on the Group’s operational
efficiency plan. Both businesses
contributed to the margin expansion.
Net Income (Group share) reached
EUR 3.2 billion, up +51% on last year.
Restructuring costs were -EUR 225 million,
down EUR 196 million on last year. Other
Operating Income and Expenses were
-EUR 21 million, mainly consisting of some
disposal gains offset by M&A and integration
costs. Net financial expenses reduced by
EUR 102 million, while the Group’s effective
tax rate was 23.2%, in line with expectations.
Free Cash Flow
In millions of euros
€2,799M
6
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3
3
7
6
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3
9
9
7
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2
3
5
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Adjusted Earnings Per Share
In euros
Dividend Per Share
In euros
€6.13
2
3
.
5
2
7
.
4
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6
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4
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€2.90
5
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9
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2
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3
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2
2017
2018
2019
2020
2021
2017
2018
2019
2020
2021
2017
2018
2019
2020
2021
The Group generated EUR 2.8 billion of
Free Cash Flow, reflective of the strong
operating cash result of EUR 4.5 billion.
Working capital evolution was negative
EUR 853 million, reflective of the strong
external demand environment. Net capital
expenditure of EUR 817 million remained
stable as a percentage of sales at
around 3%.
Adjusted Earnings Per Share was
EUR 6.13, up 30% on last year,
mostly driven by the strong operating
performance. The weighted average
number of shares in issue remained
broadly stable compared to last year.
The proposed dividend is EUR 2.90
per share, up 12% on last year, subject
to approval at the Annual Shareholder’s
Meeting to be held on May 5, 2022.
The proposed dividend would be paid
on May 19, 2022, and represents a
continuation for the twelfth year of the
Group’s progressive dividend policy.
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Life Is On | Schneider Electric
9
Integrated report
Key Achievements of 2021
January
Schneider Electric announced as the world’s most sustainable
corporation, achieving the number one position on Corporate
Knights’ 2021 Global 100 Most Sustainable Corporations in the World
ranking, out of more than 8,000 companies assessed. The jump
from 29th place in the 2020 ranking reflects Schneider’s consistent
progress towards and commitment to sustainability excellence.
February
Schneider Electric introduced its vision for “Industries
of the Future” at the ARC Industry Forum. Renewing
its commitment to transforming the industrial sector
through open, sustainable technology, its next-
generation framework and winning formula for industrial
settings is founded around three core pillars: universal
automation, sustainable efficiency, and software-
centric automation. EcoStruxure™ Automation Expert
is Schneider Electric’s first offer based on the universal
automation vision, capable of unlocking step-change
improvements in efficiency and sustainability impossible
a decade ago.
March
Schneider Electric’s majority owned subsidiary AVEVA successfully
completed the acquisition of OSIsoft, a global leader in real-time
industrial data software and services. OSIsoft’s PI System is a
leading platform for data acquisition and data structuring for its
customers, specialized on the mission-critical applications on
which AVEVA and Schneider are focused.
May
Schneider Electric ranked
4th in Gartner’s Top 25
Supply Chain Award, for
the second consecutive
year, and 1st in Europe.
The inclusion is the 6th time
that Schneider has featured
on the Top 25 list, and it
underlines the Company’s
consistent efforts to
strengthen and digitize its
supply chain operations.
June
Schneider Electric successfully completed the acquisition of
Operation Technology, Inc. (ETAP), the leading software provider
in electrical network design and simulation. The closing of this
transaction will further enhance the Group’s software capabilities
in the “Design” phase of lifecycle digitization.
SUSTAINABILITY
The Zero Carbon Project
April
Schneider Electric launches the Zero Carbon Project.
Under the new initiative, the Company will partner
with its top 1,000 suppliers – which represent 70%
of Schneider’s suppliers emissions – to halve their
operations’ CO2 emissions by 2025. The initiative is part
of Schneider’s 2021-2025 sustainability goals and is a
concrete step towards limiting the rise in average global
temperatures to 1.5°C or less by 2100, as targeted by the
Paris Agreement.
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August
Schneider Electric received top ranking by Vigeo Eiris, the principal
European environmental, social, and governance (ESG) rating
agency and part of the Moody’s Group. Schneider has also been
included among the world’s top ESG performers in the mid-year
reviews of the FTSE4Good Index and Euronext Vigeo Eiris indices.
October
Schneider Electric announced
the launch of new state-of-
the-art connected PrismaSeT
Active switchboards,
ComPacT™ molded-case
circuit breakers, and
PowerLogic™ HeatTag sensors
for its EcoStruxure™ Power
architecture. These innovative
offers, poised to revolutionize
electrical distribution, pave the
way for the 100% connected
building, where efficiency is
maximized, and facility staff
can foresee power loss and
electrical fire risks.
December
Schneider Electric wins four
awards for Sustainability and Smart
Home leadership at the CES 2022
Innovation Awards, recognizing its
commitment to sustainability and
innovation. The company’s Wiser
Energy Center receives recognition
in both the Sustainability and Smart
Home categories for redefining
home energy management and
resiliency. Merten Ocean Plastic
receives praise as the first home
energy solution made from recycled
ocean plastics, while the new Odace
Sustainable collection made from
recycled materials is named as a
Sustainability category honoree.
Winner
Microsoft Partner
of the Year
Sustainability
Changemaker
Microsoft
Partner
Network
July
Schneider Electric is recognized by Microsoft as the
company’s 2021 Sustainability Changemaker Partner of
the Year Award winner. The award recognizes the impact
Schneider has had helping its customers set and achieve
decarbonization goals using its flagship EcoStruxure™
software solutions, which are underpinned by
Microsoft technologies.
September
Schneider Electric’s Lexington, Kentucky plant is recognized by the
World Economic Forum as a Sustainability Lighthouse – one of only
three worldwide. The World Economic Forum has also recognized
the Company’s Smart Factory in Wuxi, China as an Advanced
Lighthouse – the fourth Schneider Electric factory to receive
this distinction to date, joining the Lexington, Kentucky; Batam,
Indonesia; and Le Vaudreuil, France factories.
November
Schneider Electric joined other industrial leaders and pioneers to
form UniversalAutomation.org (UAO), an independent, not-for-profit
association managing the reference implementation of a shared
source runtime. For the first time, IT and OT software vendors,
industrial end users, OEMs, and academics will share a common
automation software layer across their automation technology –
regardless of brand. The organization seeks to create an entirely
new category of industrial automation and unleash the full potential
of Industry 4.0.
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Integrated report
Proud of 2021’s Sustainability Achievements
The Schneider Sustainability Impact is a scorecard demonstrating that rapid, disruptive changes for
a more sustainable world are possible across diverse, complex topics.
We are committed to taking urgent action to co-create a brighter future aligned with the United Nations Sustainable Development Goals
(SDGs), consisting of 17 objectives and measuring our impact with transparency. The SDGs are about protecting the planet, alleviating
poverty, and achieving worldwide peace and justice.
3.92/10
outperforming 3.75/10 target
for 2021
In 2021, the Schneider Sustainability Impact (SSI) achieved a great score of 3.92/10(1) exceeding its 3.75/10 target for the year.
Schneider Electric also received top ESG recognitions and is on track to achieve its 2025 ambition.
6 Long-term Commitments
11+1 targets for 2021-2025
Baseline(2)
2021 Progress(3)
2025 Target
Climate
1. Grow Schneider Impact revenues(4)
2. Help our customers save and avoid millions of tonnes of
CO2 emissions
70%
263M
71%
347M
3. Reduce CO2 emissions from top 1,000 suppliers’ operations
0%
1%
Increase green material content in our products
Primary and secondary packaging free from single-use plastic,
using recycled cardboard
7%
13%
11%
21%
Strategic suppliers who provide decent work to their employees(1)
--
In progress
Level of confidence of our employees to report unethical
conduct(1)
81%
+0pts
Resources
Trust
Equal
4.
5.
6.
7.
8.
Increase gender diversity in hiring (50%), front-line
management (40%) and leadership teams (30%)
41/25/24
41/27/26
50/40/30
9.
Provide access to green electricity to 50M people
30M
+4.2M
50M
Generations
10. Double hiring opportunities for interns, apprentices and
4,939
x1.25
x2.00
fresh graduates
11. Train people in energy management
281,737
328,359
1M
Local
+1. Country and Zone Presidents with local commitments
0%
100%
100%
that impact their communities
(1) The SSI provides an overall measure of the Group’s progress on its sustainability goals on a scoring scale of 10. This is achieved by converting each KPI’s
performance on a 10-point scale, considering that base year performance receives a 3/10 score and the 2025 objective translates to a 10/10 score. The overall score
of the tool is the average of each KPI’s score with equal weight excluding the local commitment (SSI #+1). As an exception, in 2021, two other KPIs are excluded:
SSI #6, as the program is still in development, and SSI #7, because 2021 is the baseline year.
(2) Generally, the 2020 performance serves as a baseline for SSI programs, except for two programs measured against a 2019 baseline to mitigate COVID-19 impacts
(SSI #1 Impact revenues and SSI #10 opportunities for the next generation).
(3) Each year, Schneider Electric obtains a “limited” level of assurance on methodology and progress from an independent third party verifier for all of the SSI indicators,
in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 224). Please refer to page 206 for the methodological presentation of
each indicator. The 2021 performance is also discussed in more details in each section of this report.
(4) For the reporting requirements under the European Taxonomy Regulation, please refer to page 68 and page 216.
12
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80%
800M
50%
50%
100%
100%
+10pts
Integrated report
Strategic Report
Climate
Schneider is on the CDP
Climate Change A List for
the 11th year in a row.
Collectively, Schneider
Electric’s PPA advisory clients
have contracted for more than
10,000 megawatts of wind and
solar power globally, a volume
equivalent to over 300,000,000
metric tons of CO2.
Resources
Schneider was recognized
as the Best Global Sustainable
Supply Chain Organization
by GSSC in 2021.
First company in the world to
publish its biodiversity footprint
followed by bold commitments
to fight biodiversity loss.
Trust
Schneider awarded the
Ethisphere ‘most ethical
company in the world’
recognition for the
10th consecutive year.
Equal
Schneider awarded the
‘Grand Prix de la Transparence’
in the ESG information
category.
The Financial Times awarded
Schneider Electric the title
of ‘Diversity leader’.
Successful projects such as
opening the biggest fish farm
in West Africa in Senegal,
equipped with renewable
electricity and supporting
local communities.
Generations
Committed to train 10,000
underprivileged young adults
in Africa through the newly
created French Southern
African Schneider Electric
Education Center.
25,000+ students up for
a sustainable challenge
– a record number of
registrations to our global
Go Green competition.
Local
100% of countries committed
to act for communities:
launching 200+ local initiatives.
Joining forces to support
COVID-19 relief in India thanks
to 6,500+ contributors from
48 countries taking actions to
support emergency needs and
recovery for education thanks
to the Tomorrow Rising Fund.
Read more about our long-term commitments on page 61 (cid:496)
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Business
Market trends – All electric, all digital
At Schneider Electric, we believe a more electric and digital world is key to reaching the 1.5°C increase
trajectory needed to slow climate change and enable a resilient future. The disruption caused by the events
of the past two years highlight how we need to build a more sustainable and resilient world.
We need to save 3x more CO2 emissions by 2030
4 Gt
CO2 saved/yr
10-15 Gt
CO2 saved/yr
Current pledged savings,
post COP26, by 2030
leading to ~2.7º rise
Minimum required
savings by 2030 to
limit to 1.5º rise
Source: Schneider Electric™ Research
Institute Scenario: Back to 2050
Solutions to increase sustainability and resilience exist and are available today. Three megatrends highlight
the shift to a world becoming all-electric and all-digital:
• Electricity makes energy greener: electricity is the most efficient energy and offers the best path for decarbonization.
• Digitization builds a smart future: digital tools make the invisible visible, enabling more effective waste reduction and
efficiency improvements.
• Digitization creates resilience: data analytics and insights enable more agile operations and continuity.
All electric
All digital
Decarbonization of power supply by increasing electricity
in the energy mix from 25% in 2018 to 80% by 2050
Increased electrification in mobility, industrial processes,
homes and buildings
Growing need to aggregate exponential amount of data
Expansion of Internet of Things (IoT) in industrial processes
driving abundance of data
New business models with artificial intelligence (AI),
algorithms and digital platforms
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What we do
Industries of the Future
Schneider Electric is committed to driving innovation in the industrial world. With technology,
innovation and partnerships making up the core of our offer, we help industrial businesses
achieve new levels of efficiency, resiliency and sustainability.
As a global manufacturer, named the most sustainable corporation
in the world in 2021, with an end-to-end network of smart factories
and distribution centers--including four designated by The World
Economic Forum as Advanced Lighthouses--Schneider is on a
mission to make industries of the future eco-efficient, agile and
resilient through open, software-centric industrial automation.
operations that create step-change improvements in productivity
and cost reduction. These core pillars are delivered through our
innovative and unique EcoStruxure™ solutions and services, built
from the legacy of world-leading and award-winning brands
such as Modicon, Foxboro, AVEVA, Triconex, TeSys, Altivar,
Eurotherm, and Harmony.
Our next-generation framework and winning formula for industrial
settings center around three core pillars: universal automation,
sustainable efficiency, and software-centric automation. These
create a foundation for protecting the environment and improving
health and safety, while enabling real-time data sharing and remote
20% improvement in production efficiency
in the largest African desalination plant
Schneider Electric worked with Al-Galala desalination plant in
Egypt to improve their production efficiency and support the
increasing water demand driven by population and economic
growth. A complete EcoStruxure™ for Water and Wastewater
solution has been delivered, including Schneider Electric expert
services and leading-edge industrial software from AVEVA.
Benefits for the customer are tangible:
• 20% improvement in production efficiency
• Complete integrated solution
• Optimization in design stage
for Water & Wastewater
Apps,
Analytics,
& Services
Edge
Control
Connected
Products
Water Network
Management
Expert Services
AVEVA Plant SCADA
Modicon™ M580
MV SWG, LV MCC, Transformers,
Busway, Drives, UPS
Innovations introduced in 2021 include:
• UniversalAutomation.org (UAO) was formed by leaders
and pioneers across industry to advance the world in industrial
automation. Co-founded by Schneider Electric, UAO represents
the first time that vendors, end users, OEMs, and academics
will share a common automation software layer across their
automation technology, regardless of brand.
• EcoStruxure™ Automation Expert v21, Schneider Electric’s
own universal automation offer, expands into the water and
wastewater market.
• Next generation Lexium MC12 multi carrier system offers our
original equipment manufacturers (OEMs), machine builders,
and end-users unprecedented simplicity and flexibility from
installation and integration to operation and maintenance.
• Motor Management innovations provide a holistic lifecycle
solution for advanced asset management and energy efficiency,
from “Design & Build” to “Operate & Maintain”. Using next-
generation digital simulation and design tools to optimize safety,
performance, and sustainability, these advances are helping
industries of the future thrive.
• Schneider Electric and Wilo partnered to provide complete
solutions for energy efficiency and water conservation for
sustainable buildings, municipalities, utilities, and industrial
water applications.
>100
smart factories and
distribution centers
30%
improvement in workforce
efficiency using digital solutions
(Hubei Sanning Chemical
Industry Co., Ltd.)
50-70%
less energy required
(Oxford Energy Solutions Inc).
15%
Energy savings of up
to 15% and production
efficiency improved by 20%
(Veolia Water)
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Integrated report
Business
What we do
Buildings of the Future
We spend the majority of our lives in buildings. They are where we work, learn, shop, and
spend time with the people who matter most. That is why it is more important than ever
that buildings are:
• Sustainable and return resources to our planet rather than just
use them.
• Resilient and ready for the unexpected.
• Hyper-efficient, leveraging real-time data to be more
responsive and deliver more for less.
• People-centric with safe, healthy, and welcoming environments
that improve comfort and productivity.
Global demands for sustainability are forcing the industry to
examine the role buildings play in producing carbon emissions and
costly waste. The IEA estimates that the construction and operation
of buildings consume 30% of the world’s energy, and account for
almost 40% of annual global CO2 emissions(1).
For building owners and operators seeking to meet sustainability
targets, Schneider Electric offers a comprehensive, step-by-step
approach to move from strategy and implementation to operation,
optimization and green certification to achieve a net-zero building.
With our services, software, and solutions, customers can
increase their building valuation, meet or exceed investor and
tenant expectations, and reach net-zero targets, while contributing
to a better environment.
for Buildings
Apps,
Analytics,
& Services
Edge
Control
EcoStruxure™
Building Advisor
Planon Universe
for CRE & FM
EcoStruxure™
Engage Enterprise
EcoStruxure™
Building Operation
EcoStruxure™
Power Monitoring Expert
Headquarters of the future – London, England
The Dar Group, a leading, privately-owned professional
services group, is putting EcoStruxure™ Building Graph to use
at its new 19,000-square-foot European headquarters in London
to create a sustainable, resilient, hyper-efficient, and people-
centric work environment. Using real-time data monitoring,
the collaboration has resulted in:
• A new smart and sustainable European headquarters
building.
• LEED “Platinum” and BREEAM “Excellent” certification.
• Carbon emission reductions of 18.5%.
• A people-centric working environment focused on
employees well-being and experience.
• Real time building monitoring.
Connected
Products
Connected
Room
Solutions
Automation
Server
Smart
Panels
LVMV
Switchgear
Power
Systems
Innovations introduced in 2021 include:
• EcoStruxure™ Connected Room Solutions for Hotels:
Allows for integration and control of light, blinds, temperature
and other occupant amenities at the guest room level.
It enables a personalized and people-centric environment,
while contributing to energy and carbon reduction goals.
• EcoStruxure™ Building Graph: Building operating system
links the complex network of interactions between humans
and buildings, connecting data across systems and Internet
of Things (IoT) devices, enabling data accessibility and
application development.
• EcoStruxure™ Building Advisor: A digital twin for your
HVAC system, Building Advisor monitors the health of your
HVAC assets and BMS and identifies opportunities for
optimization of occupant comfort, maintenance prioritization,
and overall building performance.
30%
40%
80%
Buildings consume 30% of the world’s
energy, via construction and operations
Buildings account for almost 40%
of world’s annual CO2 emissions
of the buildings that will exist in 2050
have already been built(2)
(1) https://www.iea.org/topics/buildings
(2) https://www.ukgbc.org/ukgbc-work/net-zero-whole-life-roadmap-for-the-built-environment/
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Homes of the Future
At Schneider Electric, we bring to life sustainable and smart homes of the future by connecting
the lifeline of your home – electricity – with digital, to help achieve carbon-neutral goals.
We design solutions to:
Make homes more sustainable
Homes are the single largest consumer of electricity and contribute
up to 20% of carbon dioxide emissions. Schneider Electric provides
solutions to make homes multi-energy source ready, maximizing
electrification and, therefore, decarbonization (e.g., switching
from fossil fuel to electrical heating), making it easy to upgrade
existing installations.
Make homes more resilient
Schneider Electric’s advanced technology helps customers secure
homes against electrical hazard risks, cyber threats and power
interruption. Unfortunately, defaults in electrical installations are more
regular than we think, causing damage and losses. And they tend
to become even more frequent with the ever-increasing number of
natural disasters. One of our solutions, “Wiser” monitors the health
of homes at any moment, so you can call an electrician before
any harm is done. It also ensures that your critical appliances
are powered even during outages.
Make homes more efficient
Digital solutions enable greater electrification. To deliver more
efficiency, Wiser connects, controls and monitors devices, whether
connected or not. For example, through an efficient temperature
control you can save 20% to 30% in energy consumption, without
compromising on comfort. Through real-time monitoring of your
energy use, you have visibility over the electrical consumption
of your home appliances and can put that information into action
to reduce your electricity bill.
Make homes more personal
Schneider Electric helps you create a comfortable home with a
bespoke style and personalized living experience at every moment.
Thanks to digitization and machine learning, you can take complete
control of your home while Wiser learns your preferences to deliver
your unique smart home experience.
Customer testimony:
“As an innovative and committed advocate for the environment in
the construction sector, Hexaom strives to make homes increasingly
environmentally friendly and energy efficient. Our goal is to develop homes
that are affordable, adaptive and self-reliant in terms of their energy needs.
There are many such solutions on the market, across various fields, but
they are largely complementary and lack an integrated “systems approach”.
That is why we are proud of our partnership with Schneider Electric, which
together with Wiser Energy Center has now enabled us to offer a turnkey
system of energy self-consumption”.
Sébastien Perrissoud,
Innovation Leader at Hexaom
Innovations introduced in 2021 include:
• Square D energy center: A smart panel for resilient energy
and more efficient homes, offering grid-to-plug home energy
management. Recognized by the National Association of
Home Builders Global Innovation Awards.
• Merten System switch: First switch in the world
to be Cradle to Cradle Certified® Silver.
• Square D: Smart home enabled switches, dimmers,
and sensors in North America.
• Wiser home automation additional features: presence
detection, cameras, and water leaks detection.
29%
20%
of worldwide electricity is consumed
by residential segment(1)
Homes contribute up to 20%
of carbon dioxide emissions(2)
>€3.6B
of property is damaged due
to electrical fault(3)
(1) International Energy Outlook 2019 (EIA)
(2) UN environmental Program 2020
(3) International Energy Outlook 2019, End-use consumption is increasingly shifting toward electricity
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Integrated report
Business
What we do
Infrastructure of the Future
Infrastructure is the backbone of society. Schneider Electric’s technology, services,
and expertise enable cities and companies to make infrastructure more reliable, safer,
greener, and more efficient.
Grids
Sustainable, flexible, efficient, and resilient power grids are
fundamental to accelerate the energy transition. In addition to
providing innovative electrical equipment, such as switchgear that
uses pure air instead of the SF6 greenhouse gas, the company
equips grid operators with data gathering, management, and
analytics capabilities that unlock grids of the future. These
digital grid transformations further enable the decarbonization
of buildings, industry, and mobility.
Transportation infrastructure
Many governments, cities, and transit authorities are pioneering
mobility and infrastructure projects using end-to-end EV charging
solutions, renewables, battery storage, and microgrids. Schneider
Electric makes this possible through a foundation of digital, future-
proof, financially innovative, and services-based infrastructure
solutions. These solutions modernize and digitize diverse
transportation infrastructure including buses, metros, railways,
and airports, speeding up the transition to low-carbon mobility.
for eMobility
EcoStruxure™
Microgrid Advisor
EcoStruxure™
Power Advisor
Apps,
Analytics,
& Services
Edge
Control
EcoStruxure™
Microgrid Operation
EcoStruxure™ Power
SCADA Operation (PSP)
Connected
Products
PowerLogic Masterpact
EaserMV
Relay
Energy
Control
Centers
Brookville Bus Depot
A first-of-its-kind “Energy as a Service” infrastructure
electrification project ensuring the bus fleet’s continuous
operation regardless of utility outages. Backed by renewables,
it advances Montgomery County’s 2035 net-zero carbon
emissions goal. The project is set to deliver sustainable and
resilient energy and charging infrastructure supporting at least
44 electric buses at Brookville Smart Energy Bus Depot.
• Solutions installed: solar PV, on-site generation,
battery energy storage, microgrid controls, and
electric bus chargers
• 62% carbon reduction from buses eliminating lifetime
~155,000 tons of GHG
• 99.999% resilience and reliability of operations and sized to
handle peak-demand
• Turnkey Energy-as-a-Service solution
Innovations introduced in 2021 include:
• SM AirSeT and RM AirSeT are digital MV switchgear ranges
using pure air technology, eliminating the need for the SF6
greenhouse gas.
• EcoStruxure™ ADMS (Advanced Distribution Management
System) latest release provides utilities with new capabilities
in coping with far-reaching effects of climate change
• EcoStruxure™ DERMS (Distributed Energy Resource
Management System) provides active network management
for greater grid flexibility.
• EcoStruxure™ Power Automation System provides
digital automation for more efficient operation and
maintenance programs.
• EcoStruxure™ EV Advisor is a platform for building
owners and EV drivers to control EV charging remotely.
• ETAP Train Power Simulation - eTraX™ is software for
designing, analyzing, and managing AC and DC railway
infrastructure.
80%
60%
of global CO2 emissions come from the
production and consumption of energy(1)
rise in CO2 emissions from transportation
by 2050 in absence of mitigation measures(2)
(1) OECD/IEA (2020), World Energy Outlook, Climate Watch (2020), Historical GHG emissions, Schneider Electric Research
(2) Planete Energies
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Data centers of the Future
Data centers are the lifeblood of the digital world. From massive cloud data centers enabling
global peer-to-peer communications for billions of people, to the smallest micro data centers
supporting expanding edge computing applications, data centers must be sustainable, resilient,
efficient and adaptive.
Critical attributes of evolving data centers:
Sustainability – Sustainability is more than just reducing power
consumption, it’s about creating direct customer benefits. Beyond
just tracking their company-based emissions, data centers must
account for the emissions of their upstream and downstream
supply chain. Robust data is the key to rounding out an
organization’s sustainability profile.
Resilience – By reducing exposure to hazards and associated
risks, like unanticipated blackouts, data center owners can mitigate
unplanned downtime. Through monitoring and data analysis, data
center teams can proactively avoid uptime threats and support
business continuity.
Efficiency – Data center efficiencies, which often encompassed
only process and hardware performance efficiencies, will soon
include human resources, CapEx, and total cost of ownership
(TCO) efficiencies. By equipping devices with intelligent sensors
and adding more digital services and remote monitoring
capabilities, data centers will drive more efficient operations.
Adaptiveness – A new threshold for business success has
emerged: deliver goods and services with speed and precision.
As customers demands increase, data centers must also adjust.
More agile designs now allow data center owners to pivot, quickly
scaling up or down to handle changing consumer demands.
China International Intellectech Corporation
(CIIC) boosts energy savings
As part of the Zhongzhi Group, CIIC is a leading human
resources company in China, serving more than 20,000
customer companies across the country. By deploying
Schneider Electric’s low footprint Uniflair™ InRow™ Cooling
and Hot-Aisle air containment system, CIIC succeeded in
boosting energy efficiency and achieving a PUE (Power Usage
Effectiveness) of 1.5°C, while reducing the required system
footprint space by 70 square meters.
for Data Center
Apps,
Analytics,
& Services
EcoStruxure™
IT Advisor expert team
7 x 24 services
Edge
Control
Digital platform for monitoring
Connected
Products
Modular solution,
access control,
Netbotz, UPS
Innovations introduced in 2021 include:
• Galaxy VL: The new, energy-efficient Galaxy VL is designed
to help data centers grow while minimizing footprint and cost
of ownership. As a Green Premium™ product, it delivers top
performance, supports sustainability objectives, and fills a
previous gap in the market for the midrange power segment.
• Monitoring and Dispatch Services: Designed for single-phase
systems within edge environments, Monitoring and Dispatch
Services provide both customers and partners with advanced
remote troubleshooting and on-site support. End users can
reduce OpEx, improve cost predictability, and reduce costly
business interruptions.
• Smart-UPS Ultra: The first of its kind, APC Smart-UPS Ultra
is redefining the single-phase UPS, making it lighter and more
powerful. It uses lithium-ion technology to power distributed IT
and edge computing sites to ensure uptime and resilience.
Leading change in the data center industry
“The data center industry has unique characteristics, such as high
energy intensity, rapid growth, large power consumption, and water
usage, that require specialized metrics. Standardizing these metrics
will help with adoption, improve benchmarking, and progress
sustainability within the industry.”
Schneider Electric Energy Management Research Center,
Guide to Environmental Sustainability Metrics for Data Centers
1-2%
50%
50%
Estimated global energy consumption
by data centers(1)
Growth in IT sector electricity demand
by 2050(2)
Reduction in carbon intensities
of data centers by 2030(2)
(1) https://www.science.org/doi/full/10.1126/science.aba3758
(2) https://www.se.com/ww/en/insights/tl/schneider-electric-sustainability-research-institute/digital-economy-and-climate-impact-2
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Integrated report
Our Business Model
Our mission is to be your digital partner
Our advantages and resources
We are the most local of global companies. We are advocates of open standards and partnership ecosystems
that are passionate about our shared Meaningful Purpose, Inclusive and Empowered values.
People
Innovation
Environment
Partners
and suppliers
Financial
strength
128k+
1,000+
51
650k+
A-/A3
employees worldwide,
in 100+ countries
patent applications filed
globally in 2021
Number of zero-CO2
sites
service provider and
partner ecosystem
strong investment grade
credit rating
Our expertise
Energy
Management
Energy
Transition
Industrial
Automation
Industry
4.0
Our strategic pillars
Electrification
Sustainability
Digitization
Efficiency
Our strategic priorities
More
Products
More Software
& Services
More
Sustainability
End Markets
Data Centers
Buildings
Industry
Infrastructure
IMPACT
Company
Our five principles
1. Performance
The foundation for doing good
2. All Stakeholders
in our ecosystem
3. All ESG
dimensions
4. Business
Digital partner for Sustainability
and Efficiency
5. Model & Culture
set up for global and local impact
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for Sustainability and Efficiency.
One integrated company
A fully integrated company empowering its people and offering greater efficiencies to customers.
One Sales, Marketing, Digital, Supply Chain and Associated Software.
USA
Europe
India
China
Four hubs
Products
R&D
Supply
Chain
Sales
Suppliers
Quadruple integration
Energy
1
2 End Point
3 Design & Build
4 Site-by-site
Automation
Most innovative range
of connected products
Cloud
Operate & Maintain
Software across the lifecycle
Integrated Company
Management
Unified Operation
Centers
Creating value
Creating value for all our stakeholders
For our
customers
For our partners
and suppliers
347M
1k+
tonnes of CO2 saved
and avoided since 2018
of top suppliers enrolled
in Zero Carbon Project
For the
planet & local
communities
34M
59%
+49%
1-year Total
Shareholder Return
people provided access
to green electricity
since 2008
of eligible employees
benefitting from 2021
share plan
For our
employees
For our
shareholders
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Integrated report
A future worth investing in
Our mission is to be your digital partner
Schneider Electric is positioned in accelerating markets…
Need for sustainability and resiliency…
…supported by governments, businesses, investors, customers and civil society
Our Answer:
Digitization
for efficiency
Eliminate waste, drive
efficiency and optimize
from plant to plug
Electrification
for Decarbonization
Most efficient energy
and the best vector of
decarbonization
Leading to:
Sustainable
world
greener & smarter
…and will leverage our unique operating model to deliver on our mission
The integrated
company
It allows us to
provide our
customers with a
complete plug and
play and seamless
integrated solution.
Open
Multi-hub
We believe in the
power of open
ecosystems
& partners.
Multi-hub is a
key element to offer
improved resiliency,
agility, proximity
with our customers
and suppliers.
The Impact
Company
Sustainability is at
the core of everything
we do, in line with our
purpose.
Read more about our operating model in Chapter 1 on page 46 (cid:496)
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for Sustainability and Efficiency.
Through the development of incremental growth drivers
More sustainable products
More Software
78% of product sales in 2021 are with
Green Premium™ label
Across the lifecycle, from Design & Build
to Operate & Maintain, and across customer
domains of Industry & Infrastructure, Power
and Buildings. For a seamless customer
experience derived through unification
and federation of a unique portfolio.
More Services
More Sustainbility
2x Group growth, peace of mind to
customers on mission critical assets
Supporting customers in defining and
implementing their net-zero roadmap,
to drive double-digit growth
Leading to
Software
+
Digital
services
Ambition for Software, Sustainability
and Services revenues (currently c.18%
of Group revenues) to increase by +5pts
by 2025
Increased
across
domains
Edge
Control
c.50%
Group
revenue
leveraging
Field
Services
Moving towards
c.60%
of Group revenues
by 2025
Leveraging installed base,
servicing of Assets under
Management
Growing proportion of
natively connected products
through R&D, replacing
non-digital offers
Connectable
products
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Integrated report
A changemaker for sustainability
For over 15 years, sustainability has been at the core of Schneider Electric’s transformation journey.
The Group is now a world corporate leader in sustainability and a key enabler for all stakeholders
in its ecosystem to accelerate their own energy efficiency and sustainability transition. With this
experience, comes a strong belief that what makes Schneider Electric stand out today and tomorrow
is that it is an impact company.
IMPACT
Company
“Companies need to have a net positive
mindset where they can benefit from solving
the world’s problems instead of creating
them. This restorative mindset is aligned
with Schneider Electric’s impact company
model that can be a true driver for change.”
Bertrand Piccard
Chairman of the Solar Impulse Foundation
Schneider Electric is an impact company, a company which lives
by a unique sustainability strategy and operating model, built to
deliver positive impacts in the long-run. It entails a responsibility
to share learnings and keep raising the bar.
An impact company seeks to address the needs of all
stakeholders in its ecosystem, from employees to supply chain
partners, customers, as well as local communities and institutions.
To deliver sustainability in its entire value chain, it must combine
a solid profitability with leading practice on all Environmental,
Social and Governance dimensions.
It means that an impact company has inherently aligned and
integrated its purpose and its business mission to ensure its
corporate value delivers on sustainability needs and ambitions.
The company’s operating model is set up to impact on all of the
above at global and local levels. Its culture builds on strong and
practiced values with the right talent and processes to be a leading
purpose-led company.
Our Guiding Principles
1. Performance
the foundation for doing good
2. All Stakeholders
in our ecosystem
3. All ESG
dimensions
4. Business
digital partner for Sustainability
and Efficiency
5. Model & Culture
set up for global and local impact
An Impact model recognized in external ratings
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Our 2025 sustainability commitments
With less than ten years left to reach the 17 United Nations SDGs, Schneider Electric has accelerated its impact and is making new, bold
commitments to drive meaningful impact within the framework of its business activity. Such sustainability commitments and progress are
fully integrated in the governance processes and bodies that design and execute the Group’s strategy internally and externally at every
level from the Board of Directions to the operations.
Act for a
climate-positive world
Be efficient with
resources
Live up to our
principles of trust
by continuously investing in and
developing innovative solutions that deliver
immediate and lasting decarbonization in
line with our carbon pledge.
by behaving responsibly and making
the most of digital technology to preserve
our planet.
by upholding ourselves and all around
us to high social, governance, and
ethical standards.
Create equal
opportunities
Harness the power
of all generations
Empower local
communities
by ensuring all employees are uniquely
valued in an inclusive environment to
develop and contribute their best.
by fostering learning, upskilling, and
development for each generation, paving
the way for the next.
by promoting local initiatives and
enabling individuals and partners to
make sustainability a reality for all.
Schneider Sustainability Impact
Progress against our six commitments for 2021 – 2025 are
tracked through quantitative performance indicators, under two
complementary tools: the Schneider Sustainability Impact (SSI)
and the new Schneider Sustainability Essentials (SSE).
The SSI is the translation of our six long-term commitments into a
selection of 11 highly transformative and innovative programs. The
programs are tracked and published quarterly, as well as audited
annually. To instill a culture of sustainability, the SSI performance is
embedded in the short-term incentive plans for the managers and
leaders of the Group. A notable addition to the SSI in 2021 is the
local commitment, aiming to deploy meaningful local actions in
the 100+ markets where the Group operates.
The SSE is a new tool created to maintain a high level of
engagement and transparency for 25 other long-lasting programs,
such as our promise to pay all our employees above the living wage.
Our unique transformation tool
1. Focused
on material issues
2. Disrupting
the status quo
3. Transparent
quarterly disclosure
4. Robust
assured by an independent third party
5. Rewarding
employees for performance
2030 PLEDGE
For our Ecosystem
Climate
Biodiversity
Access to Energy
Carbon pledge towards net-zero
CO2 emissions
In our operations by 2030
In our value chain by 2050
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Pledge to be efficient with
resources with no net biodiversity
loss in our operations by 2030
Provide access to green electricity
to 100 million people by 2030
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25
Integrated report
2022 outlook and target
Expected trends in 2022
2022 Target
The Group expects to grow both its revenues and
profitability in 2022, in line with the framework for
sustainable growth for the medium and long-term
announced in its recent Capital Markets Day.
In 2022, the Group expects:
The Group sets its 2022 financial target as follows:
2022 Adjusted EBITA growth of between
+9% and +13% organic.
The target would be achieved through a combination of organic
revenue growth and margin improvement, currently expected to be:
• A continuation of strong and dynamic market demand,
including further recovery in late-cycle segments
• All regions and all four end-markets expected to contribute
to growth
• Sales to benefit from higher level of backlog exiting 2021
• Ongoing uncertainty linked to health crisis
• Ongoing global supply chain pressures continue to impact
•
in coming months
Increased pressure on input costs, including raw materials,
labor, freight and the sourcing of electronic components
• Despite the overall inflationary environment, and current supply
chain pressures, the Group aspires to be net price positive for
the full year (including impacts of freight and electronics)
• Revenue growth of +7% to +9% organic
• Adjusted EBITA margin up +30bps to +60bps organic
This implies Adjusted EBITA margin of around 17.6% to 17.9%
(including scope based on transactions completed in 2021 and
FX based on current estimation).
The Group expects progress on these levers to be weighted
towards H2.
26
Schneider Electric Universal Registration Document 2021
Schneider Electric Universal Registration Document 2021
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2022-2024 targets and long-term ambitions
as announced in Capital Markets Day
Integrated report
Strategic Report
2022 – 2024 Targets
• Organic revenue growth of between +5% to +8%, on average
• A yearly organic improvement of between +30 bps to +70 bps
in adjusted EBITA margin
• c.€4 billion Free Cash Flow by 2024
Longer-term ambitions
• Organic revenue growth of 5%+ on average across the
economic cycle
• Opportunity to further expand adjusted EBITA margin and
Free Cash Flow beyond 2024: Operational leverage and
continued evolution of business mix to positively impact margins
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Integrated report
Governance
Our Board of Directors
As of March 29, 2022, the Board of Directors consisted of 15 Directors and 1 Observer. The terms of office of Mr. Willy Kissling and
Mrs. Fleur Pellerin who did not ask to be renewed, will end at the Annual General Meeting to be held on May 5, 2022. The appointment as a
Director of Mrs. Nive Bhagat who joined the Board as an Observer on February 16, 2022 will be submitted to shareholders on this occasion.
As of May 5, 2022, the Board should then be composed of 14 Directors.
Board Expertise
Jean-Pascal Tricoire
Chairman &
Chief Executive Officer
Fred Kindle
Vice-Chairman &
Lead Independent Director
58 years, French
62 years, Swiss
• Organizes and oversees the
Board’s work and reports
thereon
• Represents the Company
in its dealings with third
parties, and is vested with
the broadest powers to act
on behalf of the Company in
all circumstances, within the
limits of the corporate purpose
• Ensures proper governance
• Sets the agendas for Board
meetings with the Chairman
• Meets with shareholders
• Chairs the Governance &
Remunerations Committee
• Chairs the executive sessions
• 3 Employee
Directors
• 75% independent
Directors*
• 42% women
Directors*
• 73% non-French
Directors
• 9 nationalities
from 3 continents
* The Director representing the
employee shareholders and Directors
representing the employees
are excluded as per the French
Commercial Code and AFEP-MEDEF
Corporate Governance Code.
International markets (13)
Corporate finance (12)
Public company management (11)
Industry knowledge (8)
Accounting, audit & risk (5)
Sustainability (4)
Law, governance, ethics & compliance (4)
Digital & Technology (4)
Employee perspective and knowledge of
the Group (4)
Léo Apotheker
Director
Cécile Cabanis
Independent Director
Rita Felix
Employee Director
Willy R. Kissling
Director
68 years, French & German
50 years, French
39 years, Portuguese
77 years, Swiss
Linda Knoll
Independent Director
61 years, American
Jill Lee
Independent Director
Xiaoyun Ma
Employee Shareholders Director
Anna Ohlsson-Leijon
Independent Director
58 years, Singaporean
58 years, Chinese
53 years, Swedish
Fleur Pellerin
Independent Director
48 years, French
Gregory Spierkel
Independent Director
65 years, Canadian
Lip-Bu Tan
Independent Director
62 years, American
Bruno Turchet
Employee Director
48 years, French
Nive Bhagat
Observer
50 years, British
Activities of the Board in 2021
There were 7 meetings (including a Strategy session of 4 half-days) with 97% average attendance.
Business &
Financial results
Ongoing business, Financial
statements and information
delivered to the market, ESG
strategy.
Strategy and
investment
Review of strategic priorities,
including during the Strategy
session, and authorization of
significant acquisitions and
disposals (over €250 million)
Risks & Compliance
Risk mapping, Business
continuity plan, Ethics &
Compliance framework
Corporate governance
Composition of the Board and
its committees, succession
plan for corporate officers,
compensation of Corporate
officers, Long-term incentive
plan, Preparation of the Annual
General Meeting
Anders Runevad
Independent Director
62 years, Swedish
Board committees
Governance &
Remunerations
Committee
Audit & Risks
Committee
Investment
Committee
Digital
Committee
Human Resources
& CSR Committee
Committee Chair
Board committees
Governance &
Remunerations
7 meetings**
6 members
67% independent
94% average attendance
Audit & Risks
Committee
6 meetings**
5 members
80% independent
100% average attendance
Investment
Committee
3 meetings**
6 members
80% independent*
89% average attendance
Digital
Committee
5 meetings**
5 members
75% independent*
100% average attendance
Human Resources
& CSR Committee
4 meetings**
6 members
75% independent*
100% average attendance
*Excluding the Director representing the employee shareholders and Directors representing the employees. ** Including joint meeting with other committee.
28
Schneider Electric Universal Registration Document 2021
www.se.com
Our Executive Committee
Global functions
Operations
Business
As at April 1st, 2022, the Executive Committee is chaired by the Chairman and Chief Executive Officer and meets monthly. Its mission is to
conduct Schneider Electric business in line with the strategy defined by the Board of Directors.
Integrated report
Strategic Report
Jean-Pascal Tricoire
Chairman &
Chief Executive Officer
Hilary Maxson
Chief Financial
Officer
Charise Le
Chief Human
Resources Officer
Chris Leong
Executive Vice-President
Chief Marketing Officer
Hervé Coureil
Chief Governance Officer &
Secretary General
Mourad Tamoud
Executive Vice-President
Global Supply Chain
58 years, French
44 years, American
49 years, Chinese
54 years, Malaysian
51 years, French
50 years, French
Nadège Petit
Chief Innovation
Officer
42 years, French
Gwenaelle Avice-Huet
Chief Strategy &
Sustainability Officer
Peter Weckesser
Chief Digital
Officer
Annette Clayton
Executive Vice-President
North America Operations
Philippe Delorme
Executive Vice-President
Europe Operations
Laurent Bataille
Executive Vice-President
France Operations
42 years, French
53 years, German
58 years, American
51 years, French
43 years, French
• 44% women
• 44% non-French members
• 6 different nationalities from
3 different continents
Luc Rémont
Executive Vice-President
International Operations
Zheng Yin
Executive Vice-President
China Operations
Barbara Frei
Executive Vice-President
Industrial Automation
Olivier Blum
Executive Vice-President
Energy Management
52 years, French
50 years, Chinese
51 years, Swiss
51 years, French
Our Stakeholder Committee
The primary mission for the Stakeholder Committee is to oversee the delivery of long and short-term commitments undertaken by Schneider
Electric in accordance with its Purpose and Sustainability strategy.
Jean-Pascal Tricoire
Chairman &
Chief Executive Officer
Bertrand Piccard
Chairman of Solar Impulse
Foundation
58 years, French
64 years, Swiss
Lan Xue (Dr.)
Cheung Kong Chair
Distinguished Professor and
Dean of Schwarzman College
in Tsinghua University
62 years, Chinese
Amani Abou-Zeid (Dr.)
African Union Commissioner
in charge of Infrastructure,
Energy, ICT and Tourism
Linda Knoll
Director of Schneider
Electric SE, HR&CSR
Committee Chair
60 years, Egyptian
61 years, American
Rita Felix
Employee Director of
Schneider Electric SE
39 years, Portuguese
Salvo Lombardo
Chief of staff, UNHCR
Emily Reichert (Dr.)
CEO, Greentown Labs
Michela Conterno
CEO, LATI
63 years, Italian
48 years, American
46 years, Italian
Our Shareholders
7.0%
6.3%
3.6%
2.2%
Sun Life
BlackRock, Inc.
Employees
Treasury shares
Public
80.9%
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Life Is On | Schneider Electric
29
Integrated report
Governance
Our Executive compensation
The general principles underlying the compensation policy for Corporate Officers and the analysis of their contribution to the Group’s
performance are reviewed and approved by the Board of Directors based on the recommendation of the Governance & Remunerations
Committee. Executive compensation set by the Board of Directors is aligned with the Group’s global strategy and is based on three pillars
divided into seven principles:
Pay for Performance
Alignment with shareholders’
interest
Competitiveness
1. Prevalence of variable components:
4. Significant proportion of the total
6. To benchmark the Corporate
circa 80% for CEO (at target).
compensation delivered in shares.
5. Performance conditions support
Schneider Electric’s strategic
priorities and are aligned with
shareholders’ expectations.
Officer’s compensation package
“at target” in the median range of
the Company’s updated peer group.
7. To reference the CAC 40 third
quartile and the Stoxx Europe
50 median.
2. Performance is evaluated via
economic and measurable criteria.
3. Financial and Sustainability
objectives are fairly balanced and
distributed between short-term
(annual variable compensation) and
medium-term (long-term incentive)
components.
Aligned with those principles, the
compensation of the Corporate Officer
is made of the following components:
for the variable component of the
compensation, the Board upon
recommendation of the Governance &
Remunerations Committee, chooses the
performance conditions directly linked
to the Group’s priorities. The Schneider
Sustainability Impact (SSI) which includes
a climate target (see section 2.1.2 of the
Universal Registration Document) is
used as a criterion in the annual variable
compensation of the Corporate Officer and
that of the 64,000 employees benefiting
from such compensation. In the same
way, the Schneider Sustainability External
& Relative Index (SSERI) is used for the
long-term incentive plan granted to 3,000+
employees including the Corporate Officer.
Balance between compensation elements
18%
Not linked to
performance
41%
Paid in cash
41%
Short-term
18%
Fixed
compensation
23%
Target annual
variable
compensation
130% of fixed(2)
59%
LTIP(1)
82%
Linked to
performance
59%
Paid in shares
59%
Long-term
(minimum 3 years +
presence condition)
(1) LTIP granted during 2021 fiscal year valued in accordance with IFRS standards
(2) Between 0% and 260%
Group’s strategic priorities
How the strategy links to the corporate officers’ variable compensation
Organic growth
Annual incentive plan
Value for customers
Sustainability
Continuous efficiency
Value & returns to
shareholders
Delivering strong execution and creating value for customers and shareholders every
year to contribute to Schneider Electric’s long-term success
Group organic
sales growth
40%
Group adjusted
EBITA margin
improvement
30%
Group cash
conversion
rate
10%
Schneider
Sustainability
Impact
20%
Long-term incentive plan
Building an integrated and leading company with strong sustainability focus and
attractive returns to shareholders
Adjusted Earnings
Per Share
Relative Total
Shareholder Return
Schneider Sustainability
External & Relative Index
40%
35%
25%
30
Schneider Electric Universal Registration Document 2021
www.se.com
Our Enterprise Risk Management
Schneider Electric places a significant importance on resilience within the values and principles which guide its actions, as a key element
for sustainable growth which is part of the Group’s Sustainability value.
Integrated report
Strategic Report
An Enterprise Risk
Management based
on the three lines of
defense model
Schneider Electric uses a hybrid
risk management model with
central functions and experts in
charge of setting risk management
mechanisms, establishing policies,
and other activities, while the
ownership of the risks belongs to
the Business Units and Operating
Divisions who are responsible for
deploying the central framework
to manage their risks.
Key Risks
The key risks selected and
presented below are the risks
considered by the Group as the
one specific to its business and
identified as having the potential
to affect its activity(1). In each
category, risks are assessed in
terms of potential impact for the
Group, the first one being the
most likely to affect the Group.
Key to symbols
High impact
Medium impact
Low impact
Board of Directors and Audit & Risks Committee
Accountable to stakeholders for organizational oversight
Governing body roles: Integrity, leadership and transparency
Delegation, direction,
resources oversight
Accountability,
reporting
Management
Actions (including managing risk) to achieve
organizational objectives
1st line roles:
Business and risk owner,
provide products/
services to customers
and manage risk
2nd line roles:
Global Functions Leaders
and Experts, oversee risks,
set guardrails (policies,
process, control), advise
and monitor 1st line
Alignment,
communication,
coordination,
collaboration
• Divisions, Business
Units
• Zones, Clusters,
Countries
• Cyber Security
• Compliance
• Quality
...
•
Internal Audit
Independent assurance
3rd line roles:
Advice on the adequacy
and effectiveness of
governance and risk
management
• Global Internal Audit
Categories and Risks
Potential
net impact
Event triggered risks
1
1.1 Risk of cybersecurity on the Schneider Electric infrastructure and its digital
ecosystem
1.2 Export controls
1.3 Strengthening of chemical and resource-related regulations in the Electric
and Electronic Equipment space
1.4 Corruption linked to B2B and project business
1.5 Human rights, environmental, and safety issues through the value chain
1.6 Schneider Electric connected products used as a gateway to attack Group’s
customers and partners
1.7 Product quality
1.8 Competition laws
1.9 Counterparty risk
1.10 Currency exchange risk
Trend driven risks
2
2.1 World deglobalization and fragmentation
2.2 New players such as digital giants, software players, and energy majors
entering the energy efficiency and renewable energy space
2.3 Supply chain resilience
2.4 Digital evolution and software offers
2.5 Attracting and developing talent with a focus on critical skills
3 Management practice risks
3.1
IT systems management
3.2 Pricing strategy
(1) However, the Group may be exposed to other non-specific risks, or risks of which it may not be aware, or risks of which it may be underestimating the potential
consequences, or other risks that may not have been considered by the Group as being likely to have a material adverse impact on the Group, its business,
financial condition, reputation or outlook.
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Life Is On | Schneider Electric
31
Integrated report
Our Stakeholders
Meeting the challenges of today and tomorrow
Schneider Electric is committed to open communication with its ecosystem and uses the feedback to
analyze its market and define areas of engagement. The 2021 – 2025 Schneider Sustainability Impact program
offers ways to implement quick and disruptive changes on issues identified as a priority by the Group and
its stakeholders.
Key stakes for our
ecosystem identified by
the materiality assessment
To consolidate the relationship and expectations of its external and
internal stakeholders, Schneider Electric updates its materiality
assessment on a regular basis. In 2020, the Group launched the
stakeholder consultation process to update its materiality matrix
and build the new Schneider Sustainability Impact. Almost 200
stakeholders – customers, suppliers, international organizations,
trade associations, experts, shareholders, senior managers, and
members of the Executive Committee – were invited to assess
the importance of the challenges facing the Group.
The general consensus was that companies need to become
more resilient in the face of growing environmental, social, political,
and economic instability. What stakeholders most expect from
the Group is genuine leadership in decarbonizing the economy
through its businesses, products, and solutions. The four main
trends were climate, circular economy, a fair and equitable
transition, and digitized, cybersecure solutions. All 31 issues
raised were deemed important, thus reinforcing our holistic vision
of sustainability and the Company’s extended responsibility to its
ecosystem, in particular its supply chain.
Materiality matrix
3.5
3.0
2.5
Being exemplary in the management
of our customers and partners data
Facilitating renewable energy production
Ensuring customer due diligence
Becoming a key player
in electric mobility
Ensuring social dialogue
Ensuring digital
sobriety
Contributing to
the fight against
energy poverty
Ensuring an expert and representative
governance for long term sustainable value
Guaranteeing high social
and environmental standards
for subcontractors and suppliers
Guaranteeing optimal
working health and
safety conditions
for our employees
Developing regional
value chains
Ensuring exemplary
tax practices
2.0
Ensuring an
exemplary
influence policy
Limiting global impact on biodiversity,
in our whole value chain
Contributing to training and education
in energy & digital professions
Aiming for environmental
excellence at our sites
Supporting our employees in the
transformation of their profession
Ensuring our employees
well-being in and out of
the workplace
Ensuring fair pay for
our employees
Being a recognized access
to energy player
1.5
1.5
l
s
r
e
d
o
h
e
k
a
t
s
l
a
n
r
e
t
x
E
Becoming a key player for a net zero carbon built environment*
Decarbonizing our supply chain
Becoming a leader of the circular
economy and rethinking our
resource footprint
Guaranteeing a 100%
responsible offer
Being a role model in
the effective reduction
of our own CO2 emissions
Guaranteeing cybersecurity
of products and solutions
Guaranteeing quality and safety of products
Actively contributing to
the rise of the industry 4.0
Aiming for zero corruption at all levels,
in the whole value chain
Promoting diversity and inclusion in all
our professions, countries and operations
Advocating an all electric and all digital world
2.0
2.5
3.0
3.5
Internal Stakeholders
Environment
Governance and Ethics
Mission
Product stewardship
Social
Society
Sustainable supply chain
Committed with our partners
Read more on our dialog with stakeholders page 75 (cid:496)
32
Schneider Electric Universal Registration Document 2021
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Integrated report
Strategic Report
Shared sustainable and responsible value
Schneider Electric aims to boost its positive impact on the planet and society at large by promoting
a green and responsible growth that is shared with all its internal and external stakeholders.
Unique ecosystem of partners
Stakeholder mapping
To share its expertise and develop high-performance solutions,
Schneider Electric builds long-term partnerships with a wide range
of global and local players.
Schneider has developed the industry’s largest network of
distributors, and works with many types of suppliers, as well as with
its end customers. The Group is continually strengthening its local
connections in all countries to deliver the best customer experience
and co-develop sustainable and effective digital solutions.
Alongside business partnerships, the Group is involved in
various local or international associations and organizations
supporting sustainability, working with key players from across
society. Schneider confirms its commitment to and participation
in discussions on challenges related to climate change. To further
advance social and environmental best practice, Schneider Electric
reiterates its commitment to the Ten Principles of the United Nations
Global Compact on an annual basis. Since 2018, the Group has
been among the 38 LEAD companies most committed to this
initiative. The Group is also an active member of the Business for
Inclusive Growth (B4IG) coalition.
Last but not least, the Group is committed to all its employees
empowering people across generations and regions and offering
equal opportunities.
s t o m e r s
u
C
Buildings,
Industry,
Infrastructure
and Energy
Civilsociety
Non-Governmental
Organizations,
Media, etc.
Contractors,
Integrators,
OEM, Systems
Manufacturers,
Distributors
Local Residents
and Territorial
Collectivities
Suppliers and
Subcontractors
Employees
Gimélec
companies
Shareholders,
Investors, Banks
and Insurers
Authorities and
Global Compact
S
o
c
i
a
l
Social
Partners
and Bodies,
UIMM, etc.
s
r
e
n
t
r
a
P
Groups and
Professional
Unions,
Consortiums,
JV, etc.
SRI, Financial and
Extra-Financial
Analysts, etc.
F
i
n
a
n
c
i
a
l
Standardization
Bodies IEC
and Product
Certification
Other Standardization
Bodies, Teaching and
Research, Independent
Experts, etc.
Technica l
Legislators,
European
Commission
ILO, OECD, etc.
al
n
In stitutio
Revenue breakdown by stakeholder
Source: CSR sector reporting guide, 2017.
Every year for the last 15 years, Schneider Electric has published a diagram showing its revenue distribution and financial flow for its various
stakeholders.
2021 Total Revenue: €28,905 million
Employees:
wages
States:
income taxes
€8,434 million
€966 million
Non-governmental
organizations:
donations
€19 million
Shareholders:
dividends
Bank:
net bank fees
Procurement
and other
€1,447 million
€95 million
€15,775 million
Investment capabilities
Net external financing*
including capital change
(€1,646 million)
Operating Cash flow after
Dividend Payment
€2,169 million
Investments and
development
€817 million(1)
Net financial
investments
€4,351 million(2)
Change
in cash
(€4,645 million)
R&D: €1,539 million
Borrowings, capital increases and treasury stock disposals.
*
(1) Of which €307 million in R&D.
(2) Of which €136 million for long-term pension assets.
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Integrated report
Our Stakeholders
Great people make a great company
As the changes to our world accelerate and transform our industry, we consider the Group’s culture as
a key business differentiator to achieve profitable growth through innovation and to outpace the market.
Schneider Electric is a people company where employees come to work for a meaningful purpose and
feel empowered to have an impact.
New work paradigm
As we move towards a post-pandemic era, the nature of work,
the workplace, and the relationships between companies,
customers, and employees have dramatically changed. First,
we need to strengthen trust through a meaningful purpose, ethics,
fairness, health and safety (physical and psychological), well-
being, and employee experience. Second, we must accelerate the
transformation of our culture, leadership, and new ways of working.
We believe these new ways of working – with a focus on digital, our
multi-hub approach, hybrid work, and well-being – are here to stay.
Third, there are up to five generations working side by side, and
each generation has a varied set of expectations from their employer.
This in turn is leading to a shift towards a highly personalized,
digitized employee experience with choice and flexibility.
Our people are also passionate about our meaningful purpose,
to empower all to make the most of our energy and resources,
bridging progress and sustainability. The energy transition and
digitization require Schneider Electric to work closely in its different
markets and to develop a shared vision with customers, supported
by faster innovation, technology, and deep insights. As such, we
need to shape our organizational culture to meet this challenge
and motivate us all.
The most local of global
companies
Globalization allows Schneider Electric to welcome more
diverse teams and to ensure our local presence best supports our
customers’ specific needs with a true multi-market knowledge and
culture. We prioritize how we develop and retain our employees
to create an inclusive workplace that offers long-term career and
development prospects and learning pathways.
We are the most local of global companies. Our multi-hub
operating model is built across four decentralized hubs: Paris for
Europe, Hong Kong for Asia, Boston for North America, and most
recently, India. This model empowers employees and provides
them with opportunities to grow within our organization, and we
are continually championing diversity, equity, and inclusion to
make a bigger impact on society.
Our People Vision
All this change influences how we work together and ultimately
how we create value for our customers. We updated our People
Vision to accelerate our business performance and transform our
culture and leadership. At Schneider Electric, we are building for
the future, in sync with the changes happening in our markets
and with our customers.
Our People Vision consists of the following:
• Our Employee Value Proposition (EVP) is our commitment
to engage existing and future talent. It’s the reason why people
join, stay, and remain engaged and shows how we differentiate
ourselves as an employer.
• Our Core Values determine who we are, what we do, and
define the way we work together and deliver on our EVP
promise. Our values guide our choices and illustrate the
behaviors we expect our employees to demonstrate.
• Our Leadership Expectations show how we expect leaders
to drive the Group for the future. They emphasize how
our leaders will transform the Group by stepping up both
individually and collectively.
Read more about our people programs on page 164 (cid:496)
2021 People recognitions
34
Schneider Electric Universal Registration Document 2021
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Integrated report
Strategic Report
“All generations have to work together to create a
better community. It’s not a problem for the future –
it’s a problem for present generations and we are
seeing the consequences. For generation Z, we have
a responsibility to create a completely sustainable
world for future generations.”
Helena Arias Casals (on behalf of the team),
one of the 2021 Schneider Go Green winner
New people strategy
In January 2021, the new people strategy was launched with the
aim to set the bar higher to support business growth, as well as
culture and leadership transformation.
To deliver on this mission and shape the workforce of the future in
the “next normal”, the strategy has three outcome-based themes:
• Organizational Agility – a growth and innovation culture,
enabled by a flatter, leaner, and multi-hub / multi-local structure,
customer proximity, and fast decision making, supported by
new ways of working.
• Future-ready Talent – a diverse, empowered, and digitally
skilled team. All talents develop current and future skills
through on-the-job learning, exposure, and education to
realize their potential.
Inclusive Leadership – leaders drive greater disruption
and acceleration. They build human connections by coaching,
caring, and collaborating across teams to achieve together
and deliver impact.
•
Our Employee Value Proposition
MEANINGFUL
INCLUSIVE
We empower all to make the most of
their energy and resources, ensuring
Life Is On everywhere, for everyone, at
every moment.
Our mission is to provide energy
and automation digital solutions for
efficiency and sustainability.
We adhere to the highest standards of
governance and ethics.
We want to be the most diverse,
inclusive and equitable company,
globally.
We value differences, and welcome
people from all walks of life.
We believe in equal opportunities for
everyone, everywhere.
EMPOWERED
Freedom breeds innovation.
We believe that empowerment generates
high performance, personal fulfillment
and fun.
We empower our people to use
their judgement, do the best for our
customers, and make the most of
their energy.
2021 highlights
84%
of our Country
Presidents are from the
country or region they
are leading.
41%
women at hiring as
we are committed
to building a diverse
organization at
every level.
71%
59%
our highest Employee
Engagement Index
show the outstanding
commitment of our
#SEGreatPeople.
of subscription in our
yearly Worldwide
Employee Share
Ownership Plan
(WESOP).
69%
of connected
employees registered
on our Open Talent
Market platform.
www.se.com
Life Is On | Schneider Electric
35
Integrated report
Our Stakeholders
Uplifting local communities through inclusivity
We believe in taking meaningful action and being mindful of all populations to create a fairer, more equal,
and more sustainable world.
Around the world, Schneider Electric gives people access to
energy and education through initiatives that combine training,
technological innovation, social innovation and entrepreneurship.
This means thinking about the world of tomorrow by empowering
everyone, regardless of origin, gender, or socio-economic level
to build a promising future for individuals and families worldwide.
Educating the youth and
populations in underserved
areas
For more than 20 years, training and entrepreneurship have
been the historical mission of the Schneider Electric Foundation,
under the aegis of Fondation de France. With the support of NGO
partners, more than 300,000 young people around the world have
received professional training in energy-related professions. The
Group’s ambition is to train one million people by 2025. Passing on
skills to young people and giving them the means to support their
families will improve their quality of life and create sustainable jobs.
To do this, the Schneider Electric Foundation draws on a network of
around 80 volunteer employees (or delegates) across 80 countries.
Their role is to select local partners in vocational training and
entrepreneurship in the energy sector and to raise sustainability
awareness. The Foundation also leverages its VolunteerIn
organization to empower employees to be actors and ambassadors
of the Group’s societal commitments wherever they are based.
They are the link between Schneider, the Foundation and the
supported organizations.
Read more about our social impact on page 188 (cid:496)
Bringing access to green
electricity
Today, more than two billion people have little or no access
to electricity, representing 25% of the world’s population. At
Schneider, we believe that access to energy is both a fundamental
right and a means for social and economic development. The
purpose of our Access to Energy social business is to bridge the
energy gap by bringing a safe, affordable, reliable, and sustainable
energy offer to populations in emerging markets.
We call this Electricity for Life and Electricity for Livelihood.
“Electricity for Life” means delivering access to green electricity
as a fundamental right, answering to essential needs (such as
lighting, social connection, or education) for off-grid households,
small businesses, and the humanitarian sector. There are almost
800 million people living in off-grid areas, and more than 80 million
people forcibly displaced.
“Electricity for Livelihood” means delivering access to green
electricity as a driver of economic development and poverty
reduction for households connected to an unreliable grid and
for productive businesses. Around one billion people, and many
farmers, schools, or health centers in rural areas, are dependent
on an intermittent grid and need quality energy with back-up
solutions based on solar energy.
Schneider’s access to energy solutions already benefited 30 million
people between 2009 and 2020. Our ambition is to connect an
additional 20 million people between 2021 and 2025, and 70 million
by 2030.
2021 highlights
150,000
13,000
+4.2m
328,000
28,000
people have access
to green electricity
24/7 in 5 remote cities
in Chad through a
partnership with the
local enterprise
ZIZ Energy.
Mobiya solar
lanterns distributed
in Benin, Senegal
and Cameroon in
partnership with
ADEME.
people connected
to green electricity
in 2021.
people trained in
energy management
since 2009.
volunteering days
since 2017.
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Local sustainability commitments
As part of the 2021 – 2025 Schneider Sustainability Impact, we promote local initiatives and enable individuals and partners to make
sustainability a reality for everyone, everywhere. 100% of Schneider Electric’s Country and Zone Presidents have defined three local
commitments that impact their communities in line with our sustainability transformations. Close to 200 local programs have been
deployed in 2021; here are a few examples of initiatives to implement quick and disruptive changes.
We will increase fivefold Schneider’s spend with indigenous-owned
suppliers in Australia as part of the Reconciliation Action Plan.
In Spain, Schneider Electric will give electrical products a second
life through donations to an online marketplace for educational
purposes and to improve the electrical installations of families
at risk of energy poverty.
In Italy, our employees volunteer to train 1,000 students each year
under an Energy Efficiency and Industry 4.0 program co-designed
with the Italian Ministry of Education.
The Group will install photovoltaic devices on the roofs of schools
in Francophone Africa and Islands to charge solar lamps.
Schneider will be upscaling access to energy education in
Myanmar through the establishment of vocational training facilities.
Schneider Electric aims at promoting and encouraging education
programs for vulnerable women through local associations in Chile.
We will transition to a 100% electric company car fleet in Norway
by 2023.
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Integrated report
Our Stakeholders
Proud to be one of the most ethical companies
Present in over 100 countries with diverse standards, values, and practices, Schneider Electric is committed
to behaving responsibly in relation to all its stakeholders. Convinced that its responsibility extends beyond
compliance with local and international regulations, the Group is committed to doing business ethically,
sustainably, and responsibly. Schneider’s business actions and decisions run on trust.
Trust Charter, Schneider
Electric’s Code of Conduct
In 2021, Schneider Electric evolved its Principles of Responsibility
to the Trust Charter, acting as the Group’s Code of Conduct and
demonstrating its commitment to ethics, safety, sustainability,
quality, and cybersecurity. Schneider Electric believes that trust
is a foundational value. It is earned. It serves as a compass,
showing the true north in an ever more complex world and
Schneider Electric considers it to be core to its environment,
sustainability, and governance commitments.
Trust powers all Schneider Electric’s interactions with stakeholders
and all relationships with customers, shareholders, employees,
and the communities they serve, in a meaningful, inclusive and
positive way.
Cybersecurity
C ustomersan
C ustomersan
d
d
Ethics
ams
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Ethics & Compliance program
Driven by and in complement to the Trust Charter, the Ethics &
Compliance (E&C) program establishes the framework of policies,
tools and processes related to E&C topics. By providing specific
guidelines and practices, the program ensures the business is
run with integrity, and employees are aware of potential risks. As
part of this program, all employees have access to the Trust Line,
Schneider’s whistleblowing system, to speak up in case of unethical
conduct, with the guarantee of the whistleblower protection.
Schneider has built a strong governance to lead the Ethics &
Compliance program to the highest standards, with responsibilities
at board, executive, corporate, and operational levels.
Zero tolerance for corruption
Schneider Electric has a zero tolerance policy with regard to
corruption. This commitment is materialized through a strong and
continuously developing Anti-Corruption Compliance program,
which is part of the E&C program.
In 2020 and 2021, a set of anti-corruption e-learnings was built to
provide guidance on real life risk scenarios and to take into account
the trainees’ needs and expectations. This led to a curriculum of
modules of e-learnings, deployed in 2020 and completed in 2021
with four additional modules about facilitation payments, conflict
of interest, conditions that make people commit the wrongdoing,
and how to raise concerns in Schneider Electric. The modules
were supported by top leaders’ videos demonstrating the “tone
at the top” on this crucial matter and are available in 14 languages.
Read more about our Ethics and Compliance program on page 95 (cid:496)
Read more about our Trust Charter on page 94 (cid:496)
2021 highlights
96%
employees trained on
Cybersecurity and Ethics.
81%
26%
of our employees are
confident to report unethical
conduct.
of confirmed cases raised via
the Trust Line lead to actions.
Ethisphere Institute – One of
the 2021 World’s Most Ethical
Companies.
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Sustainable relations with suppliers
With a network of more than 52,000 suppliers around the world, Schneider Electric is committed
to developing lasting relationships with each of them, while at the same time helping them introduce
more sustainable practices.
Building a sustainable
supply chain
We aim to collaborate with our global supplier network for an
inclusive and carbon neutral world, where ecosystems and
resources are preserved, and people get access to economic
opportunities and decent lives. Our ambition is to make sure that
the production of our products and services are not linked to any
kind of environmental or human rights abuses. Schneider Electric’s
sustainable purchasing strategy ensures risk management and
commits to improvements. To achieve this, we have embedded
sustainability at three levels:
• Provision of a Supplier Code of Conduct with fundamental
requirements that all suppliers delivering goods or services
to Schneider Electric are expected to adhere
• Integration of sustainability criteria in the day to day, operational
procurement actions. The qualification process focuses on
people, social responsibility, and environmental management.
Sustainability criteria account for a significant part of the
evaluation.
• Deployment of strategic programs in thematic areas of climate
change (The Zero Carbon Project), decent working conditions
& human rights (Duty of Vigilance, ISO26000, Decent Work),
circularity & resource conservation (green materials, sustainable
packaging).
In 2021 we have begun a new five-year engagement with ambitious
targets for each of the thematic areas.
Read more about our sustainable relations with suppliers page 117 (cid:496)
Supply chain vision
Our world-class supply chain is driven by the following principles
and objectives:
• Customer satisfaction and quality is our number one priority.
• Sustainability is at the core of procurement actions through
innovation and working with sustainable suppliers.
• Competitive landed costs and optimized cash, driving high
level of productivity and Schneider Electric’s top-line growth
and margin.
• An agile and secure supply chain that is a competitive
advantage in the market throughout the product lifecycle.
• World-class competencies and talents with values of
accountability, collaboration, and simplification.
Conflict minerals: we support the US conflict minerals
legislation and actively avoid the use of such minerals in our
supply chain
We’re deeply concerned about social and environmental conditions
in mines that could supply such “conflict minerals” for our products.
When the country of origin is known to be in the conflict zone, 100%
of the smelters and refiners were verified conformant. Therefore,
the Group has no reason to believe that any conflict minerals the
Group sourced, have directly or indirectly financed or benefitted
armed conflict in the covered countries.
2021 highlights
1,000
+5pts
Suppliers committed to
the Zero Carbon Project.
continuous increase of
suppliers ISO2 6000 score.
21%
total packaging spend
attributed to sustainable
packaging.
Supplier Engagement Leader
award from CDP.
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Life Is On | Schneider Electric
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Integrated report
Our Stakeholders
Schneider Electric’s vigilance plan
In 2017, Schneider started the implementation of a vigilance plan covering its business activities as well as
those of its suppliers and subcontractors. Since then, this vigilance plan has been continuously reinforced,
aiming to push further towards responsible corporate citizenship. In January 2021, the Group was awarded
the Best Vigilance Plan by the Sustainable Investment Forum and A2 Consulting.
Duty of vigilance
Schneider’s ambition is to be an ethical company. Our values
shape the way we do business with our many customers, partners,
suppliers, and communities around the world. They inform the way
we protect and foster human rights and guide our desire to make
a positive impact on the planet and the environment.
The Group’s vigilance plan reflects this ambition. It also complies
with the provisions of the 2017 French law on Corporate duty of
vigilance. The plan includes:
• A risk analysis specific to vigilance: risks that Schneider Electric
poses on the ecosystem and environment;
The 2021 analysis has not revealed major changes or gaps that were
not identified so far. The following evolutions are to be mentioned:
• Impact of the COVID-19 pandemic on Schneider Electric’s
business: Actions implemented in 2020 such as working from
home, increased sanitary measures, etc. were adapted in
2021 to respond to the fluctuating pandemic situation. Overall,
employees have reacted positively to these measures, as
demonstrated by the surveys conducted and the high level
of engagement. However, the medium-term impact of the
pandemic on morale is still to be monitored closely, as some
signs of fatigue are visible among teams.
• A review of the key actions implemented to remediate or mitigate
• Ethical business conduct: This area has been under close
these risks;
• An alert system;
• Governance specific to vigilance.
The plan is governed by the Duty of Vigilance Committee, set
up in 2017. The steering committee meets twice a year in normal
circumstances. Overall, since its inception, 13 Committee meetings
have been held (five in 2017, two in 2018, 2019, 2020 and 2021).
The Committee’s objective is to provide a discussion on strategic
orientation and prioritize initiatives and the resources allocated to
their implementation. This Committee also reviews the actions in
progress and their results and defines decisions on next steps
for action.
In this Registration document, Schneider Electric reviews the risk
matrix analysis and some of the actions to mitigate these risks are
described. When necessary, the reader will be directed to other
sections of the report to get relevant and detailed information. For
more comprehensive and complete information, the full vigilance
plan of the Group is available as a standalone document and can
be downloaded from Schneider Electric’s website at se.com.
monitoring, as the adverse business climate has put pressure on
business. However, no significant deterioration has been noticed.
• Cybersecurity and data protection: they are a subject of
permanent focus and attention, taken very seriously by the Group.
It is addressed through training programs and measures to
protect employees, customers, and stakeholders against threats.
• Analysis of specific risks to communities residing
near Schneider sites: In 2021, a specific review has been
implemented to assess Schneider’s main sites and customer
projects. The assessment is still a work in progress at this point,
but so far, no critical areas of concern have been detected.
Read more on our vigilance plan on page 112 (cid:496)
2021 highlights
#1
Vigilance Plan awarded in 2021 to
Schneider Electric by the Sustainable
Investment Forum and A2 Consulting.
800+
suppliers assessed under our
Vigilance program in 2021.
+64%
suppliers audited on-site in 2021
compared to the 2017-2020 yearly
average.
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Schneider 2021 Vigilance risk matrix
Schneider Electric sites
Suppliers
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conduct
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protection and
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Offer safety
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and data privacy
2021 highlights
Top 25%
51
11%
of companies in external ratings
for Cybersecurity.
Zero CO2 sites to decarbonize
our operations.
green material content in our products.
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Chapter 1 – Group strategy and sustainability
Schneider Electric believes the convergence of
digitization and electrification brings disruptive
new business possibilities unlocking the potential
for efficiency, resiliency, and sustainability.
We call this Electricity 4.0
42
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Chapter 1 – Group strategy and sustainability
Strategic Report
1.
1
Group strategy
and sustainability
1.1 Trends and opportunities
1.2 Schneider Electric’s unique
operating model
1.2.1 The integrated company
1.2.2 The multi-hub company
1.2.3 The open company
1.2.4 The Impact Company
1.3 Schneider Electric’s priorities
for sustainable growth
1.3.1 More Services
1.3.2 More Software for unified asset lifecycle management
1.3.3 Sustainability Business
1.3.4 Global supply chain
1.3.5 SE Ventures
1.4 Customer focus
44
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Chapter 1 – Group strategy and sustainability
1.1 Trends and opportunities
Electric and digital is the recipe for a more sustainable
and resilient world
The Intergovernmental Panel on Climate Change (IPCC)’s Sixth Assessment Report issued in 2021, was
described by the UN Secretary General Antonio Guterres as a “Code Red for Humanity”. It described how our
climate crisis requires critical decarbonization measures to stay within a global warming trajectory of 1.5°C.
Schneider Electric advocates deploying proven digital technologies for energy efficiency, and an increased
focus on electrification and sustainability to urgently decarbonize buildings, transport, and industry.
There is a need for sustainability.
This has been further accelerated with stronger sustainability commitments from all stakeholders. First, governments have put in place
unprecedented levels of green stimulus funding to build back better. More companies have set emission reduction targets aligned to the
1.5°C scenario and validated by the Science Based Targets initiative. Furthermore, investors now hold CEOs and their boards accountable
for their companies’ extra-financial performance, specifically related to carbon footprints.
In parallel, we have all faced enormous challenges due to the global COVID-19 pandemic. Over the past two years, lockdowns, industrial
supply chain disruption, travel restrictions and ever-evolving changes to our day-to-day lives, have emphasized the need for robustness,
agility and resiliency.
There is a need for resilience.
Being part of the solution
As part of its ambition to deliver a more sustainable future,
Schneider Electric uses technologies to help customers in many
sectors to build net-zero pathways. Our research shows that 70%
of emission reduction is achievable with existing, proven and
competitive technologies.
Schneider’s positioning for a sustainable future focuses on an all
electric and all digital world.
• Electricity for greener energy and decarbonization:
electricity is the most efficient energy and the best vector of
decarbonization.
• Digitization builds a smart future: digital tools make the
invisible visible, enabling more effective waste reduction and
efficiency improvements.
• Digitization creates resilience: data analytics and insights
enable more agile operations and continuity.
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Chapter 1 – Group strategy and sustainability
Strategic Report
1. All electric
2. All digital
1.
Electrification will intensify in line with the energy transition, due to
several factors:
• More electric loads, namely:
− The electrification of road mobility as the yearly electricity
consumption from electric vehicles is anticipated to grow by
21% p.a. from 2018 to 2050(1).
Today’s digital economy is driving disruption across every sector.
Digital remote interactions have become more prevalent, further
revolutionizing how we work and live together.
• Growing need to aggregate exponential amounts of data:
11 billion smart appliances in one billion homes are expected
to participate in interconnected electricity systems by 2040(4).
− Decoupling of industrial production versus access to goods,
• Large data volumes generated by IoT in industrial
driving a new energy system: further electrification of
industrial processes currently powered by coal or gas.
− Electricity in the industry energy mix is expected to reach
applications: an offshore oil rig is expected to produce
1 – 2 terabytes of data daily and a smart factory 5 petabytes
per week(5).
~80% in 2050 versus 25% in 2018(1).
• New business models with artificial intelligence,
algorithms, and platforms that turn vast amounts of data into
insights and value. It is estimated that 70% of new value created
in the economy over the next decade will be based on digitally-
enabled platform business models(6).
− Increased electrification in homes and buildings, driven by
the electrification of heating, cooking, and cooling, and new
regulations to accelerate decarbonization. Electrification rate
in buildings is anticipated to reach 81% in 2050 versus 33%
in 2018(1).
•
Innovation that promotes more cost-effective electrification
and power decentralization:
− Energy batteries are expected to provide up to five times
more energy density by 2030(2).
− More renewables, with a variable capacity mix anticipated
to reach up to 50% by 2040(3).
− More energy efficiency: the best energy is the one we do not
consume.
Why these trends matter for Schneider Electric?
Sustainability is not just a part of Schneider Electric’s business, sustainability is the core of our strategy. We integrate sustainability
everywhere, in our model and culture to have a strong impact at both a global and local level.
We see many of our customers stepping up their efforts and investments in sustainability. We have both the technologies and the
expertise to support our customers on their sustainability journeys. Our solutions, from connected devices to software, digital services,
and sustainability consulting, help our customers, whatever their maturity and scope.
Electrification and digitization are key drivers in all our end-markets bringing sustainability and efficiency. They fuel both of
Schneider Electric’s businesses: Energy Management for energy transition and Industrial Automation for Industry 4.0.
Schneider Electric’s mission is to be your digital partner for Sustainability and Efficiency. We provide energy and automation digital
solutions for sustainability and efficiency for your business. We combine world-leading process and energy technologies, real-
time automation, software, and services, enabling remote everywhere integrated solutions that are built with safety, reliability, and
cybersecurity for your homes, buildings, data centers, infrastructure, and industries.
(1) Back to 2050 scenario figures from Back to 2050 report – Schneider Electric Sustainability Research Institute.
(2) Rocky Mountain Institute.
(3) Includes Onshore Wind, Offshore Wind, Utility-scale PV, Small-scale PV, Solar thermal, Source: Bloomberg New Energy Finance.
(4) International Energy Agency.
(5) Quicksilver Capital, industrial digital transformation, Spring 2020.
(6) World Economic Forum: Shaping the Future of Digital Economy and New Value Creation, 2019.
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Chapter 1 – Group strategy and sustainability
1.2 Schneider Electric’s unique operating model
1.2.1 The integrated company
The Schneider Electric Group is built as one operating model to both deliver simplicity benefits to customers
and significant advantages in attracting talents, scaling deployment, as well as bringing simplicity and cost
efficiency, especially region by region.
ONE
Sales
Marketing
Digital
Supply Chain
Associated Software
Benefits for
Customer experience
Digital journey
Data for digitization
Customer
Company
Attractiveness for talents
Scale for deployment and strategic positioning
Simplicity and cost efficiency
To resolve our customers’ complexity, Schneider Electric’s EcoStruxure™ architecture delivers four integrations
to enable them to become more digital and more sustainable. Those four integrations allows us to provide our
customers with a complete plug and play and seamlessly integrated solution.
Quadruple integration
1
Energy
+
Automation
Schneider Electric has a unique capability to bring together both energy and automation
to achieve greater power and process efficiency.
It is this ability to differentiate, through its integrated model combining disciplines,
that allows Schneider to increase customers’ benefits.
2
End Point
Cloud
Schneider Electric products are connected from every-end point – on the shop floor, in the infrastructure, in the cloud –
so that everybody can see a digital twin of what is happening in the physical world. Our connectable products collect data,
which are processed at edge or in the cloud, through the Ecostruxure™ offering of Schneider.
3
Design & Build
Operate & Maintain
Schneider Electric provides software and solutions that cover the whole digital thread for customers
with the offering of AVEVA, RIB Software, Planon, IGE+XAO, ETAP, and others. It allows for seamless integration
of the installation’s digital life-cycle through one digital twin, from first design to operations and maintenance.
4
Site-by-Site
Unified Company Management
With Industry 4.0 and Industrial Internet of Things (IIoT) becoming more essential, manufacturers are requesting
factory floor data anytime and anywhere around the world. Our offerings allow for integration on a whole company
basis by connecting all assets and sites into one repository, allowing for efficiency at a company-wide scale –
unified operations centers enable customers to optimize efficiency, investments, and carbon reduction
strategies across the company (versus a site-by-site focus).
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Chapter 1 – Group strategy and sustainability
Strategic Report
1.2.2 The multi-hub company
The second element of our operating model, our multi-hub approach, has been key in Schneider Electric’s
strategy over the last years and has particularly demonstrated its benefits since 2020. It has improved resiliency,
agility, and proximity with our customers and our network of suppliers.
1.
As today’s world is increasingly divided by politics, trade and data regulations, and the ever-evolving health situation, this characteristic of
Schneider Electric’s model has shown its strategic importance.
North America
Europe
India
China
Products
R&D
Supply
Chain
Sales
Suppliers
In 2021, Schneider Electric’s multi-hub strategy was reinforced and strengthened with the creation of the Indian hub, built when merging
with Larsen & Toubro’s Electrical & Automation division. India is one of the most promising regions in the world for electrification, digitization,
urbanization and manufacturing, and is now one of Schneider Electric’s major manufacturing and talent centers with 30,000 employees and
30 factories.
Four hubs now serve the Group’s different markets (Europe, North America, China & India). Each hub has its own capabilities, while
operating and contributing together toward the same Group objectives.
Group objectives
Products and offers are adapted
locally to the specificity and standards
of local markets, leveraging global
R&D platforms and architectures.
This is key for compliance with
local standards (e.g., NEMA North
America, IEC Europe, and CCC Asia
Pacific), regulations (e.g., data and
cybersecurity), operating conditions,
and design specificities.
Schneider Electric’s supply chain
is organized by region, serving
local customers with the support of
local suppliers. As such, in 2020,
92% of Schneider’s supplied goods
come from the same region as its
manufacturing sites, and 80% of
Schneider’s sales are produced in
the same region as its customers.
Schneider Electric’s suppliers are
becoming increasingly local as
close relationships are built with
manufacturers in the region, for better
flexibility and resiliency.
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Chapter 1 – Group strategy and sustainability
1.2 Schneider Electric’s unique operating model
1.2.3 The open company
At Schneider Electric, we practice openness with EcoStruxure™, across our open ecosystem and through the
open standards our customers need for interoperability. As such, Schneider Electric can grow faster, deliver
complementary offers, bring additional value to existing systems, and to deliver agile innovation. Co-innovation
partnerships enable new, customer-centric value propositions, in a plug-and-play operating model.
Open ecosystem
Schneider Electric is a company that works closely with its partners. Over the years, we have built strong partnerships with customers and
suppliers, universities, technology companies, independent software vendors, solution providers, and service providers, to co-design and
share experiences. Working with global IT service companies, we have built a robust network for the benefit of our customers.
This ecosystem is key to offering our customers the most innovative and value driven solutions.
An open ecosystem and large network of partners
Exchange
60%
Revenues through partners
23k+
Suppliers in production/direct
procurement
50+
Investments in startups
100+
Partnerships
100k+
Collaborators
4.2k+
EcoXpert program partners
650k+
Service providers and partners
42k+
System integrators and developers
600
Offers listed
Technology Alliances
Open EcoStruxure™ Platform and Data as a Service
As EcoStruxure™ has become a leading industrial IoT platform, we
have decided to take the openness of EcoStruxure™ to the next
level for our customers. We designed an open platform, promoted
open standards, scaled digital offers, and fostered digital
collaboration across our ecosystem of customers and partners.
Open EcoStruxure™ enables co-innovation, which is key to the
future success of our strategy. It offers the agility, speed, and
scalability needed to accelerate digital transformation successfully.
Partners who join the ecosystem and build their own digital
services, applications and advisors that deliver specific
business value.
Open standards
Working with common, open standards drives collaboration and
ensures multi-vendor interoperability and seamless interfaces.
Examples of open standards used by Schneider Electric include:
OPC UA, MQTT, AMQP, LWM2M, LoRAWAN, Docker, Linux with
Yocto, Zigbee, Modbus, etc.
Universal automation for industries of the future
Proprietary industrial automation technology has held back the full promise of the
Fourth Industrial Revolution. It’s time for universal automation, to advance industries’
automation technology model.
Universal automation is the world of plug and produce automation software components
based on the IEC61499 standard for interoperability that is proven to solve specific
customer problems.
Schneider Electric has launched its own universal automation offer, EcoStruxure™
Automation Expert. A new category of software-centric industrial automation to manage
the complete life cycle of industrial automation systems.
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Chapter 1 – Group strategy and sustainability
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1.2.4 The Impact Company
Sustainability is at the core of our purpose, culture, and business as we accelerate our contributions
to a sustainable and inclusive world.
1.
IMPACT
Company
Paving the way as an Impact Company
Schneider Electric aims to champion environmental, social, and
ethical issues across its entire value chain and stakeholders,
while delivering solutions to its customers for sustainability and
efficiency. We call this dual approach “Impact Company”.
Today, Schneider Electric is a recognized worldwide sustainability
leader, notably awarded World’s Most Sustainable Corporation
in 2021 by Canadian media company, Corporate Knights, and a
member of several initiatives to advance on the 17 United Nations
Sustainable Development Goals (SDGs) with common objectives to
protect the planet, alleviate poverty, and achieve worldwide peace.
Our Guiding Principles
1. Performance
the foundation for doing good
2. All Stakeholders
in our ecosystem
3. All ESG
dimensions
4. Business
digital partner for Sustainability
and Efficiency
5. Model & Culture
set up for global and local impact
A unique Schneider Sustainability Impact for concrete and measurable progress
For 15 years, Schneider Electric has measured its holistic
sustainability performance through a dashboard called Schneider
Sustainability Impact (SSI) and has set specific governance bodies
to ensure that sustainability is positioned within every part of the
Group’s strategy from the Board of Directors to the operational levels.
By tracking our performance and publishing quarterly results, we
uphold our commitments to the SDGs and industry leadership in
corporate social responsibility. The new 5-year SSI 2021 – 2025
features 11 global impacts plus one local impact linked to six long-
term commitments. Beyond our SSI, we also instill a culture around
sustainability through trainings and performance incentives for
employees and leadership teams.
The SSI is a transformation scorecard demonstrating that rapid,
disruptive changes for a more sustainable world are possible across
diverse, complex topics. Its scoring scale of 10 provides an overall
measure of the Group’s progress on sustainability objectives.
Our six sustainability pillars
Read more about Schneider Sustainability Impact in Chapter 2,
page 58 (cid:496)
Act for a
climate-positive world
Be efficient with
resources
Live up to our
principles of trust
by continuously investing in and
developing innovative solutions that deliver
immediate and lasting decarbonization in
line with our carbon pledge.
by behaving responsibly and making
the most of digital technology to preserve
our planet.
by upholding ourselves and all around
us to high social, governance, and ethical
standards.
Create equal
opportunities
Harness the power
of all generations
Empower local
communities
by ensuring all employees are uniquely
valued in an inclusive environment to
develop and contribute their best.
by fostering learning, upskilling, and
development for each generation, paving
the way for the next.
by promoting local initiatives and
enabling individuals and partners to
make sustainability a reality for all.
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Chapter 1 – Group strategy and sustainability
1.3 Schneider Electric’s priorities
for sustainable growth
Against a backdrop of market acceleration, the Group will achieve sustainable growth through five priorities.
More Products
Better Systems
As customer operations are increasingly digitized, our products
are becoming natively connected. Coupled with Schneider’s
EcoStruxure™ advisors, they deliver incremental value and
support our customers in their every day operations.
Additionally, Schneider Electric strives to continuously increase
quality of its products to offer the highest level of safety and
reliability. We are also committed to reduce the environmental
impact of our products. Our Green Premium™ label was created
to provide our customers with more sustainable products and
transparency with environmental information. In 2021, more than
75% of Schneider’s product sales came from Green Premium™
products. We expect this figure to reach 80% by 2025.
The EcoStruxure™ platform is the foundational technology
backbone to build and deliver Schneider Electric solutions.
We will enrich the EcoStruxure™ platform with more segment
applications and expertise offering more value. We provide a
unified customer experience through our open ecosystem and
we upskill our people in digital technologies.
We continue to expand our natively connected equipment
portfolio with digital tools, making condition-based
maintenance and connected expert service available to
customers for more productivity, safety, efficiency, and
collaboration.
More Services
More Software
Services are the incremental growth engine for the Group,
delivering peace of mind to our customers along their life cycle
with safety, resilience, efficiency, and sustainability. We will
continue our efforts to accelerate tracking and servicing of
existing assets installed at customers’ sites.
• We will leverage new value-added services offerings
through our suite of EcoStruxure™ Advisors
• We will ensure a seamless end-to-end digital customer
experience from CapEx to OpEx.
Schneider Electric customers are looking for integration
across phases from Design, Build to Operate and Maintain.
With our software portfolio across EcoStruxure™, AVEVA,
OSIsoft, RIB Software, ETAP, Planon, IGE+XAO, ALPI, and our
partnerships, we already have outstanding coverage and a
clear market-leading position when it comes to data platforms.
Our approach is to standardize this software portfolio and the
user experience to create unified data federation.
More Sustainability
The climate crisis is a significant risk to organizational continuity. In response, stakeholders are demanding urgent action from
businesses. This pressure has driven more than 2,000 companies to join the Science-based Targets Initiative (SBTi), and in 2021,
13,000 companies reported their emissions to the CDP.
We aspire to both achieving our own aggressive climate targets and supporting our stakeholders in their decarbonization through our
solutions and influence. In 2021, we raised the ambitions of our 2021-2025 Schneider Sustainability Impact, launched new switchgear
products that avoid using the potent greenhouse gas SF6, and we expanded our global sustainability consulting business.
Over the past years, Schneider Electric has made significant
investments in these strategic priorities. Services, software and
sustainability continue to be high potential, incremental growth
engines. Directly tied to Schneider Electric’s core business, they
are expected to deliver Schneider’s indicative objectives for 2025
as the Group makes another step change on its path to becoming a
hybrid digital company:
• Group revenues from our digital flywheel of connectable
products, edge control, software and services, will increase
from ~50% today to ~60% in 2025 (+10pts).
• Strong strategic focus on software and services, will increase
from ~18% of Group revenues today to ~23% by 2025 (+5pts).
• Recurring revenues as a percentage of software and services
will step-up ~30% today to ~45% by 2025 (+15pts).
Software
+
Digital
services
From 18%
to 23% of Group
revenue by 2025
Edge
Control
From 50%
to 60% of
Group revenue
by 2025
Field
Services
Connectable
products
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Chapter 1 – Group strategy and sustainability
Strategic Report
1.3.1 More Services
Leveraging our extensive experience as a leading global provider of electrical and industrial solutions and
services, Schneider Electric ensures its customers’ peace of mind and achieves increased business value
through our best-in-class services.
1.
Our services portfolio
Consulting
Modernize
Commissioning
Training
SAFETY
EFFICIENCY
SUSTAINABILITY
RESILIENCY
Spare
Part
Predictive
Maintenance
Preventative
Maintenance
End-to-end Digital Experience
& Cybersecurity with EcoStruxure™
Building
Data Center
Infrastructure
Industry
Water, Wastewater, Consumer Packaged Goods, Mining, Minerals and Metals, Automotive, Transportation,
Oil & Gas and Petrochemical, Power & Grid, Healthcare, Cloud & Services Providers, Semi Conductors
We offer a full range of on-site field support and life cycle
services from consulting, installation and commissioning, training,
maintenance, and modernization to end-of-life services. Together
with digital services supported by our EcoStruxure™ architecture,
we enable our customers to connect data from different assets
for remote monitoring, predictive maintenance, actionable
recommendations, and strategic asset management planning for
optimized performance and reduced total cost of ownership.
We aim to further increase the share of services in the Group
revenue. To do so, three transformation pillars are underway and
progressing well.
1. Seamless CapEx to OpEx
Services are not just an optional add-on to products, but an integral
part in building customer intimacy at every phases of the life
cycle. That is why we are committed to build a seamless digitized
experience from CapEx to OpEx, integrating systems and services
of the future – a greenfield and brownfield handshake at Build,
Operate and Maintain phases.
• At Build phase, our Connected Products are manufactured with
in-built sensors and connectivity to our cloud platform.
• At end-user sites, our Digital Logbook enables our customers to
stay connected to their assets at all times.
• At Operate and Maintain phases, leveraging on these digitized
enablers and our suite of Advisors equipped with predictive
analytics, we gain data-driven insight to exceed customer needs
– remotely monitor assets 24/7, proactively reduce breakdown
risk, ensure efficiency and sustainability, and ultimately extend
lifetime value through EcoStruxure™ Service Plan.
2. Unified customer approach
We aim to be the trusted advisor for our strategic customer
segments to comprehensively support their operation and digital
transformation journey.
• We ensure a well-orchestrated coverage model and adopt a
consultative approach to bring the best of our value proposition
and end-to-end solutions to focused segments.
• We innovate offers through actively identifying mergers,
acquisitions, and investments and targeting partnerships in
domain expertise, predictive analytics, and new business
models.
• We drive life cycle circularity and sustainability as a
differentiator.
3. Scale through partners
Partners have always been at the core of our strategy. We strive to
be the most partner-friendly company in our industry. We cultivate
collaboration and innovation across our network of partners to
extend our coverage in segments and build close connections with
local markets.
• We are expanding our EcoXpert partner ecosystem and
exploring new approaches to partnership. Our mission is
to share our expertise, stimulate growth in a new customer
base, and together deliver best-in-class services to our
valued customers.
• To support our valued partners, we are transforming our
business models and increasing the focus on digital offers,
interactions, and enablement, especially via our partner portal -
mySchneider.
15,000+
services experts in 140 countries.
15+
Connected Services Hubs to provide valuable
data-driven insights to 6,000+ customers.
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Chapter 1 – Group strategy and sustainability
1.3 Schneider Electric’s top priorities for sustainable growth
1.3.2 More Software for unified asset lifecycle management
Software is central to everything we do, making sense of all the systems we are connecting and the data
collected from them. Our ambition is to develop a best-in-class software portfolio for our customers and
our partners.
As such, we will evolve our software portfolio towards digitally
augmented value propositions, which will create more value for
our customers through a unified software portfolio across the entire
life cycle.
At Schneider Electric, we are developing software to help our
customers manage their operations in IT, buildings, plants, power,
and infrastructure. All these projects are incredibly complex, and
our software aims to reduce that complexity.
To achieve this, we are focused on two areas. First, Schneider
Electric offers a complete and continuous digital thread from
Design to Build, Operation, and Maintenance, so that our
customers have one digital twin, as a faithful replication of what
is happening in their operations. With software and digital services
we are moving our discussions with customers from functions
and features to values, notably, increased productivity, efficiency
and output.
Federating software for unified asset lifecycle management
Design
Build
Operate & Maintain
Industry &
Infrastructure
Power
Building
Partnerships
Second, our customers’ projects cover several integrated domains:
Industry and Infrastructure, Power, and Building. Our customers
own factories and buildings, requiring power distribution for both.
They expect Schneider’s software portfolio to stretch across these
domains and unify their approach.
In 2021, Schneider completed the following transactions to build a
unified software federation.
• ETAP Automation Inc. in June 2021
• OSIsoft in March 2021
• AVEVA is a global leader in engineering and industrial software
Our software portfolio made up of Schneider, AVEVA/OSIsoft, RIB
Software, ETAP, ALPI, and Planon puts us in a position to have
broad coverage along the entire asset life cycle and a clear market-
leading position, when it comes to data platforms in Operate and
Maintain phases. This software interfaces with the physical world
through EcoStruxure™, through IoT, offering our customers unified
user experience and asset lifecycle management for their projects
and operations.
across the entire asset and operations life cycle.
• IGE+XAO develops, designs and sells software for electrical
engineering to digitize the design, build and maintenance of
electrical installations and/or equipment.
• ALPI is a leader in automated design and modelling software for
electrical installations for industrial and commercial markets.
• ETAP offers the most comprehensive and widely-used solutions
for the design, analysis, optimization, monitoring, control, and
automation of electrical power systems.
• RIB Software is a pioneer in the digitization of the construction
industry. The company develops and offers construction and
Building Information Modelling software (BIM) for customers in
the architecture, engineering, and real estate industries.
• Planon: is the leading global provider of real estate and facility
management software that enables building and service
digitization by integrating smart building technology, business
solutions and data.
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Chapter 1 – Group strategy and sustainability
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1.3.3 Sustainability Business
In addition to leading environmental, social, and governance (ESG) strategies by example across our value
chain, Schneider Electric continues to expand in Sustainability and climate change consulting services.
The expertise of this global business helps define strategy and drive action for our clients on their own
decarbonization journeys.
1.
Climate action is no longer optional for leading organizations:
it’s imperative for business resilience. Limiting the temperature
rise projected to 1.5°C by 2050 will require three times more CO2
emissions reductions than currently pledged – but we believe
this goal is still within reach if we can successfully transform our
production and use of energy.
First, we must decarbonize energy supply, transitioning our
global energy system from carbon intensive energy sources to
lower carbon ones. This transformation will allow us to achieve
~45% decarbonization. Second, we must increase electrification,
achieving another ~30% decarbonization. Lastly, demand
optimizations through resource efficiency, circularity, and other
activities provide the remaining solution by enabling us to achieve
more productivity while using less energy.
Decarbonization commitments have grown rapidly in past years,
as evidenced by the number of corporations that have joined the
SBTi (Science Based Targets Initiative), Climate Pledge, and others.
Schneider Electric is the market leader in helping companies to both
set and achieve these decarbonization commitments, providing
consulting and managed services coupled with leading-edge
digital tools to animate both strategy and action. Our Sustainability
Business is already engaged with more than 30% of the Fortune
500 who have set climate targets.
Our differentiated value proposition is to support our
customers on climate, from strategy setting to execution
Strategize: Define climate strategy to meet client ambitions.
Decarbonization starts by quantifying environmental baselines and
defining organizational ambitions. Our consultants help companies
measure their environmental impacts, create a decarbonization
roadmap, structure their program & governance and communicate
on commitments.
Digitize: Create a single-source-of-truth for energy and resource
data management requires monitoring of resource usage and
emissions, identifying saving opportunities and reporting on
benchmark progress. This is achieved with Schneider’s digital
platform and services (EcoStruxure™ Resource Advisor and Neo-
Network™).
Decarbonize: Execute decarbonization strategy using four key
levers: electrification of operations, reduction of energy use,
replacing energy source and engaging the whole value chain.
Ultimately, decarbonization requires action. Schneider Electric’s
robust portfolio of end-to-end net-zero solutions supports clients
to deliver those levers. Our global team of experts helps our
customers deploy these solutions to systematically achieve their
decarbonization aspirations.
Destination digital
For more than 15 years, our digital applications and trusted advisors have helped organizations around the world set strategy and
execute action to enable their decarbonization journeys.
EcoStruxure™ Resource Advisor, Schneider Electric’s
award-winning digital enterprise sustainability management
application, complements the services delivered by its
Sustainability Business. Underpinned by client specific
data, Resource Advisor’s robust AI-supported reporting and
management capabilities enable users across the C-suite,
finance, sustainability, procurement, operations, and other
functions to find quick answers and drive meaningful value to
their organizations.
NEO Network™, is Schneider Electric’s digital peer-to-peer
community of organizations advancing reliable and cost-
effective renewable energy, cleantech, and decarbonization
solutions around the world. NEO Network simplifies the solution
buying process by connecting members to trusted experts,
viable projects and technologies, and exclusive market
intelligence to enable and accelerate transaction decisions.
With more than 500 corporate members, 30+ gigawatts of
renewable capacity available for corporate offtake, and leading-
edge digital analytics apps, NEO Network is positioned to play
a crucial role in the rapidly evolving renewables market by
engaging supply and demand actors in a thriving community.
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Chapter 1 – Group strategy and sustainability
1.3 Schneider Electric’s top priorities for sustainable growth
1.3.4 Global supply chain
Schneider Electric’s global supply chain consists of networks covering the end-to-end value chain.
In 2021, Schneider launched STRIVE, its three-year strategy to be the most agile, innovative, planet-friendly and customer-centric supply
chain. STRIVE has six strategic objectives.
What is next on the global supply chain transformation journey?
Breakthroughs to boost customer centricity, cash efficiency, and improved productivity.
STRIVE
TSC 4.0 Tailored Sustainable Connected
Tailored Supply Chain 2.0
Tailored Supply Chain
Simplification
Footprint & Lean Manufacturing
2005 - 2008
2009 - 2011
2012 - 2014
2015 - 2017
2018 - 2020
2021 - 2023
More Sustainability
• Clean and safe facilities;
• Engage 100% of sites in local biodiversity preservation projects;
• Reduce carbon emission by 17% by 2025;
•
• 50 Global supply chain sites net-zero CO2;
• Circular supply chain innovations;
• 100% ecofriendly and sustainable packaging.
Improve energy efficiency by 15%, and renewables by 90%;
From tailored to Trusted
• Personalized customer experience, with reliable delivery and
proactive communication;
• Differentiated service and capabilities;
• Engage with customers through end-to-end traceability;
• Drive superior quality;
• Be ready for e-commerce – resilient supply chain.
Invest in IT and OT solutions to be cyber-resilient;
More Resilient
•
• Cybersecure offers, sites, and suppliers;
• Power of two for critical ranges, increase time to survive with
tactical buffer capacity, and double sourcing for high business
impact parts;
• Professional business continuity plans in core factories and
distribution centers;
• Grow modelling capabilities, with embedded risk identification
and mitigation.
From connected to Intelligent
• Autonomous supply chain through best-in-class data
governance model and architecture, extract full value leveraging
intelligent automation and advanced data analytics, and
leverage our digital incubator for innovation (e.g., AI, 5G);
• Smart operations powered by EcoStruxure™, connecting all
smart sites, deploy flexible automation, self-optimization of
processes and assets through a library of analytics, and deploy
smart centers of excellence;
• End-to-end orchestration and visibility.
More Velocity and Efficiency
• Shorter and simplified supply chain, regional approach with up
to 90% sourced within selling region;
• Strategic partnership with suppliers including co-innovation.
Digital supplier interaction and world-class category management;
• Agile and empowered people.
In April 2021, Schneider Electric launched the Zero Carbon
Project, to support its top 1,000 suppliers reduce their CO2
emissions by 50%. More than 1,000 suppliers have now made the
commitment.
80k
employees
183
factories
94
distribution centers
in 50 countries
150k
order lines per day
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Chapter 1 – Group strategy and sustainability
Strategic Report
1.3.5 SE Ventures
How we prepare for what is coming next
The energy industry is transforming into a decarbonized,
decentralized, and digital energy system. New solutions are
needed to move the world towards a zero-carbon economy, and
startups are developing disruptive technology and business
models. The corporate venture capital arm of Schneider Electric,
SE Ventures, enables Schneider to engage with these startups
around the world. Our Market Intelligence team perform deep dives
on quickly growing sectors, researching and developing market
maps to provide recommendations. Every growth opportunity is
evaluated as a potential investment, partnership, or incubation of a
new business. SE Ventures provides capital to bold entrepreneurs
who can benefit from Schneider Electric’s deep domain expertise,
R&D assets, and global customer base. SE Ventures has built
an extensive global innovation network, ensuring early access to
breaking technologies and fast moving markets.
SE Ventures – areas of interest
1.
How it contributes to the open ecosystem
SE Ventures partners with startups to help them scale by
connecting them with experts from our lines of business.
Connecting our employees to startups is mutually beneficial –
helping Schneider Electric to spur new ideas, reduce R&D costs,
and add complementary technologies, and startups to benefit
from our deep domain expertise, access to customers, and
our world-class supply chain. This open ecosystem connects
Schneider Electric to external companies with disruptive ideas,
ensuring we are always challenging the current state and looking
for innovation opportunities. Our recent “Dare to Disrupt” internal
innovation program reflected our employees growing innovation
DNA, with 2,500 people participating, 242 teams pitching their
ideas, and three teams selected for an external incubation to build
a new company.
New Energy
Landscape
Decentralized,
decarbonized, digitally
enabled future.
Smart
Structures
Connecting and
decarbonizing the
Built Environment.
Industry 4.0
Sustainable industry,
automation and
connected workforce.
Climate Tech
Transforming
businesses to
zero-carbon.
Examples of SE Ventures investments
Electric Vehicle
Services
Installation and integration
services for energy transition
technologies.
Industrial Predictive
Maintenance
AI-driven solutions
for critical equipment.
Manufacturing
Software
Connected worker platform
for driving manufacturing
excellence.
Home Energy
Management
Home Energy Monitor and
software provides real-time
insight into energy use.
Distributed Energy
Resources
AI-driven software to predict,
optimize, and control
distributed energy resources.
Electric Vehicles
Zero-emission electric transit
vehicles and electric vehicle
solutions for commercial
applications.
Cybersecurity
Industrial cybersecurity
platform to identify, manage,
and protect OT, IoT,
and IIoT assets.
€500m
36
6
200
fund
www.se.com
investments of which
12 in 2021
incubations
co-innovations with startups
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Chapter 1 – Group strategy and sustainability
1.4 Customer focus
Meeting customer expectations
Thanks to its fully integrated operating model, Schneider offers one experience to customers. All key processes
from account and order management to customer service are consistent across Schneider’s businesses and
in all geographical regions of the world. We strive to further digitize our customer’s experience as much as
possible and where it makes sense to ensure that a customer journey as smooth and efficient as possible.
Residential: We help create sustainable and smart
homes of the future by connecting electricity with digital
in individual homes, apartments, and public housing.
We support our customers to achieve a net-zero future, create
safe and adaptive homes with reliable power, use actionable
insights to efficiently manage energy usage and costs, and enjoy
personalized living experiences.
Mobility: We serve automotive manufacturers and
electric car battery manufacturers to enable productivity
and sustainability through digitization. We also provide
solutions for critical transportation infrastructure, such as electric
car charging, airports, railways, subways, and ports. Our solutions
include microgrids and Energy-as-a-Service, to help customers run
safe, reliable, efficient, and carbon-free operations.
Buildings: We offer intelligent building technologies for
real estate, healthcare, hotels and retail customers. Our
solutions help them maximize operational efficiency and
Oil and gas: We provide integrated digital solutions
and high-performance systems, software, and services
to oil and petrochemical companies, and Engineering
energy savings, while lowering OpEx costs, ensuring cybersecurity
and decarbonization of assets. Building on our software portfolio
that includes IGE+XAO and ALPI, we now also support the
digitization of construction, with RIB Software to unlock the full
potential of building efficiencies and sustainability.
Cloud and service providers: We provide data center,
power solutions, and edge computing to internet giants,
co- location providers, and industrial customers. We help
them increase reliability and power usage effectiveness, accelerate
decarbonization of their operations, and increase efficiency and
optimize value chains with Unified Operations Centers from AVEVA.
Power and grid: We serve companies producing,
delivering, and/ or selling electricity to help them reduce
their carbon footprint, digitize networks, and connect
customers to smart grids. We help our customers overcome
challenges, such as increased intermittent renewables or
decentralized generation, with our Advanced Distribution
Management Systems (ADMS) to better manage system
interruption duration and frequency.
Water and wastewater: We support customers across
the entire water cycle, from water resources to water
distribution, sewage management, and treatment. Through
our innovative smart water technologies and services, we help
make water safe, reliable, sustainable, and efficient across the
entire water cycle. We partner with our customers in their digital
transformation to reach resilience and sustainability goals.
Procurement and Construction (EPC) companies. We help
customers manage the entire life cycle of capital projects, achieve
sustainability targets, and improve safety and operations with
digital twins, from production to processing and supply chain
operations, namely thanks to AVEVA offers and EcoStruxure™
Power and Process, which enables the convergence of power and
control.
Consumer packaged goods: We enable digital
transformation at every step of the value chain for Food and
Beverage and Life Sciences companies. Our solutions
provide improved sustainability, efficiency, and traceability, such
as Manufacturing Operations Management and Manufacturing
Execution software from AVEVA. With ProLeiT, we help Food and
Beverage customers advance their digital transformation and
optimize their production processes, driving increased productivity
and efficiency.
Mining, minerals, and metals: We help mining, cement,
glass, and metals customers to achieve greater energy
and production efficiency and sustainability targets, thanks
to EcoStruxure™ and IoT-enabled solutions. Unified Operation
Centers from AVEVA provide a comprehensive view at company
level to drive efficiencies at scale by connecting all assets and sites
into one repository.
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Strategic Report
1.
Leveraging a global network of over 650,000 service providers and partners
We strive to be the most partner-friendly company in our industry. A significant share of Group revenues is managed through intermediary
partners, with their own added value. This network enables us to extend our segment coverage and have a strong connection to local markets.
We are increasingly focusing on digital interaction with our partner ecosystem, thanks to the Partner Portals and Schneider Electric Exchange.
Distributors and retailers: Our main distribution
partners are electrical distributors, specialists in IT,
telecom and data center applications, DIY retailers, online
marketplaces, e-tailers, and specialist technical distributors for
automation and industrial software solutions, access control, and
security products.
System integrators: System integrators design, integrate,
and support automation to meet their customers’ needs
for the performance, reliability, precision, and efficiency of
their operations. We give system integrators access to all areas of
automation from field control to Manufacturing Execution Systems
and Building Automation Systems.
Distribution now represents approximately 45% of total Group
turnover. We lead the eCommerce transformation in our industry,
seeing a strong acceleration in 2021 with eCommerce growing
23% year on year. Over the last 4 years, we have doubled our
eCommerce penetration and we now have presence in more than
800 channel partners’ webshops. We continue to digitally equip our
customers and channel partners with more web-based trainings,
enhanced product content, and digital tools for design, selection,
configuration, and customer support.
Panel builders: Collaboration with panel builders, who
build and sell electrical distribution or control/monitoring
switchboards, helps bring to market our innovative
solutions and provide end-users the solutions for a more digital
and more electric world. Panel builders buy low and medium-
voltage devices and act as specialists, or connected power
system experts, who manage and maintain electrical assets after
installation and throughout their entire operational lifetime.
Contractors: To design solutions tailored to
end-users’ specific needs, we work closely with
contractors, small specialists or generalist electricians,
and large companies that specialize in installation equipment
and systems. We provide training and support and leverage our
multichannel partner model, which is increasingly digital, via the
Partner Portal and Exchange platforms.
Specifiers/consulting engineers: To meet their
customers’ specific demands, specialist engineers,
architects, and design firms are prescribing more efficient
and integrated energy management solutions, specifically for
critical power, security, and building automation. As our essential
partners, we collaborate and provide application-focused design
information and tools.
Electricians: We have one of the most comprehensive
networks of electricians worldwide. We enable electricians
to operate more efficiently through training, technical
support, and digital tools, such as My Schneider Electric app,
where over 400,000 electricians are registered. Our relationship
with electricians is strengthened by increasing their visibility to end-
users through different tools, including online “installer locators”.
Original equipment manufacturers (OEMs): We
work with more than 15,000 OEMs to improve machine
performance and reduce time-to-market for packaging,
conveyor, material handling, hoisting, and Heating, Ventilation,
and Air Conditioning (HVAC) applications, providing tools and
software such as EcoStruxure™ Automation Expert. We nurture
strong OEM partnerships through programs to enhance their
capacity to deliver internationally.
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Chapter 2 – Sustainable development
As an impact company, we are convinced that
to do good, we need to do well, and vice-versa.
Our sustainability and business impacts converge to
act for a climate positive and socially equitable world.
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Chapter 2 – Sustainable development
Strategic Report
2.
164
166
170
177
182
185
188
development2
Sustainable
2.1 Sustainability at the heart
2.5 Great People making Schneider
of our strategy
61
Electric a great company
2.1.1 Our strategic vision towards long-term positive impact
2.1.2 The Schneider Sustainability Impact, a unique
transformation tool
2.1.3 Measuring our contribution to a more sustainable world
2.1.4 Integrated and transverse governance
of sustainable development
2.1.5 Open dialog with stakeholders
2.1.6 Main ESG risks and opportunities
2.1.7 Key external frameworks and ESG ratings
2.2 Driving responsible business
with Trust
62
63
68
72
75
81
89
92
94
2.2.1 Trust Charter, Schneider Electric’s Code of Conduct
95
2.2.2 Ethics & compliance program
101
2.2.3 Zero tolerance for corruption
2.2.4 Compliance with tax regulations
102
2.2.5 High standards for the quality and safety of our products 102
105
2.2.6 Digital trust and security
106
2.2.7 Human rights
109
2.2.8 Employee health and safety
112
2.2.9 Vigilance plan
116
2.2.10 Relations with project execution contractors
117
2.2.11 Sustainable relations with suppliers
124
2.2.12 Vigilance with local communities
2.3 Acting for a Climate positive
world
2.3.1 Climate governance
2.3.2 Roadmap towards a 1.5°C climate trajectory
2.3.3 Delivering a climate positive impact with EcoStruxure™
2.3.4 Decarbonizing our operations by 2030
2.3.5 Decarbonizing our supply chain by 2050
126
128
130
134
136
140
2.4 Being efficient with Resources
144
2.4.1 Preserving the planet and its biodiversity
2.4.2 Eco-efficient manufacturing
2.4.3 Green offers
146
150
156
2.5.1 2025 people strategy and vision
2.5.2 Diversity, equity, inclusion, and well-being
2.5.3 Talent attraction and development
2.5.4 Compensation and benefits
2.5.5 Social dialog and relations
2.6 Delivering Social Impact
for a just transition
2.6.1 Offering better lives through access to green electricity 190
2.6.2 Investing for high social impact
193
2.6.3 Empowering new generations with the Schneider
Electric Foundation
2.6.4 Developing access to education and employment
all over the world
2.7 Methodology and audit
of indicators
2.7.1
Methodology elements on the published indicators
2.7.2 Methodology elements on EU taxonomy indicators
2.7.3 Sustainability Accounting Standard (SASB)
Correspondence table
2.7.4 Task-Force on Climate Related Financial
Disclosures (TCFD) correspondence table
2.7.5 Independent third party’s report on consolidated
non-financial statement presented in the
management report
2.8 Indicators
2.8.1 Environmental & Climate indicators
2.8.2 Social indicators
2.8.3 Societal indicators
195
200
206
206
216
218
220
224
226
226
232
240
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Chapter 2 – Sustainable development
An introduction by
Chief Strategy &
Sustainability Officer,
Olivier Blum
World’s Most Sustainable Corporation
in 2021
For well over a decade, sustainability has been at the heart
of what Schneider does. Still, 2021 was a standout year, in
several respects.
In January, our continuous efforts to address climate change
and social inequality received the highest profile of external
recognitions when the Canadian media and research company
Corporate Knights ranked us the World’s Most Sustainable
Corporation. This, along with numerous other ESG recognitions
in 2021, is testimony to the valuable, long-term positive impact
we have.
Throughout the year, the need to address climate change and
social inequality hit headlines seemingly every day. In November,
governments and businesses made important commitments at the
COP26 climate change conference, though talk must now translate
into rapid, bold and comprehensive action if we’re to prevent a
potentially catastrophic rise in global temperatures.
We share the responsibility to act with governments and other
institutions, and we believe that private-sector corporates like
Schneider play a crucial role in leading the transition to a cleaner,
more inclusive world.
Paving the way as an Impact Company
As an Impact company, we’re determined to keep intensifying
our meaningful and lasting impact across all dimensions of ESG
(environmental, social, corporate governance and ethics), from
employees to supply chain partners, customers, as well as local
communities and institutions at local and global levels. By weaving
sustainability and societal impact into all facets of our business,
we create long-term value for all stakeholders and deliver
profitable growth.
During the course of the year, we moved forward with our 2021-
2025 Schneider Sustainability Impact (SSI) targets. These are
aligned to both our six long-term commitments related to climate,
resources, equal opportunities, trust, all generations, and local
communities, and to the United Nations’ Sustainable Development
Goals. This latest program reinforces our ESG commitments
through 11 global targets, plus a new local target to empower our
country organizations to address their specific challenges and
opportunities. The progress we make on these SSI targets is a
true indicator of our company’s transformation, both globally
and on the ground.
Our achievements to fight climate change
and social inequality
In the first quarter of 2021, we kicked off a new initiative to help
1,000 of our top suppliers reduce their carbon emissions by 50%
by 2025. With our supply chain community, we’re working to
evaluate, strategize and implement decarbonization actions suited
to each supplier’s specific maturity and scope. Furthermore, we’ve
raised our ambitions when it comes to the environmental and social
responsibility of our supply chain: we are well on our way to using
more sustainable resources and materials in our products and
packaging, and we audit our suppliers to ensure they comply
with the highest ethical work standards and best practices.
As ever, we’re committed to helping resolve social problems, and
to promoting equal opportunities for all our employees. We live in
a world for instance where 800 million people don’t have access to
energy, which is why we develop and deliver adapted solutions that
supply clean, safe and reliable energy, hereby unlocking education
and economic opportunity, and a better quality of life.
We also continue to prioritize learning, development and upskilling
not only for Schneider’s multi-generational workforce, but also
through the work of the Schneider Electric Foundation in supporting
local NGOs that run vocational training programs for young people.
In 2021, we reached an impressive milestone in this field, with
300,000 people trained in energy management since we launched
the program in 2009.
And no less importantly, we seek to build trust with our
stakeholders, living up to the highest standards of corporate
governance, through initiatives that monitor and educate teams on
ethics, cybersecurity, safety, and quality. Our 2021 Trust Charter,
the evolution of our Principles of Responsibility, sets out the
expectations of how we work at Schneider, and equips our teams
to confront any unethical behavior they might encounter.
These are just some highlights of 2021. Looking ahead, as a
leading Impact Company in 2022, we’re committed to doing
even more, even faster.
Read more about our performance on page 63 (cid:496)
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Chapter 2 – Sustainable development
Strategic Report
2.1 Sustainability at the heart of our strategy
In this section
2.1.1 Our strategic vision towards long-term
2.1.4 Integrated and transverse governance
positive impacts
2.1.2 The Schneider Sustainability Impact,
a unique transformation tool
2.1.3 Measuring our contribution to
a moresustainable world
62
63
68
of sustainable development
2.1.5 Open dialog with stakeholders
2.1.6 Main ESG risks and opportunities
2.1.7 Key external frameworks and ESG Ratings
72
75
81
89
2.
2021 Recognitions
2021 Highlights
#1
World’s Most Sustainable
Corporation in 2021
by Corporate Knights
3.92/10
Schneider Sustainability
Impact score, outperforming
2021 3.75/10 target
+4M
71%
People have access
to green electricity in 2021
Highest Employee Engagement
Index of all time
347M
Tonnes of saved and avoided
CO2 emissions for our
customers since 2018
1,000+
Suppliers committed to the
Zero Carbon Project
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Chapter 2 – Sustainable development
2.1 Sustainability at the heart of our strategy
2.1.1 Our strategic vision towards
long-term positive impact
2.1.1.1 A holistic and strategic vision
of sustainability
“Sustainability” is about creating system value. It encompasses
continuous improvement of environmental, social, and ethical
dimensions across an organizations entire value chain and
stakeholders.
Schneider Electric’s short-term roadmap (3 – 5 years) is built on a
consultation process involving external and internal stakeholders,
called a materiality assessment, as well as dedicated internal
governance mechanisms involving the Strategy & Sustainability
team, employees, experts in the Group, the Executive Committee,
and the Board of Directors, under the leadership of the Chief
Strategy & Sustainability Officer.
In the medium (5 – 10 years) and long term (10 – 30 years),
Schneider Electric aligns its strategy on key issues under the
United Nations Sustainable Development Goals (SDGs) and
global climate scenarios in coherence with its business model
and global footprint.
This holistic approach to sustainability allows the Group to greatly
mitigate risks and also brings tangible value added through a
greater attractivity to customers, new talents, and investors,
while boosting innovation.
The numerous awards received each year (e.g., #1 Most
Sustainable Corporation, Financial Times top 50 Diversity Leaders,
Gartner Supply Chain Top 25, etc.) and the Group’s leadership in
the main ESG indices (e.g., Dow Jones Sustainability World Index,
Euronext Vigeo Eiris World 120, etc.), confirms that Schneider
Electric is headed in the right direction.
2.1.1.2 A unique position to fight climate
change and social inequality
As a global specialist in the digital transformation of energy
management and automation, the Group places its expertise
and solutions at the service of its customers to ensure that
energy is safe, reliable, efficient, connected, and sustainable.
The Group’s sustainability roadmap
2021-2025
Progress on our Climate Pledge to reach carbon neutrality in the
Group’s operations.
Reach the 11 global, and one local, objectives of the Schneider
Sustainability Impact (SSI) 2021 – 2025, as well as the 25 objectives
of the Schneider Sustainability Essentials (SSE) under our six long
term commitments (climate, equal, resources, generations, trust,
and local).
The Group proposes an integrated offering of technologies and
market-leading solutions tailored to customer needs, promoting
the transition towards more electric, digital, decarbonized, and
decentralized energy. These solutions balance the need to reduce
the planet’s carbon footprint with the inalienable human right to
quality energy and access to digital.
In fact, Schneider Electric is uniquely positioned among the 1,000+
companies taking action for climate change because it acts on
both sides of the same equation:
• The solutions Schneider Electric brings to the market are directly
linked to activities to mitigate, adapt, and improve humanity’s
resilience to climate change;
• At the same time, Schneider Electric acts to reduce its end-to-
end CO2 footprint, aiming for a net-zero CO2 supply chain by
2050, with precise steps for 2025, 2030, and 2040.
This positive contribution is measured as Impact revenues, which
represent 71% of the Group’s total revenues in 2021. In addition,
to further contribute to a new electric and digital world, 100%
of Schneider Electric’s innovation projects are aligned with its
purpose, more than 90% being either strictly green or neutral.
On this journey for a better planet, the Group is convinced that
no one should be left behind, and businesses should operate
a just transition.
2.1.1.3 A commitment to the United
Nations Sustainable Development Goals
Schneider Electric is committed to taking urgent action to co-
create a brighter future aligned with the United Nations Sustainable
Development Goals (SDGs), consisting of 17 objectives and
measuring its impact with transparency. The SDGs are about
protecting the planet, alleviating poverty, and achieving worldwide
peace and justice. By tracking its sustainability performance
and publishing quarterly results, Schneider Electric uphold its
commitments to the SDGs and industry leadership in corporate
social responsibility.
Clim ate
Resources
Trust
Empower all to make the most of our energy and resources
E
q
u
a
l
G
e
n
e
r
L
o
c
a
l
a
ti
o
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n
s
2.1.2 The Schneider
Sustainability Impact,
a unique transformation tool
2.1.2.1 A continuous improvement process
anchored in our practice since 2005
To demonstrate significant impacts and initiate lasting change,
performance must be measured, in a relevant manner for a
company and its stakeholders. That is why Schneider Electric
defines specific Group objectives and measures its results each
quarter (since 2005) in a dashboard commonly referred to as a
“barometer”. In 2018, this barometer was renamed Schneider
Sustainability Impact (SSI). Schneider uses this tool to address its
sustainability challenges and to improve each of the pillars of its
strategy identified through its materiality matrix. The SSI uses a
scoring scale of 10 and provides an overall measure of the Group’s
progress. The tool also enables Schneider to anticipate and
effectively manage its risks and opportunities by mobilizing key
stakeholders around specific, measured objectives and reliable
results. The SSI’s performance and monitoring systems are
audited annually by an external auditor (limited assurance).
Each SSI seeks to:
• Mobilize the whole Company around holistic sustainability
goals impacting its ecosystem;
• Share the Group’s improvement plans with stakeholders;
• Create system value.
On a daily basis, Schneider Electric proves that economic,
environmental, and social interests are convergent.
2.1.2.2 Two complementary sustainability
performance dashboards to progress
between 2021 and 2025
In 2020, Schneider Electric defined six new objectives for the
2021-2025 period:
1. Act for a climate positive world, by continuously investing in
and developing innovative solutions that deliver immediate and
lasting decarbonization in line with our carbon pledge.
2. Be efficient with resources, by behaving responsibly and
making the most of digital technology to preserve our planet.
3. Live up to our principles of Trust, by upholding ourselves and
all around us to high social, governance, and ethical standards.
2.
Chapter 2 – Sustainable development
Strategic Report
4. Create equal opportunities, by ensuring all employees are
uniquely valued and work in an inclusive environment to develop
and contribute their best.
5. Harness the power of all generations, by fostering learning,
upskilling, and development for each generation, paving the
way for the next.
6. Empower local communities, by promoting local initiatives
and enabling individuals and partners to make sustainability
a reality for all.
The execution of the Group’s 2021 – 2025 sustainability strategy
is tracked through quantitative key performance indicators (KPIs),
under two complementary tools: the SSI and the new Schneider
Sustainability Essentials (SSE).
The SSI is the translation of our six long-term commitments into
a selection of 11 highly transformative and innovative programs.
The programs will be tracked and published quarterly, audited
annually, and linked to short-term incentive plans for more than
64,000 employees. A notable addition to the SSI in 2021 is the local
aspect, aiming to deploy local actions in the 100+ markets where
the Group operates in order to better empower all leaders and
collaborators to unlock meaningful local impacts.
The SSE has been created to maintain a high level of commitment
and transparency in the actions taken by the Group. This new tool
brings balance between the innovative transformation plans of
the SSI and the need to keep progressing on other long-lasting
programs. In this spirit of continuous improvement, and in a holistic
vision of sustainability, the SSE will track annual progress with
25 quantitative KPIs, and some additional qualitative programs.
Collectively, the SSI 11 Global Impacts and its Local Impact, as well
as the 25 SSE programs, are the Group’s short-term sustainability
roadmap and our contribution to the 17 United Nations SDGs. More
details on our contributions to each SDG are available online.
2.1.2.3 A vision beyond 2025 for climate,
biodiversity, and access to energy
Climate change, biodiversity loss, rising inequalities, all those
issues have long-term consequences and cannot be addressed
with a short-term mindset only: solving these issues requires a
combination of a long-term vision and concrete short-term action.
The Group’s meaningful purpose and its 2021-2025 SSI fit with
Schneider’s longer-term 2050 vision for a fair and decarbonized
world, and key steps along the way in 2030 and 2040 that are
presented below.
2030
2040
Become carbon neutral on full end-to-end footprint by 2040
(full Scopes 1, 2, and 3), 10 years ahead of 1.5°C climate trajectory.
This means that all Schneider Electric products will be carbon
neutral by 2040 (using quality offsets)
• Reach net-zero operational emissions and reduction of Scope 3
emissions by 35% (versus 2017) as part of the Group’s validated
1.5°C Science-Based Target (SBT)
2050
• Consume 100% renewable electricity (RE100)
• Double energy productivity (versus 2005) (EP100)
• Switch to 100% electric cars (EV100)
• Provide access to energy to 100 million people
Engage with suppliers towards a net-zero CO2 supply chain
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Chapter 2 – Sustainable development
2.1 Sustainability at the heart of our strategy
3.92/10
Schneider Sustainability Impact score in 2021(1),
outperforming 3.75/10 target for the year
Schneider Sustainability Impact
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Climate
1. Grow our Schneider Impact revenues(4)
2. Help our customers save and avoid millions of tonnes of CO2
emissions
3. Reduce CO2 emissions from top 1,000 suppliers’ operation
0%
1%
Increase green material content in our products
Primary and secondary packaging free from single-use plastic,
using recycled cardboard
7%
13%
11%
21%
Strategic suppliers who provide decent work to their employees(1)
--
In progress
Level of confidence of our employees to report unethical conduct(1)
81%
+0pts
Baseline(2)
2021 progress(3)
2025 Target
70%
263M
71%
347M
80%
800M
50%
50%
100%
100%
+10pts
Resources
Trust
Equal
4.
5.
6.
7.
8.
Increase gender diversity in hiring (50%), front-line management
(40%) and leadership teams (30%)
41/25/24
41/27/26
50/40/30
9.
Provide access to green electricity to 50 million people
30M
+4.2M
50M
Generations
10. Double hiring opportunities for interns, apprentices and fresh
4,939
x1.25
graduates
11. Train people in energy management
281,737
328,359
x2
1M
Local
+1. Country and Zone Presidents with local commitments that impact
0%
100%
100%
their communities
(1) The Schneider Sustainability Impact (SSI) provides an overall measure of the Group’s progress on its sustainability goals on a scoring scale of 10. This is achieved by
converting each KPI’s performance on a 10-point scale, considering that base year performance receives a 3/10 score and the 2025 objective translates to a 10/10
score. For each KPI, the relevant score is obtained by linear interpolation and rounded down to the second decimal. The overall score of the tool is the average of
each KPI’s score with equal weight excluding the local commitment (SSI #+1). As an exception, in 2021, two other KPIs are excluded: SSI #6, as the program is still in
development, and SSI #7, because 2021 is the baseline year.
(2) Generally, the 2020 performance serves as a baseline for SSI programs, except for two programs measured against a 2019 baseline to mitigate COVID-19 impacts
(SSI #1 Impact revenues and SSI #10 opportunities for the next generation).
(3) Each year, Schneider Electric obtains a “limited” level of assurance on methodology and progress from an independent third party verifier for all of the SSI indicators
(except for SSI #6, SSI #7 and SSI #+1), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 224). Please refer to page 206
for the methodological presentation of each indicator. The 2021 performance is also discussed in more details in each section of this report.
(4) For the reporting requirements under the European Taxonomy Regulation, please refer to page 68 and page 216.
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Strategic Report
Schneider Sustainability Essentials
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Climate
1. Decarbonize our operations with Zero-CO2 sites
Resources
2.
3.
4.
5.
Substitute relevant offers with SF6-Free medium voltage
technologies
Source electricity from renewables
Improve CO2 efficiency in transportation
Improve energy efficiency in our sites
6. Grow our product revenues covered with Green Premium™
7.
Switch our corporate vehicle fleet to electric vehicles
8. Deploy local biodiversity conservation and restoration
programs in our sites
9. Give a second life to waste in ‘Waste-to-Resource’ sites
2.
Baseline(1)
2021 progress(2)
2025 Target
30
0%
80%
0%
0%
77%
1%
0%
120
51
38%
82%
-1%
6.6%
78%
7.7%
0%
126
150
100%
90%
15%
15%
80%
33%
100%
200
10. Avoid primary resource consumption through ‘take-back
157,588
203,881
420,000
at end-of-use’ since 2017 (metric tons)
11. Deploy a water conservation strategy and action plan for sites
in water-stressed areas
Trust
12. Deploy a ‘Social Excellence’ program through multiple tiers
of suppliers(3)
13. Train our employees on Cybersecurity and Ethics every year
14. Decrease the Medical Incident rate
0%
--
90%
0.79
9%
In progress
96%
0.65
15. Reduce scrap from safety units recalled
4,202
4,024
100%
--
100%
0.38
2,101
16. Be in the top 25% in external ratings for Cybersecurity
Top 25%
Top 25% Top 25%
performance
17. Assess our suppliers under our ‘Vigilance Program’
Equal
18. Reduce pay gap for both females and males
374
1,203
F: -1.73%
M: 1.00%
-1.61%
1.11%
4,000
<1%
19.
Increase subscription in our yearly Worldwide Employee Share
Ownership Plan (WESOP)
20. Pay our employees at least a living wage(4)
21. Multiply the number of employee-driven development
interactions on the Open Talent Market
Generations
22. Support the digital upskilling of our employees
23. Provide access to meaningful career development programs
for employees during later stages of their career
24.
Increase our employee engagement level
53%
99%
5,019
41%
--
69%
Local
25.
Increase the number of volunteering days since 2017
18,469
61%
60%
100%
100%
x2.1
74%
In progress
71%
27,981
x4
90%
90%
75%
50,000
(1) Generally, the 2020 performance serves as a baseline for Schneider Sustainability Essentials (SSE) programs, except for SSE #5, SSE #14 and SSE #20 measured
against a 2019 baseline to mitigate COVID-19 impacts.
(2) Each year, Schneider Electric obtains a “limited” level of assurance on methodology and progress from an independent third party verifier for all of the SSE indicators
(except SSE #12 and SSE #23), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 224). Please refer to page 206 for the
methodological presentation of each indicator. The 2021 performance is also discussed in more details in each section of this report.
(3) SSE #12 ‘Social Excellence’ program currently under development and will be deployed in 2023.
(4) As of 31st December 2021, 99.99% of eligible employees, i.e. all Schneider employees treated as permanent workforce, were paid the living wage. The few remaining
gaps were closed early 2022 so that all in scope Schneider Electric employees are now paid the living wage. The final KPI result for 2021 was rounded to 100%.
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Chapter 2 – Sustainable development
2.1 Sustainability at the heart of our strategy
2.1.2.4 Process to select and deploy our commitments
2.1.2.4.1 Sustainability Strategy setting process
Plan (1 year)
Deploy (3 to 5 years)
1. Definition of Strategic Pillars
• Internal & External stakeholder
consultation (Materiality Analysis)
• SSI Steering Committee Workshops
2. Definition of key performance
indicators
• 1-to-1 workshops with Sustainability SVP
• Iterative KPI drafting and benchmarking
3. Program validation
• Group Sustainability Committee
• The Board of Directors, on the
recommendation of the Human Resources
& CSR Committee
Monitoring
Quarterly
Performance
reporting
Reward
Annual
Audit
• SSI Pilots provide quarterly
performance updates
• The Sustainability Team
coordinates quarterly
publications, the annual audit
and reporting in voluntary and
regulatory publications
• The Group Sustainability
Committee evaluates progress
and decides corrective actions
• The Board of Directors, on the
recommendation of the Human
Resources & CSR Committee,
oversees progress and approves
Reward plans
2.1.2.4.2 Program planification
Analysis of material challenges
Every three to five years, the Group defines a new SSI dashboard
in the wake of an exercise to identify sustainability challenges on
the basis of external and internal contributions.
The voices of each stakeholder are taken into account via the
Group’s materiality matrix, meetings with SRI investors, and the
questionnaires from rating agencies or from customers, which all
shed light on our strategic points of differentiation and on salient
societal concerns.
Definition of disruptive programs
For each target and indicator, and this is a critical point for the
operational implementation of each SSI, the ambition is defined
in consultation with the departments concerned.
In 2020, a specific SSI Steering Committee was created, with
about 50 members: representants of each Executive Committee
member, each geography, function, and business unit. Three all-
hands workshops took place, and the sustainability team organized
individual follow up interviews with each member to define precise
and measurable programs.
For the Group, it is a guarantee of strong mobilization in the field
that is consistent with actual priorities; for teams, it is the assurance
of having the necessary means and visibility to improve. In each
new period, the barometer update takes into account results
obtained, progress still expected, the emergence of new topics and
new priorities, and the experience gained. Thus, it is a powerful tool
to move the Group forward on its major challenges.
Four scenarios may emerge from one SSI to the next:
• Improvement plans are maintained in the barometer and their
targets are renewed or increased.
• Improvement plans change: new and more innovative or
better-adapted indicators that cover the same subject are
implemented; old indicators continue to be monitored internally
if necessary.
• Improvement plans are removed from the barometer; this is
also the case with indicators that have reached a threshold.
They continue to be monitored internally if necessary.
• Improvement plans to address new challenges are
implemented.
Governance and validation of the SSI
The Sustainability department presents a draft version of the new
SSI to the Human Resources & CSR Committee Committee, which
reports on its work to the Board of Directors, and to the Group
Sustainability Committee for validation. This latter Committee
includes six members of the Executive Committee: the Chief
Strategy and Sustainability Officer; Chief Human Resources
Officer; Chief Global Supply Chain Officer; Chief Marketing Officer;
Chief Governance Officer & Secretary General; and Chief Financial
Officer. The new barometer is then approved by the Chairman
& CEO.
2.1.2.4.3 Program deployment
Transparent quarterly and annual disclosure
Quarterly results are supervised by the Group Sustainability
Committee, which makes decisions on any corrective actions
that may be necessary to reach objectives. This Committee
meets quarterly. The Human Resources & CSR Committee within
the Board of Directors conducts an annual review of the Group’s
Sustainability Policy, analyzing, in particular, the performance
of the SSI.
Extra-financial annual results are presented together with financial
results by Jean-Pascal Tricoire, Chairman & CEO of Schneider
Electric, in order to demonstrate the Group’s commitment to making
sustainability part of the Company’s long-term strategy. In addition,
since 2014, quarterly results have been presented together with
quarterly financial information to institutional investors by the
Chief Finance Officer.
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Chapter 2 – Sustainable development
Strategic Report
Annual external verification
Each year, Schneider Electric obtains a “limited” level of assurance
from an independent third party verifier for all of the SSI and SSE
indicators, in accordance with ISAE 3000 assurance standard
(see Independent verifier’s report on page 224).
Rewarding employees for performance
Since 2011, the SSI score is included in the variable compensation
of global functions and Company leaders. In France, since 2012,
the SSI has also been included in the profit-sharing incentive plan
for the French entities, Schneider Electric Industries and Schneider
Electric France. From 2019, the weight of the SSI criteria has
increased from 6% to 20% in the collective part of the annual short-
term incentive highlighting further the importance of sustainability
on Schneider Electric’s business agenda. Further details are
provided in section “Compensation and benefits” on page 182.
In 2021, the SSI performance impacts short-term incentive plans
for 64,000 managers (20% of collective share).
Active communication of sustainability performance
The results of each SSI are released through the main
channels below:
• Quarterly conference calls on the Group’s financial and
extra-financial results to investors and the business press;
• The Group’s website (quarterly press releases, presentation
of integrated quarterly results);
• The intranet (including a quarterly internal video featuring
the CEO and the CFO on the quarter’s results – these videos
have strong internal visibility);
• Communications with the Board of Directors via its Human
Resources & CSR Committee and the Executive Committee;
• The Group’s annual reports (Universal Registration Document
including the statutory auditors’ report, Schneider Sustainability
Report, integrated report);
• The quarterly internal rating for managers on monitoring
the level of achievement of objectives related to variable
compensation;
• Customers or investors events.
2.
Overview of the five barometers since 2005, and example achievements
2005-2008
2009-2011
2012-2014
2015-2017
2018-2020
2021-2025
Number of KPIs
10
KPIs in program
Score out of 10
8/10
2008 overall
performance
Highlights
-20%
Number of lost
days from work
accidents per
employee per
year
>120
Products with an
environmental
profile
13
KPIs in program
14
KPIs in program
16
KPIs in program
21
KPIs in program
11+1
KPIs in program
9.38/10
2011 overall
performance
9.52/10
2014 overall
performance
9.58/10
2017 overall
performance
9.32/10
2020 overall
performance
3.92/10
2021 overall
performance
1,291,768
Households
at the Base of
the Pyramid
got access to
energy thanks
to Schneider
Electric solutions
70.4%
of employees
worked on
ISO 14001
certified sites
460
Missions with
the “Schneider
Electric Teachers”
NGO
16%
CO2 savings on
transportation
98.4%
of our entities
passed our
internal Ethics
& Responsibility
assessment
100%
of products in
R&D designed
with Schneider
EcoDesign Way™
9
Indicators
with increased
objectives in 2019
100%
of employees
are working
in countries
that have fully
deployed our
Family Leave
Policy
New tool
Schneider
Sustainability
Essentials with
25 objectives
Local
dimension with
200 commitments
taken by Zone
and Country
Presidents
www.se.com
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Chapter 2 – Sustainable development
2.1 Sustainability at the heart of our strategy
2.1.3 Measuring our contribution
to a more sustainable world
Schneider Electric has been an early adopter of transparent
disclosures on sustainable revenues, and created its own
methodology of “Impact revenues”(1) in 2019, covering offers
that bring environmental efficiency to its customers, while not
generating any significant harmful impact to the environment, and
excluding revenues from carbon intensive segments. Recently, the
European Union (EU) has shown international leadership by being
the first to develop a Regulation and Taxonomy aiming at driving
investments towards environmentally sustainable activities, which
the Group applauds. Both methodologies are somewhat aligned
but currently differ in the scope of eligible activities, and in end-
segments exclusions. The Group is supportive of a better alignment
over the next years to provide its multinational stakeholders
with standardized metrics and empower them to shape a more
sustainable future for all.
2.1.3.1 A purpose-led, Impact Company
Schneider Electric’s purpose is to empower all to make the most
of our energy and resources, bridging progress and sustainability
for all. The Group’s differentiation lies in its complementary actions
to demonstrate outstanding environmental, social, and ethical
performance, and to support its customers in their Net-zero CO2
journey. Schneider is the digital partner of its customers for
sustainability and efficiency.
The Group proposes an integrated offering of technologies and
market-leading solutions tailored to customer needs, promoting
the transition towards more electric, digital, decarbonized, and
decentralized energy. Those active energy efficiency solutions -
which consist of optimizing the entire energy cycle using energy
control products, systems, services, and software – help mitigate,
adapt, and improve humanity’s resilience to climate change.
Schneider Electric quantifies this climate impact as part of
Schneider Sustainability Impact (SSI) and is committed to help
its customers save and avoid 800 million tonnes of CO2 by 2025
(cumulated since 2018). As of end 2021, the Group delivered
347 million tonnes of CO2e of this commitment. The methodology
and results of this indicator are audited every year as part of the
extra-financial audit.
2.1.3.2 Early-adopter of transparent
disclosures on sustainable revenues
For more than fifteen years, Schneider Electric has led by example
and transparently presented its sustainability performance to its
stakeholders, across all environmental, social and governance
topics and tried to develop new market practices, such as its
saved and avoided CO2 methodology or biodiversity footprint.
In 2019, the Group was one of the first companies to proactively
disclose information on the share of its revenue coming from
offers that bring energy, climate, or resource efficiency to its
customers, while not generating any significant harmful impact
to the environment. Originally called “Green Revenues” to match
market standards, such sales were renamed “Schneider Impact
revenues”(1) to avoid any confusion with the new European
Taxonomy coming into force. In 2021, the Group took a step further
by committing that Schneider Impact revenues reach 80% of Group
sales by 2025 as part of its SSI. It is worth noting that each year
the performance of the SSI impacts short-term incentive plans for
64,000 employees.
Climate
SSI #1
Grow our Schneider Impact revenues
to 80%
The Group supported the Hong Kong University of Science
and Technology (HKUST) as part of its plan to deploy an
integrated data center solution to provide effective operation
and management, ensuring high reliability and 24/7
availability, as well as full visibility for day-to-day monitoring
of all systems and processes. Schneider proposed
EcoStruxure™ for Data Center, an open, interoperable,
IoT-enabled system architecture and platform. It leverages
advancements in IoT, mobility, sensing, cloud and big data
analytics technologies to bring unprecedented insight into
data center operations through our connected products,
edge control, apps, analytics and services. As a result,
HKUST achieve significant energy saving and their power
usage effectiveness (PUE) rating more than doubled.
Baseline
2021 Progress
2025 target
70%
71%
80%
Schneider Impact revenues can be split into four categories:
1. Energy efficiency architectures bringing energy and/or
resource efficiency to customers.
2. Grid reinforcement and smart grid architectures contributing
to electrification and decarbonization.
3. Products with differentiating green performance, flagged
thanks to our Green Premium™ program.
4. Services that bring benefits for circularity (prolonged asset
lifetime and uptime, optimized maintenance operations, repair,
and refurbish) and energy efficiency (maintenance to maintain
the operational performance of equipment and avoid a
decrease of energy efficiency over time).
Additionally, revenues derived from activities with fossil sectors
and others are systematically excluded, including Oil & Gas,
coal mining, and fossil-power generation, in line with prevailing
corporate responsibility reporting and sustainable finance
practices, even though Schneider Electric’s technologies deliver
resource and carbon efficiency in such sectors as well. In line with
Schneider Electric’s strategy to phase out SF6 from offers by 2025,
SF6-containing switchgear for medium voltage applications are
also excluded. In addition, neutral technologies such as signaling,
racks and enclosures, access control, or emergency lighting
are excluded.
(1) Schneider Impact revenues are calculated using Schneider’s own consistent methodology and are distinct from turnover eligible under the EU Taxonomy
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Based on our assessment, which covers 100% of Schneider
consolidated sales, the total share of Schneider Impact revenues
is 71% in 2021 versus 70% in 2019.
In addition, to further contribute to a new electric and digital world,
100% of Schneider Electric’s innovation projects are aligned with
its purpose, more than 90% qualifying as impact innovation under
Schneider’s definition, or neutral. This concerns every innovation
contributing to a decarbonized world, for instance energy and
process efficiency, resource optimization, SF6-free projects, or
Green Premium™ offers. The methodology to calculate this figure
is similar to the Schneider Impact Revenue methodology and
should not be confused with OpEx and CapEx eligible under
the EU Taxonomy.
2.1.3.3 New reporting requirements under
the European Taxonomy Regulation
The adoption of the Taxonomy Regulation (Regulation (EU)
2020/852) in 2020 establishes a European Union-wide classification
system to identify economic activities that are considered as
environmentally sustainable as part of the European Union’s long-
term plan to connect finance with its sustainability goals. Dedicated
Delegated Acts (DA) specify (or will specify), for each of the six
environmental objectives identified, which activities are likely to
make a substantial contribution to an objective (eligibility).
Chapter 2 – Sustainable development
Strategic Report
Environmental objectives with published DA (covered in this
eligibility assessment and subject to evolutions):
1. Climate change mitigation
2. Climate change adaptation
Environmental objectives for which DA are not published yet:
3. Sustainable use and protection of water and marine resources
4. Transition to a circular economy
5. Pollution prevention and control
6. Protection and restoration of biodiversity and ecosystems
2.
Pursuant to Article 8 of the regulation and the delegated regulation
published on 6 July 2021, the proportion of turnover, Capital (CapEx)
and Operational Expenditure (OpEx) resulting from products or
services associated with economic activities considered sustainable
is due to be reported progressively over the fiscal years 2021 to
2023. In FY 2021, large undertakings are required to disclose those
three KPIs for activities eligible to climate objectives according to
the EU Climate Delegated Act already published.
Eligible activities then need to be subjected to a series of screening
tests, to determine if they are Taxonomy-aligned and can be reported
as such, meaning that corporates will have to demonstrate that
the eligible activities do not significantly harm any of the other five
objectives (“Does Not Significantly Harm”, DNSH criteria), and
comply with minimum social safeguards (e.g. OECD, United Nations).
2.1.3.4 Gradual inclusion of economic
activities to the EU Taxonomy
In this report we focus on eligibility according to the current EU
Climate DA published. Full reporting on eligibility and alignment
for all six objectives is expected in 2024 (FY 2023).
Nature of Schneider Electric’s main taxonomy-eligible economic activities under current Climate DA
Energy efficiency
in buildings
Low CO2 mobility
end segment
Renewables
end segment
Transmission
and distribution
of electricity
Services related
to energy
performance
of buildings
Energy efficient building
automation and control
systems
Smart monitoring and
regulation of heating
systems
Zoned thermostats and
devices for the smart
monitoring of electricity
loads or heat loads
Electric vehicles charging
stations and supporting
grid reinforcement
technologies
Manufacture of renewable
energy technologies,
equipping wind and
solar power generation
capacities
Equipment and projects
for the construction
of transmission and
distribution infrastructure
Electrical infrastructure
for urban and suburban
public transport
Port infrastructure for
shore-side electrical
power to vessels at
berth and electrification
and efficiency of
ports’ operations
Communication and
control technologies
for the controllability
and observability of
the electricity system,
such as advanced
automation software
Technical consultations
such as energy audits,
simulations and trainings
Energy management
services
Energy performance
contracts
Proportion of Taxonomy-eligible economic activities in the Group’s total turnover,
capital (CapEx) and operational expenditure (OpEx)
28% of turnover | 27% of CapEx | 23% OpEx
Read more on Schneider Electric business model and strategy page 20 (cid:496)
Read more on Schneider Sustainability Impact page 63 (cid:496)
Read more on Schneider Electric saved and avoided methodology page 134 (cid:496)
Read more on Green Premium page 156 (cid:496)
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Chapter 2 – Sustainable development
2.1 Sustainability at the heart of our strategy
Importantly, the phased application of reporting requirements,
as well as the evolving nature of the regulatory framework means
that the KPIs disclosed in this report may evolve as the regulation
and its reporting requirements do. A complementary DA defining
additional eligible activities for the climate change mitigation
objective is also under public consultation at the time of writing,
and DAs for the remaining four environmental objectives are
expected in 2022. This means that more Schneider activities could
be included in the EU Taxonomy reference framework gradually.
For instance this may concern Schneider’s offers related to
grid reinforcement and smart grid architectures contributing to
electrification and decarbonization, products with differentiating
green performance (flagged thanks to our Green Premium™
program) or services that bring benefits for circularity and energy
efficiency. Another example is the Group’s industrial automation
activities, which can have significant environmental benefits.
2.1.3.5 Schneider Electric’s support
to the EU Taxonomy
Schneider Electric has experienced both the value and the
challenges of conducting a mapping of green business
activities early on. The Group therefore welcomes the European
Commission’s work to define a common classification system for
sustainable economic activities and believes that the taxonomy
can bring greater transparency and reporting alignment among
non-financial undertakings.
The Group is willing to share its experience in the measurement
of revenues contributing to a sustainable world and work
collaboratively and constructively with relevant stakeholders to
advance the transition to a sustainable and low-carbon economy.
In particular, Group experts are contributing to the Platform on
Sustainable Finance, an expert group assisting the EU Commission
in developing technical criteria.
2.1.3.6 Turnover derived from Taxonomy-
eligible activities under the current EU
Climate Delegated Act
Schneider Electric identified several business activities that are
eligible according to the current EU Climate DA. We provide the
list of those activities in our methodological note on page 216.
In 2021, the Taxonomy-eligible turnover amounts to 28%,
representing EUR 8,032 million out of EUR 28,905 million total
revenues. Non-eligible turnover therefore amounts to 72%.
This number is based on the first evaluation of the eligibility of
Schneider Electric’s activities using two combined approaches,
including an offer-based approach (i.e. by nature of technology),
whereby each line of business’ products are reviewed against
the definition of economic activities as defined in the EU Climate
Delegated Acts, and an end-segment approach, whereby the
amount of revenues generated from Taxonomy-eligible end-
segments (Green Transport and Renewables mainly) for each
product line is reviewed. Double-counting between offer-based
approach and end-segment-based approaches are then removed
before consolidation.
2.1.3.7 Capital (CapEx) and Operational
Expenditure (OpEx)
In 2021, Taxonomy-eligible CapEx amounts to 27%, representing
EUR 757 million out of EUR 2,764 million. Therefore, the Taxonomy-
non-eligible CapEx amounts to 73%.
All costs based on IFRS 16 related to long-term leasing of buildings
are considered eligible. CapEx related to assets or processes
associated with Taxonomy-eligible activities, including Research
& Development (R&D) CapEx, were calculated using allocation
keys of eligible turnover per business and operations. In 2021,
CapEx for eligible individual measures was not evaluated.
In 2021, Taxonomy-eligible OpEx amounts to 23%, representing
EUR 291 million out of EUR 1,276 million total OpEx (R&D).
Therefore, the Taxonomy non-eligible OpEx amounts to 77%.
Only non-capitalized costs related to R&D are reported.
OpEx related to building renovation measures, short-term leases,
maintenance and repair and other expenditures relating to the
day-to-day servicing of assets represent less than EUR 116 million
and are therefore considered as non-material for Schneider Electric
business and excluded from the KPI calculation.
Read more on our EU Taxonomy assessment methodology page 216 (cid:496)
Spotlight on Sustainability Consulting
Schneider’s sustainability consulting business brings
together the full portfolio of Schneider Electric solutions to
provide unparalleled, end-to-end support to our customers
to achieve their net-zero, sustainable transformations, from
formulating climate strategy to execution & deployment of
sustainability offers.
For example, Schneider Electric is helping the VELUX Group,
the world leader in roof windows and skylights, to develop a
global program to successfully reduce their energy use and
scale renewable capacity at each of the company’s factories.
The project, which is designed to support VELUX Group
in reaching its company carbon neutral goal by 2030 and
accelerate its plan to be Lifetime Carbon Neutral, includes
the energy assessment of all factory sites resulting in the
development and implementation of Zero Carbon Action plans,
support of its Energy Excellence program in accordance with
ISO50001, improved energy efficiency, expansion of onsite
renewable heating and electricity capacity to phase out fossil
fuels, and implementation of a global monitoring system through
Schneider Electric’s EcoStruxure™ Resource Advisor to measure
and analyze energy usage.
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Chapter 2 – Sustainable development
Strategic Report
Spotlight on Building Management Systems (BMS)
Due to their high energy use and the carbon generated during
their manufacturing and construction process, buildings account
for nearly 40% of global greenhouse gas (GHG) emissions.
Decarbonizing buildings and ensuring their efficient energy
usage requires the implementation of smarter solutions and
thereby helps combat climate change. Such activities are
qualified as “Manufacture of energy efficiency equipment
for buildings” (3.5) in the EU Climate DA.
Our EcoStruxure™ Building Operation solution is a scalable,
open integration software platform at the heart of the building
management system that facilitates control, monitoring, and
management of building assets. It offers users a single pane of
glass window for efficient monitoring and operations of building
systems to enable improved building efficiency, asset utilization,
uptime, and occupant comfort through integration of HVAC,
electrical, lighting, security, fire, power, and other subsystems.
By monitoring, controlling, organizing, and acting on disparate
data from building assets to a single system through advanced
connectivity and integration with heterogeneous building
systems, our solution brings better visibility and decision-making
processes, optimizes how and when energy is used, and
enables proactive energy reduction.
For example, our solution for the Cinnamon Grand Colombo,
Sri Lanka’s largest hotel, helps save 4,000 metric tons of GHG
emissions annually. Even though energy savings equipment
had been previously installed, the operations staff was not
able to identify specific areas where energy was being wasted.
There was a need to gain visibility into the data to develop
effective energy savings strategies. After conducting an
initial energy audit, an upgrade of the hotel’s existing BMS to
Schneider Electric’s EcoStruxure™ Building Operation solution
was recommended. At the Cinnamon Grand Colombo, the
EcoStruxure™ solution integrates the hotel’s electrical and
mechanical plants, which include building systems for air
conditioning, exhaust, ventilation fans, pumps, steam and
hot water boilers, energy meters, and high efficiency,
magnetic bearing chillers from Smardt. The result provides
efficient energy monitoring, management, and reporting
that drives savings across the entire hotel.
2.
For example, Schneider Electric supported EastLink to improve
the ventilation system of the EastLink freeway tunnels in Australia
for better energy efficiency and a reduction in noise levels from
the ventilation stacks:
Delivering environmental benefits through industrial automation
Schneider Electric works hand in hand with industrial enterprises
to automate their operations, and in doing so, helps them
reduce or eliminate carbon emissions and optimize their use
of resources. From smart sensors and connected devices to
advanced process controllers with software analytics on the
top, industrial automation systems enable better monitoring,
control, and optimization strategies to directly improve
energy performance, and indirectly, improve maintenance to
prevent an increase in energy use due to plant downtime and
resulting startup and shutdown processes, as well as defective
products. Advanced supervision also enables to mitigate
environmental pollution risks. As such, they are major enablers
to mitigate climate change, pollution prevention and support the
deployment of a circular economy
• Auditing the energy usage of the tunnel system, Schneider
identified areas where significant energy savings could
be made. Since the opening of EastLink, the speed of
airflows within the tunnels and stacks was controlled in
a traditional way - by switching individual fans on and off
at pre-programmed times of the day. When switched on,
a fan always operated at full speed. This was inefficient,
using more electricity than necessary and producing high
operating noise levels. It was also causing unnecessary
wear and tear on components.
Traditionally, industrial operators have been blamed for climate
change, resource scarcity, and harm to the environment and
the society around them. Today, industry contributes 32% of
the world’s CO2 emissions. At the same time, many of the most
energy intensive industries produce the essential building
blocks for society and key components of our modern world.
According to the BloombergNEF report, Digitalization: An
Untapped Pathway to Sustainability, industrial digitization
promotes decarbonization and circularity, reduces material
waste, prolongs equipment lifetime, and enables better
emissions monitoring. Schneider’s teams have seen it firsthand
with our industrial customers.
• To address the energy usage and noise issues, Schneider
worked with EastLink to upgrade ten large ventilation fans
from fixed speed fully off / fully on operation to a much
more efficient self-regulating or closed loop variable speed
operation. An on demand ventilation system using Schneider
Electric EcoStruxure™ architecture, Modicon M580 PACs,
Altivar Process variable speed drives and an AVEVA
Plant SCADA system was implemented to bring together
automation, connectivity and software for real time control
and visibility.
• The upgrade has reduced energy use by almost 70% and the
carbon footprint reduction by 9,000 tonnes per annum. This
is thanks to the use of the EcoStruxure™ for Industry solution
with the variable speed drives, and the control algorithms in
the M580 PAC which means the fans are only ever operating
at the speed that is required at the time. This reduction in fan
usage will also see an increase in the fan life because of the
lower stresses applied to the drive motor and impeller. The
upgrade with Schneider Electric has contributed to EastLink
being awarded the top 5-star GRESB sustainability rating.
GRESB has ranked EastLink number 1 private entity road
company in the world, and number 5 of 280 infrastructure
assets of all types around the world.
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Chapter 2 – Sustainable development
2.1 Sustainability at the heart of our strategy
2.1.4 Integrated and transverse
governance of sustainable
development
At Schneider Electric, sustainability is integrated in the processes
and bodies that design and execute the Group’s strategy at Board,
executive, and operational levels.
2.1.4.1 Management Oversight
2.1.4.1.1 The Board of Directors
In 2013, the Board of Directors decided to extend the powers of
the Governance & Remunerations Committee to corporate social
responsibility (CSR) issues. Since 2014, there has been a specific
committee for CSR, the Human Resources & CSR Committee.
The Committee meets at the initiative of its Chairperson or at the
request of the Chairman & CEO. The agenda is drawn up by the
Chairperson. The Committee shall meet at least three times a year
(five meetings in 2021). The Committee may seek advice from any
person it feels will help it with its work.
Main responsibilities:
• Employee shareholding schemes and share allocation plans;
• Compensation of Group managers;
• Succession plan for key Group Executives;
• Human resources;
• CSR policy and results.
In 2021, the Human Resources & CSR Committee reviewed
the Sustainability strategy (see Chapter 4, page 295).
2.1.4.1.2 The Group Sustainability Committee
Since 2010, the three members of the Executive Committee in
charge of Human Resources, Global Supply Chain, and Strategy
& Sustainability have met twice per year with the Sustainability
SVP to monitor and steer the Group’s action plans in this area.
In 2016, the Global Marketing EVP, joined this Committee. In 2020,
the Chief Governance Officer as well as the Chief Financial Officer
also joined. The committee meets quarterly. In 2021, this committee
met three times. The Committee may seek advice from any person
it feels will help it with its work.
Main responsibilities:
• Decides the sustainability dynamic;
• Validates the Schneider Sustainability Impact;
• Monitors global sustainability performance and rankings;
• Reviews alignment with United Nations Sustainable
Development Goals;
• Informs the Board Human Resources & CSR Committee.
2.1.4.1.3 The Stakeholder Committee
In order to reinforce its sustainability governance further with solid
external insights, Schneider Electric has created a new Stakeholder
Committee in 2021.
The Committee is composed of 8 external members, sharing
the same passion for sustainability, and its mission is to oversee
the delivery of long and short-term commitments undertaken
by Schneider Electric in accordance with its Purpose and
Sustainability strategy.
The company strives at ensuring diversity of the Stakeholder
Committee members, in terms of ethnicity, gender and experience.
The Stakeholder Committee meets three times a year and is
chaired by Jean-Pascal Tricoire, Chairman & CEO of Schneider
Electric, and Olivier Blum, the Chief Strategy & Sustainability
Officer of Schneider Electric, acts as its secretary.
2.1.4.2 Coordination and monitoring
2.1.4.2.1 The Group Sustainability department
The Sustainability department, created in 2002, has been part
of the Strategy department since 2008. It has the following
responsibilities:
• Schneider Electric’s sustainability strategy and rollout of action
plans at Group level with relevant entities;
• Schneider Electric’s innovative community projects to
ensure continued improvements in the Group’s performance
in this area;
• Central point of contact for internal and external stakeholders
regarding sustainability at Schneider Electric.
It is organized around four areas:
• Corporate Citizenship, specifically with the Schneider Electric
Foundation as well as local economic and social development
programs;
• Access to energy, with responsibility for the Access to Energy
program;
• Environment, with responsibility for deploying Group climate
and environmental policies, actions and strategies
• Group performance, in particular by steering the Schneider
Sustainability Impact, the Extra-Financial Performance
Declaration, the Schneider Sustainability Report, and the
integrated report.
2.1.4.2.2 Territory Sustainability Leaders
In 2021 Schneider Electric took a commitment to empower local
communities and asked its Country and Zone Presidents to take
three local commitments that impact their communities under the
6 long-term commitments of the Group and adapted to the specific
context in their countries, which resulted in 200 commitments
taken worldwide. To manage these programs and to better answer
the needs of Schneider’s local stakeholders, a new model for
sustainability governance in the company was created with a
network of 40 Territory Sustainability Leaders. This new network
will meet every two months and will work to further instill a culture
of sustainability at every level of the company, to empower
every employee to act, and to innovate with disruptive
sustainability actions.
A Group Sustainable Communities Taskforce, chaired by the
Executive Vice-President International Operations, and composed
of representatives of each of Schneider’s five operational regions
and the Sustainability department, has met twice in 2021 to monitor
the deployment of the local programs and the creation of the
Territory Leaders network. The Taskforce will meet annually going
forward to review progress and opportunity for global deployment
of local initiatives.
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Chapter 2 – Sustainable development
Strategic Report
Sustainability governance at Schneider Electric
t
h
g
i
s
r
e
v
o
t
n
e
m
e
g
a
n
a
M
i
n
o
i
t
a
n
d
r
o
-
o
C
g
n
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r
o
t
i
n
o
m
d
n
a
i
n
o
s
u
f
f
i
D
Board of Directors
Human Resources & CSR
Committee
• Approve the sustainability
strategy and SSI
• Approve LTIP and STIP
for the Chairman & CEO
Executive Committee
Group Sustainability Committee
Stakeholder Committee
• Validate strategy and
alignment with the
United Nations SDGs
• Challenge and monitor global
sustainability performance
and progress of initiatives
• Participate, challenge and
oversee the execution
of Schneider’s Purpose,
Sustainability strategy and
delivery of long- and short-
term commitments
2.
Sustainability department and local sustainability leads
• Co-ordinates and monitors the sustainability strategy and performance
• Manage innovation projects
• Lead the relationships between internal and external stakeholders
360-degree ESG
implementation
Businesses and
corporate functions
•
Implement strategy and
Company programs and
policies
• Execute sustainability
objectives (SSI, variable
compensation)
• Support awareness
•
Innovate
360-degree ESG vision
SSI Steering Committee
• Establish dialogue with the
entire company to boost
ambition, innovation and
integrate all challenges
• Co-develops new SSI
programs
• Representatives from
Executive Committee,
operational activities and
central functions
Network and expert
committees
Schneider Electric has
expert committees* on
dedicated and material
topics, in particular:
• Climate
• Environment
• Human rights
• Governance
• Ethics
• Citizenship
• Diversity & Inclusion
All employees
Sustainability Fellows network, Volunteers, Schneider Electric Foundation delegates
* Non-exhaustive list: Access to Energy Committee, Carbon Committee, SERE (Safety Environment Real Estate) Committee, Ethics Committee & Fraud Committee, Duty
of Vigilance Committee, Foundation’s Executive Committee & Schneider VolunteerIn Board, HR Committee, Diversity & Inclusion Committee, SSI pilots, and sponsors.
2.1.4.3.3 Other key organizations
Several other Committees and organizations drive progress
on all pillars of the sustainability strategy, for instance:
• Global Supply Chain organization, with responsibilities including
safety and the environment;
• Human Resources organization;
• The Ethics & Compliance organization.
2.1.4.3 Diffusion
2.1.4.3.1 The Schneider Sustainability Impact
Steering Committee
In 2020, a specific SSI Steering Committee was created, with
about 50 members: representants of each Executive Committee
member, each geography, function, and business unit. Three all-
hands workshops took place, and the sustainability team organized
individual follow up interviews with each member to define precise
and measurable programs for the 2021 – 2025 SSI.
2.1.4.3.2 SSI and SSE pilots and sponsors
The execution of Schneider Sustainability Impact and Schneider
Sustainability Essentials programs is ensured, for each program,
by operational managers or “pilots”, and SVP-level as well as
Executive Committee level sponsors.
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73
Chapter 2 – Sustainable development
2.1 Sustainability at the heart of our strategy
2.1.4.4 Internal governance model
Internal policies create the backbone of an organization’s
compliance and security program. They ensure employees
understand how to implement critical tasks and meet behavior
expectations. Regulators have made clear the need for effective
policy development and management programs. It is no longer
enough to merely document the existence of policies and
procedures.
Organizations must be able to demonstrate that employees know,
understand and apply them. In other words, simply developing
and publishing policies is no longer sufficient in the eyes of our
stakeholders (NGOs, regulators, customers, financial partners,
etc.). To that end, Schneider Electric has established a four tier
form of documentation pyramid of norms, under the umbrella of
its Code of Conduct called the Trust Charter, strengthened by
policies, standards, procedures, and guidelines.
Policies consist of formal statements produced and supported by
the leadership team, that state where the organization stands on
important issues. Schneider has around 85 global policies. The
Schneider Electric Global Policy Management Policy provides
the rules to be followed for global policies.
Standards defined in these internal policies assign quantifiable
measures and define acceptable level of quality. They aim to make
a policy more meaningful and effective. Procedures establish the
proper steps to take to operationalize a policy and/or standard.
Finally, guidelines provide additional guidance with a set of
recommendations to clarify expectations in relation to a
given procedure.
Trust Charter
In 2021, Schneider Electric evolved its Principles of Responsibility
to the Trust Charter, acting as its Code of Conduct and
demonstrating its commitment to ethics, safety, sustainability,
quality, and cybersecurity. It is an executive summary of our
policies and a guide on how we work. It is available publicly on our
website in 30 languages. Further details are provided on page 94.
Human rights & corporate citizenship
In 2017, Schneider Electric drafted a specific Human Rights Policy
as part of a broader program on duty of vigilance in its value chain
and in line with the United Nations Guiding Principles on Business
and Human Rights (see page 106).
Human resources and safety
The Group’s Human Resources policies cover the following topics:
diversity, equity and inclusion, health & well-being, safety, security
and travel, employee engagement, family leave, anti-harassment,
recruiting, international mobility, training, human capital
development, talent identification, total remuneration, social
benefits, and COVID-19. These apply to the Group and are
accompanied by global processes.
Ethical business conduct
In addition to the Trust Charter, different policies bolster the
Group’s commitments in terms of business ethics and integrity.
The Business Agents Policy specifies the rules to be followed when
an external stakeholder is solicited to get a deal and integrates
the approval process of business agents. The Internal Fraud
Investigation directive indicates the commitment to whistleblower
protection. The Gifts & Hospitality Policy was approved by the
Group’s CEO in December 2015 and updated in 2021 before local
deployment. It is supplemented by an anti-corruption Code of
Conduct detailing related processes. Other policies cover social
media management, competition law, conflict of interest, export
control, etc.
Cybersecurity, data privacy and protection
With the acceleration of the digitalization, Schneider Electric
developed many policies to reinforce its cybersecurity and respect
personal data and privacy, such as IT asset management and
usage, acceptable use of assets, general information security,
data classification, global data privacy, user access management
policy, email security policy, and many others. It is the pillar
containing the most policies.
Climate and resources
Schneider Electric’s environmental policy aims to improve
industrial processes, reinforce product EcoDesign and incorporate
Group customers’ concerns about environmental protection by
providing them with product and service solutions. It is bolstered by
the Energy and Environment policies. These policies apply to the
Group and are accompanied by global action plans.
Responsible sourcing
In 2016, Schneider Electric renewed the charter for its suppliers,
called the Supplier Guide Book. The first chapter of this book
sets out the Group’s sustainability expectations in five areas:
environment, fair and ethical business practices, sustainable
purchasing, working conditions, and human rights. These
requirements are detailed in a dedicated document called
the Supplier Code of Conduct. In 2018, the Group adopted
the Responsible Business Alliance (RBA) Code of Conduct for
suppliers. In October 2021, Schneider renewed its Supplier Code
of Conduct whereby it requires all its suppliers to review their own
operations, take ambitious targets, and initiate bold actions in the
areas mentioned in this Supplier Code of Conduct.
Strive for high quality
Schneider’s priority is to delight its customers with an outstanding
end-to-end experience. Quality is every customer’s right and every
employee’s responsibility. Experience is the most important driver
for customers, defining the business relationships they sustain with
suppliers and partners. The Group’s customers place trust in its
resilient, highly personalized, multi-channel experience, and the
superior quality of its products. To ensure this, the company acts
with agility, discipline, and good business sense throughout the
offer life cycle from creation to supply, manufacturing, delivery,
when in operation and when being serviced. The Group has
deployed a specific Quality Directive “Managing Customer Safety
Risks” and a Quality Procedure “Offer Safety Review” to protect its
customers. They are supported by a robust Quality Management
System, which is improved continuously to fulfill expectations of all
relevant parties. It is in full alignment with the Trust Charter as well
as in compliance with ISO 9001 standard.
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Chapter 2 – Sustainable development
Strategic Report
2.1.5 Open dialog with stakeholders
2.1.5.1 Focused dialog with clearly
identified stakeholders
This diagram is an overview of sector stakeholders proposed in
France by Gimélec, the French trade association for electrical
equipment, automation, and related services.
Schneider Electric engages in open and continuous dialog with
each of its stakeholders. In particular, the Sustainability department
takes into account the comments, ratings, and evaluations from
stakeholders on the Group’s Sustainability Policy and programs.
This feedback is integrated into the drawing up of the registration
document, the Group corporate brochure (Schneider Sustainability
Report), the integrated report, and new improvement plans
throughout the Company program, as well as during the design
of the SSI every three years.
s t o m e r s
u
C
Buildings,
Industry,
Infrastructure
and Energy
Civilsociety
Non-Governmental
Organizations,
Media, etc.
Contractors,
Integrators,
OEM, Systems
Manufacturers,
Distributors
Local Residents
and Territorial
Collectivities
Suppliers and
Subcontractors
Employees
Gimélec
companies
Shareholders,
Investors, Banks
and Insurers
Authorities and
Global Compact
s
r
e
n
t
r
a
P
Groups and
Professional
Unions,
Consortiums,
JV, etc.
2.
S
o
c
i
a
l
Social
Partners
and Bodies,
UIMM, etc.
SRI, Financial and
Extra-Financial
Analysts, etc.
F
i
n
a
n
c
i
a
l
Standardization
Bodies IEC
and Product
Certification
Other Standardization
Bodies, Teaching and
Research, Independent
Experts, etc.
Technica l
Legislators,
European
Commission
ILO, OECD, etc.
al
n
In stitutio
The table below presents the major dialog channels with stakeholders. It is not exhaustive.
Stakeholder
Dialog
Customers
Quarterly customer satisfaction surveys
Co-innovation programs
Online publication of environmental information on products
Department
Quality, Customer Satisfaction,
R&D, Sales, EcoDesign
Financial
Quarterly conference calls to present financial and extra-financial information,
meetings and plenary meetings
Finance, Secretary of the
Board, Sustainability
Regular meetings with individual shareholders
Quarterly newsletters to shareholders
Response to extra-financial rating questionnaires
Individual meetings with SRI analysts
Response to SRI analyst questions
Partners
Purchaser/supplier meetings
Suppliers’ day
Supplier qualification process
Awareness-raising about the United Nations Global Compact and ISO 26000
Participation in commissions and work groups on the sustainability of
professional groups
Social
Yearly employee satisfaction survey
Social dialog with employee representation bodies
Sustainability Open lines
Procurement, Environment,
R&D, Businesses,
Sustainability
Human Resources,
Sustainability
Technical
Collaborative approach, creation, and participation in competitiveness cluster
initiatives, R&D programs, university chairs, and professional associations
R&D, Activities, Environment
Active participation in international standardization bodies
PEP Ecopassport program
Institutional Commitment to and promotion of the United Nations Global Compact
Relationships with public authorities, legislators, and the European Commission,
especially in the field of energy efficiency
Civil society Participation in working groups and local and international organizations on
challenges within our industry
Community programs
Partnerships with local NGOs
Sustainability, Purchases,
Influence
According to subject and
audience, Foundation, and
Access to Energy program
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Chapter 2 – Sustainable development
2.1 Sustainability at the heart of our strategy
2.1.5.2 Materiality analysis
2020 methodology
In 2020, Schneider Electric built its third materiality matrix by
questioning external stakeholders (e.g., customers, suppliers,
international organizations, trade associations, experts,
shareholders) and top and senior managers within the Group,
including the Executive Committee. Nearly 200 stakeholders
have been consulted in total (143 through an internal survey,
54 interviewed in person).
Participants were first asked what they felt were the key
worldwide trends most likely to impact Schneider Electric in the
future, before being asked to assess the significance of 31 issues
according to a quantitative scoring scale. Then, participants were
interviewed for qualitative evaluation and justification of the
given scores. Participants were guided to prioritize the most
transformative issues.
Issues were scored according to their importance as follows:
Important
1 Medium or low importance
2
3 Critical
4 Chosen in top three most critical topics
These surveys and interviews also enabled Schneider Electric to
consolidate the relationship with its stakeholders and learn about
their expectations. Beforehand, the challenges were defined
using a study of the sector’s stakes (analysis of the different
CSR guidelines, sector benchmarks, etc.) and a comparison
with the 2017 materiality analysis. With the help of consulting
firm Utopies, the aim is to ensure that Schneider Electric reports
on the most important economic, social, and environmental
challenges; identifies current and future opportunities and risks
for the business; and updates its sustainability agenda with key
stakeholders’ expectations. In particular, the materiality matrix
was one of the sources used to design the 2021-2025 Schneider
Sustainability Impact and Schneider Sustainability Essentials, and
to confirm the topics to be addressed in the registration document.
Key learnings
Overall, stakeholders point to growing instability – whether
environmental, social, political, or economic. This creates
uncertainties for businesses, which should work on building
resilience:
•
• Climate is the main trend identified externally and internally.
It includes the trend for energy transition and electrification,
on which external stakeholders expect Schneider Electric
to take the lead.
Inclusion and the need for a just transition covering the
Company’s extended responsibility to its ecosystem, in
particular in the supply chain, to ensure the low-carbon transition
equally benefits all. Stakeholders also mentioned the growing
expectations in providing ethical and sustainable products.
• Resilience, and the move towards more local supply chains,
specifically post-COVID-19, can be a way to mitigate
geopolitical uncertainty and a rise in protectionism.
• Ethics in digital: the growth of digitalization and the need for
stronger ethics represents both an opportunity and a risk for
Schneider Electric. This covers topics such as the power of data
and the ethical use required, the opportunities and dangers of
Artificial Intelligence (AI), as well as people’s well-being, or job
security in a transitioning world.
• Resource scarcity and circular economy showed very high
expectations internally.
During the discussions, some elements were often mentioned:
1. The vision of the Group, endorsing the link between
sustainability and digital, is complex and not always easy to
understand for non-experts. Schneider Electric could be more
pedagogic in its advocacy.
2. There are high expectations for Schneider to become a globally
recognized leader for a decarbonized world, with its products
and solutions, and in terms of thought leadership.
3. All 31 topics are deemed important, reinforcing our holistic vision
of sustainability. Issues were prioritized based on three groups:
− Licence to operate – fundamental “must have” topics such
as product quality and safety, and cybersecurity.
− Standard issues – topics which are on track, and on which
Schneider Electric must remain mobilized (e.g., health and
security, environmental excellence, corruption).
− Key transformational topics – those which have the potential
to transform markets and differentiate Schneider Electric
from others (e.g., climate change engagement, circular
economy, human engagement).
4. The SSI is a renowned and transformative program which is a
source of pride internally, and recognition externally, but which
needs a new lease of life: simplified, with increased internal
buy-in and awareness.
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Materiality matrix
3.5
3.0
2.5
Being exemplary in the management
of our customers and partners data
Facilitating renewable energy production
Ensuring customer due diligence
Becoming a key player
in electric mobility
Ensuring social dialogue
Ensuring digital
sobriety
Contributing to
the fight against
energy poverty
Ensuring an expert and representative
governance for long term sustainable value
Guaranteeing high social
and environmental standards
for subcontractors and suppliers
Guaranteeing optimal
working health and
safety conditions
for our employees
Developing regional
value chains
Ensuring exemplary
tax practices
2.0
Ensuring an
exemplary
influence policy
Limiting global impact on biodiversity,
in our whole value chain
Contributing to training and education
in energy & digital professions
Aiming for environmental
excellence at our sites
Supporting our employees in the
transformation of their profession
Ensuring our employees
well-being in and out of
the workplace
Ensuring fair pay for
our employees
Being a recognized access
to energy player
1.5
1.5
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Chapter 2 – Sustainable development
Strategic Report
Becoming a key player for a net zero carbon built environment*
Decarbonizing our supply chain
Becoming a leader of the circular
economy and rethinking our
resource footprint
2.
Guaranteeing a 100%
responsible offer
Being a role model in
the effective reduction
of our own CO2 emissions
Guaranteeing cybersecurity
of products and solutions
Guaranteeing quality and safety of products
Actively contributing to
the rise of the industry 4.0
Aiming for zero corruption at all levels,
in the whole value chain
Promoting diversity and inclusion in all
our professions, countries and operations
Advocating an all electric and all digital world
2.0
2.5
3.0
3.5
Internal Stakeholders
Environment
Governance and Ethics
Mission
Product stewardship
Social
Society
Sustainable supply chain
Top four expectations
The materiality matrix above displays the results of the analysis, which can be summarized in four megatrends:
1
Leading climate
action in our
ecosystem with
our partners.
2
Pioneering circular
economy and
being efficient with
resources.
3
Ensuring a fair
transition and
guaranteeing high
ethical, social, and
environmental
standards along more
local value chains.
4
Leverage digital in
cybersecure solutions
to boost positive
impact.
The 2021 registration document, Schneider Electric’s commitments for the climate (see page 126), and the 2021-2025 Schneider
Sustainability Impact cover all these priority challenges through Group policies, improvement plans, indicators, and short or long-term goals.
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Chapter 2 – Sustainable development
2.1 Sustainability at the heart of our strategy
2.1.5.3 Global and local external commitments to move forward collectively
Schneider Electric works with different local and international organizations and associations on economic, social, and environmental
issues to foster sustainability in cooperation with various players. Schneider confirms its commitment to and participation in discussions
on challenges related to climate change. In the following table we present Schneider’s main memberships.
Topic
Commitment
Sustainable
governance and
cross-functional
topics
Climate
Cybersecurity
International: World Business Council for Sustainable Development (WBCSD); United Nations Global Compact
(Board); Business for Inclusive Growth coalition (B4IG); International Chamber of Commerce (ICC, Environmental
and Energy commission); Business for Social Responsibility (BSR).
Europe: International Business Europe; CEO Alliance; Energy Solutions; European Partnership for Energy
and the Environment (EPEE); VDMA (network organization for the mechanical engineering industry in Germany
and Europe).
France: French trade association for electrical equipment, automation, and related services (Gimélec);
French Study Center for Corporate Social Responsibility (ORSE, Board); Entreprises pour l’Environnement (EpE);
French Association of Private Sector Companies (AFEP); French Business Confederation (MEDEF); French trade
association for electronic, electric, and communication equipment (FIEEC); French Chamber of Commerce and
Industry (CCI France, Environmental and Energy commission).
United States: National Electrical Manufacturers Association (NEMA, Chair), National Association of
Manufacturers (NAM, Executive Committee); Information Technology Industry Council (ITI).
United Kingdom: BEAMA (UK trade association for manufacturers and providers of energy infrastructure
technologies and systems).
International: Energy Transitions Commission (ETC); signatory of the United Nations Global Compact Business
Ambition for 1.5°C Pledge; Carbon Pricing Leadership Coalition; Caring for Climate; The Climate Group and We
Mean Business (RE100, EP100, EV100, Responsible Climate Policy, Report Climate Change Information/TCFD);
Business Climate Summit; Clinton Climate Initiative; The 2°C Challenge Communiqué; White House Pledge;
Global Footprint Network.
France: EpE (ZEN 2050); French Business Climate Pledge; Climate Chance.
International: ISO/IEC JTC 1/SC 27: Information security, cybersecurity, and privacy protection; IEC/TC65/
WG10: Security for industrial process measurement and control – Network and system security; IEC/ACSEC
(Advisory Committee on Information security and data privacy), IT Industry Council (Board and Cybersecurity
Chair).
Europe: CEN/CLC/JTC 13 – Cybersecurity and Data Protection; CLC/TC 65X – Industrial-process measurement,
control, and automation; Digital Europe (board); The European cybersecurity organization (ECSO, convenorship
of the group in charge of the standardization, certification, and supply chain management aspects); EG2 group
(part of the European Commission Smart Grid task force, in charge of advising it for a future network code for
electricity supply cybersecurity).
National: IEEE Power System Communications & Cybersecurity Committee (PSCC); ISA99: Industrial
Automation and Control Systems Security; The Cybersecurity Coalition.
Energy/ Energy
efficiency/ Electric
mobility/ Digital/
Renewables
International: Alliance to Save Energy; The Green Grid (Board); eu.bac (the European association for building
automation and controls – energy efficiency in buildings); Orgalim; CAPIEL/CECAPI (CAPIEL vice Chair; Impact
of Digitization for Buildings; Smart buildings); Global Alliance for Building and Construction (GABC); Energy
Solutions; CEO Alliance.
Europe: European Alliance to Save Energy (Vice-chair); Energy Solutions; Solar Power Europe; Wind Europe.
France: National Industry Council; National Energy Transition Council, Green Building Plan; Promodul, financing
company for energy transition; Avere (Electric Vehicle Association, Board and Vice-Chair); IFPEB (Institut
français pour la performance énergétique du bâtiment); Industry of the Future Alliance; P2E Initiative; Ignes
(digital, energetic, and security engineering industries); France Data Centers; Comité Stratégique de Filière
(CSF); Industries des Nouveaux Systèmes énergétiques; Minalogic, Conseil National de l’industrie.
Industry 4.0 and Smart
Manufacturing
Industry 4.0 enables smart manufacturing with a wide offer of information and operational technologies as
well as communication technology. The acceleration of digitization, software, and data in the industrial field
is orchestrated by Industry 4.0 for more interoperability, efficiency, and value creation.
International: OPC Foundation (Board, CTO); FDT Group (Board); FieldComm Group (FCG, Board); ECLASS
(Board); AutomationML (Board); Open Process Automation Forum (OPAF); Industrial Digital Twin Association
(IDTA, Chair); Digital Twin Consortia (DTC); Industrial Automation and Control Systems Security (ISA 99); Edge
Computing Consortium (ECC); IEC TC65 (Industrial-process measurement, control, and automation, Secretary
and chair of Sub-committees); ISO TC184 (Automation systems and integration, Chair); ISO/IEC JTC1 SC 41
(IIOT and Digital Twin); CEN/CENELEC ISO joint working group on CyberSecurity; ISO Smart Manufacturing
Coordination Committee; IEC Smart Manufacturing System Committee, Universal Automation.Org (UAO,
President of the Board) for distributed control and Orchestration.
National: Industrie 4.0 (Germany); Alliance Industrie Du Futur (France); Piano Industria 4.0 (Italia),
Smart Manufacturing (USA); International Coalition for Intelligent Manufacturing (China).
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Chapter 2 – Sustainable development
Strategic Report
Topic
Commitment
Smart grids and
sustainable cities
International: Grid Edge Executive Council (Greentech Media); OpenADR Alliance; Peak Load Management
Alliance; IEEE (T&D and Power and Electronics Society); Association of Energy Service Professionals (AESP);
Association for an Energy Efficient Economy (AEEE); Urban Infrastructure Initiative led by the WBCSD;
Electric Drive Transportation Association (EDTA); ISGAN (International Smart Grid Action Network);
Europe: T&D Europe (the European association of the electricity transmission and distribution equipment and
services industry, President, Executive Committee), Orgalim (Infrastructure Task Force); CAPIEL (European
Coordinating Committee of Manufacturers of Electrical Switchgear and Controlgear); smartEn (Smart Energy
Europe, Chairman of the Board);
2.
Circular economy
and product
environmental
performance
Access to energy
Diversity, Equity and
Inclusion
United States: Research Triangle Cleantech Cluster (Raleigh, North Carolina); Fort Collins Cleantech Cluster
(Colorado); Bay Area Climate Collaborative (SF Bay); North American Electric Reliability Council (NERC,
Functional Model Demand Response Advisory Team); Pacific Northwest Demand Response program;
Think Smart grids; Tenerrdis Energy Cluster.
Circular economy initiatives and product environmental performance deliver product with lower environmental
impact and full transparency on environmental attributes.
International: Ellen MacArthur Foundation membership; PEP ecoPassport (Product Environment Profile,
Presidency), PEP ecoPassport was selected by EU as leader of PEF (Product Environment Footprint)
experimentation phase (2020-2021) for EEE cluster (Electric and Electronic Equipment), for promotion
of transparent, robust and digital Product Environmental information;
National Initiatives: AFEP (Circular economy working group); AFNOR Circular Economy; Gimélec (chairmanship
of strategic taskforce for Circular Economy); MTES/Feuille de Route Économie Circulaire (active contributions,
working groups).
Access to energy is a fundamental human right and a means for social and economic development. The pooling
of forces and the sharing of knowledge between actors are essential to advance public policies, capacity
building, new technologies or innovative financing.
International: Alliance for Rural Electrification (ARE); Sustainable Energy for all (SE4ALL); International Finance
Corporation (IFC) Energy2Equal initiative (Empowering Women in Africa’s Renewable Energy Sector); Solar
Impulse Foundation.
National Initiatives: ADEME (French Ecological Transition Agency); Renewable Energy Trade Association
(SER); HEC Movement for Social & Business Impact.
Schneider Electric’s diversity, equity, and inclusion ambition is to offer equal opportunities to everyone
everywhere. The Group wants its employees – no matter who they are, or where in the world they live – to feel
uniquely valued and safe to contribute their best. Promoting diversity, equity, and inclusion is a moral as well
as a business imperative as a diversity of people and an environment of inclusion leads to greater engagement,
performance, and innovation.
International: Signatory of the United Nations Women’s Empowerment Principles (WEP); Committed to the UN
Generation Equality Forum; Signatory of the OECD Global Deal; Member of the World Economic Forum (WEF)
Partnership for New Work Standards; Signatory of the Women’s Forum climate charter; Member of the ILO Global
Business and Disability Network (GBDN); Member of the Gender and Diversity KPI Alliance (GDKA).
National Initiatives: Diversity Charter; Agreement for professional gender equality; Parenthood Charter;
Disability Agreement; Agreement on inter-generational mechanism; Apprenticeship Agreement; Signatory
of PaQte, a collective of companies working to be more inclusive with specific action plans for working-class
neighborhood; Youth and regional development with associations (FACE, 100 Chances 100 Emplois, Energie
Jeunes, ADIE, GEFLUC).
Education
International: Training program in energy management for disadvantaged people, in partnership with local
vocational training centers and/or national or international non-profit organizations.
National Initiatives: Schneider electric school, framework agreements with the Ministry of National Education,
Higher Education and Research, partnerships with the continuing education network of UIMM, Ingénieurs
Pour l’École network (IPE), selected by the Ministry of Education for the Digital School project.
Ethics
and human rights
International: Transparency International, Global Compact LEAD (Decent Work in Global Supply Chains);
Member and co-leader of the B4IG coalition’s “Advancing human rights in direct operations and supply chains”
working group; IDH - The Sustainable Trade Initiative.
Biodiversity
Philanthropy
National Initiatives: Cercle éthique des affaires (Business ethics club, Board of Directors); Club Droits Humains
(Human rights club) of Global Compact France; Entreprises pour les droits de l’homme (Businesses for
Human Rights).
Livelihoods (carbon offset fund for biodiversity and rural communities), act4Nature Initiative; Caisse des Dépôts
et Consignations (CDC) – Positive Biodiversity Businesses club (B4B+) membership.
International: International Association for Volunteer Effort (IAVE), more than 70 NGOs supported each year
in over 35 countries; The European Venture Philanthropy Association (EVPA).
National Initiatives: Fondation de France, Admical (Association pour le développement du mécénat industriel
et commercial, member of the European network CERES); IMS-Entreprendre pour la cité; Centre français
des fonds et fondations; Alliance pour le Mécénat de compétences. The Rénovons initiative/CLER the energy
transition network; Hope, la chaire pour lutter contre la Précarité Energétique/Fondation Grenoble INP;
Stop à l’exclusion énergétique/Fondation des transitions.
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2.1.5.4 Schneider Electric contribution
to standardization
With many experts actively participating in international and
national standardization bodies, Schneider Electric is making
a decisive contribution to the creation and distribution of standards
that ensure the safety and reliability of electric facilities and
equipment, and address their environmental impacts all along
their life cycle to prepare for a better circular economy, support
the new energy landscape with the goal of greener energy
integration, safer energy delivery and better integration of
prosumers, support the digital transformation of the industry
and any other customer values.
Schneider is very active in international committees, covering also
National Committees in US, China, India and historically Europe.
CEN (European Standardization Committee), CENELEC (European
Committee for Electrotechnical Standardization) and ETSI
(European Telecommunications Standards Institute) are the
three official European standardization bodies.
CEN-CENELEC-ETSI serve as a main contributor of the
French electrotechnical institute, which is a founding member
of international (IEC – International Electrotechnical Commission)
and European (CENELEC) organizations.
CEN
CEN is an association that brings together the National
Standardization Bodies of 34 European countries. CEN provides
a platform for the development of European Standards and other
technical documents in relation to various kinds of products,
materials, services and processes. CEN supports standardization
activities in relation to a wide range of fields and sectors including:
air and space, chemicals, construction, consumer products,
defence and security, energy, the environment, food and feed,
health and safety, healthcare, ICT, machinery, materials, pressure
equipment, services, smart living, transport and packaging.
CENELEC
CENELEC is an association that brings together the National
Electrotechnical Committees of 34 European countries. CENELEC
prepares voluntary standards in the electrotechnical field, which
help facilitate trade between countries, create new markets,
cut compliance costs and support the development of a Single
European Market. CENELEC supports standardization activities
in relation to a wide range of fields and sectors including:
Electromagnetic compatibility, Accumulators, primary cells and
primary batteries, Insulated wire and cable, Electrical equipment
and apparatus, Electronic, electromechanical and electrotechnical
supplies, Electric motors and transformers, Lighting equipment and
electric lamps, Low Voltage electrical installations material, Electric
vehicles railways, smart grid, smart metering, solar (photovoltaic)
electricity systems, etc.
ETSI
ETSI creates globally applicable standards for information and
communications technologies (ICT), including fixed, mobile, radio,
converged, broadcast and internet technologies. Authorized by the
European Union, ETSI implements legislation governing electronic
use and other EU initiatives
IEC
The IEC is a global, not-for-profit membership organization that
brings together more than 170 countries and coordinates the work
of 20,000 experts globally. The IEC publishes around 10,000 IEC
International Standards which together with conformity assessment
provide the technical framework that allows governments to build
national quality infrastructure and companies of all sizes to buy and
sell consistently safe and reliable products in most countries of the
world. IEC International Standards serve as the basis for risk and
quality management and are used in testing and certification to
verify that manufacturer promises are kept.
Smart grids and sustainable cities
Involved in IEC and CENELEC, at governance and technical levels,
Schneider Electric participates actively in the standardization
of smart grids, for which it leads the definition of standards and
the standardization roadmap within the European smart grids
coordination group, as well as the group in charge of standardizing
the interfaces between smart buildings and smart grids.
•
• Schneider co-chairs the Smart Energy Grid coordination group
of the CEN-CENELEC-ETSI responsible for ensuring availability
of an appropriate set of standards for the rollout of smart grids
in Europe, as well as supporting the coming new legislative
“Clean Energy Package”.
It chairs the group at the IEC level in charge of defining the
roadmap of international standards to support the rollout of the
Smart Energy sector (smart grids, in addition to interfaces with
other energies). This roadmap also includes cybersecurity and
resilience, as well as the impact of the IoT.
It chairs and actively contributes to the definition of Prosumer’s
electrical installations, installations integrating local production
such as PV, wind, storage to ensure they are designed and
erected with a high level of safety and efficiency.
It chairs the IEC’s Advisory Committee for Energy Efficiency
(ACEE) and chairs the Advisory Committee on Safety (ACOS).
•
•
Circular economy and product environmental
performance
Schneider contributed to the European Commission’s Circular
Economy package, with CEN-CENELEC-ETSI developed a set of
published standards assessing durability, reparability, reusability,
recyclability, ability to be remanufactured, etc. which fall within the
scope of the EcoDesign directive. Schneider has appointed active
experts in each of the working groups.
It contributes to the terminology of circular economy being the first
step of the digitalization of this topic, and also contributes to the
material efficiency within environmentally conscious design, to the
life cycle assessment product category rules and specific rules for
high and low voltage equipment, and to greenhouse gas emission
reduction quantification.
Standardization to accelerate environmental
transformation
Since February 2007, Schneider has represented France on
the IEC’s Advisory Committee for Environmental Aspects (ACEA).
ACEA works to advise and coordinate the IEC’s efforts to tackle
environmental issues.
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•
•
•
•
•
It is particularly heavily involved in the working group on
sustainability (chairing environment and circular economy
groups) and in the work on the rational use of energy.
It chairs the IEC TC111 Committee on Environmental
standardization of Electric and Electronic Equipment and
IEC TC 23 Electrical Accessories (protection devices, wiring
devices, home and building control systems).
It is the secretary of IEC SC23K on Energy Efficiency Products,
Systems and Solutions.
In 2018 it led the UPS manufacturers’ group in the EU
Commission’s Product Environmental Footprint (PEF) pilots
for defining rules to assess the PEF of products put on the
EU market, prior to its implementation of the European policy.
It chairs ISO TC 184 (Automation systems and integration).
Digital transformation
Digitization is the key driver for the advanced manufacturing,
optimizing the production with more flexibility, more interoperability,
more predictability, and continuity, providing a new level of system
efficiency and sustainability. More data, software and tools
enabling virtual descriptions, defined in digital twins, creating
new capabilities and services combined with Machine learning
and Artificial Intelligence.
That’s why Schneider Electric is strongly involved in ISO and IEC
technical committees, and association like Industrial Digital Twin
Association to deep dive and deploy the Asset Administration Shell
through industrial Use Cases of the standardized digital twin and
in Universal Automation.Org, to address a more functional and
distributed approach for the orchestration of industrial systems.
National committees
Schneider Electric chairs many French standardization committees
hosted by AFNOR (French standards organization) and in other
national committees, such as the chair of the French and Swedish
Committees for environmental standardization and the French
Committee on Circular Economy. It was a major contributor to
smart manufacturing initiatives such as the AIF in France. Notably,
it is a member of the Council Board and of the IEC Conformity
Assessment Board.
2.1.6 Main ESG risks and
opportunities
2.1.6.1 Evaluation methodology
As part of its Extra-Financial Performance Declaration, the Group
presents the main risks and opportunities identified with respect
to major societal challenges in this section.
In order to compile the list of main extra-financial risks for the
Group, a panel of both internal and external tools is used to
address the expectations of its stakeholders as best as possible.
The Group Sustainability team leads the evaluation, working in
close collaboration with the Group Risk Management function
and with the Duty of Vigilance Committee.
The Group’s corporate governance bodies supervise the
development of internal control and risk management systems.
The Audit & Risks Committee has particular responsibility
for following up on the efficiency of internal control and risk
management systems and reports to the Board of Directors.
2.
Chapter 2 – Sustainable development
Strategic Report
Internal tools:
• A regular stakeholder consultation (materiality assessment
and matrix), at least once every three years (last exercise
done in 2020);
• The Group risk matrix, led by the Group Risk Management
function, updated every year;
• Specific committees (Carbon, Human Resources, Ethics, etc.);
• Vigilance risks matrix.
Continuous monitoring of external signals and international
frameworks:
• Regulatory framework: the key topics listed under Article
R. 225-105 of the French Commercial Code (Extra-Financial
Performance Declaration);
International institutions/organizations (United Nations Global
Compact and SDGs);
•
• Environment, Social, and Governance (ESG) rating agencies;
• Specific requests from investors and customers;
• Recommendations from the Task Force on Climate-related
Financial Disclosures (TCFD), and various frameworks
(SASB, GRI, etc.).
The analysis covers the entire value chain of the Group and
its stakeholders: suppliers and subcontractors, transactions,
customers, as well as Schneider Electric’s scope – extending to
the activities at its Foundation – on cross-functional, environmental,
social, and societal topics, human rights, and anti-corruption,
with a double materiality approach.
Each topic is monitored by the relevant departments and their
management teams, or “Risk Overseers”, who are in charge of
proper risk assessments and the implementation of mitigation
and prevention actions. The main departments and managers are:
• Sustainability, Access to Energy, and Environment, and the
Global Sustainability SVP and Chief Strategy & Sustainability
Officer;
• Human Resources and the Chief Human Resources Officer;
• Procurement and the Chief Procurement Officer;
• Governance, Safety, and Ethics, and the Chief Compliance
Officer and Chief Governance Officer.
The main identified risks are quantified on probability of occurrence
and magnitude of impact by these departments to determine gross
risks, and an assessment of current mitigation measures informs on
potential net impacts. Extra-financial risks presented here are gross
risks, i.e., absolute risks before a mitigation plan is implemented.
The main net extra-financial risks are presented in “Chapter 3,
How we manage risks at Schneider Electric”, page 243.
On this basis, the list of extra-financial risks is reviewed and
validated by relevant SVPs, the Board of Directors’ secretariat,
Internal Audit team, Group Risk Management function and
presented to the Human Resources & CSR Committee and
to the Group Sustainability Committee at least every 3 years,
in coherence with the SSI calendar.
Seven main risk categories were identified and are presented
in detail in the following pages:
• Business conduct
• Corporate governance
• Cybersecurity and data privacy
• Environment
• Product, projects, system quality and offer reliability
• Human rights
• Responsible workplace
• Talent development and competencies
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Following its assessment of material risks, Schneider Electric presents its main ESG risks
and opportunities.
Risk description and impact
Policies
Main actions and 2021 performance
Opportunity created
Trust Charter
Conflict of interest Policy
Competition Law Policy
• New whistleblowing system
in place this year called the
Trust Line
Increase relationship
with suppliers to ensure
compliance.
Business conduct
Competition law
Non-competitive behavior
Schneider Electric products are
sold worldwide and are subject
to national and supranational
competition laws and antitrust
regulations. Non-compliance
could result in fines and impact
the company’s reputation.
Corruption and bribery
Corruption is the abuse of
entrusted power for private
gain. It may occur through
third parties’ activities (partners,
suppliers, agents, companies to
be acquired) and cause various
impacts for the company:
• Reputational
• Legal
• Financial
• Development of the company
• Employer brand
Trust Charter
• Trust Line whistleblowing
Anti-Corruption Policy
Business Agents Policy
Gifts & Hospitality Policy
Donations Policy
Conflict of Interest Policy (new)
Business Agent Policy (new)
system
• Specific risk mapping
dedicated to “Ethics &
Compliance” risks
• SSI #7: Measure the level of
confidence of our employees
to report unethical conduct:
81% achieved, aiming for
10pts increase by 2025
• Four additional modules
as part our anti-corruption
e-learning
• SSE #13: 100% of employees
trained every year on
Cybersecurity and Ethics in
2025 (96% achieved 2021)
• SSI 2021 performance
reached 3.92/10, beyond
3.75/10 target
• Top 1% of several ESG Ratings
Worldwide confirming we are
headed in the right direction
• Upgraded quarterly SSI
reports
• Winner of the 2021
Transparency Awards for
ESG information
More opportunities with actual
and potential customers
Talent attraction and retention
Higher credibility and trust to
support our customers in their
Climate and Sustainability
journey
Risks mitigation ahead of
competition thanks to the
SSI disruptive and virtuous
continuous improvement
process
Greater attractivity to investors,
customers and talents
Strengthened partnerships
with clients, suppliers, and
other partners in the Group’s
ecosystem
Anticipation of sustainability
trends and risk mitigation
Influence other companies
to have better practices
Corporate governance
Delivering on ESG performance
Failure to achieve our long-term
sustainability commitments
• Brand and reputational impact
• Distrust from stakeholders
Internal Governance in place
at every level (Board, Executive
Committee, Operations) to drive
and monitor progress
ESG compliance
Failure to report, lack of
transparency
New Corporate Social
Responsibility regulations,
Standards and market
expectations are redefining what
“Sustainable businesses” are
• Brand and reputational impact
• Risk of exclusion from
growing Socially Responsible
Investment (SRI), ESG or
green portfolios
Quarterly Schneider
Sustainability Impact (SSI)
public disclosure
SSI performance embedded
in managers’ and leaders’
short-term incentives
Transparent public reporting
on sustainability objectives and
performance in quarterly SSI
reports and in annual reports
aligned with key frameworks
(GRI, SASB, TCFD, WEF
Common Metrics, SDGs)
Regular engagement with
stakeholders to identify
critical sustainability topics
(materiality analysis)
Engagement and dialog with
investors to ensure expectations
are met
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Risk description and impact
Policies
Main actions and 2021 performance
Opportunity created
Cybersecurity and data privacy
Business disruption
Industrial activities
Risk of a malicious exploitation or
intrusion into the infrastructures
of Schneider Electric production
and distribution centers
•
Impacts on productivity,
data privacy, operations
• Financial cost, and loss of
confidence from stakeholders
Directive Site Protection
• 200+ Cybersecurity leaders
Data center, IT Room
and Network Enclosure
Security Policy
IT Disaster Recovery Plan
for Business Continuity Policy
Network Security Policy
appointed and trained
• Operational Technologies (OT)
workers security awareness
deployed
• Access level defined,
granted, and checked
as per the profile/need
• Endpoints inventory and
Acceptable Use of Assets Policy
protection
Security testing for products
and systems
Human resources (HR) and
employee collaboration
Risks of HR systems disruption
or HR data leakage
•
Impact on business continuity,
legal compliance and overall
reputation
Acceptable Use of Assets Policy
Crown Jewel Security Policy
Digital Certification Policy
Email Security Policy
Personnel Management
Security Policy
Third-Party Security Policy
User Access Management
Policy
Compliance
Data privacy, retention &
residency
• Risk of compromise,
Data Privacy Policy
Data Classification Policy
modification or exfiltration of
data from Schneider Electric’s
data systems
Global Data Retention
Record Creation
• Representing a non-
Backup and Recovery Policy
compliance to data protection
regulations and laws as well
as business purpose leading
to potential penalties
• Non-compliance to data
protection regulations leads
to potential fines
Log Management &
Monitoring Policy
Acceptable Use of Assets Policy
Digital Certification Policy
•
• Topography of OT network,
OT monitoring and threat
detection, security policy
compliance, incident
response process
IT/OT network segmentation
secured industrial Personal
Computer (PCs), secure
remote access, backup
restore for PCs and
Programmable Logic
Controller (PLCs)
• Cybersecurity Charter shared
and signed by all employees
and contractors
• All employees trained every
year on Cybersecurity and
Ethics; dedicated mandatory
training for high-value asset
administrators
• Monthly phishing campaigns
• Data protection and cleanup
yearly campaign
• Yearly access audits on all
HR applications
• Data Protection Impact
Assessments for high-risk
applications
• External pen tests performed
on all high-value asset
applications
• Background verification
checks in accordance with
relevant laws and regulations
• Mandatory Cybersecurity
& Data Privacy annual
training sessions
• Data privacy champions
appointed
• Annual review of all policies
• Data Retention implemented
by area
• Sensitivity label feature
enabled on Microsoft Office
365 Suite for all employees
Improved supply chain
resilience
Greater confidence of our
customers and partners into
our supply chain and products
2.
Market access to critical
infrastructures/customers
Advanced discussions
with authorities and greater
collaboration on safety
and security
Attractiveness of Schneider
Electric for prospective
candidates aligned with
Trust Charter commitments
Increase sentiment of trust
for our customers, partners
and larger community
Prove alignment to regulations
and devotion to ESG
requirements
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Risk description and impact
Policies
Main actions and 2021 performance
Opportunity created
Cybersecurity and data privacy (continued)
Damage to customers assets
Field services operations &
remote customer support
Risk of malware distribution into
the production environment of a
customer through compromised
Field Service end-point or
on-site activities
•
Impact on customer assets
and production
• Reputational impact
Customer staging and project
commissioning
Risk of compromised customer
assets having an impact at site
level, as a result of a failure in
the control environment of
Schneider Electric
• Reputational Impact
• Repairment cost
IP theft and loss
R&D repositories and source
code compromise
• Compromise, deterioration or
exfiltration of R&D repositories
and source code
• Jeopardizing Intellectual
Property availability, integrity
and confidentiality
Increase sentiment of trust
for our customers, partners
and larger community
• Absolute requirement
• Global Action Plan
Greater confidence of our
customers in our products
Market access to critical
infrastructures
Advanced discussions
with authorities and greater
collaboration on safety
and security
Fulfillment of contract
requirement opening the
door for additional or further
opportunities.
On-time with tendering process
Effective visibility for risk
management and proper
actionable outcomes
Perceived as a trusted partner
Reducing risk through advance
detection of exposure of
sensitive code or potentially
compromised or modified
applications which could
facilitate criminal activity
or customer compromise
Cyber Badge Principles
Third-Party Security Principles
Network Security Policy
Malicious Software Policy
Security Principles
Cybersecurity Policy
for Products & Systems
• Cybersecurity contact
identified, ad hoc and
periodic assessments for
strategic ones
For our customer-facing
employees:
• Deployment of Cyber Badges
across 20,000+ customer-
facing employees.
• Compliance monitoring of
Cyber Badge deployment
For our customer-facing suppliers:
• Consistent Cybersecurity and
Privacy Terms & Conditions
developed for all suppliers
• Deployment of an end-to-end
Project Supply Chain Security
methodology
• Datamining for preparing
Network Security Policy
recommendations
Malicious Software
Security Policy
Source Code Security Policy
Source Code Security Policy
• Site security controls
Cybersecurity Policy for
Products and Systems
compliance, training and
awareness deployed
• Assets inventory, topography
Information Security Charter
of R&D sites
Sensitive Source Code Security
and Confidentiality Affidavit
• Protection against
vulnerabilities or malware
• Pen tests conducted
• Least Privileged Access
Control, Disaster Recovery
Plan, Network Segmentation,
Port Management, and
Protocol Hardening applied
• Source code reality checks
conducted on code
content, code engineering,
governance, etc.
• Threat detection of signals
on the surface web, the dark
web, social media etc. to spot
cracked software, Source
Code and IP exposed etc.
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Risk description and impact
Policies
Main actions and 2021 performance
Opportunity created
Environment
Climate change
Failure to meet 1.5°-aligned
GHG reduction emissions
targets
• Greater financial costs
than anticipated
• Lock-in emissions of assets
with long operating lifetime
or long-term leases
• Reputational impacts and
loss of trust from customers,
investors and employees
• Limited engagement of
suppliers to decarbonize
Scope 3 upstream emissions
Climate strategy for operations
and supply chain
Business strategy on Electricity
4.0 and Industry 4.0
Thought leadership with
Schneider Sustainability
Research Institute
Climate initiatives (such as
Climate Group)
• SSI #1: Grow our green
revenues to 80%
(71% achieved)
• SSI #3: Reduce CO2 emissions
from top 1,000 suppliers’
operations by 50%
(1% achieved)
Market growth for Schneider
Electric energy efficiency,
electrification and renewable
offers
Showcase of EcoStruxure™
in our sites
• SSE #1: 150 Zero-CO2 sites
Customer attractivity
2.
(51 achieved)
• SSE #2: 100% substitution
with SF6-free MV technologies
(38% achieved)
• SSE #3: 90% of electricity
sourced from renewables
(83% achieved)
• SSE #4: 15% CO2 efficiency in
transportation (-1% achieved)
• SSE #5: 15% energy efficiency
in our sites (6.6% achieved)
• SSE #7: one-third of fleet
comprised of electric vehicles
(7,7% achieved)
Inadequate evolution of the
supply chain footprint
Supply chain disruption due
to increase of climate-related
risks as well as the evolution of
international trade and market
barriers.
• Delays in production and
•
delivery, incurring important
costs
Impact on customer
experience if delays are too
long
Workplace disruption
Permanent site disruption due to
increased frequency and severity
of extreme weather events
• Loss of output and remediation
costs
Impact on operations
•
Resources
Resource scarcity
Volatile prices and materials and
resource availability
• Cost increase of primary
materials and energy
• Disruption of supply
Regional Supply Chain footprint
• Preventive and reactive risk
Supply chain resiliency with
multi-sourcing
Independent risk assessment
(fire, weather, climate) of our
Industrial sites
management of Natural risks
in Supplier Risk Management
• Recurring risk assessment
•
•
of our Industrial sites through
Global Risk Consulting
program
Introduction of CO2 simulations
to compare alternative supply
chain strategies and footprints,
and network models
Implementation of deliberate
redundancies of both dual
factories for same products,
and dual suppliers (“Power
of Two”) for all critical parts
and components
Strong local presence
and strategic relationships
with suppliers
Shorter lead times and
low logistics costs and CO2
from deliveries
Ability to make products and
gain market share if our supply
chain is more resilient than
that of competition
Enterprise risk management
• Pilot flood study at a critical
Business continuity
Disaster Recovery Plans
Supply chain resiliency
Green materials
Sustainable packaging
Raw material productivity and
hedging strategy
Water stewardship in water-
stressed areas
Proactive product returns and
take-back policies for a range
of offers
location in conjunction with our
insurance company launched
• New Resilience Index created
for most critical locations to
measure, monitor and improve
the site’s resilience to external
risks
• SSI #4: Increase green
material content in our
products to 50%
(11% achieved)
• SSI #5: 100% of our primary
and secondary packaging is
free from single-use plastic
and uses recycled cardboard
(21% achieved)
• SSE #11: 100% of sites in
water-stressed areas have a
water conservation strategy
and related action plan
(9% achieved)
Business continuity expertise
extended to critical suppliers
Recurring risk assessment
program extended to critical
supplier locations
Green offer differentiation.
Resilient and efficient supply
chain
Access demanding green
markets
Superior resiliency in case
virgin raw materials availability
gets challenged
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Risk description and impact
Policies
Main actions and 2021 performance
Opportunity created
Environment (continued)
End-of-life management
of products
Safety risk if assets handled
by non-certified third parties
(repair, end-of-life):
• People health and safety
impact
• Resource waste
Lack of product substance
regulations compliance
Strengthening of chemical
substance regulation, market
shift, and consumers preferences
for eco-friendly products:
• Difficulty to access market
if products are forbidden
or blacklisted
• Multiplication of uncoordinated
regional legislation
Soil, air and water pollution
At Schneider Electric sites:
• Non-compliance leading
to fines
• Health impacts on personnel
and local communities
• Site property pollution and
environmental provisions
Circular offers: ECOFIT™,
and takeback schemes
(End-of-life, EOL, etc.)
End-of-life information for our
products with Green Premium™
• SSE #10: 420,000 metric tons
of avoided primary resource
consumption through ‘take-
back at end-of-use’ since 2017
(203,881 achieved)
Market growth for Schneider
Electric circular offers (repair,
retrofit, takeback, EOL)
Substances and Material
Directive:
REACh, RoHS, China RoHS, CA
Proposition 65, TSCA, POP
Schneider Electric
Environmental Policy:
Green Premium™
EcoDesign™
Group Environment Policy
Environmental risk analysis
Environment due diligence
in M&A
• SSE #6: 80% of product
revenues covered by Green
Premium™ (78% achieved)
• Substances of Concern In
•
Products (SCIP) registration
deployment and
communication
Implementation of new Green
Premium™ claims to manage
and promote recycled content
and take back programs
• Specific compliance analysis
to unblock some markets
•
Integrated Management
System with ISO 14001
certification (244 sites certified
ISO 14001 in 2021).
• Company-wide Look at
Environmental Assessment
and Risk Review (CLEARR)
Assessment for industrial
Global Supply Chain factories.
• Environmental provisions
Opportunity with Toxic
Substances Control Act (TSCA)
regulation to demonstrate
robust substance and material
process and transparency.
Market opportunity for
Green Premium™ offers
Robust management system
to drive environmental
performance
Increased stakeholder trust
Product, project, system quality & offer reliability
Deficient product safety
Product malfunctions or
failures could result in:
• Liabilities for tangible or
intangible damages, or
personal injuries
Incurred costs related to
the product recall, to new
development expenditure,
and use of technical and
economic resources
• New or more stringent
•
standards or regulations for
quality and safety controls
could result in capital
investment or costs of specific
measures for compliance.
All our sites are certified
ISO 9001
Quality is one of our Trust pillars
Phoenix program launched
for 4 years is covering our
End-To-End Supply Chain
ReeD (Reliability End-To-End
by Design) to cover Design
practices
Implement Nets on legacy offer
to ensure we capture defects or
potential defects internally.
• Development of Agile method
in Offer Creation enabling
Quality and Customer
Satisfaction Transformation,
• Phoenix achievement in 2021
initiating move from Reactive
to Predictive
• ReeD program allows us
in 2021 to kick off a strong
learning path around
Reliability Designer
• Creation of the committee
Offer Safety Alert Prevention,
to coach all Root Causes
Analysis Leaders
Listening to signals from within
the group and from customers
Challenging innovation and
R&D to seek for perpetual
improvement
Become a leader in products
quality driving brand reputation
and value
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Risk description and impact
Policies
Main actions and 2021 performance
Opportunity created
Human rights
Conflict minerals
Sourcing of conflict minerals
and other similar sensitive
materials
• Financing directly or
indirectly armed groups,
fuel forced labour and other
human rights abuses
• Corruption and money
laundering.
• Reputational cost
Schneider Electric encourages
its suppliers to build and
maintain a due diligence
process to ensure conflict
minerals-free sourcing
The Group is an active
Responsible Minerals Initiative
(RMI) member
Human rights
Violations of human rights
and fundamental freedoms
• Reputation and brand image
• Legal impact
• Health & well-being impact for
employees of Schneider, its
suppliers and sub-contractors
Trust Charter and Trust
Line whistleblowing system
for internal and external
stakeholders
Supplier Code of Conduct
Schneider Human Rights Policy
• Conflict-free mineral
monitoring
• 87% of the smelters and
Increase relationship with
suppliers, and improved
reputation.
Increase trust with customers
favoring business relations
2.
Increased cooperation
with suppliers
Increased trust with
our customers
refiners identified in our supply
chain conformant or active
in a recognized third-party
validation scheme
• Schneider Electric has
a “conflict-free objective”
• SSE #12: Deploy a ‘Social
Excellence’ program through
multiple tiers of suppliers
(baseline to be defined
in 2022)
• SSE #17: 4,000 suppliers
assessed under our ‘Vigilance
Program’ (1,203 achieved)
• Environmental Engineering
and Health Services (EEHS)
risk mapping of suppliers
• On-site supplier audits with
RBA protocol
• EEHS in procurement process
• Continuous improvement with
ISO 26000 standard
• SSI #6: 100% of our strategic
suppliers provide decent
work to their employees
(pilot launched Q1 2022)
• SSE #12: Deploy a ‘Social
Excellence’ program through
multiple tiers of suppliers
(baseline to be defined
in 2022)
• SSE #17: 4,000 suppliers
assessed under our ‘Vigilance
Program’ (1,203 achieved)
Responsible workplace
Health and Safety
Serious or fatal employee
injury or illness
• Loss of, or impact to,
Safety strategy
Global safety directives
• SSE #14: 0.38 or below
Medical Incident rate
(0.65 achieved)
employees
Serious Incident Investigation
• Loss of productivity
• Property damage
•
• Customer confidence
• Fines
Impact to Company image
Equity, Diversity & Inclusion
Inclusive workplace
Risk of not providing equal
opportunities to everyone and
limiting the ability to attract and
retain the best talents
• Cost of turnover
• Loss of women in top
potential pipeline
• Legal issues
• Company image
Process (SIIP)
GlobES reporting, Global Safety
Alerts, EHS assessment
Recruitment of women
• SSI #8: Increase gender
Women representation
in leadership roles
Gender pay equity
Diversity & Inclusion Committee.
diversity, from hiring (50%)
to front-line managers (40%)
and leadership teams (30%),
(41%, 27% and 26% achieved
respectively)
• Financial Times, Forbes,
Bloomberg, Great Place to
Work in the US and Universum
recognized Schneider Electric
as a great place to work and a
leader in Diversity, Equity and
Inclusion in 2021
Increase confidence of current
and prospective employees.
Systemic MIR drives Safety
continuous improvement
People attraction and retention
with equal opportunities for
everyone
Follow contemporary trends
and show support to all
communities openly
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Chapter 2 – Sustainable development
2.1 Sustainability at the heart of our strategy
Risk description and impact
Policies
Main actions and 2021 performance
Opportunity created
Responsible workplace (continued)
Well-being and mental health
Not providing ideal working
conditions leads to
• Absenteeism
• Cost of turnover
• Disengagement
• Company image on the market
Employee Value Proposition
Global Family Leave Policy
Pay equity
Global Anti-Harassment Policy
Career development and
learning
Flexibility@Work hybrid policy
Well-being practices and
training
Talent development and competencies
• 99% of countries deployed
the new flexibility @ work
policy to support hybrid work.
Recognition of Schneider
Electric as an attractive
employer
• New Ways of working
playbook and training
rolled out to all managers
and employees
Improved talent retention
Talent acquisition and retention
Risk of not attracting, developing,
and retaining the best talent in the
market especially for critical skills
• Cost of recruiting and
onboarding
• Gaps in critical skills
•
Impact on talent’s brand
perception
Recognized as an employer
of choice and market leader
for talent development for
everyone, everywhere leading
to greater talent attractivity
New talent acquisition platform
to manage prospective talents
and hiring processes
Grow the early talent pipeline
through global program and
country-specific initiatives
Annual performance and
development approach, with
fair, transparent and competitive
rewards and development
Open Talent Market (OTM)
for internal mobility, project
and mentoring
Programs for specific segments
of talents at different stages of
their professional career
Upskilling for today and
tomorrow with a strong focus
on digital skills, commercial
excellence, leadership and
functional expertise
• Global Career Week with
employees participating
from over 90 countries and
>250 events
• SSE #21: x4 the number of
employee-driven development
interactions on the OTM
(x2.1 achieved)
• SSE #22: Digital upskilling
through the Digital Citizenship
program (74% in 2021)
• Accelerated employee
branding at global and target
country levels; Glassdoor
rating of Schneider Electric
continued to grow, reaching
4.2/5 in 2021
• Technical and digital skill
assessment tool for GSC and
distribution centers to review
competency levels, gaps and
actions for upskilling
Rewards, benefits and engagement
Risk of having disengaged
employees feeling that their
opinion is not valued:
•
Impact the financial results
of the Group
• Difficulty to retain talent
Embed a culture of continuous
listening, recognition, and
ongoing feedback to drive
engagement and performance
Greater employee
performance, brand image
and loyalty
Ensure that the group
maintains its position
of attractive employer
• A global annual survey covers
100% of Group employees
with additional focus on action
planning, including a nudge
and peer to peer session for
managers, deeper verbatim
analysis; design and launch
of pulse survey targeting
populations for whom attention
is needed (newly acquired
entities, entities undergoing
change projects).
• SSE #24: 75% Employee
Engagement Index
(71% achieved)
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Chapter 2 – Sustainable development
Strategic Report
2.1.7 Key external frameworks and ESG ratings
2.1.7.1 External guidelines
The United Nations Global Compact and Sustainable
Development Goals (SDGs)
The Global Compact was launched in 1999 by United Nations
Secretary-General, Kofi Annan. It brings companies and non-
governmental organizations together under the aegis of the
United Nations. Parties signing the Global Compact commit
to 10 fundamental principles in four areas: human rights, labor
rights, the environment, and anti-corruption. By signing the
Global Compact in December 2002, Schneider Electric made
a public commitment to these universal values. In line with the
requirements of the Global Compact, Schneider publishes
an annual Communication on Progress (COP) and meets
the requirements of the Global Compact Advanced Level.
The 2030 Agenda for Sustainable Development, adopted by
all United Nations Member States in 2015, provides a shared
blueprint for peace and prosperity for people and the planet,
now and into the future. At its heart are the 17 SDGs, which
are an urgent call for action by all countries – developed and
developing – in a global partnership. Schneider Electric is
committed to contribute to the 17 SDGs through its
sustainability programs.
International Organization for Standardization (ISO)
In 2010, the ISO published its guidelines on organizations’ social
responsibility (ISO standard 26000). This standard promotes a
compromise involving different players from the public, private,
and non-profit sectors from around 100 countries, and a vision
of how an organization should view societal responsibility. This
standard legitimizes the sustainability actions undertaken by
the Group since the early 2000s and provides an educational
support and framework for its actions in the field. The Group has
worked since 2012 to promote the adoption of the ISO 26000
principles with its suppliers.
Schneider also adopts other ISO guidelines or certifications:
see ISO 14001 and ISO 50001, page 129; ISO 45001, page 109;
ISO 9001, page 74; ISO 27000, page 105; and ISO 14025 and
14021, page 159.
The Global Reporting Initiative (GRI)
The GRI was established in 1997 as a mission to develop
globally applicable directives to report on economic,
environmental, and social performances. Brought about by the
Coalition for Environmentally Responsible Economies (CERES)
in association with the United Nations Environmental Program
(UNEP), the GRI integrates the active participation of companies,
NGOs, accounting bodies, business associations, and other
stakeholders from across the globe. In 2016, Schneider
integrated updates to the GRI Standards. Schneider Electric
SE has reported in accordance with the GRI Standards for the
period from 1 January 2021 to 31 December 2021. The Board of
Directors has reviewed and approved the reported information,
including the organization’s material ESG topics, under
Disclosure 2-14 in GRI 2: General Disclosures 2021. A reference
table with its indicators and those proposed by the GRI is
available on the Schneider Electric website.
The Sustainability Accounting Standards Board (SASB)
The SASB Foundation was founded in 2011 as a not-for-profit,
independent standards-setting organization. Schneider Electric
provides information in alignment with SASB reporting guidelines
for its sector (Electrical and Electronic Equipment).
A correspondence table can be found in page 218.
2.
The Task Force on Climate-related Financial Disclosures
(TCFD)
In June 2017, the TCFD, a working group led by Michael
Bloomberg under G20 Financial Stability Board’s (FSB) mandate,
published its recommendations for companies’ climate action
disclosure. CEOs from more than 100 companies signed a
statement of support for the TCFD recommendations and
Schneider Electric’s CEO was among them. Detailed information
can be found in Schneider Electric’s CDP Climate Change public
disclosure and in this report on page 220.
The Science-Based Target initiative (SBTi)
Science-Based Targets (SBTs) specify how much and how
quickly companies need to reduce Greenhouse Gas (GHG)
emissions in order to avoid a 1.5°C or 2°C global temperature
increase, compared to pre-industrial levels. Schneider Electric
is part of the 1,000+ companies globally that have committed
to reduce GHG emissions in alignment with prevailing climate
science through the SBTi. The Group’s GHG footprint is
calculated following the World Resources Institute (WRI)
GHG Protocol (see page 130). The Group’s target to achieve
net-zero operational emissions and to reduce Scope 3 emissions
by 35% by 2030 (versus 2017), was validated 1.5°C aligned by
the SBTi in 2019.
Organisation for Economic Co-operation and Development
(OECD)
The OECD is an international organization that works to build
better policies for better lives. Schneider Electric is aligned with
the OECD Guidelines for Multinational Enterprises. Schneider
Electric signed the OECD’s Convention on Combating Bribery
of Foreign Public Officials in International Business Transactions,
and established a “Conflict Minerals Compliance program”
based on the OECD Due Diligence Guidance for Responsible
Supply Chains of Minerals from conflict affected and
high-risk areas.
International Labour Organization (ILO)
Schneider Electric is a Member of the ILO Global Business and
Disability Network (GBDN) and adheres to the principles of the
ILO Declaration on Fundamental Principles and Rights at Work.
The Group’s Principles of Responsibility were inspired in part
by the standards issued by the ILO.
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Chapter 2 – Sustainable development
2.1 Sustainability at the heart of our strategy
2.1.7.2 Ratings and ESG indices
Dow Jones Sustainability Index (DJSI)
In 2021, Schneider Electric was one of 322 companies in
the DJSI World Index for the eleventh year in a row, which is
comprised of corporate leaders in global sustainability as
identified by S&P Global, and represents the top 10% from
among around 2,500 companies worldwide representing 45%
of global market capitalization. Schneider Electric obtained an
86/100 score compared with an industry average of 28/100.
CDP Climate A list and Supplier Engagement Leader
In 2021, Schneider Electric is among just 200 Climate Change
A list companies out of 13,000+ companies assessed by CDP,
and the only one in its sector to achieve this 11 years running.
Schneider Electric also scored A in CDP’s Supplier Engagement
Rating (SER) in 2021. The SER assesses performance on
governance, targets, scope 3 emissions, and value chain
engagement in the CDP Climate Change questionnaire.
At the time of writing, it belongs to several STOXX indices,
in particular Global Low Carbon Footprint, Global Climate
Change Leaders, EURO STOXX 50 Low Carbon, Global ESG
Environmental Leaders indices.
CDP Water
Schneider Electric received a B score for its fourth participation
in CDP’s Water Security questionnaire.
Vigeo Eiris industry leader
Following assessment in July 2021 by Vigeo Eiris (part of
the Moody’s Group), Schneider Electric ranked first in the
Electric Components and Equipment sector at the highest level
(Advanced), with a rating of 71/100 (+5 points versus previous
rating). As of February 2022, Schneider Electric is part of the
Euronext Vigeo Eiris World 120, Europe 120, Eurozone 120, and
France 20 indices, which are composed of the highest-ranking
listed companies in terms of their performance in corporate
responsibility. The average score for companies in the World 120
is 58/100.
FTSE4Good
Schneider Electric is part of the FTSE4Good Developed, FTSE
Environmental Opportunities, and FTSE EO Energy Efficiency
indices.
EcoVadis Advanced level and Platinum rating
In 2022, Schneider Electric has achieved Advanced level with
a rating of 82/100 and obtained a Platinum medal (top 1% of all
companies assessed) for the second year in a row
MSCI industry leader
Schneider Electric has been at AAA grade since 2011, an
industry leader and a member of the MSCI World ESG Leaders,
World Select ESG Ratings & Trend Leaders, and Socially
Responsible indices
Sustainalytics leader
Following its assessment in October 2021, Schneider Electric
was ranked 8/210 in its industry group with a 17.1 risk rating
(Low Risk), thereby confirming its inclusion in STOXX Global
ESG Leaders, Environmental Leaders, Social Leaders,
Governance Leaders, and EURO STOXX Sustainability indices.
ISS
Schneider Electric achieved a 1 ranking in Environment, 1 in
Social, and 3 in Governance at ISS (Institutional Shareholder
Services, Inc.) in the 2021 QualityScore. The rating scale runs
from 1 to 10, with 1 representing the lowest risk level and 10
the highest. Schneider Electric is at Prime level at ISS-ESG
with an absolute B rating, the best rating in its industry (Electric
Components) out of 182 companies.
ECPI
As of December 2021, Schneider Electric is included in the ECPI
Carbon, Ethical, Renewable Energy, Global Developed ESG Best
in Class, Megatrend, Climate Change, and Circular Economy
leaders.
Sustainability external ratings
DJSI
CDP Climate Change
Vigeo Eiris
EcoVadis
MSCI ESG Ratings
Sustainalytics
2021 Schneider score
Industry average score
Progress vs. 2020
Highlights
86/100
28/100
-2 pts
11th year in
world index
A
B-
same
11th year
in A List
71/100
39/100
+5 pts
82/100
45/100
same
AAA
BB
same
World 120 and
Europe 120
Indices
Platinum
medal
AAA for
eleventh year
17.1
29
same
Low risk
Assessed universe (# companies)
2,500
13,000
5,000+
90,000
8,500
14,000
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2.1.7.3 Other awards in 2021 and beyond
Impact and ESG
Global 100 most sustainable corporations
Schneider Electric has featured on Corporate Knights’ Global
100 list of corporate sustainability leaders every year since 2012,
making it to the top spot in 2021, and 4th in 2022.
2021 most responsible French companies
In November 2021, Schneider Electric was ranked 7th among 250
French companies by French magazine, Le Point and German
independent institute, Statista for its commitment to sustainability
and its innovative tool — Schneider Sustainability Impact.
Impak Finance
The new independent, B-Corp Certified impact rating agency,
has ranked Schneider Electric 1st in CAC 40 for its contribution
to the United Nations SDGs for the second year in a row in 2021.
The Group obtained a score of 434/1000, way ahead of the CAC
40 average of 231/1000.
Fortune’s Change the World List
Schneider Electric retains spot in the 2021 Fortune Change the
World List, a global ranking of the top 50 companies making
positive social or environmental impact through activities integral
to their core business strategy and operations.
Climate
Carbon Clean 200 list
Schneider Electric has consistently been included in Corporate
Knights’ Carbon Clean 200 list since ranking inception in 2016
for its revenue devoted to energy transition. In 2022, the Group
ranked 9th worldwide.
EcoAct Climate Reporting Performance
Schneider Electric ranked 4th for international companies and
1st among EURO STOXX 50 companies on EcoAct’s Climate
reporting performance leaderboard.
Champions du climat 2021
Recognized as a Climate Champion by Challenges, the French
weekly business magazine, for reducing its annual Scope 1 and 2
GHG emissions.
Supply Chain
Best Global Sustainable Supply Chain Organization
Schneider Electric has been named the Best Global Sustainable
Supply Chain organization at the Global Sustainable Supply
Chain Summit 2021 (GSSC Summit). This award puts Schneider
Electric ahead of its peers in terms of operating greener and fairer
supply chains.
EcoVadis Sustainable Procurement Leadership Awards
Schneider Electric was selected for the EcoVadis Sustainable
Procurement Leadership Awards 2022, receiving the Best Value
Chain Engagement award as a recognition of its excellence
in engaging trading partners and internal stakeholders in
sustainability initiatives.
2.
Chapter 2 – Sustainable development
Strategic Report
Gartner 2021 Supply Chain top 25
Schneider Electric maintained its 4th position in 2021 in the
Gartner Supply Chain top 25 ranking for the exemplary
management of its value chain.
Diversity & Inclusion
Bloomberg Gender Equality Index
In 2022, Schneider Electric confirmed its inclusion in Bloomberg’s
Gender Equality Index among 418 companies for the fifth
consecutive year. Schneider Electric scored above the overall
GEI average, with its highest score in the equal pay and gender
pay parity category, where the company scored significantly
higher than the global GEI average score.
Financial Times Top 50 Diversity leader 2022
Schneider Electric was recognized as a Top 50 Diversity leader
by the Financial Times for the third year in a row, ranking 5th in its
industry.
Equileap Global Gender Equality Report and Ranking
In March 2022, Schneider Electric ranks 20th globally out of
3,895 publicly listed companies assessed based on 19 gender
equality criteria, including gender balance from the board to the
workforce, as well as the pay gap and policies relating to parental
leave and sexual harassment, among other topics.
Ethics and Governance
Ethisphere
In 2022, Schneider Electric was again recognized as one of the
World’s Most Ethical Companies by Ethisphere, a global leader
in defining and advancing the standards of ethical business
practices; only three French companies were included in this
year’s ranking.
Best vigilance plan
In January 2021, Schneider Electric won the Best 2020 Vigilance
Plan after an assessment of all the CAC 40 companies by the
Sustainable Investment Forum (FIR) and A2 Consulting.
Grand Prix de la Transparence
In 2021, Schneider Electric remains in the Top 20 most
transparent companies by ranking 11th out of 141 companies,
and was bestowed the Extra Financial Award (Grand Prix de
l’Information Extra-Financiere).
Employer awards
Universum Top 50 World’s Most Attractive Employers
In 2021, Schneider was recognized by students worldwide as
one of the World’s Most Attractive Employers ranking 24th in
Engineering and IT by Universum. Over 220,000 respondents
from the Universum Talent Surveys have ranked the companies
they find most desirable to work for.
Fortune’s World’s Most Admired Companies
In 2022, Schneider is recognized by Fortune as one of the
“World’s Most Admired Companies”, ranking 3rd in the electronics
industry sector for the fifth consecutive year.
Glassdoor
Schneider received a score of 4.2/5 from Glassdoor as of
February 2022. Based on more than 10,000 reviews, 87% of
surveyed participants would recommend the Group to a friend,
and 96% approve the CEO.
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Chapter 2 – Sustainable development
Chapter 2 – Sustainable development
2.2 Driving responsible business with Trust
In this section
2.2.1
Trust Charter, Schneider Electric’s
Code of Conduct
2.2.2 Ethics & Compliance program
2.2.3
Zero-tolerance for corruption
2.2.4 Compliance with tax regulations
2.2.5 High standards for the quality and safety
of our products
2.2.6 Digital trust and security
94
95
101
102
102
105
2.2.7 Human Rights
2.2.8 Employee health and safety
2.2.9 Vigilance Plan
2.2.10 Relations with project execution contractors
2.2.11 Sustainable relations with suppliers
2.2.12 Vigilance with local communities
106
109
112
116
117
124
“Our Trust Charter underpins every aspect of our business,
as well as expressing our willingness to behave and respond
respectfully and in good faith to all our stakeholders. As our
Code of Conduct, it is our compass in a world which is more
and more complex. Its purpose is to guide us collectively and
individually.”
Hervé Coureil, Chief Governance Officer and Secretary General
Context and goals
2021 has been a year of transformation for Schneider Electric.
The Group has set ambitious targets to accelerate the fight against
climate change and social inequality, whilst mitigating the impact
of the COVID-19 crisis on its operations, supply chain, customers,
and employees. To do so, Schneider collaborates for a more
sustainable world, and collaboration requires a firm foundation
of trust.
Present in over 100 countries with diverse standards, values, and
practices, Schneider Electric is committed to behaving responsibly
in relation to all its stakeholders. Convinced that its responsibility
extends beyond compliance with local and international
regulations, the Group is engaged to doing business ethically,
sustainably, and responsibly.
Schneider lives up to the highest standards of corporate
governance, through initiatives that monitor and educate teams on
ethics, cybersecurity, safety, and quality. The 2021 Trust Charter
is the evolution of the Group’s Principles of Responsibility and
sets out the expectations of how we work at Schneider and equips
teams to confront any unethical behavior they might encounter.
Trust serves as an ethical compass for all Schneider Electric’s
interactions with stakeholders and all relationships with customers,
shareholders, employees, and the communities they serve, in a
meaningful, inclusive and positive way.
Under our 2025 Sustainability Strategy, we commit to live up to our
principles of trust by upholding ourselves and all around us to high
social, governance and ethical standards. In this report, we share
our progress on the transformations engaged in 2021 under the
Trust pillar of our Schneider Sustainability Impact and Schneider
Sustainability Essentials programs.
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2021 Highlights
Ethics
ams
e
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Chapter 2 – Sustainable development
Strategic Report
Cybersecurity
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C ustomersan
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2.
Schneider was awarded the Ethisphere
‘most ethical company in the world’ in 2021
and 2022, for eleven consecutive years.
The 2021 Trust Charter sets out the
expectations of how we work at Schneider
and equips teams to confront any unethical
behavior.
Schneider awarded the 2021 ‘Grand Prix
de la Transparence’ in the ESG information
category.
Best Vigilance Plan
In January 2021, the Group was awarded
the Best Vigilance Plan by the Sustainable
Investment Forum and A2 Consulting.
Triple recognition in UK and Ireland
demonstrating excellence in safety, health
and environmental impact.
Gartner #1 Supply Chain in Europe
Our second consecutive year at the top.
Key targets and results
Progress against our 2021-2025 Sustainability commitments
Schneider Sustainability Impact
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Baseline(1)
2021 progress(2)
2025 Target
Trust
6.
Strategic suppliers who provide decent work to their employees(3)
--
In progress
7.
Level of confidence of our employees to report unethical conduct
81%
+0pts
100%
+10pts
Schneider Sustainability Essentials
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Baseline(1)
2021 progress(2)
2025 Target
Trust
12. Deploy a ‘Social Excellence’ program through multiple tiers of
--
In progress
suppliers(3)
13. Train our employees on Cybersecurity and Ethics every year
14. Decrease the Medical Incident rate
90%
0.79
96%
0.65
15. Reduce scrap from safety units recalled
4,202
4,024
--
100%
0.38
2,101
16. Be in the Top 25% in external ratings for Cybersecurity
Top 25%
Top 25% Top 25%
performance
17. Assess our suppliers under our ‘Vigilance Program’
374
1,203
4,000
(1) Generally, the 2020 performance serves as a baseline for Schneider Sustainability Impact (SSI) and Schneider Sustainability Essentials (SSE) 2021-2025 programs.
(2) Each year, Schneider Electric obtains a “limited” level of assurance from an independent third party verifier for all of the SSI and SSE indicators (except for SSI #6,
SSI #7, SSI #+1, SSE #12 and SSE #23), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 224). Please refer to page 206
for the methodological presentation of each indicator. The 2021 performance is also discussed in more details in this section.
(3) 2021 performance is in progress for SSI #6 Decent work and SSE #12 ‘Social Excellence’ because the programs are still in development.
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Chapter 2 – Sustainable development
2.2 Driving responsible conduct of business with the Trust Charter
2.2.1 Trust Charter, Schneider
Electric’s Code of Conduct
In 2021, Schneider Electric evolved its Principles of Responsibility
to the Trust Charter, acting as our Code of Conduct and
demonstrating our commitment to ethics, safety, sustainability,
quality, and cybersecurity. Schneider Electric believes that trust
is a foundational value. It is earned, it serves as a compass,
showing the true north in an ever more complex world and
Schneider Electric considers it to be core to its environmental,
social, and governance (ESG) commitments.
As trust fuels empowerment, each section of the charter states
clear do’s and don’ts and provides clear references to relevant
policies and procedures, which are adapted to meet local legal
requirements when necessary. This Code of Conduct applies to
everyone working at Schneider or any of Schneider’s subsidiaries.
It is both an individual and collective responsibility to comply and
respect laws and regulations, to apply Schneider Electric policies,
and to uphold strong ethical principles to earn trust at all times.
2.2.1.1 Earning trust with people
Trust powers all Schneider Electric’s interactions with stakeholders
and all relationships with customers, shareholders, employees,
and the communities they serve, in a meaningful, inclusive, and
positive way. With this in mind, the document is organized across
four chapters:
• Trusted Teams that are built thanks to leaders setting the tone
and exemplifying Schneider Electric’s culture, as well as through
creating equal opportunities, harnessing the power of all
generations, championing well-being and new ways of working,
and being S.A.F.E. First;
• Trust with Customers and Partners is earned by striving for
high quality, resiliency, the highest standards for cybersecurity,
data privacy and protection, as well as prohibiting any form
of corruption, requiring third-party integrity, avoiding conflict
of interest, upholding fair competition, abiding by export
controls and sanctions, and selecting and managing
suppliers responsibly;
2.2.1.2 Communication and training
for all employees
Schneider Electric trains all its employees yearly on essential
topics. 2021 was a transition year, and as such employees were
assigned training on the Principles of Responsibility and informed,
through this course, of the upcoming transition to the Trust Charter
on September 30. The course was made available as e-learning for
connected employees, and an in-class version for non-connected
employees. The training completion rate for all Schneider Electric
eligible employees at the end of the campaign was 99% (connected
employees: 99% completion; non-connected employees: 98%
completion). A new mandatory training for all employees dedicated
to the Trust Charter will be part of the 2022 campaign.
In addition to the Trust Charter being available in 30 languages
on se.com, a Trust Portal was made available to Schneider’s
employees to link them towards related content such as policies,
useful contacts, sites, guidelines, templates, and reports for each
section of the Trust Charter. In 2021, we saw an increase of global
policy views of +61% compared with 2020.
Leadership at every level of the organization was involved in the
design, creation, and deployment of the Trust Charter to ensure that
everyone at Schneider Electric is aware of the importance of trust
and understands how to get the most out of our Code of Conduct.
Discover our Trust Charter with se.com (cid:496)
Cybersecurity
Ethics
ams
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C ustomers an
C ustomers an
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• Trust with Investors comes from preventing insider trading,
delivering accurate financial statements, records, and tax
information, delivering solutions in compliance with financial
and risk management standards, and preserving our information
technology and related intellectual property assets as well as
Schneider Electric’s reputation;
Q
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C
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m
unities
• Trust with Communities is possible by acting for a climate
positive world, being efficient with resources, upholding
responsible lobbying and political activity, empowering local
communities, not using “conflict minerals”, and acting as good
corporate citizens.
Sustaina b i
t y
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Chapter 2 – Sustainable development
Strategic Report
2.2.2 Ethics & Compliance
program
Each year, Schneider Electric’s Enterprise Risk Management team
draws up a risks matrix at Group level which is presented to the
Executive Committee and used to identify all risks faced by the
Company; as part of this wider exercise the Company conducts
a risk assessment on ethics and compliance matters.
The exposure of the Group to risks of non-compliance and
unethical practices has been increasing for several years, due
to broader externalities for the Group through its geographic
expansion, participation in complex projects, and a large range
of acquisitions, all leading to the need to strengthen the
effectiveness of its risk-based Ethics & Compliance program.
Over the past years, the increase of law enforcement by public
authorities, new regulations, and higher reputational risk with
media exposure have led to the design of a preventive approach
of several risks including corruption, fraud, violation of fundamental
human rights (health and safety, discrimination, harassment, and
sexual harassment), anti-competitive practices, sanctions, and
export control.
2.
Adopting a full compliance approach on these topics brings trust to
employees, customers, partners, suppliers, and local communities.
2.2.2.1 Governance of the Ethics & Compliance program
Schneider Electric has built a strong governance to lead the Ethics & Compliance program to the best standards, with responsibilities
at Board, executive, corporate, and zone levels.
2.2.2.1.1 Executive level
Board Audit & Risk Committee
Schneider Electric’s Board of Directors oversees the Ethics &
Compliance program through a dedicated annual session of the
Audit & Risks Committee during which the program, risks and
improvements, and action plans, are reviewed by the Directors.
Once a year, the Directors also review the Ethics & Compliance
program’s effectiveness and the allocation of resources to the
program (human and financial). In addition, the Directors agree
on the audit plan which covers several audits related to the Ethics
& Compliance program, and the program’s members are notified
of their findings and related recommendations once finalized.
Group Ethics & Compliance Committee
Schneider Electric has also put in place a dedicated governance
to lead the Ethics & Compliance program to the best standards. The
program is overseen by the Group Executive Committee, through the
Group Ethics & Compliance Committee. This Committee is composed
of nine permanent members in charge of defining the program’s
strategy and priorities: Chairman & CEO; Chief Governance Officer
(Committee Chairperson); Chief Human Resources Officer; Chief
Strategy & Sustainability Officer; Chief Compliance Officer; Chief
Legal Officer; Chief Corporate Citizenship Officer; Group Internal
Audit & Control Officer; and Senior Vice-President, Sustainability
Development. They ensure that the program is consistent with
the Group’s strategic goals. This Committee meets twice a year.
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Board – Audit & Risk Committee
Executive Committee
Group Ethics & Compliance Committee
Define, explain and disseminate priorities
Continuous improvement
Continuous improvement
Group Operational
Compliance Committee (GOCC)
Detect and manage
non-compliance
Disciplinary Committee
Disciplinary review of non-compliances
and levy sanctions
Regional, Zone, Cluster and Country Ethics & Compliance Committees
Ensure implementation of Compliance program according to risks
Regional Compliance Officers
Ethics Delegates
Support employees in navigating with our Trust Charter and prevent, detect and manage non-compliance
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Chapter 2 – Sustainable development
2.2 Driving responsible conduct of business with the Trust Charter
2.2.2.1.2 Corporate level
The Group Ethics & Compliance Committee is assisted by the
Group Operational Compliance Committee (GOCC) and the
Group Disciplinary Committee, which both ensure effectiveness
of the speak-up culture (a culture in which employees feel free and
psychologically safe to share their ideas, opinions, and concerns,
without fear of retaliation) and whistleblowing system, and fair and
transparent disciplinary policy.
Group Operational Compliance Committee
The GOCC detects and manages cases of non-compliance
with the Ethics & Compliance program in accordance with the
Group Case Management & Investigation Policy released in
February 2020 and updated in October 2021, and reviews monthly
the effectiveness of the whistleblowing system. The GOCC is
composed of the following members: Chief Compliance Officer
(secretary of the Committee), Chief Legal Officer, Group Internal
Audit & Control Officer, Group Compliance Director, Group HR
Compliance Officer, and Head of Fraud Examination Team.
Group Disciplinary Committee
The Group Disciplinary Committee is in charge of levying sanctions
and remediation actions on serious non-compliance cases upon
request of the GOCC. The Group Disciplinary Committee is
composed of the following members: Chief Governance Officer,
Chief Human Resources Officer, Chief Compliance Officer (secretary
of the Committee), Chief Legal Officer, and one rotating member.
Ethics & Compliance department
Schneider Electric has also created a standalone Ethics &
Compliance department, chaired by a dedicated Chief Compliance
Officer acting on behalf of the Group Ethics & Compliance
Committee, and reporting to the Chief Governance Officer, to
drive the strategy on the Ethics & Compliance program. The
Ethics & Compliance department includes the following teams:
Group Compliance, Group HR Compliance, Health & Safety,
Fraud Examination, IT Assets Governance, Policy Management,
Business Continuity Planning and Digital Transformation for Ethics
& Compliance. It works closely with the Legal, Human Resources,
Finance, and Strategy & Sustainability departments, as well as
Internal Control and Audit. This cross-functional and integrated
approach is central to the program’s effectiveness.
2.2.2.1.3 Operational level by geographic zone
Regional Ethics & Compliance committees ensure implementation
of the Ethics & Compliance program in alignment with risks
identified. Operationally, they rely on Regional Compliance Officers
who drive the implementation in the zone, with the support of Ethics
Delegates and relevant subject matter experts at local levels.
2.2.2.2 Pillars of the Ethics & Compliance
program
All Schneider Electric employees are expected to comply with
Schneider’s Ethics & Compliance program. Its daily application
helps them to act with integrity and transparency, and to comply
with all international and local regulations.
The Ethics & Compliance program is based on management
commitment (called “tone from the top”), which makes its pillars
effective. Top management sets the Ethics & Compliance
standards and promotes a culture of integrity throughout the
Group and its operations. In addition, middle management walks
the talk by complying with rules, spreading the right message in
their teams, and supports reporting of misconducts.
2.2.2.2.1 Risk assessment at Zone level
In 2021, Schneider Electric carried out specific risk mapping
dedicated to “Ethics and Compliance” risks on the following risks:
Corruption, Conflict of Interest, Human Rights & Labor Laws,
and Sanctions & Export Control. The objective of this “Ethics and
Compliance” risk mapping is to capture operational risk exposure
at zone level, based on local interviews led by the Regional
Compliance Officers and the Legal teams.
Tone from the top
Monitoring
& Audit
Risk
Assessment
Disciplinary
measures
Code of
conduct
& Policies
Training &
Awareness
Whistle
blowing
Ethics &
Compliance
Pillars
Specific
accounting controls
Third parties
compliance
The process at regional level was as follow:
• step 1 – each region defined its local risk universe taking into
account local specific risks,
• step 2 – each region assessed its gross risks and effectiveness
of its local mitigation measures, generating a mapping of
regional net risks, and
• step 3 – each region defined action plans (validated by the
respective regional Ethics & Compliance committees) to reduce
the risk exposure. In addition, a global gross and net risks
mapping was consolidated at Group level, as well as a set of
action plans to be taken at global level. All action plans will be
monitored during the course of 2022.
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Chapter 2 – Sustainable development
Strategic Report
2.2.2.2.2 Code of Conduct and policies
To ensure that the tools are provided to follow the Trust Charter,
it is complemented by global and local policies, providing specific
answers to the different principles, legal obligations, and local
practices. On ethics and compliance matters, Schneider Electric
has deployed several policies:
• Anti-Corruption Policy (aligned with French Sapin II law
requirements),
• Gifts & Hospitality Policy,
• Competition Law Policy,
• Business Agent Policy,
• Anti-Harassment Policy,
• Human Rights Policy, and
• Export Control Policy.
• In 2021, Schneider published and rolled out a new Conflict
of Interest Policy and a new Donations Policy.
2.2.2.2.3 Training and awareness
At Schneider Electric, we value training, at both local and global
levels as it is the best way to prevent risks and raise awareness
on ethical topics.
Each year a global campaign of mandatory trainings is run for
all employees, called Schneider Essentials, from March to end
of September. These global trainings are available in 18 different
languages in our Learning Management System and each takes
30 mins to complete. In 2021, Schneider Essentials trainings were:
• Trust Charter,
• Cybersecurity for Schneider Electric,
• Building a culture of respect, and
• Sustainability at the Core of our Purpose.
For about 40,000 employees exposed to corruption risks,
an additional anti-corruption training is required each year.
Through Schneider Sustainability Essentials #13, the Group
monitors and discloses each quarter completion rate on ethics
(Trust Charter and anti-corruption for eligible employees) and
cybersecurity trainings, aiming for 100% each year and externally
audit annual performance. At the end of 2021, SSE #13 reached
96% completion rate.
A dedicated module on Ethics & Compliance was prepared for
the induction path for Country Presidents. The module raises
Country Presidents awareness about their role and responsibility
in supporting the Ethics & Compliance program.
Besides training of our employees, since 2020 and as part of the
integration process of companies acquired, a specific training for
leaders of the acquired company is organized through the Ethics
& Compliance program. The training entails a specific focus on
what is expected from the leadership teams, including endorsing
the program and actively following up employees completion of
mandatory trainings on Trust Charter and anti-corruption.
In November 2020, Schneider Electric organized its first global
“Ethics & Compliance Day” campaign in order to promote the
Company’s values on business ethics and to bring a focus on the
need of a working environment that promotes a speak-up culture.
A second “Ethics & Compliance Day” took place in June 2021,
focusing on raising awareness about biases of ethical thinking.
Furthermore, in-person learnings were organized in sensitive
geographic areas regarding ethics and compliance challenges
(Brazil, India) or in locations where a specific risk is higher
(such as the export control risk).
2.
Trust
SSE #13
100% of employees trained every year on
Cybersecurity and Ethics
Feedback received from our employees confirm that our trainings efficiently help
them to act as “integrity ambassadors”.
Cybersecurity training: “Very much anchored in real life both professional and
personal. Did not see the 30m pass. Way to go!”
Principles of Responsibility training: “I love the fact that this course reminds you the
basics and makes you use your brain and put yourself in the shoes of colleagues in
difficult situations. Love the voice of so many of our colleagues too!”
Anticorruption training: “The content is simple and easy to understand. This is a must
for any Schneider employee.”
Baseline
2021 Progress
2025 target
90%
96%
100%
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2.2 Driving responsible conduct of business with the Trust Charter
2.2.2.2.4 Third-parties compliance
Third-party relationship management programs are complex as
each third party presents multiple risks and different oversight
functions need to be consulted to perform individual risk
assessments. For example, business agents can be used for
many legitimate purposes, such as to perform tasks that Schneider
Electric cannot perform as efficiently; however, experience has
shown that using them can be very risky in terms of exposure to
bribery or corruption. Schneider Electric Business Agent Policy
sets out the rules under which we will determine whether there is
a legitimate business purpose before engaging. We also need to
ensure that we conduct an effective and efficient due diligence
review to ultimately make the most informed decision and mitigate
any risks to the best possible extent. We have adopted a risk-based
approach to our due diligence enabling our teams to dedicate
the most significant part of their time and energy to situations that
represent the most risk exposure. Hence, we have various due
diligence policies and processes depending on the type of third
party subject to the due diligence.
Business agents cover all third parties retained entirely or in part
to assist Schneider Electric, directly or indirectly, in its business
operations, including to obtain a sales order, contract award, permits,
licenses, or other business advantage for Schneider Electric. They
are subject to a due diligence and approval process, which was
centralized with the Business Agent Policy in 2019 with digitization
beginning in 2020. Several documents and information are gathered
and sent to the Group Compliance team who will perform the due
diligence and manage the approval process by analyzing risks of
corruption, sanctions, and unethical practices. At the first level of
assessment, the business agent could be approved based on the
level of risk, or additional checks could be carried out if necessary.
The Group Compliance team can request to also review and validate
payments to a business agent based on this assessment.
Our robust network of suppliers is the foundation of our supply
chain, and we extend the same level of ethical control to them as
we do to ourselves. For more information, please refer to section
2.2.11 “Sustainable relations with suppliers”, page 117. Since
2021, the Group Compliance team has been working to further
strengthen the controls carried out as well as understanding our
risks when doing business with Schneider Electric customers in
close collaboration with both digital and export control teams.
M&A operations represent specific risks regarding ethics and
compliance, specifically corruption and export control risks.
With the support of the Group Ethics & Compliance Committee,
a specific process and guidelines were put in place in 2020 to
ensure full compliance of M&A operations with anti-corruption
and export control regulations: this process was built by the Group
Compliance Director, the Global Export Control Director, and the
M&A team, ensuring a methodology that fit with M&A processes
and ways of working. In 2021, this process was extended to the
management of Human Rights risk.
2.2.2.2.5 Specific accounting controls
Schneider Electric has developed accounting control procedures
to ensure that books, records, and accounts are not used to hide
fraud. Since June 2021, work has been initiated to strengthen
specific anti-corruption controls for a defined set of sensitive-
judged accounts and transactions.
Seven steps to securing long-term value creation in acquisitions
Screening
Day 1 Gate
Year 1 Gate
Integration Wrap up
Business + Corp. Strategy
PMI + Integration Team
PMI + Business Team
PMI + Business Team
1
3
5
7
2
Due Diligence
M&A, Functions,
Consultants
NBO
Non-Binding offer
Signing
Definitive
Agreements
4
100 Days Gate
PMI + Integration Team
6
Post Year 1 Gate
PMI + Business Team
Monitoring starts
Strategic objectives, performance & synergies
Closing
Funds & Shares Transfer
PMI = Post-Merger
Integration Team
Timing depends on conditions precedents
(such as clearance with Anti-trust Authorities)
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2.
Chapter 2 – Sustainable development
Strategic Report
In 2021, to measure the effectiveness of the Trust Line, Schneider
Electric has added to its annual employee engagement survey,
OneVoice, a new question: “I can report an instance of unethical
conduct without fear”. 81% of employees surveyed answered “yes”,
and the Group will work to increase this measurement by 10 points
by 2025 as part of Schneider Sustainability Impact.
Trust
SSI #7
Measure the level of confidence of
our employees to report behaviors
against our Principles of Trust
A speak-up mindset exists when employees and
stakeholders feel safe to speak out about issues, concerns,
and ideas in good faith, respectfully, and without fear
of retaliation. It helps protect Schneider Electric and its
employees from the effects of misconduct, including legal
liability, serious financial losses, and lasting reputational
harm. It also fosters a corporate culture of trust and
responsiveness.
Experience feedback from an employee in France
in 2021
“First it took me some time to understand that the situation
I am facing is not in line with our policies. Then it took me
some time to have enough courage to do it, we always have
doubts. Finally, I decided to speak up. My manager listened
to me and took the situation seriously. Today I feel safe
and confident. This is very difficult to speak up and we feel
uncomfortable to do it. But I know now that it was the only
right decision that I could take.”
Baseline
2021 Progress
2025 target
81%
+0pts
+10pts
*2021 is the baseline performance
2.2.2.2.6 Whistleblowing
As a pillar of Schneider Electric’s Ethics & Compliance program,
the development of a strong speak-up culture is embodied by
reporting mechanisms such as reporting to a person who can be
trusted, such as a manager, HR business partner, Legal Counsel,
or Compliance Officer without fear of retaliation. In addition,
employees and external stakeholders (suppliers, subcontractors,
customers, business agents, etc.) can directly access the
whistleblowing system through the Trust Line portal, which provides
support to people if they are a victim/witness to a potential violation
of the Trust Charter. The Trust Line is available online globally, at all
times, and protects the anonymity of the whistleblower (unless there
is legislation to the contrary). Since December 2019, employees
can better report their concerns, by selecting a type of concern
and checking its definition. In compliance with local legislation, this
system is provided by an external, impartial third-party company
and proposes alert categories, a questionnaire, and an information
exchange protocol between the person issuing the alert and the
person responsible for the internal investigation.
Each concern reported on the whistleblowing system is analyzed
by the Group Operational Compliance Committee (GOCC) and
relevant Regional Compliance Officer, and where considered
necessary, investigated. Each year, a detailed report on the
effectiveness of the system is presented to the Audit & Risks
Committee, which reviews effectiveness of the alert system.
Unless there are legal provisions to the contrary, the system can
be used to send any concern in every country in which the Group
operates, especially regarding health and safety, discrimination,
harassment (including sexual harassment), unfair treatment, labor
practices, favoritism, violation of our Anti-Corruption Policy, fraud,
conflict of interest, and antitrust.
In 2021, 655 Ethics & Compliance concerns were received through
our internal reporting mechanisms (585 internal and 70 external).
After first analysis, 582 (89%) concerns were considered as valid
alerts. After being investigated, and at the time of writing, 168
(26%) of those valid alerts were confirmed and led to 94 actions
including for instance employment termination in 23 confirmed
alerts and written warnings in 11 confirmed alerts. HR-related
concerns represented most of confirmed alerts. As it may take
several months to analyse and investigate some complex cases,
evaluation of concerns received until 31st December 2021 is
still ongoing.
For HR related concerns, even if investigation does not allow
to qualify the situation, actions may be taken, such as assigning
obligation of coaching and/or training or improving internal
processes.
Number of concerns received through
our whistleblowing system per region
Status of concerns received* through
our whistleblowing system
Distribution of confirmed alerts
by type of issue
5%
6%
9%
14%
655
concerns
received
29%
North America
Rest of the World
Europe
China
France
India
www.se.com
37%
20%
9% 2%
26%
22%
6%
8%
12%
22%
30%
43%
Valid alerts confirmed after investigation
Valid alerts not confirmed after investigation
Valid alerts under investigation
Not valid alert
Ongoing assessment
* as of 31st January 2022
Discrimination, Harassment, Unfair treatment
Fraud
Conflict of interest
Bribery & Corruption
Health & Safety
Other
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2.2 Driving responsible conduct of business with the Trust Charter
2.2.2.2.10 External engagement
Schneider Electric participates in the initiatives of many non-
governmental organizations (NGOs) and professional associations,
such as Transparency International France, a leading NGO that
aims to stop corruption and promote transparency, responsibility,
and integrity across all sectors.
Schneider is also member of Le Cercle d’Éthique des Affaires
(The Ethical Business Circle), a professional association that
facilitates co-operation between business leaders across France
to share best practices.
To maintain innovation in its approach to ethics and compliance,
Schneider became the eighth sponsor of the Master of Law and
Business Ethics at CY Cergy Paris University in 2020 and benefits
from the work of the Master’s Chair, led by experts in France and
in the United States, as well as from listening to the students and
reviewing their work.
2.2.2.2.7 Disciplinary measures
In the event of non-compliance with the Ethics & Compliance
program by an employee (especially based on the findings of
an investigation), disciplinary measures may apply depending on
local disciplinary policies and law. The relevant managers, or the
Group Disciplinary Committee for the most sensitive alerts, take
the appropriate measures in order to sanction the party or parties
involved and to remediate consequences of the misconduct (such
as launch a specific audit, review a process, perform training, etc.).
A specific disciplinary regime is specified in the Anti-Corruption
Policy, detailing the measures that Schneider Electric can take
in the event of a misconduct. This disciplinary regime was
implemented within the Group according to local disciplinary
policies and law, when the policy was deployed in 2019 and 2020.
2.2.2.2. Monitoring and audit
The Ethics & Compliance program is an integral part of the Group’s
Key Internal Controls. In 2021, this Key Internal Control framework
has been significantly reshaped and enhanced, which will allow
for improved monitoring of key pillars of the Ethics & Compliance
program. Whenever an evaluation indicates points of weakness,
action plans must be set up and monitored by internal auditors.
Also, Schneider Electric is working on additional second-level
controls to monitor and assess the effectiveness of some of the
recent evolutions of the Ethics & Compliance program.
Furthermore, the Group’s Internal Audit program includes
specific tasks related to the Ethics & Compliance program, and
to activities or subsidiaries for which an evaluation of the maturity
and effectiveness of the program will be reviewed. Several internal
audits were conducted in 2021 resulting in recommendations
related to the improvement of the Ethics & Compliance program.
For more details on Key Internal Controls and the Group’s Internal Audit,
Please refer to page 247. (cid:496)
2.2.2.2.9 Ethics and compliance leadership
in times of crisis
The focus on ethics and compliance has increased due to the
COVID-19 pandemic, with actions put into place such as global
guidance for all Country Presidents on “Ethics & Compliance
considerations in the management of COVID-19”, global risk-
management live talks focusing on general compliance, HR
compliance, and export control, and finally, meetings with subject
matter experts to identify and manage the main risks related to
COVID-19.
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Chapter 2 – Sustainable development
Strategic Report
The Gifts & Hospitality Policy provides guidance to employees
on the ethical handling of gifts and hospitality received and given
by Schneider Electric employees.
A new version of the Business Agent Policy was released in
August 2019 to meet legal requirements and public authorities’
guidance, especially regarding risk-based approach of the due
diligence, as well as internal recommendations following several
audits performed on applicability of the policy in 2018.
The risks associated with onboarding new acquisition targets
are numerous and consequently, Merger and Acquisition (M&A)
guidelines have been published to identify, manage, and mitigate
those risks at the earliest stage possible. These guidelines aim
to cover the very first steps of identifying potential targets (M&A
strategy), what to look out for in data-rooms, and finally how
we plan to integrate the acquired entity into our compliance
organization. These same rules also apply when Schneider Electric
decides to make a divestiture with a step-by-step approach to
managing the transition.
In 2021, a Conflict of Interest Policy was published, in particular
creating a procedure to disclose and manage any identified
conflict of interest. A Donations Policy has also been published
and implemented, which aims, among other things, to manage
risks of unlawful use of money and then corruption.
2.2.3.2.2 Empowering employees against
corruption
In 2020 and 2021, a set of anti-corruption e-learnings was built,
providing guidance on real life risk scenarios; it was designed
taking into account the trainees’ needs and expectations, and
is mandatory for targeted employees exposed to corruption
risks through their job codes, i.e. those identified as such by
the corruption risk mapping. This led to a curriculum of modules
of e-learnings, deployed in 2020: a general module on the “zero
tolerance” message against corruption and an explanation of the
legal framework and risks, and two specific modules about third
parties and gifts and invitations. In 2021, four additional modules
were created about facilitation payments, conflict of interest,
conditions that make people commit the wrongdoing, and how to
raise concerns in Schneider Electric. The modules were supported
by top leaders’ videos demonstrating the “tone at the top” on this
crucial matter and are available in 14 languages. In 2021, the set
of anti-corruption e-learnings has been assigned to more than
40,000 employees and 97% completed it.
2.2.3.3 Focus on responsible lobbying,
political activity, and donations
In its Trust Charter, Schneider Electric takes a clear stance with
regards to responsible lobbying, political activity, and donations.
As a Company, Schneider has a role to play in the public debate
addressing leading issues with the global community. It is
necessary that the Group states its positions clearly, participates
in technical discussions, and supports responsible public
policy development.
2.2.3 Zero tolerance for
corruption
The exposure of the Group to corruption risk has been increasing
for several years, due to the expansion of the Group’s activities
in new economies, especially in Asia and Africa, through organic
growth, and mergers and acquisitions.
The business model of the Group relies on a large ecosystem of
partners. This ecosystem may represent a risk for the Group, being
accountable for activities performed on its behalf, and in regards
to potential conflicts of interest or unethical solicitations.
In addition, the Group is participating in complex projects involving
a large range of partners in sectors at risk, such as oil and gas, and
with end-users from the public sector in countries at risk.
Over the past years, the increase of law enforcement by public
authorities, higher press coverage of fines imposed on companies,
and new regulations requiring a strong compliance program have
significantly changed the potential impact of corruption risks.
Schneider Electric has a zero tolerance policy with regard to
corruption. This commitment materialized through a strong and
continuously developing Anti-Corruption Compliance program,
which is part of the Ethics & Compliance program.
2.2.3.1 Risk assessment
To meet the legal obligations specified by the December 9,
2016 French law known as the Sapin II law, the Company launched
a risk mapping exercise focusing on corruption risks, which was
conducted in 2018 at global level and in 2019 at regional levels.
In 2020, action plans were implemented in accordance with
risks identified.
In 2021, this risk assessment was updated as part of the new
Ethics & Compliance risk mapping, which focuses in particular
on Corruption and Conflicts of Interest. Please refer to section 2.2.2
“Ethics & Compliance program”, page 95.
2.2.3.2 Risk management
2.2.3.2.1 Anti-Corruption framework
As stated in our Trust Charter and Anti-Corruption Policy, Schneider
Electric is committed to comply with all applicable laws and
regulations, such as the OECD’s Convention on Combating Bribery
of Foreign Public Officials in International Business Transactions,
the US Foreign Corrupt Practices Act (FCPA),
the UK Bribery Act, and the French Sapin II law.
Schneider Electric applies a zero-tolerance policy towards
corruption and other unethical business practices and considers
that “doing things right” is a key value-creation driver for all its
stakeholders. We count on our employees and third parties to
promote business integrity. For doing so, we must provide them
with the tools to encourage them to act right.
In order to meet the requirements of the French Sapin II law,
the Group released an Anti-Corruption Policy. The Policy was
reviewed in November 2019 to take into account results of the
corruption risk mapping and to provide employees with examples
illustrating situations they may face. The Anti-Corruption Policy shall
serve as a handbook that anyone may consult when having doubts
about appropriate business practices. It is not intended to address
every issue one may encounter, but it provides appropriate
examples of corruption risks and offers guidance to resolve
many ethical dilemmas.
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However, Schneider believes that this representation of interests
shall be conducted in a transparent and fair manner, allowing
its third parties and stakeholders to understand its activities,
positions, and statements. In particular, Schneider Electric does
not engage in political activity or political representation and does
not make any payment to political parties in relation to its public
representation. In 2021, Schneider Electric has not been involved
in sponsoring local, regional, or national political campaigning.
In the US, political contributions can only be made by a corporation
through a legally formed Political Action Committee (PAC) or Super
Political Action Committee. Schneider Electric does not engage
with Super PAC activity nor does it have a PAC in the US and
therefore cannot make any political contributions in this country.
Donations and lobbying activities are risks specifically addressed
in the Anti-Corruption Policy.
Schneider Electric presents information about its lobbying activities
in the French High Authority for Transparency in Public Life, in the
EU transparency register, and in the US Lobbying Disclosure
Act Registration.
For 2017 to 2020, the Group discloses membership fees towards
trade associations, business coalitions, and think-tanks to a large
extent in the sense that many organizations’ fees are not primarily
focusing on political campaigns or legislative activities but rather
on standardization activities and industry best practices. However,
in an effort of transparency, those have been included as they
could be referenced in policy development in the margin of their
activities. The following geographies are covered: Europe, the US,
China, and Russia, which are where the Group is mostly active
when it comes to policy and legislation.
Total contributions to such groups globally amounted €3.2 million in
2017, €2.6 million in 2018, €5.2 million in 2019, €5.9 million in 2020.
2021 data is not available at the time of writing as reporting on
these matters typically ends mid-year or end of year.
Largest contributions and expenditures concern two main
engagement topics:
• The first is “sustainable energy for all”: Schneider Electric
believes that energy management and energy efficiency are
critical to move towards a new energy landscape and therefore
supports a policy framework that unleashes the business and
climate opportunities related to the new energy landscape.
Contributions and expenditures on this topic amounted
€0.51 million in 2020 (€0.52 million in 2019) globally;
• The second is “powering the digital economy”: The Group
supports the emergence of digital economy to bring new
opportunities for businesses and people and therefore supports
a policy framework that facilitates the digital transformation
globally. Contributions and expenditures on this topic amounted
€0.47 million in 2020 (€0.27 million in 2019) globally.
2.2.4 Compliance with tax
regulations
Schneider Electric Group engages to comply with the international
and local tax regulations applicable in each of the countries in
which it operates, and to provide to the tax authorities with all the
information necessary to enable them to carry out their mission.
The tax policy of the Group can be consulted on our website
at se.com
2.2.5 High standards for the
quality and safety of our products
Quality is defined as “conformance to requirements or fitness for
use”. Constant customer satisfaction and quality change would
allow more proactive engagement to maximize our organization’s
ability to successfully achieve our overall business strategy,
purpose, and mission. Schneider Electric therefore understands
that delivering superior quality is the foundation of an ultimate
customer experience.
2.2.5.1 Risks and opportunities
Schneider Electric has more than 260,000 references produced
in 191 factories, spread across 46 countries around the world.
Operating in essential industries, product quality and safety is
a critical topic for the Group as product malfunctions or failures
could result in Schneider incurring liabilities for tangible, intangible
damages, or personal injuries. The failure of a product, system,
or solution may involve costs related to the product recall, result
in new development expenditure, and consume technical and
economic resources.
Schneider Electric’s products are also subject to multiple quality
and safety controls and regulations and are governed by both
national and supranational standards. New or more stringent
standards or regulations could result in capital investment or
costs of specific measures for compliance.
The above-mentioned costs could have a significant impact on
the profitability and cash equivalent of the Group. The business
reputation of Schneider Electric could also be negatively impacted.
Indeed, the Group has been impacted by several recalls recently,
more or less ranging from EUR 10 million to EUR 40 million,
depending on the case.
Risks identified by Schneider Electric in regard to product, project,
system quality, and offer reliability can be:
• Design quality concerns
• Manufacturing and Logistic issues
• Deficient product safety
• Software quality
• Brand labelling, Supplier & Supply mismanagement
The above risks have therefore convinced the Group to reinforce
the focus on Quality, Reliability and Robustness of its offers and
turn the above listed risks into opportunities for sustainability
and efficiency such as:
• More reliability and agility in our designs for sustainable offers
• More robustness in our manufacturing and logistics processes
• More digital in our partnerships and more circularity in our
supply chain to reduce our carbon footprint
2.2.5.2 Quality group policy
Schneider Electric, thanks to its “Issue to Prevention” process,
systematically analyses the root causes of any failures in a continuous
improvement approach. This process is split up into three clear steps:
1 The resolution – to solve the issue fast and well
2 The analysis – to identify severe and recurrent issues
3 The prevention – to fix the systemic root causes for good
From these analysis phases, Schneider Electric acknowledges
that half of the failures come from the design stage and the other
half from the manufacturing. Schneider has designed specific
programs to address both ends of these failures.
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There are directives and procedures, designed within dedicated
committees to protect our Customers:
• Quality Directive “Managing Customer Safety Risks”.
This directive requires the application of Schneider Electric’s
systematic processes to properly address potential offer safety
risks of Bodily Injury or Property Damage, discovered inside or
outside Schneider Electric. These processes are to be used for
all offers sold or manufactured by Schneider Electric.
• Quality Procedure “Offer Safety Review”. The overall
objective of offer safety is to reduce the risk arising from the use
of Schneider’s products, solutions, or services throughout their life
cycle. Offer safety reviews are conducted by Offer Safety Review
Committees and are used to focus attention on safety and help
ensure that our offers are safe when properly installed (based on
safety manual), maintained and used for their intended purpose
and other reasonably foreseeable use or misuse.
2.2.5.3 Governance
At Schneider Electric, the customer satisfaction and quality network
spreads all over the Group’s layers and functions to cover our
Global Supply Chain, our operations, and our lines of businesses.
Within such a complex organization, Schneider is engaged to
include quality into the Group culture and spread the customer
first mindset everywhere.
In this context, a new governance committee has been created
gathering heads of businesses, the Head of Customer Satisfaction
& Quality, the Chief Strategy & Sustainability Officer, EVP, Global
Supply Chain, and Schneider Digital to address the quality
transformation journey.
By engaging everyone on quality and customer satisfaction topics,
Schneider allows every employee to speak up for them, or have
customers and partners speak up.
It is the responsibility of the Group to ensure awareness-raising
to customers on potential health safety impacts when it comes to
product, services usage.
It is the policy of Schneider to only sell products, solutions, and
services which are safe when properly used for their intended
purpose or for other reasonably foreseeable purposes contributing
to the sustainability ambitions of the Group.
It is the obligation of Schneider to notify customers of safety issues
caused by its offer that may result in bodily injury or property
damage, and include instructions for immediate remedial actions,
even after the end of the useful life of the offer.
Schneider Electric benefits from a full set of quality directives
that require the application of systematic processes to properly
address potential offer safety issues discovered inside or outside
Schneider. These processes are to be used for all offers sold or
manufactured by Schneider Electric. The application of these
directives is evaluated periodically, and when deemed.
Schneider Electric’s guiding principles are as follows:
1 Customer First: Quality is the safety of our customers.
Schneider Electric prioritizes their interests and anticipates
their needs through customer journeys and customer personas
deployment everywhere in the Group. Schneider Electric follows
customer-centric rituals as quality is every customer’s right.
2 Offer Quality: Schneider Electric innovates with agility,
discipline, and good business sense throughout the offer’s
lifecycle, from creation to supply, all the way through
manufacturing, delivering, and operations and until services.
Schneider Electric delivers safe, reliable, and cybersecure
offers, for products, systems, and software, to secure
customers’ business continuity.
Intelligence: Schneider Electric runs strong analytics to convert
our customer experience data into actionable information,
enabling us to anticipate customer failures, prevent customer
complaints, and improve on all touch points. Schneider Electric
propagates this customer intelligence in all teams.
3
4 People: Schneider Electric empowers our teams to put
customer first, and to look for superior customer driven skills.
Schneider Electric removes internal barriers to always address
customer issues first. Quality is every employee’s responsibility.
5 Ultimate experience: Schneider Electric deeply analyzes
customer experience on all touch points, leverages it to prioritize
the investments, and tailors the sales tactics accordingly.
Customer experience is recognized in the Group as a strong
competitive advantage, to earn trust from customers and
develop business in a sustainable manner.
Customer Experience
Customer First
Quality and
Reliability by
Design
Customer Experience
Premium Quality
and Reliability
Ultimate
Experience
Prioritize customers’
needs and react quickly,
always going the extra
mile
Ensure business
continuity in protecting
people, assets and data
Deliver through robust
processes and digitized
end-to-end supply chain
React faster vs.
competitors with analytics
backbone and SE great
people
End to end offer quality
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2.2.5.4 Due diligence and results
The Group policy is supported by a robust Quality Management
System, which is improved continuously to fulfill expectations of
all relevant parties. It is in full alignment with our Trust Charter,
Schneider Electric’s Code of Conduct, as well as in compliance
with ISO 9001 standard. In 2021, 231 Schneider supply chain
sites were certified to ISO 9001.
• End-to-End Traceability to serialize, track, and trace
Schneider Electric’s products.
• Analytics & Optimization to leverage descriptive, predictive,
and prescriptive analytics on data generated to get actionable
insights to improve industrial quality.
• Digitization of Processes to digitize processes for
simplification, transparency, and robustness while capturing
data for analytics.
2.2.5.4.1 Reliability as a signature of
Schneider Electric
To ensure improvement in the area of design, the Group launched
in mid-2020, a dedicated program, ReeD (Reliability End To End
byDesign), to secure fundamentals and ensure full integration of
new customer expectations (from Quality to Reliability). It is the
obsession of the Group to ensure that “Reliability” is a signature
value of Schneider Electric branding:
• To deliver an outstanding customer satisfaction on products/
systems robustness
• To create and deploy an easy access to the relevant knowledge
This reliability program has been designed with R&D at its heart,
with huge interactions with all functions and businesses of
Schneider Electric:
• By ensuring that new offers development is focused
on customer promises.
• By animating mitigation plan until deviation is fixed.
• By ensuring Excellence in Offer Life Cycle changes.
• By transitioning from product quality to systems reliability.
• By combining people’s competency with robust digital
processes.
• By leveraging more digital tools to detect issues early and
reduce the number of bugs seen by customers.
• Reinforce risk analysis to ensure proper usage of our systems,
software, and products to prevent associated issues and risks.
2.2.5.4.2 Towards a sustainable quality excellence
for an ultimate customer experience
Thanks to the implementation of a robustness program, Schneider
Electric fosters a quality culture by boosting the basics to secure
cultural transformation towards Sustainable Quality Excellence for
premium customer experience through solid foundations such as
people, organization, robustness, and suppliers.
For full visibility all along the supply chain, the scope of action
has been extended outside and inside Schneider Electric. It is
the will of the group to move from a reactive to a predictive mode,
leveraging digital and analytics, and building an integration layer
that connects critical offers.
Six digital streams have been designed to achieve defined goals:
• Suppliers Process Monitoring to build with suppliers the
capabilities of real time process control.
• Manufacturing Process Monitoring to build with factories
the capabilities of real time process control.
• Logistics Process Monitoring to build the capability of real
time process control in Schneider Electric’s logistics operations.
2.2.5.4.3 Revalorising customer returns
When sustainability supports Customer Satisfaction, it translates
into new processes and policies to allow returns of adapted
products for reuse, remanufacture and refurbishment. The strong
collaboration between Sustainability, Global Supply Chain, Lines
of Business and Customer Satisfaction and Quality teams imagine
these new processes, enabling Schneider Electric to revalorize
customers returns through reuse of components or remanufacture
of new products in Local Adaptation Centers. The benefits can be
seen at customer satisfaction level: by producing and delivering
back order impacted by components in shortages, by serving
new customers orders and on Sustainability level with anticipation
of upcoming regulation compliance (Anti-Waste law), reducing
carbon footprint of our supply chain and reducing cost of non
quality due to product scrap.
Schneider Electric has an Offer Safety Alert (OSA) process to alert
the relevant Line of Business and other interested parties as soon
as it is suspected that customers’ health or property safety may
be put at risk by Schneider products, solutions, or projects. The
Offer Safety Alert Committee (OSAC) is a permanent corporate
committee that oversees and regulates the management of OSA.
Its mission is to ensure all OSA are managed with the due diligence
and urgency to minimize safety risks to customers. Its independent,
multi-discipline nature allows the OSAC to make decisions in our
customers’ best interest. As part of the Trust pillar of Schneider
Sustainability Essentials 2021-2025, Schneider is committed to
reduce by 50% the weight of scrap from safety units recalled
by 2025 (SSE #15).
Trust
SSE #15
50% reduction in scrap from
safety units recalled
In 2021 the Group recalled 14 products as approved by the
Offer Safety Alert Committee. The Customer Satisfaction
& Quality team reaches out to customers impacted by the
recall to arrange for product replacement. Investigation
will be conducted on products returned to Schneider’s
premises to determine the final root cause of the safety
issue. The returned product thereafter will be assessed on
its reusability and parts which could not be reused will be
scrapped according to the local environmental regulations.
Baseline
2021 Progress
2025 target
4,202
4,024
2,101
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• Performing reality checks via metrics, internal and external
reviews, cyber crisis drills, and vulnerability assessments to
our extended enterprise (including our acquired companies).
• Engaging cyber discussions with our customers, suppliers,
and partners to improve the resilience across the value chain.
• Partnering with leading companies, experts, and authorities
in the field of cybersecurity.
2.2.6.3 Proposing cybersecurity by design
2.
• Cybersecurity Framework and other recognized standards,
such as ISA/IEC 62443 and ISO 27000.
• Schneider Electric IoT-enabled EcoStruxure™ platform provides
our customers with end-to-end cybersecurity solutions and
services to protect a vast digital ecosystem.
As part of the Trust pillar of its 2021-2025 sustainability strategy,
Schneider Electric commits to be in the top 25% in external ratings
for Cybersecurity performance (SSE #16).
Trust
SSE #16
In the Top 25% in external ratings
for Cybersecurity performance
Schneider Electric continuously and consistently monitors
its posture with the support of cyber scoring agencies.
This scoring capability enables the Group to identify
and address vulnerabilities and weaknesses (along with
Intelligence-driven detections) around main risk categories
like Compromised Systems, Diligence, User Behavior and
Public Disclosures. Addressing findings that can negatively
impact overall cybersecurity rating and benchmarking our
performance against is aiding our maturity journey
on cybersecurity, from a performance, risk, and
communication perspective.
With this discipline, we measure the improvement of our
posture over years: from a baseline of 520 in January 2018,
we have now reached a score of 800 for the year 2021.
Evolution of our external rating since 2018 +54%.
Baseline
2021 Progress
2025 target
Top
25%
Top 25%
Top
25%
2.2.6 Digital trust and security
2.2.6.1 Cybersecurity context and stakes
Hyperconnectivity brings the promise of improved efficiency,
productivity, and safety, but, at the same time creates new
sources of risks.
At Schneider Electric, we take this threat very seriously. Our
commitment to Life is On begins with giving businesses and
citizens trust in the New Electric World. Doing so requires that
we not only help our customers to defend against these threats
through our products and services, but also maintain a strong
cybersecurity posture to avoid becoming a risk to them.
That is why cybersecurity and data protection are integral to
Schneider Electric’s business strategy and digital transformation
journey and is at the core of our Trust Charter. At all levels of
the Group, clear expectations for both individual and collective
behaviors are defined in a cybersecurity “Trust pillar.” In addition
to corporate commitment, our executives play a crucial role in
making cybersecurity a core tenet of our business and corporate
culture through the sponsorship of the Executive Committee and
oversight from the Board of Directors.
Our vision as a digital leader in energy management and industrial
automation is to raise the bar with our ecosystem. We seek to
embark partners, customers, and suppliers in our security posture.
This approach can be summarized in four steps:
1 Taking a risk-informed approach.
2 Managing cyber risks in depth to protect our customers,
our operations, and our critical infrastructures.
3 Establishing a Group-wide cybersecurity culture.
4 Partnering with our ecosystem across the value chain to
build trust and raise the defense level of the industry at large.
2.2.6.2 Reinforcing the Group’s
cybersecurity posture and that of its
ecosystem of partners and customers
Schneider Electric deploys several actions to reinforce its cyber
posture and that of its ecosystem of partners and customers:
• Holding a cyber-related business risk register to articulate
potential vulnerabilities/attacks and define remediation
activities.
Identifying and prioritizing high-value digital assets to the
Company’s operation.
Implementing cyber capabilities and digital locks around
people, processes, and technologies.
•
•
• Deploying general and dedicated awareness and training
programs on cybersecurity and data protection, with a strong
focus on high-risk population (customer-facing people, HR).
• Monitoring, detecting, responding, and learning from
cyber events.
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2.2.6.4 Training and awareness
2.2.7 Human rights
Online training on cybersecurity is mandatory for all employees.
This training helps employees to understand what cyber threats
they may face and how they should behave to be protected from
the risks. At the end of 2021, 99% of Schneider Electric employees
have completed this training. Specific employee categories
received mandatory training for risks linked to their activity.
Schneider Electric implemented the General Data Protection
Regulation (GDPR) requirements and specific training was
launched to present the major challenges of this regulation.
This training is mandatory for Schneider Electric employees
in Europe and key functions.
2.2.6.5 Data privacy and protection
Schneider Electric believes that the global implementation of a
digital strategy must reconcile economic objectives and respect
for fundamental human rights, including the right to protection
of personal data and privacy.
Schneider Electric establishes an organization, work streams,
policies, procedures, and controls required by the obligations
stemming from GDPR and data privacy and protection regulations,
including:
• Internal data privacy policy and Binding Corporate Rules (BCR).
• Training and awareness campaigns.
• Processing registers.
• Online privacy policy and privacy notices.
• Digital assets privacy assessment process.
• Data breach management and notification process.
• Maturity assessment and audit controls.
Schneider Electric has put in place a governance ecosystem
including a Group Data Protection Officer, a DPO network,
an implementation team, Data Privacy & Protection Champions
and Steercos.
In 2021, Schneider Electric has strengthened its processes for data
breach management, including specific training. It has deployed
several awareness programs including on International Data
Protection Day and on events management. Schneider Electric
has also been rolling out its Global Data Privacy & Protection
compliance approach beyond GDPR in China, the USA, and India
and in globalizing its standards. A new data protection addendum
has been deployed, including the new Standard Contractual
Clauses of the European Commission.
2.2.7.1 Risks and opportunities
Human rights, which have been a main priority of the Group for
a long time, have been growing in terms of risk exposure, due
to the increase of legal enforcement, geopolitical influence, and
new challenges raised by social, economic, and digital disruptions
such as forced labor, living wages, or migrant workers. Schneider
Electric has consistently focused on human rights and has the
ambition to remain an exemplary company on this subject.
Schneider Electric’s review of risks and opportunities related to
human rights covers fundamental human rights, decent working
conditions and equal opportunities.
Fundamental human rights
• Respect and dignity: healthy and respectful relations at work
between individuals and teams, and towards communities.
• No Child labor: defined by the International Labour
Organization (ILO) as work that deprives children of their
childhood, their potential, and their dignity, and that is harmful
to their physical and mental development.
• No Forced labor: defined by the ILO as all works or services for
which a person has not offered themselves voluntarily or willingly.
• Freedom of association: the right for workers to join
professional organizations that can defend their interests.
Decent working conditions
• Health and safety: potential incidents of various degrees
of severity related to workplace conditions.
• Security at work: physical or verbal violence that may originate
from internal or external threats.
• Working time and leave: ensuring employees work on a
schedule that respects legal time frames, rest periods, and
leave provisions, and are given the opportunity to balance
personal and professional time.
• Wages and benefits: paying employees a compensation that
is fair in view of their profile, skills, and qualifications.
• Harassment: continuous solicitation with the intention of
exhausting a person or forcing that person into unwanted
behavior.
• Data privacy: securing the data that individuals are placing into
the Company’s hands so that their privacy and freedom remain
safe and protected.
Equal opportunities
• Discrimination: creating a situation of inequality based on
an employee’s personal characteristic, at work or when hiring.
• Diversity and inclusion: risk of introducing several biases
that would result in an unbalanced representation of the society
inside the Company, and the exclusion of some groups or
communities from the Company.
• Development of competencies: giving employees the
opportunity to learn, maintain, and develop their skills
and abilities.
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In accordance with the 2017 French duty of vigilance law and its
ambition to behave as an exemplary company, Schneider Electric
implemented a specific vigilance plan. In 2021, Schneider reviewed
and updated its “duty of vigilance risk matrix” which highlights
human rights risks at its sites, as well as for suppliers, contractors,
and local communities. Several actions are implemented to mitigate
the highest identified risks in this matrix.
For more details, see section “2.2.9 Vigilance plan”, page 112. (cid:496)
2.2.7.2 Group policy
Schneider Electric’s human rights approach is articulated around
three principles.
1. Schneider is committed to fully respecting and applying laws
and regulations in all countries where it operates.
2. Schneider is committed to fostering and promoting human rights
throughout all its operational sites and subsidiaries worldwide.
3. Schneider wishes to support human rights beyond its borders,
leveraging its large network of partners and stakeholders to
promote the implementation of actions that will ensure the
respect of people’s rights.
Human rights in the Trust Charter
Through its Trust Charter, published in 2021, Schneider Electric is
taking a strong position on what values it stands for. Human rights
are fully embedded in this Trust Charter with guidance on the
following challenges:
• Create Equal Opportunities
• Harness the Power of All Generations
• Champion Well-Being and New Ways of Working
• Be S.A.F.E. First
• Reach the Highest Standards for Cybersecurity, Data Privacy,
and Protection
• Select and Manage Suppliers Responsibly
• Empower Local Communities
• Do not use “Conflict Minerals”
• Protect the Vulnerable from Abusive Working Conditions
• Respect the rights of Association, Representation, and
Social Dialogue
Global Human Rights Policy
Schneider Electric has formulated a specific Global Human Rights
Policy that defines its position on human rights. It is applicable
to all Schneider permanent or temporary employees working on
Group premises. It also aims to inspire external stakeholders. For
all human rights risks identified above, and based on the “Protect,
Respect, Remedy” principles, the policy provides a framework and
gives guidance to employees and teams on how to behave in their
daily operations or when facing a specific situation.
In 2021, Schneider Electric has started to work on the second
version of its Global Human Rights Policy, providing an update
notably with the Company’s commitments regarding migrant
workers and artificial intelligence. The full deployment is forecasted
for the second quarter of 2022 including e-learnings and trainings
modules.
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Alignment with international standards and frameworks
Schneider Electric adheres to the following principles or guidelines:
• The ILO Declaration on Fundamental Principles and Rights
at Work.
• The international human rights principles encompassed in
the Universal Declaration of Human Rights, which sets out
a common standard for all types of organization.
• The OECD Guidelines for Multinational Enterprises, which
formulate recommendations for companies, including for the
respect of human rights.
• Since 2003, Schneider Electric is part of the United Nations
Global Compact. In 2011, the United Nations issued the Guiding
Principles on Business and Human Rights which precisely
define the roles and responsibilities of States and businesses on
these matters. Schneider Electric is committed to these Guiding
Principles and to the United Nations Convention on the Rights of
the Child.
Specific policies
In addition to its Trust Charter and the Global Human Rights Policy,
Schneider Electric has implemented specific global policies to
provide guidance in the following areas:
Human resources
• Diversity & Inclusion Policy: applies to the entire Company and
covers all facets of diversity, as Schneider Electric wants to
mirror the communities in which the Group operates. This policy
is based on respect and dignity, which are the foundations for
fairness and equity.
• Family Leave Policy: provides a framework so that every
employee, whatever the country of employment, can take
some specific leave to enjoy some of life’s special moments
with their families.
• Anti-Harassment Policy: states Schneider Electric’s
commitments to have zero-tolerance for any kind of harassment
or offensive behavior.
• Flexibility at Work Policy: defines global Flexibility at Work
pathways, mandatory and recommended, to ensure consistency
and equitable treatment in the application of flexible work
arrangements across business units and countries for all eligible
Schneider Electric employees.
• Employee Benefits Policy: defines the global principles,
standards, and governance for the provision of employee
benefits at Schneider Electric.
Health and safety
• Health & Safety Policy: states the rules and guidelines
applicable to all Schneider Electric employees, and also
to specific populations performing specialized tasks. It is
supported by learning tools, and it is the subject of an annual
“Global Health & Safety Day”.
• Travel Policy: defines the rules applicable to travelers, including
the safety guidelines, procedures, and processes to ensure the
safety of Schneider business travelers at all times.
• Security Policy: defines the global scope of security applicable
to all entities, locations, and activities. This policy also
emphasizes the crucial role of managers to ensure security.
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2.2.7.3 Deployment of internal actions
Schneider Electric entities and subsidiaries are monitored through
the implementation of Key Internal Controls. These controls are
designed in co-ordination with the Internal Audit team and consist
in an annual self-assessment covering different operational topics.
Human rights and health and safety controls are included in this
annual review. The results of these assessments allow Schneider
Electric to benchmark the entities and to prioritize mitigation plans
when necessary.
Internal actions regarding respect and dignity, freedom of
association, health and safety, working time and leave, wages and
benefits, harassment, discrimination, diversity and inclusion, and
development of competencies are described in section “2.5 Great
People making Schneider Electric a great company”, page 164.
Schneider Electric is implementing training programs that are
specific to the policies listed above, to raise the level of awareness
of employees and give them advice on how to react or behave in
specific situations. Some of these trainings are mandatory, others
are part of recommended training paths. Such programs cover a
very wide area of topics, from anti-harassment to well-being, or
how to overcome bias and develop an inclusive culture. For more
details, see section 2.5.3 Talent attraction and development,
page 177.
Specifically, for health and safety, the Group maintains a follow-
up of safety metrics. Incidents are reviewed with management,
corrective actions are implemented when necessary, and
communications are sent to relevant teams throughout the
Company. When needed, a global safety alert can be launched to
draw all relevant employees’ attention. Schneider Electric organizes
a yearly “Global Health & Safety Day”, to inform all employees and
keep the level of awareness high on this key topic. For more details,
see section “Employee health and safety”, page 109.
2.2.7.4 Deployment of actions
towards suppliers
Human rights are included in the integration of the sustainable
purchases approach in the selection of new suppliers. Schneider
Electric uses a qualification process called Schneider Supplier
Quality Management (SSQM) to select new suppliers. It is based
on an evaluation questionnaire combined with on-site audits,
which include human rights and health and safety assessments.
Schneider Electric’s Supplier Code of Conduct states the
framework in which the Group wishes to operate with vendors.
Schneider Electric expects suppliers to respect the fundamental
principles on health, safety, people’s protection, and development
as defined in this document. Strategic suppliers are also
assessed through Ecovadis 3rd party, leveraging ISO26000 norm,
where Labor and Human rights is one of the four pillars of the
methodology.
Other actions are implemented through the Group’s vigilance plan.
For more details, see section “2.2.9 Vigilance plan”, page 112, and
section “2.2.11 Sustainable relations with suppliers”, page 117.
2.2.7.5 Deployment of actions
towards contractors
Schneider Electric has developed specific actions to mitigate
human rights risks related to project execution environment,
anywhere co-ordination with project contractors is necessary.
The Group is working on the evolution of the project decision-
making process to incorporate a risk assessment covering ESG
topics including human rights. The aim is to better calibrate the
mitigation measures and anticipate their implementation earlier
in the project process.
Schneider Electric is also conducting specific on-site audits for
contractors included into the Vigilance Supplier Audit program.
At the end of 2021, 13 subcontractors have been audited. For
more details, see section “2.2.10 Relations with project execution
contractors”, page 116.
2.2.7.6 Deployment of actions
towards local communities
Local communities are integrated in the vigilance risk matrix on two
types of locations: Schneider sites (factory or an office building)
and customer project sites (where the Group is operating as a
contractor or subcontractor for a customer). The risks for these
locations were assessed for the first time in 2020 in the vigilance
risk matrix and in 2021 Schneider Electric deepened the analysis
with a specific segmentation to select potential risks that may have
an impact on local communities. For more details, see section
“2.2.12 Vigilance with local communities”, page 124.
2.2.7.7 Partnerships and working groups
The Group has joined Entreprises pour les droits de l’Homme
(EDH – Businesses for Human Rights), a leading French association
of businesses providing its members with tools and advice on
implementing the United Nations Guiding Principles on Business
and Human Rights. In 2018, Schneider Electric also joined the
Responsible Business Alliance (RBA), a non-profit coalition of more
than 120 companies from the electronic, retail, automobile, and
leisure industries, for compliance with human rights and sharing the
best practices with regards to on-site auditing and monitoring of
suppliers’ activity, including forced-labor issues.
The Group also joined the Global Compact LEAD working group
“Decent Work in Global Supply Chain”. Schneider Electric co-leads
the G7 Business for Inclusive Growth (B4IG) coalition’s “Advancing
human rights in direct operations and supply chains” and “Building
inclusive workplaces” working groups.
As a result of the working group on advancing human rights, in
2020, B4IG members adopted a collective statement supporting
a European framework on mandatory human rights due diligence
and providing suggestions to be considered in legislation. In 2021,
the working group has implemented a toolbox gathering best
practices from companies’ members and put specific attention
on migrant workers and fair recruitment.
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Chapter 2 – Sustainable development
Strategic Report
2.2.8 Employee health
and safety
2.2.8.1 Risks and opportunities
At Schneider Electric, risk assessments and strategic action
plans are performed, based on the primary risks associated
with the workplaces. These plans include opportunities to reduce
serious and fatal incidents, maintain legal compliance, provide safe
working conditions, and encourage employee engagement in the
safety processes throughout the organization.
The plans are built on the Top 5 Hazards found in every aspect
of the Company, which include driving, electrical, falls, powered
industrial trucks (PIT), and fixed powered machines (FPM).
Injuries based on the Top 5 Hazards since 2018
…to enhance our brand image and contribute to world
sustainability through employees’ behavior and innovation.
In 2021, as part of its improvement efforts, Schneider Electric
successfully achieved re-certification for ISO 45001 Safety
Management System as part a fully integrated management system
certified through Bureau Veritas. This certification is in place for
over 200 locations, including 176 manufacturing and logistics sites
and the central office.
2.2.8.2.2 EHS strategy
The Schneider Electric global safety strategy includes “S.A.F.E.
First” at the core. Developed as a personal reminder to pause
and reflect on safety before beginning any task, the program
empowers employees to perform S.A.F.E. First checks and if
“Unsafe? We stop work”.
2.
20%
32%
5%
10%
14%
19%
2.2.8.2 Group policy
Electrical
Falls
Machines
Road/Driving
Powered Ind Truck
Other
2.2.8.2.1 Safety is a value
Safety is a value on which Schneider Electric will not compromise,
and this applies to Schneider Electric employees, customers,
partners, and those working on their behalf. Safety is a pillar of the
Trust Charter and it reinforces the Group’s commitment to provide
a healthy and secure workplace for all. In addition, Schneider
Electric’s ambition is to achieve the highest standards of safety
excellence. Schneider Electric is committed to invest in its people
and its workplace as stated in its Group Safety and Occupational
Health Policy, stating “the ambition is to be the standard for safety
excellence worldwide.”
The Safety and Occupational Health Policy establishes the
commitment that Schneider Electric has made to maintaining
safe and healthy working conditions, to fulfil legal obligations, to
engage employees in safety processes, and to continually improve
the health and safety program. It is the cornerstone of its certified
Safety Management System. The policy includes the Group’s
Health and Safety Vision and Mission as such:
Technical
qualifications
and safe
behaviours
G u i d i ng principles
We report
opportunities
Unsafe?
We stop
work
We resolve
and share
solutions
Operational
discipline
and execution
We are
qualified
Driving
We care for
each other
Powered
Industrial
Trucks
S.A.F.E.
First
Electrical
Machines
Falls
Top 5 haz a r d s
Safe
workplace
for everyone
Leading
as role
models
To drive Sustainable Safety Results, four strategic priorities
have been defined and embedded in the “S.A.F.E. First” global
safety strategy:
• Leading as a role model
• Technical qualifications and safe behaviors
• Operational discipline and execution
• Safe workplace for everyone
Vision:
…to be the standard of excellence and the benchmark for health
and safety within the industry.
The Schneider Electric Top 5 Hazards are constantly
being enhanced in terms of safety standards, training,
and communication.
Mission:
…to protect occupational health and safety of employees,
customers, contractors, and visitors, in the Group’s locations,
at offsite locations, and while travelling…
…to preserve Company license to operate through robust EHS
compliance and risk management…
…to provide employees safe, pleasant, and efficient workplaces
for enhanced well-being and effectiveness…
The global safety strategy also takes into consideration the five
guiding principles that help to determine actions to be taken as
part of a work task. They are:
• Ensuring employees are qualified for the work task before
performing work.
• Empowering employees to stop work if unsafe.
• Reporting opportunities for improvement.
• Resolving and sharing solutions to problems.
• Encouraging employees to care about their own safety
and the safety of their co-workers and customers.
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Chapter 2 – Sustainable development
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Continuing from the efforts in 2020, Schneider Electric has
taken further preventive measures to mitigate the risk of employee
exposure to the Novel Coronavirus (COVID-19), such as restrictions
on business travel, and limiting local visitors. Schneider Electric
has developed various Health and Safety guidance documents,
such as dealing with suspected COVID-19 case, safe operating
guidelines, vaccination guidance, and procedures to support
our communities facing the challenge of setting a “new normal”
workplace.
2.2.8.3 Due diligence and results
2.2.8.3.1 Annual EHS Assessments
To ensure successful implementation of the strategy, annual
Environmental, Health, and Safety (EHS) Assessments are
performed in industrial sites worldwide. The EHS Assessment is a
global process in which a site is evaluated to identify opportunities
and to recognize excellence. At regional and global levels, EHS
teams consolidate site results to identify and prioritize actions to
support site performance, training needs, and cross-site mentoring
opportunities. The EHS Assessment uses the same structure as
the Schneider Performance System (SPS) (Company performance
standardization tool) for simplified user-adoption and to enable
further alignment to the SPS.
2.2.8.3.2 Global Safety Culture Survey
As part of our safety strategy, Schneider Electric has launched its
first Global Safety Culture Survey in 2021 to measure employee
safety engagement, identify further safety opportunities, and
develop future safety initiatives. The response rate of 77% of
employees surveyed, showed solid engagement. The survey
results shows that 87% of employees are positive about the
Safety Culture at their site.
2.2.8.3.3 Safety awareness and communication
Communication is important to ensure coordinated and
standardized program implementation. This is evident through
quarterly safety campaigns, safety alerts, workplace standards,
and employee engagement to identify safety opportunities.
These communication programs are deeply embedded into
the safety culture at Schneider Electric. The Group also monitors
proactive leading indicators, including safety employee
engagement, which tracks the rate of employee participation
in safety opportunities, and the effective application of the EHS
Assessment tool. Safety opportunities reporting is well established
with over 300,000 safety opportunities reported each year. The
focus in 2022 will be to translate these opportunities into risk
reduction actions.
Training on hazards and their associated risks is an important
part of Schneider Electric employee expectations. There are 258
safety-related topics, housed in the My Learning Link database.
Schneider Electric employees have completed an average of
4.76 hours of safety training in 2021.
Each quarter, the Group focuses on a key safety subject to bring
attention to both workplace and human factors, that have caused
serious injuries at Schneider Electric. The campaign includes a
dedicated web-portal to access tools, videos, training materials,
posters, and leader-led topics to further promote the importance of
safety worldwide. The four quarterly safety campaigns culminated
with the annual “Global Health & Safety Day” celebration held
on October 18, 2021. During “Global Health & Safety Day” we
emphasized the importance of “S.A.F.E. First, we all have a role to
play”, through webinars, and persona posters that each Schneider
Electric employee can relate to. A special emphasis was placed
on the importance of performing “S.A.F.E. First Checks” to ensure
that each employee is mentally focused and physically well before
starting any new task.
2.2.8.3.4 Results summary
Schneider Electric has been very successful in meeting goals for
the reduction of workplace injuries and illnesses, including those
injuries resulting in lost time days. Over the past 10 years, the
Group has reduced the frequency of incidents (Medical Incident
Rate, MIR) by 81% and the severity of incidents (Lost Time Incident
Rate, LTIR) by 77%. 2021 has shown an MIR increase of 12%
versus 2020, with a corresponding LTIR performance increase by
6%. 2020 excellent performance aside, impacted positively by the
pandemic, the 2021 overall safety performance remains very much
aligned with the last 10 years improvement trend.
The MIR is the number of work incidents requiring medical
treatment per million hours worked (i.e. average hours of 500
employees working for one calendar year). Work related injuries
and occupational illnesses requiring medical treatment are
included. The Occupational Illness Rate is tracked independently
for benchmarking purposes and also to drive continuous
improvement. The Occupational Illness Rate is 2.6% of our total
medical incidents (MIR) in 2021.
2.2.8.3.5 Recognition and awards
Schneider Electric was the recipient of several awards for
occupational health and safety programs in 2021. This includes
163 Occupational Excellence Achievement Awards from the
National Safety Council (NSC) for safety performance that was 50%
or better than their industry peer group. In addition, 5 Schneider
Electric operations were recognized with the Industry Leader
Awards in 2021 for outstanding safety achievements for the top 5%
of companies that qualified for the NSC Occupational Excellence
Achievement Award.
In Russia, Mari EI republic, Schneider Electric Potencial
manufacturing site was awarded 1st place in the governmental
nomination “prevention of working places injuries and occupational
diseases”. Schneider Electric Egypt Distribution Center has been
awarded a “prestigious International Safety Award” from the
British Safety Council.
Schneider Electric UK&I received 3 RoSPA Awards (The Royal
Society Health & Safety Performance Awards) during 2021: Gold
award for demonstrating well developed occupational health and
safety management systems, for managing occupational road risk
and a winner award for demonstrating excellence in environmental
as well as health and safety management.
Multiple recognitions from different geographies were awarded
to Schneider Electric for the pandemic COVID-19 management,
highlighting Schneider Electric leadership and commitment
towards employees Safety.
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Employee engagement = Safety opportunities
reported including near-miss and safety ideas
Employee
engagement
2.42
52%
Improvement versus 2019
(2019 = 1.59)
MIR = Medical Incident Rate.
Work-related medical incidents.
MIR
18%
Improvement versus 2019
0.65
(2019 = 0.79)
LTIR = Lost Time Incident Rate.
Captures the number of work-related incidents
requiring time off work (>24hrs)
LTIR
0.33
11%
Better than target
(Target = 0.37)
2.
Chapter 2 – Sustainable development
Strategic Report
Employee engagement trend
2
4
.
2
2
1
.
2
9
5
.
1
2019
2020
2021
MIR historical trend
4
4
.
3
5
1
.
1
4
9
.
0
9
7
.
0
8
5
.
0
5
6
.
0
8
3
.
0
2012
2017
2018
2019
2020
2021
2025 target
LTIR historical trend
2
4
.
1
2
6
.
0
6
4
.
0
9
3
.
0
2
3
.
0
3
3
.
0
7
3
.
0
2012
2017
2018
2019
2020
2021
Target
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Chapter 2 – Sustainable development
2.2 Driving responsible conduct of business with the Trust Charter
2.2.8.3.6 Future evolution of safety at
Schneider Electric
Safety is a never-ending journey towards excellence. Schneider
Electric goals and initiatives are to be the standard in safety
excellence worldwide. This pursuit begins with the Group
employees, starting with leaders. Safety is leadership led, and the
Group’s ambition is to progress the entire community towards full
empowerment as defined in the “S.A.F.E. First” Human Factors
training, Safety Culture Assessment, and leadership action plans,
which were developed in 2020 and implemented in 2021.
In 2022, Safety Competency will be enhanced by strengthening
our Health and Safety subject matter expert program “EDISON”
in each and every region. They will contribute to our 2022 Global
Health & Safety program deployment.
While our quarterly health and safety spotlights will re-enforce the
“S.A.F.E. First” pillars, our safety persona will be developed further
to ensure employees understand and adopt “S.A.F.E First, we all
have a role to play”.
In 2020, Schneider set a 5 years safety target to reduce the Medical
Incident rate to 0.38 based on 2019 MIR baseline performance.
2019 was selected as baseline year to mitigate COVID-19 impacts.
The MIR performance has reduced from the baseline of 0.79 in
2019 to the result of 0.65 in 2021, which represents 34% of the
5-year target. 2021 shows an increase of MIR versus 2020, which
was an exceptional performance, impacted positively by the
pandemic. The employee safety engagement further improved
in 2021 with 2.42 safety opportunities reported by employee, an
increase by 23% versus 2020 and by 52% versus 2019.
Trust
SSE #14
0.38 or below Medical Incident Rate
In Schneider Electric, we believe that all accidents are
preventable, and Schneider Electric uses the MIR indicator
to measure progress made against this target. Schneider
Electric 2025 target of 0.38 MIR represents 1 accident
per 1,450 employees per year, which is a big step towards
Schneider Electric’s ambition of 0 accidents. Every accident
that Schneider Electric avoids, prevents pain and suffering
that Schneider Electric employees would have experienced.
This KPI drives many Safety programs in Schneider Electric.
For example, in 2021, after 3 years of Machine Safety
program deployment, Schneider Electric have reduced
machine related Medical Incidents to 3 in 2021, a reduction
by 91%.
Baseline
2021 Progress
2025 target
0.79
0.65
0.38
2.2.9 Vigilance plan
2.2.9.1 Context
Schneider Electric seeks to be a role model in its interactions with
customers, partners, suppliers, and communities when it comes to
ethics and the respect and promotion of human rights. The Group
strives to have a positive impact on the planet and the environment
by contributing to finding solutions to limit climate change.
The Group’s vigilance plan reflects this ambition. It also complies
with the provisions of 2017 French law on Corporate duty of
vigilance. The plan includes:
• A risk analysis specific to vigilance: risks that Schneider Electric
poses on the ecosystem and environment;
• A review of the key actions implemented to remediate or mitigate
these risks;
• An alert system;
• Governance specific to vigilance.
In this Registration document, Schneider Electric reviews the risk
matrix analysis and some of the actions to mitigate these risks are
described. When necessary, the reader will be directed to other
sections of the report to get relevant and detailed information. For
more comprehensive and complete information, the full vigilance
plan of the Group is available as a standalone document and can
be downloaded from Schneider Electric’s website at se.com
2.2.9.2 Evaluation of the main risks
towards Schneider Electric’s environment
2.2.9.2.1 Methodology
Schneider Electric developed a specific risk matrix for the
implementation of its vigilance plan which is reviewed annually.
The methodology is consistent with other risk evaluations
maintained at Group level but focuses specifically on the risks
posed by Schneider on its environment and ecosystem.
In order to enhance the existing risk matrix and cover a more
comprehensive scope, in 2020, a review of the methodology
for the risk matrix was done with an external consultant, Ksapa.
This review led to a harmonization of the definitions, a sharper
granularity of risk categories, a reorganization of the supplier
categories, and a focus on local communities. In 2021, Schneider
went further to deepen its analysis on local communities
specifically. Other than this point, no further modifications were
brought to the risk matrix or the methodology for its annual update.
The scope of work covered is Schneider Electric and its
subsidiaries, joint ventures, suppliers, and subcontractors.
2.2.9.2.2 Risk categories
Four risk categories have been identified: human rights,
environment, business conduct, and offer safety and cybersecurity.
In order to be able to make a granular assessment of the risk level
based on the nature of that risk and the magnitude of its impact on
Schneider Electric’s ecosystem, each category has been divided
into specific risk areas.
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Human rights:
• Decent workplace;
• Health and safety.
Environment:
• Pollution and specific substances management;
• Waste and circularity;
• Energy, CO2, and GHG.
Business conduct:
• Ethical business conduct;
• Alert system, protection, and non-retaliation.
Offer safety and cybersecurity:
• Offer safety;
• Cybersecurity and data privacy.
2.2.9.2.3 Risk location
The Group has studied four areas where risks may occur:
• Schneider Electric sites: they have been segmented based
on categories that present a specific level of risk. Employees
with frequent travels (sales, field services, travelers, audit,
top management) have been assessed separately;
Chapter 2 – Sustainable development
Strategic Report
2.2.9.2.5 Key findings
In 2021, the Group conducted an update of the risk mapping with
key internal experts. No changes were brought to the methodology
compared to last year, and the structure of our risk matrix, although
it can be further improved and refined, allows to capture the main
natures of risk from a Duty of Vigilance point of view.
Overview of the main risks and their evolution:
• Schneider Electric sites: The COVID-19 pandemic, its social,
business, and economic consequences has put significant
pressure on teams and individuals. Although the first waves
of the pandemic have been weathered, several countries
like India or South Africa for example were severely hit. As
a result, while some countries were going out of lockdowns
and recovering “normal” ways of working, some others were
going into confinement and restrictions. Operations were thus
disrupted, and the global supply chain had to deal with such
complexity country by country. Teams have been resilient, and
supported with the implementation of flexible and adaptive ways
of working, but the overall long term impact of the situation,
although complex to measure, is of fatigue. In this context,
measuring the evolution of mental health and psycho-social
risks over time is necessary.
2.
• Suppliers: the level of risk differs based on the type of process
• Suppliers: Here also, the impact of COVID-19 is probably
and technologies used, and the Group has therefore segmented
the analysis by component category of purchase. The risk level
is an average assessment. The geographical location is
factored in when selecting suppliers for the audit plan;
• Contractors: when implementing a customer project, like
building a large electrical system at a customer’s site,
Schneider Electric is working with contractors, leveraging their
expertise (civil work, electrical contracting, etc.). This “off-site”
project work generates a specific level of risk for contractors.
A separate “off-site and projects execution” category for
contractors has therefore been defined for the assessment.
• Local Communities: Schneider Electric has identified two
distinct segments: communities located around Schneider
Electric sites and communities located around customer
projects sites. Communities have been assessed against three
risk categories; human rights, environment, and business ethics.
2.2.9.2.4 Risk evaluation and scale
The evaluation combines the probability of occurrence of the risk,
with the seriousness of consequences from the risk. This is an
evaluation of risk before impact of mitigation actions. After taking
into consideration the impact of these mitigation actions, the level
of risk may be significantly reduced. Risks are assessed on the
following scale:
1 – Non-existent; 2 – Low; 3 – Medium; 4 – High; 5 – Very high.
In this 2021 risk assessment, no “Very high” risk levels were
identified.
significant, but the measurement of its consequences over our
supply chain will take longer. Our observations are that there
has been an increase of pressure in fields such as health and
safety (including mental health) due to tensions in the supply
chain, and some deterioration of the human rights situation in
some geographic areas.
• Contractors: As in 2020, the 2021 assessment confirmed
external off-site contractors as one area that needs special
attention. This is due to the specific nature of project work
(civil work, installation, etc.) that implies high labor activity
on construction sites. Projects have been under specific
pressure, as supply chain disruptions created some periods
of slow-down, or even complete halt of on-site works, followed
by intense periods of catch-up. This situation increased risks
linked to health & safety and human rights, probably augmented
by social consequences among the population of contracted
workers, and workers working abroad from their own country.
• Communities: the assessment work is still ongoing and
therefore conclusions are still preliminary. Overall, it seems that
communities located around Schneider Electric sites, at least
for the largest sites, are not affected, or only marginally affected
by Schneider Electric’s presence. This is mostly due to the
fact that Schneider Electric’s sites are located in large, already
structured industrial areas, or in cities. In regards to customer
projects, the assessment shows that there may be some impact
on communities. Schneider Electric is usually just one of the
suppliers to the customer project, and the impacts are therefore
highly variable and linked to the industrial profile of the end-
customer. A more detailed evaluation is in progress.
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Chapter 2 – Sustainable development
2.2 Driving responsible conduct of business with the Trust Charter
Schneider Electric 2021 vigilance risk matrix
The risk matrix below summarizes Schneider Electric’s risk analysis:
Schneider Electric sites
Suppliers
Contractors Communities
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Human rights
Decent
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Environment
Pollution and
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circularity
Energy CO2
and GHG
Business
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conduct
Offer
safety and
cybersecurity
Alert system,
protection and
non-retaliation
Offer safety
Cybersecurity
and data privacy
2.2.9.3 Governance
The plan is governed by the Duty of Vigilance Committee, set
up in 2017. The steering committee meets twice a year in normal
circumstances. Overall, since its inception, 13 Committee meetings
have been held (five in 2017, two in 2018, 2019, 2020 and 2021).
The Committee’s objective is to provide a discussion on strategic
orientation and prioritize initiatives and the resources allocated to
their implementation. This Committee also reviews the actions in
progress and their results and defines decisions on next steps
for action.
Composition of the Duty of Vigilance Committee
Chairman:
Executive Vice-President, Global Supply Chain
(Executive Committee member)
Management:
Senior Vice-President (SVP), Sustainability
SVP, Corporate Citizenship
SVP, Global Safety and Environment
SVP, Global Procurement
SVP Sustainable Supply Chain & Safety
SVP, Global Customer Projects
SVP, Ethics and Responsibility
SVP, Human Resources
SVP, Ethics and Compliance
Experts:
Environment Performance Measurement
Sustainable Procurement
Human Rights
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2.2.9.4 Mitigation actions
The following measures are the main actions implemented to mitigate the highest risks identified in the vigilance risk matrix.
Key Topics
Risk Categories
Policies implemented and Mitigation Actions
Pages
Schneider Electric sites
Human rights
Decent
workplace
Health and
Safety
Environment
Pollution and
specific substances
management
Waste and
circularity
Energy CO2
and GHG
See section “2.2.7 Human Rights” (i) and section “2.2.8 Employee health and safety
page 109” (ii) for more details on the deployment of health, safety, and human rights
actions on Schneider Electric sites. It covers, notably:
• Schneider Electric’s employees’ safety;
• Human rights and people development policies;
• Well-being programs.
(i) page 106;
(ii) page 109
2.
See section “2.3 Acting for a climate positive world”, for more details on the
deployment of environmental actions on Schneider’s sites. It covers, notably:
• Certification of its sites to ISO standards;
• Schneider Electric specific programs to reduce CO2 emissions;
• Reduction of SF6 emissions;
• Schneider Energy Action program for energy efficiency;
• Reduction of waste and increased circularity.
page 126
Business
Ethics
Ethical Business
Conduct
Alert system,
protection and
non-retaliation
See section “2.2.2 Ethics and Compliance” (i) and section “2.2.3 Zero-tolerance
for corruption” (ii) for more details on the deployment of business ethics actions
on Schneider Electric sites. It covers, notably:
• Internal and external alert systems;
• Third-party relationship management;
• Specific anti-corruption actions.
(i) page 95;
(ii) page 101
Offer safety
Offer safety
Cybersecurity
and Data
privacy
Cybersecurity
Data privacy
Suppliers
Suppliers
Supplier vigilance
See section “2.2.5 High standards for the quality and safety of our products”
for more details on the deployment of offer safety actions. It covers, notably:
• Sustainability Quality Excellence;
• Reliability.
See section “2.2.6 Digital trust and security” for more details on the deployment
of data privacy and cybersecurity actions. It covers, notably:
• Cybersecurity by design approach;
• Personal data protection;
• Training and awareness on cybersecurity.
See section “2.2.11 Sustainable relations with suppliers” for more details on the
deployment of actions towards Schneider Electric’s suppliers. It covers notably:
• Continuous Improvement process based on ISO 26000 standards;
• Decent Work program for strategic suppliers;
• Vigilance plan for suppliers;
• Zero Carbon Project.
Subcontractors
Sub-
contractors
Subcontractors
vigilance
Local Communities
Local
communities
Around Schneider
Electric sites
Around customer
projects sites
See section “2.2.10 Relations with project execution contractors” for more details on
the deployment of actions towards Schneider Electric’s subcontractors (or solution
suppliers). It covers notably:
• Integration of ESG into the project decision making;
• Vigilance plan for project contractors.
See section “2.2.12 Vigilance with local communities” for more details on the
deployment of health, safety, and human rights actions around Schneider Electric
and customer projects sites. It covers, notably:
• Risk mitigation around Schneider Electric sites;
• Risk mitigation around customer project sites.
page 102
page 105
page 117
page 116
page 124
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Chapter 2 – Sustainable development
2.2 Driving responsible conduct of business with the Trust Charter
2.2.10 Relations with project
execution contractors
2.2.10.1 Project execution environment
Schneider Electric’s products and solutions are usually combined
into larger systems such as electricity distribution and energy
management in a building, or production process automation
in a factory. The build-up of such systems can be complex
and typically involves several different parties before they are
commissioned by end customers. For Schneider Electric, there are
two options: to sell components through channel partners who take
the responsibility to build and deliver the system; or to build and
deliver the system directly for the end customer, as a project. This
second option requires coordinating several project contractors
(panel manufacturers, system integrators, building contractors,
etc.), usually on the premises of the end customer. The common
characteristics of these projects are that they happen primarily
off-site (mostly on customer premises, existing or future), and they
involve several different parties, global or local, bringing their
specific added value. Each project is specific, in its size, duration,
and location. Therefore, the relations with contractors are specific
to a contract, and not necessarily recurrent. In 2021, Schneider
Electric worked with more than 9,900 active solution suppliers
in the Group’s portfolio (with a spend of over €1B).
2.2.10.2 Risks and opportunities
In the frame of the “Duty of Vigilance” plan, specific risks have
been identified. For more details, please refer to page 112.
Human Rights: as project sites are located in countries where
Schneider may not be present, and involve independent
subcontractors, there is a risk that the Schneider Electric-
recommended policies in terms of health and safety, as well as
decent workplace, may not be properly implemented. The main
risks are physical accidents and injuries, or the improper treatment
of employees (wages and salaries, resting time), especially
temporary and/or foreign employees.
Business Ethics: Projects that are conducted in countries
where business ethics standards are insufficient may be subject
to specific risks such as corruption, bribery, or pressures of a
similar nature.
Cybersecurity: Some subcontractors may have digital interactions
with the end customer and Schneider at the same time. Therefore,
their level of cybersecurity and data protection may create some
risks for the project and the final customer.
A solid management of Schneider Electric’s subcontractors allows
to reduce the risks of incidents or accidents on site, and therefore
protects workers, the communities living around the project site,
and the final customer’s employees and assets.
2.2.10.3 Group policy
As part of its Duty of Vigilance program, Schneider Electric has
deployed a policy of identification of risky subcontractors and
implemented an on-site audit program. The results are described
in the “Due diligence and results” section below.
In 2021, to further anticipate and reinforce its risk mitigation
measures, the Group introduced an evolution of its project
decision-making process. The aim is to include a risk assessment
of human rights and environmental impacts at all key milestones
of the process, and to select the mitigation measures that will allow
to reduce these risks. During the execution of the project, a regular
review of the efficiency and effectiveness of these measures will be
conducted. This process evolution will be effectively applied
to project reviews from early 2022.
2.2.10.4 Due diligence and results
Schneider Electric operates with a pool of project contractors (or
“solution suppliers”) from more than 9,900 companies. Not all of
them may be active during a year. In the course of its supplier risk
mapping exercise, Schneider Electric has identified approximately
200+ solution suppliers categorized as “high risk”. Since 2018, 62
suppliers have already been audited, slightly below the ambition
due to 2021 slow down as a consequence of COVID-19. The
13 audits on solution suppliers performed in 2021 have allowed
Schneider to raise 157 non-conformities. Out of these non-
conformances, 11 are assessed as “top priority”.
The most recurring non-conformities with high risk solution
contractors are: need of adequate and effective fire emergency
evacuation and response drills, improvement of on-site security
measures to protect workers (safety hazards, permit and testing
reports for occupational injury and illness), identify correctly
effective emergency.
In addition to these non-conformities, specific risks related to local
contract negotiation and relations with local authorities may occur.
Actions following non-conformities are the same as with other
suppliers (re-audits, trainings, workshops). Specific measures
are implemented for this project environment: Schneider Electric
implements regular reviews of safety incidents on customers’ sites,
involving the Global Safety team and the Project Management
leadership. The Group also reinforced training on Anti-Corruption
and Business Agent policies for its employees involved in
commercial negotiations. The project follow-up with contractors
and the selection processes for contractors has been adapted to
ensure vigilance topics are considered early in the project stage.
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2.2.11 Sustainable relations
with suppliers
2.2.11.1 Risks and opportunities
Schneider Electric has been involved in an ambitious approach to
include sustainable development challenges in supplier selection
and working processes. This approach is all the more important
as Schneider Electric’s procurement volume represents more
than EUR 12 billion – and more than 52,000 suppliers.
With a complex global supply chain, there are some potential
risks that Schneider Electric is committed to mitigating in the
areas of health and safety, human rights, ethics, the environment,
and sustainable development. Proactively managing upstream
supplier risks, through Schneider Electric’s Supplier Vigilance, but
also driving ambitious Sustainable Development programs and
processes, also improves the Group’s reputation and shareholder
value, and greatly lowers legislative and business risks.
By working closely with its suppliers to develop their maturity in
integrating sustainability, Schneider Electric further de-risks and
improves its competitive advantage by continually improving the
global supply chain. Key opportunities of collaboration with our
partners includes: climate action, circular supply chain models,
and socially inclusive workplaces.
2.2.11.2 Risk identification and management
Schneider Electric has a risk management system to identify
and manage critical suppliers, and uses a tool, Supplier Risk
Management (SRIM), to capture risks and ensure the follow-up
of identified cases with an extended source.
The Group has also been performing sustainability risk
assessments with its own procurement specialists, supported by
its Schneider Supplier Quality Management (SSQM) processes
and ISO 26000 assessments for strategic suppliers.
In addition, Schneider Electric is reinforcing its sustainability risk
assessment by geography and type of activity as part of its
vigilance plan.
Schneider Electric has launched the Trust Line, a professional
alert system for stakeholders to escalate any violation of its Code
of Conduct/ethics/responsible behavior along the Supply Chain.
2.2.11.3 Group policy
Since 2004, the Group has been encouraging its suppliers
to commit to sustainable development initiatives. Since 2012,
Schneider Electric has been continually improving as well
mandating its strategic suppliers to make progress according
to the ISO 26000 guidelines.
This approach is supported by the General Procurement Terms
and Conditions which all suppliers must abide by: each supplier
undertakes to apply the principles and guidelines of the ISO 26000,
the rules defined in the ISO 14001 standard. Sustainability is
considered as a key selection criteria.
2.
Chapter 2 – Sustainable development
Strategic Report
Suppliers also commit to respect all national legislation /
regulations, REACH regulation, RoHS directives, and, more
generally, the laws and regulations relating to the prohibition
or restriction of use of certain products or substances. Lastly,
suppliers are expected to report the presence and country of
origin of any and all conflict minerals supplies in accordance
with the requirements of the US Dodd-Frank Act of 2010 known
as the “Conflict Minerals” law. In this context, Schneider Electric
has a “conflict-free” objective.
Schneider Electric publishes a charter for its suppliers, called
the Supplier Guide Book, initially launched in 2016. The first
section of this articulates expectations for suppliers on sustainable
development in the following five areas: environment, fair and
ethical business practices, sustainable procurement, labor
practices, and human rights. In 2021, the Group adopted a new,
revised Supplier Code of Conduct (SCoC), which aligned with the
new sustainability commitments of the Group and laid out the most
fundamental requirements that need to be met by the suppliers.
The key focal areas include environment (climate action, circularity),
human rights and decent working conditions, occupational health
and safety, fair business practices, grievance redressal, inspection
and corrective actions, sustainable procurement, and access
to remedy.
2.2.11.4 Integration of sustainability
criteria in the selection of new suppliers
Schneider Electric uses a qualification process called Supplier
Approval Module (SAM) to qualify new and legacy suppliers.
It is based on an auto-evaluation questionnaire combined with
on-site audits by Schneider Electric certified auditors.
In 2021, to reinforce the assessment on Labor, Ethics, Environment,
and Health & Safety, a new auto-evaluation questionnaire has been
introduced as part of the qualification process for new suppliers.
This self-assessment is the first qualification process step, and
only potential new suppliers with approved self-assessments can
be chosen to complete the qualification process with the SAM
functional audits.
The SAM functional audits include different sections on
sustainability as a criterion of evaluation, and these sections
represent about 15% of the supplier evaluation criteria. The most
relevant areas identified are:
• People and social responsibility: training, human rights,
ISO 26000, and health and safety.
• Environment: ISO 14001 and energy savings, REACH and
RoHS, and conflict minerals.
In 2021 Schneider Electric included SAM in the global Schneider
Supplier Portal – Supplier Relationship Management (SSP-SRM
tool). Due to this capability, SAM results are available for the
Global Supply Chain community, and all newly assessed suppliers
have their action plan registered in a central database, available
to all in real time, making supplier interactions more fluid. These
are tracked by Schneider Electric supplier leaders on a monthly
or pluri-annual basis depending on the severity of the risks and
classification of the supplier.
Schneider Electric completed 740 qualification processes in 2021,
including new and legacy suppliers.
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Chapter 2 – Sustainable development
2.2 Driving responsible conduct of business with the Trust Charter
Schneider Electric’s sustainable procurement strategy
When it comes to procurement, Sustainability is at the very heart of our mission. To streamline global action, we have implemented a
Sustainable Procurement Strategy, which was the result of a multi-stakeholder consultation process. This strategy is focused on a vision
of collaboration with our global supplier network to build an inclusive and carbon neutral world, where ecosystems and resources are
preserved, and people get access to economic opportunities and decent lives.
The strategy rests on the foundation of robust procurement processes, that embed sustainability criteria at various stages and de-risk
the operations by adhering to the relevant legal and prevailing norms.
Sustainable
Procurement
Vision
Collaborate with
global supplier
network for an
inclusive and
carbon neutral
world, where
ecosystems
and resources
are preserved,
and people
get access
to economic
opportunities
and decent lives
Supplier code
of Conduct
Summarizes the most
fundamental requirements
from Schneider Electric
towards its Suppliers.
We expect these principles
illustrated in this document
to be applied by all suppliers.
Sustainable
Procurement Business
Procedures
• Schneider Electric
Supplier Quality
Management (SSQM)/
Supplier Approval Module
(SAM)
• Business Review
• Sustainable Development,
Environment, Ethics And
Compliance Terms and
conditions
Strategic Goals and Programs
Net zero
CO2
emissions
The Zero Carbon
Project
SSI #3: Reduce CO2 emissions
from top 1,000 suppliers’
operations by 50%
Circular
supply chain
Environment
friendly
Decent
working
conditions &
human rights
Holistic
approach
Green Materials
Sustainable
Packaging
Reach/RoHS
Conflict
Minerals/Cobalt
SSI #4: Increase green material
content in our products to 50%
SSI #5: 100% packaging uses
recycled cardboard & no
single-use plastic
Continued adherence and
compliance to regulations
governing hazardous materials
and conflict minerals
Decent Work
SSI #6: 100% strategic suppliers
provide decent work to their
employees
Duty of Vigilance
SSE #17: 4,000 suppliers
assessed under Vigilance Program
ISO 26000
Improve sustainability profile
of strategic suppliers
2.2.11.5 Promotion of a continuous
improvement process based on the
ISO 26000 standard for strategic suppliers
Sustainable development is one of the seven pillars used to
measure supplier performance, allowing the highest-performing
suppliers to become “strategic” suppliers. Performance resulting
from the EcoVadis evaluation is an important element of the
sustainable development pillar.
The ISO26000 evaluation by EcoVadis remains one of the key
aspects of Schneider Electric’s supply chain and procurement-led
sustainable development strategy. The elements of the assessment
are an integral part of the business reviews scheduled between
buyers and suppliers, on a quarterly to yearly basis, depending
on the suppliers. This monitoring supposes an improvement from
the supplier.
The Group has set out to engage all its strategic suppliers in
a process of continuous improvement on this pillar. At the end
of 2021, strategic suppliers represented c. 60% of Schneider
Electric’s purchases volume. Strategic suppliers who have passed
the third-party evaluation process cover 70%+ of total strategic
purchasing volume.
In 2018, the Group took on the ambitious target of achieving
+5 points out of 100 in the average ISO 26000 assessment score
of its strategic suppliers between 2018 and 2020 as part of the SSI.
In 2019, this target was raised to +5.5 points. At the end of 2020,
+6.3 points were achieved, with an average of 57.4 points.
2021 target was set at +1 point minimum, and the end of year result
was +1.3 points with an average of 58.7 points.
The new ambition for 2021 – 2025 is to raise the bar even higher
to achieve an average of 65 points within 5 years.
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Chapter 2 – Sustainable development
Strategic Report
In 2021, despite COVID-19 travel restrictions in first part of the year,
the Group conducted 205 initial on-site audits with suppliers (audits
conducted for the first time with a supplier). These audits allow
Schneider Electric to identify non-conformances and request the
supplier to implement corrective actions.
Re-audits with suppliers already audited were also conducted
to review the corrective actions implemented to remediate non-
conformances identified during the initial audit.
Information and findings regarding on-site audits with new
suppliers are described below.
2.
A major part of non-conformance in 2021 is related to health and
safety, labor standards and management systems (36%, 29%,
and 20% respectively). Graph 3 gives the breakdown of non-
conformances by topic and graph 4 gives them by geography.
Top priority are the most serious non-conformances. For each
case, escalation is done at Chief Procurement Officer level.
An analysis of the 249 “top priorities” raised in 2021 shows
the following issues are the most recurring:
• Labor standards (61% of top priority non-conformance issues):
lack of respect of working time and resting days (time
measurement systems are often insufficient); poor overtime
reporting and payment; lack of formalization of working
contracts
• Health and safety (33% of top priority non-conformance
issues): weak emergency procedures; insufficient emergency
training issues and preparation drills; insufficient fire alarm
and protection systems; lack of medical response equipment;
and lack of training.
• Environment and management systems (6% of top priorities):
lack of administrative compliance, management tools, and
systems; and insufficient waste management and pollution
prevention systems.
Remote self-assessment
From 2021 to 2025, Schneider Electric has defined new objectives
as part of the sustainability strategy: conduct 1,000 on-site audits
on high-risk suppliers and deploy 3,000 self-assessment audits
for other suppliers.
This year, in 2021, a specific self-assessment questionnaire has
been elaborated, building on the experiences of on-site audits
performed during the past three years. Among the questions
asked, the core ones aim at checking whether the suppliers
are compliant on mandatory subjects of labor, human rights,
environment, and health and safety. After an initial pilot test, a
large-scale launch was made in second half of 2021. At the end of
the year, 624 suppliers had submitted answers. Procurement teams
are currently in the process of reviewing answers to identify which
suppliers may be eligible, in a second phase, to an on-site audit.
2.2.11.6 Vigilance plan for suppliers
Supplier risk categories and audit plan
Schneider Electric is conducting a specific evaluation of suppliers.
This evaluation covers all natures of risks identified and considers
specific parameters such as the type of industrial process used
by the suppliers, their technology, and the geographic location of
those suppliers. This allows the Group to factor in risks that may
arise from a country’s specific situation (social, political, etc.).
These parameters are compiled in a third-party independent
database (Responsible Business Alliance methodology, RBA,
ex-EICC, of which Schneider Electric has been a member since
January 2018). Schneider’s entire network of tier 1 suppliers
(52,000) is processed through this methodology and is refreshed
every year with the new supplier baseline.
The audit plan started in 2018. 2020 was the third year of
implementation and Schneider Electric completed this schedule
with 374 audits.
From 2021 to 2025, Schneider Electric has defined new objectives
as part of the sustainability strategy: expanding from the previous
plan, the Group set an objective to conduct 1,000 on-site audits
on high-risk suppliers and deploy 3,000 self-assessment audits
for other suppliers. This audit plan is integrated into the Schneider
Sustainability Essentials (SSE).
Overall plan
For our 2021 plan, the Group identified ~1,300 “high risk” suppliers;
this number varies depending on the year.
The 2021 – 2025 overall ambition is to cover 1,000 suppliers
through on-site audits, directly or through third parties, and 3,000
through a remote assessment.
~52,000 suppliers
RBA Risk assessment
1
2
3
3,000 suppliers targeted for
self-assessment evaluation plan in 5 years
1,300 high-risk
suppliers targeted for
on site audit
• 374 audits conducted
in 2018-2020
• + 1,000 audits
2021-2025
SSE #17 indicator: 4,000 suppliers assessed
under Schneider Electric’s ‘Vigilance Program’
On-site audits
Schneider Electric’s audit questionnaire and audit methodology
are fully aligned with the RBA framework. The RBA framework is
linked to the Duty of Vigilance risk matrix categories as follow:
• Human Rights: decent workplace: 36 questions, health
and safety: 40 questions.
• Environment: 21 questions.
• Offer Safety: non-applicable in RBA framework.
• Business Conduct: 11 questions.
• Cybersecurity: non-applicable in RBA framework.
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Chapter 2 – Sustainable development
2.2 Driving responsible conduct of business with the Trust Charter
Remediation and mitigation actions
As of end of 2021, Schneider Electric has closed 97% of 2020
and 3% of 2021 non-conformances (all types). Schneider Electric’s
approach is to help suppliers remediate the issues by sharing
good practices and providing them with guidance and training.
When non-conformances are not remediated (mainly top priorities),
escalation to the Chief Procurement Officer may lead to an end of
the business relationship. In 2021, one relationship with a supplier
has been terminated.
In order to reinforce the co-ordination between Schneider Electric
teams and suppliers on vigilance topics, a specific training
program has been implemented.
The primary target audience is the Schneider Electric Procurement
team, and the training modules aim to increase their knowledge on
the nature of risks, so they can integrate these topics early in the
discussions with suppliers. At the end of 2021, ~580 employees
have taken this training. These trainings combine in-class
experience with e-learning sessions.
To raise suppliers’ awareness, improve their ability to identify
risks earlier, and implement mitigation solutions, Schneider Electric
organized face-to-face workshops dedicated to vigilance subjects.
At the end of 2021, ~500 supplier team members have attended
these events. These sessions include in-class face-to-face
workshops and digital webinars.
% Risky suppliers identified in 2021 by geography – Graph 1
% Audits carried out in 2021 by geography – Graph 2
%
1
%
8
1
%
7
100
80
60
40
20
0
%
3
2
%
5
%
6
4
100
80
60
40
20
0
%
3
%
4
%
8
%
4
2
%
6
%
5
5
China
India
EAJP*
EMEA**
North
America
South
America
China
India
EAJP*
EMEA**
North
America
South
America
% Non-conformances in 2021 by topic – Graph 3
% Non-conformances in 2021 by geography – Graph 4
100
80
60
40
20
0
%
6
3
Health &
Safety
%
9
3
%
4
%
0
%
1
%
0
%
3
% 1
0
2
%
0
1
%
5
%
9
2
100
80
60
40
20
0
%
6
5
Labor
Management Environment
Ethics
China
India
EAJP*
EMEA**
North
America
South
America
* EAJP: East Asia Japan Pacific
** EMEA: Europe Middle East Africa
Impact
From the beginning of the program in 2017 to the end of 2021,
579 suppliers have been audited on site, and 7,000+ non-
conformances were raised, and subsequently remediated. 37%
were related to health and safety issues, and 25% were related to
labor issues. Among the most serious ones are issues of fire safety,
protection of workers from accidents and injuries, respect of a
decent working time including proper resting periods and
payment of overtime.
Overall, the resolution of these non-conformities has allowed
to improve the working conditions for the employees of these
suppliers. Although this is a rough estimate, we estimate that
185,000 employees have seen their working conditions
positively impacted by the Supplier Vigilance program.
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Chapter 2 – Sustainable development
Strategic Report
Schneider Electric is working with an expert third party, collecting
information from its suppliers to identify the source of the minerals
in question and ensure they are recognized as “conflict-free”
within established international standards such as the Responsible
Minerals Initiative (RMI), the London Bullion Market Association
(LBMA), and others. The Group is aware of the complexity of this
task, and that it will take time to collect the required information,
but it is committed to contributing to this responsible sourcing
initiative as well as responding to its customers’ potential concerns.
At the end of 2021, 85% of the smelters and refiners identified in
our supply chain were designated as compliant with a recognized
third-party validation scheme or actively engaging in same
(equivalent to more than 87% of the relevant spend being compliant).
The remainder are either from outside the conflict zone outlined
in Section 1502 of the Dodd Frank Act, or solely using recycled
and scrap materials. When the country of origin is known to be in
the conflict zone, 100% of the smelters and refiners were verified
conformant. Therefore, the Group has no reason to believe that
any conflict minerals the Group sourced, have directly or indirectly
financed or benefitted armed conflict in the covered countries.
2.
Trust
SSE #17
4,000 suppliers assessed under our
‘Vigilance Program’
The five-year program ambition incorporates 1,000 on site
audits and 3,000 remote self-assessments. Schneider
Electric is well on track to reach the new target. The 205
initial on site audits performed in 2021 have allowed
Schneider to raise 3,000+ non-conformances. Out of these
non-conformances, 200+ are assessed as “top priority” and
are given very specific attention during the re-audits of the
suppliers. Schneider Electric’s objective is to close 100%
of all types of non-conformances identified, whatever their
priority level.
Baseline
2021 Progress
2025 target
2.2.11.8 Cobalt program
374
1,203
4,000
2.2.11.7 Conflict Minerals rule
In August 2012, the US Securities and Exchange Commission
(SEC) adopted the Conflict Minerals rule as part of the Wall Street
Reform and Consumer Protection Act. As defined by the legislation,
“conflict minerals” include the metals tantalum, tin, tungsten, and
gold, often called “3TG”, which are the extracts of the minerals
cassiterite, columbite-tantalite, and wolframite, respectively.
The legislation focuses on the sourcing of these minerals to be
“DRC conflict free” – meaning when these minerals were extracted,
they did not directly or indirectly benefit armed groups in the
Democratic Republic of Congo (DRC) and adjoining countries.
This rule requires companies to conduct a “reasonable country
of minerals’ origin inquiry” and due diligence to determine
whether “conflict minerals”, as defined in the rule, are used
in their supply chain.
Although the US SEC Conflict Minerals rule does not apply directly
to Schneider Electric – since it is not registered with the US SEC –
it is deeply concerned about social and environmental conditions
in some mines that could supply metals for its products. As part
of the Group’s sustainable business practices, it is committed to
increasing its responsible metal sourcing efforts.
In working towards these commitments, Schneider Electric has
taken numerous steps including:
• Updating its Procurement Terms and Conditions to reflect
its expectations from suppliers.
• Establishing a “Conflict Minerals Compliance program”
supported and sponsored by its top leadership. This program
was developed based on the OECD Due Diligence Guidance
for Responsible Supply Chains of Minerals from Conflict
Affected and High-Risk Areas (CAHRA) and other appropriate
international standards, which covers a wider scope of minerals
and countries.
Identifying the use of conflict minerals in its products.
•
• Engaging with its suppliers so that they respond in a timely
manner to its requests for evidence of compliance.
• Participating in smelter outreach program.
Mid-2020, Schneider Electric added cobalt to its Conflict Minerals
Compliance program. Cobalt sales have been identified as
potentially funding or supporting inhumane treatment, including
human trafficking, slavery, forced labor, child labor, torture, and
war crimes in known CAHRA. These areas are identified by
the presence of armed conflict, widespread violence, or other
risks of harm to people. These areas are often characterized by
widespread human rights abuses and violations of national or
international law. The program, currently ramping up, is focusing
on the responsible sourcing of cobalt used as a key element for
lithium ion batteries in Schneider Electric’s supply chain.
2.2.11.9 Decent work
Background
Supply chains power the economic engine of the world. On the
one hand they help companies leverage the global capabilities
and benefit from the collective genius; on the other hand, they
help economies progress and engage in global commerce.
However, the benefits of this global integration are often unequally
distributed. One of the areas where this is prominent is working
conditions and rights available to the workers in their workplace.
Working condition crisis
Studies and research across the world have shown that mere
involvement in global commerce is not sufficient to uplift
underprivileged populations. According to the United Nations, over
700 million workers lived in extreme or moderate poverty in 2018
and as per estimates by civil society organizations, more than 40
million people are trapped in modern day slavery worldwide, with
more than 70% being women and children. The recent onslaught
of COVID-19 has had a negative impact on employment conditions.
A survey by the United Nations Global Compact revealed that
global labor income declined by an average of 10% in the first
three quarters of 2020 compared with 2019. Widespread job
losses and loss of earning members increase insecurity, making
workers vulnerable to poor and exploitative working conditions. The
scale of this challenge is too great to be handled by governments
alone. Corporations need to take responsibility and do their part in
ensuring that worker rights are respected universally.
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Chapter 2 – Sustainable development
2.2 Driving responsible conduct of business with the Trust Charter
Suppliers Decent Work initiative: A holistic approach
The extent and severity of the crisis requires a systematic, broad
based, ecosystem approach and not simple rectification of
observed malpractices. The focus needs to be opening dialog and
normalizing universal worker rights irrespective of the geography or
the context of employment. A key element in this is to institutionalize
policies and additional processes that adopt a preventive
approach for the worker rights violation and protect the dignity of
Key pillars of the Decent Work program include:
the individual. Gradually, such actions need to become the new
norm for evaluating performance of supply chain.
Towards this objective, as a first step, Schneider Electric will
implement a Decent Work program with its strategic suppliers.
The program will be based on the key tenets of the International
Labour Organization’s (ILO’s) definition of decent work.
1. Employment
opportunities
Employment opportunities should be available in a transparent, well-informed manner, and without
any charges to all eligible, as a right. In case of any expense incurred by the worker towards obtaining
employment, the same should be reimbursed by the employer. The work should respect and uphold the
dignity of employees and proactively create an environment to resolve and remediate modern slavery,
forced labor, and bonded labor. There should be a process to ensure no child is employed.
2. Adequate
earnings and
productive work
Employment should be a source of economic independence and dignified living. The gradual decline of
industrial wages and the COVID-19 crisis have severely impacted the economic outlook of the workforce,
globally. Companies should review the wage policies to ensure affordability of a dignified living by the
workers. Additionally, employment should equip the workforce to improve current skill set and knowledge
for future employability.
3. Decent working
hours
Excessive working hours is a legal violation, often accepted as “necessary”. It is generally connected with
low industrial wages and used as an excuse to not provide appropriate wages. Companies should review
and remediate excessive hours and should align with the legal and/or international requirements.
4. Stability and
security of work
Employment should be a source of economic stability and peace of mind. Uncertainty of job security
increases stress and makes the workforce vulnerable to abuse and hazardous working conditions.
The problem has been exacerbated due to COVID-19-related job losses.
5. Social dialogue
and workplace
relations
Employees should have the right to engage with management and collectively put across their concerns
and demands. Collective bargaining encourages workers to timely raise concerns, acts as a barometer
and early warning system to assess worker satisfaction and reduces worker vulnerability.
6.
Fair treatment
in employment
Employment should be based on merit, ability to do the job, and fair treatment should be extended to all
employees. Differences in lifestyle, choices, etc., often become a source of discrimination, victimization, and
harassment. This curbs freedom of expression, hiding preferences, and creates mental health challenges.
Companies should ensure a workplace that accepts diversity and provides an inclusive work environment.
7.
Safe work
Employment should result in economic independence and augment the ability to exercise a healthy
and prosperous life. It should not result in ill-health, risk to well-being, or be a source of injury/misery.
8. Social
protection
9. Purchasing
practices
Industrial wages are often not sufficient to meet the adequate living standards. The problem is exacerbated
in cases of health emergencies. Social protection, provided by employers/governments, provide a much-
needed safety net from economic shock, descent into poverty, and vulnerability. Companies should ensure
that all employees have access to the social security safety net.
Purchasing practices and requirements significantly impact working conditions. They influence the working
culture of the supplier organization to meet customer requirements. The power of procurement can be a
strong driver for positive change to include decent work conditions as a pre-requisite among the supply
chain partners, when balanced with other commercial criteria.
10. Balancing work
and family life
Family responsibilities disproportionately impact genders and result in unequal participation in economic
activities. Workplaces should strive to create a level playing field and provide all possible opportunities to
employees to participate in economic activities without compromising the family responsibilities, which
may require periods away from work (e.g., maternity, family care, flexible hours, adequate child care).
Work environment should act as a leveller/equalizer and not augment the disparity.
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Implementation plan
The program will be launched in the first quarter of 2022 with
technical training sessions for participating suppliers. The sessions
will focus on the rationale and elaborate on the requirements of the
program. In addition, special focus will be given to build capacity
and highlight the systems and processes that need to be
implemented and actions that need to be taken by companies
to ensure decent work conditions in their organization. The
evaluation of supplier performance will be done on the basis of
an online questionnaire that will be rolled out via the SSPSRM –
the supplier relationship portal.
A specifically trained team will be deployed at the Global
Procurement Services to lead the launch of the initiative. The
suppliers will be required for respond to the questions and
upload evidence to support the responses. All responses and
accompanying evidence must be evaluated to meet the minimum
criteria of decent work, in order to qualify. In cases where the
supplier actions do not meet the minimum requirements, feedback
will be given, and corrective actions need to be implemented by the
suppliers in a timebound manner. Upon rectification, the information
needs to be resubmitted along with the evidence for the re-
evaluation. The survey responses will be evaluated and corroborated
with the evidence and validated by sample on-site audits. These
audits will be conducted by the trained Duty of Vigilance auditors.
2.2.11.10 Supplier diversity program
in the United States
Schneider Electric US’ supplier diversity program strives to identify,
include, and engage qualified diverse suppliers to support the
company’s goals to foster equal opportunities.
Schneider Electric US is in constant pursuit of qualified businesses
that are certified as one, or more, of the following business
classifications and provide quality products and services
at competitive prices:
• Small Business Enterprise (SBE);
• Veteran (VET);
• Minority-Owned Enterprise (MBE);
• Women-Owned Enterprise (WBE);
• Historically Underutilized Business Zones (HUBZone).
As of end of December 2021, 19,3% of Schneider Electric US’
suppliers were diverse, aiming to demonstrate year to year
improvement in utilization of diversely owned businesses.
2.2.11.11 The Zero Carbon Project
Schneider adopted a very ambitious target for 2050: to operate
a net-zero carbon emission supply chain, meaning that all
Schneider factories and transportation, and that of its suppliers
in the entire upstream value chain would be operating without
using any fossil fuel and run only on clean energy. To achieve
this ambitious target of 2050, as the first step, Schneider has
launched The Zero Carbon Project, which aims at reducing 50% of
operational carbon emissions from its top 1,000 suppliers by 2025.
Read more details on The Zero Carbon Project in Chapter 2.3 “Acting
for a climate positive world”, page 126, and in chapter 2.7 “Methodology
and audit of indicators” page 206. (cid:496)
2.2.11.12 Green materials and
sustainable packaging
Sustainable Packaging (SSI #5)
Resource efficiency and conservation are the underlying principles
that guide all actions at Schneider. During the period of 2018 –
2020 the Company implemented an initiative to successfully move
to 99% of cardboard and pallets used in the transport of goods
to be sourced from recycled or certified sources.
2.
Chapter 2 – Sustainable development
Strategic Report
In 2021, this ambition was extended to use recycled cardboard
in all primary and secondary packaging and remove all single use
plastic from Schneider packaging by 2025 (SSI #5). To achieve this
transformation, a two-pronged approach is deployed. On the one
hand, a cross functional team is deployed to review the packaging
design and explore and authorize the use of alternate materials for
packaging; on the other hand, various procurement teams engage
with suppliers across regions to ensure the deployment of the
roadmap by the suppliers to meet the prescribed requirements.
To ensure streamlined actions, dedicated categories of packaging
material were identified to be included in the transformation. As a
result of concerted efforts by various teams, 21% of the packaging
spend in scope was attributed to sustainable packaging.
Green Materials (SSI #4)
Similarly, another initiative has been launched to increase the
proportion of green material in our products by 50% by 2025
(SSI #4).
The scope of this initiative currently includes:
• thermoplastics (direct and indirect purchase);
• steel (direct purchase); and
• aluminum (direct purchase).
Other kinds of materials like steel purchased as fabricated
components, other non-ferrous metals (such as copper, silver or
brass), and thermoset, both direct and indirect procurement, will
be considered for next phases. At the end of 2021, 11% of materials
in scope were qualified as “Green”.
For thermoplastics, the 2021 performance was achieved mainly by
embedding recycled plastics in products and by obtaining supplier
proof for both recycled and green flame retardant.
For steel, a good progress was made notably thanks to the
certification of large steel suppliers to Responsible Steel in 2021,
as well as sourcing from suppliers using Electric Arc Furnace.
For aluminum a similar approach than the one for steel will be
applied, focusing on building trust and transparency with suppliers.
Read more details on the Green materials and sustainable packaging
in chapter 2.4 “Be efficient with resources”, page 144, and in chapter 2.7
“Methodology and audit of indicators” page 206. (cid:496)
2.2.11.13 Rollout of eco-responsible
initiatives
Schneider Electric is rolling out several eco-responsible initiatives
with its suppliers.
For example, Schneider has chosen to go further than the
European REACH and RoHS regulations. The approach is rolled
out in the Group over the whole product portfolio and to all
suppliers, regardless of their geographic origin. To support the
REACH and RoHS projects, Schneider has implemented a data
collection process supported by a dedicated team to gather
the required information from its suppliers. This has allowed it to
significantly reduce its response time to collect such information
and therefore be quicker to respond to its customers’ inquiries. In
addition to data collection, the Group put in place a review process
for this data to guarantee its quality. Thanks to this process, the
level of verification required for a given supplier can be adjusted in
order to make the controls more stringent in cases where deviations
have been detected.
Another example is Schneider’s commitment to supporting the
small and medium enterprises (SME) network. This support is given
through an approach to work in an adapted manner with certain
suppliers. In France, Schneider Electric is a major player in the
International SME Pact.
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Chapter 2 – Sustainable development
2.2 Driving responsible conduct of business with the Trust Charter
Finally, by the very nature of its activity, the Group continually
encourages its ecosystem (including customers and suppliers)
to implement energy efficient solutions.
2.2.12 Vigilance with local
communities
In 2020, Schneider Electric extended the scope of its risk analysis
to communities. The notion of communities, here, corresponds
to people living in a geographic proximity of Schneider’s local
operations. As a result of this proximity, their conditions of living
could be affected by the Group’s activity. Schneider’s local
operations can be of two types:
• Local facilities, such as a factory or an office building.
• Local project sites where Schneider is operating as a contractor
or subcontractor for a customer.
2020 was the first time Schneider Electric was formally addressing
this risk analysis for communities, developing a framework with
the help of an external consultant. In 2021, the Group deepened
its analysis by selecting the sites that may present some risks for
communities and conducting an analysis specifically for each of
these sites.
2.2.12.1 Communities living around
Schneider’s local sites
2.2.12.1.1 Risk assessment for the 30 largest
Schneider sites
This detailed risk evaluation covers the 30 largest sites by size
and employees, both commercial and industrial.
Potential impacts analysis
The first step of this evaluation was to analyze the potential impact
that a Schneider site may have on its surroundings. For that
purpose, a comparison was made between the size of the site,
and the size of the urban area surrounding it. To take a practical
example, in Shanghai, a large Schneider Electric office site may
be important at Schneider level (>2,000 employees) but will have
very little impact on its immediate urban surrounding (Shanghai is
a multi-million inhabitants city). On the opposite end, a smaller site
may have a bigger impact on its rural surrounding in Africa or
South Asia.
Risk nature and level
The second step was to qualify the natures of risk and their
level, using public data available at country level on topics such
as ethical standards (National Corruption Index), individual
development (Human Development Index), or health and human
rights (Human Right score). Using this data, a composite country
risk index was built to reflect the risk level for countries where
Schneider’s main sites are located.
Conclusions
The third step was to combine Schneider’s site impact level with the
composite country risk index. The overall result shows that the level
of risk on local communities living around Schneider Electric sites is
“low” in most cases. This owes mainly to the fact that the Company
is usually located in large, urban, or peri-urban areas, crowded
with many similar or larger companies. In case of factories, they
are mostly located in already existing dedicated industrial areas,
with solid infrastructures and transportation networks, and
Schneider Electric’s presence does not have an impact on them.
Among the top 30 sites, the Group only identified a few that may
have a “moderate” impact on local communities and found no site
where Schneider Electric could have a “high” or “very high” impact.
It is to be noted that although we speak about risks, the notion of
impact can also be positive, as it is part of Schneider Electric’s
policy to include local parameters in its sourcing policy: providing
employment; including a percentage of local companies and
contractors for services (catering, maintenance, etc.).
2.2.12.1.2 In depth evaluation of 5 sites
The management and safety officers of these sites are engaged
with a dedicated questionnaire, covering environmental and human
rights potential risks and opportunities for the local communities.
The result of the evaluation shows that among the five sites
reviewed, four have no significant impact and one may have
some specific impacts.
Four sites with low impact, well mitigated:
• The four factories studied are located within dedicated industrial
parks, with specific infrastructures including transportation
and access. No competition for local resources (water, power,
staple goods, etc.) were reported. Their impact on the urban
surroundings is low, as they are either located next to a very
large city, or in one case, in the countryside and at a reasonable
distance from the nearest village.
• These sites provide a significant source of employment for
local people. Besides, these entities foster local development
initiatives such as supporting schools, cultural programs, or
local infrastructures (such as hospitals).
• The industrial activities performed on these four sites are
mostly the assembly of components. There are some marginal
activities of plastic injection that are subject to local and national
regulations, with regular compulsory reporting.
• One of the sites is part of an industrial park, that includes
housing facilities for workers (dormitories). These facilities have
been recently enhanced, are compliant to local standards, and
have not been subject to any specific alert report. However, they
remain a point of attention and follow-up on Schneider’s side.
One site with medium risk, mitigation actions in progress:
• This specific site is hosting an industrial process that involves
the use of chemicals. Although these are not critical and
restricted substances, they are required to be monitored
and processed specifically.
• The site is located close to a small urban area, therefore risks
of marginal pollution are present.
• Several mitigation actions have been implemented by the local
team. A specific review of the adequacy of these measures is
in progress.
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Chapter 2 – Sustainable development
Strategic Report
Among the projects reviewed, 2 were of type A, 6 of type B,
and 6 of type C.
• 2 projects of type A: the study of these projects is showing
the following risks and benefits on local populations:
− Temporary/brief disturbance in the transportation and
mobility due to large materials and equipment delivery.
− Temporary and planned power outages.
− No environmental or pollution risk.
− Local security implemented by final customer, with no or
little impact on the neighboring communities.
− The project is a source of employment for local companies.
• 12 projects of type B and C: among these projects, six are
projects with significant impact on the local communities
(petrochem, etc.) and six have no impact (desert or remote
location). For these projects with significant impact, relations
with local communities are handled by the end-user or the
main contractor. Given the small size of Schneider Electric’s
contribution to the overall project investment, the capacity
of Schneider to be a significant contributor to the mitigation
measures is very limited. Specific policies that would increase
this capacity, adapted to these project profiles, are currently
studied.
2.
2.2.12.2 Communities living around
Schneider Electric’s customer
projects sites
In 2021, Schneider Electric has engaged into a review of risks
for local communities residing close to the sites where the Group
is implementing projects for customers. These projects can be,
for example, the building of an electrical switchgear station to
distribute electricity, either to the grid or to private large users
(factories, professional buildings, etc.). Depending on the profile
of the end-customer, these projects necessitate the on-site
coordination of several types of contractors: civil engineering,
industrial process experts, electricity specialists, communication
infrastructure experts. Relations with local communities, when
relevant, are usually handled by the main contractor, or by the
end-customer.
2.2.12.2.1 Characterizing the sites, ranking them
by risk level, and selecting the ones for a deep dive
To identify the main sites presenting potential risks, Schneider
Electric has pre-selected customer projects based on the
combination of two criteria: country risk and customer activity.
Country risk is a compound of several external publicly available
indicators (transparency, human rights, etc.). Customer activity
is based on the industrial process specific to the end-customer.
For illustration, the top five risks are ranked as follows:
Country
Chad
Mauritania
Angola
Nigeria
Tanzania
Customer activity
Mining, minerals and metals
Oil, gas and petrochemicals
Power and grid
Life sciences
Water
Based on these criteria, the Group has established a list of
25 projects to be reviewed with their management team.
2.2.12.2.2 Evaluating the impact for selected sites
Projects reviewed can be grouped into three categories,
each reflecting the type of involvement of Schneider Electric,
and the mitigation capabilities of Schneider.
• Type A: Schneider Electric is providing switchgear and/or
industrial equipment, is also the main contractor for the project,
and is present on site. Mitigation actions can be decided and
implemented by Schneider.
• Type B: Schneider Electric is providing switchgear and/or
industrial equipment, but it is not the main contractor. Mitigation
capabilities are limited.
• Type C: Schneider Electric is providing software and control,
and is mostly working remotely, being present on site only for
final testing and commissioning. Mitigation capabilities are
very low.
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Chapter 2 – Sustainable development
Chapter 2 – Sustainable development
2.3 Acting for a climate positive world
In this section
2.3.1 Climate governance
2.3.2 Roadmap towards a 1.5°C climate trajectory
2.3.3 Delivering a climate positive impact
with EcoStruxure™
128
130
134
2.3.4 Decarbonizing our operations by 2030
2.3.5 Decarbonizing our supply chain by 2050
136
140
“Addressing climate change is the defining issue of our
generation, and businesses play a key role. We know that
we must go faster if we are to avoid the worst impacts of
global warming. Schneider Electric is part of the solution
thanks to its existing technologies and products to achieve
a climate positive impact.”
Xavier Denoly, SVP Sustainable Development
Context and goals
2021 was a year of acceleration, building on the lessons learned
from 2020. Acceleration of our collective realization of the fragility
of the world’s ecosystems, climate, resources, biodiversity, and
even human lives. The magnitude of changes needed will not
accept incremental year-on-year progress. What is now needed
is to place a planet-first lens onto our collective development
path: are we living under the limits of one planet? As science tells
us this is not the case, let us instead work backwards and define
what needs to be done to maintain climate under a 1.5°C global
temperature increase and preserve biodiversity and resources.
Companies all over the world are accelerating to align business
strategies with a 1.5°C trajectory. Since 2018, the number of
companies with targets approved by the Science Based Targets
Initiative has doubled every year, to reach over 1,000 companies
in 2021, including Schneider Electric. Another 1,000 companies
are committed to set such targets soon.
Because it strives to be an Impact Company, the Group’s
climate strategy addresses all its stakeholders, from employees
to supply chain partners, customers, as well as local communities
and institutions, and shows there are ways for companies to
“do good while doing well”.
Concrete actions for the 2021-2025 period are monitored and
shared transparently in Schneider Sustainability Impact and
Essentials and are overseen by various dedicated Committees
up to the Board of Directors. In the longer term, the Group is
committed to net-zero CO2 emissions in its operations by 2030,
and took specific commitments for renewable electricity, energy
efficiency and electric vehicles under the RE100, EP100, and
EV100 initiatives. By 2040, the Group will be carbon neutral along
the whole of its value chain, meaning all products will be carbon
neutral. Importantly, beyond targeting excellence in reducing its
own footprint, Schneider Electric also delivers about 100 million
tonnes CO2 gains to its customers each year with EcoStruxure™.
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Chapter 2 – Sustainable development
Strategic Report
2021 Highlights
Schneider Electric is on the CDP Climate
Change A list for the 11th year on a row.
The Energize program, first-of-its
-kind supplier program to advance
Climate Action with 10 Pharmaceutical
companies.
Schneider Electric wins four awards
for Sustainability and Smart Home
leadership at the CES 2022 Innovation
Awards, recognizing its commitment
to sustainability and innovation.
2.
Key targets and results
Progress against our 2021-2025 Sustainability commitments
Schneider Sustainability Impact
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Climate
1. Grow our Schneider Impact revenues(3)
2. Help our customers save and avoid millions of tonnes of
CO2 emissions
3. Reduce CO2 emissions from top 1,000 suppliers’ operation
0%
1%
Baseline(1)
2021 progress(2)
2025 Target
70%
263M
71%
347M
80%
800M
50%
Schneider Sustainability Essentials
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Climate
1. Decarbonize our operations with Zero-CO2 sites
2.
3.
4.
Substitute relevant offers with SF6-Free medium voltage
technologies
Source electricity from renewables
Improve CO2 efficiency in transportation
Baseline(1)
2021 progress(2)
2025 Target
30
0%
80%
0%
51
38%
82%
-1%
150
100%
90%
15%
(1) Generally, the 2020 performance serves as a baseline for Schneider Sustainability Impact (SSI) and Schneider Sustainability Essentials (SSE) 2021-2025 programs,
except for SSI#1 (2019).
(2) Each year, Schneider Electric obtains a “limited” level of assurance from an independent third party verifier for all of the SSI and SSE indicators (except for SSI #6,
SSI #7, SSI #+1, SSE #12 and SSE #23), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 224). Please refer to page 206
for the methodological presentation of each indicator. The 2021 performance is also discussed in more details in this section.
(3) For the reporting requirements under the European Taxonomy Regulation, please refer to page 68 and page 216.
Long-term roadmap
2030
2040
2050
• Net-zero operational emissions and
reduction of Scope 3 emissions by
35% (vs. 2017);
• Switch to 100% renewable
electricity (RE100);
• Double energy productivity vs.
2005 (EP100);
• Shift 100% of Company fleet to
electric vehicles (EV100).
Become carbon neutral on full end-
to-end footprint (full Scopes 1, 2, and
3), 10 years ahead of 1.5°C climate
trajectory.
Engage with suppliers towards
a net-zero CO2 supply chain.
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This growing demand for greener, low-carbon products and
services creates a strong business opportunity for Schneider.
Where appropriate, opportunities for growth are identified
and translated into new products (for instance our unique SM
AirSeT™ switchgear to avoid using SF6, or the creation of the new
Sustainability Business). The Group is uniquely positioned to seize
these opportunities because it acts on both sides of the equation:
• The energy management, industrial automation, and
sustainability consulting solutions Schneider brings to the
market are directly linked to activities to mitigate greenhouse
gas emissions and improve humanity’s resilience to climate
change.
• At the same time, Schneider acts to reduce its end-to-end
CO2 footprint, aiming for a carbon neutral value chain by 2040,
with precise steps for 2025 and 2030.
In 2021, 71% of the Group revenues qualify as Impact revenues,
following Schneider Electric’s definition: revenues from offers that
bring energy, climate, or resource efficiency to customers, while
not generating any significant harmful impacts to the environment.
The Group aims to grow its Impact revenues to 80% by 2025
(SSI #1). Additionally, more than 90% of Schneider’s innovation
projects contribute to solutions relating to climate change mitigation
and environment protection.
Climate-driven risks
Failure to meet 1.5°C-aligned GHG reduction emissions targets
Missing its decarbonization commitments could trigger greater
financial costs than anticipated for Schneider due for instance
to locked-in emissions of assets with long operating lifetime or
long-term leases, or reputational impacts and loss of trust from
customers, investors, and employees.
Inadapted evolution of the supply chain footprint
Volatility of energy and commodity prices as well as regulation
strengthening will generate increasing and volatile operating and
investment costs along Schneider’s value chain, impacting both
Schneider’s expenditures and those of its suppliers. This can
translate into an increase of the cost of goods sold and reduced
margins. This risk can be mitigated by securing low-carbon and
resilient sources of energy supply, increasing resource-efficiency,
and increasing resale prices along the value chain. Also, physical
assets are retrofitted for resource-efficiency, as competition with
newly built efficient infrastructure will increase. For instance,
energy-efficient and digital buildings provide superior comfort to
users while lowering operating costs, which translates into higher
asset value.
Chapter 2 – Sustainable development
2.3 Acting for a climate positive world
2.3.1 Climate governance
2.3.1.1 Governance
Schneider Electric sees itself and reviews its progress as part of
a broader ecosystem: firstly, how the Group as a company and
in its supply chain delivers progress to align with a 1.5°C climate
trajectory; secondly, how customers are helped to do the same
through Schneider’s offers; and thirdly, how Schneider helps
communities accelerate climate action.
The process for designing a new SSI includes a sustainability risks
and opportunities assessment (including climate), which leads
to the design of concrete transformation programs to align the
company on the challenges identified. Several governance bodies
are involved in this process:
• The Board of Directors and its Human Resources &
CSR Committee;
• The Executive Committee and its Group Sustainability
Committee;
• The SSI Steering Committee and the Sustainability department.
• A Carbon Committee is in charge of continuously assessing
climate-related risks and opportunities, to steer the Climate
Pledge and to propose a strategy and management plan to
the Group Sustainability Committee.
At Group level, the Chief Strategy & Sustainability Officer helps
determine and enforce the Group’s environmental goals and
underlying transformations.
Additionally, environmental transformations are driven by a network
of leading experts in various environmental fields (eco-design,
energy efficiency, circular economy, CO2, etc.). On an annual basis,
a process identifies and recognizes those individuals who own a
specific expertise that the company is keen to maintain and grow.
Various governance bodies enable these communities of experts
and leaders within the Environmental function to meet every
month or every quarter, depending on the topics and entities, to
ensure consistent adoption of Environment policies and standards
throughout the Group. To implement these policies, Environment
leaders coordinate a network of more than 600 managers
responsible for the environmental management of sites, countries,
product design and marketing.
2.3.1.2 Risks and opportunities
Climate-driven opportunities
While the climate crisis is sobering, it is also stimulating significant
action and innovation across businesses, industries, and
governments. The combined challenge of the COVID-19 virus with
increasing climate-related impacts has given rise to unprecedented
financial flows for recovery tied to improvements in efficiency and
emissions reduction, such as the EU’s Green Taxonomy and the
US infrastructure package.
Increasing awareness of the risks posed by climate change has
also led thousands of businesses to make commitments to and act
on decarbonization, energy efficiency, electrification, renewable
energy procurement, and more. These existing solutions are only
the beginning: the next decade will showcase the surge in “clean
technologies,” as entrepreneurs and corporations alike seek to
imagine, realize and scale innovations in energy storage, carbon
capture, nature-based solutions among others, further stimulating
the global economy and creating a new class of clean, green jobs.
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Transition risks
Schneider considers the possible financial impacts of future CO2
costs on its activities, by taking into consideration both operational
and supply chain footprints. Given the relatively low level of the
Group’s Scope 1 and 2 carbon emissions, carbon pricing has
indirect rather than direct impacts, resulting in increased supply
chain costs, especially regarding the purchase of raw materials
and manufactured components containing metals and plastics.
A carbon tax at EUR 50/tonne of CO2 is estimated to have an
impact on the Group’s industrial supply chain up to EUR 420 million
globally (including direct and indirect impacts).
Climate change mitigation will likely lead to regulation
strengthening, which can disrupt markets. For instance,
SF6-insulated switchgear can have a significant impact on climate
change if SF6 is mishandled at the end of life of the equipment and
leaks into the atmosphere. Schneider Electric strives to anticipate
regulation changes and launches innovative SF6-free solutions.
Workplace disruptions
Extreme weather events, floods, droughts, and other climate
impacts will increasingly put pressure onto supply chains.
Shortages of all kinds can translate directly into revenue loss
(missed orders), increased costs (urgent shipping), and increased
working capital requirements (stock management). Extreme events
can also cause damage to property and assets. This risk can be
mitigated by adopting a flexible and resilient supply chain, with
the ability to rebalance supply and manufacturing.
To further tie climate-related issues to financial planning, Schneider
successfully launched the first-ever sustainability-linked convertible
bonds in 2020. This bond has been linked to three SSI targets by
including the objective to save and avoid 800 million tonnes of CO2
on the customers’ end by 2025.
2.3.1.3 Risk management
Risks are identified and assessed through specific internal and
external metrics, but also through interviews with experts and
leaders, run by the Internal Audit Department and the Group
Risk Management Department, to update the list of general
risks at Group level each year. In 2021, around 40 of the Group’s
top managers were interviewed in addition to Board members.
Environment and climate-related risks are included in Schneider’s
unique risk taxonomy (more details in Chapter 3 “How we manage
risk at Schneider Electric”).
Every three years, a materiality analysis is conducted by the
Sustainability department, leveraging an external consultant,
and complements the risk analysis with a focus on environment,
social, and governance (ESG) topics and longer-term risks and
opportunities (more details in section 2.1.6 “Main ESG risks
and opportunities”).
2.
Chapter 2 – Sustainable development
Strategic Report
Overall, the different governance bodies involved in the definition
and monitoring of the sustainability commitments and programs
(SSI and SSE), and in particular the Carbon Committee, are in
charge of defining strategic mitigation programs in response to
the risks and opportunities identified. Strategic programs defined
at Group level are then cascaded into business divisions, down
to the sites for implementation, and are monitored through the
digital platform, EcoStruxure™ Resource Advisor. Performance
against those programs is published quarterly in the Schneider
Sustainability Impact (SSI), and annually in the Schneider
Sustainability Essentials (SSE) and Universal Registration
Document. Each program of the SSI has a dedicated pilot in
charge of driving the transformation, and is sponsored at the
Senior Vice-President and Executive levels to ensure management
control and oversight.
Climate adaptation risks are also studied and mitigated at site
level for the industrial sites. The Group’s Property Damage and
Business Interruption program, inspired from ISO 22301 standard,
maps substantive risks of financial impact on the business,
including asset destruction (buildings, equipment, inventories)
and profit loss due to business interruption. The program reviews
annually the natural hazard exposures of our manufacturing and
logistic locations. An example of a risk analyzed at site level is
flooding risks.
Risk analysis of industrial sites includes an analysis of
interdependencies, study of alternative supply, and estimation
of time to recover in case of damage, etc. Typically, all critical
industrial sites are externally audited onsite at least every two
years. In addition, starting 2021, Global Supply Chain has defined
a resiliency index to assess and mitigate business interruption
risks. This resiliency index covers several risks (such as physical
security, political stability, etc.) and includes exposure to natural
and climate-related hazards and mitigations.
Finally, environmental risks (including climate) are assessed and
mitigated at site level through the Group’s Integrated Management
System (IMS). The IMS covers the supply chain sites (plants,
distribution centers, large offices) and hosts ISO 14001, ISO 50001,
ISO 9001, and OSHAS 18000/ISO 45001 compliance management
systems. Each site is audited periodically, either externally by
Bureau Veritas (every three years), or internally. At present, the
impact of climate-related matters is not material to the Group’s
financial statements.
With suppliers, sustainability risks (including natural and climate-
related hazards), are embedded into Supplier Risk Assessment.
This process enables to define risk mitigation action plans
with suppliers, as well as prioritize double sourcing strategies.
Leveraging external data providers, the Group monitors events
across 10,000 nodes (such as ports and critical supplier locations)
to shorten reaction time when events occur and minimize
business impact.
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Chapter 2 – Sustainable development
2.3 Acting for a climate positive world
2.3.2 Roadmap towards a
1.5°C climate trajectory
2.3.2.1 Climate impact commitments
In its Trust Charter, Schneider Electric adopts an unequivocal
position regarding impact on climate change and CO2 emissions.
The Group has been a leading contributor to the fight against
climate change for the past 15 years by implementing its own
energy management and industrial automation solutions across
operations, by supporting its clients in achieving their low-carbon
and efficiency objectives, and by allowing more than 30 million
people to gain access to electricity. Schneider also takes an active
role in a variety of multi-stakeholder organizations to promote
solutions to climate change, call for a price to CO2, and strengthen
CO2 governance globally. Since 2011, the Group has also been
contributing to the Livelihoods Funds, which proposes innovative
investment models to simultaneously address environmental
degradation, climate change, and rural poverty.
The Group aims to be a role model in the fight against climate
change, by sharply decarbonizing its own operations and by
delivering services and solutions that allow its customers to reduce
more CO2 emissions than those produced by the Group’s activities.
Ultimately Schneider aims to reduce the end-to-end emissions of its
offers, by engaging suppliers and eco-designing offers for lifecycle
climate and circular performance.
Short to medium-term targets
• Before 2025, demonstrate that Schneider Electric is carbon
positive together with its customers and partners, thanks to
CO2 savings delivered by EcoStruxure™.
• On the Group’s operations (scope 1&2): be carbon neutral
by 2025 and net-zero CO2 emissions by 2030.
• On indirect emissions (scope 3) in its supply chain and with
customers: reduce emissions by 35% by 2030 (vs 2017), by
actively engaging suppliers to accelerate their climate strategy,
by sourcing greener materials, and by proposing more efficient
solutions to its customers.
The Group’s 2030 targets (net-zero CO2 emissions on scope 1
and 2, and -35% on scope 3) have been validated 1.5°C-aligned
by the Science-Based Target initiative in 2019.
Long-term targets
• Become carbon neutral on the Group’s full end-to-end footprint
by 2040 (scopes 1, 2 and 3), 10 years ahead of 1.5°C trajectory.
This means that all Schneider’s products will be carbon neutral
in 2040.
• Engage with suppliers towards a net-zero CO2 supply chain
by 2050.
In 2040, the Group commits that all Schneider Electric products
will be carbon neutral. By connecting technology, business, and
collaboration, Schneider joins the likes of global partners, such
as Amazon, Infosys, and Daimler to help deliver carbon neutrality
by 2040 as part of the Climate Pledge, a jointly created initiative
between Global Optimism and Amazon. The Climate Pledge was
founded on the conviction that global businesses are responsible
and accountable for acting on the climate crisis, together.
This milestone is set 10 years earlier than the pledge made in
2015 by all United Nations country members at Paris COP21,
showing the Group’s eagerness to accelerate the world economy
decarbonization to respect the 1.5°C targets.
By 2050, achieving net-zero CO2 emissions in its supply chain will
require Schneider Electric to work transversally with all stakeholders,
from product design, to sourcing, manufacturing and shipping.
2.3.2.2 Concrete actions in our ecosystem
2.3.2.2.1 Net-zero CO2 emissions in operations
by 2030
To deliver its Scope 1 and 2 targets, the Group has launched
several transformations under the Climate and Resources pillars
of Schneider Sustainability Impact:
• Reach 150 Zero-CO2 sites by 2025 (SSE #1),
• Propose SF6-free alternatives for all medium voltage technologies
by 2025 (SSE #2),
• Source 90% of electricity from renewables by 2025 (SSE #3), and
100% by 2030,
• Increase energy efficiency in our sites by 15% by 2025 (SSE #5)
and double energy productivity by 2030 (vs 2005),
• Shift one third of corporate vehicle fleet to electric vehicles
by 2025 (SSE #7), and 100% by 2030.
The Group leverages its Power and Building EcoStruxure™ IoT
architectures to deliver these ambitions, monitor and optimize
energy consumption, manage assets and grid infrastructure,
manage distributed renewable energy resources and electricity
load, monitor energy quality, and power electric vehicles. The
initiatives to deliver those targets are described in section 2.3.4
Decarbonizing our operations by 2030, page 136.
This strategy has delivered an absolute reduction of 405,028
tonnes of CO2e emissions on Scope 1 and 2 (from 699,079 tCO2e
in 2017), which is a 58% decrease.
2.3.2.2.2 End-to-end carbon neutrality by 2040
Schneider Electric is already taking concrete actions to engage
its suppliers to decarbonize:
• Engage 1,000 top suppliers to reduce their operational CO2
emissions by 50% with The Zero Carbon project (SSI #3).
• Reduce purchase-related CO2 emissions with EcoDesign Way™
to improve the end-to-end lifecycle environmental footprint
of its offers, notably by reducing and substituting materials
and components in products. The Group aims to source 50%
green materials by 2025, favoring bio-sourced, recycled, and
sustainable options (SSI #4).
• Have 100% of its primary and secondary packaging free from
single-use plastics and made from recycled cardboard (SSI #5).
• Reduce CO2 emissions from freight and logistics activities, by
shifting from air to sea freight and optimizing fill rates and travel
routes (SSE #4).
• Reduce CO2 emissions from waste management, with its
“Waste as Worth” program. In 2021, 126 sites achieved the
“Waste to Resources” designation as part of SSE #9.
• Reduce CO2 emissions from capital goods by optimizing real
estate space occupancy as saved surfaces translate directly
into lower CO2 emissions, as well as spared natural habitats
and agricultural land.
The initiatives to deliver those targets are described in section 2.3.5
Decarbonizing our supply chain by 2050, page 140. (cid:496)
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Chapter 2 – Sustainable development
Strategic Report
Customers
Saved &
Avoided
Saved & Avoided:
83.6 MtCO2
CO2 positive
together with
customers
800Mt CO2
2018-2025
2.
Roadmap towards a 1.5°C climate trajectory
2021 CO2
footprint
2025
2030
2040
2050
Suppliers
Scope 3
upstream
Induced:
8.2 MtCO2
Schneider’s
Operations
Scope 1 & 2
Induced:
0.3 MtCO2
Customers
Scope 3
downstream
Induced:
60.7 MtCO2
Carbon neutral operations
Net-zero CO2 operations
Carbon neutral value chain and products
Net zero CO2 supply chain
2030 commitments are aligned with 1.5°C scenario
and validated by the Science Based Targets initiative
Concrete actions
Engage suppliers towards
net-zero CO2 supply chain
Reduce operational CO2
emissions, towards net-zero
CO2
Deliver CO2 savings
to customers
SSI #3: The Zero Carbon Project
SSE #1: Zero CO2 sites
SSI #2: Saved and avoided CO2
emissions
SSI #4: Green materials
SSE #3: Renewable electricity
(RE100)
SSE #2: SF6-free technologies
SSI #5: Sustainable packaging
SSE #5: Energy efficiency (EP100)
SSE #6: Green PremiumTM
SSE #4: CO2 efficiency in
transportation
SSE #7: Electric vehicles (EV100)
SSE #10: 420,000 metric tons avoided
primary resource consumption
These commitments were taken as part of the “Business Ambition for 1.5°C – Our Only Future”. Since 2018, Schneider Electric has been
one of the 15 companies (out of 4,500+ signatories) to join the Global Compact LEAD initiative “Pathways to Low-Carbon and Resilient
Development” in which businesses proactively share best practices in sustainable climate strategies.
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Chapter 2 – Sustainable development
2.3 Acting for a climate positive world
2.3.2.3 CO2 footprint
Schneider Electric updates its end-to-end carbon footprint
(Scope 1, 2 and 3) annually and obtains a “limited assurance” from
an independent third party verifier on all figures. Scope 3 emissions
represent more than 99% of the Group’s carbon footprint, of which
90% are due to the use phase and the products’ end of life, and
around 10% result from the purchase of raw materials, equipment,
and services.
The charts below represent Schneider’s carbon footprint on
Scopes 1, 2 and 3, including all greenhouse gas emissions (GHG),
from the upstream activity of all its suppliers to the use and end of
life of its offers sold to customers. During the use phase, emissions
saved and avoided by customers thanks to energy efficiency and
renewable technologies are represented as negative emissions.
Coverage of reported emissions is 100% for energy, fugitive SF6
emissions, waste, purchases, capital goods, commuting, travel,
and freight (coverage is estimated using a relevant activity indicator
for each source of emissions, such as spent for purchases and
business travel, surface for energy and capital goods, headcount
for commuting and waste). Schneider reports no GHG emissions
on franchises, investments, or downstream-leased assets, because
these emissions are not considered relevant for its activities.
Schneider Electric carbon footprint: 2017 to 2021 evolution
2.3.2.4 Internal CO2 price
To lead the global transition to a zero-carbon economy,
Schneider Electric calls for policymakers to define robust and
predictable carbon pricing for companies, enabling companies to
integrate collaterals on climate in their strategy. A high and stable
price on carbon will strengthen incentives to invest in sustainable
technologies and to change behaviors.
As part of its carbon pledge, Schneider is committed to take into
consideration a carbon pricing of EUR 50 – 130/ton (depending
on time horizons) to inform the Group’s climate strategy. In line with
the vision, an internal price on carbon is already used in several
cases to include the cost of CO2 externality in decision-making
and strategy.
An internal CO2 price is used to assess the performance
and resiliency of operations. The cost of CO2 is evaluated for
industrial activities, taking into account CO2 emissions from
energy consumption and SF6 leaks in industrial sites. CO2 cost
is also taken into consideration in industrial network modelling to
account for future CO2 prices in industrial decisions. This enables
measurement of the potential impact of CO2 pricing on the Group’s
supply chain. Schneider views internal CO2 pricing as a useful tool
to reinforce its governance and external commitments on CO2.
Suppliers
Scope 3
upstream
Schneider’s
Operations
Scope 1 & 2
Customers
Scope 3
downstream
Customers
Saved &
Avoided
Induced: 8.2 MtCO2
11.9%
Induced: 0.3 MtCO2
0.4%
Induced: 60.7 MtCO2
87.7%
Saved & Avoided: 83.6 MtCO2
10M
9M
8M
7M
6M
5M
4M
3M
2M
1M
0
2017 2018 2019 2020 2021 2030*
0.8M
0.7M
0.6M
0.5M
0.4M
0.3M
0.2M
0.1M
0
2017 2018 2019 2020 2021 2030*
80M
70M
60M
50M
40M
30M
20M
10M
0
2017 2018 2019 2020 2021 2030*
Purchases
Freight
Business travel
Other Scope 3 upstream
Target
Electricity & heat
Energy fuels
Company cars
SF6 leaks
Target
Use of products
Product end of life
Saved
Avoided
Target
* Projection assuming that the -35% applies equally on all Scope 3 sources
2018 2019 2020 2021
0
-25M
-50M
-75M
-100M
-125M
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Chapter 2 – Sustainable development
Strategic Report
The Group sees an acceleration of the dominant role of:
• Electrification: the world is becoming more electric,
with demand growing potentially up to 3x by 2050;
• Digitization: with the increase in connectivity, complemented
by real-time information and competitive computing
capabilities, digital technologies play a major role in reaching
decarbonization targets while augmenting economic
productivity, notably around efficiency in energy and resource
use and circularity, as well as increased resiliency and security.
2.
All these findings, and their potential financial impact on our
business have helped us fine-tune key development areas that
will allow us to actively contribute to the low-carbon transition,
enabling us notably to develop our sustainability portfolio of offers.
Key findings are regularly cross-checked with new publications,
particularly the ones from the International Energy Agency, BNEF,
and the IRENA, among others. Governance is in place, under the
leadership of the Chief Strategy & Sustainability Officer, and both
short- and long-term analysis are shared internally and used to
inform strategic priorities across businesses and operations.
2.3.2.5 Climate scenarios embedded
in the Group’s strategy
In line with the Task Force on Climate-related Financial Disclosures
(TCFD) recommendations, Schneider Electric launched a
prospective approach on climate change and energy transition
three years ago, by setting up a dedicated organization in charge.
Schneider has a dedicated Strategy Prospective & External
Affairs Senior Vice-President in charge of climate and environment
scenario analysis. That person is attached to the Chief Strategy &
Sustainability Officer.
Several scenarios to 2050 were developed in 2019. Those
included critical reviews of the geopolitical landscape, commodity
and resource availability, economic and financial evolutions,
climate sensitivity and evolving policies, energy transition
pathways, and technology developments, among others, with
quantified consequences, taking into consideration 10 regions and
a number of sectors individually, framing the business landscape
in which Schneider operates. In 2020, these scenarios were further
updated. Beyond impact for long-term analysis, the COVID-19
short-term impact assessment has also been reviewed in detail,
including the importance and feasibility of climate-compatible
recovery plans. Finally, in 2021, Schneider published a set of
scenarios exploring the feasibility of a 1.5°C trajectory.
The scenarios developed by Schneider demonstrate that a
net-zero carbon future, aligned with IPCC’s 1.5°C scenarios, is
still possible, and the Group is uniquely positioned to embark its
ecosystem onto an inclusive, zero-carbon transition. The Group
sees the energy and climate transition as an opportunity for
companies who are “part of the solution” to grow their revenues.
Schneider Electric’s Energy Management and Industrial Automation
offers help customers deliver energy and resource efficiency and
reduce CO2 emissions. Furthermore, smart grid technologies
unlock the potential to electrify energy usage, powered by
renewable electricity.
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2.3.3.2 Deliver access to energy products
and solutions
Today, 25% of the world’s population still has no or reduced access
to energy, and only 17% of the total global energy consumption was
renewable in 2017. Schneider Electric’s products and solutions aim
to address this “energy paradox”, balancing the need to reduce the
planet’s carbon footprint while ensuring the inalienable human right
to quality energy and digital access.
In line with its carbon pledge towards net-zero CO2 emissions,
Schneider has committed to provide access to green electricity
to 100 million people in underserved areas by 2030, both as
a fundamental right and a means for social and economic
development. Schneider’s Access to Energy program bridges
the energy gap by focusing on offerings and business models
for village electrification and domestic energy needs, as well as
investing in and supporting companies providing affordable, clean,
and renewable energy.
Products and solutions address individual and collective needs
across the energy chain, from solar lanterns and solar home
systems to decentralized small power plants, water pumping
systems, and street lighting. A great example of Schneider’s
products is the portable Mobiya solar powered lamp providing
individual lighting and mobile charge for 48 hours. In emerging
markets, this type of device helps extend the number of hours of
activities and livelihoods, but also limits the use of kerosene lamps
that have a significant environmental impact. Villaya is another
great example of decarbonized energy solutions available for
businesses and communities to ensure electrification in remote
sites, either 100% solar or hybrid.
All of these social impact products and solutions complement
the Group’s offerings for its customers to be the digital partner
for sustainability and efficiency.
Chapter 2 – Sustainable development
2.3 Acting for a climate positive world
2.3.3 Delivering a climate
positive impact with
EcoStruxure™
2.3.3.1 Save and avoid 800 million tonnes
of CO2 emissions on customers’ end
With EcoStruxure™, the IoT-enabled architecture, Schneider Electric
helps companies become more efficient and reduce their CO2
emissions. To demonstrate this positive impact, a new indicator was
launched in 2018 to quantify CO2 savings delivered to customers
using Schneider’s offers. New technologies were added to expand
the methodology coverage in 2021: SF6 recovery services, SF6
AirSet solutions, Field Services, Energy Management Systems
(EMS for electrical network) and data center design. Overall, from
2018 to 2021, Schneider Electric helped customers save and avoid
347 million tonnes of CO2e.
From 2021 onwards, Schneider is committed to extend the
methodology to progressively include all relevant offers, to
report both saved and avoided CO2 emissions with customers
and partners, and to help customers save and avoid 800 million
tonnes of CO2 by 2025, cumulatively since 2018 (SSI #2). This
commitment is one of the three performance indicators of the first
ever convertible Sustainability-Linked Bond launched by the Group
at the end of 2020.
The innovative CO2 accounting methodology to quantify CO2
savings delivered to customers, created by Schneider, allows
for the quantification of CO2 induced and saved by the Group’s
solutions at its customers’ premises. Detailed calculation rules are
defined per offer, leveraging sales data, market expertise, and
technical knowledge. The methodology is designed to become a
shared industry standard, its principles are applicable across the
capital goods and consumer durables sectors. Attention was given
to define rigorous calculations, with conservative assumptions.
The methodology is public and was developed with Carbone 4,
an expert CO2 accounting consulting company.
Saved emissions are net emissions (savings are netted from
use-phase induced emissions) and consider savings delivered
on brownfield (retrofit) projects. Avoided emissions are defined
with respect to greenfield sales (new infrastructures); they are
defined as a limitation of emissions increase versus a reference
scenario. Avoided emissions are net emissions. They represent
the difference between emissions of a reference scenario and
emissions with the implementation of Schneider Electric’s offer.
Schneider’s methodology, “Saved and avoided CO2:
decarbonization creates value” is available for download on
se.com; as well as the detailed methodology (and hypothesis)
for all Schneider’s solutions
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Chapter 2 – Sustainable development
Strategic Report
Climate
SSI #2
Deliver 800 million tonnes of saved and avoided
CO2 emissions to our customers
CO2 savings are delivered at every layer of EcoStruxure™. For instance, Building Management
Systems (BMS) monitor, control, and optimize the performance of buildings throughout their
lifecycle. This drives occupancy productivity as well as energy savings. From 2018 to 2021,
Schneider Electric’s BMS sales enabled customers to save 11 million tonnes of CO2e.
Baseline
2021 Progress
2025 target
263M
347M
800M
2.
Saved and avoided CO2 are
delivered at every layer of
EcoStruxure™
Together with Customers and Partners:
347M tonnes
cumulated CO2 saved and avoided from 2018 to 2021
:
o
t
t
n
e
l
a
v
i
u
q
e
e
r
a
s
g
n
i
v
a
s
l
a
u
n
n
A
43M
people in the EU
416M
hectares of US forest
Apps,
analytics
and
services
Edge
control
Leverage IOT data to identify
additional energy efficiency
opportunities, increase the lifetime
of assets, optimize maintenance
services and boost demand
flexibility.
CO2 savings in the ecosystem
Example: power purchase
agreements (PPAs)
Manage on-site operations, with
day-to-day optimization of energy
consumption through remote
access and advanced automation.
CO2 savings in infrastructure
(building or industrial process)
Example: Building Management
System (BMS)
Connected
products
Connected products are eco-
designed to improve their efficiency
and deliver electricity savings.
CO2 savings at product level
Example: high efficiency UPS
Uninterruptable Power Supply
and Transformers
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Chapter 2 – Sustainable development
2.3 Acting for a climate positive world
2.3.4 Decarbonizing our operations by 2030
To deliver its net-zero target on Scope 1 and 2 by 2030, the Group has launched several ambitious transformations:
Climate and Energy
405,000
tCO2 reduced
(scope 1 and 2)
vs 2017 baseline
t
e
g
r
a
T
Net-zero CO2
on operational
scope by 2030
76%
energy productivity
(EP100) since 2005
82%
renewable
electricity
47
sites with onsite
renewable
electricity
7.7%
share of
electric vehicles
in global fleet
100%
target by 2030
100%
target by 2030
50
target by 2025
100%
target by 2030
2.3.4.1 EP100: deliver efficiency from
the inside out, Energy Action program
Schneider Electric leverages the power of its EcoStruxure™
architecture to deliver energy savings and uses its own sites
as showcases for customers and business partners.
Spotlight: IntenCity R&D Center, Grenoble, France
Near the end of 2020, Schneider opened IntenCity, its new
R&D flagship located in the scientific area of Grenoble, France.
This 26,000 square meter building welcomes 1,500 employees,
and aims to become a world reference of sustainability and
efficiency in buildings.
In smart factories and distribution centers, the Group implements
the three-layer EcoStruxure™ architecture, with connected meters
and sensors to monitor energy consumption and quality, Edge
Control Power Monitoring software to optimize daily operations, and
analytics and services to benchmark performance and optimize
energy and maintenance. Asset Performance Management also
enables the Group to optimize operations and maintenance, for
maximum uptime and longevity.
Four of Schneider Electric’s smart factories have been designated
as 4th Industrial Revolution (4IR) Advanced Lighthouses by the
World Economic Forum (WEF), in China, France, the US, and
Indonesia. Another two are classified as Developing Lighthouses
in China and Mexico. Recently in 2021, the Lexington facility in the
US was named one of the first three Sustainability Lighthouses
in the world by the WEF. With its Smart Factory and Distribution
Center (DC) programs, the Group has deployed advanced
manufacturing technologies in over 80 smart factories and
DCs in the past four years.
In offices, Schneider Electric’s EcoStruxure™ solutions Building
and Workplace Advisor enable analytics of BMS data alongside
space, utilization, and comfort metrics. These smart solutions
enable the Group and site leaders to actively benchmark and
develop occupancy and facility management strategies to ensure
continuous right sizing of its footprint and site occupation to keep
energy consumption and resultant emissions to a minimum, while
reducing costs and improving employee experience and comfort.
IntenCity was designed and built with Schneider building and
power management technologies. Its building management is
operated by EcoStruxure™ Building Operation (EBO). Energy
consumptions are optimized thanks to EcoStruxure™ Power
Monitoring Expert (PME). Finally, IntenCity produces its own green
and microgrid connected energy, managed by EcoStruxure™
Microgrid Advisor (EMA).
IntenCity is equipped with a heating and cooling system made
of two thermorefrigerating pumps which enable the building
to efficiently serve its very low power needs. The rooftops are
covered with 4,000 square meters of solar panels complemented
by two vertical wind turbines and backed by 300 kWh of battery
storage capacity. Thanks to these energy production and storage
systems, the full 970 kWh required to operate the building on an
annual basis can be entirely compensated by its on-site green
energy production.
The combination of those technologies enables IntenCity to drop
its energy needs in operation to a staggeringly low level of 37 kWh/
sqm/year, and, according to the WGBC definition, to be net-zero
carbon emission right from its commissioning date. IntenCity is
currently in the process of gaining LEED Platinum certification
with the ambition to achieve a score of 100/110, making it the
most efficient and sustainable building in the world.
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Solar and wind-powered roof at IntenCity facility in Grenoble,
France
Global, regional, and site energy reporting is delivered with the
EcoStruxure™ Resource Advisor software suite. EcoStruxure™
Resource Advisor provides a data visualization and analysis
application that aggregates volumes of raw energy data into
actionable information. EcoStruxure™ Resource Advisor is a
cloud-based software as a service (SaaS) model, it provides
reduced solution costs, increased data storage capacity,
and a flexible and mobile energy solution enhanced by
Schneider Electric expert services.
The Group is a member of EP100 (Energy Productivity 100), a
Climate Group initiative. Its target is to double energy productivity
by 2030 against the 2005 baseline, meaning double the economic
output from every unit of energy consumed within 25 years. In
2021, the Group achieved 76% energy productivity (against a
2030 target of 100%) compared against 2005.
In general, Schneider sites are low consumers of energy compared
with other industries because industrial processes are discrete
and assembled. The Schneider Energy Action program uses site
energy experts along with Schneider’s Sustainability Business
consulting team to report and analyze energy consumption, to
identify energy saving opportunities, and to deploy actions. Since
2005, the Group has fixed annual objectives for energy efficiency
each year. Schneider met or exceeded its energy efficiency goals
during the previous four Company programs (2009–2011, 2012–
2014, 2015–2017, and 2018–2020), by achieving 10%, 13%, 10%,
and 10%, respectively, totaling over 40% reduction from 2009
to 2021.
The 2021–2025 Company program aims to reduce energy
consumption by a further 15% over five years compared to 2019
(SSE #5).
Resources
SSE #5
15% energy efficiency in our sites
The Group measures energy efficiency in its 200+ largest
energy-consuming sites, accounting for 85% of the total
energy consumption of the Group. At the end of 2021,
this program enabled the following achievements:
• About EUR 5 million and 65 million kWh were saved
in 2021 compared to 2019 baseline.
• About EUR 5.2 million was invested, of which
EUR 5 million was capital costs and EUR 0.2 million
was operating costs.
Baseline
2021 Progress
2025 target
0%
6.6%
15%
Chapter 2 – Sustainable development
Strategic Report
Annual energy productivity progress against 2030 EP100 target
(vs 2005)
%
0
0
1
%
6
7
%
2
7
%
9
6
%
4
5
%
5
4
2017
2018
2019
2020
2021
2030
Annual progress
Target
2.
2.3.4.2 RE100: switch to 100% renewable
electricity by 2030
In 2017, Schneider Electric joined RE100 and committed to
source 100% of its electricity from renewables by 2030, with an
intermediary target of 90% by 2025. In 2021, the Group sourced
82% of its electricity from renewable sources, up from a starting
point of 2% in 2017. To deliver its target, the Group leverages four
complementary tools: green tariffs, renewable certificates, power
purchase agreements, and on-site generation.
This commitment entails many benefits. First and foremost,
going green is deeply aligned with the Group’s strategy. Schneider
wants to be one of the corporate players who shape the future
energy landscape, having its own sites producing and consuming
renewable electricity. Second, renewable sourcing is an important
pillar to drastically cut down CO2 emissions from the Group’s
operations, following a 1.5°C trajectory in line with Science-Based
Targets. Third, because it makes good business sense. In a lot
of cases, renewable supply enables savings on electricity costs.
It is also a way of diversifying energy supply risks and reduces
exposure to the volatility of market prices. Also, in some developing
countries, microgrid technologies coupled with renewables can
enable the securing of power supply and reduce downtime risks.
Fourth, because the Group wants to demonstrate the value add of
its own technologies and solutions, by showcasing EcoStruxure™
Microgrid IoT architecture on its own sites. Sites leverage
Schneider Electric’s connected inverters, Molded Case Circuit
Breakers (MCCB), and transformers to connect on-site solar panels
to the grid and use the energy and microgrid software to manage
energy production and consumption. Schneider also leverages the
expertise of the Sustainability Business consulting teams to deliver
this transformation.
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2.3 Acting for a climate positive world
Annual renewable electricity usage percentage by region,
and 2025 and 2030 (RE100) Group targets
%
0
8
%
2
8
%
0
0
1
%
0
9
%
0
5
%
0
3
%
2
2017
2018
2019
2020
2021
2025
2030
NAM
Europe
APAC
Rest of the World
Target
2.3.4.3 EV100: Shift 100% of company fleet
to electric vehicles
As part of Schneider Electric’s climate strategy, we investigate
opportunities to improve the accessibility of sites, with commuting
shuttles, secure bicycle storage, personal lockers and changing
areas, and pedestrian-friendly access paths connecting to
local routes. Schneider also promotes flexible working to avoid
thousands of unnecessary or avoidable trips generating travel-led
emissions by enabling employees to connect remotely, to work from
home, and at customer sites.
At the end of 2019, Schneider accelerated its efforts to cut CO2
emissions from transport with the commitment to switch to 100%
electric cars by 2030. By 2025, Schneider Electric aims to switch
one-third of its corporate car fleet. The Group demonstrates this
commitment by being a member of EV100, a global initiative
bringing together forward-looking companies committed to
accelerating the transition to electric vehicles (EVs) and making
electric transport the new normal by 2030. At the end of 2021,
7.7% of the Group’s corporate car fleet was comprised of EVs.
In 2020, Schneider Electric was recognized as the 2020 Clean
Energy Trailblazer by Climate Group’s RE100. This was the first year
of the RE100 Leadership Awards, which recognizes companies
going above-and-beyond to accelerate a clean energy future.
Schneider was awarded the honor based on its wide-ranging
commitments, including the Company’s own CO2 reduction targets,
CO2 savings delivered by EcoStruxure™ technologies to customers,
clean energy advisory services, and its Access to Energy program,
which provides energy access in underserved communities
globally.
Climate
SSE #3
90% of electricity sourced from
renewables
Since 2017, the Group has accelerated renewable electricity
sourcing and the installation of on-site solar panels, coupled
with EcoStruxure™ metering and power architectures.
In 2021, more than 195 sites source 100% renewable
electricity and 47 sites are equipped with on-site solar
capacities.
Baseline
2021 Progress
2025 target
80%
82%
90%
Resources
SSE #7
One-third of corporate vehicle
fleet comprised of electric vehicles
(100% by 2030)
The Group has set an ambition to pace its 2030 ambition
of an all-electric fleet.
Germany Is leading this transition for Schneider Electric.
Their journey started in 2018, with the objective to shift
towards 50% electric vehicles by 2021. Their approach
was holistic, taking into consideration all variables from
infrastructure maturity to fleet and driver profile; today
the country has 40% EV (due to delays in the supply chain)
and aims to reach 100% by 2023.
Baseline
2021 Progress
2025 target
1%
7.7%
33%
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In 2021 our advanced Emission Monitoring System was improved
to become more digital, with centralized monitoring, but also more
robust to any potential failure mode. This new kind of system will be
deployed in 2022 on the biggest manufacturing site of the Group.
This technology allows for continuous measurement of SF6
concentration in enclosures around devices and piping networks.
In the event of any deviations, an alarm notification is automatically
sent to maintenance teams. Additionally, the seal testing processes
of the products are mainly done with helium instead of SF6. This
method ensures that no emissions are coming from non-compliant
enclosures during the production time.
2.
Thanks to this global activity and to the commissioning of efficient
equipment, Schneider has exceeded the 0.19% target set for
2021. The Group achieved 0.1% leakage rate globally in 2021,
systematically decreasing from 4% in 2008. This SF6 leakage
reduction enabled savings of 11,400 tonnes of CO2 equivalent
in 2021 versus 2017.
Annual SF6 leakage rate
6
7
.
1
2.3.4.4 Zero-CO2 Sites
The path towards net-zero CO2 emissions in operations by 2030
will require more than just renewable electricity. While many
applications can be electrified, some applications do not, and may
not in the near future, have electricity-based alternatives. As such,
Schneider Electric has begun identifying applications on sites that
currently have electrification alternatives as well as those which will
require the use of fossil-free fuel solutions.
This effort has resulted in the Group newly embarking on its
journey towards Zero-CO2 Sites. The ambition is to source 150
sites with fossil-free energy (e.g., renewable electricity, biofuels) by
2025. But it’s not enough to just use renewable energy; it remains
critical to maintain energy efficiency. That’s why the program also
requires digital energy monitoring. For large sites in particular,
this means installing connected meters on the site’s significant
energy uses and connecting them to systems like EcoStruxure™
Power Monitoring Expert, EcoStruxure™ Resource Advisor, or
EcoStruxure™ Building Operation to ensure real-time monitoring of
energy which allows for active energy management and efficiency.
Climate
SSE #1
150 Zero-CO2 sites
The Group aims to eliminate fossil-based energy
consumption from 150 of its sites by 2025 through
electrification and sourcing renewable electricity
and the use of biofuels.
9
2
.
0
6
2
.
0
4
2
.
0
4
1
.
0
0
1
.
0
2010
2017
2018
2019
2020
2021
For sites that have achieved the Zero-CO2 site status,
they were able to reduce 43,000 tonnes of CO2 in 2021.
Baseline
2021 Progress
2025 target
30
51
150
Climate
SSE #2
2.3.4.5 Reduction of SF6 emissions
SF6 gas has excellent insulating properties which have historically
helped ensure the safety and quality of certain Schneider Electric
products. However, SF6 gas has a Global Warming Potential
(GWP) 25,200 times higher than CO2, making it one of the highest
GWP gasses. As such, Schneider is innovating its offers to move
away from SF6 gas (SSE #2: 100% substitution with SF6-Free
medium voltage technologies by 2025). In 2021 the promises from
Schneider to deliver new SF6-free medium voltage switchgear
became a reality with the installation of innovative products on
several customer sites. 2021 was the year of the industrialization
of several new product lines, free of SF6, to prepare the full
commercial launch of this new generation of products.
In the interim, all Schneider manufacturing plants and R&D
laboratories handling SF6 gas in their processes are actively
reducing, as much as possible, SF6 leaks and emissions during
the different phases of their activities. A worldwide community
of SF6 experts are sharing best practices for processes,
including procedures, equipment, and training.
100% substitution with SF6-free
medium voltage technologies
Milan is in the process of powering a fleet of 1,200 eBuses
not only with clean energy, but also with green power
infrastructure.
The innovative SM AirSeT™ MV switchgear, free of
greenhouse gases, are deployed in Milan depots’ charging
infrastructure for its bus fleet, to be 100% electric by 2030.
Digital and connected solutions allow smart and efficient
energy management and ensure greater continuity of
service.
Baseline
2021 Progress
2025 target
0%
38%
100%
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Chapter 2 – Sustainable development
2.3 Acting for a climate positive world
2.3.5 Decarbonizing our
supply chain by 2050
Decarbonizing the world at scale, in line with the conclusions of
the Intergovernmental Panel on Climate Change (IPCC), requires
immediate collective action. Schneider Electric is committed to
engaging its suppliers towards net-zero CO2 emissions by 2050,
and is already taking concrete action, through its Zero Carbon
Project for the next 5 years.
Achieving carbon neutrality in the Group’s value chain will require
Schneider to work transversally with all stakeholders, from product
design, through sourcing and manufacturing, to shipping.
2.3.5.1 The Zero Carbon Project
The Zero Carbon Project (TZCP) is the first step of this journey
to galvanize the upstream supply chain and take coordinated
actions to reduce the greenhouse gas emissions from
Schneider’s suppliers.
Schneider Electric’s Executive leadership launched the initiative
in April 2021, on the occasion of an all-digital global event,
attended by the leadership of key supplier partners.
The ambition of TZCP is to collaborate with 1,000 suppliers and
reduce their operational greenhouse gas (GHG) emissions by 50%
by 2025 (SSI #3).
The fundamental tenets of TZCP include:
• Quantifying GHG emissions;
• Targeting ambitious emission reductions;
•
Implementing an action plan to achieve the targets.
The participating suppliers will be required to make public
commitments for their reduction targets and share the emission
reduction progress with Schneider. The participating companies
cover more than 60 procurement categories from various regions,
and vary in terms of carbon maturity and size. To adapt to this
diversity, the participating suppliers are allowed a certain flexibility
to customize their reduction plans by defining their own base
year and baseline and adopt adequate reduction targets and
time frames.
So far, more than 1,000 suppliers have committed to participate
in the program. An initial survey with those suppliers showed
that more than 70% of them have not yet quantified their GHG
emissions, so an important part of the journey will be for them
to develop a robust GHG accounting tool.
Partnership and collaboration
Partnership and collaboration are at the heart of The Zero Carbon
Project. Over the past years, Schneider has implemented several
decarbonization measures and successfully reduced its own
operational GHG emissions by more than 50%. To ensure that
Schneider’s partners benefit from this experience and get a
headstart in the journey, the Group conducted eight technical
training sessions, spanning over 30 hours, for suppliers and
partners across timezones and language proficiencies. Those
sessions detailed the actions implemented at various Schneider
locations, with leading decarbonization technologies and solutions,
methodology for GHG footprint calculation, and case studies
of successful implementation at other companies. Over 1,300
suppliers attended the sessions.
To ensure constant engagement with these partners, The Zero
Carbon Project Forum Community Calls have been initiated on
a monthly basis. Those calls provide a platform, a safe space, for
experience sharing and brainstorming on decarbonization-related
experiences shared by the suppliers, so that all parties can learn
from collective intelligence.
As a support to those who are new to the decarbonization topic,
9 handholding sessions, in English and Mandarin were organized
on the GHG footprint methodology in December 2021.
Additionally, to provide specific handholding during the
quantification of GHG emissions, Quick Response Teams were
constituted to clarify and support supplier actions at regional level.
In addition to the “one-to-one” support extended to the suppliers, a
dedicated web portal has been deployed. This web portal provides
single-window access to all thought leadership, research, trainings,
case studies, decarbonization levers, and tools for quantification of
GHG emissions and decarbonization.
Calculating GHG emission reductions
As a result of the engagement described earlier and outreach,
the suppliers are starting to focus on setting up strong governance
within their organizations, which will help navigate their
decarbonization journey in the years to come.
The GHG emission reduction reported in Schneider Sustainability
Impact (SSI) #3, is measured as the average carbon intensity
reduction of reporting suppliers, multiplied by the proportion
of reporting companies among the 1,000 committed suppliers.
This normalization is done to give a more adequate picture of
the overall progress of all participating suppliers.
The initial efforts so far have resulted in about 1% reduction of
the GHG for 1,000 suppliers, and Schneider remains committed
to working together with its partners to strengthen their efforts
for stronger decarbonization. The Group will continue to record
its suppliers’ GHG declarations on an annual basis to ensure
the most accurate and updated information is available for
reporting performance.
Climate
SSI #3
Reduce CO2 emissions from top 1,000
suppliers’ operations by 50%
To address the suppliers’ need for handholding,
the engagement approaches deployed are:
• 8 technical training sessions
• 9 CO2 calculation training sessions
• Monthly TZCP Community Calls
• Dedicated TZCP Web Portal
Baseline
2021 Progress
2025 target
0%
1%
50%
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Some evidence of Schneider initiatives to mitigate the impact
of transport-related CO2 emissions include:
•
•
•
Implementation of container freight stations (CFS) in Schneider’s
sea shipping network to allow for origin consolidation and
destination deconsolidation of ocean containers resulting
in a reduction of the number of containers shipped.
Implementation in various South American countries of final
customer delivery utilizing electric vehicles and bicycles.
Additionally, piloting rail shipments from the regional ports to
Schneider’s facilities.
In North America, a strong focus on our trucking asset utilization
with the implementation of multi-deck trailers on the Mexico-
USA lane, significantly increasing fill-rate and reducing the
number of trips required.
• Exploring the use of smaller, faster, zero carbon sea transport
options to connect our shorter, high-frequency lanes to
potentially replace air freight and reduce traditional sea
shipments.
2.3.5.3 Green materials
Purchases are responsible for the largest share of Schneider
Electric upstream Scope 3 CO2 emissions. Schneider has
committed to increase green materials in products to 50% by
2025, and tracks progress quarterly under Schneider Sustainability
Impact (SSI #4). While this program does not focus on CO2 only,
but also mitigates other environmental impacts such as resources,
biodiversity or toxicity, this initiative will contribute to reduce the
Group’s Scope 3 supply chain emissions, in line with its 1.5°C
carbon pledge. To achieve this ambition, Schneider will participate
actively with industry leaders in dedicated working groups
to become a change agent of the low-carbon economy while
enhancing the traceability of materials. At the end of 2021,
11% of materials in scope where qualified as “Green”.
Read more details on the Green materials and sustainable packaging
programs in chapter 2.4 “Being efficient with Resources”, page 144, and
in chapter 2.7 “Methodology and audit of indicators” page 206. (cid:496)
2.3.5.2 CO2 efficiency in transportation
Schneider Electric uses a robust transport network to connect its
factories and distribution centers, and to deliver to its customers.
The related CO2 emissions are part of the scope 3 emissions
of the Group’s carbon footprint, as this activity is performed by
transport suppliers. From 2015 to 2017, CO2 emissions intensity
from transportation was reduced by 10%. The 2018-2020 Company
program aimed to further reduce CO2 intensity in transportation by
10% in 2020 compared to 2017. By the end of 2020, performance
compared to 2017 regarding transport-related CO2 emissions had
decreased by 8.4%.
With Schneider Sustainability Essentials 2021-2025, the Group aims
to further reduce CO2 intensity in transportation by 15% compared
to 2020, or a 3% reduction year on year (SSE #4).
For 2021, unprecedented shortage in materials and components
sourcing, coupled with lower reliability and availability of
transportation means, led to an absolute CO2 emissions increase
in freight paid by the Group of 24% (compared to 2020), yet a 1%
increase in CO2 intensity only.
Building on the work done in prior years, Schneider will be further
enhancing its CO2 reporting capability in 2022 to not only report
on freight CO2 footprint but to facilitate engagement with transport
suppliers on continuous improvement.
Collaborative engagement with the Group’s transportation
suppliers will continue, focusing on the pillars of optimizing existing
transport footprint, as well as supporting and piloting advanced low
carbon transportation technologies across all transport modes –
air, sea and road freight.
Climate
SSE #4
15% CO2 efficiency in transportation
As part of its efforts to reduce the CO2 intensity of
transportation, Schneider Electric is piloting low-carbon
transportation technologies such as electric and hybrid
vehicles. For instance, on the East Coast of the USA,
electric terminal trucks are used by a final mile transport
partner to move containers between the Distribution Center
and the Port’s Terminal.
Baseline
2021 Progress
2025 target
0%
-1%
15%
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Chapter 2 – Sustainable development
2.3 Acting for a climate positive world
2.3.5.4 SF6 Recovery services
Sulfur hexafluoride (SF6) is a gas with high dielectric (insulation)
strength, and it has been widely used for building switchgear –
especially medium voltage gear – for the past 30 years, as it
allows to reduce the size of electrical gear.
The electric power industry uses roughly 80 percent of all SF6
produced worldwide, and the global installed base is still expected
to grow by 75% by 2030.
In 2013, Schneider Electric started offering its customers a
seamless service for the removal and/or recycling of obsolete
equipment called “SF6 recovery services”. Today, recovery
services are available in France and 10 other countries; the
customer support is under development to propose a model
adapted to the different markets in different countries all over
the world.
The ambition is to offer recovery services to any SF6 Schneider
legacy by 2025.
The recovery service allows Schneider’s customers to dispose
correctly of their machinery, against a green disposal certificate,
thus granting them peace of mind. The service consists in
collecting the equipment and, together with our partners, dismantle
and reuse, recycle or dispose of all the components (such as
metals or thermoplastics) appropriately. Specifically, SF6 is
extracted from machines and sent to a specialist company for
regeneration and destruction.
2.3.5.5 Green information technology (IT)
Considering digital acceleration increases the utilization of IT
services, a challenge arises to decouple rising demand from
environmental degradation. Bearing that in mind, Schneider
Digital’s Green IT initiative prioritizes measuring and optimizing the
environmental footprint of Schneider Electric’s information systems.
An action plan has been implemented to optimize the
environmental footprint of the various components of IT.
The Group IT Asset Management (ITAM) Policy and standards have
been updated with a strong focus on standardization, sustainability,
and circular economy enablement, creating a holistic approach to
sustainability throughout the entire lifecycle of IT assets.
The consolidation and adjustment of the personal computer (PC)
replacement lifecycle allowed Schneider to reduce its yearly PC
carbon footprint by more than 15%.
Carbon footprint reduction is an integrated requirement for the IT
vendor selection processes. Consequently, new PCs are up to 40%
more energy efficient and have a 50% lower carbon footprint than
the corresponding end-of-life equipment to be replaced. Shifting
demand to standardized PC models has resulted in an estimated
1,000 tonnes of avoided CO2/year in 2020. Setting ultra-small form
factors as the default PC choice has also resulted in further CO2
avoidance of more than 1,500 tonnes per year.
Additionally, upholding the Group’s IT vendors to sustainability
requirements, the annual 2021 CO2 emission avoidance reached
the level of 1,300 tCO2 and 180 MWh of energy consumption.
IT asset disposal is especially important from a sustainability and
circular economy perspective. Therefore, the IT Asset Disposal
approach has been designed taking into account sustainability and
circular economy principles ensuring that Schneider Electric gives
preference to Responsible Recycling (R2) or e-Steward compliant
IT Asset Disposal vendors.
By using leasing services (mainly in Europe and North America),
donations, and offering an Employee Purchase Scheme (mainly in
Asia Pacific and China) a second life is made possible for retired
PCs. Refurbishing IT devices to give them a second life can
extend their lifespan by several years. Extended lifespan implies
a decrease of the weighted yearly carbon footprint by over 50%
through the amortization of embedded CO2 emissions over time.
A pilot was carried out in 2021 supporting green search engine
practices. In one month, the Group financed the planting of
approximately 387 trees. This not only aids in reversing biodiversity
loss, but also contributes to carbon sequestration absorbing
anthropogenic emissions as well.
During the year 2020, Schneider developed and introduced a
framework based on a data-driven approach to track sustainability
KPIs for End User Group devices. In 2021, the Group framework
was deployed to track sustainability KPIs with regards to IT on-
premise infrastructures. In 2022, the aim is to enable the tracking
of sustainability KPIs for cloud-based infrastructures as well.
Employee education on Green IT best practices was introduced
in 2021, thus driving efficiency not only from the top-down but from
the bottom-up as well. This was hosted through events such as
Schneider Digital Open Days.
Optimization of the Group data center footprint is achieved via its
sustainable-first hybrid IT strategy. This was performed using two
levers in 2021: the rationalization of on-premise servers and the
move towards cloud. This switch has continued, partnering with
providers who have made commitments in terms of sustainability
and carbon neutrality. Thanks to that particular effort, the Company
cloud infrastructure footprint increased by 25% in 2021, and over
80% of its server infrastructure has been virtualized. In addition
to that, on-site servers were rationalized, thus saving about
1,300 tonnes of CO2 in 2021.
Schneider Electric has been utilizing Business Cloud Storage
from a vendor which uses data centers that have achieved or have
committed to achieve 100% renewable energy targets, therefore
reducing its carbon footprint. In 2022, the aim is to migrate to a new
solution which, through a data optimization approach, will allow a
reduction of up to 40% of the size of used cloud storage data,
thus further reducing corresponding carbon footprint emissions.
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The hosting of the Schneider Infrastructure for Europe & Global
applications is provided by IBM for both its Montpellier and Grabels
data centers. Both locations are ISO 14001 and ISO 50001 certified
for the environmental management of IT. Those two IBM data center
sites hosting Schneider workloads were awarded by the European
Commission Participant status in the EU Code of Conduct (CoC)
for Energy Efficiency in Data Center program.
As part of the Group IT Resilience program (formerly known as
IT Disaster Recovery program), Schneider’s own EcoStruxure™
solutions were implemented in 63 more facilities in 2021, allowing
for actionable insights to improving IT efficiency. Additionally, 3,600
Schneider Electric products were added to our IT rooms in 2021.
This is highlighted by the rollout of EcoStruxure™ IT Expert and
EcoStruxure™ IT Advisor already underway.
Thanks to the rationalization of the Group’s application landscape,
380 applications were decommissioned in 2021, allowing
Schneider Electric to reduce data center footprints, as those
applications are replaced with applications running on more
efficient infrastructures.
Regarding the network footprint, as the move towards cloud
influences network energy consumption itself, Schneider Electric
has implemented initiatives to optimize application hosting between
edge and the cloud. A standard hybrid architecture, allowing local
hosting on virtual machines for network intensive applications while
having a cloud DRP with the best service level has been defined
using the Schneider “smart bunker” solution.
Finally, various collaboration solutions are still being implemented
for messaging, web audio, and video conferencing. This roadmap
was expedited by COVID-19. Indeed, innovative digital solutions
allowing virtual teams to work in an agile way were implemented in
2020 and improved in 2021 via remote collaborative brainstorming
tools, electronic whiteboard, and telepresence robot. International
travel was significantly reduced and replaced with digital
interaction including hosting large-scale internal and external
events virtually.
2.
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Chapter 2 – Sustainable development
2.4 Being efficient with Resources
In this section
2.4.1 Preserving the planet and its biodiversity
2.4.2 Eco-efficient manufacturing
2.4.3 Green offers
146
150
156
“Sustainability is the first pillar of our supply chain transformation,
building carbon-neutral and circular supply chains whilst
preserving local biodiversity. Together with our supply chain
partners we continue to improve energy efficiency and
sustainability throughout the entire product creation, delivery,
and support life cycle.”
Mourad Tamoud, Chief Supply Chain Officer
Context and goals
2021 came with yet additional evidence of the speed of climate
change, resource scarcity, and biodiversity losses. In 2021,
“Earth Overshoot Day” fell on July 29, meaning that humanity
consumes its natural capital budget of the year.
The decline recorded last year has been caught up due to an
economic rebound with respect to 2020. Humanity’s common
goal is clear: push back the date of overshoot to December 31 and
beyond to live within the limits of our one planet. Only by working
hand-in-hand will businesses, finance, and governments be able
to drive global systemic and transformative change, thus unlocking
new opportunities and allowing everyone to live sustainably on a
healthy planet.
Schneider Electric’s long-term commitment is to be efficient with
resources, by protecting and restoring biodiversity and innovating
towards circular business models.
On biodiversity, Schneider Electric is committed to fast-track the
adoption of ambitious biodiversity strategies, leveraging best
practices from climate Science-Based Targets: measuring impacts
and aligning targets with science.
With Schneider Sustainabilty Impact and its concrete programs,
the Group innovates towards a more circular economy, in industrial
processes, product design, and business model innovation.
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2021 Highlights
Schneider Electric recognized as the
Best Global Sustainable Supply Chain
Organization by GSSC
Schneider joining forces for circularity
innovation with Accenture through the
Circulars Accelerator program
1st company in the world to publish its
biodiversity footprint, followed by bold
commitments to fight biodiversity loss
2.
Key targets and results
Progress against our 2021-2025 Sustainability commitments
Schneider Sustainability Impact
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Baseline(1)
2021 progress(2)
2025 Target
Resources
4.
Increase green material content in our products
7%
5. Primary and secondary packaging free from single-use plastic,
13%
using recycled cardboard
11%
21%
50%
100%
Schneider Sustainability Essentials
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Resources
5.
Improve energy efficiency in our sites
6. Grow our product revenues covered with Green Premium™
7. Switch our corporate vehicle fleet to electric vehicles
8. Deploy local biodiversity conservation and restoration
programs in our sites
9. Give a second life to waste in ‘Waste-to-Resource’ sites
Baseline(1)
2021 progress(2)
2025 Target
0%
77%
1%
0%
120
6.6%
78%
7.7%
0%
126
15%
80%
33%
100%
200
10. Avoid primary resource consumption through ‘take-back
157,588
203,881
420,000
at end-of-use’ since 2017 (metric tons)
11. Deploy a water conservation strategy and action plan
0%
9%
100%
for sites in water-stressed areas
(1) Generally, the 2020 performance serves as a baseline for Schneider Sustainability Impact (SSI) and Schneider Sustainability Essentials (SSE) 2021-2025 programs.
(2) Each year, Schneider Electric obtains a “limited” level of assurance from an independent third party verifier for all of the SSI and SSE indicators, in accordance with
ISAE 3000 assurance standard (see Independent verifier’s report on page 224). Please refer to page 206 for the methodological presentation of each indicator.
The 2021 performance is also discussed in more details in this section.
Long-term roadmap
2030
• No net biodiversity loss in our direct operations by 2030
• 100% waste recovery by 2030
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Chapter 2 – Sustainable development
2.4 Being efficient with Resources
2.4.1 Preserving the planet
and its biodiversity
According to the Intergovernmental Science-Policy Platform on
Biodiversity and Ecosystem Services (IPBES) global assessment
report, biodiversity loss is unsustainable, and transformative
changes are required to safeguard economic and social models.
Major biodiversity loss undermines nature’s ability to support
people and communities, a factor which strongly improves both
quality of life and business prosperity. The fight against nature
loss should be a business priority: nature is essential to global
economic prosperity and individual business success.
A sustainable future for people and economies will be possible
if nature, climate, and people are addressed in an integrated way.
Indeed, climate change is among the main drivers of biodiversity
loss, and yet nature is part of the climate solutions. To engage in a
transformative change, clear and measurable international targets,
meaning counterparts to both the 1.5°C – 2°C increase climate limit
and its associated carbon budget, must be defined. Schneider
Electric supports the creation of ambitious biodiversity targets
during the COP15 for Biodiversity.
Schneider Electric calls for all companies to fast-track the adoption
of ambitious biodiversity strategies, leveraging best practices from
climate Science-Based Targets. In a joint effort with Marc Abadie,
Chairman of CDC Biodiversité and Eva Zabey, CEO of Business
for Nature, Schneider invites all companies to “raise corporate
biodiversity ambition and aim at no net loss”.
In addition to improving resource efficiency, it is also necessary
in order to live within the limits of our planet to transform industrial
processes and business models to move towards a circular
economy. Circular economy is an obsession to avoid wastage
and to reuse, repair, retrofit or recycle materials, maximizing
environmental and financial value.
A circular mindset also triggers process innovations and opens
the door to new business models, enhancing customer intimacy
and thus loyalty (e.g. take-back and modernization services).
High hopes are placed on circularity as a state of mind, as it
can transform multiple industries for the better.
From a risk standpoint, some challenges may arise from a lack
of stringent regulations or uncontrolled practices if used products
come back into the loop without adequate controls and expertise,
especially regarding life-critical products and electrical safety.
Schneider Electric embraces circular principles all along the
lifecycle of products and offers. The keystone of circularity is
EcoDesignWay™, a process that is applied to the development
of all new products. EcoDesignWay™ enables the right trade-offs
between the environmental impact along the lifecycle of products,
allowing to coordinate the efforts over the whole value chain.
Product
innovation
Process
innovation
On product design, Schneider has committed to:
• Phase-out potentially harmful substances
and provide transparent information on
environmental performance of products
• Design with a circular mindset with
Green Premium™, for increased durability,
repairability and recyclability
• Provide public and transparent information
for the proper dismantling and end-of-life
management of products
Increase green material content in products
to 50%
•
• 100% of its primary and secondary
packaging is free from single-use plastic
and uses recycled cardboard
In the manufacturing phase, the Group applies
circularity principles in its operations and with
customers:
• Have 200 ‘Waste-to-Resource’ sites by 2025
to optimise waste generation and recycling
on the Group’s sites
• EcoStruxure™ solutions help customers
improve resource efficiency in industrial
processes
Business
model
innovation
Over the lifecycle of offers, Schneider commits
to innovate with circular business models and
services:
• Support customers to optimise asset lifecycle
management for increased durability
and efficiency, with Asset Performance
Management (APM) services
• Give a second life to products (unsold or
obsolete stock, commercial returns), with the
‘circular certified’ label launched in France in
2020
• For specific product ranges such as products
containing SF6, offer take-back and end-
of-life management services. The Group is
committed to avoid 420,000 metric tons of
primary resource consumption through
‘take-back at end-of-use’ from 2017 to 2025
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2.
Chapter 2 – Sustainable development
Strategic Report
These environmental and safety leaders are in charge of
reporting on performance as well as executing environmental
progress plans in the field.
• For logistics: the Logistics Senior Vice-President and his/
her teams within the Global Supply Chain department are in
charge of reducing and measuring CO2 emissions from freight
at Group level.
• For countries and commercial entities: environment and
safety champions are appointed in each country and are
responsible for local reporting actions where necessary;
monitoring regulations, taxes, and national opportunities as
applicable (e.g., national transcriptions of the WEEE in relation
to end-of-life product management, and monitoring national
substance regulation such as RoHS China); the proactive
management of local environmental initiatives; and relations
with local stakeholders.
• Edison experts: a process recognizes individuals who have a
specific expertise that the Group is eager to maintain and grow.
There are 10 specific domains in which Edisons are identified,
one of them being environment. Each year, an environment
Edison is expected to dedicate 10% to 20% of his/her time
to lead a global initiative related to his/her expertise, such
as the development of an e-learning course, a new standard,
or an innovation.
Various governance bodies enable those communities to
meet every month or quarter to ensure consistent adoption of
environmental policies and standards throughout the Group.
This network has access to a wide range of resources including
standards, policies, best practices, benchmarks, and guidelines,
all of which are shared on the dedicated intranet site and databases.
Environmental performance is reported and discussed during
leadership meetings of concerned entities, including Global Supply
Chain leadership meetings, Sustainable Innovation Taskforce
with business units, the Board Audit & Risks Committee, Board
of Directors, Executive Committee, Human Resources & CSR
Committee, and Group Sustainability Committee.
To educate all employees on sustainability, an Essential
Sustainability e-learning training was rolled-out in 2021, including
a presentation of the Group’s carbon pledge and the roadmap
for execution. In addition, various e-learning modules have been
developed on topics such as climate and biodiversity. Additionally,
an environment intranet site is accessible to all employees,
informing them about the ongoing programs, best practices,
results, goals, and upcoming deadlines.
In 2019, Schneider Electric launched a company-wide initiative
named Act for Green whereby each of its employees can share
their suggestions on how the Group can “Green” its operations.
In 2020, thanks to the suggestions of many employees, the
#stopsingleuseplastic initiative to ban the single use of plastics
was launched and integrated in 2021 as part of a biodiversity for
sites program (SSE #8). Communities of passionate ambassadors
facilitate e-learning and workshops (such as Climate Fresk) to
increase awareness on climate change.
On June 5, 2021, on United Nations World Environment Day,
as it has been the case for each year over the last eight years,
Schneider organized its annual “Global Environment Day” event
involving tens of thousands of Group employees, inviting them to
celebrate and to share innovations in the areas of climate and the
circular economy, both internally to the Group and externally, in
association with local communities. That year, a special focus
was made on the importance of the ecosystem restoration.
In the image below, an overview of circular initiatives at
Schneider Electric, over the whole value chain.
Mining/Minerals
50% Green materials in
products
Product Design
80% of product revenues from
Green PremiumTM
Manufacturing
200 ‘Waste to Resource’ sites
Distribution
100% of packaging free from
single-use plastic and with
recycled cardboard
User
Recycle
Take-back and end
of life management
Refurbish/
Remanufacture
ECOFITTM
Reuse/
Redistribute
“Circular Certified”
Maintain/
prolong
Services, Asset
performance
managment
Collection
2.4.1.1 Governance
At Schneider Electric, environmental considerations are integrated
in the Group’s strategy, R&D, manufacturing, procurement, finance,
human resources, transportation, sales, marketing, services, and
the way value propositions to customers are spelt out. To deliver
ambitions, environmental transformations are driven by a global
network of over 600 managers and experts responsible for the
environmental management of sites, countries, product design,
and marketing. The network of leaders driving environmental
transformations consists of the following:
• For the design and development of new offers: Sustainable
Offers Managers and leaders in each business are in charge
of integrating key environmental considerations into the
development of new products and producing expected
environmental information for customers.
• For the management of industrial, logistics, and large
tertiary sites: Safety, Environment, and Real Estate Vice-
Presidents are nominated in each region, with dedicated teams.
They are responsible for implementing the Group’s policies
across all sites in their geographical remit. In each region,
directors coordinate teams across a group of sites (clusters),
as well as on site.
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Chapter 2 – Sustainable development
2.4 Being efficient with Resources
2.4.1.2 Biodiversity footprint
To drive change, companies need quantitative metrics to estimate,
monitor, and pilot the impacts of their activities on biodiversity
loss or demonstrate their contribution to biodiversity restoration.
Creating aggregated and standardized biodiversity metrics and
protocols is a much-needed step to ensure nature is truly placed
at the heart of the business strategy.
In 2020, Schneider Electric was the first company to publish the
end-to-end biodiversity footprint of its activities, using the “Global
Biodiversity Score” (GBS) tool developed by CDC Biodiversité.
By sharing its experience with other companies and choosing
to publish results transparently, the Group aims to demonstrate
that measuring biodiversity footprints is a key first step to help
companies define relevant and impactful biodiversity strategies,
across their entire value chain.
The GBS gives detailed and modular results which can be split
by input line (for example, by raw materials such as metal, plastic,
or timber); by pressures on biodiversity (such as land use, climate
change, fragmentation, or encroachment); or it can be presented
by scopes in Mean Species Abundance per square kilometer
(MSA.km²) like a carbon footprint. The end-to-end assessment
allowed Schneider to identify hotspots around which it is most
effective to develop a biodiversity strategy and actions.
The bar chart below illustrates Schneider Electric’s dynamic
terrestrial impact, with detail by pressure. The pie chart highlights
the weight of greenhouse gas (GHG) emissions which represent
almost 70% of Schneider Electric’s pressure on biodiversity.
Land use accounts for almost 30% of “cradle-to-gate” impacts.
Schneider Electric’s biodiversity industrial footprint (in MSA.km²)
i
s
e
u
q
m
a
n
y
d
s
e
r
t
s
e
r
r
e
t
s
t
c
a
p
m
I
)
2
m
k
A
S
M
(
Scope 1,
Scope 2
Scope 3
GHG emission
Land use of wood
Land use of metal mining
Other
Cradle to gate terrestrial dynamic pressures on biodiversity
28.4%
2.1%
0.1% 0.1%
Climate Change
Land use
Encroachment
Fragmentation
Atmospheric Nitrogen Deposition
69.3%
The biodiversity footprint results are expressed in MSA.km²,
a metric that has all the ingredients it needs to become the
international standard: synthetic, easy to understand, and widely
applicable. In 2018, the world average terrestrial MSA was only
66%, meaning that a significant part of the species abundance
of ecosystem integrity has already been lost. Under a business-
as-usual scenario, this number would fall below 60% MSA by
2050. That is far beyond the safe operating zone that respects
the planetary boundary, which is estimated at 70% MSA (CDC
Biodiversité). Such a high biodiversity loss undermines nature’s
ability to provide its contribution to people, which is vital for human
existence and a good quality of life.
2.4.1.3 Taking action towards no net
biodiversity loss
Climate change is one of the major pressures on biodiversity
globally and is the main Group’s biodiversity impact. Therefore,
Schneider’s carbon pledge will have a significant impact on
reducing the Group’s pressure on biodiversity. Five main levers
of actions have been identified and will be addressed through
specific actions.
Quantify and regularly publish the assessment of
impacts on biodiversity (MSA. km²)
As per the first step of the Group’s main commitments, the ambition
will be validated thanks to the results of the Biodiversity Footprint
Assessment performed with the Global Biodiversity Score (GBS).
Consequently, the Group is committed to updating it regularly.
Commit to reduce our impacts and align biodiversity
objectives with science
Schneider Electric recognizes the importance of nature and
biodiversity for humankind to thrive; we are all dependent on
natural resources and ecosystem services. The Group’s purpose
is to empower all to make the most of our energy and resources,
bridging progress and sustainability for all. That is why, in 2021,
Schneider stepped up its ambition and publicly committed, through
act4nature international, to achieving no net biodiversity loss in
its direct operations by 2030 (Scope 1) and to aligning with the
recommendations of international bodies (Convention on Biological
Diversity by the Science Based Targets Network).
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Develop solutions and technologies that contribute
to the preservation of biodiversity
Schneider Electric’s solutions and technologies directly support
biodiversity preservation. Its EcoStruxure™ technologies leverage
digital solutions to conserve energy, water, and resources,
reduce climate change pressure, optimize land usage, and build
transparency, traceability, and circularity in value chains. The
Group also contributes to the access to green electricity for millions
of people each year thereby mitigating further climate change while
providing economic opportunities to those people.
Engage and transform the value chain
The second largest share of the Group’s biodiversity footprint lies
in its upstream supply chain, mainly due to GHG emissions and
land usage (due to wood and metal sourcing). The Group aspires
to engage and transform its value chain and to source greener
materials, which will require innovations both in terms of supply
chain traceability and product design. Schneider Electric calls for
the creation of raw material traceability and certification schemes
to provide information all along the value chain as it is one of the
most pressing issue to solve in order to engage in a more virtuous
procurement practice.
Chapter 2 – Sustainable development
Strategic Report
Act locally, engaging employees and partners
Schneider is engaged to act locally to preserve and restore
biodiversity by joining forces with other stakeholders through
coalitions and partnerships. Its Foundation also supports NGOs
that raise the awareness of the public on nature protection (Global
Footprint Network, WWF, etc.) and act for nature restoration with
partnerships such as Livelihoods Funds. By 2025, Schneider
is engaged towards 100% of sites with a local biodiversity
conservation and restoration program (SSE #8), on top of water
conservation plans for sites in water-stressed areas (SSE #11).
To support the efforts at site level, a multi-site analysis has been
performed with IBAT (Integrated Biodiversity Assessment Tool).
IBAT integrates different biodiversity databases (such as Protected
Areas, Key Biodiversity Areas, and IUCN Red List species) and
enables a site level analysis within a buffer of 1 km. The top 30 sites,
as per risk and exposure, have been selected to perform a deeper
analysis called STAR (Species Threat Abatement and Restoration
metric), to quantify the contribution of operating at specific
locations and to reduce the threat of species extinction risk.
Along its journey, Schneider Electric will continue to leverage its
partnerships with external organizations such as CDC Biodiversité,
Livelihoods Funds, and many of the VolunteerIn initiatives.
Read more about Livelihoods Funds on page 195. (cid:496)
2.
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Chapter 2 – Sustainable development
2.4 Being efficient with Resources
2.4.2 Eco-efficient
manufacturing
2.4.2.1 Risks and opportunities
Environmental risks related to manufacturing include soil, water,
and air contamination. For instance, the release of hazardous
substances can be harmful for fauna, flora, and human health.
It can also disrupt continuity of operations and tarnish reputation.
In addition, with 183 factories and 94 distribution centers in
our Global Supply Chain organization, spread across dozens
of countries and different national environmental regulatory
frameworks, risks of non-compliance exist. These risks include
for instance effluent management, handling of waste, or
greenhouse gases related expectations.
A proactive approach towards site and property environmental
risks and environmental compliance helps preserve the continuity
of operations, reduce reputational and legal risks, and avoid
expensive remediation steps. When Schneider runs projects for
customers, its superior execution ability on environmental matters
may trigger preference from its customers and give the Group an
edge over the competition.
Resource and energy efficiency delivers not only financial savings,
but also limits the Group’s exposure to commodity-price volatility
and shortage risks. The risk extends to the reliability of the energy
on which a facility relies to maintain production. The Group’s
CO2 emissions contribute to climate change and may also incur
additional costs as carbon taxes become implemented worldwide.
Facilities and industrial assets themselves are also at risk of acute
and chronic climate events which can disrupt the supply chain and
endanger lives.
By using lean and clean eco-efficient operations, Schneider can
outperform competitors and mitigate risks. The Group believes
environmental performance is a powerful tool to innovate towards
a more efficient and resilient supply chain and generate bottom-line
savings. By using its own EcoStruxure™ architecture to achieve this
ambition, the Group also showcases carbon efficient architectures
to its customers.
Schneider Electric 2025 sustainable supply chain ambitions
2.4.2.2 Group policy
Schneider Electric continuously works towards a greener supply
chain to protect the environment, decouple its activity from the
consumption of natural resources, and innovate to build a more
circular supply chain. These ambitions are included in the Group’s
supply chain strategy, and referred to as Schneider Sustainability
Essentials (SSE), starting 2021.
The Group’s eco-efficient manufacturing goals:
• Protect the environment, prevent pollution, and limit emissions;
• Continuously improve the environmental management system
and meet compliance obligations;
• Decouple the supply chain from natural resource consumption;
Invent circular business models and supply chain loops;
•
•
Include the environment in its strategy and governance;
• Extend environmental ambitions to suppliers and partners;
• Spread a culture of environmental excellence in the company.
The Group’s energy management goals:
• Reduce the energy intensity of its operations, sustainably
decoupling energy consumption from activity growth;
• Reduce the CO2 intensity of energy consumption, and absolute
CO2 footprint, in line with the Group’s commitments to achieve
a 1.5°C climate change trajectory;
• Adopt Schneider’s own Energy Management and Automation
EcoStruxure™ solutions wherever possible, to showcase the
Group’s solutions for customers and business partners, and
help embark them onto an energy excellence journey.
Preserve life and
act responsibly
Act for a climate
positive world
Be efficient
with resources
0 fatal and serious accident
150 Zero-CO2 sites
200 ‘Waste-to-Resource’ sites
100% of applicable sites certified
with ISO 14001, ISO 50001 and
ISO 45001
90% of electricity comes from
renewable sources
100% of sites deliver energy savings,
with EcoStruxure™ Power and
EcoStruxure™ Resource Advisor
Top 1,000 suppliers reduce
operational CO2 emissions by 50%
15% CO2 efficiency in transportation
100% of packaging is free from
single-use plastic and uses recycled
cardboard
100% sites with Circular supply chain
innovations
100% sites with local biodiversity
preservation programs & water
efficiency
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Chapter 2 – Sustainable development
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Biodiversity, Waste, and Water
17
96%
126
sites banning single-use
plastics* in 2021
waste recovery in 2021
‘Waste-to-Resource’ sites
-34%
water intensity
since 2017
2.
400 sites by 2025
100% target by 2030
200 sites by 2025
-35% target by 2025
t
e
g
r
a
T
These ambitions are embedded in the Group’s Trust Charter and
the Group’s supply chain strategy as well as two global policies that
drive eco-efficiency performance: the Environment Policy and the
Energy Policy. The Group also partners with its suppliers to extend
its environmental ambitions to its upstream supply chain.
• Risks and mitigation actions are presented to the Board Audit &
Risks Committee.
• Schneider Electric’s global risk matrix takes into consideration
the biggest environmental risks (on suppliers, products, sites,
and customer projects).
Flagship programs to achieve these goals include:
• Zero-CO2 sites (SSE #1),
• Delivering energy efficiency with EcoStruxure™ solutions
(SSE #5),
• Powering facilities with renewable energy (SSE #3),
• Maximizing waste recovery through the ‘Waste-to-Resource’
program (SSE #9),
• Sustainably sourcing packaging (SSI #5),
• Focusing on water-stressed sites (SSE #11),
• Emphasizing the importance of local biodiversity (SSE #8), and
• Reducing CO2 emissions generated by transportation (SSE #4).
2.4.2.3 Environmental risk management
and prevention
The Group takes a proactive approach to managing environmental
liabilities and risks. Environmental regulatory compliance,
environmental management systems, and continuous improvement
are the foundation of the Group’s environmental risk management
and prevention program for current, former, and prospective
operations.
Key ongoing initiatives include:
• The Integrated Management System (IMS) covers the Group’s
plants, distribution centers, and large offices, and hosts ISO
14001, ISO 50001, ISO 9001, and OHSAS 18000/ISO 45001
compliance management systems. Each site is audited
periodically, either externally by Bureau Veritas (every three
years), or internally.
• The Company-wide Look at Environmental Assessment and
Risk Review program (CLEARR) was continued, with additional
and updated surveys of select manufacturing sites that focused
on historical and current potential environmental risks.
• Environmental risks and provisions are reviewed with local
and corporate finance, as well as legal functions.
• As part of mergers, acquisitions, and disposals, thorough
environmental due diligence of sites is conducted where
chemicals are or have been used. Any environmental risks
or liabilities identified are addressed through proper risk
management activities.
Historical environmental liabilities are managed on a regional
level to ensure local expertise, regulatory knowledge, and
cultural awareness is applied. Using external consultants,
known environmental issues are thoroughly investigated,
and, if appropriate, remediated or otherwise managed through
engineered or institutional controls to reduce potential risks to
non-significant levels and in compliance with local regulations.
Additionally, Schneider uses third-party services to assess
each of its key sites’ risk profile, in relation to a certain number
of external risks such as fires, earthquakes, flooding, and other
natural disasters. Through this process and its business continuity
planning efforts, Schneider endeavors to gauge related risks and
anticipate possible steps which would be required. With around
244 ISO 14001 certified sites globally, the footprint is balanced
geographically. Roughly 90 of the Group’s plants are in areas
classified as ‘high’ or ‘extremely high’ baseline water stress, as
defined by World Resources Institute’s (WRI) Aqueduct Water Risk
Atlas. The nature of the Group’s manufacturing processes (mainly
assembly) allows for the rebalancing of manufacturing lines in a
fairly prompt manner, if needed.
During the year 2021, no new material environmental impacts
were identified. Furthermore, no Schneider Electric sites are
Seveso-classified.
2.4.2.4 ISO 14001 and ISO 50001
certification
ISO 14001 certification allows Schneider Electric to define and
sustain robust environment governance on its sites, supporting
continuous improvement to deliver environmental performance. As
soon as the ISO 14001 environmental management standard was
published in 1996, Schneider decided to certify its sites. The Group
certifies all industrial and logistics sites comprised of more than 50
employees within two years of their acquisition or creation, and all
large tertiary sites of more than 500 employees. 244 sites are certified
ISO 14001 as of the end of 2021, representing approximately 76%
of the Group scope based on the share of site surfaces, 82% of the
Group scope in terms of energy consumption, and over 85% of the
Group scope in terms of water consumption, waste generation, and
Volatile Organic Compounds (VOC) emissions.
* The scope of the single-use plastics ban for the biodiversity program is “consumer” plastics (e.g. cups, cutlery, gifts/souvenirs, etc.). “Industrial” plastics (e.g. primary/
secondary packaging, products) are covered in Schneider Electric’s SSI #4 and SSI #5 programs.
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Chapter 2 – Sustainable development
2.4 Being efficient with Resources
The Group’s environmental reporting scope and targets are based
on all ISO 14001 sites. Environment reporting metrics are shown in
the table on page 226 and include energy consumption, Scope 1
and 2 CO2 emissions, waste generation, water consumption, and
VOC emissions at ISO 14001 sites.
Schneider Electric also leverages ISO 50001 certification to drive
energy excellence, focusing on the highest energy-consuming
sites. ISO 50001 certification is complementary to ISO 14001
certification and enables us to define and sustain robust energy
governance. With the support of this certification, the sites are
equipped to understand and reduce their energy footprint. The
Group aims to ISO 50001-certify all sites consuming over 5 GWh
per year. By the end of 2021, 140 sites were certified ISO 50001.
2.4.2.5 Waste to Resources
In 2021, global challenges with supply chains, material shortages,
and increased visibility towards waste pollution such as ocean
plastics have reaffirmed what Schneider Electric has known and
strived towards for years: the depletion of the Earth’s resources
in the current linear take-make-dispose models of resource
consumption are not economically or environmentally sustainable
and must be replaced with circular economy models.
In its previous program, Towards Zero Waste to Landfill, the Group
put a strong emphasis on diverting waste from the landfills through
alternative solutions. The Group achieved 206 sites meeting its
stringent requirements of 99% metal waste recovery, 97% non-
metal waste recovery, and 100% hazardous waste recovery using
the best available handling/treatment options available locally. This
helped the Group to achieve 96% waste recovery across
its operations overall.
Waste Recovery Performance
%
4
9
%
5
9
%
5
9
%
6
9
%
6
9
%
0
0
1
Resources
SSE #9
200 ‘Waste-to-Resource’ sites
Schneider Electric is driven to maximize the value of its
resources, considering waste as a resource and ensuring
its waste stays within a circular system. Beyond avoiding
landfill and looking at traditional recycling solutions,
Schneider strives to move up the waste hierarchy and find
reduce and reuse solutions for its resources.
Baseline
2021 Progress
2025 target
120
126
200
In its new program, ‘Waste-to-Resource’, Schneider pushes even
further with its waste recovery ambitions. Sites now must achieve
99% recovery for all non-hazardous waste and still achieve 100%
hazardous waste recovery using the best available handling/
treatment options locally. Additionally, to promote and emphasize
the importance of circular economy, ‘Waste-to-Resource’ sites
will not be allowed to use waste-to-energy solutions for more
than 10% of their waste. This provides an opportunity for sites
to work collaboratively within their internal supply chains, along
with external suppliers and waste management providers to find
innovative reduce, reuse, and recycle solutions.
‘Waste-to-Resource’ ambition at Schneider: maximising value
recovered from waste in sites
Reduce, Reuse,
Recycle
>90%
2017
2018
2019
2020
2021
2030
NAM
Europe
APAC
Rest of the World
Target
Waste to Energy
<10%
Landfill
<1%
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Schneider Electric generated around 135,000 tons of waste
in 2021, most of it being solid waste. Continuous improvement
plans have been deployed to manage this waste, in line with the
ISO 14001 certification. In 2021, the Group recovered 96% of
total waste reported (recovery ratio includes material and energy
recovery) and a 91% recycling rate without energy recovery.
The recovery ratio has increased from 81% to 96% since 2009,
thanks to site-by-site waste management action plans.
Schneider is committed to ensure that the potential adverse
impacts of hazardous waste on environment and health are
mitigated. Two main levers are investigated as part of the
‘Waste-to-Resource’ program: first, all sites generating hazardous
waste ensure visibility of handling and end-of-life treatment
paths. They also seek to add value to waste as much as possible
(through material or energy recovery) while neutralizing its
hazardous nature. Second, top hazardous waste-generating sites
work to reduce the volumes of waste generated in the first place,
notably by implementing “Best Available Techniques” (BAT) in
their industrial processes. Such BAT processes come along with
superior performance from a resource efficiency perspective, and/
or chemical substances use, and/or emission reductions. By 2025,
the ambition is to reduce hazardous waste intensity by 30% against
the 2017 baseline.
In 2021, hazardous waste generation intensity was 0.3 tonnes/
million EUR of revenue, an evolution of -30% versus 2017.
Chapter 2 – Sustainable development
Strategic Report
2.4.2.6 Water consumption
Due to the nature of most of its industrial processes (manual and
automatic assembly), water consumption is not generally a critical
resource for Schneider Electric, and the Group has a minimal
impact on water quality. The topic was considered not very material
by both internal and external stakeholders during the sustainability
materiality analysis. In 2021, water management and performance
information was disclosed in the CDP Water program, and
Schneider was awarded a B rating.
2.
However, Schneider fully realizes the importance of water in local
communities, especially those that are located in water-stressed
areas. Having approximately 90 ISO 14001 sites in areas classified
as ‘high’ or ‘extremely high’ baseline water stress, as defined by
World Resources Institute’s (WRI) Aqueduct Water Risk Atlas, the
Group has set the ambition that 100% of its sites in water-stressed
areas have a water conservation strategy and related action plan
by 2025 (SSE #11).
Under this program, three types of actions can be implemented:
• Standard actions which apply to all sites;
• Conditional actions which apply to certain sites based
on their type and volume of water usage;
• Site-specific actions.
In 2021, the Group achieved 9% of its 2025 target.
In addition, Schneider’s aims to reduce water intensity (in m3 of
water consumption per euro of turnover) by 35% in 2025 versus
2017, with a focus on sites with high water consumption and within
severely water-stressed areas. In 2021, water consumption intensity
was 72 m3 per million euro of revenue, an evolution of -34% against
the 2017 baseline.
Resources
SSE #11
100% of sites in water-stressed areas
have a water conservation strategy
and action plan
Schneider Electric has approximately 90 sites located
in water-stressed areas all over the world. These include
factories, distribution centers, and large offices, with water
usages including process-based, HVAC, sanitary/canteen,
and irrigation.
For instance, Schneider’s Benalla site in Australia has
installed 130,000 Liters of rainwater storage, which allows
the site to source 60% of its water needs from rainwater.
Baseline
2021 Progress
2025 target
0
9%
100
Schneider Electric’s Benalla site, Australia
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Chapter 2 – Sustainable development
2.4 Being efficient with Resources
The Group provides a breakdown of water consumption per
source, with details on water consumed from the public network,
groundwater, surface water (lakes, rivers, etc.), and other sources
of water (rain, recycled water, etc.). At Group level, water is
primarily used for cooling and sanitary purposes and, on a few
selected sites, for processes such as surface treatment. Water
drawn for the sole purpose of cooling and immediately released
without alteration is also monitored separately. For industrial water
use, water discharge is subject to appropriate treatments to reduce
pollutant potential and subject to a monitoring plan.
Global water intensity evolution (m3/million €)
8
0
1
5
0
1
4
9
7
7
2
7
0
7
Water intensity
Target
2017
2018
2019
2020
2021
2025
2.4.2.7 Biodiversity on sites
Biodiversity is a local matter and actions are required at site level
to reduce local impacts: the Group has committed to increase its
biodiversity site actions and raise the awareness of employees. In
fact, site activities such as energy and water consumption, building
infrastructure, food, landscaping, waste generation, light, sound
and other forms of pollution, exert a pressure on biodiversity that
can be reduced. For example, manicured, non-native landscaping
could potentially increase water consumption and promote invasive
species that don’t support native wildlife.
The objective is to achieve 100% of sites with a local biodiversity
conservation and restoration program by 2025 (SSE #8). To meet
this target, sites have to define and deploy a biodiversity program
consisting of a ban of single-use plastics (related to office use)
and at least one local action with significant ecological impact.
The program was launched in 2021 and many sites already
started the journey, understanding the complexities of biodiversity,
assessing their impact and identifying the right local stakeholders
to involve in a preservation or restoration program.
As it takes time to build impactful and consistent biodiversity
programs, a slow ramp up in terms of global performance of
the indicator is expected, with an acceleration after 2023.
With the objective to get an overview on biodiversity priority
sites, inform risk management, and address potential biodiversity
impacts, the Group decided to run a multi-site report with the
Integrated Biodiversity Assessment Tool (IBAT). Developed
through a partnership with Bird Life International, Conservation
International, International Union for Conservation of Nature (IUCN)
and United Nations Environment World Conservation Monitoring
Centre (UNEP-WCMC), IBAT collects and enhances the underlying
datasets and maintains that scientific information.
Resources
SSE #8
100% of sites with local biodiversity
conservation and restoration
programs
Schneider Electric is engaged to act at local level
implementing on every site mitigation, preservation, or
restoration initiatives. Every site will engage in at least one
action pursuing an ecological impact with social benefits.
In Scarborough (England, UK), the site started to restore
a wasteland area to provide a friendly environment for
local biodiversity (and employees). In alignment with local
authorities, community network, volunteers and local nature
specialists, the site performed an ecological assessment
and has moved forward with the project.
Baseline
2021 Progress
2025 target
0%
0%
100%
The IBAT report enables users to assess the biodiversity-related
features of multiple operational sites for corporate disclosure. In
particular, the report is relevant for Global Reporting Initiative (GRI)
standard GRI 304: Biodiversity. For each operational site, the report
provides the counts of protected areas and Key Biodiversity Areas
(KBAs) within a kilometer radius.
The results of the “IBAT multi-site Report, 2021*” include all
Schneider Electric sites and show that, within 1-kilometer radius:
• 21% of its sites are in proximity of a protected area as defined
by the IUCN, of which:
− 8% are in category 1a, 1b and 2 (just 6 sites are in proximity
of a category-1-protected area)
− 29% are in category 3 or 4
− 31% are in category 5 or 6
− 32% are not applicable, not assigned or not reported
Among the sites in proximity of a protected area, 33% are either
industrial sites (characterized by discrete industrial processes
such as assembly lines) or distribution centers (warehouses and
logistics); the remaining 66% are office buildings.
• 3% of the Group’s sites are in proximity of a key biodiversity area
(defined by IBAT as either “Alliance for Zero Extinction (AZE)”
or “Important Bird and Biodiversity Areas (IBAs)).
All the concerned sites are invited to consider their proximity
to natural areas in their biodiversity program.
*
IBAT Multi-site Report. Generated under license 26614-25299 from the Integrated Biodiversity Assessment Tool on 15 December 2021 (GMT). www.ibat-alliance.org
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2.4.2.8 Conditions of use and release
into the soil
Schneider Electric sites are mainly located in urban or industrial
areas. None of the Group’s businesses involve extraction or land
farming. In 2021, Schneider manufacturing sites conducted their
annual review of pollution risks as part of ISO 14001 monitoring.
No significant spills or discharges were reported in 2021 with
known harmful impacts regarding soil pollution.
Hazardous materials are stored, handled, and used in compliance
with regulations and with appropriate pollution protection
mechanisms. As part of the ‘Waste-to-Resource’ program,
additional focus is brought on hazardous waste, with efforts to
eliminate, substitute, or improve treatment (see section 2.4.2.5
Waste to Resources, on page 152).
2.4.2.9 Discharge into the water and air
Because Schneider Electric is mainly an assembler, its discharge
into the air and water is very limited. Schneider manufacturing
sites are carefully monitored, as part of ISO 14001 certification.
Discharges are locally tracked as required by current legislation.
No significant spills or discharges were reported in 2021 with
known harmful impacts in terms of water or air pollution.
Emissions of NOX and SOX and particles into the air are monitored
at site level in accordance with applicable legal requirements;
monitoring of these emissions is verified via ISO 14001 audits.
Those emissions are not consolidated at Group level.
Chapter 2 – Sustainable development
Strategic Report
Schneider Electric is committed to preventing adverse health and
environmental impacts from Volatile Organic Compounds (VOC)
emissions, and for this reason, the Group works to reduce VOC
emissions from industrial activities by 10% every three years.
VOC emissions are primarily linked to production. VOC emissions
decreased from 29 kg/million EUR in 2017 to 17.4 kg/million Eur in
2021 (-40%). The Group engages with each of its industrial sites
that contribute the most to VOC emissions, and which together
concentrate over 90% of the Group’s VOC emissions, in a Pareto
law approach. For these sites, environment, health and safety,
and industrialization teams, join hands and actively collaborate
to ensure conditions of use are strictly adhered to and health
and environmental risks are known and mitigated. Those top
VOC-emitting sites also investigate opportunities to reduce
and phase-out concerned chemicals from industrial processes
wherever possible.
Finally, CFC and HCFC emissions are monitored locally, in
accordance with applicable regulations. These emissions are
mainly due to the operation of air conditioning systems and are
not directly linked to Schneider industrial activities. These
emissions are not consolidated at Group level.
2.4.2.10 Noise, odors, and light
All Schneider Electric sites comply with local regulations on noise
and odor. Given the nature of its activities and distribution model,
Schneider does not have any significant light pollution externality.
2.
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Chapter 2 – Sustainable development
2.4 Being efficient with Resources
2.4.3 Green offers
Schneider Electric products support customers every day, make
their lives easier, and enable efficient operations. But because
products also consume resources and energy, during their
production and use, Schneider is committed to reducing their
environmental impact.
Since 2003, a Product stewardship team has been dedicated
to providing high environmental performance products to
the Group’s customers as well as full transparency regarding
environmental impact. Initially, efforts were focused on compliance
with the most rigorous environmental regulations, then on data
transparency (through Product Environmental Profiles and End of
Life Instructions). Over the last few years, additional efforts have
been made to develop a more customer-centric program, helping
Schneider customers to better differentiate offers based on strong
environmental value propositions.
With the Green Premium™ program and the EcoDesign Way™
process, Schneider reduces the environmental impact of its
products using lower impact materials, drastically changing its
packaging strategy as well as bringing circular value propositions
to extend the durability of products.
2.4.3.1 Risks and opportunities
The increasing complexity of environmental regulations could
slow down the Group’s innovation potential, and could phase
out specific chemical substances or resources too quickly with
no suitable alternative being found in a scalable manner. The
complexity is directly linked to a “regionalization” of environmental
regulations (e.g., California Prop 65 and China RoHS) while global
resources are limited.
With increasingly stringent environmental regulations year after
year, there is a risk for Schneider Electric to have key materials
and substances that could be utilized to deliver high performance
to be regulated themselves. This would limit the innovation
potential of products that would fall within the regulation radar
with possible restrictions. There is also a risk to face contradictory
recommendations due to regulations overlap (e.g., substances
restriction versus circularity performance).
By its customers’ side, Schneider has observed a multiplication
of external repositories to leverage product environmental
performance, some being specific to a single customer. As such,
there is a risk for Schneider products not to be systematically
referenced externally.
To circumvent the risks stated earlier, Schneider relies on the
completeness of the Green Premium™ program, enabling it to
cover all relevant product-oriented environmental topics. Relying
on the EcoDesign Way™ process and tools is also key to include
environmental performance as soon as possible in the new
product development process. This enables Schneider product
development teams to innovate while delivering more Green
Premium™ products that will differentiate themselves from those
of competitors thanks to higher environmental performance.
The multiplication of environmental regulations requires a lot
of information to be shared with the supply chain and updated
regularly. Only the best-in-class suppliers will be able to answer
this challenge. Also, it is an opportunity for the Group to put in
place a strong interaction with those suppliers and ensure that
future restrictions will be anticipated.
Schneider reinforces a worldwide approach of environmental
product stewardship directives fed by a regional and local
environmental steward network, which strengthen its influence
position towards regulators through Schneider professional
associations.
From the customers’ perspective, Schneider relies
on the “Check a Product” platform, a public website
(https://checkaproduct.se.com/CheckProduct.
aspx?cskey=4b4b15ad9d8148759e39fcb1b346ad9f) providing all
relevant product environmental information. Thanks to “Check a
Product”, the Group is in a good position to be well referenced in
external databases such as the SCIP (Substance of Concern
in Products) database and in customers’ prescription tools.
In a commitment to go one step further, Schneider takes the
necessary steps to digitize the environmental information of
offers. Within a fully digitized ecosystem, the Group can provide a
streamlined and efficient process to share environmental data with
external third-party databases or customers’ own prescription tools.
RoHS
PEP
EoLI
EcoDesign Way™
RoHS
REACH
RoHS
REACH
2003
2007
European Union
adopts RoHS
European Union
adopts REACH
2008
2015
2018
2022
Green Premium introduced
to provide transparent
information on regulated
substances and to share the
environmental information of
our products
EcoDesign Way launched
our internal eco-design
approach embedded in
the offer creation process
Upgraded Green Premium
program to include green
claim differentiation
Enhanced environmental
performance criteria
Data Digitization
acceleration
RoHS: Restriction of Hazardous Substances. REACH: Registration, Evaluation, Authorization and Restriction of Chemicals.
PEP: Product Environmental Profile. EoLI: End-of-Life Instructions.
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2.4.3.2 Group policy
Schneider Electric strives to distinguish itself through innovative
green offers as mentioned in the Environment Policy. This ambition
is articulated through:
In 2021, the main objectives for the Green Premium™ program
were to:
• Ensure compliance with the latest regulations within an even
more demanding context;
• Develop new environmental claims within products for higher
• Designing energy-efficient, low CO2, serviceable, and safe
performance and a clearer differentiation;
offers;
• Helping customers improve their environmental performance;
• Providing digital environmental information on offers.
To reach such ambitions, Schneider is committed to:
• Invest in R&D to create energy-efficient and environment-
friendly solutions;
• Prepare the digitization of environmental information and ease
data sharing with partners;
• Prepare the future of product stewardship for the years to come
by developing competencies within the Company.
2.
Schneider Electric is redefining the program that will encompass
three pillars in 2022: Trust, Transparency, and Performance:
• Create new eco-designed products and solutions and develop
• Trust means for Schneider to continue to be transparent with
lifecycle thinking;
• Invent circular offers and business models, through products
that can be reused, repaired, retrofitted, refurbished, and
recycled, as well as through end-of-life services;
• Provide transparent and digitized information on the
environmental information and benefits of offers;
• Deliver continuous improvement in product stewardship
through the Green Premium™ portfolio.
2.4.3.3 Green Premium™
Launched in 2008, Schneider Electric’s Green Premium™ program
was created to provide its customers with more sustainable
products and to be transparent with environmental information.
Since then, Green Premium™ has been the absolute warranty for
the Group to deliver products that comply with RoHS and REACH
regulations as well as being perfectly transparent by delivering
environmental disclosures and end-of-life instructions.
The program has evolved over the last few years to integrate
Schneider’s EcoDesign Way™ process as well as green value
propositions for an enhanced differentiation.
As an example, Schneider embedded new durability value
propositions such as the “take-back” program in Green Premium™.
Customers who have purchased one of the APC Uninterruptable
Power Supplies (UPS) have access to complimentary recycling
when the battery in the product reaches its end of usable life.
In 2021, this service collected around 14,000 tonnes of batteries
globally for recycling.
customers providing RoHS and REACH substance information
and going beyond regulations by applying the same rules
regardless of the geographies. That is and will remain the core
of the Green Premium™ program.
• Transparency is the warranty from Schneider to disclose in
a digital way the environmental impacts of its products, their
end-of-life treatment, as well as any environment-related
attribute meaningful for customers. This is crucial in the Group’s
strategy, as the first step for improvement is measurement and
quantification.
• Performance is Schneider’s commitment to deliver products
with reduced environmental impact. Performance can take
several forms:
− Usage of lower impact materials (i.e., recycled plastics);
− Enhanced product recyclability to reduce waste and loss
of critical raw materials;
− Energy efficient products with at least 10% of improved
energy efficiency with respect to the market average or
to previous generations;
− Improved durability and the ability to function as required
under defined conditions of use, maintenance, and repair,
until a final limiting state is reached (which should be at least
5% higher than market average);
− The ability to provide SF6-free products;
− Repair parts of products easily.
Green Premium™ information, including conformity declaration,
Product Environmental Profiles (PEP), and End of Life Instructions,
are digitally available 24/7 for customers in the technical data sheet
of the online catalog, in the mySchneider mobile app, and on the
“Check a Product” website at https://checkaproduct.se.com/.
Trust
Transparency
Performance
Minimal use of hazardous substances in,
and beyond, compliance with regulations
(RoHS, REACH).
Digital environment disclosure (PEP)
Circularity Profiles to provide guidance
on responsible product end-of-life
treatments
Transparent environment attributes (ie.
Mercury-/Lead-/PVC-free)
Sustainable packaging
Lower Impact
Materials
Energy
efficiency
SF6-free
Recyclability
Durability
Reparability
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Chapter 2 – Sustainable development
2.4 Being efficient with Resources
Today, 78% of Schneider Electric’s product sales come from
Green Premium™ products and the ambition is to reach 80%
by 2025 (SSE #6).
Resources
SSE #6
80% of product revenues covered
by Green Premium™
In 2021, Schneider Electric received an increasing number
of customer inquiries requesting detailed information
regarding the material content and environmental impacts
of its products. In response, the Industrial Automation
Environmental Experts of the Group generated more than
75 new Product Environmental Profile (PEP) documents.
This has enabled the certification of a larger amount of
products through the Green Premium™ program to deliver
even more transparent information.
Baseline
2021 Progress
2025 target
77%
78%
80%
2.4.3.4 EcoDesign Way™
EcoDesign Way™ is Schneider Electric’s proprietary process,
deployed on product development projects of more than
EUR 300,000. It is fully integrated in the Group’s Offer Creation
Processes (OCP), mandatory deliverables, and encompasses
all involved functions: Marketing, Quality, Design, Supply Chain,
and Project Manager. EcoDesign Way™ involves 3 steps:
1
Identification of relevant environmental performance for
customers with inputs from marketing
2 Research and assessment of alternative solutions to target
the selected environmental performance
3 Once performance is reached, draft of a marketing pitch.
The EcoDesign Way™ scorecard is fully aligned with all Green
Premium™ value propositions. Moreover, several initiatives have
been launched to embed EcoDesign Way™ earlier in the OCP with
strong inputs from the Future Offer Manager to foster innovation
and increase EcoDesign Way™’s positive impact. For instance,
a simplified Life Cycle Assessment tool was deployed to assess t
he environmental potential of incubated projects.
In 2021, Schneider Electric initiated a revamp of the EcoDesign
Way™ process to better include the latest global sustainability
programs such as Green Materials and Green Packaging. The
new eco-design process is expected to be more integrated within
the Agile framework Schneider is deploying globally. The process
should also involve the assessment of CO2 emissions at a very early
stage in the creation of new offers in order to encourage oriented
investments. Moreover, the new eco-design process will not be
limited to products but will also include systems/architectures.
Finally, the revamping of ecodesign will be the opportunity to
enhance sustainable innovation DNA by developing training
and coaching modules for the project teams.
2.4.3.5 Green materials
Schneider Electric has committed to increase green materials use
in its products to 50% by 2025, as part of Schneider Sustainability
Impact (SSI #4). With that long-term commitment, the Group
aims to:
• Be a change agent to accelerate the transformation toward
a low-carbon and circular economy of the material industry;
• Reduce Scope 3 supply chain emissions, in line with the
1.5°C carbon pledge;
• Differentiate Schneider products from those of competitors
in the eyes of customers by using low CO2, circular, and safer
materials in products.
In 2021, Cross-functional experts at Schneider (Procurement, R&D,
Environment) have worked in close relationship with suppliers to
define the Green attributes for each commodity in scope, based on
existing international schemes and standards. A green material is:
• A material with a lower environmental footprint; and/or
• A material that is the output of an industrial technology which
is a key enabler for a 1.5°C climate scenario and/or a more
circular economy.
Considering this definition, Schneider has identified two levers
of action:
• Build traceability in the value chain. This is a priority for
metals today, where visibility on the environmental impact
and technology-origin of procured metals is low.
• Select green materials based on a lower environmental footprint.
The lower environmental footprint attributes are defined for each
commodity in scope, as the environmental performance of metal
cannot be based on the same attributes as plastic. In 2021, the
scope of green materials focused on three types of commodities
covering about a third of purchased materials in volume:
• Thermoplastics (including both direct and indirect
procurement). Thermoplastics are qualified as “Green” when the
supplier is bringing evidence of a minimum recycled content,
biobased content (minimum threshold depends on whether
the compound is halogenated or not) or is using a green flame
retardant.
• Steel (direct purchases). Steel is qualified as “Green” when the
supplier is bringing evidence that the mill of origin is an Electric
Arc Furnace (EAF) or has a Green certificate such as the ones
delivered by Responsible Steel.
• Aluminum (direct purchases). Aluminum is qualified as “Green”
when the supplier is bringing evidence that the product carbon
footprint is below 8 tonnes of CO2 per ton of Aluminum, is using
a minimum of 90% of recycled content in its product or that the
mill of origin has a Green certificate such as the ones delivered
by the Aluminum Stewardship Initiative.
Volume and distribution of green materials (in kt)
30
110
220
Steel
Thermoplastics
Aluminum
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Schneider Energy Management and Industrial Automation
businesses are currently working on an implementation roadmap
of the green materials in the projects portfolio. Some offers, like
Odace Sustainable, are already out, and more are expected to
come from 2022 onwards.
Resources
SSI #4
2.
Increase green material content
in our products to 50%
The new Odace Sustainable offer from Schneider Electric
is a range of stylish, smart switches and plug solutions for
the residential market. Developed from recycled materials
collected from electrical drop off centers and supermarkets,
wasted plastics enter a circular economy loop using a
WEEE (waste electrical and electronic equipment recycling)
system, which transforms discarded materials into new
products.
Baseline
2021 Progress
2025 target
7%
11%
50%
The example of the definition of “green thermoplastic” is provided
in the illustration below.
A GREEN THERMOPLASTIC IS
REACH / RoHS / POP compliant(1)
AND
Case 1
Case 2
If plastic is
Halogen free(2)
If plastic is
Halogenated(2)
Complies with at least one
criteria below:
Complies with at least one
criteria below:
≥ 50% of recycled
content(3)
≥ 50% of biobased
content(4)
≥ 20% of recycled
content(3)
≥ 20% of biobased
content(4)
Green Flame
Retardant
For FR plastic only (5)
(1) List January 2021
(2) According to EN 50642
(3) According to ISO 14021 & EN 45557
(4) According to EN 16785 or ASTM D6866
(5) According to GreenScreen used in TCO Certification
At the end of 2021, 11% of materials in scope were qualified
as “Green” under the definition described before.
The inclusion of other commodities like copper, thermoset, and
indirect steel will be reassessed in next phases, as the program
maturity and the transparency of supply chains improve. Extending
the Green materials scope to indirect procurement would allow to
include new green criteria such as ‘lead-free alloy’, a substitution
initiative Schneider Electric is working on to anticipate future
regulation on lead.
In January 2022, Schneider became a member of Responsible
Steel, the world’s first global scheme for responsibly sourced and
produced steel. Its mission is to enhance the responsible sourcing,
production, use and recycling of steel. Schneider is one of the first
steel products consumers outside of the automotive industry to join
Responsible Steel. Being a member of Responsible Steel will allow
the Group to have a voice to influence the scheme development
while fostering opportunities to build strong partnerships with
Steel manufacturers and consumers. In 2022, Responsible Steel
will launch a standard for the certification of steel products.
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Chapter 2 – Sustainable development
2.4 Being efficient with Resources
2.4.3.6 Green packaging
2.4.3.7 Product Environmental Footprint
Packaging is the first visible asset seen by customers and is
associated with major environmental challenges such as resource
depletion, CO2 emissions, waste generation, and marine pollution.
Globally, a strengthening of the regulatory framework requires
the development of new packaging alternatives to enhance
recyclability and minimize the current and upcoming Polluter-Pays
packaging taxes.
By 2025, Schneider has committed to make sure that:
• 100% of primary and secondary packaging uses recycled
cardboard.
• 100% of our primary and secondary packaging is free of
single-use plastic.
In 2021, Schneider Electric Green Packaging Experts released
a new sustainable packaging guideline to define Schneider’s
requirements and best practices to foster improved environmental
performance of packaging by minimizing waste generation and
improving recyclability to make it an integrated part of a more
circular economy.
In 2022, the focus will be put on:
• Setting up partnerships with key suppliers to secure greener
packaging options;
• Building up traceability in the supply chain by collecting
suppliers’ declarations and strengthening procurement systems
to better track single-use plastic packaging;
• Accelerating the implementation of the “green packaging”
definition in the business projects portfolio to ensure new and
legacy products switch to more sustainable packaging options.
Resources
SSI #5
100% of our primary and secondary
packaging is free from single-use
plastic and uses recycled cardboard
The newly launched Wiser IP Camera is delivered without
any plastics in the box and a cardboard made with 70% of
recycled content. In addition, the in box user guide contains
mandatory information only and remaining content is fully
accessible online through a QR Code.
Baseline
2021 Progress
2025 target
13%
21%
100%
More and more customers, green building standards, distributors,
and electricians prefer offers with green credentials and request
environmental data. Many building standards and local regulations,
demand or promote offers providing Environmental Product
Declarations. There is clearly a growing premium assigned to
transparency.
An environmental footprint is a product or solution-related
content that provides quantitative information based on Life
Cycle Assessment (LCA, according to ISO 14040-44 standard).
Environmental footprint enables the assessment of multiple
environmental impact indicators, including the carbon footprint, for
all product or solution lifecycle stages. The scope of this assessment
is also referred as ‘cradle-to-grave’. Environmental footprint is a
mandatory requirement in the Green Premium™ program.
Schneider Electric relies on Product Environmental Profiles (PEP)
to fulfill this requirement. A PEP is defined as a product-oriented
“summarized” version of a full LCA. It relies on Product Category
Rules (PCR) or Product Specific Rules (PSR).
At Schneider, there are two types of PEP available:
•
• Certified – a type III Environmental Declaration in compliance
with ISO 14025. The certified PEP is externally reviewed by
an accredited verifier and published by a program operator
according to the rules provided by this operator (e.g., PEP
Ecopassport). In 2021, 182 certified PEPs were published
on the PEP Ecopassport association website.
Internal – the internal PEP follows the exact same rules
as the certified one. However, an internal PEP is reviewed
internally and therefore, cannot be registered through an
independent program operator. A process of accreditation for
internal verifiers guarantees the adequate level of internal PEP
verifications. Verifiers check PEPs from other lines of business
than their own, thus ensuring independence. Internal PEPs
comply with the ISO 14021 self-completed declaration.
In 2019, 77.3% of Schneider’s product revenue was covered by a
PEP, including 33.9% of ISO 14025 type III declarations and 43.4%
of ISO 14021 type II self-completed declarations.
Environmental configurators
Beyond PEPs, Schneider Electric also relies on some offers’
environmental configurators which are better suited to assess the
environmental footprint of systems and solutions. A configurator
makes it possible to assess a dynamic environmental footprint
that better reflects the specific situation of customers or end-
users. In 2021, a web configurator was developed to leverage
the environmental benefits of the ECOFIT™ service. Schneider
aims at supporting the creation and use of such configurators
since they allow the Group to provide better environmental inputs
to customers, facilitate the discussion around the environmental
footprint of offers, and therefore ease the identification of
meaningful eco-designed solutions. In 2021, Schneider
accelerated the digitization of the PEP process in order
to encourage the use of the configurator.
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Strategic Report
Substances of Concern in Products (SCIP)
In the frame of the Waste Framework Directive, the European
Chemicals Agency (ECHA) was mandated by the EU commission
to put in place the database for information on Substances of
Concern In Products (SCIP), beginning in 2021. Since 2021,
manufacturers and importers of products containing substances
of very high concern (SVHC) above the 0.1% threshold, must
register those products into this SCIP database. Despite the
difficulties to manually register Schneider’s products without any
IT to IT systems, nor any easy solution provided by ECHA, the
Group registered most of the relevant products by the end of 2021,
being one of the top contributors, and reinforcing our transparency
objective in this domain.
The environmental compliance IT system which allowed Schneider
to have a competitive advantage in terms of transparency and
substitution management, virtually throughout the last decade,
must be replaced. 2021 was dedicated to specifying our needs
in order to maintain and even improve this advantage at least
for the next 10 years. This is a key element of our substance and
regulation management strategy.
TSCA
In the US, the Toxic Substances Control Act (TSCA) regulation
which restricts the use of chemicals was reinforced with the
introduction of new substances. Schneider Electric worked
hard to identify the use case of those substances and launch
adequate actions. The TSCA restriction list will be fully integrated
in Schneider Electric’s global substances strategy soon.
IEC 62474
Substances information data sharing is key to target substitutions.
Schneider is very active in the development of data exchange
formats on substances through the IEC 62474 standard.
Other substances under investigation
Among the different subjects investigated in 2021, the
Polyfluoroalkyl substances (PFAS) restriction proposal and
Silver classification update were two points of focus. Lead
substitution was also investigated in anticipation and will be
promoted when possible.
PEP Ecopassport PCRed4
In 2021, Schneider Electric strongly contributed to the development
of the new Product Category Rules of the PEP Ecopassport
association (PCRed4 issued in September 2021), which are:
• Compliant with the EN 50693:2019 standard: Product category
rules for life cycle assessments of electronic and electrical
products and systems – currently being mirrored in the IEC/
TC111 Working Group 15 (IEC 63366);
• Fully aligned with the EN 15804+A2 standard: Sustainability
of construction works – Environmental product declarations –
Core rules for the product category of construction products;
Integrate key elements of the EU Product Environmental
Footprint (PEF), such as mandatory impact indicators,
end-of-life formulae, and quality ranking;
•
• Aligned with ISO 14067:2018: Greenhouse gases –
Carbon footprint of products – Requirements and guidelines
for quantification, integrating the latest requirements of the
French regulatory texts from RE2020.
The application of PCRed4 enables electrical and electronic
equipment manufacturers to produce product environmental
declarations, in accordance with the best-known international
standards, thus fostering cross-region and cross-industry
recognition. Schneider aims at using this new PCR document
to influence and strengthen the environmental footprint practices
of the sector through standardization (TC111 Working Group,
ZVEI initiative) and regulations (Sustainable Product Initiative
of the European Commission, Green Taxonomy).
By relying on the PEP Ecopassport PCRed4 methodology
on the one hand and on the acceleration of the environmental
data digitization on the other hand, Schneider strives to
provide systematically and seamlessly to customers quantified
environmental footprint to differentiate the green offers, and
therefore, be a change agent towards a low-carbon and
circular economy.
2.4.3.8 Substances strategy
With increasing chemical substances regulations, raising
standards from a well-being perspective, especially in the building
space, and a growing number of questions from B2C and B2B
customers on health matters, the ability to ensure compliance of
several hundreds of thousands of product references has never
been so critical. When such product traceability is mastered at
scale, with robust processes and systems in place, clear business
opportunities emerge, as digitization of such data is more and more
needed. Schneider Electric seamlessly captures underlying data
from suppliers, aggregate it, and disseminate it swiftly to customers
who need that information.
REACH and RoHS
In Europe, the Regulation on Registration, Evaluation, Authorisation
and Restriction of Chemicals (REACH) and the Restriction of
Hazardous Substances in Electrical and Electronic Equipment
(RoHS) directive are engaged in a refit process and Schneider
actively participated in the public consultations through the
professional organizations, by making some key proposals to
improve efficiency and limit the administrative burden.
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Chapter 2 – Sustainable development
2.4 Being efficient with Resources
2.4.3.9 Circular business models
The risks that Schneider Electric sees are around the perception
of “one size fits all” for circularity, as well as the temptation to see
it through a waste or recycling lens, and the focus on developing
the related guidelines, governance, and standards based on
this perception.
• Product durability versus shorter-term waste loops: all resources
are not equal in their thermal, mechanical, or electromagnetic
profiles. For the industrial sector, the biggest impact of the
circular economy will come from the promotion of reparability,
upgradability, “retrofitability”, extension of lifespan, and of
related “product second- and third-life services”. Schneider’s
products are highly technical in nature with a long lifespan and
are highly unlikely to end up as ocean plastic waste, yet a risk
that the emerging regulations may be too “resource/waste-
centric” can be seen. To meet quality and safety expectations,
and adhere to stringent electric and electronic equipment
standards, recycled materials are sometimes not available in
either quantity and/or quality. The Group actively advocates
sector-specific approaches.
• Ensuring the safety of people and assets through qualified
and certified services. Indeed, while promoting services to
extend the products’ lifespan, Schneider grows the ranks of
certified experts on its products (through thousands of Field
Services Representatives). Leveraging the circular economy,
there is a fantastic opportunity to enable more repair, retrofit,
and recycling services, on condition that concerned product
categories are adequately maintained and serviced by qualified
and certified experts.
There are opportunities to leverage the circular economies, both
externally with customers and internally in operations. Schneider’s
value propositions have long delivered resource efficiency,
enabling customers to “do more with less”.
Schneider’s deeply ingrained belief in the circular economy helps
create a win-win-win-win ecosystem: good for the planet, good
for customers (lower Total Cost of Ownership, lifespan of assets,
etc.), good for the Company as a business (customer intimacy,
stickiness, etc.), and good for its people (meaningful jobs, pride
to take part in saving resources and energy, etc.).
Through circular capabilities such as local models of reuse, retrofit,
repair, refurbish, and take-back, and by unleashing the potential of
IoT, connecting and digitizing products (predictive maintenance,
performance optimization, leasing, pay-per-use, performance
contracting), Schneider creates shared value for its customers.
Most of Schneider’s new products are digital, connectable, ensure
full product lifecycle management and predictive maintenance,
and guarantee optimum performance, hence enabling the Group
to move towards customer-intimate models like subscription,
performance contracting, and leasing.
The first focus, before considering end-of-life, is to prolong
the lifespan of products. Those solutions, using up to 60% less
materials than using brand new equipment, enable pull-through
and constant payback, increase customer stickiness, and long-
term relationships.
Schneider’s first circular distribution center
Since 2020, the Schneider Electric site in Bourguebus,
France has supported the Group’s strategy to help accelerate
its transformation towards the circular economy.
Bourguebus helps deliver on 4 key aspects of Schneider’s circular
economy strategy including:
• Repack: repackaging of new Schneider products whose
packaging has been damaged.
• Reuse: sorting, selecting, redistributing never-energized
Schneider products that are unsold and/or returned by our
customers under the “Circular Certified” label.
• Refurbish: managing the supply chain for collecting used
Schneider products and sending them to the Schneider Electric
Privas, France partner site for repair and managing customer
orders on our second-hand web platform.
• Recycle: dismantling of products to recover and resell the
valuable materials.
Schneider Electric’s Bourguebus site, France
Bourguebus’s innovative circular economy transformation, along
with the added value proposition of the “Circular Certified” label,
has led to saving 4M€ of stock in 2021 and has avoided 950 tonnes
of CO2e.
In 2022, the site will continue to grow circular industrial
capabilities to support business innovation and differentiating
offers to customers. This includes capabilities such as refurbish,
remanufacture and reverse logistics. One particular customer-
centric project will include developing a website that will support
the take-back of Schneider products at customer sites.
External engagement
Schneider Electric has been part of task forces on circular
economy, playing leadership roles in multi-stakeholder dialogs.
For example, the Group is active in France’s Circular Economy
Roadmap and engaged in China with MIIT (Ministry of Industry
and Information Technology) on circular strategy, leading AFEP,
Gimélec, FIEEC, IGNES, and ORGALIM discussions for its
sector on circular economy, publishing articles, and speaking at
conferences (Greenbiz, Gartner, WEF, SCM World, peer-to-peer,
EthicalCorp, and WindEurope, among others).
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Here are some white papers and partnerships for circular economy
to which Schneider contributed:
• Enabling a Circular Economy for chemicals with a mass balance
approach;
• Remanufacturing: Designing new products for many lives;
• Making manufacturing sustainable by design;
• The need for sector-specific circularity;
• Partnership with Accenture for the Circulars Accelerators
program.
Schneider Circular Certified label
Schneider Electric launched the “Circular Certified” label for
the French market in September 2020. The label is dedicated to
the sale and promotion of products from the circular economy
and in line with the Group’s circular economy strategy. Currently
available for the French market, it is planned to be deployed more
extensively in the near future.
Quantifying impact of circular offers
Under Schneider Sustainability Essentials, Schneider quantifies
its Circular Economy efforts, such as repair, reuse, refurbish and
recycling and targets to avoid 420,000 metric tons of primary
resource consumption through “take-back at end-of-use” by 2025,
cumulatively since 2017 (SSE #10). This program enables waste,
material, energy consumption, CO2 emissions and/or water savings.
Activities in this program will enrich on the basis of the Group’s
increasing focus on circularity business models, and are currently
constituted of:
• Batteries take back and recycling;
• Volume of devices refurbished and repaired in our repair
centers (such as UPS or Drives);
• Volume of Medium Voltage, Low Voltage and Transformers
refurbished or recycled in our ECOFIT™ Centers.
Chapter 2 – Sustainable development
Strategic Report
Resources
SSE #10
2.
420,000 metric tons of avoided
primary resource consumption
through “take-back at end-of-use”
since 2017
Danone Evian wanted to upgrade its bottling facility to
deliver natural mineral water more sustainably by reducing
energy consumption at every stage of production. Among
other upgrades, the LV switchgear were modernized within
Schneider Electric’s ECOFIT™ solutions.
By choosing equipment modernization with ECOFIT™
instead of immediate replacement, Danone Evian saved
an estimated 315 metric tons of CO2 equivalent, 372 m3
of water and 47 tonnes of raw materials.
Baseline
2021 Progress
2025 target
157,588
203,881
420,000
2.4.3.10 End-of-life product management
and WEEE
Schneider Electric has been engaged for a long time in a process
that protects the environment and the health of people in the
treatment and recycling of its products at the end of their lifecycle.
In the context of the application of the Waste Electric and
Electronic Equipment (WEEE) directive, Schneider implements
product identification and selection actions, establishing recycling
streams and pricing the taxes to be applied in compliance with the
regulations of each country where the Group’s products are sold.
For products falling within the scope of the WEEE directive, a circularity
profile including detailed end-of-life instructions is systematically
provided through the “Check A Product” public website.
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Chapter 2 – Sustainable development
Chapter 2 – Sustainable development
2.5 Great People making Schneider Electric
a great company
In this section
2.5.1 2025 people strategy and vision
2.5.2 Diversity, equity, inclusion, and well-being
2.5.3 Talent attraction and development
166
170
177
2.5.4 Compensation and benefits
2.5.5 Social dialog and relations
182
185
“We aspire to achieve our company purpose and mission by
empowering and developing our people to their fullest potential.
We act with agility and trust to innovate for our customers and
strive to win in the market. With the 2025 people strategy, we aim
to set the bar even higher to support business growth and our
culture and leadership transformation.”
Charise Le, Chief Human Resources Officer
Context and goals
Great people make Schneider Electric a great company. The Group
motivates its employees and promotes involvement by making
the most of diversity, supporting professional development, and
ensuring safe, healthy working conditions. Its ultimate ambition is to
generate higher performance and employee engagement, through
world-class people practices that are supported by a global/local
and scalable model.
Schneider is a people company where employees come to work
for a meaningful purpose and feel empowered to have an impact,
empowering all to make the most of our energy and resources.
All employees are treated equally based on their skills, notably
regarding employment, recruitment, talent identification, training,
and remuneration, thanks to common processes and policies.
Human resources thus plays a key role in supporting the
performance and talent development of Schneider Electric in the
changing context of its activities. Its growth is characterized by a
sustained internationalization, numerous acquisitions, an increase
of headcount dedicated to selling solutions and services, while
maintaining a share of blue collars close to 50%.
A lot of progress has been made on these fronts to Shape Our
Future. From a new People Vision, to a unique multi-hub model and
a leaner organization structure; from redefining talent management
to widely acknowledged diversity, equity and inclusion initiatives;
and from a global leadership development program to advancement
in digital and functional learning.
By 2025, we commit to create equal opportunities and harness
the power of all generations by ensuring all employees are uniquely
valued in an inclusive work environment and by fostering learning,
upskilling and development for each generation. In this report, we
share our progress on the transformations engaged in 2021 under
the Equal and Generations pillars of our Schneider Sustainability
Impact and Schneider Sustainability Essentials programs.
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Chapter 2 – Sustainable development
Strategic Report
2021 Highlights
Glassdoor rating is on a steady
growth, recognizing Schneider
Electric as one of the Best
Place to Work for 2021.
The Financial Times awarded
Schneider Electric the title of
‘Diversity leader’.
Schneider Electric in
Universum’s Top-25 World’s
Most Attractive Employers.
For the fifth year in a row,
recognition for our commitment
to gender equality and building
a culture of inclusion.
2.
Key targets and results
Progress against our 2021-2025 Sustainability commitments
Schneider Sustainability Impact
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Equal
8.
Increase gender diversity in hiring (50%), front-line management
(40%) and leadership teams (30%)
Baseline(1)
2021 progress(2)
2025 Target
41/25/24
41/27/26
50/40/30
Generations
10. Double hiring opportunities for interns, apprentices and fresh
4,939
x1.25
x2.00
graduates
Schneider Sustainability Essentials
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Equal
18. Reduce pay gap for both females and males
19.
Increase subscription in our yearly Worldwide Employee Share
Ownership Plan (WESOP)
20. Pay our employees at least a living wage(3)
21. Multiply the number of employee-driven development
interactions on the Open Talent Market
Generations
22. Support the digital upskilling of our employees
23. Provide access to meaningful career development programs
for employees during later stages of their career
24.
Increase our employee engagement level
Baseline(1)
2021 progress(2)
2025 Target
F: -1.73%
M: 1.00%
-1.61%
1.11%
<1%
53%
99%
5,019
41%
--
69%
61%
60%
100%
100%
x2.1
74%
In progress
71%
x4
90%
90%
75%
(1) Generally, the 2020 performance serves as a baseline for Schneider Sustainability Impact (SSI) and Schneider Sustainability Essentials (SSE) 2021-2025 programs.
(2) Each year, Schneider Electric obtains a “limited” assurance on progress and methodology from an independent third party verifier for all of the SSI and SSE indicators,
in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 224). Please refer to page 206 for the methodological presentation of
each indicator. The 2021 performance is also discussed in more details in this section.
(3) As of 31st December 2021, 99.99% of eligible employees, i.e. all Schneider employees treated as permanent workforce, were paid the living wage. The few remaining
gaps were closed early 2022 so that all in scope Schneider Electric employees are now paid the living wage. The final KPI result for 2021 was rounded to 100%.
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Chapter 2 – Sustainable development
2.5 Great People making Schneider Electric a great company
2.5.1 2025 people strategy and
vision
The world is rapidly evolving and new mega-trends are emerging.
Massive acceleration in the adoption of digital technologies
and connectivity has changed the way we all live and work. The
sense of urgency around climate change has intensified. Social
aspirations, including demand for equality, have soared. New ways
of organizing workforces have emerged. New capabilities are
being developed to maximize the human-to-digital intersection.
There has been a shift in the balance of the global versus local
economies amidst geopolitical differences.
2.5.1.1 Schneider Electric’s People Vision –
Employee Value Proposition, Core Values,
and Leadership Expectations
People Vision
Great people make Schneider Electric a great company.
To transform our culture and create a great place to work for,
we launched our new People Vision in 2018.
The People Vision provided the impetus to change the way
Schneider works and accelerate the cultural transformation at
the Company. With an Employee Value Proposition (EVP), a set
of Core Values and Leadership Expectations, there is a strong
anchor to the people strategy.
During the pandemic, the People Vision helped us remain resilient
and rebound on business performance.
The People Vision consists of the following:
1 Our EVP is our commitment to engage existing
and future talent. It’s the reason why people join, stay,
and remain engaged and shows how we differentiate
ourselves as an employer.
2 Our Core Values determine who we are, what we do,
and define the way we work together and deliver on
our EVP promises. Our values guide our choices and
illustrate the behaviors we expect our employees
to demonstrate.
3 Our Leadership Expectations show how we expect
leaders to drive the Company for the future. They
emphasize how our leaders will transform Schneider
Electric by stepping up individually and collectively.
Employee Value Proposition
The Group is also looking to establish a strong name as an
employer and communicate around its Employee Value Proposition,
which is our promise to current and future employees.
We believe that great people make Schneider Electric a great
company. We are driven by our meaningful purpose and
continuously create an inclusive environment where employees
are empowered to be at their best and innovate.
Our Employee Value Proposition continues to evolve in line
with the business. Making the emotional connection as to “Why
Schneider Electric?” is fundamental in the ability to not only attract
the best talent and be an “employer of choice”, but also to have it
resonate as authentic with employees as a form of encouragement,
motivation and inspiration.
Employee Value Proposition
MEANINGFUL
INCLUSIVE
We empower all to make the most of
their energy and resources, ensuring
Life Is On everywhere, for everyone,
at every moment.
Our mission is to provide energy
and automation digital solutions for
efficiency and sustainability.
We adhere to the highest standards of
governance and ethics.
We want to be the most diverse,
inclusive and equitable company,
globally.
We value differences, and welcome
people from all walks of life.
We believe in equal opportunities for
everyone, everywhere.
EMPOWERED
Freedom breeds innovation.
We believe that empowerment generates
high performance, personal fulfillment
and fun.
We empower our people to use
their judgement, do the best for our
customers, and make the most of
their energy.
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Chapter 2 – Sustainable development
Strategic Report
Future ready talent – a diverse, empowered, and digitally skilled
team. All talents develop current and future skills through on-the-
job learning, exposure, and education to realize their potential.
Inclusive leadership – leaders drive greater disruption and
acceleration. They build human connections by coaching,
caring, and collaborating across teams to achieve together
and deliver impact.
2.5.1.3 Organization
Since 2009, the Human Resources (HR) department has
been structured around three principal roles to better respond
to its missions:
HR Business Partners assist managers on a day-to-day basis
in setting out their business strategies and in assessing the human
resource requirements needed to meet business targets. They also
play a pivotal role in anticipating skill requirements and employee
development, and in the management of employee relations.
HR Solutions creates and develops comprehensive solutions
for the organization’s strategic challenges in key areas, such as
compensation, benefits, human capital development, learning,
and performance management. Regional teams are leveraged
to effectively support the Group’s globalized operations.
HR Services handles the logistics and administrative
responsibilities relating to payroll, sourcing, mobility, and training
programs, mainly through shared service centers designed to
optimize efficiency and costs. Since 2015, the Group has put in
place an HR Excellence initiative with the objective of creating HR
teams ready to make the Leadership and Culture vision a reality
while supporting the growth of the business.
2.5.1.4 Governance
In 2020, Schneider Electric decided to further reinforce the
governance of the Group, the professionalism of our processes,
and our foundations for trust.
A new global organization CGO (Corporate Governance Office)
was created to support this aim. Human Resources followed
suit with the creation of a governance role within the function
to articulate corporate governance directions within the function
and to reinforce its own governance.
HR Governance acts as single point of contact to corporate
organizations such as M&A, Internal Audit, Internal Control, Ethics
& Compliance, and Data Privacy facilitating an agile response to
corporate directions by the function. Similarly, HR Governance
provides support to HR people around governance questions.
Core Values define the way we work together
Customer First. Above and beyond for our Customers. We
surprise and delight customers as we would be nowhere without
them. So, not only do we put ourselves in their shoes, but we also
anticipate their needs and go the extra mile. We champion our
sales people, because they are the face of our Company. Whatever
our role, we have an impact on the customer’s experience.
Dare to Disrupt. Constantly in Beta. Innovation is our middle name.
Good is never good enough, and that’s why we are constantly
experimenting, taking risks, and disrupting the status quo. We think
fast, and we act even faster. Setbacks don’t hurt us. They motivate
us. That’s why we are not afraid to make our bets bigger and our
decisions bolder to power the digital economy through energy
management and automation. We, at Schneider, ensure Life Is On.
Embrace Different. Different is Beautiful. We are 100% committed
to inclusion. “Exclusion” is not even in our vocabulary. We believe
in equal opportunities for everyone, everywhere. This means
welcoming people from all walks of life, ages, and cultures,
embracing different perspectives and calling out bias when we
see it, so that every person feels uniquely valued and safe to be
at their best. To us, a stranger is simply a friend we haven’t met yet.
Learn Every Day. #Whatdidyoulearntoday? To stop learning is to
stop growing. We are genuinely curious, never done with learning.
To us, there is no such thing as knowing it all or having all the
answers. We believe in life-long learning. Every minute of every
day brings a new chance to listen, open up our minds, and widen
our horizons. We are never too experienced to learn.
Act Like Owners. All in. Together. Entrepreneurs at heart,
we take responsibility and ownership of everything we do.
This is not somebody else’s company. It’s ours! We are individually
empowered and collectively driven to collaborate and beat the
competition together. In the end, we do what is right for Schneider
first – always with integrity and honesty.
2.5.1.2 2025 People Strategy
During the pandemic, we successfully pivoted to digital interactions
with customers and remote working with our teams. As we move
towards the post-pandemic era, the nature of work, the workplace,
and the relationship between companies, customers, and
employees has dramatically changed.
In January 2021, our new People Strategy was launched, with the
aim to set the bar higher to support business growth and culture/
leadership transformation. To deliver on this mission and shape the
workforce of the future in the “next normal”, the strategy has three
outcome-based themes:
Organizational agility – a growth and innovation culture, enabled
by a flatter, leaner, and multi-hub/multi-local structure, customer
proximity, and fast decision making, supported by new ways
of working.
Core Values
CUSTOMER
FIRST
DARE TO
DISRUPT
EMBRACE
DIFFERENT
LEARN
EVERY DAY
ACT LIKE
OWNERS
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Chapter 2 – Sustainable development
2.5 Great People making Schneider Electric a great company
2.5.1.5 Continuous listening and
employee engagement
In the context of COVID-19 and beyond, focusing on employees’
engagement is fundamental. Engaged employees are key to enable
the organization to be at its best and support the achievement of
the Group strategy together. People who understand and connect
with the company’s purpose will feel more personally involved and
more likely to deliver more than what is expected from them.
Key updates in 2021
1. In line with Group priorities and People Strategy, the
Continuous Listening Strategy and particularly, annual employee
engagement survey, OneVoice, was updated to reflect some of
the key 2021-2025 ambitions and working in the next normal
2. There is an increased focus on action plans and follow-up
based on these insights
3. Leaders and Managers are more involved to drive the topic
and ensure care towards employees
1. Refreshed questions to adapt to working in the
next normal and align with Group’s 2025 ambition
First set up in 2009, the OneVoice internal survey was designed
to measure employee satisfaction. In 2012, the survey evolved to
include employee engagement to derive a more holistic view of
employee expectations, commitment, and sentiment.
As an inclusive company, all employees are asked to provide
their honest feedback through a questionnaire evaluating their
engagement and measuring the drivers of engagement such
as diversity, learning, and new ways of working. This process
helps the Group identify key avenues for improving employees’
engagement and their unique life at work.
In 2021, it was important to refresh the questions to make
them more relevant due to the new working environment of
employees, particularly regarding the new normal, flexibility at work,
empowerment of the teams and inclusion. As rated by our employees:
New ways of working empowerment and inclusion are the
Top 3 drivers of employee engagement
80%
feel they have
flexibility to
modify their work
arrangements when
needed.
79%
feel empowered to
choose how best to
complete their work.
78%
consider they
are treated fairly
regardless of
their individual
differences.
In 2021, despite global external predictions on the impact of
pandemic fatigue on employees, Schneider Electric recorded its
highest employee engagement score, 71%, + 7 points compared to
2019 in the pre-COVID-19 context. This is evidence of a strong and
lasting emotional bond between employees and the organization
as well as confirmation that employees felt supported by the
organization during challenging times. Schneider Electric tracks
its own employee engagement index in relation to the industry
and top-performing companies globally. The Company also has
a Schneider Sustainability Essentials (SSE) ambition to achieve
75% employee engagement score by the end of 2025.
2. Reinforce action planning to ensure meaningful
outcomes
As internal and external research has demonstrated that the role
of the manager has a significant impact on employees to drive
engagement of their teams, the Company has focused on building
awareness and knowledge among managers and following up
to ensure that action plans were implemented at all levels of the
organization. Schneider Electric carefully follows its own action
plans, making sure that they are seriously implemented, and that
good practice can be spread across the organization. In 2021,
the Company strengthened its efforts at three pivotal levels: global,
local, and team.
Global level: one of the key learning from the crisis was that
employees recognized the support provided by the company
during those times. As a concrete action taken at Group level,
live sessions were organized for all employees every month,
aiming at learning how to better take care of their Well-Being.
Local level: the financial support provided to India through
Tomorrow Rising fund had a very positive impact which was
raised in the comments of our OneVoice annual survey as a
delightful moment.
Team level: Managers still played a key role and the recognition
they gave to their team members had a positive impact on their
team members. One of the concrete actions taken in Victoria’s
plant in the United States is to empower collaborators to come
to management team with ideas for recognition events.
Key highlights for 2021
100% of employees were surveyed in May 2021 through a consistent and continued measurement of the employee engagement index but
with a refreshed set of questions to better fit our ambition:
Participation
Comments analyzed
Engagement
Managers
Action plans
85%
108,904 responses
134k
71%
+2pts vs 2020
+7pts vs 2019
4,716
have access to a
customized report
1,000+
recorded since
July 2021
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Strategic Report
2.
Generations
SSE #24
75% employee engagement score
Great progress was made in 2021 with 63% of employees
feeling that collaboration between teams and entities is
going well and that they receive fair recognition for their
work achievement (+ 8 points for collaboration and + 5
points for recognition versus 2019).
Based on the feedback of its employees from both the
2021 culture and leadership and the OneVoice surveys,
Schneider Electric refreshed the Leadership expectations
and introduced “Achieve Together” to build a strong focus
on collaboration. In 2021, collaboration was the #1 topic
raised by employees as a major driver contributing to their
engagement. During difficult times, employees expressed
their pride to feel recognized by their managers, customers,
colleagues for a successful teamwork.
Baseline
2021 Progress
2025 target
69%
71%
75%
3. More involvement of leaders and managers
Following communication of the results, and with the support of
their HR Business Partner, managers organized feedback sessions
with their team to foster dialog and build relevant action plans,
based on both qualitative and quantitative results. Acting with
trust, empathy, and humanity, communicating to teams agilely
and providing sincere support to employees is key in keeping
people engaged.
As actions are important to demonstrate that feedback is acted
upon and the company ‘walks the talk’, a “nudge” approach was
introduced to remind managers to follow up on their action plans
with their teams, while peer to peer sessions were introduced to
provide managers with opportunities to share challenges and
best practices on implementing improvement actions.
This year, to enhance action plans implementation and follow
up reviews, the Company created a leader-led Advisory Board
composed of business and HR leaders to act as a sounding
board as well as an Operating Committee, composed of employee
engagement and continuous listening partners, to pair with frontline
managers to promote, share, and test any new initiatives.
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2.5 Great People making Schneider Electric a great company
2.5.2.3 Group policy
Schneider Electric’s overall aspiration to improve the lives of
people everywhere in the world by developing sustainable energy
solutions for its customers also extends to its diversity, equity, and
inclusion (DEI) ambition. The DEI and Well-Being strategy focuses
on engaging and impacting the individual, the organization, and
society at large, via three pillars:
• “Sustain You”: Schneider Electric is committed to making sure
all employees feel safe to be their best selves in a culture that
fosters trust, respect, and flexibility. Employees are empowered
to prioritize their own well-being and mental health, invest in
healthy ways of working, and role-model inclusive behaviors.
• “Activate Schneider”: Schneider Electric is committed to
reflecting the diversity of the communities in which it operates.
The Company continues its efforts to hardwire equity and
inclusion at all stages of its Total Employee Experience, ensure
fairness in people processes and policies, and foster a culture
of care and inclusion at all levels.
• “Impact Society & Planet”: Schneider Electric is committed to
driving change within its broader ecosystem and society at large,
through advocacy and role-modelling. The Company works
closely with its strategic partners and suppliers and invests in
local actions through the Schneider Electric Foundation, with the
goal of addressing systemic inequities and becoming a leader
in corporate citizenship. Schneider Electric also engages in
coalitions and partnerships to influence policy and play its part in
building a society that embraces diversity, equity, and inclusion.
While DEI is increasingly driven by local and regional regulation,
with which the Group complies, other countries where Schneider
Electric operates are encouraged to tackle additional DEI and
well-being challenges specifically relevant to their markets and
tailored to their needs.
2.5.2 Diversity, equity, inclusion,
and well-being
2.5.2.1 Risks and opportunities
In a world where change is the new norm and innovation is critical
to ongoing business success, Schneider Electric places a key
emphasis on attracting and retaining diverse talents and building
a high performing leadership pipeline.
The Group’s diversity, equity, and inclusion ambition is to offer
equal opportunities to everyone everywhere. Schneider Electric
wants its employees – no matter who they are, or where in the
world they live – to feel uniquely valued and safe to contribute their
best. The Group believes that diversity, equity, and inclusion is a
moral as well as a business imperative, as a diversity of people
and an environment of inclusion leads to greater engagement,
performance, and innovation.
Since 2015, Schneider Electric has also made well-being and
mental health strategic priorities. The events of the last couple
years have only confirmed that nurturing employees’ well-being
and mental health is a critical business imperative, and that leaders
must develop the right skills to support their teams’ well-being.
Pandemic fatigue is real, as is the increase in employee burnout
and mental health challenges across the globe. Companies have
to accommodate these realities and strive to provide the support
every individual needs. Recognizing that well-being and mental
health matter is key to fostering an inclusive company culture
where everyone feels safe to be their unique self.
2.5.2.2 Governance
The Global Diversity, Equity & Inclusion (DEI) Board is a group
of top leaders from all markets, sponsored by the Executive
Committee, which acts as a sounding board for the global DEI
strategy as well as internal and external DEI champions. Board
members are nominated by the Executive Committee to serve
a two to three-year term.
All Schneider Electric entities develop action plans based on
the feedback of employees while meeting local regulations and
addressing country-specific situations. For DEI, leaders have been
appointed in more than 30 countries/ zones and entities of the
Group to lead these actions plans. This global network convenes
bi-monthly to share progress and best practices.
The well-being governance model consists of a structured network
of more than 50 champions worldwide converting the global vision
into customized local actions responding to the diversity and local
needs of more than 100 countries. The well-being champions
network convenes every six weeks to share progress, internal
and external trends, as well as best practices.
Beyond this governance structure, all employees at Schneider
Electric are held accountable for our DEI and well-being
transformation, through targets included in the Schneider
Sustainability Impact (SSI) and Schneider Sustainability Essentials
(SSE), the Group’s performance dashboards for sustainability.
The SSI is factored into every employee’s short-term incentive plan.
This ensures a high level of awareness and accountability from
both employees and leaders.
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2.5.2.4 A diverse workforce
2.5.2.4.1 Gender balance
Schneider Electric is strongly committed to building a diverse
organization at every level. In that context, the Group has identified
increasing the share of women in its workforce and leadership as
an absolute priority.
commitment to reach gender-balance in hiring and continues with
efforts to promote and develop women internally.
Schneider Electric is also committed to removing the structural and
social barriers hindering women’s career progression through a
holistic strategy promoting gender equality in STEM and within the
organization, and through targeted career development initiatives.
Schneider Electric’s journey to become a more gender balanced
organization began more than 10 years ago. The Group stated
ambitions on increasing female representation in the overall
workforce and in specific segments like leadership roles, and
technical and sales functions. Because they are a key internal
leadership talent pool, Schneider Electric has been focusing on
hiring and including more women in sales and technical roles. As of
end 2021, women made up 34% of IT roles with a hiring rate of 41%,
and 17% of engineering roles, with a hiring rate of 27%. Similarly,
as of end of 2021, women made up 21% of the sales population,
with a 31% hiring rate. Overall, women account for 20% of revenue-
producing roles at Schneider Electric, with a hiring rate of 30%.
While significant progress has been made in the representation of
women, especially on the Board and Executive Committee level
(respectively, 42% and 44% female as of end of 2021), the Company
recognizes that there is still a need to accelerate efforts at lower levels
in the organization.
2025 gender diversity commitment
In 2021, Schneider Electric renewed its commitment to gender
balance with the 2021 – 2025 SSI gender balance KPI, 50/40/30
– women representing 50% of all new hires, 40% of frontline
managers, and 30% of senior leadership by 2025.
This new commitment is both a testament to the progress the
Group has made so far and a clear signal that it intends to double-
down on its efforts to achieve more gender balance across all
levels of the organization.
At the leadership level, we focus on 30% representation because
research has shown that 30% is the tipping point for diversity to
have a real impact on teams. This approach is informed by critical
mass theory, which takes its roots in physics, where a minimum
‘critical mass’ is needed to sustain a nuclear chain reaction. When it
comes to diversity on teams, 30% has been identified as the critical
mass number. To get to that level of representation in leadership,
we need to build a strong pipeline for female talents to grow within
the organization and access senior levels. This starts with a strong
In 2019, the Company revitalized its commitment to gender equity
in leadership roles and partnered with INSEAD to launch the
Schneider Women Leaders’ Program (SWLP) – a global program
with a common cause, enabling more women at their mid-career
point to build the skills and confidence to step up their leadership
capability and impact. The SWLP program is a seven-month
coaching and virtual workshop experience, culminating in a three-
day virtual global summit, bringing the graduating women together
with senior Schneider leaders and world-class business school
faculty. Since its inception in 2019, more than 230 women have
benefited from this targeted leadership development program.
In addition to SWLP, a new program called “How Women Rise” was
launched for Schneider employees in several countries. Over the
last couple of years, this leadership program has benefitted more
than 1000 women.
Employee Resource Networks (ERNs) also play a large role in
empowering women locally and helping drive efforts to advance
women in leadership. As of the end of 2021, local ERNs have
contributed to the Group’s efforts towards gender equality and
inclusion in more than 40 countries.
Initiatives in France
In France, Schneider Electric Industries and Schneider Electric France
(SEI-SEF) continue to partner with Elles Bougent (an association of
women engineers), C Génial Foundation (a foundation promoting
STEM jobs), and MEDEF (union of employers) to promote technical
roles in schools and break gender stereotypes around specific
careers. Thanks to this French Women in Tech network set-up in
2014, as of the end of 2021, more than 100 technicians and female
engineers have been able to meet with over 12,000 pupils, on
Schneider Electric sites or virtually.
In 2019, SEI-SEF also launched an annual year-long mentoring
program where high potential women are paired with senior
leaders. The focus of this program is to increase both the promotion
of female talents and their access to leadership positions. From
2019 to 2021, a total of 41 women have benefited from this initiative.
Overall Workforce
Total New Hires*
Frontline management**
Leadership***
34%
41%
27%
26%
50%
2025 target
40%
2025 target
30%
2025 target
66%
59%
73%
74%
Female
Male
Female
Male
Female
Male
Female
Male
* Total new hires – all new hires in 2021.
** Frontline management – junior and mid-level management whose direct reports are individual contributors only.
*** Leadership – Vice-Presidents and above.
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Initiatives in the US
In the United States, Schneider Electric USA is a proud member
of the Society of Women Engineers (SWE) Corporate Partnership
Council. This relationship provides networking and alliances with
other leading organizations working to create opportunities for
women engineers and technologists. This partnership with SWE
provides recruitment, development, exposure, and leadership
opportunities for Schneider Electric USA employees.
Initiatives in India
In India, through a program named “Her Second Innings”,
Schneider Electric strives to leverage an untapped talent pool,
by hiring women who are looking to re-enter the workforce after a
career break. Schneider Electric Greater India also has a leadership
development program, “URJA” (which translates to “Energy” in
English), which is designed to harness the leadership skills of mid-
career women employees identified as solid potentials. As of the
end of 2021, about 600 women have participated in the program.
Equal
SSI #8
Increase gender diversity in hiring
(50%), front-line management (40%),
and leadership teams (30%)
In line with its gender diversity goal, Schneider Electric is
focused on building a robust female talent pipeline. The
company has set bold 50/40/30 targets, committing to
increase representation of women to reach 50% of all new
hires, 40% of frontline managers, and 30% of leadership
by 2025. This requires strategic planning, targeted talent
development, accountability mechanisms, and most
importantly, the support of everyone in the organization,
starting with anyone involved in hiring or promotion
decisions. This is why Schneider Electric ensures that its
talent processes are fair and equitable, and the organization
counts on each leader, when making a hiring or promotion
decision, to help advance its overall goal to create a skilled
and diverse workforce for the future.
Baseline
2021 Progress
2025 target
41/25/24
41/27/26
50/40/30
45%
2.5.2.4.2 Diversity of ethnicities and nationalities
Schneider Electric wants everyone, everywhere in the Company
to have the same chance of success irrespective of their nationality,
ethnicity, race, or location. The Group’s multi-hub model is key to
deliver on this ambition. Schneider Electric believes in a multi-
local world with locally tailored solutions supported by diverse
teams across the globe to best meet its customers’ needs with
customization, quality, and speed. In the “next normal” world,
with continued disruption and need for speed and agility, the
multi-hub operating model is more relevant than ever. The
opportunity for Schneider Electric to be the “most local of global
companies” with a balanced multi-hub footprint to enable customer
proximity, innovation, speed, collaboration, and diversity, is a key
differentiator for Schneider’s long-term success.
To continue to reinforce the “equity and equal opportunities” strategy
and to reinforce its reputation as the most global of local companies,
Schneider Electric ensures that its leadership footprint is in line
with its business footprint. As of end of 2021, 34.5% of Schneider
Electric’ leadership team is from new economies, and 84% of country
presidents are from the country or region they are leading.
Schneider also has a global commitment on ethnicity and racial
equity, with countries in the lead to drive ambition and actions.
The goal set for racial equity and inclusion means:
• Employee population is reflective of the communities operated
by Schneider Electric, including at the leadership level;
• Employees have equal opportunity for growth and training;
• Everyone feels safe, valued, and respected for who they are,
to be their authentic self.
In line with this goal, since 2021, Schneider Electric has been an
active member of the Business for Inclusive Growth Partnership
(B4IG) Working Group on Diversity, Equity and Inclusion, whose
first order of business was to gather best practices and develop
guidelines to advance ethnic diversity and inclusion in the
corporate world. These “Operational Recommendations for Ethnic
Diversity & Inclusion” were drafted collectively and endorsed by
B4IG-participating CEOs in December 2021. They will serve as
guidance while Schneider Electric continues to drive change in
this area, at the global level.
Employees in New/Mature Economies
84%
55%
of Country Presidents are
either local or regional
(41 out of 49)
New Economies
Mature Economies*
* Mature economies gather mainly Western Europe and North American
countries.
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Race and ethnicity in the US
In the United States, the past couple years have driven strong
visibility on racial and social injustices. Schneider Electric USA has
committed to evolving the racial and ethnic diversity of its employee
population, with specific representation targets in place. Schneider
Electric USA continues to be a proud member of the National
Society of Black Engineers (NSBE) Board of Corporate Affiliates
(BCA), which provides recruitment, development, exposure, and
leadership opportunities for its employees. To further accelerate
progress, Schneider Electric USA launched a Racial Equity Task
Force in June 2020. Under the stewardship of the Task Force,
several projects have been developed in 2020/2021:
• A sounding board team was created, examining how frontline
manager hiring decisions are made and whether biases exist
that create barriers to advancement for Black professionals;
• The employee-led Diversity, Equity, and Inclusion task force
worked on examining the current perceptions and experiences
of diverse groups through quantitative and qualitative measures;
• The Psychological Safety task force team identified a need
for a “Safety Zone,” a safe and confidential space to support
employees on topics impacting their psychological safety
(racism, microaggressions, inequities, mental health, etc.).
The “Safety Zone” will be implemented into a new US benefit
for all US employees in 2022.
• Schneider Electric USA debuted partnerships with two
Historically Black Colleges & Universities (HBCUs), Tennessee
State University and North Carolina A&T University, with the goal
of hiring more diverse early-career talents.
2.5.2.4.3 Generational diversity
For the five generations working at Schneider, the aim is to foster
life-long career development and knowledge exchange for and
across all generations to boost learning and innovation. Schneider
is committed to creating new opportunities for the next generation
(through, among other things, apprenticeships, internships, as
well as its annual global student contest, Schneider Go Green in
the City) and to harnessing the power of all generations, through
tailored career development opportunities offered for each career
stage (career week, coaching, development plans, reverse
mentoring, etc.). For more information, see 2.5.3 Talent attraction
and development, page 177.
Generation breakdown
7%
10%
47%
36%
Gen Y (Millennials)
Gen X
Baby Boomers
Gen Z
2.
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2.5.2.4.4 Accessibility and inclusion for
People with disabilities
Schneider Electric is strongly committed to the inclusion of
people with disabilities. In January 2021, Schneider Electric joined
the International Labour Organization (ILO) Global Business and
Disability Network and signed their charter, committing to promote
and include people with disabilities throughout their operations
worldwide.
In October 2021, in line with its commitment to digital accessibility,
the Company debuted a new, more accessible version of its
official website. In December 2021, in honor of the International
Day of People with Disabilities, Schneider Electric organized a
week-long global awareness campaign on the topic of disability
and accessibility, educating employees about the diversity of
disabilities and the actions allies can take to build an inclusive
environment for all.
At Schneider Electric France, overall, employees with disabilities
account for 5.25% of the direct workforce (as of end of 2020).
Schneider Electric France worked closely with a diverse panel
of partnerships to develop the employment of disabled people,
internally and externally, including targeted schools or universities
in order to develop the visibility of professional opportunities to
young talents with disabilities. In 2021, the Company remained
committed to the recruitment of people with disabilities, with the
addition of 24 new apprentices and 11 new permanent workers.
Schneider Electric France keeps a strong focus on raising
awareness of invisible disabilities including cognitive disabilities
and chronic diseases. The awareness campaign includes
webinars, educational materials as well as specific web series.
A new Agreement on People with Disabilities has been signed
with unions in December, giving means and objectives for 3 years
focused on more recruitments (100 in 3 years), more accessibility
(physical and digital) and more collaborative actions to allow
employees facing health issues to work.
To facilitate better communication in the context of the pandemic,
all employees with hearing disabilities as well as their co-workers are
still fitted with “inclusive masks” that allow visibility of the lower face.
2.5.2.4.5 LGBT+ inclusion
In March 2018, Schneider Electric committed to the United Nations
Free and Equal Standards of Conduct for Business on Tackling
Discrimination against Lesbian, Gay, Bi, Trans and Intersex People,
standing up for equal rights and fair treatment for LGBT+ people
everywhere.
By adopting these standards, the Group pledges to respect and
stand up for the human rights of LGBT+ workers, customers, and
members of the public; to support our LGBT+ employees and to
prevent discrimination, including workplace discrimination,
against LGBT+ people.
In June 2019, during Pride Month, the Company announced the
launch of its global LGBT+ Employee Resource Network (ERN):
Schneider LGBT+ and Allies. The Group is open to all – LGBT+
people and allies alike – with an interest to further inclusion in the
workplace. In October 2020, in addition to its (virtual) celebration
of Pride Month, Schneider Electric held its first global LGBT+
Awareness Month. Each week, video testimonials, podcasts, and
educational materials were provided to all employees interested in
learning and hearing from their LGBT+ colleagues. In June 2021,
the Company celebrated Pride Month globally, with a campaign
that focused on the concept of intersectionality.
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In addition to signing the United Nations Free and Equal Standards,
across the globe, Schneider Electric has also made public
statements of support to advance LGBT+ inclusion: Schneider
Brazil, Chile, Argentina, Colombia, and France have all signed
LGBT+ equality charters.
In the United States, since 2019, Schneider Electric USA proudly
demonstrates allyship to the LGBT+ workforce by participating
in the Human Rights Campaign’s Corporate Equality Index for
LGBT+-inclusive workplace policies and practices. In 2022,
Schneider Electric USA scored 90/100 on the Corporate Equality
Index, the nation’s foremost benchmarking survey and report
measuring corporate policies and practices related to LGBT+
workplace equality. Schneider Electric USA offers benefits to
support LGBT+ community members including fertility and infertility
care, adoption, surrogacy, gender reassignment surgeries, paid
primary and secondary parental leave, and mental health support
through free counseling sessions, online resources, digital therapy,
coaching and more. All LGBT+ community members and allies are
encouraged to present their authentic selves.
2.5.2.5 An equitable, inclusive,
and caring environment
2.5.2.5.1 Being fair and equitable
Schneider Electric wants its talent processes to be fair and
equitable. Talent decisions are based on skills, values,
performance, and potential. The Company counts on each leader
to be fair and equitable when making a hiring or promotion decision
to help advance its overall goal to create a skilled and diverse
workforce for the future. The Company has built in reminders to
check hidden bias and mitigate them through inclusive tips into
its major human resource programs, including performance and
salary review processes.
Fair and equitable pay is a core component of the Group’s
compensation philosophy, in line with the principle of equal pay for
equal work. Since 2015, the Company has adopted a Global Pay
Equity Framework – a global methodology to identify gender pay
gaps within comparable groups of employees and lead a country-
driven approach to address gaps with appropriate corrective
actions. With the help of this Framework, Schneider Electric has
committed to reaching <1% pay gap for both females and males
by 2025. As of end 2021, the pay gap was -1.61% for females and
1.11% for males, on track with target.
To learn more, please see page 182. (cid:496)
2.5.2.5.2 Managing our unique lives and work
New Ways of Working
Schneider Electric wants all employees to be able to manage their
unique lives and work in the way that works best for them and has
implemented several policies to this end.
In October 2020, Schneider Electric’s Global Flexibility@Work
Policy was refreshed, making it a global standard to work from
home (WFH) two days a week for all eligible employees, and one
day for employees working in distribution centers and plants,
starting in 2021(1). The new global standard came in response to
feedback in the Company’s 2020 global employee survey in which
a large proportion of employees stated that they preferred a hybrid
work model (mix of WFH and “work from office”). Additionally, the
policy addresses hybrid work holistically, providing employees
with mental health resources and training on best practices. This
new policy reflects the broader shifts of a global, digital, and ever-
changing environment, and contributes to a more agile, inclusive,
empowered, and trusting Company culture. As part of this new
Flexibility@Work Policy, countries can explore additional measures
such as flexible working hours, flexible holidays, part-time work,
and volunteering. Some examples of Schneider Electric countries
raising the global standards with no fixed limit on the number of
WFH days are Estonia, Finland, Latvia, Lithuania, Netherlands,
Australia, New Zealand, Slovakia, Russia, Germany, the United
Kingdom, and the United States, operating with a fully flexible,
output driven philosophy.
At the end of 2021, 99% of the countries have implemented
the new Flexibility@Work policy covering 88% of Schneider
Electric’s workforce.
In addition to its Flexibility@Work Policy, Schneider Electric’s
Global Family Leave Policy supports all employees globally with
personal time at critical life stages and empowers them to manage
their unique life and work so that they can be at their best. While
the Group’s countries have flexibility to define eligibility and policy
details per statutory/market requirements, the policy sets global
minimum standards for paid parental leave (primary parent –
12 weeks, secondary parent – 2 weeks), care leave (for sick/elderly
relatives – 1 week); and bereavement leave (1 week). In 2020,
the Group expanded its care leave from one to two weeks for our
employees to care for their dependents diagnosed with COVID-19.
For more information on our Global Family Leave policy, see page 184
“Global benefit standards”. (cid:496)
Lastly, Schneider Electric has also implemented global benefits
standards for all its employees. Schneider Electric regularly
reviews compliance with its global benefit policies and principles
to ensure that its inclusive global benefit standards are delivered
for everyone, everywhere. These standards cover healthcare,
family leave, and life cover.
To learn more on this, please refer to page 184. (cid:496)
2.5.2.5.3 Promoting well-being and mental health
Well-being in our DNA
Well-being has been a strategic priority since 2015. Schneider
Electric’s well-being ambition is to create an environment where
employees are empowered to manage their unique life and work
by making the most of their energy.
(1) Eligibility is based on employee’s role and requirements for on-site work and is determined by country/territory with additional input from managers. Some essential
roles, e.g., Plant & Distribution Center blue-collar workers, Field services engineers due to role specifications are excluded from this 2-day work-from-home policy.
Recognizing that many critical roles need to be on site, this policy was adjusted to 1 day for the eligible Plant & Distribution Center specific roles.
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The holistic view of well-being (physical, mental, emotional, and
social) and the joint effort between the Company, leaders, and
employees, are key for the success of the program. The current
strategy tackles three areas of impact:
First, the Company provides all employees with a playbook
supported by a series of trainings in several languages to equip
employees and managers with knowledge of how to deal with
Mental Health challenges.
• Overall Well-Being
• Mental Health
• New Ways of Working
The deepening and acceleration of these key avenues is
supporting the hardwire recovery and care into organizational
structure – for sustained high performance. 2021 has shown
how the expertise in well-being, gained in the past six years,
has evolved and translated into an increase of internal demand
for consulting to leaders’ teams to sustain and boost their
performance.
Awareness and training are essentials for this transformation.
Back in 2020, Schneider Electric achieved its goal to reach 90%
of employees having access to a comprehensive well-being at
work program (including access to medical coverage and
well-being training).
Employees have access to training in different topics such as
new and smarter ways of working, the upside of stress, how to work
in a hybrid world, mindfulness at work, energizing our people to
perform, spotting the signs of mental health challenges, and using
strengths to prevent burnout.
Holistic Approach – 4 Dimensions
Physical
Physical well-being is what
we do with and to our bodies:
sleep, fitness, nutrition, regular
rest and renewal.
Emotional
Emotional well-being is about
cultivating and generating
positive emotions: optimistic,
engaged, happy, joyful,
confident, enthusiastic,
present, peaceful, relaxed,
comfortable, serene.
Mental
Mental well-being is the ability
to manage and train your mind:
relax your mind, concentrate
and focus, observe your mind,
thoughts, beliefs, perceptions.
Social
Social well-being comes from
connecting and supporting
others, finding meaning in what
you do, serving something
larger than yourself, and living
in alignment with your values.
Approach: Training and researched practical applications
based on Emotional Intelligence, Positive Psychology,
Neuroscience and Mindfulness
Mental health in the workplace
According to the World Economic Forum, the cost of mental health
is projected to rise up to 230% by 2030. Beyond the economic
aspect, it is imperative for corporations to tackle the mental health
topics, even more so after the effects the pandemic.
Since 2019, mental health is part of the global well-being agenda of
Schneider Electric, raising awareness within the organization about
its importance and aligning with the World health Organization’s
definition and World Mental Health Day.
In addition, for the third year, a global mental health campaign
was organized during the month of October using the tagline
“Mental Health Matters”:
•
Internally, more than 10,000 employees worldwide participated
in different activities and trainings to learn more about how to
take care of their mental health and boost their resilience.
• Externally, testimonies about personal practices from the
Chairman & CEO, executive team, and Senior Vice-Presidents
on social media using the hashtag #MentalHealthMatters
reached over 300,000 people.
In addition, over the year, specific sessions have been held on
“Spot the signs of Mental Health Challenges” for HR and Health
& Safety people as the key support functions for this topic.
•
Mindfulness practice is an important aspect of the mental health
initiative. A global mindfulness team comprised of volunteers
across the organization drives various events, globally and
locally, to support employees. In 2021, during the October mental
health campaign, 18 global Mindfulness practice sessions were
organized, in English, Spanish, French, and Italian, and four
regional sessions for South Eastern Europe and Central &
South America.
In 2022 the learning and awareness ambition will continue through
a mandatory training for all employees “We All have Mental Health”,
which consists in understanding what mental health means,
learning to recognize the signs of mental health challenges,
and how to act upon these signs.
2.5.2.5.4 Building a culture of inclusion and
respect
In 2018, with the launch of its Global Anti-Harassment Policy,
the Group formalized its zero-tolerance stance on harassment.
The policy explicitly prohibits any kind of harassment (sexual
or non-sexual) in the workplace, and states that “no Schneider
Electric employee shall be subjected to harassment, victimization
or retaliation based on - including but not limited to - race, sex,
national origin, religion, political opinion, age, medical status,
disability, gender, marital status, pregnancy, sexual orientation or
gender identity”. The policy sets clear and consistent expectations
of workplace conduct, outlines the roles and responsibilities of
employees, managers, and witnesses in creating a workplace
free of harassment, and highlights the different reporting channels
available to all to report incidents, while maintaining confidentiality
and protection against retaliation. Lastly, the policy lays out the
type of corrective or disciplinary actions that can be taken in
case of discriminatory behavior or harassment, or failure to report
such incidents.
To learn more on the different reporting channels employees can use
to report incidents, see section 2.3. “Ethics and Compliance” page 95. (cid:496)
In alignment with its Trust Charter, and Global Anti-Harassment
Policy, Schneider Electric has developed a comprehensive
education approach to build inclusive teams and leaders at every
level. The Company’s goal to foster an environment where people
feel a sense of inclusion, belonging, and psychological safety,
begins with educating all employees:
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2.5 Great People making Schneider Electric a great company
• First, the Company educates employees on hidden biases and
how to overcome them. Through an e-workout on “Overcoming
Hidden bias”, participants learn to understand what hidden
bias means, explore clear steps to keep their decision-making
objective, and learn how to proactively call out bias when they
see it in others.
• In addition, Schneider Electric has also committed to the United
Nations Women’s Empowerment Principles (WEPs) and in
2019, became the first multinational company to achieve 100%
commitment to the WEPs across its global leadership team.
All new country leaders now make this commitment as part
of their onboarding process.
• Since 2021, all employees are also required to take a mandatory
• In 2021, the Company officially joined the World Economic
e-learning on “Building a Culture of Respect” (30 minutes).
Through this training, participants explore the importance of
building a culture of respect, learn to recognize the different
forms of harassment, and understand the actions they need
to take (as employees and managers) when witnessing such
conduct. At the end of 2021, 98% of employees had completed
this training.
• Lastly, Schneider Electric frequently reminds employees of our
diversity, equity, and inclusion values through specific nudges
(articles, videos, white papers, etc.). These nudges build on
the content of the aforementioned e-learnings and provide
employees with practical tips and real-world examples to help
them build inclusion.
2.5.2.5.5 Impacting society and advocating for
diversity, equity, and inclusion
Schneider Electric is committed to driving change within its broader
ecosystem and society at large, through advocacy and role-
modelling. The Company works closely with its strategic partners
and suppliers and invests in local actions through the Schneider
Electric Foundation, with the goal of addressing systemic inequities
and becoming a leader in corporate citizenship. Schneider Electric
USA has committed to diversifying its supply chain through its
Supplier Diversity program (see section “2.2.11.4.7 US diversity
program with suppliers” page 123).
Schneider Electric is also very open in its journey to progress
diversity, equity, and inclusion within the Company and beyond and
shares its progress both internally and externally.
Internally, this includes raising awareness by familiarizing
employees with the Company’s data, commitments, and various
partnerships and initiatives. In 2021, employees celebrated
International Women’s Day, Pride Month, International Men’s Day,
and Global Mental Health Day, and led awareness campaigns for
LGBT+ inclusion and accessibility for people with disabilities.
Schneider Electric is also engaged in various partnership to be an
agent of change within the private sector and beyond:
• In May 2021, Schneider Electric renewed its long-standing
partnership with United Nations Women through the newly
launched Generation Equality Forum (GEF). The GEF is a global
multi-stakeholder initiative that brings together representatives
from the private sector, Member States, United Nations
Entities, and civil societies, including youth organizations and
networks, to accelerate progress for gender equality around
the world. As part of the GEF “Economic Justice and Rights”
Coalition, the Company has committed, through the Schneider
Electric Foundation, to support the training of 5,000 women
in the energy trades and their self-employment or access to
jobs, through specialized partnerships, and to launch two new
international initiatives to train and empower women in the
energy field by end 2022. As part of the “Feminist Movements
and Leadership” Coalition, and in alignment with its SSI
50/40/30 target, Schneider has committed to reach 45/29/26;
that is, women representing 45% of its new hires, 29% of its
frontline managers, and 26% of its leaders by the end of 2022.
Forum’s Partnership for New Work Standards; a global, cross-
industry partnership aiming to pave the way in building a
healthy, resilient, and equitable future of work.
• Lastly, since 2020, Schneider Electric is a member of the
Gender and Diversity KPI Alliance (GDKA), a group of DEI
advocates, corporations, academics, and trade organizations
that support the adoption and use of a set of KPIs to measure
gender and other types of diversity in their organizations.
2.5.2.6 Recognitions and awards
Schneider Electric has been included in the 2021 and 2022
Bloomberg Gender-Equality Index (GEI) for the fourth and fifth year
in a row. Schneider Electric scored above the GEI average overall
as well as in data excellence, with the highest scores in equal pay
and gender pay parity, and inclusive culture.
The Company was recognized as part of the Financial Times Diversity
Leaders 2021 and 2022. The company ranked 66th overall and 5th
in its industry category, out of 850 European companies included
in the annual ranking. This Financial Times ranking aims to assess
companies’ success in promoting all types of diversity, including
gender balance, disabilities, openness to all forms of sexual
orientation, and an ethnic and social mix that reflects wider society.
Schneider Electric was named one of Fortune’s 2021 and 2022
World’s Most Admired Companies for the fourth and fifth year
in a row. This year, the Company ranked #3 in the electronics
industry sector.
Schneider Electric ranked No. 48 on the Forbes America’s Best
Employers in Diversity 2021 list and the best in our industry.
The award recognizes the Company’s commitment to building
a diverse and inclusive culture.
Schneider Electric’s Gulf well-being program won two awards in
2021: Best workplace wellness program and happiest workplace
– private sector; based on the well-being, diversity, equity, and
inclusion, and sustainability team initiatives. This brings Schneider
Middle East to a total of seven awards in the well-being sector since
2017.
Schneider Electric Mexico has won, for the tenth time in a row,
the national ERS (Socially Responsible Company) award, which
includes the evaluation of well-being within the organization. On top
of that, Schneider Electric Mexico has ranked among the Top 10
Best Employers for Young Professionals. Finally, it has obtained the
certification for TOP Employers 2022.
Schneider Electric South Eastern Europe (SEE) was recognized
as “HR initiative of the Year”, granted by the Bucharest Arena
Magazine for implementing an Employee Assistance Program
(EAP) across SEE.
Schneider Electric Poland was elected as Firma Dobrze Widziana
(a Company that is well seen) by the Business Center Club in 2021.
Awards
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Chapter 2 – Sustainable development
Strategic Report
• For specific groups of talent, there is a strong focus on high
potentials, early career talent, and a new pilot program for
talent who are in a later stage in their professional career. An
annual talent review process operates across the Company
to help ensure high potential talent, including technical and
digital talent, is identified, recognized, and supported with
an accelerated development path. There are also targeted
programs for specific skills to support our commercial, digital,
and leadership transformations and equip our blue-collar
workers for the supply chain of the future.
In the next normal, the role of leaders to transform culture, build
great teams, and deliver impact is more critical than ever. The
2021 Culture & Leadership survey of around 2,000 Schneider
leaders validated steady progress on the overall Group leadership
and culture transformation started in 2017. Key strengths include
strong ethics and integrity, sense of purpose, and customer focus,
as well as positive spirit and willingness to go above and beyond.
Moving forward, the Group has identified four resets for leaders
that require a renewed focus for the next normal. In this context, the
Leadership Expectations were refreshed in Q4 2021 to emphasize
the collective focus for leaders to disrupt, accelerate, coach, and
collaborate.
2.5.3.3 Governance
The Executive Committee discusses the overall health of the
leadership pipeline and succession strength for top positions on an
annual basis. In addition, the Executive Committee meets regularly
to make critical selection and succession decisions and review
specific talent attraction and development strategies, for example
digital talent and global top potential talent. This is supported by
integrated HR information systems and analytics platforms which
provide data and analysis in the areas of workforce planning and
talent management. In addition, Regional, Business, and Function
People Committees also meet regularly to review talent in their
perimeter.
2.5.3.4 Attracting talent to shape the
workforce of the future
In the next normal, attracting talent at all levels is more critical
than ever to enable delivery of the Group strategy and continually
innovate for our customers. To support the increased focus on
talent acquisition, the Group invested in a new talent acquisition
tool in 2021 which is enabling digital and borderless pipelines
of talent and powering a seamless digital experience to help us
compete in the market for top talent. So far, this has resulted in a
1,000% increase in talent joining our talent network, and a 95%
reduction in time to apply. Deployment will continue into 2022.
2.5.3 Talent attraction and
development
2.5.3.1 Risks and opportunities
Attracting and developing talent is crucial to the ongoing success
of Schneider Electric. The growth of the Group’s businesses in
markets around the world, in conjunction with the rapidly evolving
“next normal”, requires an acceleration of skill development
to prepare for greater organizational agility, develop leaders
who build human connections in a digital world, and shape the
workforce of the future.
The Group strives to be recognized as an employer of choice
to attract the best talent and to be a market leader for talent
development for people of all walks of life, ages, and cultures. Key
programs are in place to invest in the attraction and development
of people, creating opportunities and the environment for
people to learn and grow, while enabling employees to own their
development, taking responsibility to build critical skills to keep up
with the changing world, supported by their manager and enabled
by digital tools. This mitigates the risk of skill gaps and supports
overall retention of employees. Focusing on critical skills to drive
results and innovation for customers helps keep the businesses
ahead of the competition. The opportunity for Schneider Electric
to have a balanced multi-hub footprint will be a key differentiator
for talent attraction and retention, especially with regards to career
development and opportunities for our local and regional talents.
2.5.3.2 Group policy
Schneider Electric believes that all employees are talent and
empowers people to grow to their fullest potential, developing new
skills and building careers for today and tomorrow, enabled by our
multi-hub organization. Establishing a strong brand as an employer
is communicated in the EVP (Meaningful, Inclusive, Empowered);
the promise to current and future employees, driven and anchored
by a meaningful purpose. In addition, the Group invests in learning
and development for the wider ecosystem, including universities
and schools, partners, customers, and the wider community.
The Group has a two-pronged approach to talent development,
in order to prepare the workforce of the future – for all employees
and for specific target groups.
• For all employees, the Group ensures there are tools
and processes in place to set individual performance and
development goals, access learning and development
opportunities for their current role as well as future roles and
explore diverse career paths around the world. #LearnEveryDay
as one of the Core Values sets the tone for employees to be
open to new challenges and continue to upskill for themselves,
their teams, and their communities. In the OneVoice employee
survey, 75% of employees were favorable to being able to renew
their skills through learning and development opportunities
at Schneider.
Our Leadership Expectations 2.0
SHAPE OUR
FUTURE
Disrupt ahead
of the curve
FREE UP
ENERGY
Accelerate
and Simplify
BUILD THE
BEST TEAM
ACHIEVE
TOGETHER
USE YOUR
JUDGEMENT
Coach and Care
Collaborate to Win
Empower and Trust
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Chapter 2 – Sustainable development
2.5 Great People making Schneider Electric a great company
Providing opportunities for the next generation is a key part of the
strategy to harness the power of a multi-generational workforce,
having five generations working side by side. As part of SSI #10,
our five-year ambition is to grow the early-career pipeline by
two times. This involves leveraging traditional approaches today
but migrating to more digital, borderless, and self-paced offers,
ensuring the Company can de-bias practices and create a
more equal playing field for those interested in Schneider and
sustainability. This will be achieved through flagship global
programs and partnerships, supplemented by country-specific
initiatives:
• Schneider Global Virtual Student Experience: A completely
digital experience designed to provide students with a way
to engage with Schneider Electric through e-learning modules
and on project simulations that mirror the skills and qualities that
are important to our mission and when serving customers.
• Schneider Go Green: an annual global competition for business
and Science Technology Engineering Mathematics (STEM)
students around the world to find innovative solutions for energy
management and automation. Over the past ten years, Schneider
Go Green has had over 117,400 registrants and more than 21,700
students have submitted ideas from 172 countries. In 2021
alone, more than 25,400 students registered with close to 2,800
students submitted their ideas, proving that Go Green continues
to be consistent in developing strong and increasing interest from
students for this contest, especially from emerging economies.
• Development programs around the world that are structured
to help support the acceleration of early career talent through
a robust training and development path including graduate
programs, internships, apprenticeships, and co-ops.
• Sponsorship initiatives, virtual Careers Fairs, office/site tours,
Innovation Summit tours, digital and face-to-face speaking
engagements and networking opportunities, mentoring
relationships.
Generations
SSI #10
2x number of opportunities for
interns, apprentices, and fresh
graduate hires
Schneider Global Virtual Student Experience
In 2021, the Company ran a digital and borderless learning
experience, providing opportunities to the next generation
of talent broken into three phases: skills building through
professional e-learning courses, project simulation using
genuine business problems, and feedback and coaching
from Schneider Electric employees. This resulted in 1.6
million impressions and 5k+ registrations, growing the
next generation pipeline of talent in key skill areas: digital,
sustainability, services, supply chain, and electronics/R&D.
Baseline
2021 Progress
2025 target
4,939
x1.25
x2.00
2.5.3.5 Driving high performance
Schneider Electric’s approach to performance and development
is anchored by the Group’s Core Values, and for leaders, by the
Leadership Expectations. The approach encourages learning and
growth, enabling employees to reach their full potential individually,
as teams, and as a Company. The Group’s robust process of
setting individual performance and development goals annually
with regular reviews during the year provides everyone with a
clear roadmap to deliver with impact based on the “what” and the
“how” to ultimately achieve collective success. Schneider Electric
employees are encouraged to seek, give, and receive feedback,
empowering them to take ownership for driving their individual
performance, and managers are encouraged to support them with
coaching and frequent conversations, driving the business forward.
In 2021, 98% of eligible employees completed a performance and
development review.
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2.5.3.6 Enabling sustainable careers
Developing employees in their current role and for future roles
is critical to enable growth of the Group’s businesses. In line with
the belief that all employees are talent, Schneider Electric believes
that all employees should take ownership of their own unique
career development, whatever the stage of their career, supported
by their managers and enabled by digital tools. To empower and
engage employees with this approach, Schneider Electric held
its first Career Week for all employees in 2021. Over 250 events
took place with employees participating from over 90 countries,
sharing career stories, having career check-in conversations with
their manager, learning about different roles and skills, and being
equipped with tools and resources to develop, grow, and shape
their future. 95% of employees surveyed were positive about the
event, especially appreciating the time to discuss and learn about
career development.
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Schneider Electric have several career development programs in
place for groups of talent, supporting employees at all stages of
their career and ensuring a strong pipeline of talent for the future.
To harness the power of all generations, in addition to career
programs for early talent, pilot programs for talent in the later stages
of their professional career started in four countries in 2021. The
intention is to support talent in the later stages of their professional
career to have meaningful and fulfilling development and recognize
and leverage their unique expertise and experience to boost learning
and innovation across generations. The plan is to expand the pilot
programs to more countries in 2022. This ambition is reflected in
SSE #23.
Generations
SSE #23
Access to meaningful career
development programs for >90%
employees during later stages of
their career
Schneider Electric want to recognize and support talent
who are near the later stages of their professional career
to strengthen key skills, leverage expertise and ensure
knowledge exchange. The strategy and approach has
been defined in 2021 and ‘personas’ based on employee
motivations have been established. Ten entities have been
identified to pilot the program in 2022 including France,
Germany, Japan, Denmark, UK & Ireland, China, India
and Australia. Programs will be anchored by a robust
career plan and development options that may include
flexible work, upskilling, career pivots, personal planning,
or workplace adjustments.
Baseline
2021 Progress
2025 target
--
In progress
90%
An annual talent review process operates across the Company
to discuss employee performance and potential, and their
development. This process also ensures that high potential
individuals are identified and supported with an accelerated
development path to realize their full career potential. High potential
individuals are identified by managers as demonstrating high
levels of performance and career growth potential over time,
with the ability to deliver transformational impact with others in a
VUCA (volatile, uncertain, complex, ambiguous) world. Structured
succession planning for leadership and critical roles helps to
accelerate individual career development while maintaining
continuity for the organization. In selecting and developing talent,
an important consideration is also to foster diversity such as gender
and nationalities (new economies as well as mature economies),
as well as building the pipeline for leadership roles and technical
expertise. Towards the end of the talent review process across
the entities, there is an aggregated review with the Executive
Committee to discuss the overall health of the leadership pipeline
and succession strength for top positions.
2.
Chapter 2 – Sustainable development
Strategic Report
The Group has an expert program to recognize individual
employees who have demonstrated outstanding achievement,
expertise, and leadership throughout the Company. Schneider
Electric strongly believes that its position as a global technology
and innovation company is driven by the innovative contributions
of its creative employees. The expert program offers them a
chance to continue to extend their contribution and increase their
impact and exposure to the Group’s strategy. Employees in this
program are identified as Level 1 – Expert, Level 2 – Senior Expert,
or Level 3 – Master Expert.
The Group actively promotes a learning and teaching culture by
developing its internal trainer capability. There has been a strong
focus on equipping internal trainers to develop and facilitate virtual
classroom training, including using tools such as Klaxoon and
BlendedX for additional interaction and engagement. A Global
Virtual Internal Trainer Conference was organized in September with
the purpose to recognize, develop, and connect internal trainers. It
was a day-long conference providing sessions on facilitation skills,
creating impactful presentations, and how to create impact virtually,
with a Keynote speaker from MIT-Sloan. There are currently over
5,500 identified internal trainers who collectively delivered over
20,000 sessions in 2021, accounting for 71% of formal training.
Additionally, the Company currently has over 250 communities
of practice as part of the Communities@Work program. These
communities promote a new way of working, with employees
coming together to share activities on a specific professional topic,
solving problems, innovating, and learning together.
2.5.3.7 Upskilling for today and tomorrow
The Group recognizes skills are rapidly becoming outdated,
especially vital technical and digital skills required to accelerate
our business growth. Roles requiring digital and human skills
are growing due to the rise of AI, automation, and digitization.
Purposeful renewal of skills is necessary to ensure sustainable
careers and a resilient, future-ready business. To support this
ambition, business, and function academies are in place to partner
with the business in identifying learning needs and spotting gaps
in core and future skills for relevant employee populations. They
develop and promote learning and development opportunities
based on the 3E model (education, exposure, and experience).
Key programs include:
Consultative Selling:
The Commercial Excellence Academy has created a blended
and fully digital learning curriculum to enable sales teams to build
trusted advisor relationships with business decision makers. This
consistent, repeatable & consultative approach drives sustainable
& profitable growth, champions digitization and enables customer
success. As such, this program is a key pillar in the overall
customer-centric commercial transformation at Schneider Electric.
At the heart of the Consultative Selling approach is understanding
customers’ undiscovered pain points by conducting strategic
sales dialogues through effective questioning strategy and then
articulating outcome-based results and benefits to those customer
challenges. This sales culture transformation is a paradigm shift
in the way sales teams engage with customers and requires a
robust learning intervention on skillset, toolset, and mindset, all of
which are stitched together in the learning journey. Additionally,
the program is complemented by a robust module for sales
managers, named Coaching for Consultative Selling Approach,
which ensures that the managers are able to coach and develop
the team members constantly as they navigate this transformation,
developing best-in class consultative mindset.
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Chapter 2 – Sustainable development
2.5 Great People making Schneider Electric a great company
20,100+ employees completed the Boost Your Digital Knowledge
assessment. Specifically for Global Supply Chain, a Digital
Acumen Quiz has been designed according to the digital citizen
competency requirement. This quiz recommends related e-learning
if results are below a certain threshold. This quiz also helps to
objectively measures an employee’s digital citizenship level
within the function. For workers, the SSE #22 goal is to achieve
>90% completion of two hours of training per year on digital
transformation.
Supporting these programs and available any time, the Digital
Citizenship Learning Corner empowers employees to own their
development as digital citizens by exploring and completing
courses as needed by topic, persona, and/or function. In total, the
Group had 171,800+ completions by over 29,700 employees on
digital foundational knowledge. A special attention is given to the
blue collars in the plants and distribution centers by implementing
physical learning corners in each site with individual access to the
learning platform with dedicated, multi-language content.
Generations
SSE #22
>90% of employees undergo digital
upskilling through the Digital
Citizenship program
In Europe Operations, a data science upskilling program
was piloted in 2021. Data science skills are critical to the
digital transformation. In 2021, 60 employees from across
different functions, including marketing, sales, and IT, were
identified for the eight-month program. They were provided
with specialized learning experiences to accelerate their
development including functional skills and technical skills
provided on the Pluralsight platform. Participants also
had the opportunity to practice their skills during a mini-
hackathon. The program will result in employees being
skilled to take a Data Analyst or Data Engineer role in future.
Baseline
2021 Progress
2025 target
41%
74%
90%
By the end of 2021, 3,700 sales employees have been certified in
Consultative Selling, almost 40% of the target population. 2022 will
see continued strong deployment. As a result of the program, 93%
of managers say they have observed the participants using the
consultative approach consistently while engaging with customers.
Given the success and impact of the program in 2021, the
program has been adapted and extended to other teams including
tendering, customer care and customer facing roles in Global
Supply Chain to ensure adoption end to end of a more consultative
approach to engage and interact with customers.
Leadership for Profitable Growth:
With a fast-changing, rapidly digitizing industry and customer
base, Schneider Electric faces a challenge of transformation and
performance. The Executive Committee committed to the market
to significantly increase both top and bottom line and set a goal to
rapidly align, educate, and mobilize the top 1,000 leaders across
the company to drive for this outcome. As the COVID-19 pandemic
hit the world, severely disrupting supply chains, customer
engagements, business continuity and sales, through the design
and rapid deployment of the “Leadership for Profitable Growth”
program, Schneider was able to both continue to drive its business
profitably in extraordinary circumstances, whilst delivering critical
business, strategic, and financial acumen learning to its executive
leadership in a 100% digital solution.
The Leadership for Profitable Growth executive masterclass
combines:
• Markets & Financial theory with a finance professor
• Schneider applications in the context of the company’s three
core business models
• A business game simulation designed to engage leaders in
competitive learning for optimizing share price performance
The result has been above competitor performance, a substantial
increase in business literacy, and a more commercially capable
executive leadership population prepared to deliver in the most
challenging market circumstances. The program has also been
recognized by the industry at the 2021 Brandon Hall Group HCM
Excellence Awards with the Leadership for Profitable Growth
masterclass winning Gold in the ‘Best Unique or Innovative Learning
and Development Program’ category and two Silver awards.
Building on the 83% Learner Promoter Score, in 2021, the program
has been progressively cascaded to other leadership levels in
the Group. Almost 1,500 leaders in total have now completed the
program.
Foundational digital skills for all employees:
Digital is a must to succeed in this VUCA (volatile, uncertain,
complex, ambiguous) world and our employees are key to support
the business transformation. The Group has set the goal to achieve
>90% employees undergo digital upskilling through the Digital
Citizenship program and digital transformation training by 2025
(SSE #22). This commitment to growing the digital mindset and
digital skills of all employees, enabling them to become “digital
citizens” was introduced in the Digital Citizenship framework
in 2018. This provided an understanding of the digital baseline
of all employees. A smart learning solution “Boost Your Digital
Knowledge” was launched in 2020, by the Digital Academy,
designed for employees to self-assess and evaluate strength
and development areas, followed by learning suggestions to
upskill in key digital areas based on individual results. In 2021,
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Strategic Report
2.5.3.8 Digitizing access to learning and
development
• More than 147,000 employees with access to the system;
• More than 74,000 employees visiting MLL every month;
• More than 24,000 modules of learning content available in more
Schneider Electric launched a global career development platform,
Open Talent Market (OTM), in 2020, available to all white collar
employees globally. The tool leverages AI (Artificial Intelligence) to
match the supply and demand of internal talent with a transparent,
digital, and borderless approach, empowering employees to drive
their own careers by discovering opportunities for mentoring,
new positions, and part-time projects, as well as potential career
paths. The ambition for usage is to increase 3x the number of
employee-driven development interactions in the OTM by 2025
(SSE #21). At the end of 2021, 71% of eligible employees are
registered on the platform and 25% of those have engaged in some
type of opportunity since registration. Through OTM in 2021, 553
employees have been given visibility to over 1,100 open positions,
3,229 mentoring relationships were formed and 3,248 part-time
project roles were assigned. OTM’s Career Planning functionality
was launched in June 2021 and almost 20,000 employees visited
the feature before the end of the year.
Equal
SSE #21
4x the number of employee-driven
development interactions on the
Open Talent Market
Testimonial from Randy Kesel, Customer Project Specialist,
North America Operations.
‘Since OTM opened a couple of years ago, it has steadily
grown as a user-friendly tool to help Schneider employees
realize their potential. There are abundant opportunities
for anyone that wants to take their career to the next level,
whether that is participating in a project, finding a new
position, or taking on a mentoring role. I really think the new
Career Planning feature will be a game changer for anyone
that wants to map out future role suggestions and how to
get there. I’ve frequently used OTM to find new projects,
such as the NAM OTM Champions Community, and to stay
informed of open positions within the company.’
Baseline
2021 Progress
2025 target
5,019
x2.1
x4
Schneider Electric also has an open learning ecosystem
comprised of interconnected platforms at the center of which
is My LearningLink (MLL). This platform integrates e-learning,
webinars, social learning, classroom learning, assessments, and
full certification paths. The Group continues to see an increase in
usage and an increase in digital learning. In 2021 there were:
than one language;
• Digital learning consumption at 73% for all employees and 79%
for connected employees, stable compared to 2020 and an
increase of 45% on 2019.
My LearningLink was made available to all employees on mobile
in 2021 (as well as on desktop) and is also now integrated with
MS Teams to enable learning in the flow of work. Schneider
also continues the program to connect shop floor workers to
the Schneider Electric network, either from a computer or kiosk
installed in our facilities called “Digital Learning Corner” or from
their mobile phone.
2.
Online training content to Schneider Electric’s partners is also
delivered via My LearningLink. The mySchneider Partner Portal
is deployed in 140 countries and provides a customized learning
experience with targeted training content that is most relevant to
the different personas in partners’ businesses. The training portal
is accessible to over one million Schneider Electric partners,
distributors, resellers, and customers who have completed close to
1.4 million courses since its inception in 2015.
2.5.3.9 Recognitions and awards
Schneider Electric achievements include:
• Brandon Hall Excellence Awards in Learning Gold and Silver for
the “Leadership for Profitable Growth” program dedicated to our
top leaders.
• Fortune recognized Schneider as one of the “World’s Most
Admired Companies”, ranking #3 within the Electronics Industry
in 2021.
• Universum, university student specialized ranking, recognized
Schneider as #24 in their “World’s Most Attractive Employers
2021” ranking amongst engineering students.
• Fortune ranked Schneider #40 on their “Change the World” list
in 2021.
• Great Place to Work certified Schneider Electric in the
US, Colombia, Singapore, Indonesia, Malaysia, Thailand,
Philippines, and Vietnam.
• Schneider Electric Chairman & CEO, Jean-Pascal Tricoire, was
named as “Glassdoor Top CEOs 2021” ranking #2 in France and
#8 in Canada.
• Schneider’s Glassdoor rating is on a steady growth, up to 4.2 at
the end of 2021, recognizing Schneider Electric France as one
of the Best Place to Work for 2021:
− In 2016, Schneider’s rating was at 3.5 and increased to 3.7
and 4.0 in subsequent years, leading to 4.2 at the end of 2021,
out of a 5 points scale. The Glassdoor average is a 3.67.
− Contributing to the overall Glassdoor rating, Schneider is
rated as 4.3 in Culture & Values, 4 in Work/Life Balance, 3.9
in Compensation & Benefits, and 4.4 in Diversity & Inclusion.
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Chapter 2 – Sustainable development
2.5 Great People making Schneider Electric a great company
2.5.4.3.3 Equal pay for equal work
At Schneider Electric, the basic foundational principles of fairness,
equity, ethics, and transparency are fully embedded in our
values. Through reward policies and processes, employees are
compensated fairly and equitably for the skill set they possess and
value contributions as a business imperative. Over the past five
years, proactive actions have been taken to not only close gender
pay gaps, but to prevent new gaps from being created.
To ensure accountability and transparency, Schneider Electric
conducts quarterly reviews of compensation, both at country and
global levels, leveraging analysis from HR data, which covers all
key drivers of the employee lifecycle from hiring, performance
assessment, and salary adjustment to career moves. Focusing on
this Pay Equity Ecosystem allows Schneider Electric to proactively
create offers for new hires and promotions that do not create
pay gaps. The global pay equity framework was implemented
in all countries by the end of 2020, covering 99.6% of Schneider
Electric’s total workforce.
Given the progress made on pay equity and to support our
inclusion philosophy, starting in 2021 the focus on pay equity
has gone beyond gender. The ambition to attain and maintain a
pay gap below 1% by 2025 for both females and males has been
included as part of the SSE #18 for 2021 – 2025. Our baseline as
of the end of 2020 is -1.73% and +1.00% for females and males
respectively. As of the end of 2021, the pay gap was -1.61% for
females and 1.11% for males, on track with target. Note that this
measurement will differ from Country figures that may be required
to be reported due to statutory requirements.
Equal
SSE #18
<1% pay gap for both females
and males
A dedicated Pay Equity budget by country during
salary review, education and training for leaders, HR
and managers to create awareness of and eliminate
unconscious biases, and established governance at the
country level for HR and leaders to review progress have
been put in place to facilitate the attainment of our ambition
to achieve pay gaps of <1% for both females and males.
Baseline
Female
-1.73%
Male
1.00%
1.11%
2021 Progress
2025 target
-1.61%
<1%
<1%
2.5.4 Compensation and benefits
2.5.4.1 Risks and opportunities
To support Schneider Electric’s mission to create a great place
to work and to cater for the diverse needs of its global existing
and future workforce, the Company is committed to providing
a competitive, inclusive compensation and benefits offering,
which attracts, motivates, and retains talent.
2.5.4.2 Group policy
Schneider Electric takes its responsibility as a leading employer
seriously and ensures its diverse global workforce is treated in a
fair and ethical way. Its inclusive reward portfolio is designed to
support employees to be at their best, and it goes beyond pay and
benefits. It’s a meaningful mix of programs to engage employees,
including recognition to celebrate great work, incentives to reward
high performance, an award-winning employee share ownership
plan, and benefits to suit employees and their dependents.
Schneider Electric ensures that all compensation and benefits
decisions and policies are based on these above principles and
follow local statutory and collective agreements.
Schneider Electric believes in rewarding, recognizing, and
differentiating fairly employees who contribute to the success and
live the values of the Company. By putting recognition at the center
of a high-performance ambition, employees feel engaged and
motivated to do more. Delivering high performance is rewarded
by competitive market pay, incentive programs, employee
shareholding, and opportunities to grow careers within
Schneider Electric.
The Group offers a portfolio of benefits to care for employees’
needs at each life stage. Its diverse and multi-generational
workforce is provided with meaningful choices covering a holistic
range of well-being, flexibility, and financial protections to provide
peace of mind to employees and their dependents.
2.5.4.3 Compensation
2.5.4.3.1 Our job architecture and compensation
process
The Company has implemented a global job architecture to
support HR processes and programs and to enable Schneider
Electric to engage, develop, and move talents across different
businesses and geographies. The job architecture provides
alignment to market practice and organizational structure to
ensure the reward package offered for a role is fair and
competitive. This helps working towards creating greater
transparency for career development and progression.
2.5.4.3.2 Pay competitively and pay-for-
performance
Schneider Electric employees are empowered to receive ongoing
feedback, recognition, and coaching from their managers, and
their individual performance is assessed in a fair manner based
on their goals and behaviors. In line with the Group’s pay-for-
performance philosophy, the compensation structure typically
includes fixed and variable (incentive) elements. Compensation
programs and decisions are based on individual performance
and behaviors, Company performance, and competitive market
positioning.
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2.5.4.3.4 Living wage
In line with its Human Rights Policy and Trust Charter, Schneider
Electric believes earning a living wage is a basic human right and
a key element to decent work. Schneider Electric is committed
to paying all employees at or above the living wage to meet their
families’ basic needs. By basic needs, the Group considers food,
housing, sanitation, education, healthcare, plus discretionary
income for a given local standard of living.
In 2018, Schneider Electric started working with an independent
advisor – Business for Social Responsibility (BSR) – to implement
its living wage commitment as part of its fair and equitable policies.
Schneider Electric has initiated a global process to analyze
wage levels and employment practices against local living wage
standards set by BSR. Moving forward into 2020, the COVID-19
crisis highlighted even more strongly the need for a safety net
to guarantee a minimum income level for employees. Given the
complexity to evaluate and mitigate the macroeconomic impact of
the crisis, the Group did not run a gap analysis that year. In 2021,
the new gap analysis covered 63 countries (representing over
99% of Schneider Electric footprint globally). As of December 31st,
99.9% of in scope employees, i.e. all Schneider employees treated
as permanent workforce, were paid at least a living wage. Where
living wage gaps were identified, corrective actions were taken to
ensure that all employees are paid a living wage and no new gaps
are created. In addition to guaranteeing that all in scope employees
are paid at least a living wage, Schneider continues to comply
with all applicable federal, state and local regulations regarding
minimum wage requirements.
From 2021 onwards, the Group reiterated its commitment to pay
100% of employees at least a living wage as part of its SSE #20.
This commitment will be audited annually with the support of an
independent third party. Schneider Electric also continues to be
part of leading corporate coalitions and notably became a Decent
Work patron for the UN Global Compact. These global coalitions
work together to implement living wage standards within their
workforce and their entire ecosystem.
Equal
SSE #20
100% of employees paid at least
a living wage
The UN Global Compact announced its new 2021-2023
strategy, which aims to accelerate and scale up the global
collective impact of business by upholding the Global
Compact Ten Principles and the SDGs through accountable
companies and enabling ecosystems. Given that Schneider
Electric is a leader in providing and promoting a living
wage, the UN Global Compact invited Schneider Electric to
become a Patron of its Decent Work portfolio. The Group’s
role will be key to raise the bar by advancing decent work for
its ecosystem and other companies.
Baseline
2021 Progress
2025 target
99%
100%
100%
2.
Chapter 2 – Sustainable development
Strategic Report
2.5.4.3.5 Short-term incentive
For employees, the annual short-term incentive is linked with
the overall Company performance and individual objectives.
It is designed to encourage and motivate employees to deliver
on collective ambitions through accountability and collaboration,
driving better performance collectively and individually. With a
strong sustainability component, the annual short-term incentives
for the Group’s executives and c. 64,000 eligible employees focus
on what matters to Schneider Electric. Since 2011, sustainability
performance criteria have been embedded in the incentive goals
for Group executives. They are directly linked to the Schneider
Sustainability Impact (SSI) targets.
From 2019, the weight of the SSI criteria has increased from
6% to 20% in the collective part of the annual short-term incentive
highlighting further the importance of sustainability on Schneider
Electric’s business agenda. In France, since 2012, the SSI has also
been included in the profit-sharing incentive plan for the French
entities, Schneider Electric Industries and Schneider Electric
France. The reduction in the occupational accidents severity rate
is also considered in the profit-sharing incentive plans of 24 other
French entities.
To promote a superior sales culture where sales people go above
and beyond to surprise and delight customers, Schneider Electric
offers levels of differentiated reward for sales people to enhance
motivation and results.
2.5.4.3.6 Long-term incentive
Schneider Electric’s long-term incentive plan offers share
ownership opportunities to the Group’s key talents and critical
roles to align their rewards with the interests and experience
of Schneider Electric shareholders. Similar to the short-term
incentive, a portion of the award under the long-term incentive
plan is subject to the achievement of sustainability objectives.
From 2020, the long-term sustainability performance is measured
through the Schneider Sustainability External & Relative Index
(SSERI), a combination of external indices which cover a range of
environmental, social, and governance indicators wider than and
different from the SSI criteria included in the annual incentive plan.
See more details on SSERI in Chapter 4.2 “Compensation Report”,
page 311.
2.5.4.3.7 Recognition is in our DNA
Every day, Schneider Electric employees are making important
contributions to help the organization achieve its mission and key
business results. The global recognition portal “Step Up” gives
employees a way to formally recognize and celebrate people who
consistently demonstrate the Company’s Core Values and go
above and beyond. Schneider Electric creates a culture where
employees receive regular feedback and coaching from their
managers and colleagues and encourages the recognition of
small and big achievements by simply saying “thank you”.
In 2021, Schneider Electric celebrated five successful years of
the Step Up program. Throughout the year, the recognition culture
remained strong, with many employees continuing to utilize the
dedicated platform to appreciate and recognize colleagues.
In 2021, over 600,000 recognition moments were recorded,
acknowledging Schneider Electric employees living the Core
Values around the world.
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Chapter 2 – Sustainable development
2.5 Great People making Schneider Electric a great company
2.5.4.4.2 Employee share ownership
The Worldwide Employee Share Ownership Plan (WESOP) is one
of the Group’s recurring key annual reward programs, offering
employees across the world an opportunity to become owners
of the Company, at preferred conditions.
WESOP is strongly ingrained in the Group’s culture, as a cultural
and reward differentiator with a positive impact on engagement,
attraction and retention. Schneider Electric has strongly developed
and reinforced its offer over the years in order to build a sustainable
group of employee shareholders reflecting the workforce diversity,
to create a strong feeling of belonging, and to link employees to
the performance of the Company, acting like owners of Schneider
Electric. In that spirit, WESOP has become part of the Group
sustainability commitments towards its 2025 roadmap (SSE #19).
In participating countries, eligible employees have the chance to
participate. All eligible country teams are collaborating to deploy
WESOP and they made its success possible over the years.
In 2021 the Group successfully reintroduced WESOP in 40
countries for the 25th anniversary, after cancelling the plan in 2020
due to the COVID-19 pandemic, achieving 59% subscription rate,
a higher rate than in 2019 at 50%.
As of December 31, 2021, the employee shareholding represented
3.6% of Schneider Electric SE’s capital and 6.3% of the voting
rights. 77% of the Group employee shareholders were located
outside of France, of which 13% are in China, 15% in India, and
10% in the US. This also includes employee shareholding resulting
from the long-term incentives grants.
2.5.4.4 Benefits
Company provided benefits represent a considerable business
commitment by Schneider Electric everywhere in the world.
Schneider ensures that all employee benefits are locally and
globally compliant, as well as market relevant. Because employee
benefit plans vary significantly between countries due to different
levels of social, tax, and legal regulations, Schneider Electric’s
benefits portfolio is primarily country-driven and aims at providing
similar benefits within a country territory.
2.5.4.4.1 Global benefit standards
Schneider Electric regularly reviews compliance with its global
benefit policies and principles to ensure that its inclusive global
benefit standards are delivered for everyone, everywhere. These
standards cover healthcare, family leave, and life cover and are
audited in the SSI.
One of Schneider Electric’s underlying benefit objectives is to
ensure all its employees are equipped to manage their basic health
and well-being and to provide adequate security to employees
and their dependents. Health and well-being are embedded in
the Schneider Electric strategic people priorities and contribute
to its sustainability mission. The Group is committed to provide its
employees access to a comprehensive well-being at work program
– translated into a dual standard of access to healthcare and well-
being training programs (detailed further in subsection “Well-being
in our DNA”, page 174). Access to an inclusive and comprehensive
standard of healthcare coverage (outpatient, hospitalization, key
health risks/chronic conditions, maternity, children) is defined by
local regulations and employment agreements. Schneider Electric
also supports its employees with personal time off at critical life
stages and this is fully deployed in 100% of countries as detailed
below. In addition, the Group commits to provide financial security
to employee dependents, in the event of an employee’s death, in
the form of a minimum standard of life assurance coverage of at
least a multiple equivalent to one year’s salary.
Schneider Electric has reaffirmed and enhanced its existing global
benefit standards outlined above for all our employees worldwide,
for the duration of the COVID-19 crisis. This included a global
extension of care leave from one to two weeks for our employees
to care for their dependents diagnosed with COVID-19.
Global Family Leave Policy
As part of being a caring and responsible employer, Schneider
Electric launched its global family leave policy along with care
leave in 2017. With its industry-leading Global Family Leave Policy,
Schneider Electric supports employees with personal time at
critical life stages and empowers everyone to manage their
“unique life and work” so that they can be at their best. While the
Group’s countries have flexibility to define eligibility and policy
details per statutory/market requirements, the policy sets global
minimum standards:
• Fully paid parental leave (primary parent – 12 weeks,
secondary parent – 2 weeks);
• Care leave (for sick/elderly relatives – 1 week); and
• Bereavement leave (1 week).
All benefits eligible employees have access to this global policy.
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Equal
SSE #19
60% subscription in yearly Worldwide
Employee Share Ownership Plan
(WESOP)
Schneider Electric commits to achieve a 60% subscription
rate among eligible employees in the yearly WESOP by
2025, as a key program to support Schneider Sustainability
Essentials. Scope concerns 29 recurring participating
countries, among the 40 participating countries representing
91% of the eligible headcount.
From 53% subscription rate in the recurring countries in
2019, WESOP has reached 60.5% achieving the 2025
target four years ahead of the deadline. The Group aims
to maintaining at least 60% subscription rate in the coming
years in the recurring countries.
With more than 80% subscription rate, India, and China
outperformed and have become part of the major
contributors of the 2021 capital increase, representing
together more than one-quarter of 2021 total subscription.
Baseline
2021 Progress
2025 target
53%
61%
60%
Chapter 2 – Sustainable development
Strategic Report
2.5.5 Social dialog and relations
2.5.5.1 Risks and opportunities
Social dialog and freedom of association must be seen within the
wider context of ethics and responsibility. As a global Company,
Schneider Electric is convinced that its responsibility goes
beyond compliance with local and international regulations and
is committed to conducting its business ethically, sustainably,
and responsibly.
2.
The Company is constantly interacting with all stakeholders
throughout the world: its borders are expanding, its environment
is changing ever faster, its activities are becoming globalized,
and its social responsibilities are growing.
The challenge is to gain and maintain the highest confidence
of its stakeholders. To support each employee in this approach,
the Group emphasizes the importance of placing responsibility
at the heart of its corporate governance.
The Group currently has around 128,000 employees worldwide.
Following the Group’s various acquisitions, it has been able to
integrate this exceptional professional and cultural diversity.
2.5.5.2 Group policy
Schneider Electric considers freedom of association and collective
bargaining as fundamental rights that must be respected
everywhere and therefore in its Trust Charter commits to complying
with local laws in every country where it operates.
In its Human Rights Policy, Schneider confirms that it considers
freedom of association as the basis of a regular dialog between a
company and its employees. To that purpose, Schneider respects
the individual right of its employees to freely join, participate in,
or quit labor organizations to assert and defend their interests.
Subsequently, Schneider guarantees that any employee wishing
to do so shall be protected against any internal measure limiting
his or her freedom of association such as discrimination of any kind,
pay loss, or dismissal. Schneider also recognizes the importance of
dialog with freely appointed employee representatives, employee
representative bodies (such as Works Councils or employee
forums), or organizations (like trade unions) and supports
collective bargaining.
In addition, Schneider joined the Global Deal initiative in 2017. The
Group is promoting social dialog as a means to foster decent work,
quality jobs, increased productivity and, by extension, greater
equality and inclusive growth.
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Chapter 2 – Sustainable development
2.5 Great People making Schneider Electric a great company
2.5.5.3 Governance
2.5.5.5 Group Works Council, France
Social dialog is managed at country level by the HR leaders
with the employee representative bodies and unions, and at
transnational level with the European Works Council (EWC) which
covers most of geographical Europe. Social dialog is also taken into
consideration by the Group’s social reporting system, where local
HR teams report on the presence of trade unions, works councils,
and the Health and Safety Committee every year.
In 2014, while changing the corporate form of its parent company,
Schneider Electric SA, into a European company (Société
européenne), Schneider Electric negotiated an agreement with
employee representatives of European countries about the
involvement of these countries’ employees in the Company’s
decision-making processes, thus reaffirming its commitment
to promoting social dialog at international level.
Labor relations within Schneider Electric are based on respect and
dialog. In this spirit, management, and employee representatives
meet regularly to exchanges views, negotiate, sign agreements,
and ensure that agreements are being implemented.
2.5.5.4 European Works Council (EWC)
The changes that were made in 2014 to the EWC in the framework
of Schneider Electric SA’s transformation into a European company
significantly enhanced the intensity and the impact of social
dialog at European level. This European channel for dialog aims
at enabling management to make more efficient decisions by
giving employee representatives the opportunity to be informed
of such decisions and to understand their reasons, as well as to
put forward proposals to supplement or improve them.
It has also fostered the emergence of a strong identity, combining
different cultures and having the common aim of working towards
social and economic progress within the companies in the Group
at European level. The EWC covers all European Economic Area
countries (hence all EU member states) and Switzerland, for a
total of 43,000 employees.
In 2017, Schneider Electric and IndustriAll Europe signed an
innovative Europe-wide agreement, the European agreement
on the anticipation and development of competencies and
employment with respect to the Schneider business strategy. This
agreement is a great opportunity to create a governance for jobs
and skills at the Company by anticipating impact and evolution
in business in line with current market trends and the Company’s
ambition. It sets clear objectives for boosting employees’
employability, and for enriching the workforce by diversity and
digital generation recruitment and reinforces constructive social
dialog at European and local level within the Company.
Since the beginning of COVID-19 pandemic crisis, Schneider
Electric has constantly increased its interactions with its employees
and its representatives in order to contribute to helping create
a stimulating work environment and participate in decisions
aimed at improving the way we work and the need to adapt to
our environment, all of which go hand in hand. For example, a
new discussion space with EWC members has been set up to
propose a collective improvement of the whistleblowing process.
The digital June plenary session hosted presentations and
discussions on the Company’s strategy with Executive Committee
members including Schneider Electric’s Chairman & CEO.
Schneider Electric is organized in France through more than
28 legal entities. However, with a coverage of 80% of employees,
Schneider Electric Industries and Schneider Electric France SAS
set the tone for social dialog in France mainly through the Group
Works Council.
In 2021, we continued to limit the impact of the COVID-19 pandemic
on the business through our proven practice of social dialog, such
as negotiations about the flexible working hours agreement.
Several collective agreements were concluded with an objective
to keep resiliency, strengthen Company performance, and at the
same time maintain investments and employability of the workforce.
To anticipate and manage the consequences of the evolution
of Schneider Electric’s strategy over the next three years, a
strategic workforce planning agreement was negotiated with the
trade unions. Every year, Schneider Electric will discuss with its
employee representatives the evolution of skills and workforce,
including the opportunity to enhance its commitment on
apprenticeship programs and others disruptive actions.
2.5.5.6 Social dialog in the United States
In the US, and more generally in North America, regular
communication takes place with both union and non-union
employees on key business topics and trends affecting their jobs.
Company officials meet with key international union leaders and
local union leadership on an ongoing basis, and formally on an
annual basis, to advise and discuss competitive issues impacting
the Company’s business, and to ensure alignment with the
Company’s business strategies and challenges. In 2021, contract
negotiations took place both locally and nationally resulting in
successful contract ratification. Company officials have continued
to partner with union representatives to discuss COVID-19 and
ensure safety protocols are in place for employees, customers, and
vendors. Recently, impact bargaining took place in November with
union leaders regarding the Company’s “COVID-19 US Vaccination
Policy” aligned with the federal mandate, Executive Order 14042.
2.5.5.7 Social dialog in Mexico
In Mexico, Schneider Electric leaders conduct regular
communication with employees on topics related to their jobs;
this communication takes place in different ways, including
large communication meetings and small group conversations.
There is also continuous communication with the union leaders
and delegates of four national unions which represent unionized
employees. Schneider Electric informs them of internal and external
issues impacting the Company’s results, listens to their concerns,
and looks for alignment with the Company strategy and challenges.
Moreover, Schneider and the unions review the collective contract
every year. Social dialog has been a critical factor reinforced
during the pandemic to ensure collaboration and optimal relations
between Schneider and its unionized employees. Each site is
empowered to lead its social actions according to local needs.
For over the past 10 years, Schneider Electric Mexico has been
certified annually by the CEMEFI (Mexican Center for Philanthropy)
as a Socially Responsible Company, recognizing the Group’s
actions focused on labor relations, ethics and governance,
human rights, community impact, and sustainability.
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2.
Chapter 2 – Sustainable development
Strategic Report
The process of social dialog also includes monthly employee
communication at plants level, as well as through Quarterly Town
Hall communication on Company performance, strategy, and
challenges. Special sessions were organized for employees’
family members on the world standard safety procedures at
the workplace which boosted confidence and encouraged
employees to return to work. To drive positive mental well-being,
the Company leveraged the existing Employee Assistant Program
(Saathi) for employees and family members, which became a huge
support system. Experienced doctors and specialists facilitated
COVID-19 safety and mental health sessions. Employees regularly
connected with counsellors, read articles on relevant health topics,
and attended webinars to augment their health preparedness.
Employees were regularly involved in social and environmental
protection initiatives through large scale tree plantation drives
across the factory and at nearby locations. Campaigns on virtual
engagement and collaboration, and leaders connecting in
formal and informal settings, further ensured that a physical and
psychologically safe environment for employees was created.
2.5.5.10 Social dialog in Turkey
In 2021 the Company saw great benefits from the policies that
were deployed in 2020. All COVID-19 actions continued to be
followed systematically and more digitally by Health Safety &
Environment and HR, and updated information was regularly
shared with all employees.
This year, Schneider Electric successfully renewed the union
agreement which covers nearly 650 employees without any
dispute. With this agreement, the private health insurance scope
has been extended, and not only the employees but also the
families have been taken under the coverage. Digital learning,
which has been a priority for many years, was further encouraged
during this time. The Digital Learning Corner project has been
completed so all shop-floor employees can access digital learning,
with a wide range of topics available from Schneider Essentials
learning offer to digital technology trends, Lean Digitization
Systems, and more.
2020 also, unfortunately, saw a serious forest fire in much of Turkey,
especially the Aegean region. Schneider Electric and employees
came together and provided support to the region. In 2021,
Schneider Electric supported the project, which was initiated under
the leadership of Bogaziçi University Climate Center and United
Nations Sustainable Development Solutions Networks – SDNS
Turkey, for the training of teachers within the scope of Turkey’s
Climate Mobilization. Within the scope of the “Climate 2030:
Special Education for Educators on Climate Change” project, it
is aimed to inform about the basic concepts of climate change,
its physical foundations, the reduction and adaptation dimension
of climate change, its international processes, and sustainable
climate actions. Istanbul innovation hub started to co-operate with
selected universities in Turkey, giving young people the opportunity
to see the digital solutions in energy management and the latest
technologies applied by the Company, to expand their vision.
2.5.5.8 Social dialog in China
Schneider Electric China has over 30 legal entities and more than
100 sites. In 2021, the Company fostered active social dialog with
joint Group efforts. The HR department, in partnership with unions,
facilitate active dialog with employee representatives on topics
that cover employee lifecycle:
• Mobile-enabled learning is extended to both office and plant
workers, while virtual and on-site blended training with action
learning is deployed in all talent programs ensuring generation
and gender diversities. Employee average learning time has
reached 18 hours.
• Leadership management continuously listens to employees with
open communication, reflection, and action plans. Well-being
bi-monthly live talks have attracted over 3,000 participants;
topics cover mental health, stress management, parenting, etc.
• Sustainability practices are promoted through various events,
for instance, Zero Carbon Run to increase carbon neutral
knowledge and corporate commitments awareness.
2.5.5.9 Social dialog in India
Schneider Electric India has a strong culture of social dialog with
all employees, unionized and non-unionized. In 2021, Schneider
Electric India maintained engaging in equitable industrial relations
across its plants and associated establishments.
Industrial harmony has been achieved through a time-tested
collective bargaining process involving unions or through worker
representative committees. In some of the plants where there
are no recognized unions, this bargaining process is conducted
with elected employees on committees such as Welfare (Works
Committee). There is also strong engagement with other
committees like Health & Safety, Canteen, Sports, and Transport,
including a special committee for women employees and a
prevention of sexual harassment committee (fully compliant with
the prevention of sexual harassment governance as per local laws),
duly represented by employees and external women with specialist
knowledge of the subject and with legal backgrounds. These
committees provide a platform for employees to represent their
concerns, collective grievances, and workplace-related issues
to the management. All employee engagement programs are
run through these committees with the active participation of
every employee.
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Chapter 2 – Sustainable development
Chapter 2 – Sustainable development
2.6 Delivering social impact for a just transition
In this section
2.6.1 Offering better lives through access to
green electricity
2.6.2 Investing for high social impact
190
193
2.6.3 Empowering new generations with the
Schneider Electric Foundation
2.6.4 Developing access to education
and employment all over the world
195
200
“Today’s young people are forward-thinking, creative and one
of the largest demographics. They are committed to address
the biggest challenges of our time. However, many of them lack
access to education to unleash their true potential. Schneider
Electric has a key role to play in supporting all young people
and ensuring that they acquire the skills to build their future.”
Gilles Vermot Desroches, Senior Vice President Corporate Citizenship & Institutional Affairs
Context and goals
Schneider Electric has been building a sustainable development
approach since the late 1990s thanks to the Schneider
Sustainability Impact, measuring the Company’s objectives and
progress every quarter. These objectives have always taken into
account all dimensions of responsibility – environmental, social,
territorial, and governance – encompassing all the Group’s
stakeholders on a global scale.
In 2021, Schneider Electric was recognized by Corporate
Knights as the World’s Most Sustainable Corporation out of 5,000
companies surveyed. All of this prompted the Group to get moving,
to think about the world of tomorrow by building scenarios, both
in the environmental and climate fields – but without forgetting the
social and territorial dimensions. If the transition is not inclusive
and fair, it will not allow people in underserved communities to
build their future and create their own business. Schneider Electric
Corporate Citizenship division, created in early 2021, embodies this
vision. The planet has to be saved, and its inhabitants too.
Four main lines of action have been defined. The first one is to
ensure that the Group’s business partners respect all human
rights for everyone, everywhere, at any time and in any situation,
from decent work standards to the creation of a social label for the
Group’s products.
The second line of action is to ensure that everyone is supported in
building their future, regardless of their generation. Schneider has
always played an active role in the economic development of the
communities in which it has a presence, in particular where people
have no or poor access to energy through dedicated products
offers and socially responsible investments for impact.
This focus is in line with the third major action, youth. There have
never been so many young people on the planet, but many have
no access to training. Yet it is young people who bring innovation.
The Company has a role to play in supporting them and ensuring
that they acquire the skills to build their future. This is the mission
of the Schneider Electric Foundation, to give them the means to do
so. The first of these means is training, the Foundation’s historical
activity. It has already enabled more than 300,000 young people
around the world to receive professional training in energy-related
professions. These are essential jobs for the future in a world that is
becoming increasingly electrified and digitized and where access
to energy is still difficult for millions of people.
The fourth approach is to make citizenship a collective commitment
to co-construct the future in a dynamic way by learning and sharing
with many different initiatives.
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Strategic Report
2021 Highlights
13,000 Mobiya solar lanterns distributed
in Benin, Senegal, and Cameroon in
partnership with ADEME.
150,000 Young people trained in
energy management through UCEP
Bangladesh and Schneider Electric
Foundation partnership.
Partnership with Solar Impulse Foundation
on its Efficient Solutions Label initiative
to identify 1,000 solutions to fight
climate change.
2.
24hr electricity to 150,000 people
in 5 remote cities in Chad through a
partnership with local entreprise ZIZ energy.
+9,500 Days of Volunteering in 2021
with increased participation from
Schneider Electric employees.
The Schneider Electric Foundation has
reached the bar of 300,000 young people
trained in energy related professions.
Key targets and results
Progress against our 2021-2025 Sustainability commitments
Schneider Sustainability Impact
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Baseline(1)
2021 progress(2)
2025 Target
Equal
9.
Provide access to green electricity to 50 million people
30M
+4.2M
50M
Generations
11. Train people in energy management
281,737
328,359
1M
Schneider Sustainability Essentials
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Baseline(1)
2021 progress(2)
2025 Target
Local
25.
Increase the number of volunteering days since 2017
18,469
27,981
50,000
(1) Generally, the 2020 performance serves as a baseline for Schneider Sustainability Impact (SSI) and Schneider Sustainability Essentials (SSE) programs, except
SSI #1, SSI #10, SSE #5, SSE #14, and SSE #20, which are measured against a 2019 baseline to mitigate COVID-19 impacts.
(2) Each year, Schneider Electric obtains a “limited” level of assurance on methodology and progress from an independent third party verifier for all the SSI and SSE
indicators (except SSI #6, SSI #7, SSI #+1, SSE #12 and SSE #23, in 2021), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on
page 224. Please refer to page 206 for the methodological presentation of each indicator. The 2021 performance is also discussed in more details in each section of
this report.
Long term roadmap
2030
Give access to green electricity to 100 million people cumulated since the beginning of the program in 2009
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Chapter 2 – Sustainable development
2.6 Delivering social impact for a just transition
2.6.1 Offering better lives
through access to green
electricity
2.6.1.1 Risks and opportunities
Today, more than two billion people have little or no access
to electricity, representing 25% of the world’s population.
Notable progress has been made on energy access in recent
years, with the number of people living without electricity dropping
to 759 million in 2019 from one billion in 2016(1). Nonetheless,
as SEforAll(2) puts it, “electricity access is growing, but not for
everyone”.
In sub-Saharan Africa, colossal additional efforts must be made
to achieve universal access:
• About 600 million people in sub-Saharan Africa do not have
access to electricity, i.e., more than one in two inhabitants;
• This trend is increasing, due to demographic pressure;
• The COVID-19 pandemic will have further amplified the
difficulties of access to electricity in the most fragile areas;
according to SEforAll, the pandemic could increase the
non-electrified population by 100 million in 2020;
• By 2030, on the current trajectory, 85% of the remaining
unelectrified world population will be in sub-Saharan Africa.
Asia-Pacific is approaching universal electrification with ambitious
government off-grid electrification and grid extension programs:
• Between 2000 and 2018, more than 1.4 billion people gained
access to electricity worldwide, mainly in developing countries
in Asia;
• Nevertheless, the grid can be unreliable in remote areas, where
it must be supplemented with solar-powered backup solutions;
• The growing need for equipment and electrical appliances
for productive use in rural areas must be met with renewable
energy solutions.
In addition to the 759 million people without electricity access, an
estimated one billion people have access to intermittent, unreliable,
or dangerous electricity.
To achieve United Nations Sustainable Development Goal 7
(SDG 7), access to affordable, reliable, sustainable, and modern
energy must be a major objective, as the lack of energy affects
the poorest: among the energy poor, three quarters are also
multidimensionally poor in terms of human development2.
Access to green electricity offers a chance to live a better life,
as it can have a positive multiplier effect on all socio-economic
dimensions of the individual or community: livelihood, health,
education, security, and empowerment of women, while fighting
against climate change by replacing fossil solutions.
2.6.1.2 Group policy
Schneider Electric launched its Access to Energy program in 2009,
with a unique approach combining three dimensions that enrich
each other:
• A training and entrepreneurship program aimed at
developing skills in the electricity trades and supporting
entrepreneurs in this area, in particular women, in order to
promote sustainable and inclusive local development.
• A social and inclusive business, with products and solutions
for rural electrification (collective and individual, such as solar
lanterns, solar home systems including Pay-As-You-Go features,
solar water pumping systems, microgrids including plug
and play containerized solutions, etc.), creating local jobs in
distribution, energy services, electricity powered industries, etc.
Impact investment funds to support local economies in
gaining access to modern energy and reducing energy poverty.
•
The purpose of the Access to Energy social business is to
bring clean electricity to populations in emerging markets both
as a fundamental right and a means for social and economic
development, with a safe, affordable, reliable, and sustainable
energy offer. At Schneider, we call this Electricity for Life and
Electricity for Livelihood.
The ambition of the Access to Energy social business is to connect
an additional 20 million people between 2021 and 2025, and
70 million by 2030. 34 million people have already benefited from
the Schneider energy access solutions between 2009 and 2021.
The impact investment funds will contribute to these targets, within
the scope of the invested companies contributing to the mission
of providing access to green electricity. More broadly, Schneider’s
vision of impact investing is to fund high social impact initiatives,
such as energy and digital services that enable all generations
to contribute to a better future.
2.6.1.3 Access to energy social business
Schneider Electric develops products and solutions to meet a
range of both individual and community needs across the energy
chain, from solar lanterns and solar home systems to decentralized
small power plants, water pumping systems, and street lighting.
These offerings also make it possible to maintain a sustainable
economic and social activity as well as include and involve local
communities in projects.
2.6.1.3.1 Governance
A new governance of the Access to Energy business was put in
place from 2021. It is placed under the responsibility of the Access
to Energy Business Vice-President, reporting to the Sustainability
Senior Vice-President.
An advisory board dedicated to the subject has been set up,
made up of the Chief Strategy & Sustainability Officer, the
Energy Management Executive Vice-President, the International
Operations Executive Vice-President, as well as the Sustainability
Senior Vice-President and the Access to Energy Business
Vice-President, and, once a year, the Chairman & CEO.
The subject was also one of those reviewed in 2021 by the
Schneider Electric Stakeholder Committee.
(1) Source: Tracking SDG 7: The Energy Progress Report, produced by the International Energy Agency (IEA), the International Renewable Energy Agency (IRENA), the
United Nations Statistics Division (UNSD), the World Bank, and the World Health Organization (WHO).
(2) Using the Global Multidimensional Poverty Index.
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2.
Equal
SSI #9
Provide access to green electricity
to 50 million people
Schneider Electric is equipping five remote cities with solar
hybrid microgrids in Chad, providing electrical distribution
and monitoring software. The five sites are currently grid-
connected but with only two hours of power per day on
average and with priority given to productive hubs – homes
are not connected. Thanks to this project, hybridization and
batteries will make it possible to provide 24-hour energy to
all 150,000 inhabitants.
Baseline
2021 Progress
2025 target
30M
+4.2M
50M
2.6.1.3.2 Electricity for Life
Actions towards “Electricity for Life” focus on delivering access to
green electricity for off-grid households and small businesses, and
the humanitarian sector. Almost 800 million people live in off-grid
areas, and our world has no less than 80 million people forcibly
displaced. These people are in need for energy as a fundamental
right answering to essential needs in homes (lighting, cooking,
social connection, education, etc.).
Whether due to the geopolitical context, natural disasters, or
climate change, emergency situations continue to rise in an
increasingly uncertain world. With nearly 80 million people
displaced in 2019, the United Nations High Commissioner for
Refugees (UNHCR) has seen an unprecedented number of
people uprooted by war, violence, or persecution worldwide.
According to the NGO Oxfam, an estimated 23.5 million people
were forced to leave their homes in 2016 due to extreme natural
disasters. Since 2016, Schneider Electric has committed to offering
energy access solutions in emergency situations and has been
working closely with the UNHCR to find solutions that are suited
to the specific needs of refugees or displaced persons. In 2018,
Schneider and the UNHCR signed a memorandum of agreement
to seal their commitment with the deployment of Mobiya lamps in
refugee camps over a three-year period. This agreement has been
extended to 2022. Schneider has provided camps around the
globe with modern energy systems and services. Such systems
and services range from Mobiya lamps to microgrids – including
with connection to EcoStruxure™ for Energy Access – energy
dispensers, solar streetlights, and training in electricity trades.
2.6.1.3.3 Electricity for Livelihood
Actions towards “Electricity for Livelihood” focus on delivering
access to green electricity for households and small businesses
connected to an unreliable grid, and for productive businesses.
Around one billion people depend on an unreliable, intermittent
grid, and are in need for quality energy with solar backup
equipment. Micro-businesses and micro-industries in rural areas
need solar power generation and storage equipment; for example,
in agriculture where solar systems can power water pumping and
processing activities. “Electricity for Livelihood” proves that energy
is a driver of economic development and poverty reduction.
Electricity can make a real difference to the lives of farmers
and ensure food security through irrigation, food storage, and
processing, or linking to the market to ensure better prices, while
allowing people to be the agents of their own transformation.
In India, the “Energy for Livelihood” Schneider initiative is
transforming the lives of farmers, in particular women, through
the innovative Villaya Agri-business solution. This project promotes
sustainable livelihood activities in the farming, agri-enterprises,
food processing, livestock, handicraft, and other micro-enterprises.
Sustainable and reliable electricity is also a prerequisite for
enabling effective health services, especially in the fight against
pandemics such as COVID-19. Providing local infrastructures
with modern energy also contributes to socio-economic recovery
through better health and a greater capacity to work and enhances
rural appeal.
In Nigeria, the COVID-19 isolation facility of the Eleme General
Hospital in Rivers State needed a reliable system to provide
uninterrupted power supply to its medical equipment. Schneider
Electric supplied a solar mini-grid and power storage.
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Chapter 2 – Sustainable development
2.6 Delivering social impact for a just transition
A full range of products and solutions to provide green electricity
Mobiya
3 products
Portable, robust, and
affordable solution for
individual lighting and
charging a cell phone
Mobiya Original: solar powered LED
lamp with mobile charge, offering
48 hours of lighting without recharging
Mobiya Lite: lighter solar powered
portable LED lamp with mobile charger
Mobiya Front: head lamp
Homaya
3 products
Domestic electrification for
access to quality, affordable,
and uninterrupted power
Homaya Family: solar home system
including a solar panel and lamps
Homaya Family PAYG: solar home
system including a solar panel and
lamps, and Pay-As-You-Go function
fully compatible with all mobile payment
platforms
Homaya Hybrid: AC and DC, solar and
grid home system
Villaya
6 solutions
Collective electrification
solutions in remote sites,
either 100% solar or
hybrid
Villaya Community: solar or hybrid
microgrid to power rural communities
Villaya Agri-Business: solar power plant
to provide electricity and/or hot water to
agriculture
Villaya Emergency: containerized solar
or hybrid microgrid to provide electricity
in emergencies
Villaya Water: solar water pumping
system
Villaya Lighting: solar street lighting
Villaya Recharge: USB charging station
Including EcoStruxure™ for Energy Access,
an affordable, flexible, and open platform
using analytics to improve the profitability
and efficiency of electricity microgrid.
Case Study: Schneider Electric, its Foundation and
ADEME, the French Agency for Ecological Transition,
partner to provide 45,000 solar lanterns to vulnerable
women in Africa.
Objective: Distribute solar lanterns to women
entrepreneurs in order to extend hours of activities
and livelihood, as well as underprivileged women
and families in order to enjoy lighting for nighttime
home activities and limit the use of kerosene lamps.
Solution: Mobiya Original. An impact study will be
conducted, measuring the benefits of the solution
across the five African countries of the project:
Kenya, Nigeria, Cameroon, Benin, and Senegal.
Case Study: 300,000+ people living in remote and
rural areas of Cambodia have been provided access
to clean and reliable electricity through Schneider
Electric’s solar home systems, supplied under the
government funded rural electrification program.
Objective: Provide access to energy for basic
lighting for domestic needs, mobile charging,
and rice cookers.
Solution: Homaya Family and other customized
solar home systems.
Case Study: Schneider Electric and Entrepreneur
du Monde (NGO) launched a project to bring reliable
power for onion storage in Senegal.
Objective: Develop a low cost, decentralized
generation of refreshed storage buildings that can
conserve onions for several months as 30% to 60%
of Senegalese onions’ production rot due to lack of
storage.
Solution: Villaya Community 25 kW with sodium-
nickel batteries and Villaya Edge Control software
in order to ensure reliable power supplying cooling
system and some income generating activities.
Didactic
Offer
Educational tools for the
vocational and higher
education fields
Didactical benches for training
electricians, installers, facility managers,
entrepreneurs, and trainers, covering
the management of high and low
voltage, electrical distribution, building
management, global energy management,
and process and machine management.
Case Study: Schneider Electric and La Salle
Solidarieta Internazionale ONLUS (NGO) join forces
to empower local communities with competencies in
energy management in Chad.
Objective: Train 250 students per year in electrical
distribution, industrial control, and renewable
energies focused on practical experience.
Solution: Didactic benches to equip electrical labs
in training centers in N’djaména and Kélo in Chad.
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2.6.2.4 Tackling energy poverty in Europe
with Schneider Electric Energy Access
(SEEA)
In July 2009, Schneider Electric created an Impact Investing
structure in the form of a variable-capital SAS (simplified joint-stock
company), Schneider Electric Energy Access (SEEA), certified as a
social and solidarity investment company (ESUS certification) and
open to French employee savings through the Group’s Employee
Savings Plan (Schneider Energie Solidaire Fund).
2.
With a dedicated Schneider management team based in
Rueil-Malmaison (France), SEEA invests primarily in equity and
quasi-equity in start-ups that:
• Fight against energy poverty by promoting efficient affordable
housing and energy efficiency solutions:
− Six invested companies for a total of EUR 2.3 million
(Foncière Chênelet, Foncière du Possible, LVD Energie/
HomeBlok, Soliha BLI, Dorémi, Réseau Eco-Habitat)
• Promote digital and financial inclusion:
− Two invested companies for a total of EUR 644,000
(Sunfunder, SIDI)
• Provide access to affordable, clean and sustainable energy:
− Two invested companies for a total of EUR 940,000
(Okra Solar, Amped Innovations)
• Promote job creation and income generation:
− Three invested companies for a total of EUR 400,000
(Bretagne Ateliers, Incubethic, Envie Rhônes Alpes)
SEEA has invested in 21 companies and has exited eight. As of
December 2021, SEEA had 13 companies in its portfolio: 10 in
France, two operating in sub-Saharan Africa, and one operating
in South-East Asia, and managed the following amounts:
• EUR 3,000,000 in capital invested by Schneider Electric;
• EUR 3,200,000 invested by Schneider Energie SICAV Solidaire
(including EUR 500,000 in capital), a mutual fund managing the
employee savings scheme for Schneider Electric employees
in France;
• EUR 200,000 of capital invested by Phitrust Impact Investors;
• EUR 500,000 of capital invested by Mutuelle d’Entreprises
Schneider Electric (MESE).
SEEA brings together different stakeholders by encouraging
Schneider Electric’s employees and business partners around
the world to play an active role in this commitment. At the end of
August 2021, 6,576 (past or present) Group employees in France
have invested EUR 57 million in the Schneider Energie SICAV
Solidaire fund.
2.6.2 Investing for high
social impact
A pioneer in the corporate social investor space, Schneider Electric
has been investing for impact since 2009:
• 2009 – Launch of Schneider Electric Energy Access (SEEA)
• 2011 – Investment in Livelihoods Carbon Fund #1
• 2015 – Launch of Energy Access Ventures (EAV)
• 2017 – Investment in Livelihoods Carbon Fund #2
• 2020 – Launch of Schneider Electric Energy Access Asia
(SEEAA)
• 2021 – Investment in Livelihoods Carbon Fund #3
Schneider Electric Impact Investing activities catalyze and facilitate
multiple coalitions with different stakeholders (Schneider Electric
Foundation, employees, DFIs, NGOs, social businesses, impact
investors, asset management companies) to leverage Schneider
Electric competencies towards a fair and inclusive transition.
2.6.2.1 Risks and opportunities
Schneider Electric’s Impact Investing strategy aims to address
the fundamental needs of underserved communities and minorities
around the world.
By investing in and supporting companies with high social and
environmental impact, Schneider Electric contributes to bridging
the energy gap, supporting local economies to get access to green
energy and to reduce energy poverty. It also promotes digital and
financial inclusion and the transition to a decarbonized world.
2.6.2.2 Group policy
The goal of Schneider Electric’s Impact Investing is to generate
high social impact while protecting the assets under management.
Accordingly, it has adopted strict management rules, such as:
• Always invest in partnerships with recognized players;
• Never take a majority stake;
• Always provide efficient company support (help develop a
business plan, provide technical advice, etc.) to deliver the
optimum social impact while minimizing risk; and
• Ensure that ethical business practices and rules are respected.
2.6.2.3 Governance
Each investment vehicle has its own governance structure
generally composed of at least two bodies.
The first one is a Board of Directors or a Supervisory Board
in charge of ensuring compliance with all legal and ethical
regulations. In most cases investors are represented in this board.
The second one is a Management Investment Committee which
can be either totally independent or composed by investors
according to the legal structure. All Management Investment
Committee members bring specific competencies and knowledge
to assess investment decisions. In some cases, they can also rely
on external experts. They are responsible for ensuring compliance
with investment policies and are regularly updated on investment
performance, both in terms of impact and finance.
In some cases, an investment vehicle can also rely on Advisory
Committee or Strategic Committee to help them setting up and
managing their investment strategies and policies.
All investment vehicles are supervised by independent auditors.
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With a dedicated Schneider management team based in
Singapore, SEEAA invests primarily in equity in start-ups that
work toward increasing quality of life and boosting economic
development in Asia, thanks to access to affordable, clean,
and sustainable energy. The goals of SEEAA are twofold:
1
Increasing access to affordable and reliable energy primarily
targets unprivileged communities where last mile energy
access is not, or poorly, available. SEEAA aims at creating to
social impact for these rural communities especially leveraging
productive use of energy.
2 Accelerating the transition of economies to clean and
renewable sources and increasing the mix of renewables
in total energy consumption. For instance, this can be
achieved by investing in companies developing renewable
energy assets.
As of December 2021, SEEAA had invested in four start-up
companies for a total of EUR 2.5 million. Two companies are
contributing to Goal 1, both operating in India: Frontier Markets
and Oorja Development Solutions, and two are contributing to
Goal 2, Freyr Energy and Xurya operating in India and Indonesia
respectively.
India: a farmer irrigates his crop using water from a solar-powered
pump operated by Oorja in Bahraich district, Uttar Pradesh.
© Oorja Development Solutions India Private Limited
Chapter 2 – Sustainable development
2.6 Delivering social impact for a just transition
2.6.2.5 Bringing access to green energy
in Africa with Energy Access Ventures
impact fund (EAV)
Schneider Electric initiated and supported Energy Access Ventures
(EAV), a fund which manages EUR 75 million to be invested in
companies transforming communities across Africa and stimulating
economic development through energy access solutions. The fund
is jointly backed by Schneider Electric, CDC group (on behalf of the
UK Department for International Development, DFID), the European
Investment Bank, FMO (Dutch development Bank), FISEA-
PROPARCO, OFID, and AFD-FFEM.
At the end of 2021, EAV has invested in 15 companies and
has exited one. EAV is now entering the seventh year and the
independent management team based in Nairobi (Kenya) is now
focusing on actuating on value creation in the portfolio, follow-on
investments, and driving liquidity events.
EAV invests primarily in equity and quasi-equity in start-ups that:
• Provide access to affordable, clean, and sustainable energy
solutions:
− Five invested companies for a total of EUR 15.1 million
(Zola Electric in Tanzania, PEGAfrica in Ghana, Nuru in DRC,
Zonful Solar Energy in Zimbabwe, ZIZ Energy in Chad)
• Provide access to clean productive use energy:
− Six invested companies for a total of EUR 22.2 million
(ManoCap Energy in Ghana, Candi Solar in South Africa,
SolarX in Mali, PayGo Energy, SunCulture, and InspiraFarms
in Kenya)
• Promote digital and financial inclusion:
− Three invested companies for a total of EUR 8.9 million
(Mawingu, Solarise Africa, Palgo in Kenya)
2.6.2.6 Bringing access to green energy in
South and South East Asia with Schneider
Electric Energy Access Asia (SEEAA)
In recent years, electrification rates in Asia have improved due
to strong government policies supporting national electrification.
As Asian countries are now approaching universal access to
electricity, the focus has been shifting to integrating renewable
energy into the energy mix. However, at the micro level, there
are still a considerable number of rural areas without access to
electricity. Even when access is available, electricity is often not
reliable as power grids struggle with load and connectivity issues.
Schneider Electric recognizes the gap and opportunities in this
region and envisioned the SEEAA impact investing vehicle in
2018 to help the region advance towards SDG 7 “Affordable and
Clean Energy”. The vision convinced three other investors to join
forces and the SEEAA was officially established in December 2019
with four founding partners investing EUR 20.9 million: Schneider
Electric (SEI SAS), the European Development Finance Institution
Management Company (EDFI MC), Norwegian Investment Fund for
Developing Countries (Norfund), and Amundi Finance et Solidarité
(Amundi).
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2.6.2.7 Contributing to decarbonize
the world with the Livelihoods Funds
Schneider Electric is a founder member of the Livelihoods Carbon
Fund: the first sustainable carbon fund with high social impact
created in 2011, managed by an independent team based in Paris.
In 2021, Schneider Electric invested EUR 25 million in Livelihoods
Carbon Fund #3, in addition to the EUR 10 million invested in
Livelihoods Carbon Funds #1 and #2 (EUR 5 million each).
A total of EUR 250 million, invested by private companies and
financial investors, is dedicated to investing in high potential carbon
clusters to generate positive impact for people and the planet. As
at the end of 2021, three million tons of CO2 have been avoided or
sequestrated and 1.5 million people have been positively impacted.
The Livelihoods Funds support three types of projects:
reforestation, agroforestry, and agricultural practices, and rural
energy (improved cookstoves).
The Livelihoods Carbon Funds #1 and #2 have contributed to three
mangrove reforestation projects in Senegal, India, and Indonesia.
These projects have enabled local communities to improve their
living conditions thanks to the restoration of the ecosystem (fish,
crabs, etc.). Furthermore, the mangrove has provided efficient
protection to the villages and crops during the last tornadoes
that struck Asia recently.
Livelihoods Agroforestry projects enable farming communities
to increase their revenues thanks to improved conditions for cash
crops such as coffee or cocoa and the plantation of fruit trees such
as mangoes. Furthermore, Livelihoods Funds contributes to the
creation of new downstream activities such as food processing
and commercialization.
Rural energy projects contribute strongly to improving women’s
lives and create jobs thanks to the construction and the distribution
of the cookstoves. The carbon credits from the Hifadi project in
Kenya, supported by Schneider Electric, are used to offset all the
carbon emissions generated by the Schneider Electric Marathon
de Paris; the race has been carbon-neutral since 2019.
All these projects are an integral part of Schneider Electric’s
Carbon Pledge, ensuring that the compensation part has a real
effect both on climate and on social development.
Senegal: the largest mangrove restoration program in the world –
Artisanal fishing
© Hellio & Van Ingen/Livelihoods Funds
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2.6.3 Empowering new
generations with the
Schneider Electric Foundation
2.6.3.1 Risks and opportunities
Today’s young people are forward-thinking, creative and one of
the largest demographics. They need to be empowered with the
necessary skills and supported to build a life aligned with their
dreams and aspirations.
2.
New social and environmental challenges have weakened social
cohesion and blurred opportunities for the future, especially for the
youth. They are going to be the first generation to feel the sting of
issues such as climate change, and the last generation that can
do something about it. Skilling and empowering the youth enables
them to actively define their future and find their place in a complex
and fast-paced world.
2.6.3.2 Group policy
In a world where ecological and social challenges are more
widespread and more urgent than ever, the Schneider Electric
Foundation, under the aegis of Fondation de France, supports
innovative and forward-looking initiatives to empower youth with
the energy they need to succeed.
Optimistically, the Foundation’s aim is to help build a fairer,
lower-carbon society to give future generations the keys to
transform our world.
2.6.3.3 Governance
2.6.3.3.1 The Foundation fully in line with the
Sustainable Development Goals
For more than 20 years, the Schneider Electric Foundation has
been deploying the Group’s philanthropic activities in coherence
with its sustainability commitments. It contributes directly to the
achievement of the United Nations Sustainable Development Goals
(SDGs), and more specifically SDGs 1, 4, 7, 8, 10, 11, 13, and 17.
In 2021, there were more than 100 projects, 46,817 young people
receiving support, through 9,512 days of volunteering. With an
annual budget of EUR 4 million, the Schneider Electric Foundation
contributes to the partnerships that are completed by more than
EUR 15 million in support from Schneider Electric’s entities.
Group employees are also involved in these partnerships.
In total, more than EUR 19.5 million has been invested to help
local communities worldwide.
2.6.3.3.2 A foundation under the aegis of
Fondation de France
Fondation de France is a non-profit organization that, since its
creation in 1969, has been the bridge between donors, founders,
and field structures in order to support projects in a range of
general interest areas. It supports other foundations (916 in 2021)
whose operations are governed separately, but who are legally
part of Fondation de France. It is responsible for ensuring that
their actions comply with its by-laws and the legal framework of
the sponsorship. The Schneider Electric Foundation’s Executive
Committee determines the major focuses of its actions and the
projects it supports. It then informs Fondation de France of its
decisions, and the latter verifies the projects’ compliance and
implements them.
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2.6 Delivering social impact for a just transition
2.6.3.3.3 A governance that combines internal
and external expertise
Since 2019, the composition of the Schneider Electric Foundation’s
Executive Committee is as follows:
on skills to young people and giving them the means to support
their families could, in the long term, boost the local electricity
and electrotechnical sectors. This will improve their quality of
life and create sustainable jobs. That is what the Training &
Entrepreneurship program set up in 2009 is all about.
• Chairman: Jean-Pascal Tricoire;
• Members: Monique Barbut (external expert), Agnès Bouffard
(employee representative, Schneider Electric), Bénédicte Faivre-
Tavignot (external expert), Christel Heydemann (Schneider
Electric), Yoann Kassi-Vivier (external expert), David Lechat
(employee representative, Schneider Electric), Pierre-François
Mourier (external expert), Philippe Pelletier (external expert),
and Luc Rémont (Schneider Electric).
Its missions are the following:
• Define the strategic directions of the Foundation;
• Validate the activity report and financial report;
• Decide on the allocation of budgets by program;
• Validate commitments exceeding EUR 200,000.
One to two Executive Committee meetings are organized
each year.
The Schneider Electric Foundation organization has been
reinforced with the creation of the zone/cluster foundation
committees in 2019. These committees are made up of zone
/cluster Presidents and aims to:
• Share a quarterly activity report;
• Validate the commitments/partners to join;
• Specify the respective contribution levels (financial or in-kind
donations, skills);
• Follow up on projects.
These committees meet two to three times a year.
The members of the operational team are:
The Schneider Electric Foundation encourages and provides
long-term support for vocational and entrepreneurial training
organizations. These include associations and electrical
profession educational institutions. The vocational training and
entrepreneurship program capture 67% of the funding allocated by
the Foundation. All of these actions are monitored and measured
on a quarterly basis within the scope of the Schneider Sustainability
Impact (SSI #11): “1 million people trained in energy management
by 2025”.
Since 2009, 328,359 underprivileged people have been trained
in more than 45 countries.
2.6.3.4.2 Raising awareness of sustainability and
the use of reliable, affordable, and clean energy
Contributing to meeting the United Nations SDGs also involves,
amongst other things, raising awareness among as many people
as possible, especially young people, about the challenges of the
fight against climate change and of sustainability.
The Schneider Electric Foundation therefore invests in emblematic
and international programs by making available its knowledge of
energy systems management, through donations in resources and/
or knowledge. It has made a four-year commitment to the Solar
Impulse Foundation, which selects 1,000 solutions that contribute
to the achievement of at least five SDGs:
• Clean, Accessible Water for All (SDG 6);
• Affordable and Clean Energy (SDG 7);
•
Industry, Innovation and Infrastructure (SDG 9);
• Sustainable Cities and Communities (SDG 11); and
• Responsible Consumption and Production (SDG 12).
• Gilles Vermot Desroches, General Delegate;
• Patricia Benchenna, Corporate Philanthropy Director;
• Brigitte Antoine, Employee Engagement Leader;
• Morgane Lasserre, Administrative Assistant.
The selected solutions must meet the following criteria: technical
feasibility, environmental benefits, and economic viability.
Schneider Electric employees are mobilizing their skills to analyze
the various solutions within their field of expertise.
Lastly, the Foundation’s Selection Committee is composed of:
• Gilles Vermot Desroches, General Delegate;
• Patricia Benchenna, Corporate Philanthropy Director;
• François Milioni, Program Director, Training & Entrepreneurship.
2.6.3.4 Give all young people the means
to build solutions for a better life
The Schneider Electric Foundation supports innovative initiatives
all over the world that enable the most vulnerable, especially young
people, to access the energy needed to succeed and build the
world of tomorrow. To be relevant and effective, i.e., to have the
greatest possible impact and respond specifically to the needs of
the people concerned, it is essential that these initiatives combine
education, technological innovation, social innovation, and
entrepreneurship. These initiatives cover three main areas.
2.6.3.4.1 Vocational training for the youth,
underprivileged persons, and entrepreneurship
support
Training is the historical mission of the Schneider Electric
Foundation. The energy sector, and more particularly electricity
and renewable energies, offers a lot of potential, especially in
areas where access to energy is difficult and growing. Passing
The Solar Sound System project by Atelier 21, a Foundation partner,
obtained two Solar Impulse Efficient labels:
• Solar sound systems for events powered by renewable energies
(solar or bike-powered). With seven systems in place in France
and Switzerland, Solar Sound System has set up solidarity
projects in Haiti, Brazil, India, Taiwan, and Cameroon and has
projects in Reunion, the United States, and South Africa.
• Regenbox, the first do-it-yourself “non-rechargeable” alkaline
battery charger. Regenbox aims to be ecological and anti-
planned obsolescence. This project is also an educational
tool and a mean to raising awareness about a different use of
batteries in order to reduce the amount of electronic waste so
present in our daily lives.
Bertrand Piccard, Chairman of the Solar Impulse Foundation, will
then promote this portfolio of solutions to corporate and political
leaders worldwide. At the end of 2021, 1,000+ solutions had
already received the Solar Impulse Efficient Solution label.
These included insulating blocks made from hempcrete, wind
turbine floats, and a web-based pallet exchange platform.
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2.6.3.5 Responding to the COVID-19
and post-COVID-19 emergency
In April 2020, the Schneider Electric Foundation set up the
Tomorrow Rising fund in response to the COVID-19 health crisis.
The purpose of this global initiative is to provide local responses
to meet the challenges of the emergency, to promote the recovery
of education and training of the most vulnerable young people
and to boost resilience.
1 Response: an initial response to the emergency. Food bank,
first aid, COVID-19 health kits, maintenance of access to
education, etc. For example, a project in China to help low-
income students in technical schools to cope better with
the crisis (SDG 1 and SDG 4);
2 Recovery: support to the Foundation’s partners in resuming
their activities and helping them to roll-out new ones, in
particular, the establishment of new partnerships to provide
training in energy trades to young people. For example, a
project in Brazil to provide young people with tablets and
internet access (SDG 4 and SDG 10);
3 Resilience: the ability to continue to train and awareness-
raising actions using digital technologies.
KiMSO conducted an assessment of the Tomorrow Rising initiative,
based on a three-stakeholders approach, covering all the regions
where the initiative has been deployed. Interviews and online
surveys took place between July and October 2020.
2.
Tomorrow Rising Impact study*
Project owners
Support
Impact on beneficiaries
Impact on project owners
and NGOs
74 projects
in 65 countries
70% new partners
of the Foundation
€5.5K to €65.5K
In a context where funding
became scarce
More than 25% of the
budget for 1/3 project
1.5 million of beneficiaries
of which 78% below the
poverty line
Strong effects on their
confidence and credibility
in a context of uncertainty
Study findings
Study findings
Study findings
Study findings
89% answering to an
emergency situation
Crucial for 35% of the
NGOs
Quick and flexible
87% were able to fill In
the funding request form
easily
68% Specific projects
created to face the
COVID-19 health crisis
75% addressing existing
needs that have increased
due to the COVID-19
crisis** (food, education,
housing…)
1. Access emergency
1. Meet beneficiaries
food aids
2. Get digital tools for
school/studies
3. Keep hope about
the future
4. Access protective
medical equipment
or hygiene kits
needs for all
2. Teams confidence
and motivation
3. New relationships
with partners
4. Greater visibility
* This qualitative and quantitative study was conducted in 2020 by KIMSO, Research & Consulting in social impact assessment. The online survey covered all affected
areas and resulted in a 60% response rate (37 answers). Scores “quite agree/completely agree” are bundled in % figures.
** Many project owners also mentioned emerging needs to due the crisis, such as employment and health.
Priorities for project owners (Emergency aid should not replace long-term support)
• 54% more budget
• 51% unrestricted financial support (for project and running costs)
• 49% over-time fundings
• 46% to be put in contact with other funders
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Chapter 2 – Sustainable development
2.6 Delivering social impact for a just transition
2.6.3.6 Foundation actions worldwide
Other key programs include:
The Schneider Electric Foundation has actions in 100 countries on
all continents, in particular Asia, the Americas, Africa, and Europe.
2.6.3.6.1 Initiatives in North America
The Schneider Electric North America Foundation provides
monetary support, product, expertise, and volunteers to non-profit
organizations that align with business priorities, values and
geographies.
The Schneider Electric Foundation North America offers employee
programs to support efforts in their communities:
• Matching Gift provides a dollar match on employee donations
to the non-profit of their choice
• Dollars for Doers provides financial grants to organizations
where employees volunteer their time
• Sponsorship Grants offer financial and product donations
to sponsor events, capital projects and employee missions
• New Hire Program welcomes new employees with a gift to
donate to a non-profit of their choice
• Service Days and Volunteer events enables employees to
donate time during their working hours
The Schneider Electric North America Foundation has strategic
partnerships focusing to support the Schneider Electric Foundation
areas:
• Disaster Relief – Provide support to those impacted by disasters
through American Red Cross and the Footprint Project
• Habitat For Humanity – Support sustainable and transformative
housing with product donations, financial support, and more
than 2,500 hours of work done by volunteer employees
• FIRST Robotics –Inspiring future leaders through STEM
education with employee mentors and financial support
• National Merit Society –Support the future with scholarships
for children of employees
In 2021, the North America Foundation contributed over 5.3 million
dollars in cash and product donations to over 1,619 charitable
organizations.
2.6.3.6.2 Initiatives in India
In 2021, Schneider Electric India Foundation has been instrumental
in supporting vocational training of 14,888 unemployed youth out
of which 514 are women. 294 trainers were trained and recruited
in the program to enhance the quality of training.
In the education field, 57 new electricity and renewable energy
training centers were established. Upskilling of 1,232 electricians
was done through solar training to enhance their employability in
the current markets. 10 alumni meetings were conducted in 2021
enabling 280 alumni from vocational skill development centers to
share their professional journey and experiences as well as meet
and recommend new trainees to their current organizations and
businesses for placements. 85 aspiring entrepreneurs have been
incubated this year to establish their own businesses.
• Under the Energy for Sustainable Livelihoods program,
120 irrigation pumps powered by green energy were installed,
thus supporting 2,400 farmers to switch from monocropping
to multi-cropping.
• Through Conserve My Planet, 50 schools have been registered
across five cities taking the program forward with 100 Change
Maker Teachers and sensitization of 5,035 Green Ambassadors
towards environment and energy conservation, digitally.
• Taking another step forward towards a cleaner and greener
tomorrow, SEIF has planted 30,060 saplings across 10 cities
in India.
• Facing COVID-19, through Healthcare initiatives, SEIF has
reached 4,758 beneficiaries through free medical consultations
and basic medicines. Also, to ensure preparedness towards the
third wave of COVID-19, SEIF is supporting 12 hospitals across
10 states by strengthening their infrastructure to save more lives.
Volunteers from Schneider Electric India Foundation came forward
to support of the Foundation causes like youth coaching through
teachers’ missions, tree plantation, and donations, dedicating 413
volunteering days, including 264 Teachers Missions where they
shared their knowledge and skills with young people training as
electricians. Most of these Teachers Missions were carried out
remotely via a digital platform due to COVID-19 restrictions.
2.6.3.6.3 Initiatives in Australia
The Schneider Electric Pacific Fund was established as a sub-fund
of the Australian Communities Foundation in July 2021 to help
facilitate Schneider Electric’s philanthropic giving in the region. Its
purpose is to promote sustainability, enable access to energy, and
tackle fuel poverty by forming engaged, long-term partnerships
with organizations in Australia.
In 2021, the Fund has contributed AU$ 315,000 to four major
charity partners – Australian Wildlife Conservancy, Kokoda Track
Foundation, Brotherhood of St Laurence, and the Centre for
Appropriate Technology. Funds donated through the Schneider
Electric Pacific Fund are supplemented by other programs run
directly by Schneider Electric in the zone including matched
donations for employees (up to AU$ 5,000/employee/year);
21 hours of volunteering leave and charity funding in New Zealand
continue to be funded directly.
2.6.3.7 Support grassroots initiatives:
a network structure that acts locally
The Schneider Electric Foundation’s network structure is an original
and very powerful means for engaging local, human, and lasting
sponsorship. This network includes Schneider Electric employees,
non-profit associations, public institutions such as the Education
ministries of the countries concerned, and government agencies
such as ADEME in France.
The Schneider Electric Foundation:
• Has established partnerships with 90 NGOs and associations
in 38 countries, such as Solar Impulse Foundation, Don Bosco
Tech in India, etc.;
• Works with ministries of education in 13 countries including
France, Cambodia, and South Africa.
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The delegates manage a digital platform, VolunteerIn, that groups
together all the missions proposed by the Foundation locally and
internationally. Available in eight languages, the platform can be
accessed from anywhere in the world and enables employees to
apply for volunteer assignments for the benefit of the Foundation’s
partners and their beneficiaries.
Finally, the delegates co-ordinate the organization of the Schneider
Electric Foundation’s campaigns for international mobilization such
as the Tomorrow Rising fund. This showcases local initiatives to
a global audience. They also engage in campaigns organized
following natural disasters.
2.
An assignment campaign will be conducted in 2022 to renew
the Foundation delegates’ mandates.
Each year, around 35,000 employees in 50 countries take part
in these campaigns.
2.6.3.8.3 Standardize measurement to improve
the impact and coherence of actions in favor
of sustainability
The Schneider Electric Foundation is a groundbreaker in the
measurement of the social impact of the actions that it supports.
The idea is to enable its partners to better fulfill their missions by
identifying areas for improvement.
The Schneider Electric Foundation is assisted in particular by
KiMSO, a social impact assessment consulting firm. A first study
was conducted in 2018, as part of the fight against energy poverty,
to draw up an innovative methodology to assess the social impact
of missions. This methodology is placed at the disposal of project
sponsors. CLER, the Energy Transition Network, has used this
methodology.
Generations
SSE #25
50,000 volunteering days since 2017
In 2021, employee participation in the activities of the
Schneider Electric Foundation greatly increased.
The pandemic raised a lot of fragilities in our society. In
this difficult period, volunteers at Schneider Electric have
accelerated their contribution to initiatives aiming at access
to food, education and health. Mainly through digital and
remote missions, they demonstrated their ability to adapt
and to help the most vulnerable; above all the youth in
need of support and coaching. With more than 25,000
volunteering days in 2021, over 50% of the 2025 target for
this indicator has already been reached.
Baseline
2021 Progress
2025 target
18,469
27,981
50,000
The Schneider Electric Foundation works almost exclusively
with local structures. It is a guarantee of reliability and efficiency
because only organizations that work most closely with the
communities to be supported know their specific needs and
constraints and can provide the appropriate solutions. The creation
of the zone/cluster committees, since 2019, made up of Schneider
Electric zone directors is a step in that direction.
Over and above financial, material, or logistics support for projects,
the actions of the Schneider Electric Foundation aim to create
bonds among partners, encourage structures to work together,
and build relevant and innovative solutions with all stakeholders
to raise the challenges of sustainability.
2.6.3.8 Group employees, spearheading
the Schneider Electric Foundation’s
actions
The Schneider Electric Foundation strongly focuses on the
involvement of Group employees in all the actions it implements.
Whether they are Foundation delegates or employee volunteers,
they are the link between the Company, the Foundation, and
the supported organizations. In 2012, the Schneider Electric
VolunteerIn NGO was created to organize volunteer missions
benefiting the Foundation’s partners. Wherever the Company is
based, Schneider Electric VolunteerIn empowers people to be
actors and ambassadors of societal commitments in the fields of
education, access to energy, and the fight against energy poverty.
In particular:
• Employees volunteer their time and make their skills available;
• Partners look for skills to support their activities, specify their
needs, and support volunteers in carrying out their mission;
• The Schneider VolunteerIn association as well as the Foundation
delegates co-ordinate, connect, and organize the process
and cover costs related to carrying out missions, in particular
abroad;
• The Schneider Electric entities host the volunteers when the
mission takes place outside their country of habitual residence.
2.6.3.8.1 Governance
The Schneider Electric VolunteerIn Executive Board is composed
of Schneider Electric leaders:
• Charise Le (Chairman, Chief Human Resources Officer);
• Michel Crochon (Vice-President),
• François Milioni (Secretary, in charge of the Training &
Entrepreneurship program);
• Christophe Poline (Treasurer, in charge of the SEEA solidarity
investment fund);
• Emir Boumediene (Member, volunteer representative);
• Gilles Vermot Desroches (Member, Senior Vice-President
Corporate Citizenship).
One to two Executive Board meetings are organized each year.
2.6.3.8.2 100 delegates in 80 countries to catalyze
the Schneider Electric Foundation’s actions
The Schneider Electric Foundation draws on a network of around
100 volunteer employees, also known as delegates, covering
80 countries. Their role is to select local partners in the fields of
vocational training in the energy sector, entrepreneurship, and
raising sustainability awareness. They inform the employees of their
entity, as well as the Foundation. They follow the progress of the
projects after they have been launched. Each proposed project is
subject to a review process based on administrative and financial
data by the Schneider Electric Foundation and by Fondation de
France before funds are released.
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Chapter 2 – Sustainable development
2.6 Delivering social impact for a just transition
2.6.4 Developing access to
education and employment
all over the world
2.6.4.1 Risks and opportunities
Education is an essential catalyst for the youth inclusion in the
social and environmental challenges. In 2021, for the second year
in a row the COVID-19 pandemic has heavily impacted education
systems and left millions of children and youth out of school.
The youth unemployment rate is growing worldwide and there is
an urgent need to create a better transition between education
and access to employment, and to develop the tools to provide
continuous education even in time of crisis.
Technical and Vocational Education and Training (TVET) play
a vital role in national sustainable development for countries, it
fosters employment and entrepreneurship, and promotes economic
development. In order to have better impact and ensure life-long
competencies, the TVET systems need partnership between the
private and public sectors, and higher investments.
2.6.4.2 Group policy
Schneider Electric and the Schneider Electric Foundation are
committed to include all generations in the energy transition. For
more than 10 years the Training & Entrepreneurship program has
been supporting the development of TVET. Training in the energy
field is a key that offers an inclusive answer to several challenges of
the United Nations Sustainable Development Goals (SDGs). TVET
plays two major roles regarding social and economic development.
The first role is to provide training and career opportunities for
people, in particular, those who are not in education, employment
or training. The second role is to help build a generation of skilled
manpower, which are needed at all levels of the economies.
Furthermore, TVET can also be a valuable tool for sustainable
development, as it allows the development of environmentally sound
skills, critical for shifting toward a more sustainable economic model.
The program has a specific focus on impacting people not in
education, employment, or training, the youth, refugees, women
in vulnerable situations, and marginalized groups of people. The
actions are always implemented in partnership with local players
and/or national or international non-profit organizations (NGOs,
governments, etc.) and with Schneider Electric’s local subsidiary.
Thanks to the ecosystem of partners, the program has supported
the training of more than 300,000 people across Asia, South
America, Africa, and Middle East since 2010. More than 5,000
trainers and 4,000 entrepreneurs have also been supported.
The COVID-19 pandemic has heavily impacted education and
increased inequalities. We are committed to go further and
faster by reaching one million people trained by 2025, 10,000
entrepreneurs supported, and 10,000 trainers trained. From
now on, the program will also operate in OECD countries.
2.6.4.3 Governance
The Training & Entrepreneurship program follows the rules and
governance of the Schneider Electric Foundation and Fondation
de France.
To increase effectiveness in following up the partnerships and
achieve the 2025 ambition, the program organizes every six
months zone meetings with the zone President, the Foundation
representatives, and the Training & Entrepreneurship program
leaders. Each zone has a defined ambition up to 2025 and a
pipeline of projects that is reviewed. Corrective actions are
implemented if necessary.
The program is led by zone representatives and in-country
leaders that exchange on a daily basis. One global co-ordinator
sets regular meetings to support the zone representatives and
guarantee the progress of the program in each zone.
The program is part of the Schneider Sustainability Impact.
Every quarter, the zone representatives report on a central tool
the impact of the program, and data are reviewed by an external
auditor. With rare exceptions, all projects-initiated benefit from
monitoring by employees of Schneider Electric entities operating
in the countries concerned.
2.6.4.4 Actions supporting trainees and
trainers’ skills development
The key challenge of training in the energy sector is to provide the
youth with the knowledge and skills to be able to carry out a trade
in a safe and responsible way, providing them and their families
with the means for satisfactory subsistence. It will also give them
the ability, should they wish, to sell and maintain energy solutions
and to create their own small business in time. Furthermore, they
are a vital and indispensable element for all responsible and
sustainable rural electrification policies.
Schneider Electric’s strategy, backed by its Foundation, under
the aegis of Fondation de France, for training people in the energy
sector, includes three key priorities:
• Basic training over a few months, which is free and accessible
to many people and adapted as much as possible to the
local situation. These training courses lead to the issuing
of a certificate of competence by Schneider Electric;
• Single or multi-year trainings leading to qualifications,
in partnership with local Ministries of Education, or even
under bilateral agreements; and
• The training of trainers to support the effective and quality
roll-out of training down the line.
The Training & Entrepreneurship program also provides valuable
support to trainers involved in projects at its partners training
centers. The aim is to help trainers thoroughly grasp the training
approach and materials, enabling them to efficiently convey full and
relevant knowledge to the students in short and long-term courses.
Training of trainers ensures effective long-term transmission of
quality, up-to-date knowledge finely tuned to the characteristics
of today’s energy markets in the host country.
Training of trainers is supported by the VolunteerIn association
via missions at the partners training centers:
“I helped to create an entire training module using a pragmatic
and realistic approach. I feel like I’ve contributed to a better future
for a lot of young people in Vietnam.” Nathalie Nguyen, Manager,
Customer Digital Experience Mission in 2019 as part of the IECD
Seeds of Hope Program in VietnamIn 2021. Due to the COVID-19
pandemic on sites missions were stopped, but via digital tools
contact was kept with the training centers.
2.6.4.5 Actions supporting women
integration in the energy trades
Since the beginning of the Training & Entrepreneurship program,
female participation in the energy trainings has remained low.
Indeed, the energy sector is still a male dominated environment,
and young women are sometimes discouraged by social norms
and even by their family to venture down this path. Moreover, for
Schneider Electric and its Foundation, it is essential to include
women in all stage of the energy value chain. Most programs
today only include women in non-technical, such as selling solar
products, and non-essential activities.
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To start this journey, in 2021 Schneider has collaborated with
SENAR, an Augmented Reality platform development company,
to develop digital twins of Schneider’s didactic equipment. Until
now, three practical simulator exercises are ready and are being
tested in Indonesia.
The three simulators are about:
• Study bench for grounding schemes
• Motor starting
• Microgrid for isolated areas
2.
Schneider Electric also has an in-house simulator-based training
tool, the Augmented Operator Advisor (AOA), which is typically
used to train customers in Industry 4.0. It has a builder feature
which allows teams to build their own exercises and disperse them
among learners. It is currently being tested with trainers in France
to create practical exercises for vocational training.
2.6.4.8 Testimonies of people trained
In 2021, Schneider Electric continued to promote Tomorrow Rising,
a five-episode docuseries made up of concrete testimonies. It
presented the stories of four students who are building tomorrow’s
energy world each in their own way:
• Yéyé is the narrator and her ambition is to become a respected
engineer. The documentary follows her from the beginning of
her training in Lagos, Nigeria, to her diploma;
• Pierre, in Senegal, has been trained to be a teacher and is
now fighting to improve the future of youth in his country;
• For Vitor, in Brazil, Schneider’s training has been a genuine
lifeline helping him build a career in electricity;
• Lastly, in India, Gurdeep, an ambitious young entrepreneur
installs solar panels and employs young people, like him,
benefiting from Schneider Electric training.
Resources
SSI #11
Train 1 million people in energy
management
In 2021, a partnership with Ministry of Labor and Vocational
Training of Cambodia was established through its subsidiary
college, NTTI. The partnership aims to build 1 center of
excellence and upgrade 21 schools across the nation,
which will train 290 teachers and 7,300 students.
Baseline
2021 Progress
2025 target
281,737
328,359
1M
Schneider Electric Foundation’s Training & Entrepreneurship
Program supports local organizations specializing in skills
development and women empowerment, which are two critical
factors in achieving a sustainable change. These organizations
create inclusive ecosystems offering training, mentoring, and
funding to enable women to work in the energy sector and become
entrepreneurs. Schneider Electric and its partners also raise
awareness among local communities, promoting best practices
and encouraging a bottom-up approach to gender equality.
Through these initiatives, the Training & Entrepreneurship Program
seeks to play a dual role, championing economic inclusion and
gender equality.
In 2017, in Ivory Coast, Schneider Electric and the Foundation,
Mastercard Foundation, and International Rescue Committee have
partnered to support 1,250 unemployed youth to acquire long-term
competencies and start their own activity in electricity and solar
energy; 60% of the total beneficiaries are women. In 2021, USAID
joined force through their “Women’s Global Development and
Prosperity Initiative” with the three existing partners, to expand the
program targeting women and support two new training centers in
Abidjan and Ferké.
In 2021, during the Generation Equality Forum, Schneider Electric
and its Foundation took commitments under the Economic Justice
and Rights Coalition. On one hand, to support the training of 5,000
women in the energy trades and their self-employment or access
to jobs by the end of 2022. On the other hand, to launch two new
international initiatives around women training and empowerment
in the energy field.
2.6.4.6 Actions towards entrepreneurs
Encouraged by the achievements of its training courses, the
Training & Entrepreneurship program is going further by providing
informal entrepreneurs and those trained in the electricity sector
with support in setting up their own businesses. Employment
markets in emerging economies are characterized by high
proportions of informal sectors, underemployment and people
holding multiple jobs to make ends meet. In addition to specific
skills training, entrepreneurs need business startup support and
access to funding, both being key factors in the creation of long-
lasting businesses.
Since 2017, 52 technical laboratories in electricity and energy
management have been upgraded in Pakistan’s Punjab province.
6,200 youths have been trained and 1,890 have become
entrepreneurs. This project was financed by Schneider Electric and
implemented in Pakistan by Muslim Hands Pakistan (as the lead
agency) in partnership with the Technical Education and Vocational
Training Authority (TEVTA) Punjab, and Punjab Vocational Training
Council (PVTC), to improve and expand vocational training in
Pakistan’s dynamic energy sector.
2.6.4.7 Actions towards digital trainings
The digitization program strategy is to provide the current partners
with online tools to deliver their training programs while also
supporting new online programs. The online programs will allow
to both study theory and practice related to the energy content
and will deliver a certificate.
Schneider Electric and its Foundation have the objective to develop
digital training to complement the training offer in energy and
automation. Theoretical courses but also practical courses will be
covered to deliver comprehensive training curriculum, that can be
followed online only or through blended learning (a mix of in-class
and online training).
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Chapter 2 – Sustainable development
2.6 Delivering social impact for a just transition
Training & Entrepreneurship program key figures and 2025 targets
People trained since 2009
Trainers trained since 2009
Entrepreneurs trained since 2009
328,359
5,879
4,789
1m 2025 target
10k 2025 target
10k 2025 target
Breakdown of people trained by geography since 2009
6,220
people trained
in 2021: 87
75,701
people trained
in 2021: 17,271
27,865
people trained
in 2021: 5,681
48,653
people trained
in 2021: 1,761
22,639
people trained
in 2021: 6,961
147,281
people trained
in 2021: 14,861
Africa
Americas
China
Asia & Indonesia (excl. China, India)
India
Middle East
2.6.4.9 Impact assessment of training
actions
In 2019, the Schneider Electric Foundation launched a global
initiative to assess the social impact of training actions in the
energy sector. With its partner KiMSO, the Group built a
guidebook intended to support its local partners in assessing,
in a standardized way, the social impact of their training activities.
The pilot phase was carried in several centers. The roll-out program
was shelved because of the health crisis, leading to the temporary
closure of many centers. KiMSO is a social impact assessment
consulting firm that helps charities, NGOs, and Foundations to
understand, measure and value their impact on key stakeholders.
The project covers both social impact assessment and results
chain analysis.
Social impact consists of the direct or indirect, intended or
unintended, effects of an organization’s actions on its stakeholders
(i.e., beneficiaries, users, volunteers, partners) and on society
in general.
Social impact assessment refers to the process of monitoring,
analyzing, and managing those social consequences, which can be
both positive and negative. This is an evaluative process aiming at
answering the following key question: what changes thanks to us?
Results chain analysis establishes causal relationships from the
resources used to conduct a program to the long-term effects
following the end of the program. It sets out a logical and plausible
outline of how a sequence of inputs and outputs interacts with
individuals’ behavior and conditions to generate outcomes.
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In 2019, to reinforce the link with the Group, the school changed
its name to École Schneider Electric and a new vocational training
has been added in the frame of the creation of its CFA (Centre de
Formation d’Apprentis).
In July 2021, to meet the ever-increasing need for skills in the
energy and electrical sectors, and in a context where there is
growing concern about the professional future of young people,
the CFA has taken a new step forward and expanded its range of
training courses both geographically and in terms of content by
forging new partnerships. In addition to the current BTS “Fluids
Energies Home Automation” and the Licence professionnelle
“Connected Buildings and Intelligent Energy Management”
courses, which are currently offered by the CFA, there are:
• The BTS CRSA (Design and Production of Automatic Systems)
with the Vaucanson High School in Grenoble (France);
• The vocational baccalaureate MELEC (Electrical Trades and
Connected Environments) with the Lycée Pablo Neruda in
Saint-Martin-d’Hères (France);
• The BTS FED Home Automation and Communicating Buildings,
extended to a new geographical area, with the Lycée
Maximilien-Perret in Alfortville (France).
2.
2.6.4.10 Action towards employability
in France
Wherever it operates, Schneider Electric makes a strong
commitment to community partners and civil society through
positioning itself in a way that is indispensable for a global
enterprise that wants to keep in touch with the labor markets
of its industrial locations. In France, numerous projects, broken
down into four challenges: youth, planet, poverty, and territory,
demonstrate Schneider Electric’s desire to be engaged, notably in
the area of employability, and to contribute fully to local economic
development. Based on their successes, some of them are planned
to be deployed broadly in the frame of the long-term commitments
in the Schneider Sustainability Impact; called “Empower local
communities”.
2.6.4.10.1 Schneider Electric School
In 1929, Schneider Electric founded its own school – Paul-Louis
Merlin – in Grenoble, to address the difficulty of recruiting skilled labor
in the energy industry and help young people in precarious situations
to access promising jobs. Today, it still focuses on vocational training
in Schneider Electric areas of expertise, with innovative training
approaches and close alignment with actual industry practices.
Students leave with qualifications enabling them to continue in
higher education or take employment in innovation-rich energy-
sector fields such as renewable energies, home automation,
and smart buildings, as well as energy management.
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2.6 Delivering social impact for a just transition
2.6.4.10.2 Social integration of disadvantaged
young adults
Diversity of backgrounds, cultures, profiles, and experience is
always a source of wealth, sharing new ideas and innovation.
In priority urban areas, there is a huge amount of talent that is
eager to grow. Recognizing this, Schneider Electric believes that
companies have a role to play. It is their duty to act, particularly
in the heart of the markets in which they operate.
Convinced of the need to better support young people entering the
workforce, Schneider Electric is involved in different ways: training,
work/study programs for young adults from underprivileged
backgrounds entering the workforce, partnerships with schools
and associations, financial support for young students, and
participation in technical or general training courses. Such is
the scope of the initiatives implemented by Schneider Electric.
These actions complement the partnerships established within
the framework of the Schneider Electric Foundation.
The unemployment of young people, especially those living in
priority employment neighborhoods, is unacceptable and efficient
actions have been put in place to reduce this scourge, regardless
of the economic, social, or industrial situation.
Schneider Electric is involved in three major programs. Two of
them are sponsored by the French Government: paQte (priority
neighborhoods under the City Policy, QPV)) and the “La France,
une chance. Les Entreprises s’engagent” program. The third
program, “Le Collectif pour une Économie plus Inclusive,”
is sponsored by companies.
This group was initiated by the CEO of Danone at the end of
2018. Schneider Electric joined the group and has developed the
“inclusion focus” in France in 10 cities (Aubervilliers, Strasbourg,
Rouen, Marseille, Lyon, Bordeaux, Nantes, Lille, Toulouse, and
Grenoble). Within this framework and in conjunction with state
employment stakeholders (the French Public Employment Service,
Youth Employment Centers, and Maison de l’Emploi), it organized
neighborhood-oriented forums, e-forums during the pandemic,
and coaching sessions for the youth.
Lastly, there is the “100 opportunities – 100 jobs” system, which
takes in more than 1,000 young people primarily from priority
neighborhoods (as defined in the City Policy/QPV) and helps them
to find long-term employment or training. Today it represents a
collective of 1,500 companies located in 45 territorial areas. The
relationship between all the local companies builds a melting pot
that becomes the network for young people who have no network,
in order to support them and structure their future project. It is a real
public/private partnership that brings two worlds together for work.
The “100 opportunities – 100 jobs” system was implemented for
the first time in Chalon-sur-Saône in 2005, and by the end of 2021
more than 8,600 young people had been involved, with 68%
achieving positive exits, fixed-term contracts or interim contracts
longer than six months, permanent contracts, or a qualification
or diploma training.
Schneider Electric works to help inhabitants of the disadvantaged
neighborhoods identified in the City Policy (QPV) and is naturally
in line with the PaQte (Pact with Neighborhoods for all Companies)
with respect to the four pillars of Raise Awareness, Train, Recruit,
and Buy.
Schneider Electric in France includes integration clauses in
contracts to encourage suppliers to become committed to an
approach of vocational integration of persons who are outside the
job circuit. Schneider Electric in France challenges employment
agencies to put in place temporary occupational integration
contracts (CIPI) and interim open-ended employment contracts
(CDI-I), which accompany the unemployed toward long-term
employment and encourage temporary work that integrates people.
Finally, Schneider Electric has partnered with many other structures
or associations: École de la Deuxième Chance, les Entreprises
pour la Cité, FACE, Télémaque, Fondation de la 2ème Chance, EPA,
La Cravate Solidaire, Emmaüs Connect la Varappe, etc., and has
made a commitment to double the number of its apprentices,
interns, and doctoral students.
2.6.4.10.3 Spirit of entrepreneurship for
collaborators
For more than 27 years, Schneider Electric in France has supported
employee projects to create businesses or business takeovers
through Schneider Initiatives Entrepreneurs (SIE), through a
dedicated structure (Pass Créations) demonstrating the Group’s
commitment to its local labor markets: promoting actions to support
local economic development and proposing and supporting
volunteer employees in reliable career paths that are external to
the Group. It comes resolutely within the development of a spirit
of entrepreneurship.
SIE provides support for Schneider Electric employees at all
stages of business creation, as well as afterward, with a follow-up
period of three years. Sustainability rates at three years remain
above 85%.
SIE’s dedicated team of seasoned managers and young work/
study participants are responsible for reviewing the financial,
legal, technical, and commercial aspects of business creation
or company purchase projects to ensure they are viable and
sustainable.
Since 2010, 1,009 projects have been supported, and 537 of
them have resulted in the creation or takeover of a business:
these include electricians, bakers, organic trades, consultants,
asset managers, and florists, creating more than 637 jobs
(employees recruited by the founders to support company growth).
The SIE structure is represented directly or indirectly in local
business networks and enhances the quality of services offered
through partnerships with associations such as Réseaux
Entreprendre, France Initiative, and other local structures.
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Thanks to SIE’s expertise in entrepreneurship, it is regularly called
upon to develop training courses in this field. SIE is highly active in
the promotion of spin-offs (business creation and takeover support
for employees), in particular through the DIESE association made
up of other major groups.
Since 2008, SEI teams have showcased and rewarded the six most
creative projects for company creation or takeover by employees
of the Group through the Vivez l’Aventure competition. This
competition and the prize-giving bring together many managers
from the Group as well as political and economic figures. This
event is an opportunity to reaffirm the important role this scheme
plays in the Group’s values and strategy.
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The SIE teams manage many actions to contribute to local
economic development, for example:
• Specific missions within the fabric of the local SMEs (small
and medium enterprises) carried out by Schneider Electric
senior experts or missions in the framework of skills-based
sponsorship (Alizé system);
• Pass Compétences, which allows experienced managers to
take long-term assignments with SMEs. These experts invest
in structuring and strategic development projects for SMEs;
• Support for organizations dedicated to the creation of activities
and companies (Réseau Entreprendre, France Initiative, etc.);
• Supports employees who want a career path external to the
Group within the framework of a skills-based sponsorship
system called Pass Associations. It enables employees to work
on defining projects with partner associations or NGOs for one
or two years. It encompasses all types of professions, and there
are some 30 effective assignments each year. These specific
systems are valued and taken into account in human resources
processes and management in France.
2.
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2.7 Methodology and audit of indicators
In this section
2.7.1 Methodology elements on the
published indicators
2.7.4 Task-force for Climate Related Financial
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Disclosure (TCFD) correspondence table
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2.7.2 Methodology elements on EU taxonomy indicator
216
2.7.5 Independent third party’s report on the
2.7.3 Sustainability Accounting Standard (SASB)
Correspondence table
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consolidated non-financial statement
presented in the management report
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2.7.1 Methodology elements on the published indicators
2.7.1.1 Human Resources, safety and
environment indicators
The Human Resources (HR), safety and environmental data
come from our HR Analytics for the HR data, Resource Advisor
for Environmental data and GlobES (Global Environment and
Safety) for the safety data. Its consolidation is placed respectively
under the Global Human Resources, the Global Environment and
the Global Supply Chain functions. Data reliability checks are
conducted at the time of consolidation (review of variations, inter-
site comparison, etc.). Details for data coverage are specified in
tables page 232 for each topic and are generally well above 80%.
The safety data of the sites are included in the Group metrics after
one complete calendar year following their creation or acquisition.
A site joining the Group in year n will be included in the metrics
on January 1, n+2, except in exceptional circumstances when an
agreement stipulates that the safety data will not be included for
two years.
The scope of environmental reporting is that of ISO 14001-certified
sites, and certain non-certified sites on a voluntary basis and
without interruption in time. All production and logistics sites with 50
or more FTE employees must obtain ISO 14001 certification before
the end of the third full calendar year of operation or membership
of the Group. Administrative, R&D and sales sites with 500 FTE
employees or more also have to obtain ISO 14001 certification.
Other sites may seek certification and/or report on a voluntary
basis. A difference can be thus recorded with respect to the scope
of financial consolidation.
Schneider Electric has drawn up a frame of reference with
reporting methods for Schneider Sustainability Impact (SSI),
Schneider Sustainability Essentials (SSE) indicators and for
Human Resources, safety and environmental data.
This frame of reference includes the scope, collection and
consolidation procedures and definitions of this information. As it is
engaged in a process of constant improvement, Schneider Electric
is gradually supplementing this work to adapt its frame of reference
for sustainable development indicators to changes in the Group.
This document is updated every year.
In keeping with its commitment to continuous improvement,
Schneider Electric asked Ernst & Young to conduct a review in
order to obtain a “limited” level of assurance for certain Human
Resources, safety and environmental data indicators, and all
of the key performance indicators from the SSI and SSE (see
Independent verifier’s report on page 224). The audit work builds
on that conducted since 2006.
As a general rule and subject to any particular exception to be set
out in the universal registered document:
(i) Schneider Electric reports extra-financial data at Group level
for all entities over which it has operational control, within 2
years of acquisition;
(ii) Data is consolidated over all fully integrated companies within
the scope of financial consolidation;
(iii) Companies accounted for by the equity method are not
included in the reporting.
(iv) Within the above scope, small entities may exceptionally be
excluded if their collective exclusion does not exceed 5%
of consolidated revenues or total number of employees, in
agreement with external auditors.
Notable exclusions in 2021 (except for SSI #1):
• AVEVA and OSIsoft. AVEVA remains a listed company and
publishes its financial and extra-financial statements on regular
basis. It acquired OSIsoft in March 2021.
• Companies acquired in 2020 and 2021: Larsen & Toubro; RIB
software; ETAP.
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SSI #2: Deliver 800 million tonnes of saved and
avoided CO2 emissions to our customers
This indicator measures CO2 savings and avoidances delivered by
Schneider Electric offers to customers.
CO2 savings and avoidances are calculated for global sales of
the reporting year and cumulated over the offers’ lifetime. Net
emissions are calculated as the difference between emissions
with Schneider Electric’s offer and emissions in the reference
situation. The ambition for this indicator has been increased in 2021
with the definition of the new sustainability strategy: Schneider is
committed to save and avoid 800 million metric tons of CO2 thanks
to EcoStruxure™ for its customers.
2.
The difference between “saved” and “avoided” emissions is key:
saved CO2 emissions correspond to brownfield sales that enable
reduction of global CO2 emissions compared to previous years,
and avoided CO2 emissions correspond to greenfield sales that
enable a limitation of the increase of global emissions.
• Brownfield sales correspond to the situation where the offer
sold replaces or upgrades an existing system, leading to a
change of GHG emissions of installed infrastructure versus the
previous year. For “saved” emissions, the “brownfield reference
situation” is defined as the situation before the new solution is
sold and installed at the customer’s site.
• Greenfield sales correspond to the situation where the solution
is installed into a new system, allowing a better performance
with respect to the market alternative.
The calculation of CO2 impact of offers over their lifetime is based
on sales data per product range. The electricity emission factors
are forward looking, integrating the decarbonization of the global
energy mix as per scenario of the IEA. Market data and expert
assumptions are used to determine the use-case scenario of offers
and the associated CO2 impact. This methodology is associated to
typical uncertainties of CO2 corporate accounting methodologies,
and conservative assumptions are preferred.
More methodological details can be found in our website that has
been made public in 2019.
This indicator was audited by Ernst & Young.
SSI #3: Reduce CO2 emissions from top 1,000
suppliers’ operations by 50%
Under this program, also called Zero Carbon Project, the Group
partners with 1,000 of its suppliers, who commit to reduce their
company’s CO2 emissions (mandatory Scope 1 & 2; Scope 3
is optional) and not just on the proportion of sales to Schneider
Electric. The active participation of upstream supply chain is critical
because it represents multiple times GHG emission compared to
Schneider Electric’s own operations. The top 1,000 suppliers come
from 64 categories across direct material, indirect material and
project procurement and have been nominated by the respective
procurement teams.
2.7.1.2 Indicators from the
Schneider Sustainability Impact
SSI #1: Grow Schneider Impact revenues to 80%
Schneider Impact revenues are defined as offers that bring
energy, climate, or resource efficiency to our customers, while
not generating any significant harmful impact to the environment.
Schneider Impact revenues are split into four categories described
thereafter. Activities included are:
1) Energy efficiency architectures bringing energy and/or
resource efficiency to customers. Offers include building
management systems, power management systems, lighting
and room control, thermal control, variable speed drives,
Sustainability Business (SB), and industry automation. Neutral
technologies such as signaling, racks and enclosures, access
control, or emergency lighting are excluded.
2) Grid reinforcement and smart grid architectures
contributing to electrification and decarbonization. This
includes all technologies and architectures contributing to
a New Electric World, helping grid and electrification come
to life: smart grid and microgrid technologies, EV charging
infrastructures, medium voltage systems to upgrade electricity
distribution networks, low voltage connectable offers enabling
smart grid management and energy efficiency, secure power
and switches that enable security, and security of supply;
3) Products with differentiating green performance, flagged
thanks to our Green Premium program. Green Premium
products offer environmental transparency (with digital life
cycle analysis and circular end-of-life instructions), superior
compliance to stringent environmental regulations, and
differentiating environmental performance through specific
environmental attributes (note: double-accounting with
categories 1 or 2 is removed);
4) Services that bring benefits for circularity (prolonged
asset lifetime and uptime, optimized maintenance operations,
repair, and refurbish) and energy efficiency (maintenance to
maintain the operational performance of equipment and avoid
a decrease of energy efficiency over time).
Additionally, revenues derived from activities with fossil sectors
and others are systematically excluded, including Oil & Gas,
coal mining, and fossil-power generation, in line with prevailing
corporate responsibility reporting and sustainable finance
practices, even though Schneider Electric’s technologies deliver
resource and carbon efficiency in such sectors as well. In line with
Schneider Electric’s strategy to phase out SF6 from offers by 2025,
SF6-containing switchgear for medium voltage applications are
also excluded. In addition, neutral technologies such as signaling,
racks and enclosures, access control, or emergency lighting
are excluded.
All revenues consolidated in financial accounts are taken into
account. Calculation is based on revenues per line of business.
Exclusion of fossil revenues is based on orders per customers’
end-segment, with extrapolation to estimate destination of
transactional sales.
This indicator was audited by Ernst & Young.
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2.7 Methodology and audit of indicators
To ensure suppliers get adequate handholding during the
implementation, several capacity building and engagement
modules have been deployed. These initiatives sensitize the
suppliers on various approaches and technical levers for
decarbonization, including training on basic requirements and
calculations. Moreover, Schneider attempts to support and
drive collaborations with suppliers through services and
EcoStruxure™ solutions.
As a first step in the long-term journey to decarbonize, top 1,000
suppliers are required to quantify their carbon emissions and take
ambitious reduction targets and deploy roadmap to achieve them.
Suppliers are required to share the carbon emission performance
via the dedicated Schneider Supplier Portal-Supplier Relationship
Management (SSPSRM). To measure the carbon emission
reduction achieved, we calculate the average carbon intensity
reduction achieved by responding suppliers, multiplied by the
percentage of suppliers reporting carbon emission data. Carbon
intensity is calculated as Scope 1 & 2 CO2 emission divided by
financial turnover.
This indicator was audited by Ernst & Young.
SSI #4: Increase green material content in our
products to 50%
A Green Material is defined as either of the following:
• a material with a lower environment footprint;
• a material that is the output of an industrial technology which
is a key enabler for a 1.5°C climate scenario and/or a more
circular economy.
For 2021, the scope of this KPI covers commodities identified as
relevant in terms of volume (circa 29% of total products volume
in 2019), environmental impact (carbon footprint and biodiversity
assessment) and industry readiness, meaning:
• Steel and aluminum direct purchases;
• Thermoplastic direct and indirect purchases.
Overall, the materials in scope represent approximatively 400,000
metric tons.
Cross-functional experts at Schneider Electric (Procurement, R&D,
Environment) have worked in close relationship with suppliers to
define the Green attributes for each commodity in scope, based on
existing international schemes and standards.
Thermoplastics are qualified as “Green” when the supplier is
bringing evidence of a minimum recycled content, biobased
content (minimum threshold depends on whether the compound is
halogenated or not) or is using a green flame retardant.
Steel is qualified as “Green” when the supplier is bringing
evidence that the mill of origin is an Electric Arc Furnace (EAF)
or has a Green certificate such as the ones delivered by
Responsible Steel.
Aluminum is qualified as “Green” when the supplier is bringing
evidence that the product carbon footprint is below 8 tons of CO2
per ton of Aluminum, is using a minimum of 90% of recycled content
in its product or that the mill of origin has a Green certificate such
as the ones delivered by the Aluminium Stewardship Initiative.
The scope will be yearly reassessed as the program maturity and
the transparency of supply chains improve.
To consolidate the KPI, several sources of data are used. The
volumes of green materials are identified using Prism extract for
metals and Puma extract for thermoplastic, both tools are providing
budgeted volumes. The total volume in scope (the denominator
of the KPI) is determined using RMI extracts for thermoplastic,
steel and aluminum providing purchased volumes in metric tons.
For silicon steel there is no consolidation in RMI since silicon
steel is not a market index, thus the volume is estimated based
on a negotiation file RCM. Schneider Electric decided to identify
reported and tracked Green Materials using ‘budgeted’ volume
since the precision of the reporting tool is better compared to RMI
extract. Actually, Prism and Puma allowed to track suppliers and
material grade that make the two levers mentioned above possible
to activate.
This indicator was audited by Ernst & Young.
SSI #5: 100% of our primary and secondary
packaging is free from single-use plastic and
uses recycled cardboard
This program has been designed to:
• Ensure legal compliance through the selection of our packaging
materials and the availability of adequate take-back, collection
and sustainable options for our customers.
• Support the achievement of our 2025 Green packaging
commitment:
− 100% of our primary and secondary packaging uses
recycled cardboard.
− 100% of our primary and secondary packaging is free from
single-use plastic.
− Define the best practices to offer differentiating green
packaging solutions to our customers.
The scope includes tier-one strategic suppliers with a direct
purchase of cardboard and plastics in the Schneider Electric
procurement system. Geographically, all regions under the global
supply chain will be covered, as well as Equipment & Transformers.
Cardboard is considered as recycled when it includes at least 70%
of recycled fiber by weight. Temporary exemption is made for NAM,
where an average of 50% of recycled fiber by weight is required to
be considered recycled.
Every reporting period, the spend on cardboard and plastics
is extracted from the system and each element is classified as
sustainable or none based on criteria mentioned above. Verification
is done for sustainable declarations on the definitions already
provided as well as certificates and other documentary evidence
from suppliers. The list of eligible certificates/documents is
continually updated to make it exhaustive and to cover countries
specificities.
A global campaign is being run in all global supply chain regions to
progressively move the spend to sustainable sources and remove
single use plastic usage with sponsorship from top management.
This indicator was audited by Ernst & Young.
SSI #6: 100% of our strategic suppliers provide
decent work to their employees
Schneider Electric has deployed a series of engagement on the
topic of working conditions to correct mal practices, but also
proactively work to implement measures which will prevent such
violations in future. This philosophy is the foundation of the Decent
Work program.
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This indicator was calculated for the first time in 2021 and reached
an 81/100 performance. As such, this KPI is excluded from the
2021 SSI score computation, and will be integrated in 2022.
The methodology for this indicator was reviewed by Ernst & Young.
SSI #8: Increase gender diversity, from hiring
(50%) to front-line managers (40%) and leadership
teams (30%)
Schneider Electric is strongly committed to building a diverse
organization at every level, with a workforce that reflects the
diverse markets in which we operate. This indicator measures
female representation within Schneider, at the hiring, frontline
manager, and leadership level.
It covers all new hires within the company, including both non
direct variable costs (NDVC i.e. white-collar) and direct variable
costs (DVC i.e. blue-collar) positions; managers who are in NDVC
positions, at the junior and mid-management level and whose
direct reports are individual contributors only; and all leaders in
Senior Vice Presidents & Vice Presidents positions.
This is a composite indicator: the progress of each metric (new
hires, frontline managers, leaders) is being evenly weighted (1/3) to
calculate the achievement of this commitment.
At the end of each quarter,
• Percentage of female new hires: Count number of new hires
that are women divided by total new hires in the current year
*100.
• Percentage of female frontline managers: Count number of
frontline managers that are women divided by total frontline
manager population *100
• Percentage of female leaders: Count of women leaders
divided by count total leaders *100
• Blended achievement percentage: Weighted 1/3, based
on annual % progression from Base Year to total 5-year
achievement.
− 50% new hires progression: Subtract current period % of
women who are new hires from 2020 base line and divide by
targeted 5-year progression target (9%).
− 40% frontline managers progression: Subtract current period
% of women who are frontline managers from 2020 base line
and divide by targeted 5-year progression target (15%).
− 30% leaders progression: Subtract current period % of
women who are leaders from 2020 base line and divide by
targeted 5-year progression target (6%).
− Calculate blended progression achievement %: 1/3 of each
KPI current period progression
This indicator was audited by Ernst & Young.
SSI #9: Provide access to green electricity
to 50 million people
Schneider aims to provide access to electricity from renewable
sources to 50 million people, thanks to the products and solutions
that are developed and/or commercialized under the Access to
Energy (A2E) program, from 2009 to end-2025.
Taking inspiration from the pioneering work of ILO, Schneider has
defined 10 pillars of Decent Work:
1. Employment opportunities;
2. Adequate earnings and productive work;
3. Decent working hours;
4. Stability and security of work;
5. Social dialogue and workplace relations;
6. Fair treatment in employment;
7. Safe work;
8. Social protection;
9. Purchasing practices; and
10. Balancing work and family life.
The program requires strategic suppliers to develop a pro-active
policy and provide a safe, attractive, inclusive workplace to their
employees, and treat all workers as we treat our own workforce.
Criteria defined for each Decent Work pillar may overlap with
ISO26000 standard and are validated by Global Procurement,
Human Resources, Supply Chain and Sustainability teams.
The suppliers will be assessed through remote questionnaires
supported by relevant documentation as well as onsite visits, spot
audits and their performance will be monitored by experts. All
questions have a minimum acceptable answer defined. Suppliers
responses will be evaluated against the minimum acceptable
criteria to qualify as Decent Work compliant. Program deployment
is ensured by Global Procurement Services to onboard, train and
assess suppliers.
Through Decent Work standard setting and compliance, Schneider
employment aims to enhance social integration, equity, security,
dignity, satisfaction and overall improvement in the quality of life
for the workers, and their family. For each Decent Work issue
identified, the Global Procurement team will ask for corrective
actions to be undertaken and supported by documentation. If the
supplier effectively deploys corrective actions, it can be counted in
the KPI calculation. Otherwise, it is still counted as non-compliant
regarding the requirements of the program.
A pilot for this indicator will be launched early 2022. As such, this
KPI is excluded from the 2021 SSI score computation, and will be
integrated in 2022.
The methodology for this indicator was reviewed by Ernst & Young.
SSI #7: Measure the level of confidence of our
employees to report behaviors against our
principles of Trust
Speak-Up helps to maintain high standards, a strong reputation,
and a healthy and productive working environment, and protects
Schneider Electric and its employees from multiple risks. Misconduct
situations will be less likely to occur if people, employees and
stakeholders feel safe to speak up about concerns, dilemmas or
issues in good faith, respectfully and without fear of retaliation.
Our Trust Charter and Ethics & Compliance program participate to
transform this belief into practical actions, notably offering multiple
fair, neutral and confidential reporting channels to our employees to
make them feel confident to report an unethical conduct.
In order to assess this KPI, the question “I can report an instance of
unethical conduct without fear” is annually asked to all Schneider
Electric employees included in the OneVoice survey scope. The
percentage of “Agree” and “Strongly Agree” amongst the answers
determines the level of confidence of Schneider Employees
to report unethical conduct. Responses are anonymized and
aggregated for compliance purposes.
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Geographical scope are countries where the A2E program is
operating, in APAC, Africa, Middle East, and South America. Within
these A2E countries, the impact is calculated based on:
Calculations are based on actual external requisition positions filled
in the Global Applicant Tracking System and opportunities tracked
via connect Candidate Relationship Management.
•
Individual and domestic electrification: the number of units
sold is counted out of the defined list of references providing
access to green electricity, and a coefficient is applied to
translate into an estimated number of people impacted.
• Collective electrification: the total power sold is counted
out of the defined list of references giving access to green
electricity; it is translated into a number of people impacted from
an average energy consumption of a household in the targeted
areas, estimated from external databases and studies.
• Large A2E projects or electrification of public services: as
an alternative to the above method, actual or statistical number
of people connected can be taken into account. In this case,
the technologies sold by Schneider can go beyond the strict
A2E references, but their value must be at least equal to the
estimated price of the project’s inverters.
Impact funds (SEEA, SEEA Asia and EAV): 100% of the impact
of companies that contribute directly to the Schneider A2E
mission of providing green and reliable electricity in Africa and
in Asia are taken into account, as well as 50% of the impact of
companies that contribute indirectly. To this result, we apply the
percentage of participation of SE in the fund.
•
An exhaustive list of products and solutions considered with
reference codes is available and maintained. Considered products
and solutions are those already available at the end of 2020, and the
forthcoming products and solutions providing access to electricity.
Products and solutions that are out of scope: A2E products and
solutions that are sold out of A2E countries; other A2E products
and solutions, not directly providing access to electricity (e.g.
MPPT, EcoStruxure™ for Energy Access, batteries, etc.).
This indicator was audited by Ernst & Young. The methodology and
2021 performance was audited, not values cumulated before 2021.
SSI #10: Create 2x opportunities for the next
generation
The purpose of this initiative is to ensure Schneider Electric has
a sustainable talent strategy to develop a Next Generation (Next
Gen) pipeline of talent through full-time, temporary, and self-
paced opportunities. Our goal is to provide access to professional
opportunities for young adults, educating them about sustainability
and how Schneider Electric plays a part in this endeavor.
To achieve this ambition to double opportunities, the Group
accounts for the various ways it interacts with talent considered
to be part of the next generation pipeline, including Student
Opportunities and Recent Graduate Hires:
• Student opportunities are defined as the workforce on the
cusp of entering the job market, engaged in a temporary
relationship with Schneider Electric with a defined start and end
date at the onset (i.e.: Intern, learning event about Schneider
and sustainability).
• Recent Graduate Hires are recent graduates or early career
professionals hires from a formal education program whose
relationship with Schneider has a defined start date but open-
ended end date (i.e.: Contract type: open ended contract, fixed
term contract).
This indicator was audited by Ernst & Young.
SSI #11: Train 1 million people in energy
management
The deployment of professional training programs in energy
management enable people to acquire skills to pursue a career
that offers them, as well as their families, the means for a decent
standard of living. These courses must benefit to disadvantaged
people. They are defined according to a local reference and
justifiable by the partner who must be able to justify the BoP nature
of the people trained, related to the defined local benchmark.
In partnership with local and international NGOs and local
authorities, the Schneider Electric Foundation and the Company’s
local entities provide direct and indirect contributions to
professional training centers. The objective is to help them improve
the level of vocational training courses with diploma or certification
in energy management. As a technical partner, Schneider Electric
does not pay operating expenses.
The minimum duration of these courses is three months
(or totaling 100 hours). Schneider’s Contributions may be
(cumulative possible):
•
funding of electrical and didactic equipment, donation of
request equipment, first generation, for practical work;
• knowledge transfer through trainer training, and support for
future entrepreneur training.
The KPI score is calculated with the number of students enrolled
in trainings courses, supported by Schneider Electric through
partnership agreement (supporting documents (list of young
people) required).”
This indicator was audited by Ernst & Young.
SSI #+1: 100% of Country and Zone Presidents
define 3 local commitments that impact their
communities in line with our sustainability
transformation
Since its creation in 2005, the former Planet & Society barometer
(now Schneider Sustainability Impact), has focused on measuring
progress against key sustainability performance indicators at
worldwide level.
In SSI 2021-2025 Schneider Electric introduces a new component
to measure local impact because:
• There is a high internal demand for local communication
on progress, as well as to locally empower collaborators to
contribute to our meaningful purpose;
• Sustainability priorities are highly dependent on local context
therefore it makes sense to not only deploy worldwide
programs, but also local actions close to local context and
needs.
In order to boost local impact towards communities close to
Schneider Electric, Countries with at least 100 employees have
set 3 commitments aligned with the Group’s sustainability strategy,
on different pillars: Climate, Resources, Trust, Equal, Generations
and Local.
Progress against these commitments is measured by precise Key
Performance Indicators (KPI). The assessment of this objective
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goes as follow: KPIs are validated by zone/ country presidents,
and a local SSI lead is designated and communicated to the
Sustainability Team. This local Lead is in charge of consolidating
KPI performance on an annual basis.
This indicator was not audited by Ernst & Young and is not included
in the SSI score.
2.7.1.3 Indicators from the Schneider
Sustainability Essentials
SSE #1: 150 Zero-CO2 sites
A site achieves Zero CO2 site status if it emits zero greenhouse
gas emissions related to energy consumption and has in place
Digital Energy Monitoring. Additionally, the site must have no SF6
leaks. Exclusions for energy-related greenhouse gas emissions are
considered for small sources (<3%) of a site’s total energy where no
feasible fossil-free solution exists today. Digital Energy Monitoring
is defined as having energy data connected to a Schneider Electric
solution (such as Power Monitoring Expert, EcoStruxure™ Building
Operation, Resource Advisor, etc.). For larger sites, this requires
a significant proportion of the site’s energy to be measured and
monitored through real-time connected meters. For smaller sites,
this requires energy invoices to be available in Schneider Electric’s
Resource Advisor solution. This indicator relates to all sites within
the Group’s full real estate footprint.
This indicator was audited by Ernst & Young.
SSE #2: 100% substitution with SF6-Free medium
voltage technologies
This indicator measures the ability of Schneider Electric to offer
to the market (i.e. SELL gate of our Offer Creation Process)
industrialized SF6-Free solutions for all geographies.
The range considered for the calculation of this KPI are Primary &
Secondary switchgears up to 40.5 kV, Indoor only:
A SF6 free ranges ready in 2020: Vaccuum components,
Premset, primary AIS with vaccum CB, HVL, Masterclad…
B SF6 ranges in 2020: RM6, FBX, Ringmaster, DVCAS, Flusarc,
SM6, RN2C, GMA, GMAe GHA, WS, WSG, CGBS-0, CGBS-1,
HVL-CC, Mcset, F400
C SF6 free offers to be launched from 2021-2025: SM AirSeT, Air
PacT, RM AirSeT, RingmasterX, GM AirSeT, HVLCCX, …
Products above 40.5kV (WI, CBGS-2, Kite), Outdoor Equipment
such as Pole mounted, Reclosers, Sectionalizers, Instrument
transformers, as well as ranges manufactured by JVs and local
offers adaptation are excluded.
The performance is measured as the percentage of the quantity of
SF6 free offer range available for order (A+C above) compared to
the total quantity of the current ranges sold in the 2019 reference
base (for both MV switchgears and components). The current
range for 2019 reference base is defined as the sum of the current
SF6 and non-SF6 (Air, Vaccum) ranges sold in quantities (A+B
above).
For the calculation, as an example, 1 RMairSet =1 RM6.
Calculation: KPI % = (A + C) / (A + B). Reference Base: total
quantities by range sold in 2019.
This indicator was audited by Ernst & Young.
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SSE #3: 90% of electricity sourced from
renewables
This program measures the share of renewable electricity in
Schneider Electric electricity supply, on the scope of environmental
reporting (industrial sites >50 employees and tertiary sites >500
employees certified ISO 14001).
Four different types of renewable sourcing are taken into account:
• Renewable electricity produced onsite and consumed onsite;
• Renewable power purchase agreements (PPAs);
• Green tariffs; and
• Renewable certificates (depending on the country: REC, iREC,
GO, EAC, etc.).
2.
Electricity purchased with no specific renewable electricity claim
is not taken into account, even if the electricity mix of the supplier
includes a share of renewable power.
This indicator was audited by Ernst & Young.
SSE #4: 15% CO2 efficiency in transportation
Transport within Schneider Electric is a significant generator of
CO2 due to dependence on fossil-fuels. To achieve its net-zero
target, the Group must engage with its transport providers on both
efficiency opportunities as well as technical advancements in
transport assets.
This KPI measures the Group progress against an annual 3% CO2
emissions for its paid transportation footprint for each of the next
5 years, or 15% total reduction from 2020 to 2025. The scope of
the program covers all shipments globally with all transportation
providers and modes where the freight is paid by the Group.
This equates to approximately two-thirds of the total freight CO2
impact to the Group. The base calculation for CO2 efficiency uses
an activity-based method of weight multiplied by distance and by
mode/equipment CO2 factors. Progress is measured using CO2
emissions per tonne shipped as unit.
This indicator was audited by Ernst & Young.
SSE #5: 15% energy efficiency in our sites
This program measures the normalized energy reduction of the
Group’s largest energy-consuming sites against a baseline. The
objective is to reduce energy consumption by ~3% each year, for
a total reduction of 15% over the whole duration of the company
program (2021-2025) using Schneider Electric solutions and
services. The program focuses on Schneider sites within the scope
of environmental reporting that consume >3 GWh of total energy,
along with other sites the Group considers strategic (213 sites in
2021). Energy savings are calculated versus a baseline year (2019)
for the whole duration of the company program. In order to ensure
a fair calculation of the savings, the actual consumption of a site is
normalized versus the baseline year. This normalization is based
upon a site-specific linear regression model enabling climate and
changes in production levels to be taken into account. All energy
consumption that can be modelled is taken into account and
converted into MWh.
This indicator was audited by Ernst & Young.
SSE #6: 80% of product revenues covered by
Green Premium™
Schneider Electric provides environmentally conscious products to
customers that support their sustainability goals and ambitions. The
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2025 target is a transformation of the existing program, for products
focused on green materials, low CO2, circularity and digitization
of data.
Each site reports initiatives at completion. At Group level,
performance is calculated by dividing completed initiatives by total
required initiatives.
Green Premium products provide detailed information on their
regulatory compliance, material content, environmental impact and
circularity attributes. They deliver market driven value propositions
through third-party labels, such a Green Building and product
certifications, that support our customers’ sustainability ambitions.
All globally sold products are within the scope of Green Premium.
The product must be identifiable by an individual commercial
reference number sold under a recognized brand of Schneider
Electric. The Group provides resources efficient products (energy
at usage, low CO2, material efficiency) whose footprints are fully
available through the ‘Product Environmental Profile’ relying on
Life Cycle Assessment; Green Premium offers also come with
‘Circularity profiles’, providing information on a product’s Circularity
through product end-of-life instructions and take-back services.
Green Premium offers are regulatory compliant. Schneider is going
beyond regulatory compliance with step-by-step substitution
of certain materials and substances from our products. All this
information is provided digitally to our customers.
This indicator was audited by Ernst & Young.
SSE #7: One-third of corporate vehicle fleet
comprised of electric vehicles
Schneider Electric has joined the EV100 initiative of Climate Group
to reduce its carbon emissions by committing to electrify 100%
of its fleet by 2030. The fleet reporting structures the fleet carbon
emissions calculations, the calculation of EVs share in the fleet
and allows to support countries in the transition. As a mid-term
objective, by 2025, Schneider commits to switch a third (1/3) of its
fleet to electric vehicles (EV).
Schneider Electric uses the definition by the Climate Group for
electric vehicles, including:
• Battery Electric Vehicle (BEV),
• Plug-in hybrids (PHEV): Extended Range vehicle (EREV)
and Fuel Cell Electric Vehicle (FCEV) - with at least 50km of
electrical autonomy
Vehicles’ count is a picture at 31/12. The share of electric vehicle in
fleet is calculated by dividing EV count by total vehicle count
Fleet leasers are the source of information; global leasers operate
the largest share of Schneider Electric’s fleet and provide data
on multiple countries by region. A detailed reporting is asked to
all countries to eventually correct, complete or complement the
information (considering for instance vehicles under local leasers).
This indicator was audited by Ernst & Young.
SSE #8: 100% of sites with local biodiversity
conservation and restoration programs
This program measures, for each site in scope, the percentage
completion of a set of biodiversity-related actions. The scope is
Schneider Electric sites within full real estate footprint that have >50
people.
Initiatives are defined as “eliminate single-use plastic”, and “local
biodiversity action” (2 required for large ISO14001 sites, 1 for
small sites).
This indicator is audited annually by Ernst & Young.
SSE #9: 200 ‘Waste-to-Resource’ sites
A site achieves ‘Waste-to-Resource’ status if it recovers more
than 99% (by weight) of its non-hazardous waste while leveraging
waste-to-energy solutions for less than 10% of its non-hazardous
waste. Additionally, if a site generates hazardous waste, it must
ensure 100% proper handling and treatment of that waste. Proper
handling and treatment of hazardous waste means that hazardous
waste shall be handled as per Schneider Electric’s requirements
and local regulations, whichever is the most restrictive. Waste is
considered as recovered if it is reduced, reused, or sent to a waste
provider for recycling or disposal in any manner except landfill
and incineration without energy recovery. Waste composting and
energy recovery systems qualify as recovered. This indicator
relates to all sites within the Group’s full real estate footprint.
This indicator was audited by Ernst & Young.
SSE #10: 420,000 metric tons of avoided primary
resource consumption through ‘take-back at
end-of-use’ since 2017
The aim of this KPI is to measure Schneider Electric’s Circular
Economy efforts, meaning all the industrial activities that contribute
to the Circular Economy model, such as repair, reuse, refurbish and
recycling, thus avoiding waste, material & energy consumption,
CO2 emissions and/or water depletion.
Activities in this KPI will enrich on the basis of SE increasing focus
on circularity business models, and are currently constituted of
• Batteries take back and recycling;
• Volume of devices refurbished and repaired in our repair
centers (eg UPS, Drives);
• Volume of MV, LV and Transformers refurbished or recycled in
our Ecofit Centers.
This indicator was audited by Ernst & Young.
SSE #11: 100% of sites in water-stressed areas
have a water conservation strategy and related
action plan
This program measures the percentage completion of a set of
water conservation actions that sites in water-stressed areas must
complete. The scope is Schneider Electric sites within the scope of
environmental reporting that are classified as ‘high’ or ‘extremely
high’ baseline water stress, as defined by World Resources Institute
(WRI) Aqueduct Water Risk Atlas. Actions are defined based on the
amount of water that a site consumes along with the application(s)
that the site uses water for. At the Group level, performance is
calculated by totaling all completed site actions and dividing by the
total required actions.
This indicator was audited by Ernst & Young.
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SSE #12: Deploy a ‘Social Excellence’ program
through multiple tiers of suppliers
This indicator has not yet been deployed by Schneider Electric.
observation or counselling; the conduct of diagnostic procedures,
such as x-rays and blood tests, including the administration of
prescription medications used solely for diagnostic purposes (e.g.
eye drops to dilate pupils); or first aid.
SSE #13: 100% of employees trained every year
on Cybersecurity and Ethics
As per to our Ethics & Compliance and Cybersecurity programs,
training of employees on ethics, corruption risks (for eligible
employees) and cybersecurity is mandatory. To do so, Schneider
Electric launched 3 new trainings as part of the Global Schneider
Essentials training campaign reconducted every year with
new content:
• Since 2018: Training on the Principles of Responsibility (PoR
document replaced in September 2021 by Trust Charter
Schneider’s Electric Code of Conduct) and Anticorruption.
• Since 2020: Training on Cybersecurity.
The scope of this KPI is all employees registered in TalentLink
(legal entities integrated in Talent Link, Core HR data system)
as of November 15:
• Principle of Responsibility and Cybersecurity e-learnings:
all active employees with Open Ended Contracts (OEC)
(exception: Chinese and Bulgarian Fix Term Contracts – FTC –
are included), present in the Group on December 31st and hired
before December 1st
• Anticorruption e-learning: exposed employees identified
based on the job description (Schneider Electric System of
Reference – description of functions), active, with connectivity
type online-corporate credentials, with OEC (exception: Chinese
and Bulgarian FTC) present in the Group on December 31st and
hired before December 1st
This KPI is calculated as followed: the number of employees who
completed all required e-learnings assigned based on defined
criteria (2 or 3) divided by the number of employees x 100.
This indicator was audited by Ernst & Young.
SSE #14: 0.38 or below Medical Incident rate
Safety is one of the 5 pillars of Schneider Trust Charter, which
emphasizes the importance Schneider Electric is placing on
its employees, customers, and contractors. Schneider works
with many VIP global customers, and they demand the highest
standards of Health & Safety management and performance before
they engage and continue to do business with Schneider Electric.
Moreover, at Schneider Electric our mission is to protect
Occupational Health and Safety of employees, customers,
contractors, and visitors to our locations. The Group also strives
to provide employees safe, pleasant, and efficient workplaces for
enhanced wellbeing and effectiveness. As such, we aim to reduce
the Medical Incident Rate (MIR) to 0.38 by 2025.
The MIR is the number of work incidents requiring medical
treatment per million hours worked (i.e. average hours of 500
employees working for one calendar year). Work related injuries
and occupational illnesses requiring medical treatment are
included. Work incidents may or may not have resulted in time
off work.
All work-related incidents reported on Schneider Electric sites
are counted (including therefore incidents affecting Schneider
employees and other employees working under the supervision
of Schneider, i.e. temporary workers). All Schneider sites within
scope are considered. Medical incidents do not include: visits to a
physician or other licensed healthcare professional solely for
This indicator was audited by Ernst & Young.
SSE #15: Reduce by 50% scrap from safety units
recalled
Schneider Electric’s priority is to delight its customers with an
outstanding end-to-end experience. The Group strives to ensure
our products’ reliability, safety and cybersecurity to secure
customers’ business continuity and protect their people, assets
and data. Quality is every customer’s right and every employee’s
responsibility. By rationale, with an enhanced emphasis on quality,
Schneider products henceforth should have minimal recall. In
addition, safety in using Schneider products is of utmost priority
and therefore we set this target with the mindset to ensure that our
products remain safe for use for our customers.
In the unfortunate event of a recall, the Group aims to encourage a
circular economy by reusing any parts from the recalled product as
possible instead of scrapping it.
This KPI is based on all Problem (PRB) opened with Go decision
from the Offer Safety Alert Committee (OSAC). Target of weight of
scrap need to be included in the OSAC presentation and decision.
The used definition of ‘recall’ is a product recalled from Customer
sites to Schneider’s premises. Products remediated at customer’s
site without physical recall to SE’s premises is excluded. The
scope of this KPI includes all physical products sold by Schneider.
Software are by definition excluded. Also, safety recalls bound by
Non-Disclosure Agreement is excluded.
The weight of scrapped materials (in kilograms) is estimated by
multiplying the number of physical products scrapped following a
safety recall multiplied by the weight of product. The % reduction
is calculated by comparing the weight of scrapped materials in the
reporting year to that of the baseline (4,202 kilograms in 2020).
This indicator was audited by Ernst & Young.
SSE #16: In the Top 25% in external ratings for
Cybersecurity performance
Schneider Electric is continuously and consistently monitoring the
security of its digital footprint with the support of cyber scoring
agencies and this discipline is applied across the extended
ecosystem* (e.g. integrated and non-integrated entities).
Our primary scoring agency is BitSight which rates company
security maturity between 300 to 820. This rating is calculated in
real time with a proprietary algorithm that examines two classes of
externally observable data:
• configuration information, which represents how diligent a
company is in implementing best practices to mitigate risk.
• observed security events, which are evidences of cyber events
like system compromises or data breaches etc.
Security incidents or identified vulnerabilities can negatively impact
the company’s rating. They are addressed in a timely manner and
the Group strives to maintain the score above 800.
*Bitsight scores for non-integrated entities (e.g. Aveva) are not
included and are monitored separately.
This indicator was audited by Ernst & Young.
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SSE #17: 4,000 suppliers assessed under our
‘Vigilance Program’
Schneider Electric seeks to be a role model in its interactions with
customers, partners, suppliers, and communities, when it comes to
ethics and the respect and promotion of human rights. The Group’s
vigilance plan reflects this ambition. It also complies with the
provisions of 2017 French law on Corporate duty of vigilance: Duty
of Vigilance introduced a new legal framework by which French
authorities could hold corporations accountable.
Risks within our Supply Chain are multiple: potential violations of
human rights and fundamental freedoms, serious bodily injury,
Environmental damage, Health and Safety risks, etc. Impact are
therefore quite various: reputation impacts, legal impacts, people
health & safety, environmental pollution…
To mitigate these risks with suppliers, the 2021-2025 plan is to
deploy on site and remote audits for 4,000 suppliers:
• 1,000 identified in “high risk” level (by a 3rd party methodology,
RBA or other) with one site audits; and
• 3,000 others through remote self-declarative assessment.
Suppliers answering are counted, removing, if any, suppliers
that have been audited in the current year or in past.
The KPI adds the total number of audits performed. The baseline
takes into account on site audits performed between 2018 and
2020 (i.e. 374 audits); this value has been audited and validated by
Ernst & Young in the previous years.
This indicator was audited by Ernst & Young.
SSE #18: <1% pay gap for both females and males
Over the last five years, Schneider Electric has proactively
worked to identify and address female pay gaps with appropriate
corrective actions through a country driven approach. Given
the progress made on Pay Equity and to support its inclusion
philosophy, starting in 2021, Schneider Electric has engaged in
best practices to maintain a pay gap below 1% by 2025 for both
females and males.
Measurement of the individual pay gap is achieved by comparing
each employee to a universal median total target salary “TTC”
(base salary + target short term incentive) for all genders. In other
words, an individual’s TTC is assessed against the median TTC
of their comparator group (individual TTC/median of comparator
group TTC – 1). The comparator group is defined by the drivers of
job level (grade) and salary structure within a country.
This indicator was audited by Ernst & Young.
SSE #19: 60% subscription in our yearly Worldwide
Employee Share Ownership Plan (WESOP)
The World Employee Share Ownership Plan (WESOP) is one
of the Group’s recurring key annual reward programs, offering
employees across the world an opportunity to become owners of
the Company, at preferred conditions. Schneider Electric commits
to achieve a 60% subscription rate among eligible employees in the
yearly WESOP by 2025.
The scope concerns 29 recurring participating countries,
representing 91% of the eligible headcount, which are all long-term
employees of countries participating in WESOP with seniority of
3 month in the company. The KPI is calculated by collecting the
number of subscribers from the subscription tool, divided by the
number of eligible employees in the 29 countries as per data from
our global HRIS system.
This indicator was audited by Ernst & Young.
SSE #20: 100% of employees paid at least
a living wage
In line with its Human Rights Policy and Trust Charter, Schneider
Electric believes earning a living wage is a basic human right.
Schneider Electric is committed to paying 100% of employees at or
above the living wage to meet their families’ basic needs. By basic
needs, the Group considers basic household expenditures (food,
housing, clothing, sanitation, education, healthcare, transport), plus
discretionary income for a given local standard of living.
There is no universal benchmark or methodology on how to
calculate a living wage, which is why Schneider Electric has been
working with an external consultant since 2018 to calculate living
wages for all its locations worldwide. To calculate a living wage, the
external consultant estimates the basic household expenditures of
employees, as well as the number of persons earning a wage in a
“typical” household based on various sources of cost of living and
macroeconomic data (national statistics, OECD, United Nations
agencies, etc.).
To measure compliance with the living wage, a gap analysis is
conducted every year post salary review for all our Schneider
Electric employees treated as permanent workforce (employee
scope coverage was 99% in 2021 and will be extended to 100%
in 2022). The Reward team centrally compiles and analyses
total employee remuneration data (base salary, bonus, and
allowances) to compare it with agreed living wage. Employees
are benchmarked to their work location living wage. To calculate
employee remuneration, the Reward team uses data available in its
global HRIS system, as well as local payroll. For final reporting of
the year end results, Schneider Electric can disclose a final score
that considers living wage gaps closed by countries until the end of
the year after they have been identified.
This indicator was audited by Ernst & Young.
SSE #21: 4x the number of employee-driven
development interactions on the Open Talent
Market
The purpose of this initiative is to create an integrated and digital
Open Talent Market (OTM) that enables employees to drive their
own career development. The platform is borderless, neutral, and
uses AI to help achieve best matches. The ambition is to multiply
the number of employee-driven interactions within OTM by 4 in the
next 5 years.
Interactions are tracked in the tool for each feature of OTM. At the
start of 2021, current features available to employees are:
• Positions;
• Projects; and
• Mentorships.
These 3 features work best when employee profiles are robust and
rate a 3/4 for completeness. The scope of this initiative extends
to the connected population of Schneider Electric as defined in
January 2021, thus excluding non-connected workers (ie: plant), as
well as contractors, and interns/apprentices.
This indicator was audited by Ernst & Young.
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SSE #24: 75% employee engagement score
A high Employee Engagement index is linked to higher sales
growth, higher operating income and ultimately higher customer
satisfaction and loyalty toward the company. This index is
calculated once a year through a survey called OneVoice, sent to
100% of Group employees, and serves a starting point to adapt the
Group’s people strategy, and action plans.
The computation of this KPI includes all Schneider employees
treated as permanent workforce (i.e. open ended and fixed term
contracts over 3 months), thus excluding interns or third party
contractors.
2.
The Kincentric employee engagement model is used, composed of
6 questions, 2 per item (SAY, STAY, STRIVE), scored on a 6 points
scale by employees:
• Employee Engagement Index: is the percentage of people for
which the average of the 6 questions is equal or higher than 4.5
• Employee Disengagement: percentage of people for which the
average of the 6 questions is equal or lower than 3.5
• Neutral: is the percentage of people for which the average of the
6 questions is scored between 3.5 and 4.5
This indicator was audited by Ernst & Young.
SSE #25: 50,000 volunteering days since 2017
Schneider Electric employees’ volunteering activities mainly take
place in vocational or educational NGOs (vocational and technical
training, schools, universities, etc.), and companies supported by
the Schneider Electric Access to Energy Fund and more globally in
all organizations referenced by the Schneider Electric Foundation
delegates in their countries. They principally fall into actions
benefiting young people, underprivileged families, the environment
and are organized depending on the personal or professional skills
of the volunteers as well as the needs identified by the supported
organizations (specialized or non-specialized needs). Missions
are posted on a dedicated digital and multilingual platform called
VolunteerIn enabling Group employees to apply for volunteer
missions among the Foundation’s partners. Local and spontaneous
initiatives organized by the Schneider Electric Foundation
delegates and their partners in which employees engage are also
taken into account.
In 2021, the Schneider Electric Foundation and partner NGOs
increased the number of digital missions offered to employees,
enabling employees to continue on engaging even under
restrictions due to the pandemic. One day of volunteering is
counted when a staff member dedicates five hours of his or her
time to one of these partner organizations. The indicator also
includes the training missions organized abroad for a period of five
days minimum. However, due to the pandemic this type of mission
has not been organized in 2021 for safety reasons. Only missions
lasting a minimum of 0.5 days are considered.
This indicator was audited by Ernst & Young.
SSE #22: >90% of employees undergo
digital upskilling
The Group is committed to growing employee digital citizenship
and aims to achieve digital upskilling for >90% employees by
2025. The progress combines white collars and workers
populations KPIs.
• For white collars, the Group aims to achieve >90% eligible
employees reaching Intermediate, Advanced or Expert Digital
Citizenship level by 2025. The Digital Citizenship level of all
employees will be assessed by their managers each year.
Eligible employees in 2021 are active employees hired before
January 31 2021, Open-ended and fixed-term contracts,
and excludes employees in non-integrated entities & further
exclusion defined by country.
• For workers, the Group aims to achieve >90% workers
complete 2 hours of training per year offered by the GSC
Academy on digital transformation, such as Smart factory
program, Cybersecurity, Digital knowledge. The scope covers
active workers populations and plant team leaders defined
by specific job codes and hired before January 31 2021,
Open-ended and fixed-term contracts (China only) in relevant
operating units, and excludes workers on extended leave
of more than 6 months during the year and factories which
planned to be closed before Q2 of the following year.
The scope and exclusions of this indicator will be reviewed at the
beginning of each year.
The KPI is an aggregated % based on the % of employees
meeting the target defined for white collars and workers to the total
employee population in scope (white collars & workers).
This indicator was audited by Ernst & Young.
SSE #23: 90% of employees have access to a
program that supports meaningful development
in the later stages of their professional career
This indicator aims to support and recognize talent who are near
or at the later stages of their professional career through a robust
career plan and development options, in order to strengthen key
skills, leverage expertise and ensure knowledge exchange.
In 2021, the strategy and approach were defined. Pilot programs
will start fully in 2022. As such, this indicator was not measured
in 2021.
From 2022, the indicator will be calculated as total headcount in the
countries which meet the global minimum standard for a program,
compared with overall Schneider Electric headcount. All countries
with >250 employees are in scope. The minimum standard for a
program include:
• Training, coaching or one to one support available for
employees (and their managers) in the later stages of their
professional career enabling them to have a career check-in/
next-step conversation that results in a meaningful career
development plan.
• A selection of support options available in the employees’
country that may include flexible work, upskilling and career
growth options, career pivot options, personal planning options
or workplace adjustments.
The methodology for this indicator was reviewed by Ernst & Young.
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2.7.2 Methodology elements on
EU taxonomy indicators
For the remaining 14% of revenues (related to entities having their
own reporting frameworks), analysis is conducted separately
following a review of each entity’s product line reporting.
Regarding the calculation of the proportion of activities considered
eligible in accordance with Article 1(5) of the Disclosure Delegated
Act in turnover, capital (CapEx) and operational expenditures
(OpEx), Schneider Electric provides the following additional details:
Calculation of Taxonomy-eligible turnover
As detailed in Annex 1 of the Delegated Act on Article 8, the
denominator of Taxonomy eligible turnover is equal to the net
turnover recognized pursuant to IAS 1.82(a) after removal of intra-
group transactions. At Schneider Electric, this represents EUR
28,905 million, as disclosed in the first line of the consolidated
statement of income in this Universal Registration Document (URD,
page 344).
For 86% of revenues (excluding entities having their own reporting
framework), eligibility calculation combines two approaches:
• An offer-based (by nature of technology) approach, whereby
workshops are conducted with offer management teams
for each line of business to define whether products are in
line with the definition of economic activities included in the
EU Climate Delegated Act. The analysis is performed at the
level of each product category, which enables a granular
segmentation between Taxonomy-eligible and Taxonomy-non-
eligible revenues. For example, Building Management Systems
(BMS) generally include energy efficiency systems, which are
Taxonomy-eligible, and fire safety and access control systems,
which are not. In this example, the analysis enables to account
only for energy efficiency systems installed as part of a BMS. An
eligibility ratio is then consolidated for each product line (which
includes multiple product categories).
• An end-segment-based approach, whereby commercial teams
indicate for each product line the amount of revenues generated
from Taxonomy-eligible end-segments (Green Transport and
Renewables mainly).
Double-counting between offer-based approach and end-
segment-based approaches are removed before consolidation.
The following assumptions are made:
• At the granularity level of product categories, data is based
on orders instead of revenues. Therefore, the eligibility ratio is
calculated by dividing the amount of eligible orders by the total
amount of orders, and then applied to the net turnover.
• At the granularity level of product categories, a non-significant
share of orders (<5%) is not allocated per product category.
These are not considered in the calculation of Taxonomy
alignment per product line (the product line’s average eligibility
ratio is applied).
• End-segment sales data is based on orders. A correction factor
is applied to assess the value of net revenues per end-segment.
Calculation of Taxonomy-eligible Capital
Expenditure (CapEx)
As per specification of CapEx as detailed in Annex 1 of the
Delegated Act on Article 8, the denominator of Taxonomy-eligible
CapEx KPI is equal to additions to tangible and intangible assets of
the financial year 2021 (including IFRS 16 rights of use), considered
before depreciation, amortization and any re-measurement and
including those resulting from revaluations and impairments for
the financial year 2021 and excluding fair value changes. The
denominator also covers additions to tangible and intangible assets
resulting from business combinations that occurred during the
financial year 2021.
At Schneider Electric, total tangible assets resulting from
the above definition represents EUR 581 million, including
EUR 536 million from additions, as disclosed in the note 11 of the
Group financial statements in this URD, and EUR 45 million from
business combinations.
The total covered IFRS 16 rights of use over 2021 represents
EUR 402 million, as disclosed in the note 11 of the Group financial
statements (page 369), including EUR 349 million from additions
and EUR 53 million from business combinations.
The total intangible assets resulting from the above definition
represents EUR 1,782 million. This amount is split as follows:
EUR 333 million from additions, as disclosed in the note 10 of the
Group financial statements (page 367) – this includes EUR 307
millions of capitalized Research and Development (R&D) projects,
as disclosed in the note 10 of the Group financial statements, and
EUR 1,449 million from business combinations.
As per specification of CapEx as detailed in Annex 1 of the
Delegated Act on Article 8, all costs based on IFRS 16 related
to long-term leasing of buildings are eligible. CapEx related to
assets or processes associated with Taxonomy-eligible activities,
including R&D CapEx, were calculated using allocation keys of
eligible turnover per business and operations. In 2021, CapEx for
eligible individual measures was not evaluated, however the Group
is working to implement the reporting process to do so next year.
Calculation of Taxonomy-eligible Operational
Expenditure (OpEx)
Only non-capitalized costs related to Research and Development
(R&D) are reported. OpEx related to building renovation measures,
short-term leases, maintenance and repair and other expenditures
relating to the day-to-day servicing of assets represent less than
EUR 116 million and are therefore considered as non-material for
Schneider Electric business, and therefore excluded from the KPI
calculation.
The denominator of Taxonomy eligible OpEx KPI represents
EUR 1,276 million, corresponding to non-capitalized Research and
Development costs of the Group for EUR 1,232 million presented
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before offsetting with the R&D Tax Credit for EUR 44 million, as
disclosed in the note 4 of the Group financial statements in this
URD (page 365).
Taxonomy eligible OpEx KPI numerator corresponds to R&D OpEx
related to assets or processes associated with Taxonomy-eligible
activities. R&D OpEx dedicated to Taxonomy-eligible activities
were calculated using allocation key of eligible turnover per
business and operations.
Double-counting between offer approach (by nature of technology)
and segment approach (by nature of customers and infrastructure
built such as renewable and low-carbon transport) are removed
before consolidation.
The Group provides below a mapping of Schneider activities
eligible under the current EU Taxonomy in order to provide a better
understanding for its stakeholders.
2.
Activity name as specified
in Annex 1 of the EU Climate
Delegated Act
3.1 Manufacture of renewable
energy technologies
3.5 Manufacture of energy
efficiency equipment for
buildings
3.6 Manufacture of low carbon
technologies
4.15 District heating/cooling
distribution
4.9 Transmission and distribution
of electricity
6.15 Infrastructure enabling low-
carbon road transport and
public transport
6.16 Infrastructure enabling low-
carbon water transport
7.5 Installation, maintenance
and repair of instruments
and devices for measuring,
regulation and controlling
energy performance of
buildings
9.3 Professional services related
to energy performance of
buildings
Activity definition as specified in Annex 1
of the EU Climate Delegated Act
Corresponding business activities
of Schneider Electric
Manufacture of renewable energy technologies,
where renewable energy is defined in Article 2(1)
of Directive (EU) 2018/2001.
• Manufacture of renewable energy
technologies, equipping wind and solar
power generation capacities
Manufacture of energy efficiency equipment for
buildings.
Manufacture of technologies aimed at substantial
GHG emission reductions in other sectors of
the economy, where those technologies are not
covered in activities 3.1 to 3.5 of the Annex.
Construction, refurbishment and operation
of pipelines and associated infrastructure for
distribution of heating and cooling, ending at the
sub-station or heat exchanger.
Construction and operation of transmission
systems that transport the electricity on the extra
high-voltage and high-voltage interconnected
system.
Construction and operation of distribution
systems that transport electricity on high-voltage,
medium-voltage and low-voltage distribution
systems.
Construction, modernization, maintenance and
operation of infrastructure that is required for zero
tailpipe CO2 operation of zero-emissions road
transport, as well as infrastructure dedicated to
transshipment, and infrastructure required for
operating urban transport.
Construction, modernization, operation and
maintenance of infrastructure that is required
for zero tailpipe CO2 operation of vessels or the
port’s own operations, as well as infrastructure
dedicated to transshipment.
• Building management systems
(except fire safety and access control)
• Power metering systems for buildings
• Smart monitoring and regulation of
electricity or heat in buildings, such as
thermostats and controls for lighting
systems
• Cooling systems
• Manufacture of variable speed drives
• Manufacture of medium voltage switchgear
SF6-free technology
• Control, measurement and supervision
systems for heat and cold networks
• Equipment and projects for the
construction of transmission and
distribution infrastructure
• Services for the operation of transmission
and distribution infrastructure
• Communication and control technologies
for the controllability and observability of
the electricity system, such as advanced
automation software
• Electric vehicles charging stations and
supporting grid reinforcement technologies
• Electrical infrastructure for urban and
suburban public transport
• Port infrastructure for shore-side electrical
power to vessels at berth and electrification
and efficiency of ports’ operations
Installation, maintenance and repair of
instruments and devices for measuring, regulation
and controlling energy performance of buildings.
• Service plans related to building
management and power metering systems
in buildings
Professional services related to energy
performance of buildings.
• Technical consultations such as energy
audits, simulations and trainings
• Energy management services
• Energy performance contracts
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Chapter 2 – Sustainable development
2.7 Methodology and audit of indicators
2.7.3 Sustainability Accounting Standard (SASB)
Correspondence table
Topic
Accounting metric
Category
Unit of measure
Code
Energy
Management
Hazardous
Waste
Management
(1) Total energy consumed
(2) percentage grid electricity
(3) percentage renewable
Amount of hazardous waste generated, percentage
recycled
Number and aggregate quantity of reportable spills,
quantity recovered
Quantitative
Quantitative
Gigajoules (GJ)
Percentage (%)
Metric tons (t),
Percentage (%)
Number,
Kilograms (kg)
RT-EE-130a.1
RT-EE-150a.1
RT-EE-150a.2
Number of recalls issued, total units recalled
Number
RT-EE-250a.1
Product Safety
Quantitative
Total amount of monetary losses as a result of legal
proceedings associated with product safety
Percentage of products by revenue that contain IEC
62474 declarable substances
Reporting
currency
Percentage (%)
by revenue
Product
Life cycle
Management
Percentage of eligible products, by revenue, that meet
ENERGY STAR® criteria
Quantitative
Revenue from renewable energy-related and energy
efficiency-related products
Reporting
currency
Description of the management of risks associated with
the use of critical materials
Discussion
and Analysis
n/a
RT-EE-250a.2
RT-EE-410a.1
RT-EE-410a.2
RT-EE-410a.3
RT-EE-440a.1
Materials
Sourcing
Business
Ethics
Description of policies and practices for prevention of:
(1) corruption and bribery and
(2) anti-competitive behavior
Discussion
and Analysis
n/a
RT-EE-510a.1
Total amount of monetary losses as a result of legal
proceedings associated with bribery or corruption
Total amount of monetary losses as a result of legal
proceedings associated with anticompetitive
behavior regulations
Number of units produced by product category
Quantitative
Quantitative
Reporting
currency
Activity metrics
Number of employees
Quantitative
Number
RT-EE-510a.2
RT-EE-510a.3
RT-EE-000.A
RT-EE-000.B
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Response/ Data/ Reference
The following KPIs covers our measured energy consumption (about 81% of Group energy consumption):
(1) 3,889,318 GJ (1,080,366 MWh)
(2) 37.0% (399,564 MWh)
(3) 58.3% (629,844 MWh)
Topic
Energy
Management
2.
Hazardous waste generated: 8,549 tons.
Hazardous waste channeled according to Schneider Electric expectations: 8,549 tons.
Zero reportable spills in 2021, therefore no recovered quantity to report.
14 product recalls have been issued in 2021. Schneider Electric has an Offer Safety Alert (OSA) process to alert the
relevant Line of Business and other interested parties as soon as it is suspected that customers’ health or property safety
may be put at risk by Schneider products, solutions, or projects. The Offer Safety Alert Committee (OSAC) is a permanent
corporate committee that oversees and regulates the management of OSA. Its mission is to ensure all OSA are managed
with the due diligence and urgency to minimize safety risks to customers. Its independent, multi-discipline nature allows
the OSAC to make decisions in our customers’ best interest.
No material loss at the Group level.
Around 60 to 70% of our products (by turnover) contain IEC 62474 substances (which covers 37 worldwide regulations
and about 160 substance families). With the current information collected from our supply chain, we manage to cover
nearly all substances and regulations. Information disclosed for our Green Premium products covers these substances.
More details on Green Premium in section 2.4.3 “Green offers” page 156.
This metric is not relevant at global level as it is only applicable in US and Canada. Revenues derived from ENERGY STAR
UPS are included in our Impact Revenues measure (see below).
Schneider Electric measures “Impact revenues” (previously “Green revenues”), ie revenues coming from offers that
bring energy, climate, or resource efficiency to our customers, while not generating any significant harmful impact to the
environment. In 2021, 71% of Group revenues qualify as Impact revenues. The Group aims to grow its Impact revenues to
80% by 2025 as part of SSI 2021-2025.
Details regarding our sustainable procurement practices are provided in section 2.2.11 “Sustainable relations with
suppliers” page 117, in particular our Vigilance plan, Conflict Minerals and cobalt programs. When the country of origin
is known to be in the conflict zone, 100% of the smelters and refiners were verified conformant. Therefore, the Group has
no reason to believe that any conflict minerals the Group sourced, have directly or indirectly financed or benefitted armed
conflict in the covered countries.
The Group is exposed to fluctuations in energy and raw material prices, in particular steel, copper, aluminum, silver, lead,
nickel, zinc and plastics. The Group has implemented certain procedures to limit exposure to rising non-ferrous and
precious raw material prices. The Purchasing departments of the operating units report their purchasing forecasts to the
Corporate Finance and Treasury department. Purchase commitments are hedged using forward contracts, swaps and, to
a lesser extent, options.
As stated in its Trust Charter and Anti-Corruption Code of Conduct, Schneider Electric is committed to comply with all
applicable laws and regulations, such as the OECD’s Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions, the US Foreign Corrupt Practices Act (FCPA), the UK Bribery Act, and the French
Sapin II law. Schneider Electric applies a zero-tolerance policy towards corruption and other unethical business practices
and considers that “doing things right” is a key value-creation driver for all its stakeholders. We count on our employees
and third parties to promote business integrity. A thorough description of our policies and practices is provided in sections
‘Prohibit any Form of Corruption” and “Require Third-Party Integrity” of the Trust Charter.
Hazardous
Waste
Management
Product Safety
Product
Life cycle
Management
Materials
Sourcing
Business
Ethics
No material losses.
No material losses.
A breakdown of revenues by activity is provided in business model page 20 and page 404.
128,384 (spot 2021 year-end headcount, excluding supplementary workforce).
More workforce statistics in section 2.7.2 “Social Indicators” page 232.
Activity metrics
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Chapter 2 – Sustainable development
2.7 Methodology and audit of indicators
2.7.4 Task-force for Climate Related Financial Disclosure (TCFD)
correspondance table
Climate Change has been clearly identified as crucial to both Schneider Electric’s internal and external stakeholders during the various
materiality assessments that took place in 2014, 2017 and 2020. It is also one of the pillars of the Group’s Code of Conduct (Trust Charter).
Overall, transformations linked to climate change are a source of opportunities for Schneider Electric, the main risk being to fail leading
by example and thereby lose traction with customers, investors, new talents and collaborators in the company. Concrete climate-related
programs to either grab opportunities, or mitigate risks are deployed every 3 to 5 years in our Schneider Sustainability Impact (SSI) and
complement the Group’s Climate Pledge – our short-term (2025), mid-term (2030) and long-term (2040, 2050) objectives, aligned with a
1.5°C trajectory. We present below our main climate-related disclosures in line with TCFD recommendations.
Recommended
Disclosure
CDP Climate Change
& URD 2021 references
Brief description (please refer to CDP Climate Change response and other sections of this
Universal Registration Document for further details)
1. Governance: Disclose the organization’s governance around climate-related risks and opportunities.
1. a) Describe the
board’s oversight of
climate-related risks and
opportunities.
1. b) Describe
management’s role in
assessing and managing
climate-related risks
and opportunities.
CDP – C1.1b
URD – chapter 2 (2.1.4;
2.3.1); chapter 3 (3.1.4)
CDP – C1.2, C1.2a
URD – chapter 2 (2.1.6,
2.3.1)
The process for designing a new Schneider Sustainability Impact program (SSI)
includes a sustainability risks and opportunities assessment (including climate),
which leads to the design of concrete transformation initiatives to align the company
on the challenges identified. The risks and opportunities are then monitored and
managed on a continuous basis. Several governance bodies are involved in this
process:
• The Board of Directors has oversight of climate-related issues notably through
its Human Resources & CSR Committee. This Committee has 6 Director
members who report to the Board of Directors, and reviews Schneider’s CSR
strategy, SSI performance and the Group’s positioning vs. its peers.
• The Executive Committee has a dedicated Group Sustainability Committee,
which gathers 6 Executive Committee members (1 level below the Chairman
& CEO) and is chaired by the Chief Strategy & Sustainability (Chairman of the
Committee). This Committee meets two to three times a year and decides on the
sustainability strategy and validates the SSI and carbon pledge.
• The SSI Steering Committee was formed in 2020 to propose precise and
measurable transformation programs for the 2021 – 2025 SSI, which were then
submitted to the Group Sustainability Committee for approval.
• The Sustainability Department coordinates the overall sustainability strategy of
the Group and rollout of action plans.
• A Carbon Committee is in charge of continuously assessing climate-related
risks and opportunities, steering the Group carbon pledge and proposing a
strategy and management plan to the Group Sustainability Committee.
Additionally, environmental transformations are driven by a network of leading
experts in various environmental fields such as eco-design, energy efficiency,
circular economy, or CO2. Environment leaders coordinate a network of more than
600 managers responsible for the environmental management of sites, countries,
product design and marketing.
Read more in section 2.3.1 “Climate governance” page 128.
2. Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities in the organization’s businesses,
strategy and financial planning where such information is material.
2. a) Describe the
climate-related risks
and opportunities the
organization has identified
over the short, medium,
and long term.
2. b) Describe the impact
of climate-related risks
and opportunities on the
organization’s business,
strategy, and financial
planning.
CDP – C2.1a, C2.2a,
C2.3, C2.3a, C2.4, C2.4a
URD – chapter 2 (2.1.6,
2.3.1)
CDP – C2.3a, C2.4a,
C3.1, C3.2, C3.2a, C3.3,
C3.4, C3.4a
URD – Chapter 2 (2.3)
The growing demand for greener, low-carbon products and services creates a
strong business opportunity for Schneider Electric. The Group is uniquely positioned
to grab these opportunities because it acts on both sides of the equation:
• The solutions Schneider Electric brings to the market are directly linked to
activities to mitigate, adapt, and improve humanity’s resilience to climate change;
• At the same time, Schneider Electric acts to reduce its end-to-end CO2 footprint,
aiming for a net-zero CO2 supply chain by 2050, with precise steps for 2025,
2030 and 2040.
In 2021, 71% of the Group revenues qualify as Impact revenues, following Schneider
Electric’s definition, meaning revenues from offers that bring energy, climate, or
resource efficiency to customers, while not generating any significant harmful
impacts to the environment. The Group aims to grow its Impact revenues to 80%
by 2025. Additionally, maintaining the best offers on the market for greener,
more efficient products and services that support the transition to a low-carbon
economy needs adapted investments in Research and Development in the short
term. Schneider Electric invest about 5% of its annual revenues in R&D each year.
It is estimated that more than 90% of its innovation projects contribute to solutions
contributing to climate change mitigation.
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Recommended
Disclosure
CDP Climate Change
& URD 2021 references
Brief description (please refer to CDP Climate Change response and other sections of this
Universal Registration Document for further details)
2. a) and 2. b) (continued)
Schneider Electric has identified the following main climate-related risks:
CDP – C3.2, C3.2a
URD – chapter 2 (2.3)
2. c) Describe the
resilience of the
organization’s strategy,
taking into consideration
different climate-related
scenarios, including a 2°C
or lower scenario.
2.
• Failure to meet 1.5°-aligned GHG reduction emissions targets: missing its
decarbonization commitments could trigger greater financial costs than
anticipated for Schneider due for instance to locked-in emissions of assets with
long operating lifetime or long-term leases, or reputational impacts and loss of
trust from customers investors and employees.
Inadequate evolution of the supply chain footprint: volatility of energy and
commodity prices as well as regulation strengthening will generate increasing
and volatile operating and investment costs along Schneider’s value chain,
impacting both Schneider’s expenditures and those of its suppliers. This can
translate into an increase of the cost of goods sold and reduced margins.
•
• Transition risks: given the relatively low level of the Group’s Scope 1 and 2 carbon
emissions, future carbon pricing regulations would have rather indirect impacts,
resulting in increased supply chain costs, especially regarding the purchase of
raw materials and manufactured components containing metals and plastics.
• Workplace disruptions: extreme weather events, floods, droughts, and other
climate impacts will increasingly put pressure onto supply chains. Shortages
of all kinds can translate directly into revenue loss (missed orders), increased
costs (urgent shipping), and increased working capital requirements (stock
management). Extreme events can also cause damage to property and assets.
To further tie climate-related issues to financial planning, Schneider Electric
successfully launched the first-ever sustainability-linked convertible bonds, linked
to 3 SSI targets including the objective to save and avoid 800 million tons CO2 on
customers’ end by 2025, since 2018.
Read more in section 2.3.1 “Climate governance” page 128 and 2.3.2 “Roadmap towards a
1.5°C climate trajectory” page 130..
Schneider Electric has a dedicated Strategy Prospective & External Affairs SVP
attached to the Chief Strategy & Sustainability Officer, in charge of climate and
environment scenario analysis. Several scenarios to 2050 were developed in 2019,
which included critical reviews of the geopolitical landscape, commodity and
resources availability, economic and financial evolutions, climate sensitivity and
evolving policies, energy transition pathways and technology developments, among
others, with consequences quantified, looking at ten regions and a number of
sectors individually, framing the business landscape in which Schneider operates.
In 2021, Schneider Electric published a set of scenarios exploring the feasibility of
a 1.5°C trajectory in a report called “Back to 2050”, demonstrating that a net-zero
carbon future, aligned with IPCC’s 1.5°C scenarios, is still possible, and the Group
is uniquely positioned to embark its ecosystem onto an inclusive, zero-carbon
transition.
Key findings are regularly cross-checked with new publications, particularly the
ones from the International Energy Agency, BNEF, the IRENA, among others.
Governance is well in place, under the leadership of the Chief Strategy &
Sustainability Officer, and both short- and long-term analysis are shared internally
and used to inform strategic priorities across business and operations.
As part of the analysis, the Group identified that a growing demand for greener, low-
carbon products and services creates a strong business opportunity for Schneider
Electric. Key takeaways from the analysis is the dominant role of:
• Electrification: the world is becoming more electric, with demand growing
potentially up to 3x by 2050;
• Digitization: with the increase in connectivity, complemented by real-time
information and competitive computing capabilities, digital technologies play
a major role in reaching decarbonization targets while augmenting economic
productivity, notably around efficiency in energy and resource use and
circularity, as well as increased resiliency and security.
All these findings, and their potential financial impact on its business have helped
the Group to fine-tune key development areas that will allow its active contribution
to the low-carbon transition, enabling notably the development of its sustainability
portfolio of offers.
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Chapter 2 – Sustainable development
2.7 Methodology and audit of indicators
Recommended
Disclosure
CDP Climate Change
& URD 2021 references
Brief description (please refer to CDP Climate Change response and other sections of this
Universal Registration Document for further details)
3. Risk Management Disclose how the organization identifies, assesses, and manages climate-related risks.
CDP – C2.1, C2.1a,
C2.1b, C2.2, C2.2a
URD – chapter 2 (2.1,
2.3)
CDP – C2.1, C2.2
URD – chapter 1 (1.7),
chapter 2 (2.1, 2.3)
CDP – C2.1, C2.2
URD – chapter 1 (1.7),
chapter 2 (2.1, 2.3)
3. a) Describe the
organization’s processes
for identifying and
assessing climate-related
risks.
3. b) Describe the
organization’s processes
for managing climate-
related risks.
3. c) Describe how
processes for identifying,
assessing, and managing
climate-related risks
are integrated into the
organization’s overall risk
management.
Environment and climate-related risks are included in Schneider’s unique risk
taxonomy (more details in section 2.3.1.3 Risk management, page 129). Risks are
identified and assessed at Group level through interviews with experts and leaders,
run by the Internal Audit Department and the Group Risk Management Department
each year. In 2021, around 40 of the Group’s top managers were interviewed in
addition to board members. In addition, a materiality analysis is conducted by the
Sustainability department every 3 years to identify and prioritize material ESG issues
through engagement with various stakeholders.
The different governance bodies involved in the definition and monitoring of
Schneider’s Sustainability roadmap and programs (SSI), and in particular the
Carbon committee, are in charge of defining strategic mitigation programs in
response to the risks and opportunities identified. Strategic programs defined
at Group level are then cascaded into business divisions down to the sites for
implementation and are monitored through our digital platform EcoStruxure™
Resource Advisor. Performance against those programs is tracked and published
quarterly in the Schneider Sustainability Impact (SSI), and annually in the Schneider
Sustainability Essentials (SSE) and URD. Each program of the SSI has a dedicated
pilot in charge of driving the transformation and is sponsored at the Senior Vice
President and Executive Committee level to ensure management control
and oversight.
Climate adaptation risks are also studied and mitigated at site level for our industrial
sites. Our Property Damage and Business Interruption program, inspired from
ISO 22301 standard, maps substantive risks of financial impact on the business,
including asset destruction (buildings, equipment, inventories) and profit loss due
to business interruption. An example of a risk analyzed at site level is flooding risks.
Risk analysis of industrial sites includes an analysis of interdependencies, study
of alternative supply, and estimation of time to recover in case of damage, etc.
Typically, all critical industrial sites are externally audited onsite at least every
two years.
In addition, an Integrated Management System (IMS) covers the Group’s main
plants, distribution centers, and large offices, and hosts ISO 14001, ISO 50001, ISO
9001, and OSHAS 18000/ISO 45001 ––– management systems. Each site is audited
periodically, either externally by Bureau Veritas (every three years), or internally.
With suppliers, sustainability risks (including natural and climate-related hazards),
are embedded into Supplier Risk Assessment. This process enables to define
risk mitigation action plans with suppliers, as well as prioritize double sourcing
strategies. Leveraging external data providers, the Group monitors events across
10,000 nodes (such as ports and critical supplier locations) to shorten reaction time
when events occur and minimize business impact.
At present, the impact of climate-related matters is not material to the Group’s
financial statements.
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Recommended
Disclosure
CDP Climate Change
& URD 2021 references
Brief description (please refer to CDP Climate Change response and other sections of this
Universal Registration Document for further details)
4. Metrics and Targets Disclose the metrics and targets used to assess and manage relevant climate-related risks and
opportunities where such information is material.
4. a) Disclose the metrics
used by the organization
to assess climate-related
risks and opportunities in
line with its strategy and
risk management process.
4. b) Disclose Scope 1,
Scope 2, and if
appropriate, Scope 3
greenhouse gas (GHG)
emissions, and the related
risks.
4. c) Describe the targets
used by the organization
to manage climate-related
risks and opportunities
and performance
against targets.
CDP – C4.2, C4.2a,
C4.2b, C9.1
URD – chapter 2 (2.1,
2.3, 2.6, 2.7, 2.8)
CDP – C6.1, C6.2, C6.3,
C6.5
URD – chapter 2 (2.3,
2.7, 2.8)
Each year, Schneider Electric measures and discloses transparently its end-to-
end carbon footprint (Scope 1, 2 and 3) and obtains a “limited assurance” from an
independent third party verifier on all figures. The carbon footprint of the Group
helps to pinpoint and understand the magnitude of climate-related risks and
opportunities, and is also used to monitor progress. Scope 3 emissions represent
more than 99% of the Group’s carbon footprint, of which 87% are due to the use
phase and the products’ end of life, and around 11% come from the purchase of
raw materials, equipment, and services. Emissions induced, saved, and avoided
by Schneider’s products and services during their use phase and end-of-life are
also quantified. Key metrics over the last four years (from publication year) on GHG
emissions are published page 230 of this document.
2.
CDP – C4.1, C4.1a,
C4.1b, C4.2, C4.2a,
C4.2b
URD – chapter 2 (2.1,
2.3, 2.6, 2.7)
Emissions calculations are done with GHG Protocol methodology. The carbon
footprint methodology is compliant with ISO 14069 principles. The results are
calculated in tons of CO2 equivalent, taking into account all greenhouse gases
included in the Kyoto Protocol.
The Group has launched several concrete programs aiming at either directly or
indirectly reducing GHG emissions, under the Climate and Resources pillars of
its 2025 strategy. These programs are presented under Schneider Sustainability
Impact (SSI) and Schneider Sustainability Essentials (SSE) 2021-2025 programs
in pages 63 to 65 of this document. These programs cover the performance of the
Group’s operations (such as energy efficiency, renewable electricity procurement,
fleet electrification), suppliers (such as The Zero Carbon Project, green materials or
sustainable packaging) and customers (Green Premium offers, SF6-free alternative
offers, CO2 savings and avoidance quantification on customer’s end thanks to
EcoStruxure™).
The overall performance of the SSI represents 20% in the short-term incentives
for 64,000+ employees worldwide (collective share). The Schneider Sustainability
External and Relative Index (SSERI), which measures Schneider’s performance in 4
major ESG external ratings (CDP Climate Change, Vigeo Eiris, DJSI and EcoVadis),
also impacts 25% of the long-term incentives (LTI) for 2,300+ top leaders.
In addition, Schneider is committed to embed a carbon pricing of EUR 30-130
/metric ton (depending on time horizons) in strategic supply chain and R&D
decisions, to assess the performance and resiliency of operations as well as to
assess whether the investment and reduction efforts are in line with the cost of
CO2 externality.
Schneider Electric is a signatory of the Business Ambition for 1.5°C initiative aimed
at setting Greenhouse Gas (GHG) emissions reduction targets in line with the global
effort to limit warming to 1.5°C.
Group short to medium-term targets:
• Before 2025, demonstrate that Schneider Electric is carbon positive together with
its customers and partners, thanks to CO2 savings delivered by EcoStruxure™;
• On the Group’s operations (scope 1 and 2): be carbon neutral by 2025 (allowing
CO2 offsets) and net-zero CO2 emissions by 2030;
• On indirect emissions (scope 3) in its supply chain and with customers: reduce
emissions by -35% by 2030 (versus 2017), by actively engaging suppliers to
accelerate their climate strategy, by sourcing greener materials and by proposing
more efficient solutions to its customers.
The Group’s 2030 targets (net-zero CO2 emissions on scope 1 and 2, and -35% on
scope 3) have been validated 1.5°C-aligned by the Science-Based Target initiative
in 2019.
Group long-term targets
• Become carbon neutral on the Group’s full end-to-end footprint by 2040 (scope
1, 2, and 3), 10 years ahead of 1.5 °C trajectory. This means that all Schneider
Electric’s products will be carbon neutral in 2040;
• Engage with suppliers to move towards a net-zero CO2 supply chain by 2050.
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Chapter 2 – Sustainable development
2.7 Methodology and audit of indicators
2.7.5 Independent third party’s report on consolidated non-financial
statement presented in the management report
To the General Assembly,
In our quality as an independent third party, accredited by the
COFRAC under the number n° 3-1681 (scope of accreditation
available on the website www.cofrac.fr), and as a member of the
network of one of the statutory auditors of your entity (hereinafter
“entity”), we conducted our work in order to provide a conclusion
expressing a limited level of assurance on the compliance of the
consolidated non-financial statement for the year ended 31st
December, 2021 (hereinafter the “Statement”) with the provisions
of Article R. 225-105 of the French Commercial Code (Code
de commerce) and on the fairness of the historical information
(whether observed or extrapolated) provided pursuant to 3° of
I and II of Article R. 225-105 of the French Commercial Code
(hereinafter the “Information”) prepared in accordance with the
entity’s procedures (hereinafter the “Guidelines”), included in the
management report pursuant to the requirements of articles
L. 225 102-1, R. 225-105 and R. 225-105-1 of the French
Commercial Code (Code de commerce).
Conclusion
Based on the procedures performed, as described in “Nature and
scope of the work”, and on the elements we have collected, we did
not identify any material misstatements that would call into question
the fact that the consolidated non-financial statement is not
presented in accordance with the applicable regulatory requirements
and that the Information, taken as a whole, is not presented fairly in
accordance with the Guidelines, in all material respects.
Preparation of the non-financial performance statement
The absence of a generally accepted and commonly used framework
or established practices on which to base the assessment and
measurement of information allows for the use of different, but
acceptable, measurement techniques that may affect comparability
between entities and over time.
Therefore, the Information should be read and understood with
reference to the Guidelines, the significant elements of which are
presented in the Statement.
Limitations inherent in the preparation of the Information
The information may be subject to uncertainty inherent in the state
of scientific or economic knowledge and the quality of external
data used. Certain information is sensitive to the methodological
choices, assumptions and/or estimates made in preparing it and
presented in the Statement.
The entity’s responsibility
It is the responsibility of the Board of Directors to:
• select or establish appropriate criteria for the preparation of the
Information;
• prepare a Statement in accordance with legal and regulatory
requirements, including a presentation of the business model, a
description of the main non-financial risks, a presentation of the
policies applied with regard to these risks as well as the results
of these policies, including key performance indicators;
• and to implement the internal control procedures it deems
necessary to ensure that the Information is free from material
misstatement, whether due to fraud or error.
The Statement has been prepared in accordance with the entity’s
procedures, the main elements of which are presented in the
Statement (or which are available on request at the entity’s
head office).
•
Responsibility of the independent third party
On the basis of our work, our responsibility is to provide a report
expressing a limited assurance conclusion on:
•
the compliance of the Statement with the requirements of article
R. 225-105 of the French Commercial Code;
the fairness of the information provided in accordance with
article R. 225 105 I, 3° and II of the French Commercial Code,
i.e., the outcomes, including key performance indicators, and
the measures implemented considering the principal risks.
As it is our responsibility to form an independent conclusion on the
Information as prepared by management, we are not permitted
to be involved in the preparation of the Information, as this could
compromise our independence.
However, it is not our responsibility to comment on :
•
the entity’s compliance with other applicable legal and
regulatory requirements, in particular the French duty of care
law and anti-corruption and tax avoidance legislation;
the compliance of products and services with the applicable
regulations.
•
Regulatory provisions and applicable professional standards
The work described below was performed in accordance with the
provisions of articles A. 225-1 et seq. of the French Commercial
Code, as well as with the professional guidance of the French
Institute of Statutory Auditors (“CNCC”) applicable to such
engagements and with ISAE 3000(1).
Independence and quality control
Our independence is defined by the requirements of article
L. 822-11-3 of the French Commercial Code and the French Code
of Ethics (Code de déontologie) of our profession. In addition,
we have implemented a system of quality control including
documented policies and procedures regarding compliance
with applicable legal and regulatory requirements, the ethical
requirements and French professional guidance.
Means and resources
Our verification work mobilized the skills of eight people and took
place between October 2021 and March 2022 on a total duration
of intervention of about twenty-three weeks.
We conducted several interviews with the people responsible for
the preparation of the Statement.
Nature and scope of the work
We planned and performed our work taking into account the risks
of material misstatement of the Information.
In our opinion, the procedures we have performed in the exercise
of our professional judgment enable us to provide a limited level of
assurance:
• we obtained an understanding of all the consolidated entities’
activities and the description of the principal risks associated;
• we assessed the suitability of the criteria of the Guidelines with
respect to their relevance, completeness, reliability, neutrality
and understandability, with due consideration of industry best
practices, where appropriate;
• we verified that the Statement includes each category of social
and environmental information set out in article L. 225 102 1 III of
the French Commercial Code;
• we verified that the Statement provides the information required
under article R. 225-105 II of the French Commercial Code,
where relevant with respect to the principal risks, and includes,
where applicable, an explanation for the absence of the
information required under article L. 225-102-1 III, paragraph 2
of the French Commercial Code;
(1) ISAE 3000 – Assurance engagements other than audits or reviews of historical financial information
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•
and assessed the data collection process to ensure the
completeness and fairness of the Information;
for the key performance indicators and other quantitative
outcomes that we considered to be the most important
presented in Appendix 1 , we implemented:
− analytical procedures to verify the proper consolidation of
the data collected and the consistency of any changes in
those data;
− tests of details, using sampling techniques, in order to verify
the proper application of the definitions and procedures
and reconcile the data with the supporting documents. This
work was carried out on a selection of contributing entities
and covers between 14% and 49% of the consolidated data
relating to the key performance indicators and outcomes
selected for these tests (18% of worked hours, 21% of
headcount, 28% of energy consumption, 32% of total waste
generated, 49% of hazardous waste generated, 14% of water
consumption);
• we assessed the overall consistency of the Statement based on
our knowledge of all the consolidated entities.
We believe that the work carried out, based on our professional
judgement, is sufficient to provide a basis for our limited assurance
conclusion; a higher level of assurance would have required us to
carry out more extensive procedures.
2.
Paris-La Défense, 11 March 2022
French original signed by:
Independent third party
EY & Associés
Eric Mugnier
Partner, Sustainable Development
• we verified that the Statement presents the business model
and a description of principal risks associated with all the
consolidated entities’ activities, including where relevant
and proportionate, the risks associated with their business
relationships, their products or services, as well as their policies,
measures and the outcomes thereof, including key performance
indicators associated to the principal risks;
• we referred to documentary sources and conducted interviews to
− assess the process used to identify and confirm the principal
risks as well as the consistency of the outcomes, including
the key performance indicators used, with respect to the
principal risks and the policies presented, and
− corroborate the qualitative information (measures and
outcomes) that we considered to be the most important
presented in Appendix 1; concerning certain risks (anti-
corruption policy, cybersecurity, products safety, raw
materials scarcity), our work was carried out on the
consolidating entity, for the others risks, our work was carried
out on the consolidating entity and on a selection of entities:
Uniflair (Italy), Execution Stezzano (Italy), SEII Stezzano
Galileo M&L V (Italy), Transfo Services Chateaubourg
(France), Master TECH (France), Schneider Electric France,
Schneider Electric Mexico;
− concerning the indicators of the Schneider Sustainability
Impact (SSI) and Schneider Sustainability Essentials (SSE),
tests of details, using sampling techniques, in order to verify
the proper application of the definitions and procedures and
reconcile the data with the supporting documents, except for
indicators SSI 6, SSI 12, SSE 12, SSE 23. Depending on the
indicators, the selected sample ranges between 15 % and
100 % of the consolidated data;
• we verified that the Statement covers the scope of consolidation,
i.e. all the consolidated entities in accordance with article L.
233-16 of the French Commercial;
• we obtained an understanding of internal control and
risk management procedures the entity has put in place
Appendix 1: The most important information
Quantitative Information (including key performance indicators)
Qualitative Information (actions or results)
Social Information
Five Schneider Sustainability Impact (SSI) indicators and eleven
Schneider Sustainability Essentials (SSE) indicators related to
health and safety, equity, diversity and inclusion, creating equal
opportunities and living up to Schneider Electric principles of trust.
Other indicators:
• Headcount (including by gender), hires and departures,
• Number of training hours,
• Medical incident rate, lost-time accident and lost-time days rate,
occupational illnesses frequency rate.
Environmental Information
The five Schneider Sustainability Impact (SSI) indicators and eleven
Schneider Sustainability Essentials (SSE) indicators related to climate,
resources efficiency and environment.
Other indicators:
• Weight of generated and recovered waste, per waste category,
• Water and energy consumption, per energy source,
• Sulfur hexafluoride (SF6) consumption and related leaks,
• Full greenhouse gases emissions, as per GHG Protocol guidance
(scope 1, scope 2 market-based, scope 2 location-based, all
scope 3 categories),
• Volatile Organic Compounds (VOC) emissions.
Societal Information
Two Schneider Sustainability Impact (SSI) indicators and three
Schneider Sustainability Essentials (SSE) indicators related to ethics
and development, harnessing the power of all generations and
empowerment of local communities.
Results of policies related to health and safety at work, equity
diversity and inclusion, well-being at work, talent acquisition and
retention.
The results of the policies related to:
• Environmental management,
• Greenhouse gases emissions,
• Natural resources and raw materials management,
• Pollution prevention,
• Biodiversity management.
The results of policies related to cybersecurity and data protection,
product safety, harnessing the power of all generations and
empowerment of local communities.
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Chapter 2 – Sustainable development
2.8 Indicators
In this section:
2.8.1 Environmental and climate indicators
2.8.2 Social indicators
2.8.3 Societal indicators
226
232
240
2.8.1 Environmental and climate indicators
2.8.1.1 Key performance indicators from the Schneider Sustainability Impact and
Schneider Sustainability Essentials
Schneider Sustainability Impact
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Climate
1. Grow Schneider Impact revenues(3)
2. Help our customers save and avoid millions of tonnes of CO2
emissions
Baseline(1)
2021 progress(2)
2025 Target
70%
263M
71%
347M
3. Reduce CO2 emissions from top 1,000 suppliers’ operations
0%
1%
Resources
4.
Increase green material content in our products
5. Primary and secondary packaging free from single-use plastic
and using recycled cardboard
7%
13%
11%
21%
80%
800M
50%
50%
100%
Schneider Sustainability Essentials
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Climate
1. Decarbonize our operations with Zero-CO2 sites
2. Substitute relevant offers with SF6-Free medium voltage
technologies
3. Source electricity from renewables
4.
Improve CO2 efficiency in transportation
Resources
5.
Improve energy efficiency in our sites
6. Grow our product revenues covered by Green Premium™
7. Switch our corporate vehicle fleet to electric vehicles
8. Deploy local biodiversity conservation and restoration programs in
our sites
9. Give a second life to waste in ‘Waste-to-Resource’ sites
Baseline(2)
2021 progress(3)
2025 Target
30
0%
80%
0%
0%
77%
1%
0%
120
51
38%
82%
-1%
6.6%
78%
7.7%
0%
126
150
100%
90%
15%
15%
80%
33%
100%
200
10. Avoid primary resource consumption through ‘take-back at end-
157,588
203,881
420,000
of-use’ since 2017 (metric tons)
11. Deploy a water conservation strategy and action plan for sites in
0%
9%
100%
water-stressed areas
(1) Generally, the 2020 performance serves as a baseline for SSI and SSE programs, except SSI #1, SSI #10, SSE #5, SSE #14, and SSE #20, which are measured against
a 2019 baseline to mitigate COVID-19 impacts.
(2) Each year, Schneider Electric obtains a “limited” level of assurance on methodology and progress from an independent third party verifier for all the SSI and SSE
indicators (except SSI #6, SSI #7, SSI #+1, SSE #12 and SSE #23, in 2021), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on
page 224). Please refer to page 206 for the methodological presentation of each indicator. The 2021 performance is also discussed in more details in each section of
this report.
(3) For the reporting requirements under the European Taxonomy Regulation, please refer to page 68 and page 216.
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The indicators below concern all entities where Schneider Electric has operational control, and integrated in the Group for more than 2 years.
Within the Group perimeter, given the complexity to obtain robust and meaningful data, in particular for small leased offices, estimated
coverage indicators are provided for each reporting table.
All Group industrial and logistics sites, in addition to certain major tertiary sites are covered. As per the Group’ s Environmental Policy, all
industrial and logistics sites with more than 50 people and tertiary sites with more than 500 people must be ISO 14001 certified within 2 years
after their acquisition or creation.
A difference can, therefore, be noted with respect to the scope of financial consolidation. Comments on the indicators are included in the
corresponding chapters.
2.
2.8.1.2 Perimeter and Environmental Management Systems (ISO 14001)
Indicators
ISO 14001 certified Sites(1)
Industrial and logistics sites
Tertiary sites
% of sites certified ISO 14001(2)
Units
#
#
#
%
2021
244
211
33
87%
2020
232
212
20
90%
2019
241
220
21
89%
2018
253
230
23
86%
(1) ISO 14001 certification is systematic for all large industrial, logistics and tertiary sites within two years of acquisition. A reduction in the number of ISO 14001 certified
sites usually results from sites closing during the year.
(2) the percentage of sites certified ISO 14001 is calculated based on waste generation from certified sites vs total sites, as the majority of sites - in number - are small
leased offices where certification is not relevant.
2.8.1.3 Group site consumption, emissions and waste
Materials
GRI
301-2
301-2
Indicators
SSI #4 – Green material content in our
products(1)
SSI #5 – Primary and secondary packaging
free from single-use plastic using recycled
cardboard(2)
SSE #6 – Product revenues covered by Green
Premium™
SSE #10 – Metric tons of avoided primary
resource consumption through ‘take-back at
end-of-use’
SSE #15 – Reduce scrap from safety units
recalled
Units
%
%
%
2021
11%
21%
2020
7%
13%
2019
UP
UP
2018
UP
UP
78%
77%
55%
46%
metric tons
46,293
60,149
53,867
43,572
kg
4,024
4,202
UP
UP
2021 audited indicators. UP = Unpublished
(1) SSI #4 coverage is about 30% of purchased materials volume for our products
(2) SSI #5 coverage is about 87% of total packaging purchases
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Chapter 2 – Sustainable development
2.8 Indicators
Waste
GRI
Indicators
Estimated coverage (% waste generation)
Units
%
2021
87%
2020
90%
2019
89%
2018
86%
306-3
Total waste generated
metric tons
136,816
125,292
152,171
154,940
Total waste generated/Turnover
metric tons/
4.73
4.98
5.60
6.02
million €
306-3
Non-hazardous waste generated
metric tons
128,267
of which reused or recycled
metric tons
115,550
117,607
113,211
143,149
145,391
136,316
137,500
306-5
306-2
306-3
306-2
306-3
306-3
of which incinerated with energy recovery
metric tons
of which landfilled or incinerated without
energy recovery
Non-hazardous waste reduction(1)
Share of non-hazardous waste recovered or
reduced(2)
Hazardous waste generated
Hazardous waste channeled according to
Schneider Electric expectations(3)
Hazardous waste generated/Turnover
Hazardous waste intensity reduction against
2017(4)
# and aggregate quantity of reportable spills
Quantity of spills recovered
Number of significant fines (> EUR 10,000)
related to environmental or ecological issues
metric tons
metric tons
%
metric tons
metric tons
metric tons/
million €
%
kg
kg
#
6,964
5,753
13,667
95.9%
8,549
8,549
0.30
-30%
0
NA
0
4,396
6,833
7,891
7,729
96.5%
7,685
7,667
3,265
95.3%
9,022
8,727
0.30
0.33
-27%
-21%
0
NA
0
UP
UP
UP
UP
UP
9,549
9,239
0.37
-12%
UP
UP
UP
2021 audited indicators. UP = Unpublished. NA = Not Applicable
(1) Waste reduction measures specific, targeted projects which reduce/avoid waste. Examples of waste reduction projects include creating a closed-loop system for
pallets between the site and the supplier, or reducing packaging waste from incoming shipments. Normal operational decreases of waste due to reduced activity do
not count as waste reduction.
(2) Non-hazardous waste recovered or reduced is calculated as the ratio between waste reused/recycled, incinerated with energy recovery and reduced, divided by the
total non-hazardous waste generated and waste reduced. The Group’s waste recovery% without waste reduction is: 95.5%, 96.3%, and 95.2% for 2021, 2020, and
2019, respectively.
(3) ‘Schneider Electric expectations’ for hazardous waste means: 1) Waste meets/exceeds all local legal requirements for handling/treatment, and either 2a) waste is
neutralized of its hazardous nature, or b) waste is handled/treated using the feasibly best available technique which provides the most environmentally beneficial
impact.
(4) 2017 hazardous waste intensity was 0.42 metric tons per million euros of revenues.
Biodiversity
GRI
304-1
Indicators
Number of sites owned, leased or managed
in or adjacent to protected areas and/or key
biodiversity areas (KBA)(1)
of which industrial sites or distribution centres
of which office buildings
2021 audited indicators. UP = Unpublished.
Units
#
#
#
2021
260
107
153
2020
UP
UP
UP
2019
UP
UP
UP
2018
UP
UP
UP
(1) Within 1-kilometre radius, 21% of our sites are in proximity of a protected area as defined by the IUCN and 3% of our sites are in proximity of a key biodiversity area
(defined by IBAT as either “Alliance for Zero Extinction (AZE)” or ”Important Bird and Biodiversity Areas (IBAs)).
Atmospheric pollutions
GRI
Indicators
Estimated coverage (% VOC emissions)
305-7
305-7
VOC emissions (estimates)
VOC/Turnover (estimates)
2021 audited indicators.
Units
%
kg
2021
90%
2020
90%
2019
90%
2018
90%
501,455
440,442
653,502
664,352
kg/million €
17.3
17.5
24.1
25.8
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Water
GRI
Indicators
Estimated coverage (% water withdrawal)
Total water withdrawals
303-3-a-i
of which surface water
303-3-a-ii
of which groundwater
303-3-a-v
of which third party sources
of which other sources(1)
303-3
Water withdrawn for cooling and restituted w/o
impact(2)
Units
2021
86%
2020
88%
2019
88%
2018
86%
2,072,263
1,928,032
2,554,428
2,700,674
19,156
513,631
17,461
17,074
17,993
452,602
501,163
490,563
1,507,606
1,446,391
2,021,168
2,163,276
31,870
879,602
11,578
15,023
28,842
780,201
880,276
1,376,335
2.
%
m3
m3
m3
m3
m3
m3
303-3
Water withdrawal/Turnover(3)
m3/million €
71.7
303-3-b
303-1
Water withdrawal intentisy reduction vs 2017(3)
Total water withdrawals from areas with water
stress(4)
SSE #11 – Sites in water-stressed areas with a
water conservation strategy and related action
plan(4)
2021 audited indicators. UP = Unpublished.
%
m3
%
-33.6%
930,603
8.5%
76.5
-29.1%
UP
UP
94.1
-12.9%
UP
UP
105.0
-2.8%
UP
UP
(1) Other water sources include sources such as grey water and rainwater
(2) Water withdrawn for cooling and restituted without impact (i.e. returned back to the source with only a very small temperature change) are measured separate from
total water withdrawals and excluded from performance calculations
(3) excluding water withdrawn for cooling restituted without impact. The 2017 baseline value is 108.0 m3/million €
(4) Schneider Electric’s ISO 14001 sites are designated as water stress sites based on the World Resources Institute’s Aqueduct Water Risk Atlas. Using Baseline Water
Stress criteria, a site is designated as water stressed if it is located in an area classified as ‘high’ or ‘extremely high’ stress.
Energy
GRI
Indicators
Estimated coverage (% energy consumption)
ISO 50001 Certified Sites
Units
%
#
2021
99%
140
2020
100%
150
2019
100%
153
2018
100%
168
302-1,
302-4
302-1,
302-4
302-1,
302-4
Estimated total energy consumption
MWh
1,325,491
1,204,381
1,442,841
1,540,831
of which measured energy consumption
MWh
1,080,366
1,021,539
1,192,508
1,258,081
of which estimated energy consumption for
sites out of reporting perimeter(1)
MWh
245,125
182,842
250,333
282,750
Estimated total energy consumption/turnover
MWh/million €
45.9
47.9
53.1
59.9
Estimated total energy productivity
€/MWh
21,803
Estimated total improvement in energy
productivity vs 2005(2)
Estimated total energy consumption from
renewable sources
%
75.7%
MWh
670,287
Estimated total percentage of renewable energy
%
50.6%
MWh
655,204
%
49.4%
20,924
68.6%
21,335
71.9%
19,070
53.7%
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
Estimated total energy consumption from
non-renewable sources
Estimated total percentage of non renewable
energy
Measured energy consumption by source
grid electricity
purchased renewable electricity(3)
self generated renewable electricity
district heating
fuel oil
gas
coal
renewable fuel and heat
Measured renewable electricity generated on
site and sold back to the grid
MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh
132,771
612,752
15,861
33,830
6,967
148,969
406,200
585,495
402,363
12,464
27,602
6,941
9,161
75,253
8,595
584,721
257,356
5,388
84,263
9,672
276,954
251,377
298,319
320,153
0
1,231
2,558
0
1,155
2,734
0
1,778
2,149
0
1,916
1,370
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Chapter 2 – Sustainable development
2.8 Indicators
GRI
Indicators
SSE #3 – Measured electricity sourced from
renewables
Estimated energy consumption by source(1)
grid electricity
purchased renewable electricity(3)
self generated renewable electricity
district heating
fuel oil
gas
coal
renewable fuel and heat
2021 audited indicators. UP = Unpublished.
Units
%
MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh
2021
82%
2020
80%
2019
50%
2018
30%
148,720
40,443
0
5,491
797
49,674
0
0
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
UP
(1) For sites below size thresholds for mandatory environmental reporting, energy consumption by source is estimated by multiplying site surface (m2) with energy
intensity ratios (kWh/m2) measured in larger sites. For sites located in countries with country-level renewable electricity contracts, 100% of the estimated electricity
consumption of the site is counted as renewable, as such supply contracts cover all sites within a country.
(2) 2005 estimated energy productivity is 12,408 € per MWh
(3) Renewable electricity reported here includes renewable electricity purchased through Power Purchasing Agreements (PPA) or green tariffs, and electricity covered
by Energy Attributes Certificates (EAC). The 2021 EAC account for 43.5% of total purchased renewable electricity measured.
Greenhouse gas (GHG)
GRI
Indicators
Estimated coverage (% GHG emissions)
Estimated Total scopes 1 and 2 GHG emissions
(market-based)(1)
305-1,
305-2
305-5
305-4
Units
%
2021
99%
2020
100%
2019
100%
2018
100%
TCO2e
294,051
287,865
437,293
570,431
Absolute reduction vs base year (2017)(2)
%
-57.9%
Total scopes 1 and 2 per euro turnover
TCO2e/
million €
10.2
-58.8%
11.4
-37.4%
16.1
-18.4%
22.2
305-1
Direct (scope 1) GHG emissions(1)
of which fuel oil
of which gas
of which coal
of which vehicle fleet
of which SF6 emissions(3)
SF6 leakage rate
Target SF6 leakage rate
of which estimated scope 1 GHG emissions
of sites out of reporting perimeter(4)
305-2
Energy indirect (Scope 2) GHG emissions(1)
of which grid electricity (market-based)
of which renewable electricity
(market-based)(5)
of which district heating
of which estimated scope 2 GHG emissions
of sites out of reporting perimeter (market-
based)(4)
Other relevant indirect (scope 3) GHG emissions
Absolute variation vs base year (2017)(2)
Total scope 3 per euro turnover
305-3
305-5
305-4
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
%
%
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
140,936
142,658
180,751
189,870
4,520
56,776
0
62,683
6,104
0.10%
0.19%
10,853
153,115
66,692
701
14,714
71,008
4,451
52,197
0
73,229
7,557
0.14%
0.25%
5,224
5,748
61,733
0
91,169
13,601
0.24%
0.25%
8,499
6,626
65,631
0
94,287
13,010
0.26%
0.25%
10,316
145,207
256,542
380,561
70,145
134,122
258,975
694
795
219
11,550
62,818
35,020
86,605
39,541
81,825
TCO2e 68,901,866
2.2%
%
TCO2e/
million €
2,384
65,921,222
74,256,245
70,765,244
-2.2%
2,620
10.2%
2,733
5.0%
2,750
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Strategic Report
GRI
305-3
Indicators
Units
2021
2020
2019
2018
Other relevant indirect (scope 3 upstream) GHG
emissions
TCO2e
8,237,192
6,966,062
8,610,739
8,903,363
1. Purchased goods and services
2. Capital Goods
3. Fuel- and energy-related activities (not
included n Scope 1 or Scope 2)
4. Transportation of good paid by the Group
5. Waste generated in operations
6. Business travel
7. Employee commuting
305-3
Other relevant indirect (scope 3 downstream)
GHG emissions
TCO2e
TCO2e
TCO2e
7,278,733
6,137,388
7,388,926
7,605,700
62,876
53,167
63,863
55,151
64,398
67,993
42,760
616,519
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e 60,664,674
152,359
30,778
497,761
753,253
31,872
33,304
39,710
139,054
146,723
157,405
58,955,160
65,645,506
61,861,881
2.
64,000
72,775
816,888
44,000
140,000
160,000
9. Transportation of goods not paid by the
Group
11. Use of sold products(6)
12. End-of-life treatment of sold products
SSE #1 – Number of Zero-CO2 sites
Saved GHG emissions thanks to sold products
and services(7)
Avoided GHG emissions thanks to sold products
and services(7)
SSI #2 – Cumulative CO2 saved and avoided
thanks to sold products and services since
2018(7)
TCO2e
485,877
371,159
449,507
462,695
TCO2e 55,224,389
4,954,408
TCO2e
#
51
TCO2e 49,708,425
53,998,500
60,447,799
57,158,727
4,585,501
4,748,200
4,240,459
30
UP
UP
46,964,497
50,994,695
57,501,195
TCO2e 33,930,803
28,605,883
39,406,306
39,849,166
TCO2e 346,960,969
263,321,741
187,751,362
97,350,361
2021 audited indicators. UP = Unpublished.
Note than Schneider Electric carbon footprint has been updated in 2021 to reflect changes in Global Warming Potential (GWP) values for SF6 gaz published by the
IPCC in its 6th Assessment Report. Previous GWP value of 23,500 (AR5) has been updated to 25,200 (AR6) for 2021 and historical emissions and impacts scope 1
and scope 3 CO2 equivalent emissions.
(1) The CO2 emissions linked to energy consumption are considered estimates, because the indirect emissions are calculated on the conversion factors per country.
Scope 1 and 2 CO2 emissions from energy consumption are quantified using energy reporting data, in MWh of energy per energy source.
Scope 2 emissions are quantified with the market-based methodology and the location-based methodology, following GHG Protocol scope 2 guidance. Location-
based scope 2 electricity emissions on energy reporting perimeter are equal to 327,653 tCO2e (audited value), and 413,683 tCO2e on total estimated perimeter. Total
scope 1 and 2 (location-based) CO2 emissions (energy, vehicles, and SF6 emissions in tCO2e) on full perimeter are equal to 554,619 tCO2e (audited value).
Electricity emissions calculated with market-based and location-based methodologies should not be added. Market-based electricity emissions are calculated using
residual electricity emissions factors (source AIB, 2017) for European countries, and average country emission factors for other countries (IEA, 2017);
(2) In 2017, direct (scope 1) emissions, energy indirect (scope 2) emissions and other relevant indirect (scope 3) emissions amounted to 187,477, 511,602 (699,079 total
scope 1+2) and 67,413,029 TCO2e respectively;
(3) 13 sites in 2021, 14 sites in 2020 and 2019; 16 sites in 2018;
(4) CO2 emissions for sites not included in the energy reporting perimeter are estimated based on site surface and average CO2 intensity of sites per region from our
energy reporting.
(5) Greenhouse gas emissions from renewable electricity are due to CH4 and N2O emissions of renewable electricity from biomass. In addition, biogenic CO2 emissions
are due to the consumption of renewable electricity from biomass, and are not reported in scope 2 emissions following GHG protocol guidance. These emissions are
of 17,215 tCO2b in 2021.
(6) Emissions of products sold by Schneider Electric during the year of reporting, and cumulated over their lifetime. These emissions are due to electricity consumption of
products, either due to internal consumption or due to heat dissipation (Joule effect);
(7) CO2 savings are calculated for sales of the reporting year and cumulated over the offers’ lifetime. Emissions are calculated as the difference between emissions with
Schneider Electric’s offer and emissions in the reference situation. The methodology distinguishes “saved” and “avoided” emissions: saved CO2 emissions correspond
to brownfield sales that enable reduction of global CO2 emissions compared to previous years, and avoided CO2 emissions correspond to greenfield sales that enable
a limitation of the increase of global emission. Each year, new methodologies are developed, and CO2 saved and avoided from those offers is quantified for sales that
occurred since 2018, and counted fully in the performance of the reporting year. In 2021, out of the 83.6 MTCO2e saved and avoided, 7.8 MT (9%) came from 2018-
2020 backdated performance.
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Chapter 2 – Sustainable development
2.8 Indicators
2.8.2 Social indicators
2.8.2.1 Key performance indicators from the Schneider Sustainability Impact and
Schneider Sustainability Essentials
Schneider Sustainability Impact
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Baseline(1)
2021 progress(2)
2025 Target
Trust
Equal
6.
7.
8.
Strategic suppliers who provide decent work to their employees
--
In progress
Level of confidence of our employees to report unethical conduct
81%
+0pts
100%
+10pts
Increase gender diversity in hiring (50%), front-line management
(40%) and leadership teams (30%)
41/25/24
41/27/26
50/40/30
Generations
10. Double hiring opportunities for interns, apprentices and fresh
4,939
x1.25
x2.00
graduates
Schneider Sustainability Essentials
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Baseline(1)
2021 progress(2)
2025 Target
Trust
12. Deploy a ‘Social Excellence’ program through multiple tiers of
--
In progress
suppliers(3)
13. Train our employees on Cybersecurity and Ethics every year
14. Decrease the Medical Incident rate
90%
0.79
96%
0.65
15. Reduce scrap from safety units recalled
4,202
4,024
--
100%
0.38
2,101
16. Be in the top 25% in external ratings for Cybersecurity
Top 25%
Top 25% Top 25%
performance
17. Assess our suppliers under our ‘Vigilance Program’
Equal
18. Reduce pay gap for both females and males
19.
Increase subscription in our yearly Worldwide Employee Share
Ownership Plan (WESOP)
20. Pay our employees at least a living wage(4)
21. Multiply the number of employee-driven development
interactions on the Open Talent Market
Generations
22. Support the digital upskilling of our employees
23. Provide access to meaningful career development programs
for employees during later stages of their career
24.
Increase our employee engagement level
374
1,203
F: -1.73%
M: 1.00%
-1.61%
1.11%
4,000
<1%
53%
99%
5,019
41%
--
69%
61%
60%
100%
100%
x2.1
74%
In progress
71%
x4
90%
90%
75%
(1) Generally, the 2020 performance serves as a baseline for SSI and SSE programs, except SSI #1, SSI #10, SSE #5, SSE #14, and SSE #20, which are measured against
a 2019 baseline to mitigate COVID-19 impacts.
(2) Each year, Schneider Electric obtains a “limited” level of assurance on methodology and progress from an independent third party verifier for all the SSI and SSE
indicators (except SSI #6, SSI #7, SSI #+1, SSE #12 and SSE #23, in 2021), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on
page 224). Please refer to page 206 for the methodological presentation of each indicator. The 2021 performance is also discussed in more details in each section of
this report.
(3) SSE #12 ‘Social Excellence’ program currently under development and will be deployed in 2023.
(4) As of 31st December 2021, 99.99% of eligible employees, i.e. all Schneider employees treated as permanent workforce, were paid the living wage. The few remaining
gaps were closed early 2022 so that all in scope Schneider Electric employees are now paid the living wage. The final KPI result for 2021 was rounded to 100%.
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Indicators below have a Group scope.
HR data cover about 93% of the workforce from consolidated companies (excluding 6,300 AVEVA and OSIsoft employees and 5,100
employees from companies not integrated to the Group’s information system tools). According to our extra-financial reporting principles,
8,000 employees from new acquisitions (including RIB Software and L&T) are also excluded from 2021 figures. Total Group average workforce
(including supplementary employees) for all entities is 166,025 employees.
The calculation methodology of the absenteeism rate varying from one country to another, in this domain Schneider Electric communicates at
Group level the number of lost days and the number of hours worked (Safety data). The precisions on the variations of scope are contributed at
the end of the tables below and indicated by footnotes. The comments on the indicators are given in the corresponding chapters and indicated
in the tables below.
2.
2.8.2.2 General disclosure
Spot workforce at year-end
GRI
Indicators
Units
2021
2020
2019
2018
Spot workforce at year-end including
supplementary employees*(1)
Spot workforce at year-end excluding
supplementary employees*
Open-ended contract
Fixed-term contract
year-end HC
147,468
147,349
150,828
151,019
year-end HC
128,384
128,770
135,307
137,534
%
%
87.2%
12.8%
87.3%
12.7%
18,548
23.7%
87.3%
12.7%
15,456
21.6%
87.2%
12.8%
13,480
20.6%
Spot supplementary employees* at year-end
year-end HC
19,084
102-8
Share of temporary personnel (fixed-term
contracts and supplementary personnel*)
%
24.0%
2021 audited indicators.
* Supplementary employees are employees under short-term contracts to supplement short-term activities and work peaks.
(1) Based on data tracked in our global TalentLink tool, excluding supplementary employees, recent acquisitions, entities not integrated to the Group’s information system
tools and interns (128 384 employees, i.e. around 87% of employees excluding supplementary employees);
Workforce composition(1)
GRI
102-8
401-1
401-1
Indicators
Organization of working time
Full-time
Part-time
Hires(2)
Departures(2)
Layoffs
Resignations
Other (retirement, end of contract, etc.)
401-1
Total employee turnover
Voluntary turnover
102-8
Breakdown of workforce by region
Asia-Pacific
Western Europe
North America
Rest of the world
102-8
Breakdown of workforce by country (the most
significant countries)
United States
France
China
Mexico
India
Germany
Russian Federation
Spain
Indonesia
United Kingdom
Australia
Units
2021
2020
2019
2018
%
%
HC
HC
HC
HC
HC
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
98%
2%
27,189
22,877
7,114
11,944
3,819
18.1%
9.5%
31%
27%
26%
16%
14%
11%
11%
10%
8%
4%
3%
3%
3%
3%
2%
97%
3%
19,536
20,840
5,626
8,729
6,485
16.1%
6.9%
32%
27%
24%
17%
13%
12%
11%
10%
10%
3%
3%
3%
3%
3%
2%
98%
2%
25,131
23,381
8,190
10,600
4,591
17.6%
8.0%
35%
26%
20%
19%
13%
11%
10%
7%
10%
3%
6%
3%
3%
3%
2%
98%
2%
23,228
24,036
7,680
11,595
4,761
17.0%
8.4%
32%
27%
22%
20%
13%
11%
10%
7%
10%
3%
6%
3%
3%
3%
2%
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Chapter 2 – Sustainable development
2.8 Indicators
GRI
Indicators
Brazil
102-8
Annual change in workforce by country (the
most significant countries)
Units
%
2021
1%
United States
France
China
Mexico
India
Germany
Russian Federation
Spain
Indonesia
United Kingdom
Australia
Brazil
102-8
Women in our workforce
Overall workforce
Board of Directors
Executive Committee
All management (junior, middle, leadership)
Leadership teams
Front line management
Middle management
Junior management
Management positions in revenue-
generating functions
Sales
STEM
White collar
Men
Women
Blue collar
Men
Women
102-8
Breakdown of workforce by age(3)
< 30 years
30-50 years
> 50 years
102-8
Breakdown of workforce by seniority
< 5 years
5/14 years
15/24 years
25/34 years
> 34 years
102-8
Breakdown of workforce by function
Marketing
Sales
Services and projects
Support
Technical
Industrial
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
5%
-2%
8%
7%
8%
9%
0%
6%
-3%
-9%
-2%
-8%
34%
42%
44%
33%
26%
27%
23%
37%
16%
21%
19%
51%
66%
34%
49%
66%
34%
23%
59%
18%
40%
34%
16%
7%
3%
4%
13%
19%
24%
10%
31%
2020
2%
-5%
-2%
-2%
36%
-3%
-9%
-51%
-5%
-9%
-6%
-7%
-12%
33%
42%
38%
23%
24%
25%
23%
34%
UP
19%
21%
50%
67%
33%
50%
67%
33%
23%
59%
18%
46%
33%
13%
6%
2%
4%
13%
19%
29%
7%
28%
2019
2%
-4%
-2%
-2%
1%
0%
-1%
-5%
2%
-7%
-2%
-5%
-6%
33%
42%
25%
23%
23%
24%
22%
33%
UP
19%
20%
51%
67%
33%
49%
68%
32%
22%
59%
18%
46%
33%
13%
6%
2%
4%
13%
19%
30%
6%
28%
2018
2%
-3%
-7%
0%
-4%
-3%
-3%
-10%
1%
0%
-1%
-10%
-7%
32%
38%
25%
UP
22%
UP
UP
UP
UP
UP
UP
51%
68%
32%
49%
68%
32%
23%
59%
18%
44%
36%
12%
6%
2%
3%
12%
19%
28%
6%
32%
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Strategic Report
2021 audited indicators. UP = Unpublished.
(1) Based on data tracked in our global TalentLink tool, excluding supplementary employees, recent acquisitions, entities not integrated to the Group’s information system
tools and interns (128,384 employees, i.e. around 87% of employees excluding supplementary employees);
(2) Acquisitions/disposals and supplementary employees not taken into account in the calculation;
(3) Excluding data for the US and Canada due to local regulation of non-disclosure of birth data of employees.
Indicators
Units
2021
2020
2019
2018
Hires(1)(2)
GRI
401-1
Breakdown by type of contract
Permanent contract
Fixed-term contract
401-1
Breakdown by category
White collar
Blue collar
401-1
Breakdown by gender
Men
Women
401-1
Breakdown by age(3)
< 30 years
30-50 years
> 50 years
401-1
Breakdown by region
Asia-Pacific
Western Europe
North America
Rest of the world
GRI
401-1
Breakdown by type of contract
Open-ended contract
Fixed-term contract
401-1
Breakdown by category
White collar
Blue collar
401-1
Breakdown by Region
Asia-Pacific
Western Europe
North America
Rest of the world
2.
%
%
%
%
%
%
%
%
%
%
%
%
%
64%
36%
34%
66%
59%
41%
64%
34%
2%
34%
13%
42%
12%
62%
38%
19%
81%
59%
41%
UP
UP
UP
26%
9%
55%
10%
70%
30%
37%
63%
60%
40%
UP
UP
UP
44%
12%
29%
15%
63%
37%
39%
61%
62%
38%
UP
UP
UP
35%
16%
33%
16%
%
%
%
%
%
%
%
%
70%
30%
22%
78%
33%
9%
47%
10%
72%
28%
20%
80%
28%
8%
50%
14%
79%
21%
33%
67%
30%
8%
44%
18%
80%
20%
35%
65%
23%
10%
42%
24%
2021 audited indicators. UP = Unpublished.
(1) Based on data tracked in our global TalentLink tool, excluding supplementary employees, recent acquisitions, entities not integrated to the Group’s information system
tools and interns (128 384 employees, i.e. around 87% of employees excluding supplementary employees);
(2) Acquisitions/disposals and supplementary employees not taken into account in the calculation;
(3) Excluding data for the US and Canada due to local regulation of non-disclosure of birth data of employees.
Layoffs (1)(2)
Indicators
Units
2021
2020
2019
2018
(1) Based on data tracked in our global TalentLink tool, excluding supplementary employees, recent acquisitions, entities not integrated to the Group’s information system
tools and interns (128 384 employees, i.e. around 87% of employees excluding supplementary employees);
(2) Acquisitions/disposals and supplementary employees not taken into account in the calculation.
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Chapter 2 – Sustainable development
2.8 Indicators
Resignations(1)(2)
GRI
401-1
Indicators
Breakdown by seniority
< 1 year
1/4 years
5/14 years
15/24 years
25/34 years
> 34 years
Units
2021
2020
2019
2018
%
%
%
%
%
%
41%
36%
19%
4%
1%
0%
41%
39%
16%
3%
1%
0%
40%
34%
17%
5%
2%
2%
39%
37%
20%
3%
1%
0%
(1) Based on data tracked in our global TalentLink tool, excluding supplementary employees, recent acquisitions, entities not integrated to the Group’s information system
tools and interns (128 384 employees, i.e. around 87% of employees excluding supplementary employees);
(2) Acquisitions/disposals and supplementary employees not taken into account in the calculation.
Departures(1)(2)
GRI
401-1
Indicators
Breakdown by gender
Men
Women
401-1
Breakdown by age(3)
< 30 years
30-50 years
> 50 years
401-1
Breakdown by region
Asia-Pacific
Western Europe
North America
Rest of the world
Units
2021
2020
2019
2018
%
%
%
%
%
%
%
%
%
62%
38%
50%
38%
12%
31%
15%
41%
13%
63%
37%
UP
UP
UP
30%
17%
39%
14%
62%
38%
UP
UP
UP
34%
15%
35%
16%
61%
39%
UP
UP
UP
33%
16%
34%
18%
UP = Unpublished.
(1) Based on data tracked in our global TalentLink tool, excluding supplementary employees, recent acquisitions, entities not integrated to the Group’s information system
tools and interns (128 384 employees, i.e. around 87% of employees excluding supplementary employees);
(2) Acquisitions/disposals and supplementary employees not taken into account in the calculation;
(3) Excluding data for the US and Canada due to local regulation of non-disclosure of birth data of employees.
Average supplementary employees*
GRI
102-8
Indicators
Breakdown by category
White collar
Blue collar
102-8
Breakdown by region
Asia-Pacific
Western Europe
North America
Rest of the world
Units
2021
2020
2019
2018
%
%
%
%
%
%
8%
92%
67%
16%
6%
11%
10%
90%
64%
15%
7%
14%
* Supplementary employees are employees under short-term contracts to supplement short-term activities and work peaks.
2.8.2.3 Dialog and social relations
GRI
Indicators
Coverage
102-41
Employees represented by
Unions
Works Council
403-1
102-41
102-41
Health and Safety Committee
Number of collective agreements
Employees covered by collective bargaining
agreements
Units
%
%
%
%
#
%
2021
92%
80%
63%
81%
150
72%
2020
85%
66%
70%
89%
78
69%
11%
89%
64%
16%
7%
13%
2019
92%
64%
68%
86%
81
70%
7%
93%
62%
18%
8%
11%
2018
90%
67%
68%
86%
138
75%
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2.8.2.4 Health and safety of employees and subcontractors
GRI
Indicator
Number of ISO 45001 sites
Percentage of operational facilities that are ISO
45001 certified
Units
#
%
2021
180
77%
403-2
Number of medical incidents(1)
of which Schneider Electric employees
of which temporary workers
403-2
Number of lost-time accident(1)
of which Schneider Electric employees
of which temporary workers
403-2
Number of fatal accidents
of which Schneider Electric employees
of which temporary workers
#
#
#
#
#
#
#
#
#
186
152
34
96
76
20
2
2
0
2020
184
80%
154
133
21
85
74
11
1
1
0
2019
UP
UP
233
193
40
116
94
22
1
1
0
403-2
SSE #14 Medical Incident Rate(2)
per million
0.65
0.58
0.79
hours worked
of which Schneider Electric employees
per million
0.63
0.58
0.77
hours worked
of which temporary workers
per million
0.73
0.55
0.91
hours worked
403-2
Lost-Time Injury Rate (LTIR)(2)
per million
0.33
0.32
0.39
hours worked
of which Schneider Electric employees
per million
0.32
0.32
0.38
hours worked
of which temporary workers
per million
0.43
0.29
0.50
hours worked
2.
2018
UP
UP
277
225
52
136
105
31
1
1
0
0.94
0.90
1.10
0.46
0.42
0.66
403-2
Lost-Time Day Rate (LTDR)(2)
per million
15.58
13.74
16.69
13.69
hours worked
of which Schneider Electric employees
per million
16.47
14.92
17.69
14.39
hours worked
of which temporary workers
per million
11.00
6.61
10.96
9.54
hours worked
403-2
Number of lost days
of which Schneider Electric employees
of which temporary workers
#
#
#
4,477
3,963
514
3,662
3,412
250
4,909
4,427
482
4,025
3,579
446
403-2
Number of hours worked
# 287,369,013
266,582,055
294,202,028
294,001,927
of which Schneider Electric employees
# 240,649,594
228,742,624
250,235,482
248,633,265
of which temporary workers
# 46,719,419
37,839,431
43,966,546
45,368,662
403-2
Occupational Illness Frequency Rate (OIFR)(2)
per million
0.017
0.019
0.014
0.020
hours worked
of which Schneider Electric employees
per million
0.021
0.022
0.016
0.024
hours worked
of which temporary workers
per million
0.000
0.000
0.000
0.000
hours worked
2021 audited indicators. UP = Unpublished.
(1) Includes business travel, excludes home/workplace travel.
(2) LTIR = Number of incidents with lost days x 1,000,000/number of hours worked. International standard indicator comparable to the accident frequency rate.
LTDR = Number of lost days x 1,000,000/number of hours worked. International standard indicator comparable to the accident severity rate (the latter, however, is
calculated per thousand hours worked). MIR = Number of accidents requiring medical treatment x 1,000,000/number of hours worked.
Occupational Illness Frequency Rate (OIFR) is based on 1 million hours worked (The number of Occupational illness X 1,000,000 Hours/Total Hours Worked).
Note that the Medical Incident Rate (MIR) consists of both medical incidents + Occupational Illnesses and is based on 1 million hours worked.
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Chapter 2 – Sustainable development
2.8 Indicators
2.8.2.5 Talent development and training
GRI
Indicator
Coverage
404-1
404-1
Number of training hours
Average hours of training per person by
category and gender
White collar
Blue collar
Men
Women
404-1
Breakdown of hours by category(1)
White collar
Blue collar
404-2
Employees taking one day training
(7 hours or more)
Breakdown by country
United States
France
China
Mexico
India
Germany
Russian Federation
Spain
Indonesia
United Kingdom
Australia
Brazil
Percentage of the eligible workforce who
received training on anti-corruption practices
SSE #13 – Employees trained every year on
Cybersecurity and Ethics
Breakdown of hours by training type(1)
Health, safety and environment
Technical
Languages
IT
Products, Solutions and Services
Management and Leadership
Personal Development
Functional
Mandatory/Compliance
Supply Chain
Wellbeing
Agile
Total Learning & Development spend(2)
million €
Units
%
2021
91%
2020
90%
2019
92%
2018
87%
#
#
#
#
#
#
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
2,881,627
2,869,111
3,117,348
3,283,492
24.5
25.1
24.0
24.9
23.7
53%
47%
83%
75%
77%
81%
97%
86%
70%
97%
85%
96%
72%
79%
91%
97%
96%
17%
5%
0%
6%
12%
6%
7%
25%
9%
12%
1%
1%
56.8
24.5
25.0
27.5
24.9
24.0
25.1
23.2
27.1
22.9
25.6
23.7
30.5
24.1
28.3
25.6
52%
48%
81%
76%
69%
84%
74%
90%
79%
98%
84%
93%
65%
80%
95%
94%
90%
20%
6%
0%
8%
12%
4%
11%
24%
4%
9%
2%
UP
54%
46%
81%
78%
71%
86%
87%
84%
80%
93%
83%
76%
69%
78%
92%
UP
UP
22%
5%
5%
8%
13%
6%
8%
27%
6%
UP
UP
UP
44.2
52.3
58%
42%
86%
82%
76%
89%
93%
97%
86%
95%
88%
80%
80%
81%
90%
UP
UP
20%
5%
1%
10%
24%
5%
16%
14%
3%
UP
UP
UP
UP
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Strategic Report
GRI
Indicator
Units
2021
Learning & Development cost per employee
€/employee
425.8
2020
356.1
2019
386.6
Breakdown of costs by category(1)
White collar
Blue collar
Breakdown of costs by training type(1)
Products, Solutions and Services
Personal Development
Health, safety and environment
Management and Leadership
Functional
Technical
IT
Languages
Mandatory/Compliance
Supply Chain
Wellbeing
Agile
404-3
Employees having had a performance review(3)
Breakdown by category
White collar
Blue collar
Breakdown by gender
Men
Women
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
64%
36%
12%
6%
31%
13%
15%
9%
6%
2%
0%
4%
1%
1%
98%
76%
26%
71%
29%
52%
48%
10%
10%
39%
12%
9%
10%
3%
1%
1%
5%
0%
UP
98%
75%
25%
72%
28%
68%
32%
28%
5%
9%
18%
12%
4%
11%
13%
0%
UP
UP
UP
98%
76%
24%
72%
28%
2.
2018
UP
72%
28%
21%
19%
15%
14%
11%
6%
3%
3%
0%
UP
UP
UP
96%
76%
24%
73%
27%
2021 audited indicators. UP = Unpublished.
(1) Based on spot workforce at year-end.
(2) Includes Learning and development teams, travel and expenses as well as vendors costs - Sources: Schneider Electric TalentLink Employee data and Procurement
tracking system - Excludes training sold to customers
(3) The data relates to the eligible workforce for Performance interview at 12/31/2021 (TalentLink).
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Chapter 2 – Sustainable development
2.8 Indicators
2.8.3 Societal indicators
Indicators are published on the basis of declarative information submitted by Foundation delegates. It covers 80% of Schneider Electric
employees and highlights the importance of company and employee participation in the Foundation’s approach to involvement towards
local communities. With EUR 19.5 million in 2021, the amount of budget for the Foundation’s actions includes the Foundation’s intervention
budget, the amount of the donations from entities, employees and partners, and the amount of donations in kind.
2.8.3.1 Key performance indicators from the Schneider Sustainability Impact and
Schneider Sustainability Essentials
Schneider Sustainability Impact
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Baseline(1)
2021 progress(2)
2025 Target
Equal
9. Provide access to green electricity to 50 million people
30M
+4.2M
50M
Generations
11. Train people in energy management
281,737
328,359
1M
Schneider Sustainability Essentials
Long-term commitments
aligned to UN SDGs
2021-2025 programs
Baseline(1)
2021 progress(2)
2025 Target
Local
25. Increase the number of volunteering days since 2017
18,469
27,981
50,000
(1) Generally, the 2020 performance serves as a baseline for SSI and SSE programs, except SSI #1, SSI #10, SSE #5, SSE #14, and SSE #20, which are measured against
a 2019 baseline to mitigate COVID-19 impacts.
(2) Each year, Schneider Electric obtains a “limited” level of assurance on methodology and progress from an independent third party verifier for all the SSI and SSE
indicators (except SSI #6, SSI #7, SSI #+1, SSE #12 and SSE #23, in 2021), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on
page 224). Please refer to page 206 for the methodological presentation of each indicator. The 2021 performance is also discussed in more details in each section of
this report.
2.8.3.2 Breakdown of the Foundation’s financial commitments
Indicator
Foundation's intervention budget
Breakdown by program
Training and entrepreneurship
Energy poverty
Raising awareness about sustainable development
Employees’ volunteering/skills-based sponsorship
Emergency
Breakdown by region
Africa & Middle East
America
Asia & Pacific
Europe
Cross countries
Units
€
2021
2020
2019
4,000,000
4,000,000
4,000,000
%
%
%
%
%
%
%
%
%
%
75%
3%
17%
1%
4%
8%
10%
48%
18%
16%
63%
7%
10%
1%
19%
25%
4%
45%
20%
6%
51%
28%
17%
4%
UP
31%
6%
11%
44%
8%
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2.8.3.3 Breakdown of contributions from employees and Schneider Electric entities to
the Foundation’s actions
Indicator
Total financial contribution
From employees
From the Schneider Electric entity
From partners
Units
2021
2020
2019
€
€
€
€
7,045,158
9,287,805
7,715,663
1,121,092
1,454,801
827,682
5,893,925
7,413,102
6,659,701
30,141
419,902
228,280
2.
2.8.3.4 Breakdown of total contributions (Employees, Schneider Electric entities and
Schneider Electric Foundation) to the Foundation’s actions
Indicator
Breakdown by region
Africa & Middle East
America
Asia & Pacific
Europe
Cross countries
Donations in products or services for a partner/project of the Foundation
Number of employees involved in the Foundation’s actions
UP = Unpublished.
2.8.3.5 Total budget for the Foundation’s actions
Units
2021
2020
2019
%
%
%
%
%
€
#
3%
34%
29%
31%
3%
8%
31%
27%
30%
4%
11%
38%
21%
30%
UP
8,444,800
6,927,700
8,062,248
35,000
35,000
35,000
Indicator
Units
2021
2020
2019
Foundation budget, financial contributions and donations in kind
€
19,489,958
20,215,505
19,777,911
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Chapter 3 – How we manage risk at Schneider Electric
We believe a strong resilience is a key element
for sustainable growth, one of our core values.
It includes the way we identify, assess and
manage risks.
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Chapter 3 – How we manage risk at Schneider Electric
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3
How we manage risk
at Schneider Electric
3.
3.1 Definition and objectives
of internal control and
risk management
3.1.1 Definition and objectives
3.1.2 Scope of this report
244
244
244
3.2 Organization and management
244
3.2.1 Group values
3.2.2 General internal control and risk management
principles: our three lines of defense
3.2.3 Governing bodies
244
245
246
3.3 Risk management mechanism
249
3.3.1 One unique risk taxonomy is established to
have a common risk language
3.3.2 Different mechanisms to identify, assess,
and mitigate risks
3.3.3 Each Risk Overseer is in charge of moving
the risk flywheel for his/her respective domain
3.3.4 Risk identification and management
3.4 Key risks
3.5 Insurance
249
250
251
252
254
265
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Chapter 3 – How we manage risk at Schneider Electric
3.1 Definition and objectives of internal control
and risk management
3.1.1 Definition and objectives
3.1.2 Scope of this report
The system is designed to cover the Group, defined as the
Schneider Electric SE parent company and the subsidiaries
over which it exercises exclusive control.
Acquired companies are integrated progressively into the
internal control and risk management systems.
The Group’s internal control and risk management systems
focus on:
• protecting the Group’s value, assets, and reputation;
• identifying and measuring the major risks to which the Group
is exposed;
• anticipating and foreseeing changes in these risks; and
• implementing risk prevention and transfer measures.
The Group’s risk management systems are designed to ensure:
• Risks are properly and timely identified, assessed,
and prioritized;
• Risks and vulnerabilities are properly monitored;
• Risks are efficiently mitigated.
The Group’s internal control procedures are designed to ensure:
• compliance with laws and regulations;
• application of instructions and guidelines issued by Group
Senior Management;
• the proper functioning of the Company’s internal processes;
• the reliability of financial reporting; and
• more generally, internal control helps the Group manage
its businesses, run efficient operations, and use its
resources efficiently.
3.2 Organization and Management
3.2.1 Group values
Resilience as a top value
Hybrid risk management model
Schneider Electric has placed significant importance on resilience
within the values and principles which guide and inspire its actions
and, in particular, its business practice. Indeed, resilience is one of
the fundamental elements of sustainable growth and belongs directly
to the Group’s Sustainability value. All Group entities, along the three
lines of defense described hereafter, are encouraged to:
• Develop a culture promoting resilience for the Group;
• Raise resilience awareness and best practices, within their
scope of work;
• Implement initiatives aimed at increasing the Group resilience,
by decreasing the risk exposure and/or increasing its level
of preparedness.
Schneider Electric uses a hybrid risk management model. It means
that there are Central functions and experts in charge of setting risk
management mechanisms, establishing policies, and other activities,
but that the ownership of the risks belongs to the Business Units and
Operating Divisions who are responsible for deploying the central
framework to manage their risks. The section hereafter (3.2.2) goes
over our three lines of defense and gives more detail about our hybrid
risk management model.
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3.2.2 General internal control and risk management principles:
our three lines of defense
The three lines model
Board of Directors and Audit & Risks Committee
Accountable to stakeholders for organizational oversight
Governing body roles: Integrity, leadership and transparency
3.
Delegation, direction,
resources oversight
Accountability,
reporting
Management
Actions (including managing risk) to achieve organizational objectives
1st line roles:
Business and risk owners,
provide products/services to
customers and manage risk
• Divisions, Business Units
• Zones, Clusters, Countries
2nd line roles:
Global Functions Leaders and
Experts, oversee risks, set
guardrails (policies, process,
control), advise and monitor 1st line
• Cyber Security
• Compliance
• Quality
...
•
Alignment,
communication,
coordination,
collaboration
Internal Audit
Independent assurance
3rd line roles:
Advice on the adequacy and
effectiveness of governance
and risk management
• Global Internal Audit
Corporate culture
Figure 1: The three lines model
1st line of defense: Business and risk owners
Among other responsibilities, Operating Divisions and Business
Units have a duty to preserve good faith and trust. As business
and risk owners, they must:
• Embed risk management into first line processes;
• Execute risk strategy in line with risk appetite and standards;
• Complete risk assessments and provide supporting data;
•
Identify and control risks relating to their own environment,
in compliance with the rules and procedures implemented
and communicated by the Group functional department;
• Design and implement remediation actions.
More specifically, Operating Division and Business Unit
management supplement and adapt the Enterprise Risk
Management framework drafted by the Group management, by
drawing up detailed policies and internal control procedures which
comply with the relevant laws, regulations, and customer practices
in the country they operate, to exercise control more effectively
over risk specific to their local market and culture.
2nd line of defense: Risk Overseers
Risk Overseers and expert Functions
The various Group functional departments and Risk Overseers
assist the Enterprise Risk Management body with the identification
and ranking of risks. Each department defines and rolls out risk
management systems in its activity sector and ensures the
consistency of actions undertaken in the Business Units and
Operating Divisions. It assists all Group entities by facilitating the
sharing of risk management and internal control best practice.
Depending on the risk category, Risk Overseers must:
•
•
Identify and manage adoption of regulatory and
legal standards;
Initiate first risk identification as a base for risk-specific
programs design;
• Own risk-specific policies;
• Define risk-specific processes and controls.
Enterprise Risk Management body
In the current context of an acceleration towards a more complex
and fragmented world, the Group has engaged in a restructuration
of its Enterprise Risk Management body, with the help of experts.
It has started in 2021, with most of the deployment scheduled in
2022. The objective is to strengthen the overall risk management
at Schneider Electric, with a more robust Enterprise Risk
Management to implement and deploy advanced mechanisms,
support the first and second lines of defense, and consolidate and
report to the Executives and the Board of Directors. It will ensure
that the maturity level and effectiveness of the governance and
organization, management systems, processes and controls,
and communication and training will all increase. Engaging in
this journey until 2024, the Group expect to reach optimized
maturity level in the way we develop and maintain a Group risk
appetite framework.
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Chapter 3 – How we manage risk at Schneider Electric
3.2 Organization and Management
A more robust description on the Group internal audit is presented
in section 3.2.3, hereafter.
3rd line of defense: Internal audit
In accordance with professional standards governing this activity,
the internal audit independently assesses the effectiveness of
internal control and risk management procedures given that,
irrespective of how well they are implemented and how strictly
they are deployed, these procedures can only provide reasonable
assurance – and not an absolute guarantee – against all risks.
3.2.3 Governing bodies
The Group’s corporate governance bodies supervise the
development of internal control and risk management systems.
The Audit & Risks Committee has particular responsibility for following
up on the efficiency of internal control and risk management systems
and reports to the Board of Directors.
Board of Directors
The Board is informed about the efficiency of the internal control and risk management systems.
Senior Management
Audit Committee
Follows-up on the efficiency of
internal control and risk management
systems and reports to the board
thereon (see chapter 4, section 4.1.4,
page 300).
Global Finance
Department
Organizing control and ensuring
compliance with procedures.
Responsible for designing and leading the overall internal control system including
the oversight, identification and assessment, and mitigation of risk at Group level
as well as Business Unit level and across key Group functional areas.
Internal Audit
Internal Control
Annual internal audits and control
missions. Embedding risk and control
concerns. Monitoring implementation
of recommendations.
Organizing and monitoring self-
assessment campaigns and the
implementation of set action plans.
Operating Divisions
and business units
Within each business unit, the
management team organizes
control of operations, ensures that
appropriate strategies are deployed
to achieve objectives, and tracks
business performance.
Global Functions
Decision-making and risk
management at corporate level.
Issue, adapt, and distribute policies,
target procedures, and instructions
to units and individuals assigned
to handle specific duties.
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Senior Management
Internal Control department
Senior Management is responsible for designing and leading
the overall internal control system, with support from all key
participants, in particular the Group Internal Audit and Internal
Control departments.
It also monitors the Group’s performance during business reviews
with the Operating Divisions and Global Functions. These reviews
cover business trends, action plans, current results, and forecasts
for the quarters ahead.
Similar reviews are carried out at different levels of the Group prior
to Senior Management’s review.
Internal Audit
The Internal Audit department reports to Senior Management.
It had an average headcount of 18 auditors and 23 regional
internal controllers in 2021. The internal auditors are responsible
for ensuring that, at the level of each Business Unit:
The Internal Control department, which reports to the Reporting
and Consolidation unit, is responsible for, in particular:
• defining and updating the list of Key Internal Controls in close
co-operation with the Global Functions and other subject matter
experts in line with the recommendations of the French Financial
Market Authorities (AMF) reference framework;
• maintaining and leading a network of around 14 local
internal controllers who are responsible for supporting local
management on internal control topics and acting as process
owners for certain key areas such as the chart of authority and
segregation of duties; and
• organizing and monitoring the roll-out of self-assessment
campaigns and implementation of set action plans following
self-assessments.
The team continues to improve the internal control process and
adapt its procedures following the results of self-assessments
and changes in the business environment or organization.
3.
the identification and control of risks is performed;
•
• significant financial, management, and operating information
Global Finance department
is accurate and reliable;
• compliance with laws and regulations and with the Group’s
policies, standards, and procedures is ensured;
• compliance with the instructions of the Chairman & CEO
is ensured;
• acquisition of resources is carried out at a competitive cost,
and their protection is ensured;
• expenses are properly engaged and monitored;
• correct integration and control of acquisitions are ensured.
Annual internal audit and internal control plans are drawn up based
on a combination of a risk-based and audit universe coverage-
based approach. The risk-based dimension is embedding risk
and control concerns identified by Senior Management, taking
into account the results of past audits, the results of Key Internal
Control self-assessments returned by the Business Units, and other
indicators such as the evolution of a set of financial metrics, the
Corruption Perception Index, or the Employees Disengagement
Index. When necessary, the audit plan is adjusted during the year
to include special requests from Senior Management.
After each internal audit, a report is issued setting out the auditors’
findings and recommendations for the Business Unit or Function
audited. The management of audited entities or audited domains
is requested to define for each recommendation an action plan
aiming at implementing corrective actions. Measures are taken
to monitor implementation of the recommendations and specific
follow up audits are conducted if necessary.
Audit reports and the implementation of their recommendations
are distributed to Senior Management. An executive summary is
sent to the Chairperson of the Audit Committee as well as to the top
management. A synthesis of the main takeaways and conclusions
from a selected number of audit missions is presented to the Audit
Committee for each committee session (five times per year).
These reports are subject to regular exchange with the
Group’s auditors.
The Head of Internal Audit has direct access to the Chairperson of
the Audit Committee and meets her on a regular basis throughout
the year.
The Global Finance department is actively involved in organizing
control and ensuring compliance with financial procedures.
Within the department, the Reporting and Consolidation unit plays
a key role in the internal control system by:
• drafting and updating instructions designed to ensure that
statutory and management accounting practices are consistent
throughout the Group and compliant with applicable regulations;
• organizing period-end closing procedures;
• analyzing performance and tracking the achievement of targets
assigned to the Operating Divisions and Business Units.
The Reporting and Consolidation unit is responsible for:
•
•
•
•
the proper application of Group accounting principles
and policies;
the integrity of the consolidation system database;
the quality of accounting and financial processes and data;
training for finance staff by developing and leading specific
seminars on the function; and
• drafting, updating, and distributing the necessary documents
for producing quality information.
The Reporting and Consolidation unit drafts and updates:
• a glossary of terms used by the Reporting and Consolidation
unit, including a definition of each term;
the chart of accounts for reporting;
•
• a Group statutory and management accounting standards
manual, which includes details of debit/credit pairings;
• a Group reporting procedures manual and a system
user’s guide;
• a manual describing the procedures to be followed to integrate
newly acquired businesses in the Group reporting process;
• an intercompany reconciliation procedures manual; and
• account closing schedules and instructions.
The Reporting and Consolidation unit monitors the reliability of data
from subsidiaries and conducts monthly reviews of the various
Business Units’ primary operations and performance.
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3.2 Organization and Management
Within the Global Finance department, the Tax team oversees
tax affairs to provide comprehensive management of these risks.
The Financing and Treasury department is responsible for:
• centralized management of cash and long-term Group
financing;
• centralized management of currency risk and non-ferrous
metals risk;
• monitoring of Group trade accounts receivable risk and
the definition of the credit policy to be implemented;
the distribution of rules for financial risk management and
the security of payments:
− define guidelines and contribute to the definition of
•
Key Internal Control indicators relating to treasury and
credit management,
− review the related risks of complex projects as a subject
matter expert,
− select Group tools for credit, trade, and cash management;
and
•
the annual financial review meetings with the Group companies
to assess the financial structures, financial risk management,
as well as capital allocation.
Procedures for managing financial risk are described in “Key risks”
on page 254.
Global Functions and Operating Divisions
In addition to specific processes or bodies such as the Group
Acquisitions Committee for making and implementing strategic
decisions and centralization of certain functions within the Global
Finance department (see above), Schneider Electric centralizes
certain matters through dedicated Global Functions, thus
combining decision making and risk management at the
corporate level.
A Technology Community, namely the Chief Technology Officers
(CTO) community, grouping all Divisional and Business Unit
Chief Technology Officers as well as key Corporate Technology
Functions involved in Offer Creation & Research, meets on a
regular basis to ensure cross-divisional co-ordination in setting
the strategic direction for innovation and driving end-to-end
architectures, and defining next generation platforms and systems.
Additionally, this community partners closely with the senior
business leaders. This has been done to ensure a simple structure
so that technology can be close to business and to maintain
consistency across all divisions of Schneider Electric.
The Human Resources department is responsible for deploying
and ensuring the application of procedures and compliance with
HR regulations concerning employee development, promoting
diversity, and well-being. The department is also responsible for
establishing guidelines on rewards and compensation, hiring,
on and off boarding, and learning, amongst other human
resources-related duties.
The Procurement department within the Supply Chain Function is
responsible for establishing guidelines concerning the procurement
organization and procedures, relationships between buyers and
vendors, and procedures governing product quality, level of
service, and compliance with environmental and safety standards.
Global Functions and Operating Divisions also issue, adapt,
and distribute policies, target procedures, and instructions to
Business Units and individuals assigned to handle their specific
duties. Global Functions have correspondents who work with the
Internal Control department to establish and update the
Key Internal Controls deployed across the Group.
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3.3 Risk management mechanisms
3.3.1 One unique risk taxonomy is established to have a common
risk language
One of the core assets of the Group risk management practice is a unique risk taxonomy, used by the different domains within the
organization (Sales Regions, Business Units, Global Functions). It is key to ensure all the Group entities speak the same risk language
and collaborate efficiently on decreasing the risk exposure. This document is updated once a year based on the relevance and
characteristics of identified risks in a business context. The taxonomy contains several levels, described in the illustration below.
3.
Each risk is mapped to the pieces of the flywheel (see section 3.3.3, page 251) to ensure there are no gaps in the Group monitoring
and mitigation of the risk universe.
Risk nature
Differentiation between event
triggered risks, strategic risks
and management practice risks
Highest structure of risk for
Executive reporting & visualization
granularity of the Risk Matrix
e.g. Third party screening and
sanctions compliance
Risk category
RISK MATRIX
ENTERPRISE RISK
MANAGEMENT
Accountable risk level: for each
risk type a risk owner is identified
Risk type
Detail available on risk zooms in the
risk matrix
e.g. Export control
Operational risk level, managed
by the domain/function in charge
of the risk
e.g. Supplies from countries
under sanction
Figure 2: Risk taxonomy structure
Risk vector
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3.3 Risk management mechanisms
3.3.2 Different mechanisms to identify, assess, and mitigate risks
The Group recognizes that each risk nature is unique, and therefore requires a unique approach in the way it is identified, assessed,
monitored, and mitigated. The figure below brings a few definitions and examples for each risk nature and shows the parameters that
allow to differentiate them: Expected reward for risk and controllability.
Trend driven risk
Risk resulting from organizational
strategic and operational choices
intended to generate value
Or
Risk resulting from long term business,
market, political and economic disruptions
(e.g. sustainability as a business,
economic cycles)
Controllability
(Ability of org. to reduce
the uncertainties
creating risks)
Management
practice risk
Risk resulting from day-to-day
operations, behaviours and decisions
from constituents
(e.g. P&L management,
Rewards & benefits, IT systems)
Expected reward for risk
(Value for the org. to take on risk)
Rewarded risk
Event triggered risk
Risk originating from uncontrollable
and unavoidable external factors
(e.g. Cyber attacks,
workplace disruptions, frauds)
Unrewarded risk
Figure 3: Three risk nature and their unique approaches
For the trend-driven risks, the objective is to reduce the business
impact cost-effectively and prepare to turn a disrupted environment
into opportunities. We identify, assess, and monitor the risks
through frequent organization leaders and external stakeholders
interviews. This is complemented with specific strategy cadences.
For the event triggered risks, the objective is to reduce the risk
exposure and increase the level of preparedness. Here are
a few examples of the assets used to achieve this goal: crisis
management and business continuity planning, strong policies and
procedures adoption, and continuous risk and incidents monitoring.
For management practice risks, the objective is to avoid or eliminate
occurrences cost-effectively with a risk culture and compliance
model embedded in Operating Divisions, strong policies and
procedures adoption, and an effective set of internal controls.
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3.3.3 Each Risk Overseer is in charge of moving the risk flywheel
for his/her respective domain
Risk taxonomy
Yearly risk reviews
The Group established a unique risk taxonomy to have a common
language with all stakeholders. All risk categories included are
mapped to a Risk Overseer who is responsible for all assets and
processes around the risk flywheel (see figure below). The risk
taxonomy is reviewed once per year, with inputs from the three
lines of defense.
Trust Charter
The Trust Charter is the Group code of conduct. Each section
is mapped to the risk taxonomy and has the goal, among others,
to bring a level of awareness to employees that will contribute to
decreasing the Group risk exposure. See more details about the
Trust Charter in Chapter 2, section 2.2.1.
Policies
A policy is an official statement and process description produced
and supported by the leadership team and states where the
organization stands on important topics or issues. They create the
backbone of an organization and are important for all stakeholders
to enable and reinforce trust. Each Risk Overseer is responsible to
ensure needed policies are written and published. Then, that they
are implemented, communicated, and their implementation is
being monitored. See more details about policies in Chapter 2,
section 2.1.4.4.
Mandatory PMI(1) tasks
The Enterprise Risk Management framework applies not only to its
core and legacy activities, but also to recently acquired companies
as part of the post-acquisition integration process. Trust Standards
are defined to ensure the integration process is addressing risks
and compliance matters, meeting legal obligations, creating a more
standardized back-end, and providing clarity regarding integration
requirements across the portfolio of companies.
Key Internal Controls
The Group uses a set of internal controls that is reviewed and
updated annually, with the feedback of the Risk Overseers
(among others). One of the goals of internal controls is to assess
the effectiveness of the mitigation put in place to address a risk.
For the controls that are risk specific, the outcome of the yearly
self-assessment campaign is twofold: provide a high-level view
of the situation to the top management and Risk Overseers, and
provide action plans to the risk owners to improve their mitigation,
if relevant.
Key risk metrics
Risk metrics are defined to measure the Group risk exposure for
each risk category. They are defined by the Risk Overseers and
reviewed on a regular basis. Defining risk thresholds helps to
foster a risk centric culture and take business decisions based
on risk appetite.
(1) PMI = Post-Merger Integration
3.
The Group’s entities are performing frequent risk reviews.
There are three types:
• Zone or country risk reviews, where the leadership team
and risk owners review the top risks affecting their territory
and legal entities, as well as the mitigation in place.
• Function or risk category reviews, where the leadership team
and Risk Overseers review the risks affecting their domain of
expertise, as well as the mitigation they put in place.
• Consolidated risk reviews, performed by the Audit & Risks
Committee aiming, in particular, to review and assess the
internal control framework and risk management system
effectiveness.
Risk maturity assessments
In a spirit of continuous improvement, Risk Overseers perform
risk maturity self-assessments on a regular basis. It helps drive
constant improvements to the ways in which the risk is managed
within the Group. Among other things, it ensures the Group takes
the right steps towards an optimized risk maturity level including:
• Governance and organization with dynamic resource allocation;
• Management systems are aligned and optimized across all
three lines of defense;
• Processes and controls rely on digital and advanced analytics
to optimized effectiveness and efficiency;
• Communication and training are adapted to specific needs,
with a measured impact.
Risk
Taxonomy
Risk Maturity
Assessment
Trust
Charter
Yearly Risk
Review
Policies
Key Risk
Metrics
Mandatory
PMI Tasks
Key Internal
Controls
Figure 4: Risk flywheel
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3.3 Risk management mechanisms
3.3.4 Risk identification and management
The network of Solution Risk Managers assess the risks and
mitigations related to major projects in conjunction with the subject
matter experts and Tender Managers during the preparation of
offers. Solution Risk Managers then provides a comprehensive,
360-degree view on project risk and mitigations to support the
opportunity approval process.
Risk management by the Legal department
The Legal department oversees the legal affairs and manages the
risks relating to legal matters.
The Financial Risk Insurance team contributes to the internal control
system by defining and deploying a Group-wide insurance strategy,
as defined in “Insurance”, section 3.5 on page 265. The insurance
strategy includes the identification and quantification of the main
insurable risks, the determination of levels of retention, and the
cost benefit analysis of the transfer options. The Risk and Insurance
department also defines, proposes, and implements action plans
to prevent these risks and protect assets.
Risk management by the
Global Security department
The Group’s Global Security department defines corporate
governance regarding loss prevention in the area of willful acts
against property and people.
The Global Security Group Committee was created in 2017, uniting
the Zone Security Leaders. Some of these leaders report directly
to the Global Security department and some to local management
with functional reporting to Global Security. In close co-operation
with the Compliance department and the Risk and Insurance
department, Global Security is involved in assessing the nature
of risk to our people, as well as defining adequate prevention and
protection measures.
General risks at the Group level
The Internal Audit and Group Risk Management departments
conduct interviews to update the list of general risks at Group level
each year. In 2021, around 40 of the Group’s top managers were
interviewed in addition to external financial analysts and Board
members. Since 2016, individualized risk matrices by Operating
Division or by Business Unit have been created.
The risks identified through these interviews are ranked by a risk
score (comprising impact and likelihood of occurrence) and level
of mitigation.
Risk factors related to the Group’s business, as well as procedures
for managing and reducing those risks, are described in “Key
risks”, section 3.4 on page 254. These procedures are an integral
part of the internal control system.
The risk matrix and the analysis of changes from one year to the
next contribute to the development of an internal audit plan for the
following year. Around two-thirds of the risk categories identified in
the Group’s risk matrix are audited by the Internal Audit department
over a period of five to six years to assess action plans for
managing and reducing these risks.
Local risks related to the Company’s
business at the Business Unit level
Local risks related to the Company’s business are managed first
and foremost by the Business Units in liaison with the Operating
Divisions, based on Group guidelines (particularly via the Key
Internal Controls). Each subsidiary is responsible for implementing
procedures that provide an adequate level of internal control.
The Operating Divisions implement cross-functional action plans
for key risks related to the Company’s business identified as being
recurrent in the Business Units or as having a material impact at the
Group level, as appropriate. The internal control system is adjusted
to account for these risks.
Risks related to the Solutions business
The Solutions Risk Management department defines and implements
principles and tools designed to manage the contractual (such as
limitation of liabilities), technical (such as technical discrepancy
versus customer specifications), and financial risks (such as factors
that may impact margin at solution execution phase).
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3.
Global Security provides support to local teams for any security
issues (site audit, expatriates or local employee security, security
on assignments, etc.). The team also:
• publishes internally, a table of “Country Risks” for use in security
procedures that are mandatory for people traveling, expatriates,
and local employees;
• provides daily co-ordination with the Group’s worldwide partner
in the field of medical and security assistance (International SOS
& Controls Risks – start of contract in January 2011);
• organize, as needed, psychological support in some crisis
context (Eutelmed – start of contract in April 2015).
It brings its methodology to develop emergency plans (evacuation
plans, crisis management plans, etc.) and co-ordinates the
corporate crisis team (SEECC – Schneider Electric Emergency
Coordination Center, created in 2009) each time that it is activated.
Global Security also participates in crisis management, in
managing the corporate crisis cell, and in supporting local entities
(to limit the consequences of the occurrence of certain risks
such as civil war, weather events, pandemics, attacks on people,
terrorism, etc.). In addition, it regularly organizes Security Audits
(R&D centers, head offices, sensitive plants, etc.).
Global Security sits on the Group Operations Compliance
Committee (previously named Fraud Committee) alongside
Compliance, Internal Audit, and the Legal department. Global
Security supports internal investigators as well as contributing
to the Group’s methodology and procedures to conduct
investigations properly and in accordance with the law.
Management of cyber and product
security and associated risks across
Schneider Electric
The Cybersecurity and Product Security Functions inside the
Governance organization define the Company’s cyber and
product security strategies and approaches. The departments
are accountable for protecting Schneider Electric’s business
operations; securing the digital assets and offers for Schneider
Electric and subsidiaries; managing the Cyber Risk Register;
driving cybersecurity awareness across the Company; owning
the creation, maintenance, and enforcement mechanisms of cyber
and product security policies; ensuring the execution of cyber
and product security initiatives across Schneider Digital Functions
and entities; and managing the Cybersecurity Incident Prevention,
Detection, and Response process.
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3.4 Key risks
Principal risks
The Group risk inventory is organized in three categories and includes 17 key risks identified.
The key risks selected and presented below are the risks considered by the Group as specific to its business and identified as having
the potential to affect its activity, its image, its financial situation, its results, or the achievement of its objectives.
However, the Group may be exposed to other non-specific risks, or risks of which it may not be aware, or risks of which it may be
underestimating the potential consequences, or other risks that may not have been considered by the Group as being likely to have
a material adverse impact on the Group, its business, financial condition, reputation or outlook.
In each category, risks are assessed in terms of potential impact for the Group according to 3 levels (red, yellow, green), the first one
being the most likely to affect the Group. The assessment is the result of the process performed as part of the overall risk management
mechanism described in “Risk identification and management”, section 3.3.4 on page 252. The impact considered for the assessment is the
potential net impact which corresponds to the potential gross impact (financial/human/legal/reputation), after having taken in consideration
the current mitigation measures, as well as the probability of occurrence of this risk. The assessment by Schneider Electric of this level of
materiality may be changed at any time, in particular should new facts, whether external or specific to the Group, come to light.
Categories and Risks
Event triggered risks
Risk of cybersecurity on the Schneider Electric infrastructure and its digital ecosystem
1
1.1
1.2
Export controls
1.3
Strengthening of chemical and resource-related regulations in the Electric and Electronic Equipment space
1.4
Corruption linked to B2B and project business
1.5
Human rights, environmental, and safety issues through the value chain
1.6
Schneider Electric connected products used as a gateway to attack Group’s customers and partners
1.7
Product quality
1.8
Competition laws
1.9
Counterparty risk
1.10 Currency exchange risk
2
Trend driven risks
2.1 World deglobalization and fragmentation
2.2 New players such as digital giants, software players, and energy majors entering the energy efficiency and
renewable energy space
2.3
Supply chain resilience
2.4
Digital evolution and software offers
2.5
Attracting and developing talent with a focus on critical skills
3
Management practice risks
3.1
IT systems management
3.2
Pricing strategy
Potential
net impact Page
255
255
256
256
257
258
259
259
260
260
261
261
262
262
262
263
264
Key to symbols
High impact
Medium impact
Low impact
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1. Event triggered risks
1.1 Risk of cybersecurity on the Schneider Electric infrastructure and its
digital ecosystem
Risk description
Schneider Electric, like other organizations with a similar global
footprint and presence, is exposed to the risk of cyberattacks
and data privacy breaches.
As an industrial and technology company, the Group has IT and
Operational Technology activities spread over more than 25 sites,
with dozens of R&D sites, and more than 200 production and
logistic units. On those sites, Operational Technology systems are
converging more and more with IT systems, especially through the
use of Internet of Things (IoT) expanding the overall attack surface.
Additionally, the move from a product-centered business model
to a service-oriented business model with software (e.g., digital
offers like “Advisors” software suites or managed digital services)
and augmented data naturally increases cybersecurity risks, such
as data breaches and intellectual property theft.
Risk monitoring and management
The NIST framework (Identify, Protect, Detect, Respond, and
Recover) is used with a Cyber Risk Register and High-Value
Assets program:
1.2 Export controls
Risk description
International, foreign, and national export control laws and
regulations govern the transfer of goods, services, and
technologies within a country or between countries and/or their
nationals. Elements that may trigger restrictions and licensing
requirements may include, but are not limited to, countries, parties,
product, and end-uses.
Schneider Electric being a Multi-National Corporation (MNC) with
international operations spanning across more than 100 different
countries worldwide, must constantly ensure full compliance to
such laws and regulations by implementing a robust corporate
export control compliance program. Any implications may result in
a significant impact on the Group’s businesses, results, reputation,
and financial position.
Albeit that Schneider Electric’s product portfolio only has a limited
product range that may have dual-use goods features as well as
non-dual-use goods (e.g., breakers) that may be used in sensitive
applications; restriction or licensing requirements may apply to
these products, especially if associated with politically sensitive
countries and destinations.
• Cyber threats are mitigated by implementing cyber practices
and capabilities, policy-driven controls, and enforcing
mechanisms. For example, the Group implemented a Data
Protection program, Source Code Management framework,
and System & Solution security program.
• Global Cyber incident management and response process is
in place. Events and incidents are monitored through a Security
Operations Center, driven jointly with the Group’s partners.
• 99% of employees were trained on cybersecurity in 2021.
Specific employee categories received mandatory trainings
for risks linked to their activity.
• Multiple cyber risk assessments were completed in 2021 by
the Group’s cybersecurity consulting partners. Furthermore,
the Group is conducting regular crisis simulation exercises
on different scenarios.
• Schneider Electric’s posture is continuously revisited and
adapted through “reality checks”, including emergency and
improvement plans across the Company and cyber scoring
platforms.
Independent “reality checks” were performed: three cross-
cutting internal audits and external assessments.
•
3.
Risk monitoring and management
Schneider Electric has comprehensive policies and processes
to ensure compliance with applicable export control laws and
regulations (“Schneider Electric Export Control Program”) and
to mitigate the above described risks. The Global Export Control
Center of Excellence, as part of the Schneider Electric Global
Legal and Risk Management Function, oversees the monitoring
and enforcement of the Schneider Electric Export Control Program.
The Schneider Electric Export Control Program may include,
but is not limited to, embargo and restricted country, denied party,
dual-use goods, and sensitive end-users screenings; incorporation
of Export Control provision in the main sales and procurement
contractual template; and conducting of regular awareness and
online and classroom training sessions for all relevant Schneider
Electric employees.
The Schneider Electric Export Control Program will continue its
enhancement and updates to ensure compliance with applicable
export control laws and regulations.
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3.4 Key risks
1. Event triggered risks
1.3 Strengthening of chemical and resource-related regulations in the
Electric and Electronic Equipment space
Risk description
Schneider Electric’s plants and products are subject to strict
environmental laws and regulations.
Many countries have increased legal requirements for the use of
chemicals and resources, both in manufacturing processes and
in the bill of materials of products.
Key Product Environmental regulations were strengthened in 2019,
especially those specific to Electric and Electronic Equipment
(EEE): RoHS (restriction of hazardous substances in electrical
and electronic equipment) and WEEE (waste electrical and
electronic equipment). RoHS bans ten chemical substances used
in many product categories sold by Schneider Electric: this may
require substitutions and may represent a considerable risk of
non-compliance. WEEE concerns the Group Extended Producer
Responsibility and obliges an active role in the framework of
products end life, particularly in terms of financing the collection
channels. In 2021, Toxic Substances Control Act (TSCA) introduced
restrictions on additional substances.
Regulations could phase out specific chemical substances or
resources too quickly, with no suitable alternative being found
in a scalable manner.
In relation with Mergers and Acquisitions (M&A) Schneider
Electric needs to critically assess environmental risks of
all acquired companies’ product portfolios to ensure strict
environmental compliance of all their products, in every market
where they are traded.
In addition, as described in Note 21 (see “Notes to the consolidated
financial statements”, section 5 of chapter 5, page 381), provisions
of EUR 350 million are set aside to cover environmental risks. These
provisions are primarily funded to cover clean-up costs related to
sites (not potential penalties). The estimation of the expected future
outflows is based on reports from independent experts.
French “Duty of Care” and country-specific initiatives (e.g., China)
have reaffirmed the expectations towards engaging suppliers in
environmental de-risking efforts.
Local regulations could force a percentage of recycled
content in some product categories, where neither the relevant
recycled resources may be available, nor the product certified
or accepted – with recycled content – by IEC, NEMA, or any
other electrical standards.
Risk monitoring and management
The Group’s Integrated Management System (IMS), which
covers safety, energy, quality, and environment, continues to be
deployed across all industrial sites and major commercial offices.
Environmental and Safety compliance audits, conducted by third-
party consultants or internal specialists, take place periodically
across countries.
Offer Creation Process (OCP) is strict, and each step and
deliverable embed EcoDesign ambitions and principles: selection
of resources, identification of critical substances, life cycle
assessment, and then production of REACH and RoHS reports.
The Group’s community of EcoDesign business partners train the
R&D teams in all new and upcoming environmental regulations and
assist them with precise guidance.
Schneider Electric has been part of taskforces on the circular
economy, playing leadership roles in multi-stakeholder dialogues in
Europe, China, and the USA, to discuss opportunities and hurdles:
regulations, environmental impacts, protection of customers’
interests, and job creation. Schneider Electric is active in France’s
Circular Economy Roadmap and engaged in China with MIIT on
circular economy. The Group engages in discussions on circular
economy relating to its sector with FIEEC, Gimélec, IGNES,
ORGALIM, and other various circles.
1.4 Corruption linked to B2B and project business
Risk description
The exposure of the Group to corruption risk has been increasing
for several years, due to the expansion of the Group’s activities
in new economies, especially in Asia and Africa, through organic
growth, and mergers and acquisitions.
The business model of the Group relies on a large ecosystem
of partners, including more than 52,000 suppliers throughout
the world representing a procurement volume in excess of
EUR 12 billion, and also, resellers and distributors. This ecosystem
may represent a risk for the Group, being accountable for activities
performed on its behalf, and in regards to potential conflicts of
interest or unethical solicitations.
In addition, the Group is participating in complex projects involving
a large range of partners in sectors at risk, such as oil and gas,
and with end-users from the public sector in countries at risk.
Over the past years, the increase of law enforcement by public
authorities, higher press coverage of fines imposed on companies,
and new regulations requiring a strong compliance program have
significantly changed the potential impact of corruption risks.
Risk monitoring and management
To mitigate this risk, Schneider Electric has built a dedicated Group
Compliance Team, composed of corporate compliance counsels
and regional compliance officers. Since August 2020, a new Ethics
& Compliance department has been created, overseeing – among
others – the Fraud Examination Team.
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A global whistleblowing system, available to employees and
external stakeholders, is also managed to combat this risk.
In 2021, 585 employee and 70 external stakeholder alerts
have been received and managed through follow-up inquiries.
In addition, the Group Ethics Charter, the Principles of
Responsibility, was updated in September 2021 and renamed
the Trust Charter, acting as the new Group Code of Conduct,
reinforcing guidance regarding anti-corruption commitments.
Beyond the recent updates of the Business Agents Policy
(August 2019) and of the Anti-Corruption Policy (November 2019),
the new Conflict of Interest Policy was deployed in 2021 and two
further policies were finalized at the end of 2021, for deployment
early 2022: the updated Gift & Hospitality Policy and the new
Philanthropy Policy.
Furthermore, a Group-wide Ethics & Compliance risk assessment
was carried-out in the second half of 2021, which led to regional
and Group level risk maps on corruption matters. Action plans
related to global and regional corruption risks were deployed
in 2021, and internal controls and internal audit missions were
reinforced on compliance risks with several audits performed.
98% of employees exposed to corruption risks have been
trained thanks to the yearly mandatory Anti-corruption e-learning.
The content of this e-learning is updated each year.
A new project to screen the Group’s third parties on anti-corruption
matters has been initiated in 2021, with a gradual geographic
deployment in waves planned until end 2022; the first wave of
screening has been carried-out in Q4 2021.
A system built-in segregation of duties control is in place in the
Group’s main ERPs.
3.
All compliance-related aspects are part of the due diligence
undertaken by the Group for mergers and acquisitions, in line
with the specific M&A Compliance framework put in place in
February 2020.
1.5 Human rights, environmental, and safety issues through the value chain
Risk description
The exposure of the Group to human rights risks has been
increasing for several years, due to the expansion of the Group’s
activities in countries with lesser regulatory framework regarding
human rights.
Specifically, Schneider Electric’s procurement volume represents
more than EUR 12 billion with more than 52,000 suppliers. As part
of the Duty of Vigilance program in the supply chain, Schneider
Electric has performed a risk analysis through its network of
suppliers and identified potential risks in the following areas:
• Human rights
• Environment
• Ethical business conduct
• Cybersecurity and data privacy
The occurrence of these risks with third parties may result in the
following impacts on Schneider Electric:
Reputation
Schneider Electric’s image may be negatively impacted by third
parties who:
• Do not respect human rights or safety rules for their workers;
• Are responsible for pollution and damage to the environment;
• Are conducting business in a non-compliant or illegal manner.
Disruption of supply chain
It may occur due to:
• Short-term termination of relations with a supplier;
• Events resulting from a lack of safety or insufficient protective
measures (e.g., fire prevention) that may affect the supply
of components;
• Damage to data exchanged with suppliers or digital systems
(e.g., virus, malware).
Legal
Over the past two years, laws regarding human rights protection,
such as modern slavery matters in Australia, or the European
Union’s new framework on restrictive measures against serious
human rights violations and abuses, have increased. Higher
coverage of fines imposed on companies, and new regulations
requiring a strong compliance program have significantly changed
the impact of human rights violations risks.
Schneider Electric expects that the exposure will continue to grow,
in reference to the current drafting of a Duty of Vigilance directive
at European level, as well as the European Action Plan on Human
Rights and Democracy 2020-2024, which sets out ambitions and
priorities for the next five years in this field. In addition, the current
discussions on human rights due diligence framework at United
Nations level, supported by the Global Compact that Schneider
Electric is part of, will certainly increase the pressure on the private
sector to tackle human rights challenges in the supply chain.
2021 Specific events
The competent court regarding Duty of Vigilance cases was
determined on October 21, 2021 by the joint commission in France
(commission composed of seven deputies and seven senators).
The judicial court will have jurisdiction over such cases, which is
composed of dedicated professional lawyers.
Regarding the cases related to non-compliance with the Duty of
Vigilance, there has been no update on the substance of the cases,
the question of jurisdiction competency being pending.
In 2021, a group of associations and NGOs filed a complaint in
France against four companies in the textile sector (excluding
Schneider Electric) regarding their potential involvement, via
suppliers/subcontractors, in human rights violations in China.
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3.4 Key risks
1. Event triggered risks
1.5 Human rights, environmental, and safety issues through the value chain
(continued)
Risk monitoring and management
Human rights are part of the Ethics & Compliance program which
is managed by the Ethics & Compliance Committee, and Legal
and Corporate Citizenship departments. More specifically, human
rights are managed by the Corporate Citizenship department with
the support of the Ethics & Compliance Committee in regards to
risk identification through risk assessment as well as risk detection,
with the whistleblowing system available for employees and for
external stakeholders.
Regarding training, e-learning on the Trust Charter is mandatory
for all employees and, in 2021, focused on human rights amongst
other ethics and compliance topics. 93% of employees completed
the training by the end of 2021.
Suppliers are selected according to the “Schneider Electric
Supplier Quality Management” system, which includes sustainable
development criteria weighing 15% of the total evaluation of a
supplier. These criteria include human rights topics.
In 2019, Schneider Electric organized the Global Suppliers Day.
During this day, the Trust Charter was introduced to suppliers.
As part of the Group’s five-year objective for 2021 – 2025, strategic
suppliers are requested to submit themselves to an ISO 26000
evaluation. Consistent with a continuous improvement effort,
these suppliers have achieved on average a +6.3 points increase
between 2018 and 2020 and a +1.2 points increase in 2021 to
reach an average score of 58.6.
Schneider Electric has built a supplier vigilance plan in which
risky suppliers are identified using criteria that take into account
the geographical location of the supplier, the technologies, and
the processes used. An audit plan is then built to perform either
on-site supplier audits or remote self-assessments. When non-
conformances are identified, corrective actions are deployed.
The suppliers are then re-audited to verify that the actions have
remediated the non-conformances. In 2021, in the scope of 2021
– 2025 SSE objective #17 “4,000 suppliers assessed under our
‘Vigilance Program’”, the Group conducted 180 on-site audits
and 629 remote self-assessments. At the end of 2021, 94% of non-
conformances from 2020 have been closed. The supplier vigilance
plan also includes an internal training program for Schneider
Electric Procurement teams and workshops with suppliers.
The Group has also defined, in 2021, a specific program with
the objective to ensure that 100% of Schneider Electric’s strategic
suppliers provide decent work to their employees, in the scope of
SSI indicator #6. The program will be launch in 2022.
Schneider Electric is also currently developing a program to ensure
“social excellence” for the Group’s suppliers.
1.6 Schneider Electric connected products used as a gateway to attack
Group’s customers and partners
Risk description
The Energy Management and Industrial Automation sectors,
like many others, are becoming more digital with pervasive IoT
usage and augmented data being major accelerators for mobility,
the cloud, pervasive sensing, big data, and analytics.
The digitalization of products, including native connectivity, is
increasing the exposure to cybersecurity risk, where connected
products and digital offers (e.g., remotely managed services like
“Advisor”) at Schneider Electric or customers sites could be used
as a gateway for malicious cyberattacks.
Schneider Electric Exchange is an ecosystem collaboration
platform with over 50,000 users, approximately 300 leverageable
applications, more than 150 service providers, and around
100 communities. These types of digital offers and platforms, if
compromised, could negatively impact a customer’s business and
consequently affect the service quality, profitability, and reputation
of Schneider Electric.
Risk monitoring and management
The Product & Systems Security Office (PSO) is reinforced with
a strong mandate of developing products and securing the
ecosystem in conformity with cybersecurity standards (such as the
ISO 27000 suite and IEC 62443). As an illustration, the IoT Cloud
Platform (EcoStruxure™ Technology Platform) has implemented
controls that are mappable against the ISO 27001 standard.
Schneider Electric follows a Secure Development Lifecycle
process to build cybersecurity into its products, even before
the design stage. In 2019, security and privacy design were
enhanced with a new Secure Development Lifecycle and certified
to IEC 62443-4-1. Since 2020, all digital offers (mainly “Advisor”
software suites) were assessed in the framework of digital security
and privacy conformance.
Schneider Electric enforces digital security and privacy
conformance for products, systems, software, platforms,
applications, and digital offers through security reviews and,
when applicable, the Digital Certification process.
Schneider Electric addresses cybersecurity vulnerabilities affecting
products, software, and systems to support the security and safety
of our customers. Schneider Electric works collaboratively with
researchers, Cyber Emergency Response Teams (CERTs), and
asset owners to ensure that accurate information is provided in
a timely fashion to adequately protect customer installations.
In case of a cyber incident, a process of response, connecting,
and debriefing is organized with partners and customers.
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1.7 Product quality
Risk description
Schneider Electric has more than 260,000 references produced
in 191 factories, spread across 46 countries around the world.
Operating in essential industries, product quality and safety is
a critical topic for the Group as product malfunctions or failures
could result in Schneider Electric incurring liabilities for tangible,
intangible damages, or personal injuries. The failure of a product,
system, or solution may involve costs related to the product recall,
result in new development expenditure, and consume technical
and economic resources.
Schneider Electric’s products are also subject to multiple quality
and safety controls and regulations and are governed by both
national and supranational standards. New or more stringent
standards or regulations could result in capital investment or
costs of specific measures for compliance.
The above-mentioned costs could have a significant impact on
the profitability and cash equivalent of the Group. The business
reputation of Schneider Electric could also be negatively impacted.
Indeed, the Group has been impacted by several recalls recently,
more or less ranging from EUR 10 million to EUR 40 million,
depending on the case.
1.8 Competition laws
Risk description
Schneider Electric’s products are sold in markets worldwide
and are subject to national and supranational competition laws
and antitrust regulations.
Some Group entities worldwide including, but not limited to,
entities in Pakistan, Belgium, France, and Spain have been directly
or indirectly cited in antitrust proceedings or investigated.
In Pakistan and Belgium, the Group inherited, and subsequently
discontinued, local operations from AREVA. These operations were
investigated and sanctioned by the World Bank and the Belgium
Competition Authority respectively.
In France, investigations were performed in September 2018
by the French police and antitrust authorities at Schneider
Electric’s head office and other premises concerning electrical
distribution activities in France. Schneider Electric is co-operating
with the French authorities in their investigations. As with any
investigation, it is possible that these investigations could lead to
formal proceedings against the Group in the future. While such
proceedings and the possible outcomes cannot be determined
at this time, it is possible it could be material in nature.
In Spain, the local subsidiary was indicted for anti-competitive
behavior related to a previously owned subsidiary. The
investigation was concluded in February 2020 without any
significant consequence for the Group.
Risk monitoring and management
In 2019, the Group launched a specific program called Phoenix
to continue to strengthen manufacturing tools and processes. This
is extended to logistic processes and suppliers, and leverages
processes digitization at suppliers’ sites and in our own entities.
To ensure improvement in the area of design, the Group launched
in mid-2020, a dedicated program, ReeD (Reliability End To End
by Design), to secure fundamentals and ensure full integration of
new customer expectations (from Quality to Reliability).
3.
To continue to protect our customers, the Group first defined five
critical products ranges, and now 15 where some internal “Nets”
are implemented. The objective is to identify internal weaknesses
and ensure our customers avoid facing those.
The Group grows its new design offer through constant learning,
insights from the current offer, and leverage methodologies such
as “Agile” to embed quality in each and every design step.
Thanks to advanced analytics, the Group is starting to proactively
listen for weak signals from internal captures or from customer
experiences.
Risk monitoring and management
The whistleblowing system of Trust Line for employees and
external stakeholders such as suppliers is managed to identify
any inappropriate practice or behavior with competitors or
business partners that may be reported.
Furthermore, internal controls and internal audit missions have
been reinforced on compliance risks, including in respect of
competition and antitrust risks.
A revised compliance due diligence program for mergers and
acquisitions was issued to strengthen upfront identification of
compliance issues with potential acquisition targets.
The Group deployed the Trust Charter in September 2021, with
reinforced guidance regarding competition and antitrust rules,
and issued various other policies and directives related to
competition and anti-corruption.
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3.4 Key risks
1. Event triggered risks
1.9 Counterparty risk
Risk description
The Group has a particularly wide international presence (more
than 115 countries), with revenue almost equally spread across the
four regions (Asia Pacific, Western Europe, North America, Rest of
the World), and 43% of the revenue generated in new economies.
The Group is therefore facing multiple counterparty risks, as
any economic downturn could lead to local liquidity issues with
consequences in terms of cash collection and delay of payments
from the customers, affecting adversely the Group’s cash
conversion rate.
The Group is also exposed to counterparty risks coming from
financial operation with financial institutions. It includes activities
such as deposits and asset management and transactions implying
flows in future value dates.
As of December 31, 2021, 10.8% of trade receivables were
overdue, of which 2.5% by more than three months (refer to
Note 16 in “Notes to the consolidated financial statements”,
section 5 of Chapter 5, page 373).
1.10 Currency exchange risk
Risk monitoring and management
Financial transactions are entered into with carefully selected
counterparties and adapted terms and conditions are included in
contracts with customers.
Banking counterparties are chosen according to the customary
criteria, including the credit rating issued by an independent rating
agency. Group policy consists of diversifying counterparty risks
and periodic controls are performed to check compliance with the
related rules.
In addition, the Group takes out substantial credit insurance
and uses other types of guarantees (letters of credit and bank
guarantees) to limit the risk of losses on trade accounts receivable.
As of December 31, 2021, the amount of the provision for
receivables impairment is EUR 498 million (as described in Note
16 in “Notes to the consolidated financial statements”, section 5 of
Chapter 5, page 373).
Risk description
Risk monitoring and management
The Group’s international operations and the particularly wide
international presence expose it to the risk of fluctuation of
exchange rates.
Fluctuations in exchange rates between the reporting currencies of
the Group entities and the currencies of transactions can have an
impact on the Group’s results and distort year-on-year performance
comparisons. The same applies to the fluctuations between euro
and the reporting currencies, in a more significant proportion.
The main exposure of the Group in terms of currency exchange
risks is related to the US dollar, Chinese yuan, and currencies
linked to the US dollar.
In 2021, revenue in foreign currencies amounted EUR 23.01 billion,
including around EUR 7.4 billion in US dollars and EUR 4.4 billion
in Chinese yuan.
The Group estimates that in the current structure of its operations,
a 10% appreciation of the euro compared to the US dollar would
have a translation effect of around minus EUR 96 million on
adjusted EBITA.
The result of exchange gains and losses of 2021 amounts to
EUR -8 million (as described in Note 7 in “Notes to the consolidated
financial statements”, section 5 of Chapter 5, page 366).
The Group manages its exposure to transactional currency risk
to reduce the sensitivity of earnings to changes in exchange
rates. Receivables and payables of the Group’s subsidiaries
denominated in currency other than their functional currency
are hedged primarily by means of rebalancing assets and liabilities
per currency (natural hedge).
More than 20 currencies are involved, with the US dollar, the
Singapore dollar, the Chinese yuan, Russian ruble, Japanese
yen, Mexican peso and Canadian dollar representing the most
significant sources of those risks.
Depending on market conditions, risks in the main currencies
may be hedged based on cash-flow forecasting using contracts
that expire in 12 months or less.
The financial instruments used to hedge exposure to fluctuations
in exchange rates are described in Note 23 in “Notes to the
consolidated financial statements”, section 5 of Chapter 5,
page 383.
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2. Trend driven risks
2.1 World deglobalization and fragmentation
Risk description
Stable trade is beneficial for economic growth. Trends of
increased mercantilism is leading towards regionalization of
trade around the United States, China, Russia, Europe, and Indian
poles. Regionalized, rather than globally balanced government
regulations and policies on, but not limited to, digitization,
circularity, carbon, supply chain management, and others could
handicap offer development efficiency through redundant efforts.
These offer development duplication efforts can potentially
impact Schneider Electric’s profitability. In addition to the trade
regionalization trend, technology decoupling, specifically between
the USA and Chinese poles, have been observed through
increased regulations.
Furthermore, this acceleration of regional versus global trade
and technology policies is increasing the pressure on the supply
chains of global companies in the forms of both tariff and non-tariff
barriers. As such, trade wars could disrupt Schneider Electric’s
operations and global supply chain. The above-mentioned
combination of both nationally orientated tariff and non-tariff
burden could increase the cost to market and potentially adversely
impact the Group profitability.
Risk monitoring and management
To mitigate the risk on supply chain efficiencies and tariff impacts,
Schneider Electric has implemented a multi-hub organization.
The Group has R&D and supply chain activities, suppliers, and
commercial networks in the main international hubs, which are
North America, EMEA, and Asia. In this multi-local context,
Schneider Electric can rebalance its activities across geographies.
This setup has proved pertinent as the Group has demonstrated
a solid resilience in 2020 and 2021.
Schneider Electric uses prospective scenarios planning, focusing
on geopolitics and trade. While the pace of external changes
continues at a historically unprecedented scale regionally, global
teams are working across stakeholders from Business Units,
Regional Operations, and Transversal Functions (i.e., Finance,
Supply Chain, Legal, Marketing, R&D, HR).
3.
2.2 New players such as digital giants, software players, and energy majors
entering the energy efficiency and renewable energy space
Risk description
Risk monitoring and management
Schneider Electric operates in the energy market which attracts
new players and creates a new competitive landscape. Indeed,
the energy industry is undergoing major transformations and
disruptions driven by the following main trends:
• A net-zero world: pressure on climate change and sustainability
call for a change in business practices;
• An all-electrical world: oil majors urged to reduce their impacts
on carbon emissions;
• An all-digital world: increasing influence of digital giants and
software players.
In this context, Schneider Electric’s competition landscape is
evolving, and the Group can now see some digital giants, software
players, or large companies such as energy majors positioning
themselves – directly or indirectly – as providers of energy
efficiency, which may compete with the digital services Value
Propositions currently developed by the Group.
The Group is driving competition performance analysis and follow-
up of organizational changes and M&A news, and reviewing its
competitors peer group and all key players in its environment.
To anticipate these changes in the competitive landscape, the
Group is communicating more widely its values and positioning
on climate change and sustainability.
Schneider Electric also reinforces its offer portfolio with acquisitions
or investments in software companies, such as RIB Software in
2020, and OSIsoft with AVEVA in 2021.
Schneider Electric provides a full portfolio of solutions for
customers (hardware and software) – as EcoStruxure™ solutions
– and energy and automation digital solutions for efficiency
and sustainability.
It is also developing the Group’s network of partners and
reinforcing its Strategic Technology Alliances.
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3.4 Key risks
2. Trend driven risks
2.3 Supply chain resilience
Risk description
The Group is exposed to supply chain dependency and business
continuity risk.
Since the onset of the COVID-19 pandemic, constrained labor
availability, global shortages of raw materials, and unreliable
transportation have challenged suppliers and put pressure on
global and regional supply chains across industries. Due to
market dynamics, these constraints are unlikely to abate in the
first half of 2022, particularly in electronic components such as
semiconductors.
Risk monitoring and management
The Group’s supply chain strategy team is responding to the
global supply chain crisis to ensure supply chain flexibility and
resilience is continually improved.
2.4 Digital evolution and software offers
Risk description
Major transformation in several areas is impacting the markets
in which Schneider Electric operates, including the digitization
of the Energy industry.
In the age of IoT, customers expect ever smarter products with
open interfaces enabling them to be tightly integrated into more
and more complex software-based solutions and benefit from new
services leveraging artificial intelligence and advanced algorithms.
The Group is investing in its digital transformation journey and as
such is increasing the share of its digital offers. In 2021 software
and digital services had a strong growth. As such, Schneider
Electric is focusing on offering more digital services, generating
more recurring revenues, and increasing customer retention.
Also, in 2021, the Group has acquired ETAP, which is a
fundamental brick of the digitization of electrical distribution
network. This acquisition will accelerate Schneider Electric’s
journey to build a network digital twin software portfolio and
reach a leadership position in digital and sustainable solutions.
The Group is working closely with its suppliers and research
and development teams to qualify alternate components to
support increased demand and improve continuity of supply.
More than 80% of selected capex is engaged in the Power of
Two in Manufacturing project, leveraging multiple factories and
suppliers to bolster greater resiliency. 84% of top risks are secured
with strategic stock, and 51% of top risks secured under a specific
multi-sourcing project.
Leveraging its network of more than 190 factories and 90
distribution centers globally, and network of seven control towers
(in each region), the Group is able to monitor global transport
reliability, labor availability, and overall market dynamics in real
time, adjusting lead times as necessary, while enacting mitigating
actions to ensure lead times are as short as possible.
Teams are empowered to proactively communicate with customers
to continue to support them and their operations.
The transformation risk will be linked to the monetization and scale
of this new digital portfolio in order to generate a steady revenue
stream from this mass customers and products connectivity.
Risk monitoring and management
The Group has launched several initiatives including but not
limited to:
• creation of a new organization dedicated to the growth of digital
services with a clear ambition to leverage a robust strategy,
a structured offer portfolio, and a segment market approach;
• monetizing critical connected assets with advanced Advisor
offer through installed base, using Artificial Intelligence and
algorithms;
• definition of a consistent connectivity path for partners and
direct go-to-market;
• acceleration of the attachment of digital services from CapEx
to OpEx business.
2.5 Attracting and developing talent with a focus on critical skills
Risk description
The growth of the Group’s businesses in markets around the world,
the digital transformation, and the rapidly evolving context of the
“next normal” requires an increased focus on talent. Shaping
the workforce of the future depends on the Group’s ability to
attract, hire, onboard, develop, and retain the best talent. Critical
skills, especially in the areas of technologies, software, services,
sustainability, supply chain, and electronics must be prioritized.
In addition to critical skills, workforce diversity, equity, and
inclusion – especially gender, generation, and nationality/ethnicity –
also needs to be a priority to ensure equal opportunities for
everyone, everywhere.
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Competition for attracting and recruiting talent in a tight labor
market is intense, in particular for critical digital and technical skill
sets in key markets. Accelerating skill development (upskilling and
reskilling) of employees and the development of leaders who can
build human connections in a digital world is also necessary to
reduce the risk of skill gaps and bring greater organizational agility.
Risk monitoring and management
The Group has a number of initiatives and programs in place
to mitigate these risks, anchored in the Group’s People Strategy,
at the heart of which is the Employee Value Proposition, the Core
Values and Leadership Expectations 2.0. Schneider’s approach
focuses on the end-to-end talent pipeline from hiring to rewarding
to developing for all employees as well as critical talent segments
from a workforce size, quality, diversity, and velocity perspective.
This systematic approach allows for data-driven monitoring of
key gaps and risks. Supporting initiatives and programs include:
• Annual performance and development goal setting and reviews,
as well as talent reviews – culminating in year-end reviews of
pipeline, succession, diversity, and skills by each entity with
the Chairman & CEO and Chief Human Resources Officer.
Overall health of the talent attraction and development strategy,
leadership pipeline, as well as succession of key people and
positions is reviewed monthly with the Executive Committee;
• A five-year ambition to grow the early-career pipeline by 2x
including internships, trainees, apprenticeships, and fresh
graduates. For example, the Schneider Global Student
Experience and the Schneider Go Green annual competition
each year attracts thousands of university talents;
3. Management practice risks
3.1 IT systems management
Risk description
The Group operates either directly or through service providers,
a wide range of highly complex information systems, including
servers, networks, data repositories, applications, and databases
with three targeted landing zones, on premise, co-location hubs,
and in the cloud, that are essential for the efficiency of its sales
and manufacturing processes, as well as platforms to enable
digital offers such as EcoStruxure™. The Group is deploying
various applications aimed at enhancing commercial experience,
employee experience, and supply chain efficiency as well as
enabling digital commercial offers.
Significant failure in fulfilment by a service provider or a major
network outage, hardware and/or system failure could adversely
affect the quality of service offered by Schneider Electric.
•
Investing in a new talent acquisition platform to manage
prospective talents and the hiring processes, providing a
seamless digital experience and enabling the Group to compete
in the market for top talent. To date this has resulted in a 1,000%
increase in talents joining the talent network;
• An 50/40/30 ambition towards gender: 50% of women in hiring,
40% in frontline management, and 30% in leadership (Vice-
President and above);
• Policies for family leave, pay equity, and flexible “new ways
of working”, supplemented with a strong program of activities
to accelerate the diversity, equity, and inclusion agenda and
focus on employee well-being, especially mental health;
• A multi-hub operating model enabling customer proximity,
innovation, speed, collaboration, and diversity of talent
opportunities;
• Career development focus for all employees, leveraging
Open Talent Market for internal mobility and anchored in
an annual performance and development review;
• Programs for specific segments of talent including early talent,
experts, high-potential talent, and talent in the later stages of
their professional career;
• Upskilling for today and tomorrow with a strong focus on digital
skills, technical skills, commercial excellence, and functional
expertise, led by Global learning academies of experts;
• A collective focus for leaders to disrupt, accelerate, coach, and
collaborate in order to transform culture and build great teams;
• Continuous listening strategy to seek feedback from employees
throughout their employment lifecycle.
3.
In addition, the provision of safe and secure foundational
Information Systems is critical to the ongoing expansion of digital
offers and customer interactions. As the Group moves towards
more digital offers, services, and software, the variety of legacy
systems makes it harder and more complex to evolve and scale.
Despite the Group’s policy of establishing governance structures
and contingency plans, there can be no assurance that information
systems projects will not be subject to technical problems and/
or execution delays. While it is difficult to accurately quantify the
impact of any such problems, data loss, or delays, they could
have an adverse effect on inventory levels, service quality, and,
consequently, on the Group’s financial results.
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3.4 Key risks
3. Management practice risks
3.1 IT systems management (continued)
Risk monitoring and management
The Group regularly examines alternative solutions to protect
against those risks, performs regular compliance checks on
service provider service level agreements, performs system
monitoring, and has developed contingency plans and incident
response capabilities to mitigate the effects of any information
system failure.
The Group undergoes constant evolution and planning pertaining
to its information systems, which encompasses but is not limited to:
• ERP transformation and the evolution of the Group’s financial
systems to prepare for digital offers;
• Elimination of legacy IT applications and associated hardware
to simplify the landscape and mitigate risks linked to
obsolescence;
3.2 Pricing strategy
Risk description
Not only has raw material and foreign exchange rate fluctuation
impacted our cost base significantly, but it has also resulted in
a sharp increase in freight rates and a shortage of components
worldwide. Such fluctuations, if not offset by tactical pricing
decisions in compliance with national and international laws,
can negatively impact the Group’s profitability. The Group was
able to overcome these cost impacts by reacting adequately over
the cycle. In addition, our strategic pricing program contributed a
substantial amount.
• Build and operate regional co-location hubs for high availability
in an effort to ensure the sustainability of the IT landscape with
ongoing focus on business continuity and disaster recovery
planning for hardware and software.
All new applications are subject to certification testing,
attempting to remove system vulnerabilities. These systems are
housed either in data centers (either managed by the Group
internally or by service providers), in co-locations hubs, or are
cloud-based applications.
In 2021, the Group continued to reduce legacy IT applications
through a dedicated “Technical Debt Reduction” program.
Risk monitoring and management
To anticipate negative impact on profitability, the Group has
reinforced its comprehensive global pricing program with robust
compliance, commercial policy, pricing, and quotation tools.
2021 Specific events – COVID-19
In the continuity of 2020, the COVID-19 pandemic has accentuated and accelerated this regionalization trend. The multiple waves of
the pandemic have impacted the different global regions in complex ways. In 2021, the Group has seen a few indirect consequences
on the supply chain; for example, with the many shortages and shipping delays. This complex new environment is requiring
strong resilience.
2022 Specific events – Russia – Ukraine
As a consequence of the hostilities, which commenced at the end of February, 2022 between Russia and Ukraine, and the unstable
geopolitical situation, the Group has seen several direct and indirect impacts on its employees, stakeholders and business. Continuous
risk identification, assessment and mitigation is being performed. It focuses, first, on the humanitarian aspects including the support
provided by the Group to the Group employees and their families. Further, it encompasses, in no particular order: the financial and
operational impacts resulting from sanctions and counter-sanctions, the cybersecurity increased threats on both the Group assets and
its customers’ safety and products, and the potential unavailability or loss of critical suppliers. In 2021, Ukraine represented a revenue
of 70M€ and Russia a revenue of about 640M€. It is a total of around 2% of the Group’s global revenues, with no significant impact on
the Group’s balance sheet. As of February 2022, and to answer to this fast evolving environment, the Group activated its crisis cells
and preparedness plans in order to be in a position to respond effectively to a wide range of scenarios.
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3.5 Insurance
Schneider Electric transfers high severity, low frequency risks to leading insurance companies. The Risk and
Insurance department reviews the current pricing and coverage conditions of the external insurance market
in implementing the most efficient insurance program.
3.
• For transportation risks, the lessons learned from losses
are communicated across the Group to improve the risk
management of shipments and the Insurance department
liaise closely with Logistic and Planning teams to minimize
incident impact.
• Employee safety and a safe work environment are priority
topics at all site management meetings. Safety training for
new employees combined with regular reviews ensure
continuous learning and improvement in the recognition
and elimination of hazards.
Self-insurance
As part of the overall insurance strategy the Group self-insures
certain risks through two captive insurance and reinsurance
companies located in Europe and North America.
Examples of the policies reinsured by the Group, include
property damage and business interruption, general liability,
and transportation.
The total amount retained for these risks is capped at
EUR 20 million (except for USA and Canada).
The cost of the self-insured risks is not considered material
at the Group level.
The Group assumes a deductible at a site/entity level –
though this is not regarded as self-insurance.
Cost of insurance programs
The cost (including tax) of the Group’s main global insurance
programs, excluding premiums paid to captives, totaled around
EUR 24 million in 2021.
These policies are arranged on a global basis for all Group
subsidiaries over which Schneider Electric has operational control.
These policies are in all countries where the Group operates and
are compliant with local regulations. All insurance companies
used by Schneider Electric must meet certain credit and
security requirements.
All insurance policies have aggregate limits determined based
upon loss scenarios and available capacities on the market.
However, there is the risk that an extreme claim could exceed
the amount of insurance purchased.
The insurance policies that are purchased cover varying exposures
including, but not limited to:
• General liability risks arising from events where the Group is
liable for damages to a third party as a result of the activities
of its people or its products;
• Property damage and business interruption resulting from an
insured risk such as fire, flood, or earthquake at a Group site or,
to a lesser extent, a customer or supplier location;
• Risks associated with the transportation of assets by land, sea,
or air;
• Damage to equipment being installed at customer locations
or construction sites;
• Risks arising from data breaches and attacks on IT systems;
• Local compulsory policies for employee safety and automobiles;
• Liabilities of Executive Directors and Officers;
• Environmental risks;
• Emergency assistance and repatriation for employees travelling.
Insurable risk mitigations
The Group identifies and measures the impact of the main
insurable risks with a view to reducing or eliminating their impact.
•
In order to minimize the risks of damage and protect our
production capacity, protection standards (including for
the sites managed by third parties) are defined, and main
industrial sites are audited by an independent loss prevention
company with a process to action any recommendations from
these audits.
• Business continuity plans are implemented, reviewed, and
tested, in particular for the Group’s main sites and critical
suppliers. These plans are developed to identify internal
alternative manufacturing and storage solutions to reduce
the disruption to the business.
• Crisis management tools are implemented in conjunction with
the Group’s Global Security department. These are tested on
a systematic basis. Regular exercises are performed to identify
areas for improvement.
• Hazard and vulnerability studies are carried out to protect our
people and our equipment.
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Chapter 4 – Corporate Governance Report
A robust system of corporate governance is
essential for long-term success. The governance
structure implemented by the Board of Directors
has supported the successful execution of
Schneider Electric’s strategy in 2021, resulting
in the delivery of record results.
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Corporate Governance
Report4
Corporate
Governance
4.
4.1 Governance Report
4.1.1 Composition of the Board of Directors
4.1.2 Organizational and operating procedures
of the Board of Directors
4.1.3 Board activities
4.1.4 Operating procedures and activities of the
Board committees
4.1.5 Report of the Vice-Chairman & Lead Independent
Director of the Board of Directors
4.1.6 Senior management
4.1.7 Regulated agreements and commitments
4.2 Compensation Report
4.2.1 Overview
4.2.2 Report on the compensation granted or paid
during the 2021 fiscal year (say on pay ex-post)
4.2.3 Compensation policy for the 2022 fiscal year
(say on pay ex-ante)
4.2.4 Compensation of Group Senior Management
(excluding Corporate Officers)
4.2.5 Long-term incentive plans
268
270
287
299
300
308
309
310
311
311
313
325
336
337
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Chapter 4 – Corporate Governance Report
4.1 Governance Report
Vice-Chairman & Lead
Independent Director’s
introduction
Fred Kindle
Vice-Chairman & Lead Independent Director
Dear Shareholders,
2021 was a record year and has set the foundation for ongoing
sustainable growth with all-time high revenues, adjusted EBITA
margin and net income. These strong results, achieved amidst
ongoing sanitary and supply constraints, were testament to the
success and robustness of the strategy implemented under the
leadership of Jean-Pascal Tricoire, Chairman & CEO. This then
led the Board to propose a dividend of €2.90, the 12th year of
consecutive dividend progression.
2021 was also the year where we were recognized by Corporate
Knights as the world’s most sustainable corporation. In the
year, the Board, in its commitment to continually raising the bar
on sustainability, launched our new and ambitious Schneider
Sustainability Impact 2021-25 program. We are off to a strong
start achieving a score of 3.92 against a year-one target of 3.75.
During the year, the Board continued to improve and reinforce its
composition, and invites you to support the appointment of Ms. Nive
Bhagat as a new Independent Director at the Shareholders’ Meeting.
On February 16, 2022, Ms. Nive Bhagat was appointed by the Board
as an Observer upon the recommendation from the Governance &
Remunerations Committee who conducted the search process for
new candidates. Ms. Nive Bhagat is currently Global Chief Executive
Officer for Global Cloud Infrastructure Services of Capgemini and
a member of their Group Executive Committee. She will bring to
the Board her experience and an additive skillset derived from her
wide-ranging finance and business background in the digital space.
She will further strengthen the Schneider Board through her excellent
knowledge of the Asian market. I invite you also to renew the terms
of office of Independent Directors Linda Knoll and Anders Runevad,
both of them bringing many complementary skills to the Board.
Throughout 2021, I had the opportunity to discuss our
compensation policy and practices, engaging with many
of Schneider Electric’s shareholders, as well as investor
representative bodies. I will continue this dialogue into 2022.
For 2021, the Board decided again to use the discretion clause
provided in the existing Compensation Policy on annual variable
compensation. Targets set at the beginning of 2021, which did not
appear to be applicable anymore, were upgraded due to the much
higher market growth than initially anticipated. This decision has
been made to make targets more challenging and ensure a better
alignment with the shareholder’s experience.
For 2022, the Board of Directors wishes to maintain the overall
stability of the Compensation Policy, which has markedly driven the
right behaviors. It appears balanced, provides market competitive
pay, ensures a strong link between pay and performance, solidifies
alignment with both employees and shareholders, and incentivizes
long-term focus. However, after taking into account shareholders’
feedback, the Board also proposes to implement the following
changes to the 2022 Compensation Policy: (i) strengthening the
LTIP vesting scale relating to the relative TSR criterion, with no
vesting below median; (ii) committing to disclose ex-post the
LTIP targets inherent to adjusted earnings per share, which will
allow shareholders to better assess their stringency as well as
the link between pay and performance; and (iii) expressing the
LTIP cap related to the Corporate Officer as a percentage of
his remuneration instead of a number of shares as previously
provided. The Board hopes that these improvements will garner
strong support among shareholders on the two resolutions that are
submitted in relation to (i) the Say on Pay on the Chairman & CEO
Compensation Policy, and (ii) the Long-Term Incentive Plan.
In addition, you will be asked to approve the merger of our
Company with its listed subsidiary IGE+XAO. This approval is
requested in order to proceed with the plan to integrate IGE+XAO
into the Schneider Electric Group following on the simplified public
tender offer that was launched on the shares of IGE+XAO in
November 2021.
Further to this letter, I invite you to read the governance and
compensation report as well as the notice of meeting. They
provide more details on the governance structure of the Company
as well as all draft resolutions you are asked to approve at the 2022
Shareholders’ Meeting. After these two last Shareholders’ Meetings
held digitally, I count on your attendance at this Shareholders’
Meeting this year which will be held physically unless new pandemic-
related restrictions arise by then. We look forward to a successful
AGM and sincerely hope that many of you will take part in the
Company’s decisions by voting on the resolutions submitted to your
approval and by expressing your views during the Q&A session.
Thank you for your support and your trust,
Fred Kindle
Vice-Chairman & Lead Independent Director
This corporate governance report has been approved by the Board of Directors at its meeting of February 16, 2022.
Corporate Governance Code
The Company applies all the AFEP-MEDEF Corporate Governance Code that are available online at medef.com.
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Corporate Governance
Governance structure
Read more in section 4.1.4 (cid:496)
5
members
5
meetings
Digital
Committee
100%
attendance
75%
independence*
5
members
6
meetings
Audit & Risks
Committee
100%
attendance
80%
independence
15
Directors including:
9 independent Directors
2 Employee Directors
1 Employee Shareholder Director
Board of Directors
97%
7
75%
independence*
meetings
in 2021
attendance
rate
in 2021
4.
6
members
7
meetings
Governance &
Remunerations
Committee
94%
attendance
67%
independence
5
executive sessions
in 2021
6
members
3
meetings
Investment
Committee
89%
attendance
80%
independence*
6
members
4
meetings
Human Resources
& CSR Committee
100%
attendance
75%
independence*
Directors’ nationality
Board diversity
Board tenure
Canada
Portugal
Germany
Singapore
China
Switzerland
USA
Sweden
France
1
1
1
1
1
2
2
2
4
7
Women
8
Men
2
< or equal to 1 year
2
> than 12 years
3
6–12 years
8
1–5 years
*
Employee Directors and
Employee Shareholders Director
excluded as prescribed by
the AFEP-MEDEF Corporate
Governance Code.
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Chapter 4 – Corporate Governance Report
4.1 Governance Report
4.1.1 Composition of the Board of Directors
4.1.1.1 Board members
As of December 31, 2021, the Board of Directors consisted of 15 Directors. Mrs. Nive Bhagat was appointed as an Observer by the Board
of Directors on February 16, 2022 with the intent to submit her candidacy at the Annual Shareholders’ Meeting to be held on May 5, 2022.
Jean-Pascal Tricoire
Chairman and Chief Executive Officer
Fred Kindle
Vice-Chairman
& Lead Independent Director
C
Léo Apotheker
Director
C
Cécile Cabanis
Independent Director
Rita Felix
Employee Director
Willy R. Kissling
Director
Linda Knoll
Independent Director
C
Jill Lee
Independent Director
C
Xiaoyun Ma
Employee Shareholders Director
Anna Ohlsson-Leijon
Independent Director
Fleur Pellerin
Independent Director
Anders Runevad
Independent Director
Gregory Spierkel
Independent Director
Lip-Bu Tan
Independent Director
Bruno Turchet
Employee Director
Nive Bhagat
Observer
C
Board committees
Governance &
Remunerations
Committee
7
meetings*
6
members
Fred Kindle
Léo Apotheker
Willy R. Kissling
Linda Knoll
Anders Runevad
Gregory Spierkel
Audit & Risks
Committee
Investment
Committee
Digital
Committee
Human Resources
& CSR Committee
6
meetings*
5
members
Jill Lee
Cécile Cabanis
Willy R. Kissling
Anna Ohlsson-Leijon
Fleur Pellerin
3
meetings
6
members
Léo Apotheker
Fred Kindle
Anders Runevad
Gregory Spierkel
Lip-Bu Tan
Bruno Turchet
5
meetings*
5
members
Gregory Spierkel
Léo Apotheker
Xiaoyun Ma
Fleur Pellerin
Lip-Bu Tan
4
meetings*
6
members
Linda Knoll
Rita Felix
Willy R. Kissling
Xiaoyun Ma
Fleur Pellerin
Anders Runevad
*
Including joint meetings with other committees.
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Chapter 4 – Corporate Governance Report
Corporate Governance
Overview of the composition of the Board of Directors as of the date of this Universal
Registration Document
Personal information
Position within the board
Attendance rate
in 2021
Participation in Board committees
Age Gender
Natio-
nality
Number of
directorships
in listed
companies*
Number
of Schnei-
der Electric
shares held
Indepen-
dence
First
appoint-
ment**
Term
end
Seniority
on the
Board**
Board
Commit-
tee
Gover-
nance
& Remuner-
ations
Committee
Human
Resources
& CSR
Committee
Audit
& Risks
Committee
Investment
Committee
Digital
Committee
Jean-Pascal Tricoire, Chairman & Chief Executive Officer
58
M
2
793,239
2013
Fred Kindle, Vice-Chairman & Lead Independent Director
62
M
3
40,000
2016
Léo Apotheker, Non-independent Director
68
M
3
3,093
2008
Cécile Cabanis, Independent Director
50
F
4
1,000
2016
Rita Felix, Employee Director
39
F
1
0
2020
Willy Kissling, Non-independent Director
77
M
1
1,600
2001
Linda Knoll, Independent Director
61
F
3
1,000
2014
Jill Lee, Independent Director
58
F
2
1,000
2020
AGM
2025
AGM
2024
AGM
2023
AGM
2024
AGM
2024
AGM
2022
AGM
2022
AGM
2024
Xiaoyun Ma, Director representing the employee shareholders
58
F
1
29,531
2017
Anna Ohlsson-Leijon, Independent Director
53
F
2
1,000
2021
Fleur Pellerin, Independent Director
48
F
3
1,000
2018
Anders Runevad, Independent Director
62
M
3
1,000
2018
Gregory Spierkel, Independent Director
65
M
3
1,000
2015
Lip-Bu Tan, Independent Director
62
M
4
1,000
2019
Bruno Turchet, Employee Director
48
M
Nive Bhagat, Observer
50
F
1
1
732
0
2021
AGM
2025
AGM
2025
AGM
2022
AGM
2022
AGM
2023
AGM
2023
AGM
2025
8
5
100%
–
100% 83.5%
C
4.
13
100% 100%
C
5
1
100% 100%
100% 100%
20
100% 100%
7
1
4
86% 91.5%
C
100% 100%
C
100% 100%
<1
100% 100%
3
3
6
2
71.5% 100%
100% 82.5%
100% 100%
100% 100%
<1
100% 100%
C
–
–
–
–
–
–
–
–
–
–
Including Schneider Electric SE directorship.
*
** As a Director or member of the Supervisory Board (if any, the period of presence at the Board as an Observer is not taken into account).
Governance &
Remunerations
Committee
Audit & Risks
Committee
Investment
Committee
Digital
Committee
Human
Resources &
CSR Committee
C
Committee
Chair
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Chapter 4 – Corporate Governance Report
4.1 Governance Report
Changes in the composition of the Board of Directors in 2021 and until the date of this
Universal Registration Document
Directors whose term of office was renewed at the
2021 AGM*
Name
Gender
Nationality
Date of appointment
Term end
Jean-Pascal Tricoire
M
April 2013
AGM 2025
Directors who left the Board of Directors in 2021
Patrick Montier
Directors who joined the Board of Directors in 2021
Anna Ohlsson-Leijon
Bruno Turchet
Observer who joined the Board of Directors in 2022
Nive Bhagat
M
F
M
F
September 2017
AGM 2021
April 2021
April 2021
AGM 2025
AGM 2025
February 2022
AGM 2022
*
Annual General Shareholders’ Meeting.
4.1.1.2 Biographies of the Board members
List of directorships and other functions of the members of the Board of Directors as of the date of this
Universal Registration Document
Experience and qualifications
Jean-Pascal Tricoire has been successively Chairman of the Management Board and Chairman & CEO of
Schneider Electric since 2006. Prior to that, he spent his early career with Alcatel, Schlumberger, and Saint-Gobain and
joined the Schneider Electric Group (Merlin Gerin) in 1986. From 1988 to 2001, he occupied operational functions within
Schneider Electric abroad, in Italy, China, South Africa and the US. He held corporate positions from 1999 to 2001
including Director in charge of Strategic Global Accounts and the strategic plan. From January 2002 to the end of 2003,
he joined the Executive Committee as Executive Vice-President of Schneider Electric’s International Division. In October
2003, he was appointed Deputy CEO before becoming Chairman of the Management Board of Schneider Electric SA
on May 3, 2006. On April 25, 2013, following the change in mode of governance of the Company, he was appointed
Chairman & CEO. Jean-Pascal Tricoire is a graduate of ESEO Angers and obtained an MBA from EM Lyon.
Term of office
First appointed: 2013/Term ends: 2025
Current external directorships
Other directorships at listed companies:
Director of Qualcomm, Inc. (USA).
Other directorships:
Co-Chairman of the France-China Business Committee;
Director of the Board of the United Nations Global
Compact (USA); Member of the Board of Trustees of
Northeastern University (USA).
Other internal directorships:
Chairman of the Board of Directors of Schneider Electric
Industries SAS; Director of Delixi Electric Ltd; Director
of Schneider Electric USA, Inc.; Chairman of the Board
of Directors of Schneider Electric Asia Pacific Ltd;
Chairman of the Board of Directors of Schneider Electric
Holdings Inc.
Skills
Jean-Pascal Tricoire
Chairman and Chief Executive Officer of
Schneider Electric SE
Age: 58 years
Nationality: French
Business address: Schneider Electric
35, rue Joseph Monier, 92500 Rueil-
Malmaison, France
793,239(1) Schneider Electric SE
shares
Attendance rate at:
Board meetings
100%
Honorary Chairman: Mr. Didier Pineau-Valencienne
An independent Director within the meaning of the AFEP-MEDEF Corporate Governance Code.
*
(1) Held directly or through the FCPE.
Note: bold indicates the names of companies whose securities are listed on a regulated market.
Board committees
Governance &
Remunerations
Committee
Audit & Risks
Committee
Investment
Committee
Digital
Committee
Human
Resources &
CSR Committee
C
Committee
Chair
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Corporate Governance
Experience and qualifications
Fred Kindle, who currently is the Vice-Chairman & Lead Independent Director of Schneider Electric SE, is the former
CEO of ABB. He began his career in the Marketing Department of Hilti AG in Liechtenstein from 1984 to 1986. From
1988 to 1992, he worked as a consultant at McKinsey & Company in New York and Zurich. He then joined Sulzer AG
in Switzerland where he held various management positions. In 1999, he was appointed CEO of Sulzer Industries
and in 2001, he became CEO of Sulzer AG. After joining ABB Ltd in 2004, Fred Kindle was appointed CEO of the
ABB Group, a position which he held until 2008. He then became a partner at Clayton, Dubilier & Rice LLC, a private
equity fund based in London and New York. He is now an independent consultant and Director at several companies.
Board member of Schneider Electric SE since 2016, he was appointed Vice-Chairman & Lead Independent Director
in April 2020. Fred Kindle graduated from the Swiss Federal Institute of Technology (ETH) in Zurich and holds an
MBA from Northwestern University, Evanston, USA.
Term of office
First appointed: 2016/Term ends: 2024
Current external directorships
Other directorships at listed companies:
Chairman of the Board of Directors of VZ Holding
AG (Switzerland) and Director of Stadler Rail AG
(Switzerland).
Other directorships:
None.
Previous directorships
Previous directorships held in the past five years:
Director of Exova Plc. (United Kingdom); Partner of
Clayton Dubilier & Rice Llc. (USA); Chairman of
the Board of Directors of Exova Group Plc. (United
Kingdom); Chairman of the Board of Directors of
BCA Marketplace Plc. (United Kingdom); Director
of Rexel SA (France); Member of the Development
committee of the Royal Academy of Engineering
(London); Vice-Chairman of Zurich Insurance Group
Ltd. (Switzerland); Chief Executive Officer of Kinon AG
(Switzerland).
Skills
4.
Experience and qualifications
Léo Apotheker, former CEO of SAP and Hewlett-Packard, began his career in 1978 in Management Control. He
then held management and executive responsibilities in several firms specializing in information systems including
SAP France & Belgium, where he was Chairman and CEO between 1988 and 1991. Léo Apotheker was founding
Chairman and CEO of ECsoft. In 1995, he returned to SAP and, after various appointments within SAP as Regional
Director, he was appointed in 2002 as a member of the Executive Committee and President of Customer Solutions
& Operations, then in 2007 as Deputy CEO of SAP AG and in 2008 CEO of SAP AG. In 2010, he became CEO and
Chairman of Hewlett-Packard, a position he held until the fall of 2011. Board member of Schneider Electric SE since
2008, Léo Apotheker served as Vice-Chairman & Lead Independent Director from 2014 to April 2020. In 2020, he
launched a SPAC (Special Purpose Acquisition Company) called Burgundy Technology Acquisition Corporation,
listed on the Nasdaq Capital Market, which intends to focus on public and private opportunities in the technology
sector, particularly companies in enterprise software or technology-enabled services. Léo Apotheker graduated
with a degree in International Relations and Economics from the Hebrew University in Jerusalem.
Term of office
First appointed: 2008/Term ends: 2023
Current external directorships
Other directorships at listed companies:
Director of NICE-Systems Ltd (Israel); Chairman
and Co-CEO of Burgundy Technology Acquisition
Corporation (USA).
Other directorships:
Chairman of the Board of Directors of Unit 4 NV
(Netherlands); Chairman of Syncron International AB
(Sweden); Director of P2 Energy Solutions (USA);
Director of Taulia (USA), Director of MercuryGate (USA).
Previous directorships
Previous directorships held in the past five years:
Chairman of the Supervisory Board of Signavio GmbH
(Germany); Director and Chairman of the Board of KMD
A.S. (Denmark), Member of the Supervisory Board of
Steria (France).
Skills
Fred Kindle*
Vice-Chairman & Lead Independent
Director of Schneider Electric SE
Age: 62 years
Nationality: Swiss
Business address: Schneider Electric
35, rue Joseph Monier, 92500 Rueil-
Malmaison, France
40,000 Schneider Electric SE shares
Board committees
C
Attendance rate at:
Board
meetings
Committee
meetings
100%
83.5%
Léo Apotheker
Company Director
Age: 68 years
Nationality: French/German
Business address: Schneider Electric,
35, rue Joseph Monier, 92500 Rueil-
Malmaison, France
3,093 Schneider Electric SE shares
Board committees
C
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
An independent Director within the meaning of the AFEP-MEDEF Corporate Governance Code.
*
Note: bold indicates the names of companies whose securities are listed on a regulated market.
Skills
Public Company
Management
Law, Governance, Ethics &
Compliance
www.se.com
Corporate Finance
International Markets
Industry Knowledge
Sustainability
Digital & Technology
Accounting, Audit & Risk
Employee perspective and
knowledge of the Group
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Chapter 4 – Corporate Governance Report
4.1 Governance Report
Experience and qualifications
Cécile Cabanis is currently Deputy Chief Executive Officer of Tikehau Capital. She began her career in 1995 at
L’Oréal in South Africa, where she worked as Logistics Manager and Head of Management Control before working in
France as an internal auditor. In 2000, she joined Orange as Assistant Director in the Group’s Mergers-Acquisitions
Division. Cécile Cabanis move to Danone in 2004 as Corporate Financial Officer, then Head of Development.
In 2010, she was appointed Chief Financial Officer of the Fresh Dairy Products Division. From 2015 to February
2021, she has been Danone’s Chief Financial Officer Technology & Data, Cycles & Procurement. Since 2018, she
has been a member of the Board of Directors of Danone SA and was appointed Vice-Chairwoman in December
2020. In 2021, she joined Tikehau Capital and serves as Deputy Chief Executive Officer of the Group where she
oversees the Human Capital, ESG/CSR, Communications and Brand Marketing functions of the Group. She is also
the Chairwoman of the Board of Directors of Livelihoods Fund SICAV SIF, a fund created to accelerate its partners’
actions in favor of the climate and the most vulnerable people. Cécile Cabanis is an engineer graduated from
Agro Paris Grignon.
Term of office
First appointed: 2016/Term ends: 2024
Current external directorships
Other directorships at listed companies:
Deputy Chief Executive Officer of Tikehau Capital
(France); Vice-Chairwoman of the Board of Directors of
Danone SA (France); Member of the Supervisory Board
of Unibail-Rodamco-Westfield SE.
Other directorships:
Vice-Chairwoman, member of the Supervisory Board
of Mediawan (France); Member of the Supervisory
Board of Société Editrice du Monde (France), Director
of France Médias Monde.
Previous directorships
Previous directorships held in the past five years:
Director of Michel et Augustin SAS (France);
Chairwoman and member of the Board of Directors of
Livelihoods Fund (SICAV, Luxembourg); Chairwoman
and Director of 2MXOrganic (France); Director of
Central Danone (Morocco), Fromagerie des Doukkala
(Morocco), Danone Djurdura (Algeria), Produits Laitiers
Frais Iberia (Spain), Danone SA (Spain), Compagnie
Gervais Danone (France), Dan Trade (Russia), Danone
Limited (United Kingdom), Danone Industria LLC
(Russia), JSC Danone Russia (Russia), Danonewave
(Public Benefit Corporation – USA); Member of the
Supervisory Board of Danone Sp.z.o.o (Poland);
Toeca International Company B.V. (the Netherlands);
Chief Executive Officer of Danone CIS Holdings B.V.
(Netherlands).
Skills
Experience and qualifications
Rita Felix has been an Employee Director designated by the European Work Council since 2020. She began her
career in consulting at Deloitte, where she worked from 2006 to 2008. After that she joined the Marketing Department
of COSEC (a credit insurance company partially owned by Euler Hermes). Rita Felix came to Schneider Electric
Portugal in 2012 as Business Excellence. In 2017, she was appointed Project Management Officer (PMO) for Global
Marketing, International Operations at Schneider Electric Group. From 2020 to 2021 she has been working as a
PMO, Inside Sales Director and recently appointed to a new position as Market and Competitive Intelligence leader.
Since July 2020, she was designated Director representing the employees of Schneider Electric SE. Rita Felix is
graduated from ISCTE – IUL (University Institute of Lisbon) including six months in the Vrije Universiteit (Amsterdam).
She also holds a master’s degree in Marketing Management (2012). During November 2020, she attended the High
Performance Boards at IMD Business School and recently, has successfully completed the Strategy in the Age of
Digital Disruption training from Insead.
Term of office
First appointed: 2020/Term ends: 2024
Current external directorships
Other directorships at listed companies:
None.
Other directorships:
None.
Previous directorships
Previous directorships held in the past five years:
None.
Skills
Cécile Cabanis*
Deputy Chief Executive Officer of
Tikehau Capital
Age: 50 years
Nationality: French
Business address: Tikehau Capital,
32 rue de Monceau, 75008 Paris, France
1,000 Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
Rita Felix
Market Segmentation and Competitive
Intel Leader
Age: 39 years
Nationality: Portuguese
Business address: Schneider Electric,
Av. do Forte 3, Ed. Suécia IV, Piso 3,
2794-038 Carnaxide, Portugal
0(1) Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
An independent Director within the meaning of the AFEP-MEDEF Corporate Governance Code.
*
(1) Held directly or through the FCPE.
Note: bold indicates the names of companies whose securities are listed on a regulated market.
Board committees
Governance &
Remunerations
Committee
Audit & Risks
Committee
Investment
Committee
Digital
Committee
Human
Resources &
CSR Committee
C
Committee
Chair
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Chapter 4 – Corporate Governance Report
Corporate Governance
Experience and qualifications
Willy R. Kissling, currently Company Director, is the former CEO of Landis+Gyr Corporation. He began his career at
Amiantus Corporation and then joined Rigips, a plasterboard manufacturer, in 1978. He was appointed to the Rigips
Executive Committee in 1981 and subsequently became CEO. From 1987 to 1996, Willy R. Kissling served as CEO
of Landis+Gyr Corporation, a provider of services, systems and equipment for energy management, building control
and payment systems for payphone operators. From 1998 to 2005, he was Chairman of Oerlikon Bührle Holding AG
(renamed OC Oerlikon Corp.) and of SIG Holding Ltd, and Vice-Chairman of Holcim Ltd (renamed LafargeHolcim
Ltd). Willy R. Kissling has also been a member on various Board of Directors including those of Kühne&Nagel
International Ltd and European Advisory Board member of Pratt&Whitney and Booz Allen Hamilton. Willy R. Kissling
is a graduate from the Universities of Bern (Dr. Rer.pol) and Harvard (P.M.D).
Term of office
First appointed: 2001/Term ends: 2022
Current external directorships
Other directorships at listed companies:
None.
Previous directorships
Previous directorships held in the past five years:
None.
Skills
4.
Experience and qualifications
Linda Knoll, currently Company Director, is the former Chief Human Resources Officer of Fiat Chrysler Automobiles.
After a career in the Land Systems Division of General Dynamics, Linda Knoll joined CNH Industrial in 1994. She
held various positions there, culminating in her appointment to multiple senior management positions. In 1999, she
became Vice-President and General Manager of the Group’s Crop Production Global Product Line. From 2003 to
2005, she was Vice-President for North America Agricultural Industrial Operations. She then served as Executive
Vice-President for Worldwide Agricultural Manufacturing until 2007, managing 20 plants in 10 countries, before being
appointed Executive Vice-President Agricultural Product Development, President Parts and Service (ad interim)
and Executive Vice-President Worldwide Agricultural Manufacturing. Linda Knoll has been Chief Human Resources
Officer in CNH Industrial (from 2007 to 2019) and Fiat Chrysler Automobiles (from 2011 to March 2021). Linda Knoll
holds a Bachelor of Science Degree in Business Administration from Central Michigan University.
Term of office
First appointed: 2014/Term ends: 2022
Current external directorships
Other directorships at listed companies:
Director of Iveco Group N.V. (Netherlands).
Other directorships:
Director of Comau S.p.A.
Previous directorships
Previous directorships held in the past five years:
Chief Human Resources Officer and member of the
Group Executive Council of Fiat Chrysler Automobiles
N.V. (Netherlands); Chief Human Resources Officer
and member of the Group Executive Council of CNH
Industrial N.V. (Netherlands).
Skills
Willy R. Kissling
Company Director
Age: 77 years
Nationality: Swiss
Business address: Schneider Electric,
35, rue Joseph Monier, 92500 Rueil-
Malmaison, France
1,600 Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
Linda Knoll*
Company Director
Age: 61 years
Nationality: American
Business address: Schneider Electric,
35, rue Joseph Monier, 92500 Rueil-
Malmaison, France
1,000 Schneider Electric SE shares
Board committees
C
Attendance rate at:
Board
meetings
Committee
meetings
86%
91.5%
An independent Director within the meaning of the AFEP-MEDEF Corporate Governance Code.
*
Note: bold indicates the names of companies whose securities are listed on a regulated market.
Skills
Public Company
Management
Law, Governance, Ethics &
Compliance
www.se.com
Corporate Finance
International Markets
Industry Knowledge
Sustainability
Digital & Technology
Accounting, Audit & Risk
Employee perspective and
knowledge of the Group
Life Is On | Schneider Electric
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4.1 Governance Report
Jill Lee*
Group Chief Financial Officer of
Sulzer Ltd
Age: 58 years
Nationality: Singaporean
Business address: Sulzer Ltd,
Neuwiesenstrasse 15, Winterthur 8401,
Zurich, Switzerland
1,000 Schneider Electric SE shares
Board committees
C
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
Xiaoyun Ma
Chief Financial Officer for Schneider
Electric’s China Operations
Age: 58 years
Nationality: Chinese
Business address: Schneider Electric,
8F, Schneider Electric Building, No. 6,
East WangJing Rd. Chaoyang District
Beijing 100102, China
29,531(1) Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
Experience and qualifications
Jill Lee is currently Chief Financial Officer of Sulzer Ltd. She began her career in finance in 1986 at Siemens, AT&T
and Tyco Electronics in Singapore. She pursued her career within Siemens where she held a number of leadership
positions from 1997 to 2010 (including Chief Financial Officer) and Senior Vice-President of Siemens in Singapore, CFO
and Senior Executive Vice-President of Siemens in China, Group Chief Diversity Officer), then Senior Vice-President,
Finance, Strategy and Investments for Neptune Orient Lines in Singapore (2010 to 2011) and later ABB from 2012 to
2018 where she was Senior Vice-President and Chief Financial Officer for ABB China and North Asia Region and then
Group Senior Vice-President and Head of Next Level Program Management of ABB. Since April 2018, Jill Lee serves
as Group Chief Financial Officer of Sulzer Ltd, a company where she had been previously a member of the Board of
Directors for seven years and Chairwoman of the Audit Committee. Jill Lee holds a Bachelor’s Degree of Business
Administration from National University of Singapore and an MBA from Nanyang Technological University in Singapore.
Term of office
First appointed: 2020/Term ends: 2024
Current external directorships
Other directorships at listed companies:
Non-executive Director of medmix AG (Switzerland).
Other directorships:
Advisory Board Member of Nanyang Business School
(Singapore); Foundation Board Member of IMD Business
School (Switzerland) (both being advisory roles for the
university with max. two meetings/year).
Previous directorships
Previous directorships held in the past five years:
Observer of Schneider Electric SE; Member of the
Supervisory Board of Signify N.V. (formerly Philips
Lighting); Non-executive Director of Sulzer Ltd.
Skills
Experience and qualifications
Xiaoyun Ma, currently Director representing the Employee Shareholders, is the Chief Financial Officer for Schneider
Electric’s China Operations, in charge of China daily finance operations, organization, simplification and internal
digital transformation. Graduated from top Chinese universities and holding a Chinese Public Accountant Certificate,
she started her career as a finance professional at an audit firm (PWC). She joined Schneider Electric in 1997 as
the Controller of Schneider (Beijing) Medium Voltage Co., Ltd. in Beijing China. Since then, she has worked in many
different controller and Chief Financial Officer positions, covering manufacturing, supply chain and front office,
in the China and Asia Pacific zone, while getting an MBA from New York City University in 2004.
Term of office
First appointed: 2017/Term ends: 2025
Current directorships
Other directorships at listed companies:
None.
Other directorships within Schneider Electric Group:
Chairwoman of the Board of Directors of Schneider
Electric IT (China) Co., Ltd.; Vice-Chairwoman of the
Board of Directors of Citic Schneider Smart Building
Technology (Beijing) Co., Ltd., Beijing BipBop Efficiency
and Automation Application Technology Center (China);
Director of Full Excel (Hong Kong) Limited (Hong Kong),
Schneider Electric (China) Co., Ltd., Schneider Shanghai
Power Distribution Electrical Apparatus Co., Ltd.,
Schneider Shanghai Low Voltage Terminal Apparatus
Co., Ltd., Schneider Shanghai Industrial Control Co.,
Ltd., Schneider Busway (Guangzhou) Ltd., Schneider
(Beijing) Medium and Low Voltage Co., Ltd., Schneider
Merlin Gerin Low Voltage (Tianjin) Co., Ltd., Schneider
Shanghai Apparatus Parts Manufacturing Co., Ltd.,
Schneider Wingoal (Tianjin) Electric Equipment Co., Ltd.,
Shanghai ASCO Electric Technology Co., Ltd. (formerly
known as Schneider Automation Solutions (Shanghai)
Co., Ltd.), Schneider (Shaanxi) Baoguang Electrical
Apparatus Co., Ltd., Schneider Switchgear (Suzhou)
Co., Ltd., Schneider Smart Technology Co., Ltd.;
Supervisor of Zircon Investment (Shanghai) Co., Ltd.;
Executive Director of Beijing Leader Harvest Energy
Efficiency Investment Co., Ltd. (China).
Other directorships or functions outside Schneider
Electric Group:
Vice-Chairwoman of the Board of Directors of Sunten
Electric Equipment Co., Ltd. (China).
Previous directorships
Previous directorships held in the past five years:
Chairwoman of the Board of RAM Electronic Technology
and Control (Wuxi) Co., Ltd., Beijing Chino Harvest Wind
Power Technology Co., Ltd., Schneider Electric Trading
(Wuhan) Co., Ltd.; Vice-Chairwoman of the Board of
Directors of Schneider Electric (Xiamen) Switchgear Co.,
Ltd., Schneider Electric (Xiamen) Switchgear Equipment
Co., Ltd.; Director of Telvent Control Systems (China)
Co., Ltd., Schneider Automation & Control Systems
(Shanghai) Co., Ltd., Ennovation Systems Control Co.,
Ltd., Schneider (Suzhou) Transformer Co., Ltd., Telvent-
BBS High & New Tech (Beijing) Co., Ltd., Beijing Leader
Harvest Electric Technologies Co., Ltd., Schneider
Electric Equipment and Engineering (Xi’an) Co., Ltd.,
Shanghai Foxboro Co., Ltd., Shanghai Invensys Process
Systems Co., Ltd., Schneider Great Wall Engineering
(Beijing) Co., Ltd., Tianjin Merlin Gerin Co., Ltd.,
Schneider (Beijing) Medium Voltage Co., Ltd., Shanghai
Schneider Electric Power Automation Co., Ltd., Tianjin
Wingoal Electric Equipment Co., Ltd., Schneider South
China Smart Technology (Guangdong) Co. Ltd., Clipsal
Manufacturing (Huizhou) Co., Ltd.
Skills
An independent Director within the meaning of the AFEP-MEDEF Corporate Governance Code.
*
(1) Held directly or through the FCPE.
Note: bold indicates the names of companies whose securities are listed on a regulated market.
Board committees
Governance &
Remunerations
Committee
Audit & Risks
Committee
Investment
Committee
Digital
Committee
Human
Resources &
CSR Committee
C
Committee
Chair
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Chapter 4 – Corporate Governance Report
Corporate Governance
Experience and qualifications
Anna Ohlsson-Leijon is currently Chief Executive Officer Europe and Executive Vice-President of AB Electrolux.
Anna Ohlsson-Leijon began her career in 1993 at PricewaterhouseCoopers where she held various positions advising
high-tech, industrial and media companies. In 2000, she joined Kimoda, an e-commerce platform, as Chief Financial
Officer, before joining in 2001 AB Electrolux (Sweden) as Director of Project Management. Anna Ohlsson-Leijon
then held various senior positions in corporate functions including Director Internal Audit & Global Program Manager
Sarbanes-Oxley Act from 2003 to 2005, Head of Management Assurance & Special Assignments until 2008, Group
Treasurer until 2011, Head of Corporate Control & Services until 2013 and Chief Financial Officer Major Appliance
EMEA thereafter. She was then promoted to Chief Financial Officer of AB Electrolux in 2016 before taking her current
position of Chief Executive Officer Europe and Executive Vice-President of AB Electrolux in 2018. Anna Ohlsson-Leijon
holds a Bachelor of Sciences Degree in Business Administration and Economics from Linköping University (Sweden).
Term of office
First appointed: 2021/Term ends: 2025
Current external directorships
Other directorships at listed companies:
Director of Atlas Copco AB (Sweden).
Other directorships:
None.
Previous directorships
Previous directorships held in the past five years:
Observer of Schneider Electric SE; Director of
Alfa Laval AB (Sweden).
Skills
4.
Experience and qualifications
Fleur Pellerin is the Founder and currently the CEO of Korelya Capital. Fleur Pellerin became a magistrate at the
Court of Auditors in the early 2000s. In addition, she worked for the United Nations as an external auditor. In 2007,
she joined “Club XXIe Siècle”, a not-profit association dedicated to diversity and equal opportunities, and served
as President between 2010 and 2012. She took over as French Minister for SMEs, Innovation and Digital Economy
in 2012 where she launched a program for the development of French start-ups referred to as “French Tech”. In
April 2014, she was appointed Secretary of State for Foreign Trade, Tourism Development and French people
residing abroad, a position that she held till August 2014 when she became Minister for Culture and Communication.
Additionally, Fleur Pellerin is a lecturer at the ENA and was a Director of the Public Sénat channel from 2011 to 2012.
In 2016, she left politics and founded Korelya Capital, an investment fund with €330 million under management which
promotes and supports investments in technology start-ups in France and in Europe. Fleur Pellerin graduated from
the Ecole Supérieure des Sciences Economiques et Commerciale (ESSEC), the Paris Institut d’Etudes Politiques
(IEP-Sciences-Po), and the Ecole Nationale d’Administration (ENA).
Previous directorships
Previous directorships held in the past five years:
Director of Reworld Media (France), of Naver France
(France) and of Snips (France).
Skills
Term of office
First appointed: 2018/Term ends: 2022
Current external directorships
Other directorships at listed companies:
Director of I2PO (France); Member of the Supervisory
Board of KLM Royal Dutch Airlines (the Netherlands).
Other directorships:
Director and CEO of Korelya Consulting, Korelya
Capital, Korelya Fondateurs (France); Director of Korelya
Portfolio companies (Devialet, Ledger, Synapse);
Director of Stanhope Capital LLP (United Kingdom);
Member of the Strategic orientations committee of
Talan (France); Member of the Board or Supervisory
committee of following Associations: Canneseries,
Eurockéennes, and France Digitale (France).
Anna Ohlsson-Leijon*
Chief Executive Officer Europe and
Executive Vice-President of AB
Electrolux
Age: 53 years
Nationality: Swedish
Business address: AB Electrolux,
St Göransgatan 143, 105 45 Stockholm,
Sweden
1,000 Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
Fleur Pellerin*
Founder & Chief Executive Officer of
Korelya Capital
Age: 48 years
Nationality: French
Business address: Korelya Capital,
87 rue Réaumur, 75002 Paris, France
1,000 Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
71.5%
100%
An independent Director within the meaning of the AFEP-MEDEF Corporate Governance Code.
*
Note: bold indicates the names of companies whose securities are listed on a regulated market.
Skills
Public Company
Management
Law, Governance, Ethics &
Compliance
www.se.com
Corporate Finance
International Markets
Industry Knowledge
Sustainability
Digital & Technology
Accounting, Audit & Risk
Employee perspective and
knowledge of the Group
Life Is On | Schneider Electric
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4.1 Governance Report
Experience and qualifications
Anders Runevad, currently Company Director, is the former CEO of Vestas Wind Systems A/S. He started his career at
Ericsson in 1984 as a Design Engineer before holding various management positions in Sweden, Singapore, Brazil, UK
and USA. In 1998, he was appointed President of Ericsson Singapore. From 2000 to 2004, he served as Vice-President
Sales and Marketing of Ericsson Mobile Communications AB. In 2004, he was appointed President of Ericsson Brazil.
From 2007 until 2010, he served as Executive Vice-President and member of the Board at Sony Ericsson Mobile
Communications AB. He then became President of Western & Central Europe at Telefonaktiebolaget LM Ericsson
(public company) in 2010. In 2013, he left Ericsson to join Vestas Wind Systems A/S as Chief Executive Officer and
Group President, a position from which he stepped down in 2019. Anders Runevad holds a Master of Science Degree
in Electrical Engineering from the University of Lund (Sweden), where he also studied business and economy.
Anders Runevad*
Company Director
Term of office
First appointed: 2018/Term ends: 2022
Current external directorships
Other directorships at listed companies:
Vice-Chairman of the Board of Vestas Wind Systems
A/S (Denmark); Chairman of the Board of Peab AB
(Sweden).
Other directorships:
Director of Copenhagen Infrastructure Partners (CIP)
(Denmark); Chairman of the Board PGA National
Sweden (Sweden).
Age: 62 years
Nationality: Swedish
Business address: Schneider Electric,
35, rue Joseph Monier, 92500 Rueil-
Malmaison, France
1,000 Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
82.5%
Previous directorships
Previous directorships held in the past five years:
Director of Nilfisk Holding A/S (Denmark); President &
CEO of Vestas Wind Systems A/S (Denmark); Member
of the General Council of the Confederation of Danish
Industry; Member of the Industrial Policy Committee of
the Confederation of Danish Industry, Director of NKT
A/S (Denmark) (2018).
Skills
Experience and qualifications
Gregory Spierkel, now Company Director, is the former CEO of Ingram Micro Inc. He began his career working for
Bell Canada in sales and product development, followed by a period with Nortel Inc. in market research. For four years,
he served as Managing Director of Mitel Telecom with responsibilities over Europe and Asia. He then spent five years
at Mitel Corp. where he served as President of North America and President of Global Sales and Marketing. In August
1997, he joined Ingram Micro as a Senior Vice-President Asia-Pacific. In June 1999, he was appointed as Executive
Vice-President and President of Ingram Micro Europe. He was promoted to President of the Ingram Micro Inc. Group
in 2004, before assuming the role of CEO of Ingram Micro Inc. from 2005 to 2012. Gregory Spierkel holds a Bachelor’s
Degree in Commerce from Carleton University (Ottawa) and a Master’s Degree in Business Administration from
Georgetown University. He also attended the Advanced Manufacturing program at INSEAD.
Previous directorships
Previous directorships held in the past five years:
None.
Skills
Gregory Spierkel*
Company Director
Term of office
First appointed: 2015/Term ends: 2023
Current external directorships
Other directorships at listed companies:
Director of MGM Resorts International (USA);
Director of PACCAR Inc. (USA).
Other directorships:
Member of McLaren Advisory Group (McLaren
Technology Group) (United Kingdom).
Age: 65 years
Nationality: Canadian
Business address: Schneider Electric,
35, rue Joseph Monier, 92500 Rueil-
Malmaison, France
1,000 Schneider Electric SE shares
Board committees
C
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
An independent Director within the meaning of the AFEP-MEDEF Corporate Governance Code.
*
Note: bold indicates the names of companies whose securities are listed on a regulated market.
Board committees
Governance &
Remunerations
Committee
Audit & Risks
Committee
Investment
Committee
Digital
Committee
Human
Resources &
CSR Committee
C
Committee
Chair
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Chapter 4 – Corporate Governance Report
Corporate Governance
Experience and qualifications
Lip-Bu Tan, currently Executive Chairman of Cadence Design Systems, Inc., held management positions at EDS
Nuclear and ECHO Energy before being Vice-President of Chappell & Co. He also serves as Chairman of Walden
International, a venture capital firm he founded in 1987. After joining the Board of Cadence Design Systems, Inc.
in 2004, Lip-Bu Tan was appointed as CEO in 2009, a position that he held until December 2021. At that time, he
transitions to his current role of Executive Chairman of Cadence Design Systems, Inc. He holds a Master of Science
Degree in Nuclear Engineering from the Massachusetts Institute of Technology, an MBA from the San Francisco
University, and a Bachelor of Science Degree from the Nanyang University of Singapore.
Previous directorships
Previous directorships held in the past five years:
CEO of Cadence Design Systems (USA), Director of
Hewlett Packard Enterprise (USA); Board member
of Habana Labs Ltd. (Israel), Tagore Technology, Inc.
(USA), WekaIO, LTD (Israel), Aquantia Corporation
(USA), Semiconductor Manufacturing International
Corporation (China), SINA Corporation (China),
Quantenna Communications, Inc. (USA) and
Ambarella Inc. (USA).
Skills
4.
Lip-Bu Tan*
Chairman of Cadence Design Systems,
Inc.
Age: 62 years
Nationality: American
Business address: One California Street,
Suite 1750, San Francisco, CA 94111,
United States
1,000 Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
Term of office
First appointed: 2019/Term ends: 2023
Current external directorships
Other directorships at listed companies:
Chairman of Cadence Design Systems, Inc. (USA),
Chairman of the Board of Credo Technology Group
Holding Ltd. (Cayman Islands); Director of Softbank
Group Corp. (Japan).
Other directorships:
Director of Advanced Micro-Fabrication Equipment
Inc (Shanghai), CNEX Labs, Inc. (USA), Fungible, Inc.
(USA), Innovium, Inc. (USA), Komprise (USA), RF Pixels,
Inc.(USA), LightBits Labs (Israel), Movandi Corporation
(USA), NuVia, Inc. (USA), Oryx Vision (Israel), Prosimo,
Inc. (USA), Proteantecs (Israel), Rosetal System
Information Ltd. (Israel), Vayyar Imaging (Israel),
HiDeep, Inc. (South Korea), Silicon Mitus, Inc. (South
Korea), SambaNova Systems, Inc. (USA), The Electronic
System Design Alliance (ESD Alliance), Member of the
board of trustees and the School of Engineering Dean’s
Council at Carnegie Mellon University (CMU), Global
Advisory board Member of METI Japan, Member of the
board of Global Semiconductor Alliance (GSA), Member
of The Business Council and Committee 100.
Experience and qualifications
Bruno Turchet, currently Employee Director, began his career in 1999 as Electromechanical Engineer for Assystem
Technologies (French consulting and engineering company) and held the role of Key Account Manager for the
industry market (2001 – 2005). He joined Schneider Electric in 2005 and has been working in different operations.
He started as Project Technical Leader for Low Voltage Equipment in France for two years, before expatriation to
Schneider Electric China as Low & Medium Voltage Equipment R&D Manager for three years. Back in France in 2011,
he led the Productivity Department of one of the main divisions of the Group and deployed there the sustainability
program. From 2016 to 2021, he was New Products Industrialization Director of Final Distribution Line of Business.
Since July 2021, Bruno Turchet is Vice-President Industrialization for Home & Distribution Europe Division. In April
2021, he has been appointed Director of the Board representing the employees of Schneider Electric SE. Bruno
Turchet holds a Master of Science Degree in Engineering & Quality from the University of Besancon (France). He also
attended the High Performance Boards program at IMD Business School of Lausanne (Switzerland) in October 2021.
Term of office
First appointed: 2021/Term ends: 2025
Current external directorships
Other directorships at listed companies:
None.
Other directorships:
None.
Previous directorships
Previous directorships held in the past five years:
None.
Skills
Bruno Turchet
Vice-President Industrialization for Home
& Distribution Europe Division
Age: 48 years
Nationality: French
Business address: Schneider Electric,
31 rue Pierre Mendès France, 38320
Eybens, France
732(1) Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
An independent Director within the meaning of the AFEP-MEDEF Corporate Governance Code.
*
(1) Held directly or through the FCPE.
Note: bold indicates the names of companies whose securities are listed on a regulated market.
Skills
Public Company
Management
Law, Governance, Ethics &
Compliance
www.se.com
Corporate Finance
International Markets
Industry Knowledge
Sustainability
Digital & Technology
Accounting, Audit & Risk
Employee perspective and
knowledge of the Group
Life Is On | Schneider Electric
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Chapter 4 – Corporate Governance Report
4.1 Governance Report
Experience and qualifications
Nivedita Krishnamurthy Bhagat, also known as Nive Bhagat, is currently Global Chief Executive Officer for
Global Cloud Infrastructure Services of Capgemini and a member of its Group Executive Committee. Nive began
her career in articling with PricewaterhouseCoopers before joining KPMG’s Corporate Finance team. She later joined
Infosys Technologies where she held several leadership positions including Head of Enterprise Solutions EMEA
and head of its Proximity Development Centre in London. In 2010, Nive joined Capgemini and held senior executive
positions including Chief Operating Officer of its Application Business in the UK and European Head of the Cloud
Infrastructure Services business before taking her current global position of leading Capgemini’s global Cloud,
Cyber and Infrastructure business. Nive has a Bachelor’s degree in Economics and is a Chartered Accountant
from the Institute of Chartered Accountants of India.
Nive Bhagat
Chief Executive Officer Cloud
Infrastructure Services of CapGemini
Age: 50 years
Nationality: British
Business address: CapGemini,
40 Holborn Viaduct, London, EC1N,
United Kingdom
0 Schneider Electric SE shares
Term of office
Co-optation as Observer member: February 2022
Candidate for appointment as a Director: May 2022
Current external directorships
Observer of Schneider Electric SE.
Other directorships at listed companies:
None.
Other directorships:
Director of Capgemini UK plc. (United Kingdom),
CGS Holdings Ltd. (United Kingdom),
Capgemini Outsourcing Services GmbH (Germany).
Previous directorships
Previous directorships held in the past five years:
Non-executive director of Mitie Plc. (United Kingdom)
(2017 – 2022); Member of Audit & Nomination
Committees of Mitie Plc. (United Kingdom).
Skills
Note: bold indicates the names of companies whose securities are listed on a regulated market.
Board committees
Governance &
Remunerations
Committee
Skills
Public Company
Management
Audit & Risks
Committee
Investment
Committee
Digital
Committee
Human
Resources &
CSR Committee
C
Committee
Chair
Corporate Finance
International Markets
Industry Knowledge
Sustainability
Law, Governance, Ethics &
Compliance
Digital & Technology
Accounting, Audit & Risk
Employee perspective and
knowledge of the Group
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4.1.1.3 Skills and diversity
Diversity policy within the Board of Directors
and within the management of the Company
The Board of Directors pays due attention to its composition and
that of its committees. It relies on the works of the Governance &
Remunerations Committee which reviews regularly and proposes
as often as required, the relevant changes to the composition of
the Board of Directors and its committees depending on the
Group’s strategy.
In that respect, in conformity with its internal regulations, the Board
of Directors ensures through its proposals and its decisions that:
•
•
•
•
•
its composition reflects the international nature of the Group’s
activities and of its shareholders by having a significant number
of members of non-French nationality;
it protects the independence of the Board through the
competence, availability, and courage of its members;
it ensures open and unrestricted speech;
it pursues its objective of diversifying the Board of Directors
in compliance with the legal principle of attaining balanced
representation between men and women on the Board;
it appoints persons with the expertise required for developing
and implementing the Group strategy while considering
the objectives of diversity based on criteria such as age,
professional skills, nationalities, and background;
• employee shareholders and employees shall continue to be
•
represented on the Board in compliance with the provisions set
forth in Articles 11.3 and 11.4 of the Articles of Association; and
it preserves the continuity of the Board by changing some of its
members at regular intervals, if necessary, by anticipating the
expiry of members’ terms of office.
The gender diversity ratio of the Board of Directors, should the
appointment of Mrs. Nive Bhagat be confirmed in the 2022 Annual
Shareholder’s Meeting, will reach 45% (excluding the employee
Directors and the representative employee shareholders Director).
Chapter 4 – Corporate Governance Report
Corporate Governance
Schneider Electric is deeply committed towards diversity in general
and gender diversity in particular. Schneider Electric focuses on
taking proactive measures to encourage a balanced representation
of men and women at the leadership level: the portion of women at
the Executive Committee had been increased from 38% in 2020 to
44% in 2021. For the leadership pool comprising of the top leaders
(around 1,000 employees), the female representation is 26%
(+2% vs. 2020).
At its meetings of December 15, 2021 and February 16, 2022,
the Board of Directors reviewed senior management’s ambitions
regarding the balanced representation of men and women at the
leadership level and noted that the objectives are set to:
• at least 40% of women at the Executive Committee;
• at least 30% of women among the Leadership (VP and above,
around 1,000 employees).
4.
To achieve these objectives and further improve gender diversity,
the Group aims at attracting female talents by offering a training
leadership program and dedicated mentoring, an equal treatment
policy and a tailored family leave policy.
Skills within the Board of Directors
The Board of Directors undertook a review of the skills to include in
its skills matrix in order to meet the Company’s strategic needs and
some peer comparisons. It reviews its composition and expertise
to identify skills that could be strengthened in the future or would
deserve a stronger disclosure/narrative.
Schneider Electric’s Board, assessed against these skills,
appears strong and balanced, and globally well positioned. The
Board comprises individuals from diverse and complementary
professional and cultural backgrounds, true to the Group’s history
and values. This enables it to perform its duties collectively and
constructively.
The experience and expertise brought to the Board by each
director at the date of this Universal Registration Document can
be summarized as follows.
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Public Company Management
Corporate Finance
Accounting, Audit & Risk
International Markets
Industry Knowledge
Employee perspective and Knowledge
of the Group
Digital & Technology
Law, Governance, Ethics & Compliance
Sustainability
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Skills
Definition
Public Company Management
Corporate Finance
Accounting, Audit & Risk
International Markets
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Directors with experience in executive leadership positions of public companies.
These positions include industry CEOs (6 among the 14 Board members excluding the
Chairman & CEO are former CEO of listed Companies: F. Kindle, L. Apotheker, W. Kissling,
A. Runevad, G. Spierkel and Lip-Bu Tan) as well as other top executive positions
(e.g. CFO, COO) and top management roles (regional or divisional leadership).
Directors who have gained experience in banking, investments, restructuring or M&A.
Also, those high-level executives with responsibilities for financial management
(e.g. CEO, CFO).
Directors from an auditing, or internal finance role (e.g. financial reporting responsibilities).
As well as this, expertise in risk management gained from subject matter expertise or
responsibility for corporate risk management (note: non-executive positions are not taken
into consideration).
Directors who have spent a large portion of their career in, or have been directly
responsible for, foreign markets. Schneider Electric’s Board expertise is well balanced
between US, Asian and European markets experience:
• European market: JP. Tricoire, F. Kindle, L. Apotheker, C. Cabanis, W. Kissling, J. Lee,
A. Runevad, A. Ohlsson-Leijon, G. Spierkel;
• US market: L. Apotheker, L. Knoll, G. Spierkel, LB. Tan; and
• Asian market: JP. Tricoire, J. Lee, X. Ma, F. Pellerin, A. Runevad.
Industry Knowledge
Directors who have gained experience in energy sectors.
Employee perspective and Knowledge
of the Group
Directors who are also employee of the Group and have gained a deep and inside
knowledge of the Group.
Digital & Technology
Directors who have gained technical or managerial experience directly in information
technology, digitization, data and innovative technologies in relevant industries.
Law, Governance, Ethics & Compliance Directors with advanced and relevant legal qualification or experience in a corporate legal
Sustainability
setting, direct career exposure to relevant regulators, or governmental organisations.
Also includes directors who have a proven track record contributing to ethical business
practices and governance.
Directors who have made significant contributions to either sustainability in business,
or have notoriety for promotion of sustainable business in the wider economy. This skill
does include experiences such as technical experience in innovative green technologies.
4.1.1.4 Independence and conflict of interests
Independent Directors
Each year, as provided under the AFEP-MEDEF Corporate Governance Code, the Board of Directors, on the report of the Governance &
Remunerations Committee, dedicates one of the points on its agenda to the qualification of its members as independent with regard to the
criteria for independence set out in Article 9.5 of this Code and presented in the table below.
Criterion 1: employee or Corporate Officer within the previous five years
Not to be and not to have been within the previous five years:
• an employee or executive Corporate Officer of the Company;
• an employee, executive Corporate Officer, or Director of a company consolidated with the Company;
• an employee, executive Corporate Officer, or Director of the Company’s parent company or a company consolidated with this
parent company.
Criterion 2: cross-directorships
Not to be an executive Corporate Officer of a company in which the Company holds a directorship, directly or indirectly, or in which
an employee appointed as such or an executive Corporate Officer of the Company (currently in office or having held such office within
the last five years) holds a directorship.
Criterion 3: significant business relationships
Not to be a customer, supplier, commercial banker, investment banker, or consultant:
•
• or for which the Company or its group represents a significant portion of its activity.
that is significant to the Company or its group;
The assessment of the significance or otherwise of the relationship with the Company or its group must be debated by the Board and
the quantitative and qualitative criteria that led to this evaluation (continuity, economic dependence, exclusivity, etc.) must be explicitly
stated in the annual report.
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Corporate Governance
Criterion 4: family ties
Not to be related by close family ties to a Corporate Officer.
Criterion 5: auditor
Not to have been an auditor of the Company within the previous five years.
Criterion 6: period of office exceeding 12 years
Not to have been a Director of the Company for more than 12 years. Loss of the status of independent Director occurs on the date
of the 12th anniversary.
Criterion 7: status of non-executive Corporate Officer
A non-executive Corporate Officer cannot be considered independent if he or she receives variable compensation in cash or in the
form of securities or any compensation linked to the performance of the Company or Group.
4.
Criterion 8: status of the major shareholder
Directors representing major shareholders of the Company or its parent company may be considered independent, provided these
shareholders do not take part in the control of the Company. Nevertheless, beyond a 10% threshold in capital or voting rights, the
Board, upon a report from the Governance & Remunerations Committee, should systematically review the qualification as independent
in light of the Company’s shareholding structure and the existence of a potential conflict of interest.
Upon recommendation from the Governance & Remunerations
Committee, the Board of Directors, during its meeting of
February 16, 2022, reviewed the independence of each
Board member in regard of the criteria reminded above.
• With regard specifically to independence in terms of business
relations, the Board of Directors noted that, due to:
(i) The absence of business relations between the Directors
and Schneider Electric;
(ii) The nature of Schneider Electric activities and those of the
companies in which members of the Board of Directors are
employed or serve as Directors;
(iii) The amounts, either unitary or global, of operations
performed or that may be performed between Schneider
Electric and these companies that are agreed at arm’s length
and that are by no means likely to be referred to the Board
of Directors;
the existing business relations between Schneider Electric and
these companies in which the members of the Board of Directors
are employed or serve as officers are not likely to prejudice their
independence, indeed, when such operations exist, they are
agreed at arm’s length and their amounts, representing less than
0.1% of the consolidated turnover of each group, are without a
doubt insignificant for each party, in particular with regard to
respective size of the groups concerned.
Among 15 Directors, 9 are independent according to
the definition prescribed by the AFEP-MEDEF Corporate
Governance Code: Mrs. Cécile Cabanis, Mr. Fred Kindle,
Mrs. Linda Knoll, Mrs. Jill Lee, Mrs. Anna Ohlsson-Leijon,
Mrs. Fleur Pellerin, Mr. Anders Runevad, Mr. Gregory Spierkel,
and Mr. Lip-Bu Tan.
• Mr. Jean-Pascal Tricoire, as Chief Executive Officer,
Mrs. Xiaoyun Ma, as employee shareholders representative,
Mrs. Rita Felix and Mr. Bruno Turchet as employee Directors,
Mr. Léo Apotheker, and Mr. Willy Kissling, who have served
on the Board for over 12 years, are not considered to be
independent Directors under the AFEP-MEDEF Corporate
Governance Code.
• The AFEP-MEDEF Corporate Governance Code recommends
that, in non-controlled companies, the Board comprises at least
50% independent Directors (Directors representing employee
shareholders and employees are not computed in calculating
this percentage). The proportion of independent Directors of
the Company, excluding Mrs. Xiaoyun Ma, Mrs. Rita Felix and
Mr. Bruno Turchet, is therefore 75%. The proportion would rise
to 82% should the renewal of Mrs. Linda Knoll and M. Anders
Runevad, and the appointment of Mrs. Nive Bhagat be voted in
the Annual Shareholders’ Meeting per respectively the 11th, 12th,
and 13th resolutions.
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Chapter 4 – Corporate Governance Report
4.1 Governance Report
The following table shows the status of each Director with regard to the criteria for independence set out in Article 9.5 of the AFEP-MEDEF
Corporate Governance Code.
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Criteria(1)
Criterion 1:
Employee or corporate officer within the
past five years
Criterion 2:
Cross-directorships
Criterion 3:
Significant business relationships
Criterion 4:
Family ties
Criterion 5:
Auditor
Criterion 6:
Period of office exceeding 12 years
Criterion 7:
Status of non-executive Corporate Officer
Criterion 8:
Status of the major shareholder
Conclusion
signifies that a criterion for independence is satisfied and
(1) In this table,
(2) Mr. Jean-Pascal Tricoire is Chairman & Chief Executive Officer of Schneider Electric SE, Chairman of the Board of Directors of Schneider Electric Industries SAS,
Director of Delixi Electric Ltd, Chairman of the Board of Directors of Schneider Electric Holdings Inc., Director of Schneider Electric USA Inc. and Chairman of the
Board of Directors of Schneider Electric Asia Pacific Ltd.
signifies that a criterion for independence is not satisfied.
(3) Mrs. Rita Felix has an employment contract with Schneider Electric Portugal Lda.
(4) Mrs. Xiaoyun Ma has an employment contract with Schneider Electric (China) Co., Ltd.
(5) Mr. Bruno Turchet has an employment contract with Schneider Electric Industries SAS.
Declarations concerning the situation
of the members of the administrative,
supervisory, or management bodies
Service contracts
None of the Directors has a service contract with the Company or
any of its subsidiaries providing for benefits under such contract.
Absence of conviction or incrimination
To the best of the Company’s knowledge, in the last five years,
none of the Directors or the Chairman & CEO have been:
•
the subject of any convictions in relation to fraudulent offenses
or of any official public incrimination and/or sanctions by
statutory regulatory authorities;
• disqualified by a court from acting as a member of the
•
administrative, management, or supervisory bodies of an issuer or
from acting in the management or conduct of the affairs of an issuer;
involved, as a member of an administrative, management, or
supervisory body or a partner, in a bankruptcy, receivership,
or liquidation.
Family ties
To the best of the Company’s knowledge, none of the Directors and/or
the Chairman & CEO of the Company are related through family ties.
Conflicts of interest
To the best of the Company’s knowledge, there are no
arrangements or understandings with major shareholders,
customers, suppliers, or others pursuant to which a Director or
the Chairman & Chief Executive Officer has been selected as a
member of an administrative, management, or supervisory body
or a member of senior management of the Company.
To the best of the Company’s knowledge, there are no conflicts
of interest between the duties of any Directors and the Chairman
& Chief Executive Officer with respect to the Company in their
capacity as members of those bodies or their private interests
and/or other duties.
To the best of the Company’s knowledge, the Directors and the
Chairman & Chief Executive Officer have no restrictions on the
disposal of their Company shares aside from those stipulated in
Performance Share plans (see section 4.2.5 of Chapter 4 of the 2021
Universal Registration Document) for the Chairman & Chief Executive
Officer and a minimum 1,000 shareholding requirement for Directors.
4.1.1.5 Director’s holding in the Company’s
share capital
Article 11 of the Company’s Article of Association provides that
Directors are each required to hold at least 250 Schneider Electric
shares during their term of office. Moreover, in accordance with
Article 6 of the Board Internal Regulations, each Board member
shall hold 1,000 Schneider Electric shares.
The Board of Directors has set a retention target of shares
representing five years of base salary for the Chairman & CEO.
Calculation of the number of shares held is based on Schneider
Electric SE shares and the equivalent in shares of the corporate
mutual fund units invested in Schneider Electric shares held by
the beneficiary. He has to retain at least 50% of the Performance
Shares granted to him until this number of shares is reached.
The shareholding target described above is largely met by
Mr. Jean-Pascal Tricoire who owns 793,239 Schneider Electric’s
shares.
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Corporate Governance
To the Company’s knowledge, the Directors’ shareholdings in the Company’s registered capital as of the date of December 31, 2021 are
as follows:
Board member
Jean-Pascal Tricoire
Fred Kindle
Léo Apotheker
Cécile Cabanis
Rita Felix
Willy Kissling
Linda Knoll
Jill Lee
Xiaoyun Ma
Anna Ohlsson-Leijon
Fleur Pellerin
Anders Runevad
Gregory Spierkel
Lip-Bu Tan
Bruno Turchet
TOTAL
Schneider Electric shares
793,239
40,000
3,093
1,000
0
1,600
1,000
1,000
29,531
1,000
1,000
1,000
1,000
1,000
732
876,195
4.
The members of the Board of Directors directly held 0.15% of the share capital as of December 31, 2021.
The table below shows the transactions in Schneider Electric securities carried out during fiscal year 2021 and notified to the Autorité des
marchés financiers (AMF) in accordance with Article 19 of Regulation n° 594/2014 of April 16, 2014 on Market Abuse and Article L. 621-18-2
of the French Monetary and Financial Code:
First name and last name
Transaction date
Transaction type
Description of the financial instrument
Jean-Pascal Tricoire
26/03/2021
Acquisition
LTIP – Plans 30 & 31
Xiaoyun Ma
26/03/2021
Acquisition
LTIP – Plan 31
Jean-Pascal Tricoire
17/06/2021
Pledge
Ordinary shares
Bruno Turchet
06/07/2021
Subscription
Shares in Schneider Electric FCPE
Number of
securities/
instruments
Unit price
(in euros)
Amount of the
transaction
(in euros)
58,909
6,418
19,550
68.38
–
–
–
–
–
–
110.19
110.19
7,534.79
410,070.98
Jean-Pascal Tricoire
06/07/2021
Subscription
Shares in Schneider Electric FCPE
3,721.49
Jean-Pascal Tricoire
06/07/2021
Subscription
Shares in Schneider Electric FCPE
1,369.51
110.19
150,906.31
Anna Ohlsson-Leijon
13/08/2021
Acquisition
Ordinary shares
1,000
152.62
152,620.00
See details regarding Performance Shares granted to Executive Directors in section 4.2.5 of Chapter 4 of this Universal Registration
Document.
4.1.1.6 Renewal and appointment at
the next Annual Shareholders’ Meeting
Board members
The Board of Directors shall have at least three and up to eighteen
members, all of whom must be natural persons elected by the
shareholders at the Shareholders’ Meeting. However, in case of
death or resignation of a member, the Board may co-opt a new
member. This appointment is then subject to ratification at the
next Shareholders’ Meeting.
Directors are appointed for four-year terms (renewable). However,
from the age of 70, Directors are re-elected or appointed for a
period of two years. No more than one-third of the Directors may
be 70 years old or over.
Mrs. Xiaoyun Ma represents the employee shareholders in
accordance with the provisions of Articles L. 225-23 and
L. 22-10-5 of the French Commercial Code. She was elected
at the Annual Shareholders’ Meeting upon the recommendation
of the supervisory boards of the FCPEs.
Mrs. Rita Felix and Mr. Bruno Turchet represent the employees
in accordance with the provisions of Article L. 225-27-1 of the
French Commercial Code. They were appointed respectively by
the European works council and by the most representative trade
union organization in France in pursuance of Article 11.4 of the
Articles of Association.
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4.1 Governance Report
Directors selection process
The Independent Director selection process is led by the Vice-
Chairman & Lead Independent Director and Chairman of the
Governance & Remunerations Committee. When one or more
directorships become vacant, or more broadly when the Board
of Directors wishes to expand or modify its composition, the
Governance & Remuneration Committee documents and ranks
the selection criteria for potential candidates, taking into account
of the desired balance and diversity in the Board’s composition.
The Committee takes into account the diversity policy and the
objectives defined by the Board of Directors in term of skillset.
Based on these criteria, the Committee steers the search for and
selection of new directors, where appropriate with the assistance
of an external consultant, and conducts the necessary verifications.
The members of the Governance & Remunerations Committee then
interview the candidates and issue a recommendation to the Board
of Directors.
In preparation of the 2022 Shareholders’ Meeting, the Governance
& Remunerations Committee focused on furthering the international
diversification of the Board of Directors and increasing the number
of women directors, as well as adding digital expertise. A specific
selection process exists for directors representing employees and
directors representing employee shareholders, in accordance with
prevailing regulations.
Succession planning of corporate officer
Succession plans at Schneider Electric correspond to a systematic,
structured process for identifying and preparing employees with
potential to fill key organizational positions, should the position
become vacant. This process applies to all key positions including
the Chairman & CEO position. Succession plans aim at ensuring a
continued effective performance of the organization by providing
for the availability of experienced and capable employees who
are prepared to assume these roles as they become available.
Succession plans are necessary processes to reduce risk of
vacant positions or skill gap transitions, create a pipeline of future
leaders, ensure full business continuity and improve employee
motivation and engagement.
The mission of the Governance & Remunerations Committee
includes preparing for the future of the Company’s executive
bodies, in particular through the establishment of a succession
plan for the executive officers. The plan, which is reviewed
at meetings of the Governance & Remunerations Committee,
addresses various scenarios:
• unplanned vacancy due to prohibition, resignation or death;
• planned vacancy due to retirement or expiration of term
of office.
Through its work and discussions, the Committee seeks to
devise a succession plan that is adaptable to situations arising
in the short, medium or long term. The Governance &
Remunerations Committee:
• provides the Board with progress reports, in particular at
executive sessions;
• works closely with the Chairman & Chief Executive Officer
to (i) ensure the plan is consistent with the Company’s own
practices and market practices, (ii) ensure high-potential
internal prospects receive appropriate support and training,
and (iii) check there is adequate monitoring of key posts likely
to fall vacant;
• meets with key executives.
The succession plan is being reviewed and examined in light
of the wish expressed last year by the Board to separate the
roles of Chairman & Chief Executive Officer during Mr. Tricoire’s
current term.
Proposals to the Annual Shareholders’ Meeting
on the composition of the Board of Directors
Mr. Willy Kissling, member of the Board of Directors for twenty-one
years, and Mrs. Fleur Pellerin, member of the Board of Directors
since 2018, have decided not to seek the renewal of their terms
of office which expire at the closing of this Shareholders’ Meeting.
The Board of Directors expressed its gratitude to Mr. Willy Kissling’s
and Mrs. Fleur Pellerin’s dedication to the Board of Directors’ work
and to their long-term commitment.
As part of the Board’s continuous review of its composition,
the Board of Directors asked the Governance & Remuneration
Committee to make some recommendation on the renewal
of Mrs. Linda Knoll and Mr. Anders Runevad, and search for
complementary candidates in line with the skillset highlighted
by its Board skills matrix and the challenges of the Company.
In that respect, the Committee has analyzed Mrs. Linda Knoll’s
and Mr. Anders Runevad’s situation with regards to their time
commitment and availability to fulfill their duties. Neither of them
holds an excessive number of directorships, and their individual
attendance rates at Board and Committee meetings are high as
indicated in their biography (see section 4.1.1.2 of this Chapter
4 of the 2021 Universal Registration Document). The Board also
assessed their respective contributions to the work of the Board
and of the Committees to which they belong, and decided that
keeping them as directors was in the interests of the Company
and consistent with the targeted composition of the Board as
identified in the process described above. As a Director,
Mrs. Linda Knoll brings the Board of Directors experience
in senior Human Resources executive roles with international
groups. Mr. Anders Runevad brings to the Board the benefit of
his experience as the former CEO of Vestas Wind Systems A/S
and a strong profile on sustainability matters.
The Governance & Remunerations Committee also identified
the skills that would be necessary to diversify and strengthen
the Board composition and hired an external recruitment firm
(Heidrick & Struggles) to search for suitable candidates. Among
these candidates, the Governance & Remuneration Committee
preselected a short list and the members of the Committee
interviewed the short-listed candidates. Following these interviews,
the Committee recommended a candidate to the Board of Directors,
Mrs. Nivedita Krishnamurthy Bhagat, also known as Nive Bhagat,
who, on February 16, 2022, was appointed as an Observer
with the aim to propose her appointment to the Shareholders’
Meeting. Mrs. Nive Bhagat, a British citizen, is currently Global
Chief Executive Officer for Global Cloud Infrastructure Services of
Capgemini and a member of its group executive committee. The
board has analysed her situation with regards to her global time-
commitment and concluded she has sufficient time to dedicate
and fulfill her role at the Board. She will bring to the Board the
experience and additional skillset based on her wide-ranging
finance and business background especially in the field of digital
and will further add to the gender diversity of the Board of Directors.
She will also strengthen the profiles of the Schneider Electric Board
by her excellent knowledge of the Asian market. She will qualify as
an independent Director with regard to all the criteria set by Article
9.5 of the AFEP-MEDEF Corporate Governance Code and,
if appointed, will join the Digital Committee.
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Corporate Governance
If all proposals submitted to the Annual Shareholders’ Meeting are approved by the Shareholders, the Board of Directors would comprise:
Board member nationality
Board expertise
Directors
14
Employee Directors
3
Independent Directors*
Average age of Directors
9
(82%)
Women Directors*
45%
57
Europe (6)
France (4)
North America (3)
Asia (2)
Public company management (11)
Corporate finance (11)
International markets (12)
Industry knowledge (7)
Sustainability (3)
Law, governance, ethics &
compliance (3)
Digital & technology (4)
Accounting, audit & risk (5)
Employee perspective knowledge
of the Group (4)
4.
* Excluding the Director representing the employee shareholders and the Directors representing the employees.
All these considerations conducted the Board to renew
Mr. Jean-Pascal Tricoire’s office as Chairman & CEO further to
his reappointment as a Director by the Annual General Meeting
held on April 28, 2021 where 94.92% of the shareholders supported
his re-election.
The Chairman & Chief Executive Officer represents the Company
in its dealings with third parties. He is vested with the broadest
authority to act in any and all circumstances in the name and
on behalf of the Company. He exercises this authority within the
limits of the corporate purpose, except for those matters that are
reserved by law expressly to the Annual Shareholders’ Meetings
or the Board of Directors.
In addition, the internal regulations of the Board of Directors
provide that the Chairman & Chief Executive Officer must submit
for approval to the Board any acquisition transactions or disposal
of assets amounting to more than €250 million as well as any
strategic partnership agreement.
4.1.2 Organizational and
operating procedures of the
Board of Directors
4.1.2.1 Governance structure
The Chairman & Chief Executive Officer
The Company is a European company with a Board of Directors.
The functions of the Chairman and Chief Executive Officer are
carried out by Mr. Jean-Pascal Tricoire, who was appointed
Chairman & Chief Executive Officer on April 25, 2013 and renewed
on April 25, 2017 and lastly on April 28, 2021.
The performance by Mr. Jean-Pascal Tricoire of the duties of
Chairman & Chief Executive Officer seems particularly appropriate
to the Board of Directors for all the following reasons:
• The results of the external Board assessment conducted in
October 2020 and the internal one performed in 2021 that both
confirmed that (i) all Board members individually support the
current leadership structure and (ii) the level of transparency
between management team and the Board of Directors is
considered as excellent;
• Jean-Pascal Tricoire’s profile, his excellent track record within
the Company, his leadership, and his openness to the Board
members’ recommendations;
• The governance mechanisms in place to safeguard the balance
of power between the Board and the management (appointment
of a Lead Independent Director with specific powers, high rate
of independent Directors within the Board (75%), independence
of the committees mainly chaired by independent Directors,
executive session proposed systematically at the end of each
Board meeting);
• The requirement for the Board to deliberate each year on the
unification of the functions of Chairman and Chief Executive
Officer in pursuance of its internal regulations.
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4.1 Governance Report
Powers and responsibilities of the
Vice-Chairman & Lead Independent Director
Article 1 of the internal regulations of the Board of Directors defines
the duties and missions of the Vice-Chairman & Lead Independent
Director who is mandatorily appointed when the Board decides to
unify the functions of Chairman and Chief Executive Officer.
As such, the Vice-Chairman & Lead Independent Director:
•
is informed of major events in the life of the Group within the
framework of regular contacts and monthly meetings with the
Chairman, as well as through contacts that he/she can have with
managers of Schneider Electric and possible visits to the Group’s
sites he/she can undertake. In addition, he/she can attend all
meetings of committees of which he/she is not a member;
• can answer shareholders’ questions or meet them on
governance issues when it is considered that he/she is the
most appropriate spokesperson;
• sets the agenda for Board meetings with the Chairman;
• chairs the Governance & Remunerations Committee which,
starting from the evaluation of the functioning of the Board and
that of the CEO, proposes each year to the Board either the
continuation or separation of the unified functions of Chairman
& Chief Executive Officer and, as needed, makes proposals
for a successor in one or both functions;
• chairs the “executive sessions”, i.e., meetings of the Board of
Directors not in the presence of any executive member, namely
the CEO and Deputy CEO(s), if any;
• reports to the Chairman on the results of the “executive sessions”;
•
•
leads the annual evaluations of the Board of Directors;
informs the Chairman & CEO and the Board of any conflicts
of interest which could be identified or which may be reported
to him/her;
• reports on his/her activities during the Annual Shareholders’
Meeting.
It is reminded that at its meeting of February 19, 2020, the Board of
Directors designated Mr. Fred Kindle, whose biography is provided
in section 4.1.1.2 of Chapter 4 of the 2021 Universal Registration
Document to become Vice-Chairman & Lead Independent Director
of Schneider Electric SE. In application of Article 10 of the internal
regulations which prescribes that the Governance & Remunerations
Committee shall be presided by the Vice-Chairman & Lead
Independent Director, Mr. Fred Kindle chairs this Committee.
The charter for the Vice-Chairman & Lead Independent Director
is found in section 4.1.2.4 of Chapter 4 of the 2021 Universal
Registration Document. As every year, the Vice-Chairman & Lead
Independent Director, Mr. Fred Kindle, reported on the missions
he carried out in 2021 in line with his functions (see section 4.1.5
of Chapter 4 of the 2021 Universal Registration Document).
4.1.2.2 Missions and powers of the
Board of Directors
Specific powers are vested in the Board of Directors under
French law and the Company’s Articles of Association as well
as the Internal Board Regulations.
The Board of Directors
Powers vested by law
• determine the Group’s strategic directions and ensures their
implementation, in doing so, the Board shall act in accordance
with the corporate interest and shall take into account social
and environmental matters;
• examine all matters related to the efficient operation of the
business and make decisions about any and all issues
concerning the Company, within the limits of the corporate
purpose, except for those matters which, by law, can only be
decided on by the shareholders in a Shareholders’ Meeting;
• approve the corporate and consolidated financial statements;
• carry out all audits and controls that it deems necessary;
• authorize any regulated agreements on a preliminary basis;
• co-opt Directors whenever necessary;
• determine the method of exercising the senior management
of the Company;
• appoint executive Corporate Officers and also remove them
from office (Chief Executive Officer and Deputy Chief Executive
Officers, if any), and subject to shareholders’ control, set their
compensation and the benefits granted to them as well as the
compensation policy applicable to them;
• set the Directors’ remuneration within the total maximum amount
determined by the Annual Shareholders’ Meeting as well as the
compensation policy applicable to them;
• call Annual Shareholders’ Meetings and approve all reports
submitted to shareholders;
• decide on the use of authorizations granted by the
Shareholders’ Meetings, more particularly for increasing
Company capital, buying back the Company’s own shares,
carrying out employee shareholding transactions, implementing
Long-Term Incentive Plan through the granting of Performance
Shares and canceling shares;
• authorize the issue of bonds;
• authorize the issue of sureties, endorsements, and guarantees.
Additional powers arising from Articles of Association
or Internal Board Regulations
• may appoint a Vice-Chairman;
• may appoint up to three Board Observers;
• regularly review, in relation to the strategy it has defined, the
opportunities and risks, such as financial, legal, operational,
social and environmental risks, as well as the measures taken
accordingly;
• ascertain the implementation of a process aimed at preventing
and detecting corruption and influence peddling;
• checks that the executive Corporate Officers implement a policy
of non-discrimination and diversity, notably with regard to the
balanced representation of men and women on executive bodies;
• shall give prior authorization for:
− all disposals or acquisitions of holdings or assets by the
Company or by a Group company for a sum of more than
€250 million,
− concluding any strategic partnership agreement;
• shall review every year its composition, its organization and its
mode of operation;
• shall be consulted prior to acceptance by the Chief Executive
Officer or Deputy Chief Executive Officers of any corporate
appointment in a listed company outside the Group;
• shall be informed about market developments, competitive
environment and the most important challenges the company
has to face, including in the area of social and environmental
responsibility.
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4.1.2.3 Internal regulations and procedures of the Board of Directors
On April 25, 2013, the Board of Directors adopted its own internal regulations. These were later modified on December 11, 2019 to reflect
the regulatory changes which took place in 2019. These internal regulations include the rules of procedure of the board committees and
the Directors’ charter as recommended by the AFEP-MEDEF Corporate Governance Code. The regulations are reproduced hereafter
and available on the Company’s website, www.se.com.
Article 1 – Method of exercising general management – chairmanship and vice-chairmanship of the
Board of Directors
A. Method of exercising general management
1. General management of the company is under the responsibility of either the chairperson of the Board of Directors, who will then
go by the title of Chairman and Chief Executive Officer, or of another natural person appointed by the Board of Directors going by
the title of Chief Executive Officer.
2. The Board of Directors decides between these two methods of exercising general management at the time when the Chairman of
the Board of Directors or the Chief Executive Officer is appointed or when renewing their terms of office. If the Board of Directors
has decided to combine the functions of Chairman and Chief Executive Officer, it will deliberate on this choice every year.
4.
3.
In order to maintain continuity in the company’s operation if the Chairman serving as CEO leaves his role or is prevented from
doing so, the Deputy CEO(s) shall take the interim responsibility for general management functions in the company, unless
otherwise decided by the Board, until such time as a new CEO is appointed. The Vice-Chairman shall temporarily take the
Chair of the Board of Directors.
B. Chairperson of the Board of Directors
1. The Board of Directors shall elect a chairperson amongst its members (“Chairman”). The Chairman shall be appointed for a
period that can be no longer than his/her term of office as a Director. The Chairman is eligible for re-election. He/she may be
removed from office by the Board of Directors at any time.
2. The Chairman of the Board of Directors organizes and manages the Board’s activities, and reports thereon at the Annual General
Shareholders Meeting.
3. The Chairman of the Board of Directors sets the agenda and the schedule for Board meetings with assistance from the
Vice-Chairman Lead Director.
4. The Chairman of the Board of Directors ensures that the different corporate bodies operate correctly and especially that
the Directors are in a position to fulfill their mission. The Chairman may request any document or item of information useful
to enlighten the Board of Directors when preparing its meetings.
C. Vice-Chairman of the Board of Directors – Lead Independent Director
1. The Board of Directors may appoint a Vice-Chairman. The Vice-Chairman shall be appointed for a period that may not be any
longer than his term of office as a Director. The Vice-Chairman is eligible for re-election. The Vice-Chairman may be removed
from office by the Board of Directors at any time.
2. The Vice-Chairman shall preside over Board meetings in the absence of the Chairman.
The Vice-Chairman shall be called upon to replace the Chairman of the Board of Directors in the event of any temporary inability
of the latter to fulfill his/her functions or in the event of death. In the event of the Chairman’s inability to fulfill his/her functions, he/
she will be replaced by the Vice-Chairman as long as his/her inability may last and, in the case of death, until the election of a
new Chairman.
3.
In exception to 1 above, and in compliance with Article 12.2 of the Articles of Association, the appointment of a Vice-Chairman
is compulsory if the roles of Chairman and CEO are combined. In this case, the Vice-Chairman also takes on the role of
independent Director. In this respect:
• The Vice-Chairman is kept informed of major events in Group life through regular contacts and monthly meetings with the
Chairman serving as CEO;
• The Vice-Chairman is consulted by the Chairman serving as CEO on the agenda and the sequence of events for every Board
meeting as well as on the schedule for Board meetings;
• At the end of every Board meeting, the Vice-Chairman convenes executive sessions with non-executive members of the Board of
Directors, over which he will preside. It is the Vice-Chairman’s responsibility to appreciate for each topic discussed whether the
employee Directors should leave the meeting till the topic is closed. In addition, the Vice-Chairman may convene an executive
session between two Board meetings. Any Director may ask the Vice-Chairman to convene additional executive sessions;
• The Vice-Chairman shall promptly report to the Chairman serving as CEO on the conclusions of executive sessions;
• The Vice-Chairman shall draw the attention of the Chairman and of the Board of Directors to any possible conflicts of interest
that he may have identified or which may be reported to him;
• The Vice-Chairman is the chairperson of the Governance and Remunerations Committee;
• Like any other member of the Board, the Vice-Chairman may attend any meetings of committees of which he is not a member;
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Article 1 – Method of exercising general management – chairmanship and vice-chairmanship of the
Board of Directors continued
C. Vice-Chairman of the Board of Directors – Lead Independent Director continued
In order to complement his knowledge, the Vice-Chairman may meet the Group’s leading managers and visit company sites;
•
• The Vice-Chairman carries out annual assessments of the Board of Directors and, in this context, assesses the actual
contribution of every member of the Board to the Board’s activities;
• The Vice-Chairman shall report on his actions at Annual General Shareholders’ Meetings;
• The Vice-Chairman shall meet any shareholder who wishes so and inform the Board of their concerns on governance matters.
4. The Vice-Chairman Lead Director must be an independent member of the Board, as defined in accordance with the criteria
published by the company.
Article 2 – Roles and powers of the Board of Directors
1. The Board of Directors shall determine company business policies in accordance with its social interest and while considering
its social and environmental aspects, and ensure that they are implemented. Subject to the powers expressly conferred to
Annual General Shareholders’ Meetings and within the limit of the corporate purpose, it shall deal with any issue affecting the
company’s efficient operation and take business decisions within its remit.
The Board regularly reviews, in relation to the strategy it has defined, the opportunities and risks, such as financial, legal,
operational, social, and environmental risks, as well as the measures taken accordingly. To this end, the Board of Directors
receives all of the information needed to carry out its task, notably from the executive Corporate Officers (Chief Executive Officer,
Deputy Chief Executive Officers).
The Board ascertains the implementation of a process aimed at preventing and detecting corruption and influence peddling.
It receives all of the information required for this purpose.
The Board also checks that the executive Corporate Officers implement a policy of non-discrimination and diversity, notably
with regard to the balanced representation of men and women on the governing bodies.
2.
In accordance with legal or statutory provisions, it is the Board of Directors’ responsibility to:
• Determine the method of exercising general management of the company;
• Appoint executive Corporate Officers and also remove them from office as well as to set their remuneration and the benefits
granted to them;
• Co-opt Directors whenever necessary;
• Convene Annual General Shareholders’ Meetings;
• Approve corporate and consolidated accounts;
• Draw up management reports and reports for Annual General Shareholders’ Meetings;
• Draw up management planning documents and the corresponding reports;
• Draw up the corporate governance report as provided for in Article L. 225-37 of the French Commercial Code;
• Decide on the use of the delegations of authority granted at Annual General Shareholders’ Meetings, more particularly
for increasing company capital, redeeming the company’s own shares, carrying out employee shareholding operations,
and cancelling shares;
• Authorize the issue of bonds;
• Decide on the handing out of options or restricted/Performance Shares within the limits of authorizations given at Annual
General Shareholders’ Meetings;
• Authorize statutory conventions (conventions covered by Article L. 225-38 and following of the Commercial Code);
•
Implement a process to regularly assess that the rules used to qualify a related party transaction as regulated agreement
or not, are relevant and effective;
• Authorize the issue of sureties, endorsements, and guarantees;
• Decide on the constitution of study committees and designate their members;
• Decide on the dates for the payment of dividends and any possible down-payments on dividends;
• Distribute Directors’ remuneration allocated at the Annual General Shareholders’ Meeting amongst members of the
Board of Directors.
In compliance with the provisions set forth in the Commercial Code, the Board of Directors delegates all powers to the Chairman
serving as CEO (or the CEO if appropriate):
• For issuing, with the possibility of sub-delegating, sureties, endorsements, or guarantees within a maximum annual sum
of 500 million euros, limited per surety, endorsement, or guarantee to:
(i) EUR150 million for commitment guarantees made by Group subsidiaries for Group financial optimization operations,
(ii) EUR 250 million for commitment guarantees made by Group subsidiaries, for taking over the company’s commitments
whenever acquisition operations are made on companies or business activities,
(iii) EUR 100 million for other guarantees.
The above limits are not applicable to any sureties, endorsements, and guarantees that may be issued with regard to tax or
customs authorities.
• For formally recording any increases in capital following conversions of convertible bonds, exercising warrants and stock
options, as well as subscribing to capital securities or shares giving access to company capital in the context of increases
in capital reserved for employees and carrying out all prior and subsequent formalities related to any such changes in capital
and to any modifications to the Articles of Association.
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4.
3. To enable the Board to exercise its duties as defined in 1 and beyond its specific powers summarized in 2, the Board of Directors:
• Shall be informed by its Chairman or by its committees of any significant event concerning the company’s efficient operation
as well as the successful conclusions of any significant projects;
• Shall give prior authorization for:
− All disposals or acquisitions of holdings or assets by the company or by a Group company for a sum of more than
250 million euros,
− Concluding any strategic partnership agreement;
• Shall review every year its composition, its organization and its mode of operation;
• Shall be consulted prior to acceptance by the Chief executive officer or Deputy Chief executive officers of any corporate
appointment in a listed company outside the Group;
• Shall be informed about market developments, competitive environment and the most important challenges the company
has to face, including in the area of social and environmental responsibility.
4. The activities of the Board of Directors and its committees shall be described in the corporate governance report.
Article 3 – Membership of the Board of Directors
In the proposals it makes and the decisions it takes, the Board of Directors shall ensure:
• That it reflects the international nature of the Group’s activities and of its shareholders by having a significant number of members
of non- French nationality;
• That it protects the independence of the Board through the competence, availability and courage of its members;
• That it pursues its objective of diversifying the Board of Directors in compliance with the legal principle of attaining balanced
representation between men and women on the Board;
• That it appoints persons with the expertise required for developing and implementing the Group strategy while considering the
objectives of diversity based on criteria such as age, professional skills and experiences;
• That employee shareholders and employees shall continue to be represented on the Board in compliance with the provisions set
forth in Articles 11.3 and 11.4 of the Articles of Association;
• That it preserves the continuity of the Board by changing some of its members at regular intervals, if necessary by anticipating
the expiry of members’ terms of office.
Article 4 – Meetings of the Board of Directors
1. The Board of Directors shall meet whenever the interests of the company so require and at the least six times a year, including
one meeting for examining strategy in detail.
Notices to attend shall be issued by all means, including verbally. They shall be sent via the secretary of the Board.
2. Board meetings shall be convened by the Chairman or, if such person is unable to do so, by the Vice-Chairman.
Moreover, if no Board meeting takes place for over two months, the Chairman must convene a meeting of the Board at a date
no later than fifteen days after at least one-third of the members of the Board have made a justified request for this purpose.
If the request goes unheeded, the person or persons requesting the meeting may convene a meeting himself or themselves,
stating the agenda of the proposed meeting.
Similarly, the Chief executive officer, if he is not Chairman of the Board of Directors may also address a request to the Chairman
to convene a meeting on any given agenda.
The person responsible for convening the meeting shall set its agenda. The agenda may be modified or completed at the time
of the meeting.
Board meetings shall be held at the company’s registered offices or at any other place specified in the notice of the meeting,
whether in France or abroad.
3. Any member of the Board may appoint another member to represent him at a Board meeting by means of a proxy form.
During the same meeting, each member of the Board may only use one proxy form that he has received further to the foregoing
paragraph.
Members of the Board may attend Board meetings by videoconference or telecommunication links, which allow them to be
identified and which guarantee their effective participation. In such a case, they are counted among the members present
to the meeting. However, in accordance with applicable laws, for the purposes of checking and controlling annual accounts,
consolidated accounts and the management report, the members of the Board of Directors who attend the meeting by video
conference or telecommunication links shall not be taken into account for the purposes of determining the quorum or the majority.
Deliberations of the Board of Directors shall only be valid if at least half of the Directors are present. However, in application of
Article 15 of the Articles of Association, the Board of Directors may only deliberate validly on the methods for exercising general
management if two-thirds of the Directors are present or represented.
Decisions shall be taken on a majority vote by the Directors present or represented. In the event of equality of votes, the Chairman
of the meeting shall have the casting vote.
4. Besides the secretary of the Board, the Deputy CEO in charge of finance shall attend Board meetings.
The Board of Directors shall hear operational managers concerned by major issues submitted to examination by the Board.
The Board of Directors may authorize persons who are not members of the Board to attend Board meetings including by
videoconference or by telecommunication links.
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Article 4 – Meetings of the Board of Directors continued
5. An attendance register shall be kept at the registered office.
The proceedings of the Board of Directors shall be recorded in minutes.
The secretary of the Board shall be authorized to certify copies or excerpts from the minutes of the Board’s proceedings.
Article 5 – Information for the Board of Directors
Members of the Board of Directors shall be provided with all the information necessary to enable them to carry out their duties and
this within time limits that enable them to familiarize themselves with this information in a meaningful way. They may procure any
documents they require for this purpose prior to meetings.
Any request for information made by members of the Board on specific subjects shall be addressed to the Chairman serving as CEO
(and, if appropriate, to the CEO), who will reply thereto as promptly as possible.
In order to provide members of the Board of Directors with complete information, visits to sites and customers shall be organized for
them. Members of the Board of Directors shall have the right to meet the main company executives. They shall inform the Chairman
serving as CEO (and, if appropriate, the CEO) thereof.
The Chairman serving as CEO shall meet each member of the Board individually once a year.
Article 6 – The status of members of the Board of Directors
1. Members of the Board of Directors shall represent all the shareholders and shall act in the interests of the company in all
circumstances.
2. Members of the Board of Directors shall attend Board meetings and meetings of the committees of which they are members.
Any member, who has not attended at least half of the meetings held during the year, unless there are exceptional reasons,
shall be deemed to wish to terminate his term of office and shall be invited to resign from the Board of Directors or the committee
concerned, as appropriate.
3. Members of the Board of Directors shall be bound by a general confidentiality obligation with respect to the deliberations of
the Board and the committees and with respect to information which is not in the public domain, which they receive further to
performing their duties.
4. Directors may not exercise more than 4 other terms of office in listed companies outside the Group.
5. Members of the Board of Directors shall have a duty to inform the Board of Directors of any office they may hold or no longer hold
in other companies.
6. Members of the Board of Directors have a permanent duty to ensure that their personal situation shall not give rise to a conflict
of interest with the company. In this respect, they shall disclose:
•
the existence of any conflict of interest, even a potential one, upon assuming their duties and then each year in response
to a request made by the company at the time of preparation of its Universal Registration Document;
• upon occurrence of any event which would render the statement above mentioned totally or partially inaccurate.
Any member of the Board of Directors having a conflict of interest, even a potential one, has a duty to notify it to the Vice-Chairman
Lead Director who shall in turn inform the Board of Directors. The Board of Directors shall rule upon the conflict of interest and may
request to the member(s) of the Board of Directors concerned to correct his/her situation. The member of the Board of Directors
having a conflict of interest, even a potential one, shall not take part to the discussions nor to the vote of the corresponding
decision and shall leave the meeting of the Board of Directors when the decision is debated.
7. During their term of office, members of the Board of Directors, to the exclusion of the Directors representing employees, shall
possess at least 1,000 shares in Schneider Electric SE. For applying this obligation, except for the 250 shares which must be
held to comply with Article 11.1 of the Articles of Association, shares held via a company mutual fund essentially invested in the
company shares can be taken into account. The Schneider Electric shares that they hold shall either be in purely registered
(nominatif pur) or in managed registered (administré) form.
8. Members of the Board of Directors shall inform the French financial market authority within three business days from the
completion of the operation, by e-mail at the following address: https://onde.amf-france.org/RemiseInformationEmetteur/Client/
PTRemiseInformationEmetteur.aspx, as well as the secretary of the Board, of any acquisition, sale, subscription or exchange
concerning shares issued by Schneider Electric SE or any operation on financial instruments linked thereto, conducted on their
own account or on their behalf.
8A. Members of the Board of Directors shall provide the secretary of the Board with the list of the persons closely associated with
them as defined by the European Regulation n°596/2014 (“Market Abuse Regulation”), whom they shall notify of their individual
duties to inform the French financial market authority and Schneider Electric SE (to the attention of the secretary of the Board),
similar to those applicable to themselves pursuant to paragraph 8 above.
9. Members of the Board of Directors undertake to abide by the compliance Code governing stock-market ethics, of which they
have received a copy, with respect to their personal financial transactions. In consequence, members of the Board of Directors
may not acquire or dispose of options or any other derivative relating to Schneider Electric SE shares, except authorized hedging
of stock- options plans in order to hedge stock option plans (e.g., hedging of shares subscribed upon exercise of options).
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Members of the Board of Directors shall refrain from carrying out any transaction involving company’s listed shares during the
31 days before the day following publication of annual or half-yearly accounts, and during the 16-day period before the day
following publication of quarterly information. The same principle applies when they hold insider information, i.e., precise
information concerning the company, which has not been made public and which, if it were made public, could have a marked
impact on share price or on any financial instrument related to them.
10. Members of the Board of Directors shall attend Annual General Shareholders’ Meetings.
11. Members of the Board of Directors shall be remunerated by the payment of an annual fixed amount allocated at Annual General
Shareholders’ Meetings. The said amount will be distributed by the Board of Directors to its members.
The Board of Directors may grant exceptional remuneration for assignments or offices conferred upon Directors.
12. Travelling expenses, notably including hotel and restaurant expenses, incurred by the members of the Board of Directors in
relation to the performance of their duties, shall be borne by the company on presentation of supporting documents.
13. Members of the Board of Directors shall complete the on-boarding programme offered to them at the beginning of their first term.
Article 7 – Non-voting Directors
The non-voting Directors shall attend Board meetings in a consultative capacity.
They shall receive the same information as the other members of the Board. They may be appointed as members of committees,
except for the Audit Committee.
They shall act in the interest of the company under all circumstances.
They shall be bound by the same general confidentiality obligation as the members of the Board of Directors and shall be subject
to the same limitations regarding transactions involving the company’s shares. Their remuneration shall be determined by the
Board of Directors.
4.
Article 8 – The committees of the Board of Directors
1. The committees created by the Board of Directors shall be as follows:
• Governance and Remunerations Committee;
• Audit and Risks Committee;
• Human Resources and Corporate Social Responsibility Committee;
•
• Digital Committee.
Investment Committee;
2. The role of these committees shall be to research and prepare certain matters to be considered by the Board of Directors.
They shall make proposals, give recommendations and issue opinions, as appropriate, in their area of competence.
Created by virtue of Article 13 of the Articles of Association, they shall only have a consultative role and shall act under the
authority of the Board of Directors.
3. The chairpersons and members of the committees shall be appointed by the Board of Directors. However, the Vice-Chairman
Lead Director shall preside over the Governance and Remunerations Committee. They shall be appointed in a personal capacity
and may not be represented.
The terms of office of committee members shall coincide with their terms of office as members of the Board of Directors.
The terms of office of committee members may be renewed.
As a matter of good governance and to the exclusion of the Governance and Remunerations Committee chaired by the Vice-
Chairman Lead Director, committee chairs should be rotated and not exceed four-years for a given committee. The Board of Directors
shall deliberate annually on the chairmanship of the concerned committee whenever such four-year limit is reached or exceeded.
4. Committees shall meet on the initiative of their chairperson or on request from the Chairman of the Board of Directors or the CEO.
5. The Chairman serving as CEO or the CEO shall be kept informed of committee meetings. He/she shall be in regular contact
with committee chairmen.
6. Committee meetings shall be held at the company’s registered offices or any other place decided upon by the chairperson
of the committee with an agenda prepared by the latter. If necessary, they may be held by audio or video conference.
Members of the Board of Directors may attend meetings of committees of which they are not a member. Only the members
of the committee shall take part in the committee’s discussions.
A secretary will prepare the minutes of the meetings, which shall be recorded in an ad hoc register specific to each committee
by the secretary of the Board.
A report on each committee’s activities shall be given by the committee’s chairperson or one of its members at the next Board
meeting. Minutes of committee meetings shall be provided for the members of the Board of Directors.
After referring the matter to the Chairman of the Board, every committee may request studies from external consultants.
Every committee may invite any person of its choice to its meetings, as and when required.
7. Other than the permanent specialist committees that it has created, the Board of Directors may also decide to set up any ad hoc
committees for specific operations or assignments.
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Article 9 – The Audit and Risks Committee
1. Membership and operation of the Audit Committee
The Committee shall be comprised of at least three members, two-thirds of whom must be independent members of the Board
of Directors. At least one of the members must possess special skills concerning matters of finance and accountancy and be
independent with regard to specified, published criteria.
The Deputy CEO in charge of finance shall act as the Audit Committee’s contact. The head of internal audit shall act as secretary
to the Audit Committee.
The Committee shall meet at least five times a year. The chairperson of the Committee shall draw up agendas for meetings.
The meetings shall be attended by members of the finance department and of the company’s internal audit department and,
with respect to meetings devoted to examining accounts, by the statutory auditors. The Committee may invite any person it
wishes to hear to its meetings. It may also require the CEO to provide any documents it deems to be useful.
Outside the presence of company representatives, the Committee shall regularly hear the statutory auditors and the head
of the internal audit.
2. The duties of the Audit Committee
The Audit Committee monitors questions on drawing up and controlling accounting, financial, and extra-financial information.
It prepares the Board of Directors’ decisions in these domains. It issues recommendations to the Board for the purpose of
ensuring the integrity of the financial and extra-financial information and gives advices. For this purpose:
•
It shall prepare for annual and half-yearly accounts to be approved by the Board and therefore, more particularly:
− Checks the appropriateness and consistency of the accounting methods used for drawing up consolidated and corporate
accounts, as well as checking that significant operations on Group level have been dealt with appropriately and that rules
relating to the consolidation perimeter have been complied with;
− Examines off-balance-sheet risks, including those of a social and environmental nature, and commitments as well as the
cash situation;
•
•
− Examines the process for drawing up financial and extra-financial information.
It examines the draft annual report, which bears the status of Universal Registration Document and contains the information on
internal control, the draft half-yearly report and, where applicable, any remarks made by the French Financial Market Authority
(AMF) concerning these reports, as well as the other key financial information documents.
It handles follow-up on legal control of annual and consolidated accounts made by statutory auditors, notably by examining
the external audit plan and results of controls made by statutory auditors.
• After a consultation process, it shall suggest reappointing the existing statutory auditors or appointing new statutory auditors.
It shall check the independence of statutory auditors, especially at the time of examining fees paid by the Group to their firm
•
or their network, and by giving prior approval to any missions that are not strictly included in the scope of the statutory audit.
It monitors the efficiency of internal control and risk management systems. For this purpose:
− It shall examine the organization and resources used for internal audit, as well as its annual work program. It shall receive
summaries of reports produced on audits on a quarterly basis. However, the chairperson of the Committee shall receive
these reports in full;
•
− The Committee shall examine operational risk-mapping and make sure that measures exist for preventing or minimizing risks;
− It shall examine how to optimize risk coverage on the basis of reports requested from internal audit;
− It shall examine Group internal control measures and look into the results of entities’ self-assessments with respect to
internal control. It shall ensure that a relevant process exists for identifying and processing incidents and anomalies;
− It shall ascertain the existence of Group compliance policies notably concerning competition, anti-bribery, ethics, and data
protection and the measures implemented to ensure that these policies are circulated and applied.
The Audit Committee shall examine proposals for distribution as well as the amount of financial authorizations submitted for
approval at Annual General Shareholders Meetings.
The Audit Committee reports to the Board on the implementation of Schneider Electric SE’s Charter on the related party
transactions and on the relevance of the criteria to qualify related party transactions as regulated agreements or not.
The Audit Committee shall examine all financial and accounting questions and questions related to risk-management submitted
to it by the Board of Directors.
The Audit Committee reports to the Board on the findings of its works and how they contributed to the integrity of the financial and
extra-financial information. It informs the Board of the follow-up actions that it proposes to take. The chairperson of the Audit Committee
shall keep the Chairman and the Vice-Chairman Lead Director promptly informed of any difficulties encountered by the Committee.
Article 10 – Governance and Remunerations Committee
1. Membership and operation of the Governance and Remunerations Committee
The Committee shall be comprised of at least three members.
The Governance and Remunerations Committee shall be presided by the Vice-Chairman Lead Director. Failing this, the Board
shall appoint the chairperson of the Committee.
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The secretary of the Board shall be the secretary of the Governance and Remunerations Committee.
The Committee shall meet at the initiative of its chairperson. The agenda shall be drawn up by the chairperson of the Committee
after consultation with the Chairman of the Board of Directors. The Committee shall meet at least three times a year.
In order to carry out its assignments, the Committee may hear any person it wishes.
2. The Governance and Remunerations Committee’s duties:
The Committee will formulate proposals to the Board of Directors in view of any appointment made:
(i) To the Board of Directors:
• Directors or non-voting Directors,
• Chairman of the Board of Directors, Vice-Chairman and Vice-Chairman Lead Director,
Chairpersons and members of committees;
(ii) For general management of the company. The Committee will also give its opinion to the Board on nominations for any Deputy CEOs.
The Committee shall formulate proposals to the Board of Directors on the compensation policy of the executive Corporate Officers
(Chairman of the Board of Directors and/or CEO, Deputy CEO), ensuring in particular its alignment with the corporate interest. The
Committee shall prepare annual assessments of the persons concerned and make recommendations to the Board of Directors
concerning the determination of the components of the compensation due to executive Corporate Officers in accordance with
the compensation policy. To this end, it uses the works of the Human Resources and CSR Committee.
4.
The Committee shall prepare the draft corporate governance report of the Board of Directors.
When the Committee reports to the Board on these matters, the Board of Directors debates and deliberates without the presence
of the executive Corporate Officers.
The Committee shall propose measures to the Board of Directors that will reassure both shareholders and the market that the
Board of Directors carries out its duties with all necessary independence and objectivity. For this purpose, it will organize for
yearly assessments to be made of the Board of Directors. It shall make proposals to the Board of Directors on:
• Determining and reviewing Directors’ independence criteria and Directors’ qualifications with regard to these criteria;
• Missions carried out by the committees of the Board of Directors;
• The evolution, organization, and operation of the Board of Directors and its committees;
• The company’s use of national and international corporate governance practices;
• The total amount of Board members’ remuneration proposed at Annual General Shareholders’ Meetings together with
its allocation amongst them.
Article 11 – Human Resources and Corporate Social Responsibility Committee
1. Membership and operation of the Human Resources and Corporate Social Responsibility Committee.
The Committee shall be comprised of at least three members.
The Director of Human Resources for the Group shall be the secretary to the Human Resources and Corporate Social
Responsibility Committee.
The Committee shall meet at the initiative of its chairperson. The agenda shall be drawn up by the chairperson of the Committee
after consultation with the Chairman serving as CEO. The Committee shall meet at least three times a year.
In order to carry out its assignments, the Committee may hear any person it wishes.
2. The Committee’s duties:
The Committee shall formulate proposals to the Board of Directors on setting up share subscription/purchase options plans
and free/Performance Shares plans.
The Committee shall formulate projects on proposals made by general management on:
• Compensation of the members of the Executive Committee;
• Principles and criteria for determining the compensation of Group executives.
The Committee shall be informed of any nomination of members of the Executive Committee and of the main Group executives.
It shall examine succession plans for key Group executives.
The Committee shall prepare the Board of Directors’ deliberations on (i) expansion of employee shareholding, (ii) review by the
Board on social and financial impacts of major re-organization projects and major human resource policies, (iii) monitoring risks
management in relation to human resources, and (iv) examining the different aspects of the “CSR” Group policy.
Article 12 – Investment Committee
1. Membership and operation of the Investment Committee
The Committee shall be comprised of at least three members.
The Director of Group Strategy will be secretary to the Investment Committee.
The Committee shall meet at the initiative of its chairperson. The agenda shall be drawn up by the chairperson of the Committee
after consultation with the Chairman serving as CEO. The Committee shall meet three times a year, less or more depending on
the circumstances.
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Article 12 – Investment Committee continued
In order to carry out its assignments, the Committee may hear any person it wishes and call upon the Group M&A Director.
2. The Investment Committee’s duties:
The Committee prepares the Board of Directors’ deliberations on investment policy. To this purpose, the Committee:
• Shall elaborate recommendations for the Board on major capital deployment decisions;
• Shall advise the management team on capital deployment strategies;
• May launch, at the Board’s request, or suggest research projects leading to material investments for the company, typically
for capital deployment decisions of EUR 250 million or above;
• May investigate matters of smaller scale, if the strategic significance warrants it or the Board/Chairman of the Board specifically
requires it;
• Shall provide recommendations on major merger, alliances, and acquisition projects;
• Shall pay special attention to reconfiguration or consolidation scenarios happening in the sectors the company is operating
in or likely to operate in;
• Shall examine portfolio optimizations and divestment projects of financial or strategic significance;
• Shall support the management in the elaboration of investment policies linked to the long-term positioning of Schneider
Electric, such as innovation and R&D strategies or any major organic growth investments;
• Shall present to the Board social and environmental aspects of the strategic projects submitted to it such as M&A projects.
Article 13 – Digital Committee
1. Membership and operation of the Digital Committee
The Committee shall be comprised of at least 3 members.
The Chief Digital Officer or the Chief Information Officer will be secretary to the Digital Committee.
The Committee shall meet at the initiative of its chairperson. The agenda shall be drawn up by the chairperson of the Committee
after consulting with the Chairman & CEO. The Committee shall meet at least three times a year, including a joint review on
cybersecurity risks with the Audit and Risks Committee.
In order to carry out its assignments, the Committee may hear any person it wishes.
2. The Digital Committee’s duties:
The purpose of the Digital Committee is to assist the Board in digital matters in order to guide, support and control the Group
in its digitization efforts. The Digital Committee prepares the Board of Directors’ deliberations on digital matters.
For this purpose, the Digital Committee will review, appraise, and follow-up projects and, generally, advise, inter alia on 7 areas:
1. Development and growth of the EcoStruxure™ digital business, including (i) enhancing Core Businesses with Connectivity
& Analytics, (ii) building new digital offers & business models, (iii) establishing its contribution to and consistence with the
overall strategy;
2. Improvement and transformation of the Group’s Digital Customers & Partners Experience;
3. Improvement of Schneider Electric’s Operational Efficiency through the effective use of Information Technology and digital
automation capabilities;
4. Assessment of cyber risks and enhancement of the Group’s cybersecurity posture (jointly with the Audit Committee);
5. Assessment of the contribution of potential M&A operations to the Group’s Digital strategy;
6. Monitoring and analysis of the digital landscape (competitors and disrupters, threats, and opportunities);
7. Checking that the company is equipped with the right pool of talents for digital transformation.
Article 14 – Perimeter of internal regulations
The present internal regulations have been unanimously approved by the Board of Directors. A purely internal act, their objective
is to complete the Articles of Association by stipulating the main conditions of organization and operation of the Board of Directors.
Their purpose is not to replace the Articles of Association. They may not be relied upon by shareholders or third parties for use against
members of the Board of Directors, the company, or any company in the Schneider Electric Group. They may be modified at any time
solely by deliberation of the Board of Directors.
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4.1.2.4 Charter of the Vice-Chairman & Lead Independent Director
The Board of Directors adopted the Charter of the Vice-Chairman & Lead Independent Director which is reproduced hereafter and available
on the Company’s website, se.com.
1. The Board of Directors may appoint a Vice-Chairman. The Vice-Chairman shall be appointed for a period that may not be any
longer than his term of office as a Director. The Vice-Chairman is eligible for re-election. The Vice-Chairman may be removed
from office by the Board of Directors at any time.
2. The Vice-Chairman shall preside over Board meetings in the absence of the Chairman.
The Vice-Chairman shall be called upon to replace the Chairman of the Board of Directors in the event of any temporary inability
of the latter to fulfill his functions or his death. In the event of the Chairman’s inability to fulfill his functions, he will be replaced by
the Vice-Chairman as long as his inability may last and, in the case of his death, until the election of a new Chairman.
3.
In exception to 1 above, and in compliance with Article 12.2 of the Articles of Association, the appointment of a Vice-Chairman
is compulsory if the roles of Chairman and CEO are combined. In this case, the Vice-Chairman also takes on the role of Lead
Independent Director. In this respect:
4.
•
•
•
•
•
•
•
•
•
•
•
the Vice-Chairman is kept informed of major events in Group life through regular contacts and monthly meetings with the
Chairman serving as CEO;
the Vice-Chairman is consulted by the Chairman serving as CEO on the agenda and the sequence of events for every Board
meeting as well as on the schedule for Board meetings;
the Vice-Chairman may convene executive sessions with non-executive members of the Board of Directors, over which he will
preside. An executive session shall be included on the agenda of every Board meeting. It is the Vice-Chairman’s responsibility
to decide whether it should be held or not. It is therefore held as decided by the Vice-Chairman, either directly before or after
each Board meeting. In addition, the Vice-Chairman may convene an executive session between 2 Board meetings. Any
Director may ask the Vice-Chairman to convene an executive session;
the Vice-Chairman shall promptly report to the Chairman serving as CEO on the conclusions of executive sessions;
the Vice-Chairman shall draw the attention of the Chairman and of the Board of Directors to any possible conflicts of interest
that he may have identified;
the Vice-Chairman is Chairman of the Governance Committee;
like any other member of the Board, the Vice-Chairman may attend any meetings of committees of which he is not a member;
in order to complement his knowledge, the Vice-Chairman may meet the Group’s leading managers and visit company sites;
the Vice-Chairman carries out annual and biennial assessments of the Board of Directors and, in this context, assesses the
actual contribution of every member of the Board to the Board’s works;
the Vice-Chairman shall report on his actions at Annual General Shareholders’ Meetings;
the Vice-Chairman shall meet any shareholder who wishes so and inform the Board of their concerns on governance matters.
4. The Vice-Chairman Lead Director must be an independent member of the Board, as defined in the criteria published by the
company.
4.1.2.5 Information and training of the
Board of Directors and its members
Information given to Directors
To ensure that the Board of Directors is well informed at all times,
Schneider Electric SE applies the following rules: members of the
Board have access, via a secure dedicated platform, in principle,
ten days before every Board meeting, to the agenda for the
meeting and to the draft minutes of the last meeting and, four
to five days before, to the Board’s file.
Executive Committee members are invited, depending on
the subject, to present the major issues within their areas of
responsibility. Statutory auditors attend the portion of the Board’s
meetings at which the full year and half year financial statements
are reviewed.
In addition, each year a Board meeting called “strategy week”
is held in the form of a seminar and invites key executives of the
Group to contribute to Board discussions. These seminars also
enable directors to constantly refine their understanding of the
challenges facing the Group through themed-based presentations
and site visits.
Furthermore, the Board organizes a range of specific training
sessions throughout the year to help directors increase their
knowledge of the Group (through presentations of its ecosystem,
challenges, businesses and certain of its regions) and its
competitive environment, as well as recent market disruption
trends and technological developments. In 2021, four training
sessions were organized on subjects like Climate change,
Talents or Supply Chain.
Between each meeting of the Board of Directors, aside from
meetings that they may have with the Chairman & CEO, Directors
receive information through relevant financial analysts’ reports,
and other documents. Board members also have the opportunity
to meet informally with key members of senior management.
Board of Director dinners are organized in order to offer more
opportunities to interact with investors, customers, experts, etc.
These dinners are meant to provide the Board members with
external views on the Group, to increase their understanding of
the changes in its business environment, and to gain more insight
on the needs and motivations of all stakeholders. In 2021, due to
COVID-19 sanitary crisis and the lockdown in France, only two
dinners were organized.
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On-boarding program of new Directors
A complete on-boarding program is provided to any new Director
in order to help him/her to get a deep understanding of the
business, the challenges and priorities of Schneider Electric as well
as its governance and values. As such, new Directors are offered
a training and information program on the Group’s strategy and
businesses designed around a common core which comprises of:
In addition, the Directors representing employees, Mrs. Rita Felix
and Mr. Bruno Turchet, benefit from a training program compliant
with legal requirements and approved by the Board of Directors. In
pursuance of new French regulations coming from law n° 2019-486
of May 22, 2019 relating to companies’ growth and transformation,
known as PACTE law, the Director representing the employee
shareholders, Mrs. Xiaoyun Ma, was offered a tailored training
session to address her needs.
• a set of documents including, in particular, the last registration
document and integrated report, the Company’s Articles of
Association, the internal regulations of the Board of Directors,
the AFEP-MEDEF Corporate Governance Code, the compliance
Code governing stock- market transactions (see below), the
minutes of the Board’s and committees’ meetings for the period
starting from the appointment back to the full year before,
Directors’ and officers’ liability master policy and the last
three periodic information letters;
• a summary relating to the Group organization;
• working meetings with the Chief Financial Officer and Executive
Vice-Presidents of Strategy, Energy Management, Industrial
Automation, and other EVPs as the case may be;
• a work session with the secretary of the committee(s) he/she
will join;
•
• concerning governance and values: work session with the Vice-
Chairman & Lead Independent Director; the Chief Governance
Officer, the Secretary of the Board of Directors, as well as with
the persons in charge of compliance and ethics and sustainable
development;
to know more about Schneider Electric’s shareholding structure
and shareholders’ expectations, an interview with the senior
Vice-President Investors Relations;
training on the use of the secure dedicated platform on which
all the Board’s files are filed and kept;
the designation of a mentor for any new Director to facilitate his/
her integration;
•
•
• as the case may be, visits to sites which are particularly
illustrative of Schneider Electric’s activities.
Compliance Code governing stock-market
transactions
Schneider Electric has adopted a compliance Code governing
stock-market transactions for members of the Board of Directors
and Group employees designed to prevent insider trading. Under
these provisions, both Directors and relevant employees are barred
from trading in the Company shares and shares in companies for
which they have inside information that has not yet been made
public. In addition, they may not trade in Schneider Electric SE
shares during the 31 days preceding the day following publication
of the annual and interim financial statements, nor during the
16 days preceding the day following publication of a quarterly
update, nor may they engage in any type of speculative trading
involving Schneider Electric SE shares (including margin trading,
purchasing, and selling shares in a period of less than four months).
In addition, in accordance with the AFEP-MEDEF Corporate
Governance Code, Corporate Officers also undertake not to enter
into hedges of shares resulting from exercise of options and of
Performance Shares they are required to hold (see section 4.1.1.5
of Chapter 4 of the 2021 Universal Registration Document). These
restrictions supplement the prohibition against hedging unvested
stock options and Performance Shares during their vesting period.
The compliance Code governing stock-market transactions was
revised when the European “Market Abuse Regulation” nº 2014/596
of April 16, 2014 entered into force, and subsequently updated
in December 2018. The regulation obliges companies to draw up
insider lists, and market operators to put in place mechanisms
aimed at preventing and detecting suspicious transactions,
enabling them to report to the Autorité des Marchés Financiers
those that seem to them to constitute insider dealing.
4.1.2.6 Self-assessment of the Board of Directors
Pursuant to its internal regulations, Schneider Electric SE’s Board of Directors annually reviews its composition, organization, and
operations, as well as those of its committees. This yearly assessment is carried out through a written questionnaire sent to Board members
or an interview with the Board member. The evaluation is conducted under the leadership of the Vice-Chairman & Lead Independent
Director by the Secretary of the Board of Directors. In addition, as per the AFEP-MEDEF Corporate Governance Code, the Board of
Directors shall undertake at least once every three years, a formal self-assessment, which may be conducted with the assistance of an
external consultant.
Internal self-assessment conducted in September and October 2021
An internal assessment was conducted by the Vice-Chairman & Lead Independent Director, who guaranteed the confidentiality of opinions
expressed, based on (i) a questionnaire answered anonymously by Board members and (ii) another anonymous questionnaire answered
by Executive Committee members to know better their expectations toward the Board of Directors.
The report was presented and discussed in detail at the Governance & Remunerations Committee on October 25, 2021 and a summary
report was presented to the Board of Directors on October 26, 2021. The Vice-Chairman & Lead Independent Director provided individual
feedback on the assessments of the effective contribution of each Director.
Themes
(i) Membership and dynamics of the Board; (ii) Mission, organization, and operation of the Board; (iii) Works of the committees;
(iv) On-boarding program of the new members; (v) 2022 top Board priorities; and (vi) Effective contribution of each Director.
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Key findings
•
Involvement and contribution of Board members is perceived as very high. Excellent leadership and contribution of the Chairman & CEO
who is described as open, engaging, transparent, charismatic, and driven by vision
• Perfect fit between the Chairman & CEO and the Vice-Chairman & Lead Independent Director who have a strong relationship and is
considered as very open and truly independent
• Quality of relations between the Board and the management is unanimously seen as trustful and supportive (everyone feels free to
express his/her opinion)
• Board members are satisfied with the agendas, which are well designed and balanced between business, financial, and governance
topics
• Social and environmental dimensions are systematically taken into account in all discussions with the board
• All committees operate properly, and their work is satisfactory and useful to the Board decision-making process
• Overall, the on-boarding program is considered as very valuable by all the new Board members
• The one-to-one meetings between Board members and Executive Committee members are perceived as very valuable and useful.
Areas for improvement
• Majority of Board members considers that the span of skills brought to the Board is adequate but could be reinforced in Digital
4.
and Software and in Asian market knowledge
• Progress could be made by dedicating more time on competitive landscape or R&D expenses (investment and KPIs measurement)
• Possibly a little bit more time during the meeting should be devoted to debate vs. presentation
•
• Rhythm of interactions between Board members and Executive Committee members could be increased.
Information should be provided more in advance of Board meetings and could be more synthetic
4.1.3 Board activities
The Board held seven meetings in 2021 (versus. twelve in 2020 due to the COVID-19). The meetings lasted six hours and twenty minutes on
average with an average participation rate of Directors of 97% (same as in 2020). Thirteen Directors have an attendance rate of 100% and
none have an attendance rate less than 71.5% as shown in the table summarizing the Directors’ individual attendance at Board meetings.
All absences were legitimate and excused.
The Board of Directors devoted most of its activities to the Company’s business, strategy, and corporate governance as detailed below:
Business and financial results
• review and approval of the 2020 financial statements based on the Audit & Risks Committee’s report and the report by the statutory
auditors, who were present at the meeting;
information, at each meeting, on the business situation;
• review and approval of the financial statements for the first half of 2021;
• review of the first and third quarterly results and reports prepared by the senior management;
• review of the Group’s 2021 guidance set in February and of the new guidance issued in April and July 2021;
• proposal to the Annual Shareholders’ Meeting that the dividend be set at €2.60 per share;
•
• review of the Audit & Risks Committee’s report on the works of the Group’s internal audit and internal control teams;
• review of the 2021 risk matrix, the framework design and the deployment status of the Enterprise Risk Management;
• selection of the statutory auditors;
• review of the Group “Ethics & Compliance System”;
• monitoring of the implementation of the share buyback;
• review of the liquidity;
• authorization of the CEO to issue of sureties, endorsements, and guarantees.
Strategy
•
thorough review of the Group strategy, as every year, as part of a meeting of four days named “Strategy session”, held physically
and remotely from August 30 to September 2, 2021, specifically dedicated to the topic;
• review, during this Strategy session, on an in-depth strategy analysis of North America, India, software strategy;
• authorization or review of external growth operations (such as Uplight, Qmerit)
• review of the portfolio;
•
information about moves and changes concerning competitors of Schneider Electric.
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Corporate governance & Sustainability
• deliberation on the composition of its membership and that of its committees and the principle of balanced representation of men and women;
• deliberation on whether to maintain the unification of the functions of Chairman & CEO;
• deliberation, at its meeting of October 26, 2021, on its self assessment;
• deliberation on and review of the principles and criteria relating to the compensation of the Corporate Officers and approval of the
•
compensation and benefits of all types that may be or have been granted;
information on the meetings with major shareholders conducted by the Vice-Chairman & Lead Independent Director on governance
topics;
information on the salary review of members of the Executive Committee;
•
• review of the Group’s Diversity & Inclusion program;
• decision on the implementation of the 2021 Long-term incentive plan;
• recorded the calculation of the level of achievement of performance conditions applicable to Performance Share plans n° 30, 31, 31bis,
32, 33, 34, 35, 36, 37, and 37bis;
• decision of capital increases reserved for employees;
• reviewed the CSR strategy, results of the Schneider Sustanability Impacts 2018-2020 and targets of the Schneider Sustanability Impacts
2021-2025 ;
• review of the opportunity to introduce a Say on Climate;
• approval of the corporate governance report as provided for in Article L. 225-37 of the French Commercial Code;
• approval of the management report as provided for in Article L. 225-100 of the French Commercial Code;
• review of the regulated agreements and commitments;
• review of the assessment process relating to the qualification of the related party agreements as “current” or “regulated”;
•
thorough review, as every year, of the succession planning of the Corporate Officers and top management.
2021 Annual Shareholders’ Meeting
The Board approved the agenda and draft resolutions of the 2021 Annual Shareholders’ Meeting, and its report to the shareholders at the
meeting. It was informed of the positions expressed by the shareholders met during the preparation of the Annual Shareholders’ Meeting
and took note of the proxy-advisors’ reports. It approved the responses to the written questions.
Due to the COVID-19 pandemic, and in order to protect all shareholders, guests, and organizers, the Annual Shareholders’ Meeting was
held behind closed doors, without the physical attendance of shareholders and other persons entitled to attend, in pursuance of the order
n° 2020-321 of March 25, 2020 (as extended and amended by governmental order n° 2020-1497 of December 2, 2020), and governmental
decree n° 2020-418 of April 10, 2020 (as extended and amended by governmental decrees n° 2020-1614 of December 18, 2020 and n° 2021-
255 of March 9, 2021), at the Company’s headquarters. It approved all resolutions supported by the management, including those relating to
the composition of the Board of Directors, the compensation of the Corporate Officers, and the renewal of financial authorizations.
In application of the provisions of Article 1.C.3 of the internal regulations, the Vice-Chairman & Lead Independent Director convenes
executive sessions of the Board of Directors (without the Corporate Officers) at the end of each Board meeting. In 2021, the Board of
Directors held five “executive sessions”, vs. three in 2020.
In addition, when the Board debated and determined the compensation of the Chairman & CEO, the interested party was not present,
as prescribed by Article 10.2 of the internal regulations, unless solicited to provide information on specific issues.
4.1.4 Operating procedures and activities of the Board committees
In its internal regulations, the Board defined the functions, missions, and resources of its five study committees: the Audit & Risks Committee,
the Governance & Remunerations Committee, the Human Resources & CSR Committee, the Investment Committee, and the Digital Committee.
Committee members are appointed by the Board of Directors on the proposal of the Governance & Remunerations Committee. Committees
may open their meetings to the other Board members.
The Vice-Chairman & Lead Independent Director may attend any meetings of committees of which he is not a member. The committees may
commission research from external consultants after having consulted with the Chairman of the Board of Directors. They may invite anybody
they wish to meetings, as necessary. Secretaries of the Board committees organize and prepare the work of the committees. They draft the
minutes for the meetings of the committees which, after their approval, are sent to all members of the Board of Directors. The secretaries of
the committees are members of Group management teams and specialists in the subject matters of each committee.
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4.1.4.1 Audit & Risks Committee
The members, operating procedures, and responsibilities of the Audit & Risks Committee are compliant with the recommendations
included in the Audit & Risks Committee final report as updated by the AMF in July 2010.
6
meetings in 2021*
5
members
80%
of independent Directors
100%
average attendance rate
Composition as of December 31, 2021
The internal regulations and
procedures of the Board of
Directors stipulate that the
Audit & Risks Committee must
have at least three members.
• Cécile Cabanis
Chairwoman
• Willy Kissling
• Jill Lee
Member
Member
Independent
Non-independent
Independent
4.
Two-thirds of the members must
be independent and at least one
must have in-depth knowledge of
accounting standards combined
with hands-on experience in
applying current accounting
standards and producing
financial statements.
• Anna Ohlsson-Leijon
Member since April 28, 2021
Independent
• Fleur Pellerin
Member
Independent
As demonstrated by their career records, summarized in section 4.1.1.2 of the 2021 Universal
Registration Document the Audit & Risks Committee members all have recognized expertise
in finance, economics, and accounting. In addition to their in-depth financial and accounting
knowledge, Mrs. Cécile Cabanis also brings her extensive knowledge of the challenges of a
major French group in the CAC 40, Mr. Willy Kissling his knowledge of the building industry and
Schneider Electric, Mrs. Jill Lee an in-depth knowledge of Schneider Electric’s activities and of
the Asian markets, Mrs. Anna Ohlsson-Leijon her professional experience and skills based on
her wide-ranging finance and business background, and Mrs. Fleur Pellerin her economic and
financial skills in the field of technologies.
Changes in the composition in 2021
• Chairpersonship: Mrs. Jill Lee was appointed as Chairwoman of the Committee as from January 1st, 2022 in replacement
of Cécile Cabanis who remains member of the Committee.
• Membership: following her appointment as a Director by the Annual Shareholders’ Meeting of April 28, 2021,
Mrs. Anna Ohlsson-Leijon was appointed as a member of the Committee.
Individual attendance rate in 2021
• Cécile Cabanis 100%
• Willy Kissling 100%
Operating procedures
• The Committee meets at the initiative of its Chairperson
or at the request of the Chairman & CEO.
• At least five meetings are held during the year.
• The Head of Internal Audit is the secretary of the Audit &
Risks Committee.
• The Committee may invite any person it wishes to hear to
its meetings.
• The statutory auditors attend meetings at which financial
statements are reviewed and, depending on the agenda,
all or some of the other meetings.
• Jill Lee 100%
• Anna Ohlsson-Leijon 100%
• Fleur Pellerin 100%
•
It may also require the CEO to provide any documents
it deems to be useful.
It may also commission studies from external consultants.
•
• The Committee presents its findings and recommendations
to the Board. The Chairperson of the Audit & Risks
Committee keeps the Chairman & CEO and the Vice-
Chairman & Lead Independent Director promptly informed
of any difficulties encountered.
*
Including the joint meeting with the Digital Committee relating to cybersecurity risk review.
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Responsibilities
The Audit & Risks Committee is responsible for preparing the work of the Board of Directors by making recommendations on financial,
extra-financial, accounting, internal control, internal audit, compliance, and risk management issues. Accordingly, its missions are as
follows:
Items
Details of missions
Preparation for the
annual and interim
financial statements to be
approved by the Board
• To check the appropriateness and consistency of the accounting methods used for drawing up
consolidated and corporate accounts, as well as to check that significant operations on Group level
have been dealt with appropriately and that rules relating to the scope of consolidation have been
complied with
• To examine off-balance sheet risks (including those of a social and environmental nature) and
commitments as well as the cash situation
• To examine the process for drawing up financial and extra-financial information
• To review the Universal Registration Document as well as the reports on the interim financial
statements and other main financial documents
Issues related to statutory
auditors
• To make recommendations concerning the appointment or reappointment of the statutory auditors
• To handle follow-up on legal control of consolidated and statutory accounts made by statutory auditors,
Following-up on the
efficiency of internal
control, risk management
systems, and compliance
program
notably by examining the external audit plan and results of controls made by statutory auditors
• To verify the auditors’ independence, in particular by reviewing fees paid by the Group to their firm
and network and by giving prior approval for assignments that are not strictly included in the scope
of the statutory audit
• To examine the organization and resources used for internal audit, as well as its annual work
program; to receive a quarterly summary report on the findings of the audits carried out
• To review operational risks mapping and its year-on-year evolution; to ensure procedures are
implemented to prevent and reduce them
• To review risk mitigation and coverage optimization
• To review the rollout of the Group’s internal control system and to acknowledge the outcome of
entities’ self-assessment regarding internal control; to ensure that procedures are implemented
to identify and handle anomalies
• To ascertain the existence of Group compliance policies notably concerning competition, anti-
bribery, ethics and data protection, and the measures implemented to ensure that these policies
are circulated and applied
• To report to the Board on the implementation of Schneider Electric SE’s charter on related party
transactions and on the relevance of the criteria to qualify related party transactions as regulated
agreements or not
• To examine all financial, accounting, and extra-financial questions and questions related to risk
management, including those of a social and environmental nature, submitted to it by the Board
of Directors
Activity in 2021
The Audit & Risks Committee reported on its work at the Board’s meetings of February 10, July 29, September 2, and
December 15, 2021.
Items
Details of missions
Financial statement
and financial
disclosures
Internal audit,
internal control,
risk management,
and compliance
Statutory auditors
• Review of the annual and interim financial statements and of the reports on the financial statements
• Review of goodwill, the Group’s tax position, provisions and pension obligations, or similar obligations
• Review of investor relations’ documents concerning the annual and interim financial statements
• Review of the Group’s scope of consolidation
• Review of pension commitments
• Review of the risk mapping
• Review of the 2022 audit and control missions plan
• Review of the main internal audits performed in 2021
• Review of risks covered by insurance
• Status report on the Enterprise Risk Management System
• Review the Ethics and Compliance program
• Update on the “duty of care” program and human rights-related topics
• Cybersecurity risk review (jointly with the Digital Committee)
• Review of the management report
• Review of the main litigations
• Review of the fees paid to the statutory auditors and to their networks
• Review of the 2022 external audit program
• Selection of the external statutory auditors
Corporate
governance
• Recommended dividend for 2021
• Review of the financial authorizations and proposition for their renewal by the Annual Shareholders’
Meeting of April 28, 2021
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4.1.4.2 Governance & Remunerations Committee
7
meetings in 2021*
6
members
67%
of independent Directors
94%
average attendance rate
Composition as of December 31, 2021
The Board of Directors’ internal
regulations and procedures
provide that the Governance &
Remunerations Committee must
have at least three members.
• Fred Kindle
• Léo Apotheker
• Willy Kissling
• Linda Knoll
Chairman
Member
Member
Member
Independent
Non-independent
Non-independent
Independent
4.
It is chaired by the Vice-Chairman
& Lead Independent Director.
• Anders Runevad
Member since February 10, 2021
Independent
• Greg Spierkel
Member
Independent
Changes in the composition in 2021
• Chairpersonship: no change.
• Membership: Mr. Anders Runevad was appointed as a member of the Committee on February 10, 2021.
Individual attendance rate in 2021
• Fred Kindle 100%
• Léo Apotheker 100%
• Willy Kissling 100%
Operating procedures
• Linda Knoll 83%
• Anders Runevad 80%
• Greg Spierkel 100%
• The Committee is chaired by the Vice-Chairman & Lead
Independent Director.
• The Committee shall meet at least three times a year.
• The Committee may seek advice from any person it feels
• The Committee meets at the initiative of its Chairperson
will help it with its work.
or at the request of the Chairman & CEO.
• The Secretary of the Board of Directors is the secretary
• The agenda is drawn up by the Chairperson, after consulting
of the Committee.
with the Chairman & CEO.
Responsibilities
Items
Details of missions
Appointments
• To formulate proposals to the Board of Directors in view of any appointment made:
(i) within the Board of Directors as a Director or Observer, Chairman of the Board of Directors, Vice-
Chairman or Vice-Chairman & Lead Independent Director, chairperson, or committee member
(ii) at the Company’s senior management; particularly, to advise the Board on proposals for the
appointment of any Corporate Officer
• To formulate proposals to the Board of Directors on the compensation policy of executive Corporate
Officers (Chairman of the Board of Directors and/or CEO, and Deputy CEOs if any) and of the
Board members
• To make recommendations to the Board of Directors concerning the determination of the components
of the compensation due to executive Corporate Officers in accordance with the compensation
policy approved by the shareholders and based on the contribution of the concerned persons
to the performance of the Group
• To organize for yearly assessments to be made of the Board of Directors
• To make proposals to the Board of Directors on:
− determining and reviewing Directors’ independence criteria and Directors’ qualifications with
regard to these criteria
− missions carried out by the committees of the Board of Directors
− the evolution of the organization and mode of operation of the Board of Directors
− the application by the Company of national and international corporate governance practices
− the total amount of Board members’ remuneration proposed to the Annual Shareholders’ Meetings
together with its allocation rules
− the compensation of the Vice-Chairman & Lead Independent Director
Compensation of
Corporate Officers
Missions aiming at
reassuring both
shareholders and
the market that the
Board of Directors
carries out its duties
with all necessary
independence and
objectivity
*
Including the joint meeting with the Human Resources & CSR Committee relating to the 2022 - 2025 Long-term incentive plan of the Corporate Officer.
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Activity in 2021
The Governance & Remunerations Committee reported on its work at the Board’s meetings of February 10, April 27, July 29,
October 26, and December 15, 2021.
Items
Details of missions
Proposals to the Board
of Directors
• Composition of the Board of Directors and its committees
• Status of the members of the Board with regard to independence criteria
• Mode of exercising the functions of Chairman and CEO
• Compensation of Corporate Officers (amount and structure of 2021 compensation, 2021 objectives
and level of achievement of 2020 objectives) and allocation to them of performance shares as part
of the Long-term incentive plan
• Definition of the criteria for short-term (STIP) and long-term (LTIP) compensation of Corporate
Officers (jointly with the Human Resources & CSR Committee)
• Presentation of “Say on Pay” 2020 and the principles and criteria proposed for 2021 to the Annual
Shareholders’ Meeting
• Directors’ remuneration
• Training program of the Directors representing the employees for 2021
• Opportunity to introduce a Say on climate
Reports to the Board
of Directors
• Review of the succession plan for the Chairman & CEO
• Draft corporate governance report of the Board of Directors
Self-assessment of the
Board of Directors
Shareholder engagement
• Leading of the self-assessment of the Board of Directors
• Reporting on the Vice-Chairman & Lead Independent Director’s meetings with governance analysts
within the main shareholders: 24 meetings were held, covering about 35% of the share capital.
These meetings reflect the importance given by the Company to dialogue and the direct commitment
of Directors towards shareholders (see “Report of the Vice-Chairman & Lead Independent Director
of the Board of Directors”, section 4.1.5 of Chapter 4 of this Universal Registration Document)
4.1.4.3 Human Resources & CSR Committee
4
meetings in 2021*
6
members
75%
of independent Directors**
100%
average attendance rate
Composition as of December 31, 2021
The Board of Directors’ internal
regulations and procedures
provide that the Human
Resources & CSR Committee
must have at least three members.
• Linda Knoll
• Rita Felix
• Willy Kissling
• Xiaoyun Ma
• Fleur Pellerin
• Anders Runevad
Chairwoman
Member
Member
Member
Member
Member
Independent
Employee Director
Non-independent
Employee Director
Independent
Independent
Changes in the composition in 2021
• Chairmanship: no change.
• Membership: no change.
Individual attendance rate in 2021
• Linda Knoll 100%
• Rita Felix 100%
• Willy Kissling 100%
Operating procedures
• Xiaoyun Ma 100%
• Fleur Pellerin 100%
• Anders Runevad 100%
• The Committee meets at the initiative of its Chairperson
or at the request of the Chairman & CEO.
• The Committee shall meet at least three times a year.
• The Committee may seek advice from any person it feels
• The agenda is drawn up by the Chairperson, after consulting
will help it with its work.
with the Chairman & CEO.
• The Chief Human Resources Officer, Mrs. Charise Le,
is the secretary of the Committee.
Including the joint meeting with the Governance & Remunerations Committee relating to the 2022 – 2025 Long-term incentive plan of the Corporate Officer.
*
** Employee Directors excluded as prescribed by the AFEP-MEDEF Corporate Governance Code.
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Responsibilities
Items
Details of missions
Employee shareholding
schemes and share
allocation plans
• To formulate proposals to the Board of Directors on the implementation of employee shareholding
schemes and allocation of free or Performance Shares, and on the volume of shares granted to all
of the eligible Corporate Officers, including executive Corporate Officer(s)
Compensation of
Group managers
Succession plan
for key Group
executives
Human resources
and CSR policy
• To formulate projects on proposals made by general management on:
− compensation for members of the Executive Committee
− principles and conditions for determining the compensation of Group executives
− pay-equity ratio
• To examine succession plans for key Group executives
• The Committee shall be informed of any nomination of members of the Executive Committee and
of main Group executives
• To prepare for the Board of Directors’ deliberations on:
− employee shareholding development
− reviews made by the Board on social and financial impacts of major re-organization projects
and major human resources policies
− monitoring management of risks related to human resources
− examining the different aspects of the Group’s CSR policy
− diversity and inclusion policy, including the policy on the equal treatment of men and women
4.
Activity in 2021
The Human Resources & CSR Committee reported on its work at the Board’s meetings of February 10, October 26, and
December 15, 2021.
Items
Details of missions
Proposals to the Board of
Directors
• 2021 annual Long-term incentive plan and implementation of specific Performance Share plans
to support the recruitment and the retention policy
Reports to the Board
of Directors
• Definition of the criteria for short-term (STIP) and long-term (LTIP) compensation of top managers
and executive Corporate Officers (jointly with the Governance & Remunerations Committee)
• Review of the compensation, performance, and succession plans of Executive Committee members
• 2022 Long-term incentive plan
• Review of equal opportunity, gender pay equity, and diversity & inclusion policy
• Review of the CSR strategy and performance and of the Group’s positioning vs. its peers
4.1.4.4 Investment Committee
3
meetings in 2021
6
members
Composition as of December 31, 2021
80%
of independent Directors*
89%
average attendance rate
The Board of Directors’ internal
regulations and procedures
provide that the Investment
Committee must have at least
three members.
• Léo Apotheker
Chairman
Non-independent
• Fred Kindle
• Anders Runevad
• Greg Spierkel
• Lip-Bu Tan
Member
Member
Member
Member
Independent
Independent
Independent
Independent
• Bruno Turchet
Member since April 28, 2021
Employee Director
Changes in the composition in 2021
• Chairmanship: no change.
• Membership: Mrs. Xiaoyun Ma left the Committee following her appointment as a member of the Digital Committee.
Mr. Bruno Turchet was appointed as a member of the Committee with effect on April 28, 2021 in replacement of Mr. Patrick Montier.
* Employee Directors excluded as prescribed by the AFEP-MEDEF Corporate Governance Code.
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Individual attendance rate in 2021
• Léo Apotheker 100%
• Fred Kindle 67%
• Anders Runevad 67%
Operating procedures
• Greg Spierkel 100%
• Lip-Bu Tan 100%
• Bruno Turchet 100%
• The Committee meets at the initiative of its Chairperson
• The Committee shall meet three times a year, less or more
or at the request of the Chairman & CEO.
• The agenda is drawn up by the Chairperson, after consulting
•
with the Chairman & CEO.
depending on the circumstances.
In order to carry out its assignments, the committee may
hear any person it wishes and call upon the Chief Strategy
& Sustainability Officer.
• The Chief Strategy & Sustainability Officer, Mr. Olivier Blum,
is the secretary of the Committee.
Responsibilities
Items
Details of missions
Preparation of the Board
of Directors’ deliberations
on investment policy
• The Committee:
− Elaborates recommendations for the Board on major capital deployment decisions
− Advises the management team on capital deployment strategies
− Launches, at the Board’s request, or suggests research projects leading to material investments
for the Company, typically for capital deployment decisions of EUR 250 million or above
− Investigates matters of smaller scale, if the strategic significance warrants it or the Board/
Chairman of the Board specifically requires it
− Provides recommendations on major merger, alliances, and acquisition projects
− Pays special attention to reconfiguration or consolidation scenarios happening in the sectors
the Company is operating in or likely to operate in
− Examines portfolio optimizations and divestment projects of financial or strategic significance
− Supports the management in the elaboration of investment policies linked to the long-term
positioning of Schneider Electric, such as innovation and R&D strategies or any major organic
growth investments
− Presents to the Board, social and environmental aspects of the strategic projects submitted
to it such as M&A projects
Activity in 2021
The Investment Committee reported on its work at the Board’s meetings of February 10, July 29, and December 15, 2021 and during
the Strategy session.
Items
Details of missions
Proposals to the Board of
Directors
• Follow-up of investment projects and opportunities
• Strategic minority investment in Uplight
• Acquisition of Qmerit, squeeze-out of RIB’s minority shareholders and merger with IGE+XAO
• Portfolio review
4.1.4.5 Digital Committee
5
meetings in 2021*
5
members
Composition as of December 31, 2021
75%
of independent Directors**
100%
average attendance rate
The Board of Directors’ internal
regulations and procedures
provide that the Digital Committee
must have at least three members.
• Greg Spierkel
• Léo Apotheker
• Xiaoyun Ma
• Fleur Pellerin
• Lip-Bu Tan
Chairman
Member
Independent
Non-independent
Member since February 10, 2021
Employee Director
Member
Member
Independent
Independent
*
Including the joint meeting with the Audit & Risks Committee relating to cybersecurity risk review.
** Employee Directors excluded as prescribed by the AFEP-MEDEF Corporate Governance Code.
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Changes in the composition in 2021
• Chairmanship: no change.
• Membership: Mrs. Xiaoyun Ma was appointed as a member of the Committee on February 10, 2021.
Individual attendance rate in 2021
• Greg Spierkel 100%
• Léo Apotheker 100%
• Xiaoyun Ma 100%
Operating procedures
• Fleur Pellerin 100%
• Lip-Bu Tan 100%
• The Committee meets at the initiative of its Chairperson
• The Committee shall meet at least three times a year,
or at the request of the Chairman & CEO.
• The agenda is drawn up by the Chairperson, after consulting
with the Chairman & CEO.
including the joint review of cybersecurity risks with the
Audit & Risks Committee.
In order to carry out its assignments, the Committee may
hear any person it wishes.
•
• The Chief Digital Officer, Mr. Peter Weckesser, is the
secretary of the Committee.
4.
Responsibilities
Items
Details of missions
• To assist the Board in
digital matters in order
to guide, support, and
control the Group in its
digitization efforts
• To prepare the Board of
Directors’ deliberations
on digital matters
• For this purpose, the Digital Committee will review, appraise, and follow-up projects and, generally,
advise, inter alia on seven areas:
− Development and growth of the EcoStruxure™ digital business, including (i) enhancing Core
Businesses with Connectivity & Analytics, (ii) building new digital offers and business models,
and (iii) establishing its contribution to and consistency with the overall strategy
− Improvement and transformation of the Group’s Digital Customers & Partners Experience;
− Improvement of Schneider Electric’s Operational Efficiency through the effective use of
Information Technology and digital automation capabilities;
− Assessment of cyber risks and enhancement of the Group’s cybersecurity posture (jointly with
the Audit & Risks Committee);
− Assessment of the contribution of potential M&A operations to the Group’s Digital strategy;
− Monitoring and analysis of the digital landscape (competitors and disrupters, threats, and
opportunities);
− Ensuring that the Company is equipped with the right pool of talents for digital transformation.
Activity in 2021
The Digital Committee reported on its work at the Board’s meetings of February 10, July 29, October 26, and December 15, 2021.
Items
Details of missions
Proposals and
reports to the Board
of Directors
• EcoStruxure™ Openness
• Product Lifecycle Management
• End to End Digital Customer Experience
• AI & Scale Program
• ERP strategy
• Joint review with the Audit & Risks Committee of the cybersecurity risks
• General updates on Schneider Digital
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4.1 Governance Report
4.1.5 Report of the
Vice-Chairman & Lead
Independent Director of
the Board of Directors
Mr. Fred Kindle hereby reports on the work he carried out in 2021
as part of his responsibilities as Vice-Chairman & Lead Independent
Director. He was appointed as Vice-Chairman on April 23, 2020 in
replacement of Mr. Léo Apotheker.
The Vice-Chairman & Lead Independent Director is appointed by
the Board of Directors in pursuance of Article 12 of the Articles of
Association, which provide for the appointment of a Vice-Chairman
with the function of a Lead Independent Director if the roles of
Chairman & CEO are combined. In compliance with Article 12 of
the Articles of Association, the duties of the Vice-Chairman & Lead
Independent Director are defined by the internal regulations of the
Board of Directors. Those internal regulations and the charter for
the Vice-Chairman & Lead Independent Director can be found on
section 4.1.2.4 of Chapter 4 of this Universal Registration Document.
Information of the Vice-Chairman & Lead
Independent Director
To be able to carry out his duties, the Vice-Chairman & Lead
Independent Director must have excellent knowledge of the Group
and be particularly well informed about its business performance.
As such, the Vice-Chairman & Lead Independent Director is
apprised of current events and the performance of the Group
through weekly exchanges with the Chairman & CEO. He meets
regularly with members of the Group Executive Committee and
pursues regular interactions with managers and other employees
of the Group in various sites of Schneider Electric.
He is continuously kept informed of the evolution of the
competitive environment, technological breakthroughs, and
business opportunities. Additionally, he is the Chairperson of the
Governance & Remunerations Committee and a member of the
Investment Committee.
Participation in the preparation of the meetings
of the Board
The Vice-Chairman & Lead Independent Director participated in
the preparation for meetings of the Board of Directors. As a result,
he has participated in all the “pre-Board” meetings. As a matter of
fact, each meeting of the Board of Directors is preceded by one
or two pre- Board meetings, in which the Chairman & CEO, the
Vice-Chairman & Lead Independent Director, the Chief Financial
Officer, the Chief Governance Officer, and the Secretary of the
Board of Directors review the topics and issues addressed by the
committees, and establish the agenda prepared by the Chairman
& CEO and the content of the meeting file.
Executive sessions
The Vice-Chairman & Lead Independent Director chairs the
executive sessions (i.e., the meetings where Board members meet
without the presence of the Corporate Officer), convened at the
end of each Board meeting. The employee Directors are invited
to attend all executive sessions following meetings of the Board
at which they are present.
The Board of Directors held five executive sessions in 2021 during
which its members expressed their views and observations on,
among others, the Group’s strategic options and the succession
planning of the Corporate Officer. The Vice-Chairman & Lead
Independent Director reported the conclusions thereof to the
Chairman & CEO.
Interaction with shareholders
The Vice-Chairman & Lead Independent Director is the designated
contact for the shareholders on matters pertaining to corporate
governance. He carried out two shareholder engagement
campaigns in 2021: one before the Annual Shareholders’ Meeting
to present to those who so wished, the resolutions submitted to
the shareholders’ approval; the other one, in the fall semester, to
freely exchange views on topical themes of corporate governance
that do not materialize in resolutions submitted to the shareholders’
approval and thus, are excluded from the usual dialog. On this
occasion, the Vice-Chairman & Lead Independent Director
explained to the investors’ representatives the growing importance
of social and environmental topics at the Board of Directors and
their reflection in the Corporate Officers’ compensation. Overall,
these two campaigns comprised 24 face-to-face or phone
meetings with analysts from a wide range of corporate governance
cultures and covered around 35% of the share capital. The
conclusions of these discussions have been reported in detail to
the Governance & Remunerations Committee and contributed to its
on-going thought process on governance matters. A report thereon
was subsequently made to the Board.
Other duties
The Vice-Chairman & Lead Independent Director conducted the
annual deliberation of the Board on its composition, organization,
and operations as well as those of its committees. In 2021, this
self-assessment was carried out internally. The conclusions of
this assessment, which highlighted the quest for continuous
improvement, are presented in section 4.1.2.6 of this Universal
Registration Document.
The Vice-Chairman & Lead Independent Director has also had
frequent contacts with each of the Directors. He ensured that there
was no conflict of interest within the Board of Directors, which he
would have been responsible for bringing to the attention of the
Chairman.
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4.1.6 Senior management
The senior management of Schneider Electric SE consists of the Chairman & Chief Executive Officer supported by the Executive Committee.
The Executive Committee
The operational organization of the senior management of the Group is supported by the Executive Committee, which is chaired by the
Chairman & Chief Executive Officer. The Executive Committee meets every month to analyze and evaluate the financial performance of
the Group’s various businesses compared with the budget, strategic developments, and major events affecting the Group.
As of April 1st, 2022, the Executive Committee comprises of the 16 following members. As per its Diversity & Inclusion Policy, Schneider Electric
pays a lot of attention to the composition of its Executive Committee, in particular to ensure a diversity of culture and gender. Thus, six
nationalities from three continents are part of the Executive Committee. According to the objective to comprise at least 40% of women,
the Executive Committee includes 44% of women (vs. 38% previously).
Name of Executive Committee member
Gender
Age
Nationality
Responsibility
4.
Jean-Pascal Tricoire
Gwenaelle Avice-Huet
Laurent Bataille
Olivier Blum
Annette Clayton
Hervé Coureil
Philippe Delorme
Barbara Frei
Charise Le
Chris Leong
Hilary Maxson
Nadège Petit
Luc Rémont
Mourad Tamoud
Peter Weckesser
Zheng Yin
M
F
M
M
F
M
M
F
F
F
F
F
M
M
M
M
58
42
43
51
58
51
51
51
49
54
44
42
52
50
53
50
French
French
French
French
American
French
French
Swiss
Chinese
Malaysian
American
French
French
French
German
Chinese
Chairman & Chief Executive Officer
Chief Strategy & Sustainability Officer
Executive Vice-President France Operations
Executive Vice-President Energy Management
Executive Vice-President North America Operations
Chief Governance Officer & Secretary General
Executive Vice-President Europe Operations
Executive Vice-President Industrial Automation
Chief Human Resources Officer
Executive Vice-President Chief Marketing Officer
Chief Financial Officer
Chief Innovation Officer
Executive Vice-President International Operations
Executive Vice-President Global Supply Chain
Chief Digital Officer
Executive Vice-President China Operations
The Business Pulse community
The Business Pulse community includes the Executive Committee members and approximatively 1,000 leaders of Schneider Electric’s main
functions and business operations respectively. Its responsibilities are to ensure cascading of the Group’s objectives, help ensure rapid,
responsive decision-making, as well as smooth, efficient implementation of such decisions. The Business Pulse community met digitally
seven times in total in 2021 to exchange on these matters.
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4.1.7 Regulated agreements
and commitments
4.1.7.1 Review of the Regulated Agreements
and Commitments entered into by
Schneider Electric SE
No agreement were concluded during the year that should
have required to be approved by the Annual General Meeting in
accordance with article L. 225-38 of the French Commercial Code.
4.1.7.2 Procedure for assessing agreements
relating to ordinary business operations
concluded under normal conditions
The Board of Directors, at its meeting of December 11, 2019,
established a procedure for regularly assessing whether agreements
relating to ordinary business operations concluded under normal
conditions meet these conditions. Any persons directly or indirectly
concerned by any of these agreements shall not participate in
its assessment.
The procedure is comprised of two phases:
•
•
the assessment of the application of Schneider Electric SE’s
internal charter for regulated agreements approved by the Board
of Directors on February 19, 2020, which results in an annual
business report drawn up jointly by the legal department and the
Secretary of the Board of Directors. This report is made available
to the Audit & Risks Committee for preparing the evaluation report
it draws up for the Board of Directors;
the assessment by the Board of Directors of criteria for qualifying
agreements relating to ordinary business operations concluded
under normal conditions which deliberates on the basis of the
above-mentioned assessment report drawn up by the Audit &
Risks Committee.
According to this procedure, the Governance & Remunerations
Committee reviewed at its meeting of December 13, 2021, the
relevance of criteria for qualifying agreements relating to ordinary
business operations concluded under normal conditions as defined
by the procedure and decided not to amend it.
4.1.7.3 Statutory auditors’ report on related
party agreements
To the Shareholders,
In our capacity as statutory auditors of your Company, we hereby
present to you our report on related party agreements.
We are required to inform you, on the basis of the information
provided to us, of the terms and conditions of those agreements
indicated to us, or that we may have identified in the performance of
our engagement, as well as the reasons justifying why they benefit
the Company. We are not required to give our opinion as to whether
they are beneficial or appropriate or to ascertain the existence of
other agreements. It is your responsibility, in accordance with Article
R. 225-31 of the French Commercial Code (Code de commerce),
to assess the relevance of these agreements prior to their approval.
We are also required, where applicable, to inform you in
accordance with Article R. 225-31 of the French Commercial Code
(Code de commerce) of the continuation of the implementation,
during the year, of the agreements previously approved by the
Annual General Meeting.
We performed those procedures which we deemed necessary in
compliance with professional guidance issued by the French Institute
of Statutory Auditors (Compagnie Nationale des Commissaires aux
Comptes) relating to this type of engagement.
Agreements submitted for approval to the
Annual General Meeting
We hereby inform you that we have not been notified of any
agreements authorized during the year to be submitted to the Annual
General Meeting for approval in accordance with Article L. 225-38 of
the French Commercial Code (Code de commerce).
Agreements previously approved by the
Annual General Meeting
We hereby inform you that we have not been notified of any
agreements previously approved by the Annual General Meeting,
whose implementation continued during the year.
Paris-La Défense, March 11, 2022
The Statutory Auditors
French original signed by
MAZARS
Loïc Wallaert Mathieu Mougard Alexandre Resten
ERNST & YOUNG et Autres
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4.2 Compensation Report
4.2.1 Overview
Throughout 2021, the Board continued to discuss compensation
policy and approach with many of Schneider Electric’s largest
shareholders, as well as investor representative bodies. The
Vice-Chairman & Lead Independent Director met with 24
investors, representing ~35% of the share capital during two
shareholders engagement campaigns dedicated to Governance
and Remuneration topics, one in March ahead of the AGM and one
in the fall, and reported back to the Governance & Remunerations
Committee and to the Board thereafter. This dialogue will be
pursued in 2022 to ensure that the Board takes the feedback
into account to determine the compensation policy of the
Corporate Officers.
The compensation paid or granted to the Corporate Officer in
2020 was approved by more than 87% of our shareholders at the
2021 Annual General Meeting and the 2021 compensation policy
Key changes proposed in the Compensation policy
was supported by 81% of the shareholders at the 2021 Annual
Shareholders’ meeting. The Board listened carefully to some
comments made by the shareholders during the subsequent
engagement with the shareholders. No major concerns were
raised. Institutional shareholders have different guidelines
and sensitivities which the Board tries to incorporate as much
as possible.
For 2022, the Board of Directors wishes to maintain the overall
stability of the compensation policy which demonstratedly
drives the right behaviours, appears balanced, provides
market competitive pay, ensures a strong link between pay
and performance, strong alignment with both employees and
shareholders, and long-term focus, while at the same time taking
into account the shareholders’ feedbacks. The Board proposes
the following changes for 2022:
4.
Stringency of the TSR criterion
for the LTIP
The vesting for the criterion of TSR compared to a bespoke industry panel of 11 companies would
be made more stringent, with no vesting at ranks 7 and below in the bespoke peer group. No vesting
under the median of the group would be allowed.
Disclosure of the targets set for
the improvement of the adjusted
Earnings per share criterion for
the LTIP
Cap of the LTIP granted to the
Corporate Officer
The Board is also committing to disclose ex-post the targets of improvement of the adjusted
Earnings per share which will allow shareholders to assess their stringency and the link between
pay and performance.
The cap of long-term instruments that could be granted to the Corporate Officer was previously
expressed in number of shares, no more than 60,000 shares. The Board proposes that the cap be now
expressed as a percentage of his remuneration (fixed and variable short-term compensation at target).
Notably, the long-term instruments granted to the Corporate Officer, valued in accordance with IFRS
standards, should not represent a disproportionate percentage of his overall compensation, and should
be no more than 200% of the combined fixed and short-term variable compensation at target.
Group’s strategic priorities
How the strategy links to the Corporate Officers’ variable compensation
Organic growth
Value for customers
Sustainability
Continuous efficiency
Annual incentive plan
Delivering strong execution and creating value for customers and shareholders every year
to contribute to Schneider Electric’s long-term success, in line with the financial objectives
communicated to the market
Group organic
sales growth
40%
Group adjusted
EBITA margin
improvement
30%
Group cash
conversion
rate
10%
Schneider
Sustainability
Impact
20%
Long-term incentive plan
Building an integrated and leading company with strong sustainability focus and attractive
returns to shareholders
Value & returns to
shareholders
Adjusted Earnings
Per Share
Relative Total
Shareholder Return
Schneider Sustainability
External & Relative Index
40%
35%
25%
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4.2 Compensation Report
2021 performance highlights
Business performance
2021 was a record year setting foundation for ongoing sustainable growth with all-time high Revenues, Adj. EBITA margin and Net Income.
Revenue
€28.9bn
Cash conversion
87%
Adjusted EBITA (organic)
€4.9bn
Progress on Schneider Sustainability Impact
3.92
Positioning in relation to the Company’s performance
Chairman & Chief Executive Officer compensation vs. shareholder value creation – share price and enterprise value growth over
10 years (base 100).
2
1
0
2
r
e
b
m
e
c
e
D
1
3
n
o
d
e
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v
n
i
0
0
1
€
f
o
e
u
a
V
l
333
292
131
€108bn
€140
€32bn
€48
m
1
.
4
€
m
7
.
4
€
m
9
.
4
€
m
7
.
4
€
m
9
.
4
€
m
0
.
6
€
m
7
.
5
€
m
8
.
5
€
m
3
.
6
€
m
8
.
4
€
100
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Total Awarded Compensation (salary + actual Annual Incentive + performance shares granted in the year of reference according to IFRS valuation)
SE share price
Enterprise value (shares in issue + net debt + minority interests + net pension liability)
Note: LTI grants for 2020 and 2021 are presented “at target”.
Summary of the compensation realized during the year 2021
Jean-Pascal Tricoire, Chairman and CEO (Euros)
1,000,000
Salary
1,990,300
STIP
10,022,858(1)
LTIP
629,578
Other
(1) LTIP represents realized value of shares vested in 2021 (LTIP 2019).
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Corporate Governance
4.2.2 Report on the compensation granted or paid during the
2021 fiscal year (say on pay ex-post)
4.2.2.1 Pillars and principles
The principles and criteria determining the 2021 compensation described in this section were supported by the shareholders at the
Annual Shareholders’ Meeting on April 28, 2021. They are deemed to constitute the last policy approved by the shareholders in the
meaning of Article L. 22-10-8 of the French Commercial Code and govern the entirety of the compensation granted by the Group to
the Corporate Officers until the next policy is approved by the shareholders.
Pillar
How It is reflected in the Group 2021 Compensation Policy
Pay-for-performance
Principle 1: Prevalence of variable components: circa 80% for CEO (at target).
A prevalent part of the Corporate Officer target package shall be variable; the 2021 target package
thus consists of approximately 80% variable pay component (excluding pension payments).
4.
Chairman and Chief executive officer:
On target pay mix
Fixed
18%
Annual
incentive 23%
Performance shares
59%
18%
82%
Principle 2: Performance evaluated via economic and measurable criteria.
Performance is evaluated via criteria that are mainly economic (80% of variable cash compensation
and 75% of multi-year Performance Shares) and measurable, which are selected based on KPIs
used in the market communication and drivers of the Group’s strategy. All criteria have measurable
targets approved by the Board at the beginning of the performance period, ensuring targets are
achievable but demanding.
Principle 3: Financial and Sustainability objectives are fairly balanced
and distributed between short-term (annual incentive) and medium-term
(long-term incentive) components.
2021 Annual Incentive (80% financial/
20% sustainability):
• 40% Group organic sales growth
• 30% Adjusted EBITA margin (organic)
2021 Long-term incentive (75% financial/
25% susutainability):
• 40% Adjusted Earning per Share (EPS)
• 35% Relative Total Shareholder Return
• 25% Schneider Sustainability External &
improvement
• 10% Group cash conversion rate
• 20% Schneider Sustainability Impact (SSI)
Relative Index (SSERI)
Alignment with
shareholders’
interests
Principle 4: Significant proportion of the total compensation delivered in shares.
The Corporate Officer’s target package consists of approximately 60% long-term share-based
compensation, meaning their compensation is subject to the same share price volatility that
shareholders experience.
Principle 5: Performance conditions aligned to shareholders’ expectations and
Schneider Electric’s strategic priorities.
Performance criteria were selected from financial indicators that are most representative of Group
performance and that are closely linked to shareholder value creation. Performance levels required
to reach targets were set at the beginning of the performance period in line with the objectives
disclosed to the market at the same time as the results of the previous fiscal year and were
supplemented by factors that enable the Group to offer a long-term and satisfactory development
outlook for all stakeholders in the Company’s success.
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4.2 Compensation Report
Competitiveness
Principle 6: To benchmark the Corporate Officer’s compensation package
“at target” in the median range of the Company’s peer group.
Schneider Electric competes for talent in a global marketplace. Most of the Group’s key competitors
are headquartered outside France. To reflect this, the International Peer group consists of 24
French, European, and US companies that are comparable to Schneider Electric in size or industry
sector, or that represent a potential source of recruitment or attrition. Compensation levels for
Corporate Officer are reviewed annually and benchmarked by reference to the median of this
peer group to ensure they remain reasonable and appropriately competitive. This benchmarking
is primarily used to establish a frame of reference for what competitors are paying to comparable
roles, rather than as the main factor for making compensation decisions.
The 2021 peer group comprises European and US-based companies:
• Business competitors (in particular, those identified in the Long-term incentive plan as
performance peers for TSR comparison purposes);
• Talent competitors for operational and functional roles; and
• “Acceptance” peers (i.e. similar groups in terms of size, business, or structure).
For 2021, the Board decided to replace Thyssenkrupp by BASF which size and geographical
markets are more similar to Schneider Electric.
Group 1:
European
(Capital Goods)
Group 2:
European
(Construction)
ABB
Atlas Copco
Legrand
Siemens
CNH Industrial
ACS
Lafarge Holcim
Saint-Gobain
Vinci
Group 3:
European
(Technology
Hardware
& Software)
Dassault
Systèmes
Hexagon
SAP
TE Connectivity
Group 6:
US
(Technology
Hardware
& Software)
Autodesk
PTC
Group 4:
European
(Industrial B2B)
Group 5:
US
(Capital Goods)
Airbus Group
Air Liquide
Bayer
BASF
Eaton
Emerson
Honeywell
Johnson
Controls
Rockwell
Automation
Principle 7: To reference the CAC 40 third quartile and the Stoxx Europe 50 median.
The Board reviews Corporate Officer’s compensation with reference to the upper quartile of the
CAC 40 companies and the median of the Stoxx Europe 50 companies, in line with the Group’s
position within these panels.
Positioning relative to the market benchmarks
Chairman and CEO compensation relative
to the market benchmarks
CAC40
Company
Peer Group
Stoxx
Europe 50
75%
50%
25%
Compa
Ratio
l
.
70 116
vs Q3
y
p
r
m
a
a
o
S
C
e
s
a
B
a
t
o
T
l
3rd
quartile
Median
1st
quartile
75
85
65
86
vs Median
vs Median
l
y
r
a
a
S
e
s
a
B
.
p
m
o
C
l
a
t
o
T
l
y
r
a
a
S
e
s
a
B
.
p
m
o
C
l
a
t
o
T
Total compensation includes base salary, annual incentive at target, and IFRS value of Performance
Shares granted during the year.
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Corporate Governance
4.2.2.2 Chairman & CEO’s compensation in relation to the 2021 fiscal year
At its meeting on February 16, 2022, after examining the suitability and fairness of the outcome of the 2021 compensation policy for the
Corporate Officer and its alignment with the Group’s performance, upon recommendation of the Governance & Remunerations Committee,
the Board determined the Corporate Officer’s compensation for 2021 in accordance with the principles and criteria previously approved
by the shareholders in April 2021 at the Annual Shareholders’ Meeting. The outcome is detailed and commented hereinafter along with
the performance results for each component of the compensation.
Table summarizing the compensation paid or granted to the Chairman and CEO in 2021
The following table summarizes the compensation and benefits awarded or paid to the Chairman and CEO for the fiscal years 2021 and 2020,
presented on a reported basis in accordance with AFEP-MEDEF guidelines as well as on a realized basis, where performance conditions
assessment have ended in the reported fiscal year.
Jean-Pascal Tricoire
Chairman & Chief executive officer
(Euro)
A – CASH COMPENSATION
Fixed compensation
Annual variable compensation(1)
Compensation in relation to the Director’s office
SUBTOTAL (A) (CASH)
B – LONG TERM INCENTIVE
Valuation of the Performance Shares
SUBTOTAL (B) LONG TERM INCENTIVE
C – PENSION CASH BENEFIT
Compensation & benefits
awarded for fiscal year
Compensation & benefits
realized in fiscal year
2021
2020
2021
2020
4.
1,000,000
1,990,300
0
2,990,300
875,000
1,048,775
0
1,923,775
1,000,000
1,990,300
0
2,990,300
875,000
1,048,775
0
1,923,775
3,326,329(2)
3,326,329
2,897,700(2)
2,897,700
10,022,858(3)
10,022,858
6,968,935(3)
6,968,935
Complementary payment for pension building (fixed)
Complementary payment for pension building (variable)
SUBTOTAL (C) PENSION CASH BENEFIT
191,600
381,341
572,941
191,600
229,652
421,252
191,600
381,341
572,941
191,600
229,652
421,252
D – OTHER BENEFITS
Other benefits(4)
SUBTOTAL (D) OTHER BENEFITS
56,637
56,637
36,124
36,124
56,637
56,637
36,124
36,124
TOTAL COMPENSATION AND BENEFITS (A)+(B)+(C)+(D)
6,946,207
5,278,851
13,642,736
9,350,086
(1) The annual incentive for the fiscal year 2020 was paid in 2021 after approval by the shareholders at the Annual Shareholders’ Meeting of April 28, 2021 of the 6th
resolution relating to the compensation paid, due, or awarded to Jean-Pascal Tricoire in respect of the 2020 fiscal year. Hence, the total compensation in cash actually
paid in the fiscal year 2021 to Jean-Pascal Tricoire amounts to €2,470,027 (2021 fixed compensation + 2020 annual incentive + fixed portion of pension benefit for
2021 + variable portion of pension benefit for 2020). Likewise, in accordance with Article L.22-10-34 II of the French Commercial Code, the variable elements in cash
awarded to Jean-Pascal Tricoire for the financial year 2021 will only be paid in 2022, subject to their prior approval by the shareholders at the Annual Shareholders’
Meeting of May 5, 2022 under the 8th resolution.
(2) Value of Performance Shares granted during fiscal year – As per AFEP-MEDEF Corporate Governance Code methodology, compensation is presented on
a reported basis. Long-term incentives for the fiscal year include Performance Shares granted during the fiscal year, the performance period of which has not
elapsed. The value of Performance Shares corresponds to the number of shares granted, before reduction on account of performance, multiplied by the share price
determined in line with IFRS accounting standards.
(3) Value of Performance Shares deemed vested during the fiscal year – In order to facilitate the analysis, the Long-term incentives are also presented on realized
value basis, where the value of Performance Shares corresponds to the actual number of shares (granted in previous years) deemed vested at the end of the fiscal
year, after reduction for performance conditions, multiplied by the share price on December 31, 2020 or 2021, as the case may be.
(4) Other benefits include company car, employer matching contributions to capital increase for employees or contributions to Employee Saving Plan and to collective
Pension Saving Plan (PERCO) as well as benefits from French profit-sharing plan.
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Chapter 4 – Corporate Governance Report
4.2 Compensation Report
Say on pay table relating to the compensation paid or granted to the Chairman and CEO in 2021
The fixed, variable, and exceptional components of the total compensation and benefits paid or awarded for the fiscal year 2021 to
the Corporate Officer, as detailed below, will be submitted to the shareholders for approval at the 2022 Annual Shareholders’ Meeting
of May 5, 2022 under the 8th resolution.
The tables below summarize the compensation paid during the past fiscal year and compensation awarded for the past fiscal year,
along with a description of how each component was calculated in compliance with the compensation policy in force.
Elements of
compensation
submitted to
the vote
Fixed
compensation
Amounts
Description
€1,000,000
(amount due
for 2021 paid
in 2021)
Reminder:
€875,000
(amount due
for 2020 paid
in 2020)
Reminder of the 2021 compensation policy
In 2020, as a practical expression of solidarity with the Group employees affected by
the COVID-19 crisis, Mr. Jean-Pascal Tricoire volunteered to contribute 25% of his 2020
fixed compensation payed for six months to the Tomorrow Rising Fund. Hence, his fixed
compensation paid during and for the fiscal year 2020 amounted to €875,000.
For the fiscal year 2021, his theoretical gross annual fixed compensation was set by
the Board of Directors at €1,000,000 upon recommendation from the Governance &
Remunerations Committee.
Annual
variable
compensation
€1,990,300
(amount due
for 2021 to be
paid in 2022)
Reminder:
€1,048,775
(amount due
for 2020 paid in
2021)
For 2021, the Board decided not to award a
salary increase to the Corporate Officer. The fixed
compensation is reviewed at long intervals by the
Board in accordance with the AFEP-MEDEF Corporate
Governance Code. Base salary element represents
approximately 20% of total target compensation for
Corporate Officer.
Salary increase
over the last 5 years
2021
Nil
2020
Nil
2019
Nil
2018
5%
2017
Nil
Application of the 2021 compensation policy
Mr. Jean-Pascal Tricoire received in 2021 a fixed compensation of €1,000,000.
Reminder of the 2021 compensation policy
The annual variable compensation rewards achievement of the short-term financial,
and sustainability (corporate and social responsibility) objectives of the Group.
The pay-out opportunity is as follows:
• at threshold performance: 0% of the fixed compensation;
• at target: 130% of the fixed compensation;
• at maximum over-performance: 260% of the fixed compensation.
The payment of the variable annual cash compensation is conditional upon approval
by shareholders of the compensation granted to the concerned Corporate Officer.
The structure of the 2021 Annual variable compensation focuses on what matters to
Schneider Electric in delivering value to shareholders. 100% of the variable compensation
depends on measurable objectives:
• 80% depends on Financial criteria which closely align pay outcomes for the Corporate
Officer to Schneider Electric’s financial performance:
− organic sales growth (40%),
− adjusted EBITA margin improvement (30%), and
− cash conversion rate (10%);
• 20% depends on Schneider Sustainability Impact (SSI) highlighting the importance
of sustainability on Schneider Electric’s business agenda.
The Board also ensured that stringent targets were set for the annual variable compensation with
maximum award only payable if a strong performance is delivered on each performance metric.
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Annual
variable
compensation
(continued)
Chapter 4 – Corporate Governance Report
Corporate Governance
Application of the 2021 compensation policy
The annual incentive due for 2021 was determined by the Board at the meeting of February 16,
2022, based on the attainment rate of the objectives set for fiscal year 2021 as follows:
Weight (%)
Performance Range
Achievement
Achievement
rate
Threshold
0%
Target
100%
Maximum
200%
2021
Results
(non-
weighted)
Achievement
rate
(weighted)
2021 performance criteria
Group financial
indicators (80%)
Organic Sales growth
Adjusted EBITA margin
improvement (org.)
Cash Conversion rate
Sustainability (20%)
Schneider
Sustainability Impact
(score)
40%
8% 10%
12%
12.7%
200.0%
80.0%
30% 0.9pts 1.3pts
10%
85% 100% 115%
1.5pts +1.4pts
87%
150.0%
13.3%
45.0%
1.3%
4.
20%
3.25
3.75
4.25
3.92
134.0%
26.8%
Total
100%
153.1%
Overall, 2021 annual variable compensation resulted in a total achievement rate of 153.1%,
above target, reflecting record levels in revenues and adjusted EBITA, and good free cash-flow
delivered by Schneider Electric in 2021 and the exceptional achievement of ambitious targets.
Indeed, after having set the compensation targets on February 10, 2021, aligned with the
targets disclosed to the market published at that time, the Board decided on April 27, 2021
to use the discretion clause provided in the 2021 Compensation policy approved by
shareholders at the 2021 Annual General Meeting. The targets set at the beginning of 2021
did not appear adequate anymore considering the market’s growth which was much higher
than expected. Therefore, the Board resolved to adjust and increase the targets linked to
revenue growth and Adjusted EBITA margin improvement in order to align them with the new
guidance announced to the market at that time:
• Revenue growth of +8% to +11% organic;
• Adjusted EBITA margin up +90bps to +130bps organic.
This decision has been made to ensure a better alignment with the shareholders experience.
The 2021 results having exceeded the targets disclosed to the market in April 2021, the total
achievement rate of the annual variable compensation of the Corporate Officer was set by
the Board at 153.1% of the targeted variable compensation, reflecting strong performance
of Schneider Electric in 2021 as was also reflected in the excellent Total Shareholder Return
of Schneider Electric.
When the targets disclosed to the market were, once again, upgraded in July 2021, the Board
resolved not to review the compensation targets as it was considered that this new guidance
could not anymore be attributed to external factors, such as improved market conditions, but
was instead linked to the company’s intrinsic performance.
Detailed achievement of each criterion:
• Organic Sales growth: The Group delivered an organic sales growth of +12.7%,
which was above the guidance communicated to the market in April 2021 of +8% to +11%.
Therefore, this good performance resulted in the maximum achievement rate of this
criterion, i.e., 80% on the range between 0% to 80%.
• Adjusted EBITA margin improvement: In 2021, Adjusted EBITA margin rate improved by
+140bps organically to reach 17.3%, thanks to a combination of strong top line performance,
pricing actions and productivity. This performance is above the guidance objective of
+90bps to +130bps communicated to the market in April 2021. As a result, the achievement
rate on this criterion is set at 45% on a scale from 0% to 60%.
• Cash conversion: free cash-flow was €2.8bn with operating cash flow impacted by working
capital requirements, as trade receivables rebounded and inventory increased both as a
consequence of the strong external demand environment, and the supply chain pressures
(some components shortages leading to higher safety stocks). Therefore, cash conversion
was only 87% in 2021 which represented an achievement rate of 1.3% on this criterion,
on a scale from 0% to 20%.
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4.2 Compensation Report
Annual
variable
compensation
(continued)
Long-term
incentive
(Performance
shares)
37,903
Performance
Shares
granted in
March 2021
(€3,326,329
according
to IFRS
valuation)
Reminder:
60,000
Performance
Shares granted
in March 2020
(€2,897,700
according to
IFRS valuation)
• Schneider Sustainability Impact: The Schneider Sustainability Impact (SSI), is the
translation of our six long-term commitments into a selection of 11 highly transformative and
innovative sustainability programs. It’s the Group’s five-year (2021-2025) plan with progress
tracked and published quarterly, as well as audited annually. In 2021 the SSI achieved a
great score of 3.92/10 exceeding its 3.75/10 target for the year, representing an
achievement rate of 26.8% on a scale from 0% to 40%.
As a result, the 2021 Annual variable compensation pay-out for the Corporate Officer was
calculated on the base of his fixed compensation as follows:
At Target pay-out
Achievement rate
2021 Actual pay-out
as a % of salary
Amount (€)
as a % of target
as a % of base salary
Amount (€)
130%
€1,300,000
153.1%
199%
€1,990,300
In compliance with Article L.22-10-34 II of the French Commercial Code, the payment of this
Annual variable compensation is subject to approval by the shareholders of the compensation
granted to the Corporate Officer for the fiscal year 2021 (see 8th resolution to be submitted to
the Annual Shareholders’ Meeting of May 5, 2022).
As a reminder, an amount of €1,048,775 was paid in 2021 to Mr. Jean-Pascal Tricoire for
the Annual variable compensation due for the fiscal year 2020 after the approval of the
6th resolution by the Annual Shareholders’ Meeting on April 28, 2021 (see page 269 of the
2020 Universal Registration Document).
Reminder of the 2021 compensation policy
The 2021 Compensation policy provided:
• a maximum annual award to the Chairman and CEO of 60,000 shares;
• a vesting period of three years with an additional mandatory one year holding period
for 30% of shares granted under the plan reserved to the Corporate Officer;
• performance conditions as follows:
40%
Improvement
of Adjusted
Earnings Per
Share (EPS)
Average of the annual rates of achievement of Adjusted EPS improvement
targets for the 2021 to 2023 fiscal years. Adjusted EPS performance is
published in the external financial communications and its annual variance
will be calculated using adjusted EBITA at constant FX from year N-1 to
year N. Foreign exchange impacts below adjusted EBITA will be taken
in full. Significant unforeseen scope impact could be restated from this
calculation upon decision of the Board.
35%
Relative TSR
17.5% vs. CAC 40
companies
• 0% below median
• 50% at median (rank 20)
• 100% at rank 10
• 120% at ranks 1 to 4*
linear between these points
• 0% at rank 8 and below
• 100% at rank 4
• 150% at ranks 1 to 3*
linear between these points
• 0%: not in World
• 50%: included in World
• 100%: sector leader
17.5% vs. a panel of
11 peer companies
(ABB, Legrand, Siemens,
Eaton, Emerson, Honeywell,
Johnson Controls, Rockwell
Automation, Fuji Electric,
Mitsubishi Electric, and
Yokogawa)
6.25% DJSIW
6.25% Euronext Vigeo
• 0%: out
• 50%: included in World 120 or Europe 120
• 100%: included in World 120 & Europe 120
6.25% Ecovadis
6.25% CDP Climate
Change
• 0%: Silver medal or less
• 50%: Gold medal
• 100%: Platinum medal
• 0%: C score
• 50%: B score (25% at B-)
• 100%: A score (75% at A-)
25%
Schneider
Sustainability
External &
Relative Index
(SSERI)
* The over-achievement of relative TSR performance condition can off-set the under-achievement of the objectives
under the adjusted EPS performance condition.
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Corporate Governance
Long-term
incentive
(Performance
shares)
(continued)
Application of the 2021 compensation policy
The volume of the maximum annual award was set in consideration of:
• The market practice and competitive positioning of the Chairman and CEO’s
compensation package;
• The Group’s resilient performance;
• The structure of performance measurement governing the final acquisition
of LTIP awards;
• The culture of ownership deeply rooted in Schneider Electric’s DNA.
Pension
benefits
€572,941
(amount due
for 2021
(fixed portion
of €191,600
paid in 2021
and variable
portion of
€381,341 to
be paid in
2022))
Reminder:
€421,252
(amount due
for 2020 (fixed
portion of
€191,600 paid
in 2020 and
variable portion
of €229,652 paid
in 2021))
4.
Considering the continuous increase in the Company’s stock price and in the spirit of
maintaining a culture of moderation in an uncertain economic environment, the Board decided
to reduce the number of shares granted to Jean-Pascal Tricoire markedly below the maximum
allowed by the compensation policy, which would represent 60,000 performance shares.
According to the authorization given by the Annual Shareholders’ Meeting on April 25, 2019
in its 21st resolution, the Board of Directors, during its meeting of March 25, 2021 decided to
grant Mr. Jean-Pascal Tricoire a total of 37,903 Performance Shares (representing 0.006% of
Schneider Electric’s share capital) subject to the performance criteria described above and
measured over a period of three years:
• 11,371 Performance Shares under Plan n° 38 in his capacity as Chairman and CEO of
Schneider Electric SE;
• 26,532 Performance Shares under Plan n° 39 in his capacity as Regional Asia President
and Chairman of Schneider Electric Asia Pacific.
Reminder of the 2021 compensation policy
Complementary payments are intended to take account of the fact that, following the decision
of the Board of Directors on February 18, 2015 to remove the benefit of the defined-benefit
pension scheme (Article 39) for Corporate Officers, Mr. Jean-Pascal Tricoire is personally
responsible for building up his pension. He undertook to redirect these complementary
payments, net of taxes, to investment vehicles devoted to financing his additional pension.
To determine this authorized complementary compensation, the Board of Directors sought
the recommendation of an independent expert, namely the firm Willis Towers Watson, and
ensured that the mechanism implemented therefore, was in line with shareholders’ interests.
Accordingly, Mr. Jean-Pascal Tricoire is entitled to receive annually a complementary
component, split into a fixed and variable portion as follows:
Fixed portion
Target (% of Fixed)
Minimum
At target
Maximum
Total at Target
€191,600
130%
€0
€249,080
€498,160
€440,680
Variable portion
The variable part is dependent on performance criteria aligned with the variable annual
compensation (see above).
Application of the 2021 compensation policy
At the meeting held on February 16, 2022, the annual complementary variable portion for
pension for 2021 to be paid after the Annual Shareholders’ Meeting if the latter approves it,
was set by the Board of Directors at 199% of the annual complementary fixed portion,
i.e. an achievement rate of 153.1%.
For 2021, Mr. Jean-Pascal Tricoire is entitled to receive:
Fixed amount
€191,600
Target achievement rate
Variable amount(1)
Total due for 2021
130%
€ 381,341
€ 572,941
(1) Calculated by applying to the fixed compensation above the percentage of target achievement determined for
the calculation of the 2021 annual variable compensation, i.e. 153.1%.
In compliance with applicable law, the payment of the variable amount will be subject to
shareholders’ approval (see 8th resolution submitted to the Annual Shareholders’ Meeting
of May 5, 2022).
Reminder: an amount of €229,652 was paid in 2021 to Mr. Jean-Pascal Tricoire for
the variable portion of his pension due for the fiscal year 2020 after its approval by the
Annual Shareholders’ Meeting on April 28, 2021 (see page 273 of the 2020 Universal
Registration Document).
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4.2 Compensation Report
Other
benefits
€56,637
received in
2021
Reminder:
€36,124 received
in 2020
Reminder of the 2021 compensation policy
The Compensation policy provides that the Chairman and CEO may benefit from:
•
•
• a company car;
• supplementary Life & Disability scheme.
the employer matching contributions;
the profit-sharing;
Application of the 2021 compensation policy
For the fiscal year 2021, the Chairman and CEO was eligible for profit-sharing and the
employer matching contributions paid to Employee Saving Plan subscribers. In addition,
he was eligible for the employer matching contributions paid to subscribers to the collective
pension fund (PERCO) for the retirement of workers in France. The use of a company car in
2021 represented an equivalent cost of €44,931.
Employer matching
contributions to
Employee Saving Plan
Employer matching
contributions to collective
pension saving plan
(PERCO)
Profit-sharing
Company car
Total 2021 benefits
€1,404
€800
€9,502
€44,931
€56,637
The Chairman and CEO is eligible for (i) the collective welfare plan applicable to employees
of Schneider Electric SE and Schneider Electric Industries SAS covering the risks of illness,
incapacity, disability, and death and (ii) additional coverages conditional on the fulfilment of
some conditions as described in the compensation policy (see Chapter 4, section 2.3.1 of the
Universal Registration Document).
Termination
benefits
No payment
Involuntary Severance Pay
The Chairman and CEO is entitled to involuntary termination benefits in case of change of
control or strategy and taking into account the non-compete compensation described below,
is capped at twice the arithmetical average of his annual fixed and variable compensation paid
over the last three years (see Chapter 4, section 2.3.1 of the Universal Registration Document).
Non-compete compensation
The Chairman and CEO is entitled to non-compete compensation for a period of one year
capped at 6/10ths of his average gross compensation (i.e. including annual complementary
payments – fixed and target variable) over the last 12 months of service (see Chapter 4,
section 2.3.1 of the Universal Registration Document).
For 2021, Mr. Jean-Pascal Tricoire was not awarded nor
benefited from multi-annual variable compensation, exceptional
compensation, stock options, welcome bonus, or Directors’ fees.
Employer social contributions paid by the Group’s companies in
respect of Mr. Jean-Pascal Tricoire’s compensation amounted to
€324,278.92 in 2021.
Mr. Jean-Pascal Tricoire is granted 30% of his cash compensation
described above (fixed compensation, annual variable
compensation and pension complementary payments) in
consideration for his duties as a Corporate Officer (Chairman
& CEO) of Schneider Electric SE exclusively. The remainder is
granted to him for the discharge of his operational duties as
Regional Asia President, Chairman of Schneider Electric Asia
Pacific and executive Director of Schneider Electric USA Inc.
Details relating to the 2019 Long-term Incentive Plan
realized in 2021 (LTIP 2019)
The performance period for shares granted in 2019 finished
on December 31, 2021 and shares under the Plans n° 32 and 33
are therefore deemed vested. Their final acquisition is, however,
still subject to the satisfaction of the presence condition at the
delivery date.
At its meeting of February 16, 2022, the Board assessed the
achievement rate of the performance criteria based on the Group’s
performance over the three-year period 2019 – 2021 and set the
final rate of achievement at 96.86%, i.e. a reduction of 3.14% in
relation to the number of shares originally granted.
The Chairman and CEO was conditionally granted 18,000 shares
under Plan n° 32 and 42,000 shares under Plan n° 33. After
applying the reduction for performance not achieved, the resulting
outcomes were as follows:
Corporate Officer
Jean-Pascal Tricoire
Vesting date
Number of Shares
(Plan n° 32)(1)
Number of Shares
(Plan n° 33)
Number of shares
deemed vested
No of shares
lapsed
Value of deemed
vested shares(2)
18,000
42,000
58,117
1,883
€10,022,858
March 28, 2022
March 28, 2022
(1) Plan n° 32 – Performance Shares granted under this plan to Corporate Officer is subject to one-year holding period following vesting, therefore shares will only
become unrestricted on March 27, 2023.
(2) Vested shares are valued at the closing share price of December 31, 2021, i.e. €172.46.
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Shares granted under the 2019 LTIP were subjected to performance conditions as follows:
40%
Organic adjusted EBITA
margin improvement
Average
achievement rate for
2019, 2020 & 2021
2019
Actual result: +0.7pts
Achievement rate: 100%
2020
Actual result: +0.2pts
Achievement rate: 40%
2021
Actual result: +1.4pts
Achievement rate: 100%
25%
Cash conversion rate
Average
achievement rate for
2019, 2020 & 2021
2019
Actual result: 121%
2020
Actual result: 159%
2021
Actual result: 87%
20%
Schneider Sustainability
Impact
Note in 2019, 2020
& 2021
2019
Actual result: 7.77
2020
Actual result: 9.32
2021
Actual result: 3.92
15%
Relative TSR
Ranking vs. peer
group in December
2021
Actual result: Rank 1st
4.
Weighted rate: 31.5%
Weighted rate: 37.5%(1)
Weighted rate: 16.86%
Weighted rate: 22.5%(1)
(1) The good level of cash conversion exceeded the initial target and the over-performance of the relative TSR condition off-set the under-performance of the adjusted
EBITA condition (for 8.5%).
2021 was the final year of performance measurement for the LTIP
2019. Schneider Electric ranked 1st on relative TSR, delivering
213% return to shareholders over the same three-year period,
demonstrating a strong value creation for the shareholders.
Schneider Electric delivered robust organic adjusted EBITA margin
improvement year-on-year, largely beating initial targets, exceeding
the cash conversion rate three-year target, and demonstrating
consistent progress on the Group’s sustainability targets which are
at the heart of the Group’s strategy. These strong results across the
range of performance criteria led to a vesting outcome of 96.86%
out of 100%.
LTIP 2019 Performance criteria achievement
0%
Achievement Scale
100%
Adjusted EBITA margin (organic)
improvement (40%)
Cash conversion Rate (25%)
Relative TSR (15%)
Schneider Sustainability Impact (20%)
Total weighted achievement rate
31.5% 8.5%
25%
15%
16.86%
96.86%
• Organic adjusted EBITA margin improvement (40%) – During
the 3 years plan, the adjusted EBITA organic margin improved
by more than +0.7pts on average, reflecting the successful
execution of the strategy combining top line growth, positive net
pricing, better mix, industrial productivity, and better efficiency
to reduce SFCs. Overall, the achievement rate for this criterion
was 31.5% (out of 40%).
• Cash conversion (25%) – Our efforts on cash management
delivered outstanding results consistently over the three-
year period with an average cash conversion rate c. 122.3%,
outperforming the target of 100% average cash conversion.
The achievement rate for this criterion was set at 37.5%,
including the over-performance of 12.5%, which contributed
to the offsetting of the non-achievement of the adjusted EBITA
margin criterion.
• Relative TSR (15%) – The Group’s performance was
acknowledged by the market and reflected in the stock price
increase, which, combined with a robust dividend distribution
policy and consistent share buy-back program to balance the
dilution coming from allocation of Performance Shares and
employee shareholding schemes, generated strong returns
to shareholders over the period. Schneider Electric’s TSR was
ranked 1st versus the selected peers (ABB, Legrand, Siemens,
Eaton, Emerson, Honeywell, Johnson Controls, Rockwell
Automation, Fuji Electric, Mitsubishi Electric, and Yokogawa).
The achievement rate for this criterion was set at 22.5%,
including the over-performance of 7.5%, which contributed to
the offsetting of the non-achievement of the adjusted EBITA
margin criterion.
• Schneider Sustainability Impact (SSI) (20%) – The SSI
provides, on a scoring scale of 10, an overall measure of the
Group’s progress on sustainability issues. Over the last three
years, Schneider Electric demonstrated strong delivery and
continuous improvement on its sustainability programs. The
SSI reached a score of 3.92/10 end of 2021 exceeding
its 3.75/10 target set by the Board for this criterion, which
resulted in an achievement rate of 80.2% for 2021 with overall
16.86% shares vesting out of 20% allocated to this criterion.
The fact that the compensation mechanism has materialized
this year does not create any disconnection between pay and
performance considering that the payout rate actually reflects
the good performance of the Company over the last 3 years and
the strong 2021 results. In addition, this result is aligned with the
shareholders’ experience, the TSR being 213% over this period.
Historical vesting of the Corporate Officers’ Performance Share plans:
LTIP 2019
96.86%
LTIP 2018
98.18%
LTIP 2017
99.54%
LTIP 2016
91.46%
LTIP 2015
71%
LTIP 2014
78%
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4.2 Compensation Report
4.2.2.3 Non-executive Directors’ compensation in relation to the 2021 fiscal year
Amounts granted to non-executive Directors are determined
by taking into account the Board member’s responsibilities, the
expected commitment for the role and the competitive market
rates among international peers. Besides the fixed base amount,
Directors’ compensation mostly depends upon the said Directors’
attendance at Board and committee meetings.
Upon the recommendation from the Governance & Remunerations
Committee, the Board of Directors is responsible for setting
the allocation of the Directors’ fees among Board members
accordingly with the maximum annual amount of Directors’ fees
that can be paid to the Board members is set at €2,500,000 by
the Annual Shareholders’ Meeting held on April 25, 2019; and the
2021 compensation policy approved by the Annual Shareholders’
Meeting held on April 28, 2021 which provides that the allocation
rules of the fees to the non- executive Directors are as follows:
• Non-executive Directors are paid:
− an amount of €4,000 per Committee meeting attended;
− an amount of €5,000 (for intercontinental travel) or €3,000
(for intra-continental travels) per Board session physically
attended.
• Additional annual payments are made to non-executive
Directors who chair a Committee to reflect the additional
responsibilities and workload:
− Audit & Risks Committee: €20,000;
− Human Resources & CSR Committee, Digital Committee,
and Investment Committee: €15,000; and
− Vice-Chairman and Lead Independent Director, who is
also the Chairman of the Governance & Remunerations
Committee: €250,000.
• For an observer, an annual fixed payment of €20,000 is paid,
unless they become a non-executive Director at the next
General Meeting. In this case, they will receive the same
fees for attending the Board and committee meetings as
non-executive Directors.
− a fixed basic amount of €25,000 for membership
• All payments are pro-rated for time served during the year
of the Board;
− an amount of €7,000 per Board meeting attended;
and are paid in cash.
Directors’ compensation earned in 2020 and 2021 was as follows, noting that Jean-Pascal Tricoire, Chairman of the Board, and Xiaoyun Ma
who represents the employee shareholders, waived the payments of the compensation they were entitled to as members of the Board:
Léo Apotheker
Cécile Cabanis
Rita Felix(3)
Fred Kindle
Willy Kissling
Linda Knoll
Jill Lee
Xiaoyun Ma(3)(4)
Patrick Montier(5)
Anna Ohlsson-Leijon
Fleur Pellerin
Anders Runevad
Gregory Spierkel
Lip-Bu Tan
Bruno Turchet(3)(6)
Total
Directors’ compensation (in euros)
Other compensation & benefits (in euros)
Total (in euros)
2021(1)
2020(2)
2021(1)
2020(2)
2021(1)
2020(2)
155,000
118,000
90,000
368,000
144,000
121,000
104,000
–
33,082
100,000
112,000
120,000
152,000
106,000
52,986
272,479
147,000
47,753
353,973
192,000
174,000
133,000
–
129,000
–
166,000
152,000
205,000
150,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
155,000
118,000
90,000
368,000
144,000
121,000
104,000
–
33,082
100,000
112,000
120,000
152,000
106,000
52,986
272,479
147,000
47,753
353,973
192,000
174,000
133,000
–
129,000
–
166,000
152,000
205,000
150,000
–
1,776,068
2,122,205
1,776,068
2,122,205
(1) Awarded for the fiscal year 2021 and paid in 2022.
(2) Awarded for the fiscal year 2020 and paid in 2021.
(3) Employee Directors are separately entitled to the compensation granted to
(4) Xiaoyun Ma waived the payment of the sum of €110,000 she was entitled to.
(5) Board member whose term of office ended in 2021.
(6) Bruno Turchet waived the payment of 30% of the sum he was entitled to,
them for the performance of their duties as an employee, such compensation
is not affected by their office as a Director and is not disclosed.
i.e. €15,896, in favor of the trade union which appointed him.
The total amount awarded to the Board members for 2021 was €1,776,068 compared to €2,122,205 for 2020 due to the return to a normal
rhythm of meetings and a wider use of digital meetings in 2021. Excluding the special fee paid to the Vice-Chairman & Lead Independent
Director, the amount is composed of approximately 25% fixed compensation and 75% variable.
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4.2.2.4 Pay Equity ratio
Employees experience at Schneider Electric
Delivery of the strategy, both short term and long term, depends upon Schneider Electric’s success in attracting and engaging a highly
talented workforce, and on equipping people with the skills for the future. The Group is committed to fair pay, which is at the forefront
of the Group’s and executives’ agenda, ensuring that all Schneider Electric employees are appropriately and fairly rewarded for their
contribution. The progress is monitored via the Schneider Sustainability Impact Indicators. More information can be found in the
Sustainable Development (chapter 2) of the Universal Registration Document.
Pay Equity
Living wage
Recognition
Well-being
Engagement
Fair and equitable
pay is a core
component of
the Group’s
compensation
philosophy. Since
2015, the Company
has adopted a
Global Pay Equity
Framework.
With the help of
this Framework,
Schneider Electric
has committed to
reaching <1% pay
gap for both females
and males by 2025.
Furthermore, the pay
equity adjustment
is fully integrated
into the annual
global salary review
and its principles
leveraged during the
promotion and hiring
processes.
Schneider Electric
believes earning a
decent wage is a
basic human right
and a key element
to decent work. The
Group is committed
to paying employees
in the lower salary
ranges at or above
the living wage to
meet their family’s
basic needs. By
basic needs, the
Group considers
food, housing,
sanitation, education,
and healthcare, plus
discretionary income
for a given local
standard of living.
Schneider Electric
is committed to
creating a culture
where employees
receive regular
feedback and
coaching from
their managers
and colleagues,
celebrating people
who constantly
demonstrate the
Company’s Core
Values and go above
and beyond – using
global recognition
portal “Step Up”
and encouraging
the recognition
of small and big
achievements by
simply saying
“Thank you”.
Health and well-
being are embedded
in the Schneider
Electric strategic
people priorities
and contribute to its
core sustainability
mission. The
Company has a
commitment to
comprehensive
well-being at work
program translated
into dual standard of
access to healthcare
and well-being
training programs.
4.
The Group listens
to employees
through a number of
different channels,
both formally and
informally. Two of the
Board directors are
employees of the
Company, appointed
through a formal
designation process.
the Group runs
OneVoice internal
survey designed to
measure employee
satisfaction and
engagement;
the Group also
recognizes the
importance of
dialog and engages
with the local
work councils on
compensation
matters on a regular
basis.
Pay Equity Ratio
Equity pay ratio measures the ratio between the level of
compensation of the Chairman and CEO and the average
and median compensation of the employees, as required by
Article L.22-10-9-3 6° and 7° of the French Commercial Code.
Calculation methodology
The compensation comparisons and pay ratios set out below
were calculated based on the fixed and variable compensation
paid and relevant benefits during the fiscal years indicated, and
Performance Shares granted during the same periods valued at
their fair value (IFRS) on the grant date. The calculation includes
employees who were continously employed during the financial
years concerned. For part-time employees, compensation was
established on a full-time equivalent basis.
Scope
France perimeter:
The legal scope, the issuer, comprises of only one employee,
therefore, an alternate “relevant scope” was defined to reflect a
larger representative employee population in France as prescribed
by article 26.2 of AFEP-MEDEF Code. It is based on the French
holding entity Schneider Electric Société Européenne (SESE)
(the issuer) as well as all employees in France of the operational
company Schneider Electric Industries (SAS). This group of
employees is employed on comparable terms to the Corporate
Officer and represents more than 4,000 employees in France
on a full time equivalent basis.
Global perimeter:
In addition, from 2021 the Board of Directors, upon
recommendation of the Governance & Remunerations Committee
and of the Human Resources & CSR Committee, decided to
voluntarily report the evolution of the pay ratio between the
Chairman and CEO and the average and median compensation of
the employees on a broader scope which includes approximately
117,000 Schneider Electric employees across the top 30 countries
(“Global Scope”). This represents circa 84% of all Schneider
Electric employees globally. There is no historical data for this
ratio as the HR Information System was not ready before to report
on this extended scope.
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4.2 Compensation Report
Evolution of the Corporate Officer and employees’ compensation, pay ratios, and Group’s performance over five years
FY2017
FY2018
FY2019
FY2020
FY2021
Adj EBITA
Revenue
French Perimeter
Mr. Tricoire total compensation paid in FY
% change in total compensation
Pay ratio – average compensation
% change in average pay ratio
Pay ratio – median compensation
% change in median pay ratio
106
104
100
116
108
107
102
137
117
5,789,994
22%
6,184,007
7%
5,754,154
-7%
5,525,324
-4%
5,430,941
-2%
65
14%
81
15%
68
5%
84
4%
64
-6%
78
-7%
60
-6%
73
-6%
57
-5%
70
-4%
Employees average compensation
% change in employment average compensation
88,551
6%
91,127
3%
90,369
-1%
92,861
3%
94,950
2%
Global perimeter
Pay ratio – average compensation
Pay ratio – median compensation
110
156
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4.2.3 Compensation policy for the 2022 fiscal year
(say on pay ex-ante)
The compensation policy intention is to provide a clear link between delivery of Schneider Electric’s strategy and the Corporate
Officers’ compensation, while reflecting outcomes for shareholders. Set out below is the Corporate Officer and non-executive
Directors’ compensation policy for 2022. It will be submitted to the shareholders at the 2022 Annual Shareholders’ Meeting (9th and 10th
resolutions) and, subject to shareholders approval, will remain in force until the next policy is approved by the shareholders.
4.2.3.1 Executive Compensation policy
Schneider Electric follows a rigorous process for determining executive compensation, under the leadership of committed and
independent Directors.
4.
Role of the Governance & Remunerations Committee
The general principles and criteria forming part of the
compensation policy for Corporate Officer, and their individual
compensation packages are prepared and reviewed by
the Governance & Remunerations Committee which makes
recommendations to the Board of Directors for decision. The Board
receives inputs and recommendations from the Human Resources
& CSR Committee on the incentive structure and performance
criteria (annual variable compensation and Long-term incentive
plan) applied to the members of the Executive Committee (see
section 4.2.4 of the Universal Registration Document), as well as
the Group’s other employees.
To help the Board in the decision process, the Governance &
Remunerations Committee and the Human Resources & CSR
Committee are authorized to call upon external experts for specific
topics, benchmarking data and analyses. The Committees hold
at least one joint meeting every year to discuss the compensation
structure applicable to Corporate Officer and other employees
of the Group.
These joint committee meetings are attended by one of the two
employee Directors and the Director representing the employee
shareholders who are members of the Human Resources &
CSR Committee.
As part of its preparatory work for its proposals to the Board, the Committee:
Defines performance criteria
Benchmarks Corporate
Officers’ pay
Engages with shareholders
Defines performance criteria based
on Schneider Electric’s executive
compensation pillars and business
strategy. Targets are determined at the
beginning of the performance period
in accordance with the goals of the
Strategic Plan.
Based on circumstances and
priorities, the targets also
encompass risks raised by the Audit
& Risks Committee as well as the
recommendations of the Human
Resources & CSR Committee.
Benchmarks Corporate Officer’s
pay against the median of a peer
group consisting of 24 French and
international companies that are
comparable to Schneider Electric
in terms of market capitalization,
revenue, and industry, or that
represent a potential source of
recruitment or attrition.
This benchmarking is used as an
indicator, not as a target, and is done
ex-post only for reference.
Relies on the Vice-Chairman &
Lead Independent Director to directly
engage with shareholders to ensure
their perspectives and feedbacks on
Schneider Electric’s compensation
policy are heard and considered in
decision-making.
The topic of Corporate Officer’s
compensation is usually discussed
at four Board meetings every year.
Corporate Officers do not take part in
the debates of the Board concerning
their own compensation.
This process ensures consistency and alignment between the compensation policy applied to the other executives and employees and
the compensation policy applied to Corporate Officer. They share the same objectives and priorities and their rewards are aligned with
the Group’s performance and shareholder value creation.
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4.2 Compensation Report
Use of discretion
In determining executive compensation, the use of discretion
is limited, and an appropriate disclosure on the use of discretion
would be provided, if any, so that shareholders understand the
basis for the Board’s decisions. This discretion is available to the
Board to ensure successful execution of the policy and to reflect
the fact that there are no qualitative objectives in Corporate
Officer’s compensation:
• Flexibility to take into account unexpected changes in the
industry environment and in compensation practice generally,
this allows to respond to changes in circumstances, for example
in modifying the benchmarking peer groups.
• Exercise discretion, upwards or downwards, to adjust the
formulaic outcome for annual or long-term incentive awards
resulting from the strict application of the approved policy,
where a qualitative assessment of performance is required
to ensure that the awarded compensation is fair in light of the
Corporate Officer’s actual contribution to the Company’s overall
performance, its positioning vs. competition, and the outcomes
for shareholders and employees.
Changes in the 2022 Compensation policy
The Committee has reviewed the existing policy and reassessed
the pillars and principles formulated in 2018, the compensation
elements and criteria considering the feedback of shareholders
received during the shareholder engagement process
described above. Upon recommendations of the Governance &
Remunerations Committee, the Board wishes to overall maintain the
stability of the compensation policy which appears balanced and
provides market competitive pay, ensuring a strong link between
pay and performance, strong alignment with both employees and
shareholders, and long-term focus, while at the same time taking
into account the shareholders’ feedbacks.
Balance between compensation elements
Therefore, based on the Committee’s analyses and
recommendations, the Board proposes to implement the following
changes for the 2022 Compensation policy:
• Stringency of the TSR criterion for the LTIP: The vesting scale
of the criterion of TSR compared to a bespoke industry panel
consisting of 11 companies would be made more stringent,
with no vesting at ranks 7 and below in the bespoke peer group,
no vesting below the median of the group would therefore
be allowed;
• Disclosure of the targets set for the improvement of the
adjusted Earnings per share criterion: the Board would also
commit to disclose ex-post the targets of improvement of the
adjusted Earnings per share set by the Board which will allow
shareholders assess their stringency and the link between
pay and performance;
• Cap of the LTIP granted to the Corporate Officer: The cap of
long-term instruments that could be granted to the Corporate
Officer was previously expressed in number of shares, capped
at 60,000 shares. The Board proposes that the cap be now
expressed as a percentage of his remuneration (fixed and
variable short-term compensation at target). Notably, the
long-term instruments granted to the Corporate Officer, valued
in accordance with IFRS standards, should not represent a
disproportionate percentage of his overall compensation,
and should be no more than 200% of the combined fixed
and short-term variable compensation at target.
18%
Not linked to
performance
41%
Paid in cash
41%
Short-term
18%
Fixed
compensation
23%
Target annual
variable
compensation
130% of fixed(2)
59%
LTIP(1)
(1) LTIP granted during 2021 fiscal year valued in accordance with IFRS standards
(2) Between 0% and 260%
82%
Linked to
performance
59%
Paid in shares
59%
Long-term
(minimum 3 years +
presence condition)
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Corporate Governance
Group’s strategic priorities
How the strategy links to the Chairman and CEO’s variable compensation
Organic growth
Value for customers
Sustainability
Continuous efficiency
Value & returns to
shareholders
Annual variable compensation
Delivering strong execution and creating value for customers and shareholders every
year to contribute to Schneider Electric’s long-term success
Group organic
sales growth
40%
Group adjusted
EBITA margin
improvement
(organic)
30%
Group cash
conversion
rate
Schneider
Sustainability
Impact
10%
20%
Long-term incentive plan
Building an integrated and leading company with strong sustainability focus and
attractive returns to shareholders
Adjusted Earnings
Per Share
Relative Total
Shareholder Return
Schneider Sustainability
Relative & External Index
40%
35%
25%
4.
How are performance criteria linked to
Schneider Electric strategic priorities?
Variable pay is linked to performance metrics designed to deliver
Schneider Electric strategy. At the start of each year, the Board
reviews the measures, targets, and weightings to ensure they
remain consistent with the annual priorities and Group strategy.
For the annual variable compensation and the Performance Shares,
the approach to performance measurement is intended to provide
a balance of measures to assess performance focusing on
execution of the Group’s strategic priorities.
Considerations of wider workforce
compensation and shareholders’ views
The Board monitors and reviews the effectiveness of the
compensation policy for Corporate Officer and senior management
and has regard to its impact and consistency with compensation
policies in the wider workforce. During the year, the Board
is provided with information and context on pay in the wider
workforce and various HR initiatives to enable its decision-making.
This includes the approach to gender pay gap and living wage
programs rolled out globally, the annual variable compensation
results, and the total cost of LTIP awards.
The Board is committed to an open and transparent dialogue with
Schneider Electric’s shareholders through the Vice-Chairman &
Lead Independent Director. Where appropriate, Schneider Electric
actively engages with shareholders and shareholder representative
bodies, taking their views into account when making any decisions
about the Corporate Officers’ compensation. The Vice-Chairman &
Lead Independent Director is also available to answer questions at
the Annual Shareholders’ Meeting.
2021 Compensation Pillars and Principles
Pay for Performance
Alignment with shareholders’
interest
Competitiveness
• Principle 1: Prevalence of variable
components: circa 80% for CEO
(at target).
• Principle 2: Performance is
evaluated via economic and
measurable criteria.
• Principle 3: Financial and
Sustainability objectives are fairly
balanced and distributed between
short-term (annual variable
compensation) and medium-term
(long-term incentive) components.
• Principle 4: Significant proportion
of the total compensation delivered
in shares.
• Principle 5: Performance
conditions support Schneider
Electric’s strategic priorities and
are aligned with shareholders’
expectations.
• Principle 6: To benchmark the
Corporate Officer’s compensation
package “at target” in the median
range of the Company’s updated
peer group.
• Principle 7: To reference the
CAC 40 third quartile and the
Stoxx Europe 50 median.
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Fixed compensation
The fixed compensation is reviewed at long intervals by the Board in accordance with the
AFEP-MEDEF Corporate Governance Code, unless there are specific circumstances that
would warrant a salary increase, for example a major change in the duties. The Board ensures
that the Chairman and CEO’s salary is set reasonably compared to similar roles in the market.
Considering the positioning of the Corporate Officer’s salary on the relevant markets, the
Company performance, and also pay conditions for other employees, the Board decided
that there were no special circumstances that would call for a salary increase in 2022.
Salary increase over the last
5 years
2022
Nil
2021
Nil
2020
Nil
2019
Nil
2018
5%
Corporate Officer
Jean-Pascal Tricoire, Chairman and CEO
Annual variable compensation
FY 2022
(January 1, 2022)
FY 2021
(January 1, 2021)
€1,000,000
€1,000,000
% Change
0%
Annual variable compensation provides variable cash compensation which rewards achievement of the short-term financial and
sustainability targets of the Group.
At the start of the fiscal year, financial and sustainability performance criteria, weightings, and annual targets are reviewed in detail
by the Committee and recommended to the Board for approval. Outcomes will be determined based on performance against each of
those targets. The Board has the flexibility to review targets during the year to ensure continuous alignment with shareholders’ interests.
The payment of the annual variable compensation is conditional upon approval by shareholders of the compensation granted to the
Chairman and CEO. The Company does not operate a clawback policy.
The pay-out opportunity at threshold performance is 0%, with 50% of maximum annual variable compensation payable for achieving
target. The maximum annual variable compensation will only be earned where a strong performance is delivered on each performance
metric. Pay-outs between threshold and target, and between target and maximum, are determined on a straight-line basis.
Schneider Electric does not operate a deferral program.
2022 Annual variable compensation opportunity at target and maximum (no change vs. the 2021 policy):
Minimum
At target
Maximum
0% of fixed compensation
130% of fixed compensation
260% of fixed compensation
Nil
€1,300,000
€2,600,000
For 2022, the Board proposes that the measurable financial performance criteria determine 80% and sustainability criteria, 20% of the
variable cash compensation of Mr. Jean-Pascal Tricoire as follows:
Performance criteria
Description and link to strategy
40% Group organic sales growth
Fostering organic growth through deployment of strategic priorities in key markets
30% Adjusted EBITA organic margin improvement
Enabling shareholder value creation through continuous efficiency
10% Group cash conversion
Enabling returns to shareholders
20% Schneider Sustainability Impact
Promoting continuous progress towards more sustainability and value for
customers
For business confidentiality reasons and as in previous year, the targets cannot be disclosed; however, the targets have been set
precisely by the Board at the meeting of February 16, 2022 and will be communicated ex-post.
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4.
Performance shares (Long-term incentive plan – LTIP)
LTIP links the largest part of the Chairman and CEO’s
compensation with the long-term performance of the Group
and the actual outcome varies with performance against
criteria linked directly to strategic priorities.
Shares granted are subject to a vesting period of three years
with an additional mandatory one year holding period for
30% of shares which are granted under the Plan reserved
to the Corporate Officers.
For threshold performance, 0% of shares granted will vest,
for maximum, 100% will vest. Vesting will normally operate
on a straight-line basis between these points.
LTIP time horizon
Year 1
Year 2
Year 3
Year 4
Long-term
incentive
plan
1 year
holding
period
Shares
released
Perfomance period
30% of shares
that vest
Shares
granted
Performance assessed
& shares vest (70% released)
The 2022 LTIP criteria will remain the same as in 2021, in line with Company’s objectives and the proposals approved by shareholders
under the LTIP resolution at the 2019 Annual Shareholders’ Meeting on April 25, 2019 (21st resolution) with two changes regarding the
vesting scale of the criterion of TSR compared to a bespoke industry panel of 11 companies which would be made more stringent
(no vesting under the median of the group would be allowed) and the disclosure of the targets set for the improvement of the adjusted
Earnings per share criterion which will be disclose ex-post allowing shareholders to ensure the stringency of the targets set by the Board.
In order to align the interests of the Group’s executives to those of the shareholders, in 2022, the Board will allocate Performance
Shares to more than 3,500 Group executives and Senior Management, leaders, and key talents (Plans n° 40 and 41). For Group Senior
Management, 100% of shares allocated will be subject to performance conditions measured over three years.
The maximum annual award to the Corporate Officer for 2022, valued in accordance with IFRS standards, will be now capped at 200%
of the combined fixed and target short-term variable compensation at the date of grant to ensure that it does not represent
a disproportionate percentage of his overall compensation.
The volume of the annual award will be set in consideration of:
• The market practice and competitive positioning of the Chairman and CEO’s compensation package;
• The Group’s performance in 2021, acknowledged by the market;
• The performance criteria applicable to the final acquisition of LTIP awards;
• The culture of ownership deeply rooted in Schneider Electric’s DNA.
In the context described above, the Board decided that the number of shares granted to the Chairman and CEO continues to
be reasonable in terms of quantum and market practice for comparable roles; it rewards the Company’s resilient performance
in a challenging year and supports the culture of ownership strongly promoted by Schneider Electric.
Performance conditions
100% measurable and quantifiable criteria
75% Financial & TSR and 25% Sustainability
Performance conditions and weightings applicable to the 2022 LTIP:
• 40%, improvement of Adjusted Earning per share;
• 35%, relative TSR performance of Schneider Electric:
− 17.5% measured vs. a bespoke panel of 11 companies: ABB, Legrand, Siemens, Eaton, Emerson, Honeywell, Johnson Controls,
Rockwell Automation, Fuji Electric, Mitsubishi Electric, and Yokogawa,
− 17.5% measured vs. CAC 40 companies;
• 25%, based on Schneider Sustainability External & Relative Index (SSERI).
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• Adjusted EPS (40%)
Adjusted EPS is a key long-term performance metric which promotes the execution of Schneider Electric’s strategy to deliver profitable
growth, thus reinforcing alignment with shareholders. Performance Shares could vest subject to the achievement of the following
targets as set by the Board of Directors at the beginning of each year:
• a minimum Adjusted EPS improvement threshold under which there will be no vesting;
• an intermediary targeted Adjusted EPS improvement objective that the Company will have to achieve in order to vest 75% of the
shares under this condition;
• a targeted Adjusted EPS improvement objective that the Company will have to achieve in order to vest all shares under this condition;
the Performance Shares will vest progressively, on a linear basis, if the Adjusted EPS improvement is between these objectives.
•
As explained above, the Board commits to disclose ex-post, at the end of each Long-Term Incentive Plan, the minimum Adjusted EPS
improvement thresholds and the targeted Adjusted EPS improvement objectives.
Adjusted EPS performance is published in the external financial communications and its annual variance will be calculated using
adjusted EBITA at constant FX from year N-1 to year N. Foreign exchange impacts below adjusted EBITA will be taken in full. Significant
unforeseen scope impact could be restated from this calculation upon decision of the Board.
• Relative TSR (35%)
This criterion strengthens the alignment between the shareholders’ interests and compensation of the Corporate Officer.
• For 17.5% of the shares, Schneider Electric TSR will be compared to a bespoke industry panel consisting of 11 companies
(ABB, Legrand, Siemens, Eaton, Emerson, Honeywell, Johnson Controls, Rockwell Automation, Fuji Electric, Mitsubishi Electric
and Yokogawa) with a vesting scale as follows: 0% at rank 7 or below, 50% at median (rank 6), 100% at rank 4, 150% for ranks 3 to 1,
and linear between these points, as explained above, the Board proposes to strengthen the vesting scale for a better alignment
with performance.
• For the remaining 17.5%, Schneider Electric TSR will be compared with the TSR of the companies in CAC 40 index to reflect
the macro-economic and stock-market specific trends which influence the performance of the share and in turn, the return to
shareholders with a vesting scale as follows: 0% below median, 50% at median (rank 20), 100% at rank 10, 120% in ranks 1 to 4,
and linear between these points.
In case of over-performance, if Schneider Electric’s TSR ranks first to third of the bespoke industry panel or within top 9 of the CAC 40
companies, this criterion may compensate the under-performance under the Adjusted EPS criterion up to the same number of shares.
If the Schneider Electric TSR is closely clustered with that of other companies in the panel, then the Board of Directors will apply its
judgment to decide whether Schneider Electric’s TSR shall be deemed to be ranked in the same position as those companies.
• Schneider Sustainability External and Relative Index (SSERI) (25%)
The Schneider Sustainability External and Relative Index measures the long-term sustainability performance of the Group in terms
of relative performance, through a combination of external indices which cover a range of environmental, social, and governance
indicators wider than and different from the Schneider Sustainability Impact (SSI). Using external indices would also ensure that the
sustainability priorities governing the assessment of the long-term sustainability performance of the Group are at all times those which
matter the most to the stakeholders. As their content is dynamic and includes new and more relevant topics as they emerge, it forces
participants to constantly anticipate the most demanding trends in global sustainability. The Board has selected some of the most
challenging external indices which are objective, recognized, and independent, covering main geographies in line with the Group’s
global footprint and which complement each other as they cover different sustainability dimensions:
• DJSI World which covers three dimensions: economic, environmental, and social;
• Euronext Vigeo which covers environment, community involvement, business behavior, human rights, corporate governance,
and human resources;
• Ecovadis which covers four dimensions: environment, labor and human rights, sustainable procurement and ethics; and
• CDP Climate Change which covers climate change, water, and forests and represents a major reference for climate change
leadership globally.
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4.
The table below summarizes the Performance Conditions that will apply to the plan:
40% Improvement of adjusted
Earnings Per Share (EPS)
• 0% at the minimum Adjusted EPS improvement threshold
• 75% at the intermediary Adjusted EPS improvement
objective
• 100% at the targeted Adjusted EPS improvement
35% Relative TSR
17.5% vs. CAC 40
25% Schneider Sustainability
External & Relative Index
(SSERI)
17.5% vs. a panel of 11 companies
(ABB, Legrand, Siemens, Eaton,
Emerson, Honeywell, Johnson
Controls, Rockwell Automation,
Fuji Electric, Mitsubishi Electric
and Yokogawa)
6.25% DJSIW
6.25% Euronext Vigeo
6.25% Ecovadis
6.25% CDP Climate Change
objective
Vesting linear between these points
• 0% below median
• 50% at median (rank 20)
• 100% at rank 10
• 120% at ranks 1 to 4
Vesting linear between these points
• 0% at rank 7 and below
• 50% at median (rank 6)
• 100% at rank 4
• 150% at ranks 3 to 1
Vesting linear between these points
• 0%: not in World
• 50%: included in World
• 100%: sector leader
• 0%: out
• 50%: included in World 120 or Europe 120
• 100%: included in World 120 & Europe 120
• 0%: Silver Medal or less
• 50%: Gold Medal (top 5%)
• 100%: Platinum Medal (top 1%)
• 0%: C score
• 50%: B score (25% at B-)
• 100%: A score (75% at A-)
For each grant, the performance conditions will be determined by the Board and, although the Board favors stability, they could be
adapted from the ones presented above. Depending on the evolution of the Group’s strategic objectives, should they cease to be
relevant or new criteria be deemed more appropriate based on their review by the Board of Directors, the latter would elect for criteria
with similar long-term stringency, that will ensure a strong link between pay and performance.
Pension benefits
The Chairman & CEO receives complementary cash payments in lieu of participation in the defined benefit pension scheme (Article
39) (“Top Hat”), which was discontinued for Corporate Officers following the decision of the Board of Directors on February 18, 2015.
The purpose of the pension cash payments is to provide a competitive retirement benefit in a way that is cost effective to the Company
and that allows the Chairman & CEO to continue building his retirement benefits independently. The cash payments are a combination
of fixed and variable payments that are considered “other benefits” to ensure consistency and comparability with other French or
international companies. The maximum annual Complementary Pension Cash Benefit for 2022 remains unchanged and is detailed
in the table below. Variable portion is subject to the same performance criteria and targets as the annual variable compensation.
The Chairman & CEO has committed to depositing these additional payments, after taxes, into investment vehicles dedicated to the
supplementary financing of their pensions.
Corporate Officer
Fixed portion
Target
(% of fixed
compensation)
Minimum
At target
Maximum
Total at target
Jean-Pascal Tricoire, Chairman and CEO
€191,600
130%
€0
€249,080
€498,160
€440,680
Variable portion
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Other benefits
Schneider Electric aims to provide an appropriate level of benefits considering market practice and the level of benefits provided for
other employees in the Group. The benefits currently provided are described below, but may also include, for example, relocation
assistance if required and subject to the Board’s decision.
Employer Matching Contributions and Profit-Sharing
The Chairman and CEO is eligible for profit-sharing and the employer matching contribution paid to subscribers to the capital increase
reserved for employees. He is also eligible for the employer matching contribution paid to subscribers to the collective pension fund
(PERCO), for the retirement of employees in France.
Company Car
The Corporate Officer may use the cars made available to Group Senior Management with or without chauffeur services. In addition,
the Chairman and CEO is provided with a company car.
Tax assistance
The Corporate Officer may benefit from a tax assistance.
Health, Life and Disability schemes
The Corporate Officer is eligible for:
i.
The collective welfare plan applicable to employees of Schneider Electric SE and Schneider Electric Industries SAS covering
the risks of illness, incapacity, disability, and death;
ii. Additional coverage of the Group’s French executives for risks of illness, incapacity, disability, and death. The main features
of this coverage are:
1) In case of illness or accident resulting in a temporary stoppage or incapacity (of any category), the Corporate Officer shall
be entitled to continue to receive 18 months’ worth of his compensation (fixed and target variable) authorized by the Board,
2) In case of death, the policyholder’s beneficiaries shall be entitled to the compensation (fixed and target variable) authorized
by the Board of Directors for the current month, along with a death benefit equal to 6 months of the average compensation
authorized by the Board of Directors (monthly average of the fixed and variable compensation paid during the last 12 months
of employment);
iii. The entitlement to a life annuity pension paid to the surviving spouse in the event of death before his retirement, or if he left the
Company after the age of 55 without returning to work, equal to 60% of 25% of the average of compensation paid during the three
years before the date of death, with a deduction made from the theoretical pension payment that may be obtained under insurance
conditions from the additional payments that will have been made;
iv.
In the event of disability causing the Corporate Officer to completely stop working, the right to pension payments (payable to the
surviving spouse at a rate of 60%) beginning from his retirement equal to 25% of the average of the total cash compensation paid
over the three years preceding the date of disability minus 1.25% per quarter of absence so as to obtain a full rate of pension and
minus the amount of additional compensation that may be obtained under insurance conditions at the time the disability occurred;
v.
In the event of an accident, the Group insurance covering the executive’s accident risk, stipulating the payment of a benefit the
sum of which may be up to four times the annual compensation based on the type and circumstances of the accident.
Eligibility for benefits (ii) through (v) above is conditional on the fulfilment of one of the following conditions:
•
•
the average of the net income of the last five fiscal years preceding the event is positive;
the average of the free cash flow of the last five fiscal years preceding the event is positive.
Director’s fee
The Chairman and CEO has waived the attendance fees to which he is entitled in his capacity of Board member.
Extraordinary awards
The Compensation policy does not include any provisions for extraordinary payments. The Board decided to maintain the prohibition
of one-off payments that are not provided for in the compensation policy approved by the shareholders.
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Post-mandate benefits
Listening carefully to the concerns raised by the shareholders and taking their feedback into account, the Board changed in the 2020
Compensation policy the Chairman and CEO’s post-mandate benefits:
• Complementary payments for pension are now excluded from the severance indemnity calculation;
• A resignation may qualify as a forced departure only if the resignation was requested, which may include reasons such as change
in strategy, voluntary resignation does not qualify as a forced departure;
• Prorata rule now applies as a principle to determine the Chairman and CEO’s right to keep unvested shares after their constraint
departure.
The table below presents a summary of the benefits that could be granted to the Chairman and CEO on leaving office depending on
the terms of the departure. The information provided in this summary is without prejudice to any decisions that may be made by the
Board. In determining overall termination arrangements, the Board will ensure that termination benefits shall be granted only in case of
forced departure and regardless of the form of the departure. In any case, Involuntary Severance Pay will not be paid if the resignation
is a consequence of wrongful or gross misconduct.
4.
Voluntary resignation/Removal from
office for wrongful or gross misconduct
Forced departure
Involuntary
Severance Pay
Not applicable
Maximum Amount = twice the arithmetical
average of the Corporate Officer’s annual
fixed and variable cash compensation, to
the exclusion of complementary pension
payments, paid over the last 3 years
taking into account the non-compete
compensation, if any, and subject to the
attainment of performance conditions.
Retirement or change of
assignment within the Group
Not applicable
Non-compete indemnity
If not waived by the Board, 60% of annual fixed and target variable
compensation (excluding pension payments)
Retention of unvested
share awards
Forfeited in full
Rights retained on prorata basis to
presence within Schneider Electric
Not applicable
Rights retained in full
• The termination benefits only become payable if the departure of the Chairman and CEO is forced, including requested resignation,
in the following cases;
− Dismissal, non-renewal or requested resignation of the Chairman and CEO, within the six months following a material change
in Schneider Electric’s shareholder structure that could change the membership of the Board of Directors;
− Dismissal, non-renewal or requested resignation of the Corporate Officer, in the event of a reorientation of the strategy pursued
and promoted by the Chairman and CEO until that time, whether or not in connection with a change in shareholder structure as
described above; and
− Dismissal, non-renewal or requested resignation of the Chairman and CEO, although, on average, two-thirds of the Group
performance criteria have been achieved for the last four fiscal years from the day of departure.
• Payment of the Involuntary Severance Pay is subject to fulfilment of the following performance conditions based on the average
rate of achievement of the Group’s performance criteria used in the annual variable compensation for the last three fiscal years
preceding the date of the Board’s decision:
Group criteria achievement
Severance payment
< 66%
66%–100%
>100%
No payment
75%–100% of the Maximum Amount, calculated on a straight line basis
100% of the Maximum Amount
• The aggregate amount of the Involuntary Severance Pay and the non-compete compensation, if any, shall not exceed the Maximum
Amount.
• Non-compete: the Chairman and CEO is bound by a non-compete agreement in case of departure. The one-year agreement calls
for compensation to be paid at 60% of annual fixed and target variable parts (excluding complementary payments). In line with the
recommendations of the AFEP-MEDEF Corporate Governance Code, the Board will determine whether to apply the non-compete
clause at the time of departure of the Corporate Officer.
If the Chairman and CEO leaves the Group in circumstances of a forced departure, he will be entitled to retain unvested
Performance Shares, which would typically vest at the end of the relevant vesting period, subject to the applicable performance
conditions, and which will be pro-rated for the time the Corporate Officer remained with the Group in any capacity during the vesting
period. In case of retirement or change of assignment within the Group, the Chairman and CEO will keep his right to the unvested
Performance Shares granted to him previously, subject to the applicable performance conditions and without any prorata.
•
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In conformity with the recommendations of the AFEP-MEDEF Corporate Governance Code:
• The entitlement to involuntary severance pay is subject to strict performance conditions, assessed over a period not lesser
than two years;
• Only circumstances of a forced departure, regardless of the form of the departure, could trigger the entitlement to involuntary
severance pay;
• Together with the non-compete indemnity, if any, the involuntary severance pay could not exceed twice the average of the
Corporate Officer’s annual compensation (fixed and variable part, to the exclusion of the pension benefits);
• The Board shall determine unilaterally whether or not to apply the non-compete clause at the time of the departure of the
Corporate Officer;
• The Corporate Officer shall not be entitled to Involuntary Severance Pay in the case that he is entitled to benefit from his/her
pension rights.
Corporate Officer
Employment contract
Top-Hat pension benefits
Payments or benefits that
may be due in the event of
termination of assignment
Payments in relation to a
non-compete agreement
Jean-Pascal Tricoire, Chairman and CEO NO
NO(1)
YES
YES
(1) The Board of Directors of February 18, 2015, decided to put an end to the benefits of the top-hat pension plan for Corporate Officers.
Recruitment policy
On appointment of a new Corporate Officer, the Board expects any new Corporate Officer to be engaged on terms that are consistent
with, and in no case more favorable than the policy approved by the shareholders at the last Annual Shareholders’ Meeting, until the
next policy is approved. However, it is recognized that all circumstances in which Corporate Officer may be appointed cannot be
anticipated. The Board will aim to set compensation that is appropriate to attract, motivate, retain, and reward an individual of the
quality required to run the Group successfully, while avoiding paying more than is necessary. If the Board determines that it is in the
best interests of the Company and shareholders to secure the services of a particular individual not promoted within the Group, it may
require considering the terms of that individual’s existing employment and/ or their personal circumstances.
The table below summarizes the policy on appointment of a new Corporate Officer.
Fixed compensation
Salaries are set by the Board, taking into consideration a number of factors including the current
pay for other Corporate Officers, the experience, skill and current pay level of the individual, and
external market forces. The Board may choose to set the salary below that of the market or the
other Corporate Officers with the intention of applying staged increases as the individual gains
experience in the role.
Annual variable compensation
Annual variable compensation will be awarded within the parameters of the policy in force.
Pension
Other benefits
Buy-out awards
Relocation
Internal promotion
The Board would set the pension cash supplementary payments at the appropriate level based
on an individual’s circumstances.
The Board would expect any new Corporate Officer to participate in the benefit schemes that are
open to other senior employees (where appropriate, referencing the candidate’s home country)
but would take into account the individual’s existing arrangements, market norms, and their status
as a Corporate Officer.
The Board may offer compensatory payments or buy-out awards where an individual forfeits
outstanding variable pay opportunities or contractual rights as a result of their appointment.
The specifics of any buy-out awards would be dependent on the individual circumstances of
recruitment and would be determined on a case-by-case basis. On assessing such awards, the
Board will seek to make awards on a like-for-like basis to ensure that the value awarded would be
no greater than the value forfeited by the individual. The Board may choose to apply performance
conditions to these awards.
Where an individual is relocating in order to take up the role, the Board may approve certain
one-off benefits such as reasonable relocation expenses, accommodation for a defined period
following appointment, assistance with visa applications or other immigration issues, and ongoing
arrangements such as tax equalization, annual flights home, and a housing allowance.
Where an existing employee is appointed to the Board, he/she will be required to resign from
his/her employment contract and the Board will consider all existing contractual commitments
including any outstanding share awards or pension entitlements.
In making any decision on the compensation of a new Corporate Officer, the Board would balance shareholder expectations, current
best practice and the circumstances of any new Corporate Officer. It would strive not to pay more than is necessary to recruit the right
candidate and would give full details in the next remuneration report.
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4.2.3.2 Non-executive Directors compensation policy
At the 2019 Annual Shareholders’ Meeting, the shareholders approved under the 13th resolution the maximum total amount
of the annual compensation that can be paid to the members of the Board which since then stands at €2,500,000. It is proposed:
• To maintain the cap of annual total compensation payable to the members of the Board at €2,500,000; and
• To review the allocation rules as detailed below.
Director’s individual compensation
• Non-executive Directors will be paid:
− a fixed basic amount of €25,000 for membership of the Board;
− an amount of €7,000 per Board meeting attended;
− an amount of €4,000 per Committee meeting attended;
− an amount of €25,000 for the yearly strategy week (half in case of digital assistance);
− an amount of €5,000 (for intercontinental travel) or €3,000 (for intra-continental travels) per Board session physically attended.
• Additional annual payments are made to non-executive Directors who chair a Committee to reflect the additional responsibilities
and workload:
− Audit & Risks Committee: €20,000;
− Human Resources & CSR Committee, Digital Committee, and Investment Committee: €15,000; and
− Lead Independent Director, who is also the Chairman of the Governance & Remunerations Committee: €250,000.
4.
• For an observer, an annual fixed payment of €20,000 is paid, unless they become non-executive Director at the next General Meeting.
In this case, they will receive the same fees for attending the Board and committee meetings as non-executive Directors.
• All payments are prorated for time served during the year and are paid in cash.
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4.2.4 Compensation of Group Senior Management
(excluding Corporate Officers)
Compensation paid in 2021
Gross compensation, including benefits in kind, paid by Group
companies in 2021 to the members of Group Senior Management
other than Corporate Officers, amounted to €25.2m, including
€5.5m in variable compensation paid in the 2021 fiscal year.
The performance objectives for the annual incentive for the
fiscal year 2021 were:
Improvement of Group adjusted EBITA margin (organic);
• Group organic sales growth;
•
• Group cash conversion rate;
• Schneider Sustainability Impact.
Long-term incentive plans
Performance shares were granted in 2021 to the Group Senior
Management. As of December 31, 2021, as part of the Long-term
incentive plan, Group Senior Management (other than Corporate
Officers), held:
• 696,839 conditional performance shares;
• 0 options;
• 0 Stock Appreciation Rights (SARs).
Pension benefits
Schneider Electric policy concerning pension benefits states that:
the Group’s Senior Management who are not subject to the
•
French Social Security System are covered by pension plan
arrangements in line with local practices in their respective
countries;
the Group’s Senior Management subject to the French Social
Security system, with the exception of Corporate Officers, are
covered by the additional defined-contribution pension (Article
83) plans for employees, and/or Group Senior Management.
Their defined-benefit pension plan (Article 39) was canceled
on March 22, 2016.
•
Scope of Senior Management in 2021
On December 31, 2021, Group Senior Management is composed
of 15 Executive Committee members. The Executive Committee
is chaired by the Chairman and CEO and includes:
• Executive Vice-Presidents of Corporate Functions: Finance,
Supply Chain, Digital, Strategy & Sustainability, Innovation,
Governance, Marketing, Human Resources.
• Executive Vice-Presidents of Operations: North America
Operations, China Operations, France Operations, Europe
Operations, International Operations;
• Executive Vice-Presidents of Activities: Industry Automation,
Energy Management.
With the appointment of the new Group Chief Innovation Officer
(in May 2021) to the Executive Committee, 44% of the Group Senior
Management (including Chairman and CEO) is composed of
women (versus 38% in 2020).
Compensation policy
The compensation principles of Group Senior Management
(excluding the Corporate Officer) and their individual analyses
are reviewed by the Human Resources & CSR Committee for
information and consultation with the Board of Directors. The
Human Resources & CSR Committee may consult external experts
for specific analyses.
The compensation policy of the Group Senior Management
follows the principles of competitiveness, pay-for-performance,
and alignment with shareholders’ long-term interests, aligned with
the principles applicable to the Corporate Officers as described
in this report, with the following variations:
• The competitiveness of the Group Senior Management
compensation is considered using a relevant geographical
panel and the scope of responsibilities as prepared by the
consultancy firm Willis Towers Watson;
• The proportion of variable components within their on target
compensation package is around 70% versus around 80%
for the Corporate Officer.
On target compensation pay mix – 2021
30%
70%
Variable Part
Fixed Part
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Chapter 4 – Corporate Governance Report
Corporate Governance
Beneficiaries include members of Group Senior Management, top
managers, high-potential managers and employees in all countries
whose performance was judged remarkable. The grants made in
2021 are characterized by:
• A total of 3,416 beneficiaries in the 2021 LTIP (vs. 3,100
beneficiaries in the 2020 LTIP);
• Allocations to Executive Committee members, including the
Corporate Officer, represented 14.0% of the total attributions
in the framework of the 2021 LTIP (similar to the proportion
prevalent (14.5%) in the framework of the 2020 LTIP);
• 28.4% of the beneficiaries were women in the 2021 LTIP to
whom 26,7% of the shares were granted (vs. 26.0% of women
in the 2020 LTIP to whom 24.5% of the shares were granted).
4.
Corporate Officers formally undertake, for each grant of shares,
not to engage in hedging transactions until the end of their duties
as executive Officers.
4.2.5 Long-term incentive plans
Grant policy
As part of its overall staff pay policy, Schneider Electric sets up a
Long-Term Incentive Plan (LTIP) every year. These plans allow the
Group to ensure the competitiveness of the compensation offered
by the Group, in dynamic and competitive international markets,
and in sectors where the ability to attract talent is a key factor to
success. These plans also aim at mobilizing Schneider Electric’s
management for the achievement of the Group’s long-term
objectives and align their interest with those of our shareholders.
The Long-term incentive plans are based on an allocation
of Performance Shares. No stock options or SARs have been
granted since December 2009 and the last plan of stock options
implemented expired on December 31, 2019.
These plans are granted by the Board of Directors, based on the
recommendation from the Human Resources & CSR Committee.
Past share plans (as of December 31, 2021)
Plan number
Plan 30, 31, 31bis
Plan 32, 33, 34, 35
Plan 36, 37, 37bis
Plan 38, 39, 39bis, 39ter
Date of Annual Shareholders’ Meeting Apr. 25, 2016
Apr. 25, 2016
Apr. 25, 2019
Apr. 25, 2019
LTIP 2018
LTIP 2019
LTIP 2020
LTIP 2021
Date of the grant by the Board
Mar. 26, 2018
Oct. 24, 2018
Number of shares at grant of which:
– Jean-Pascal Tricoire
– Top ten employee beneficiaries
2,371,940
60,000
205,200
Vesting/delivery date
Mar. 26, 2021
Oct. 24, 2021
Mar. 26, 2019
Jul. 24, 2019
Oct. 23, 2019
2,444,010
60,000
214,700
Mar. 28, 2022
Jul. 25, 2022
Oct. 24, 2022
Mar. 24, 2020
Oct. 21, 2020
2,216,791
60,000
218,500
Mar. 24, 2023
Oct. 23, 2023
Mar. 25, 2021
July 29, 2021
Oct. 26, 2021
1,557,170
37,903
141,866
Mar. 25, 2024
July 29, 2024
Oct. 26, 2024
End of holding period
Number of rights outstanding
as of Dec. 31, 2020
Mar. 25, 2022 for
Plan 30
(only for
25,800 shares of
which 18,000 shares
granted to
Jean-Pascal Tricoire)
Mar. 27, 2023 for
Plan 32
(only for
25,800 shares of
which 18,000 shares
granted to
Jean-Pascal Tricoire)
Mar. 24, 2024 for
Plan 36
(only for
18,000 shares
granted to
Jean-Pascal Tricoire)
Mar. 25, 2025 for
Plan 38
(only for
11,371 shares
granted to
Jean-Pascal Tricoire)
2,138,056
2,307,769
2,189,851
N/A
Number of rights granted in 2021
N/A
Number of shares delivered in 2021
2,091,053
Number of rights canceled in 2021
47,003
N/A
1,800
97,540
Number of rights outstanding
as of Dec. 31, 2021
0
2,208,429
Total number of rights outstanding as
of Dec. 31, 2021
5,863,887
N/A
800
75,510
2,113,541
1,557,170
0
15,253
1,541,917
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Chapter 4 – Corporate Governance Report
4.2 Compensation Report
LTIP 2018
Plan number
Plan 30
Plan 31
Plan 31bis
Date of Annual Shareholders’ Meeting Apr. 25, 2016
Apr. 25, 2016
Apr. 25, 2016
Date of the grant by the Board
Mar. 26, 2018
Mar. 26, 2018
Oct. 24, 2018
Number of shares at grant
of which:
– Jean-Pascal Tricoire
Number of rights outstanding
as of Dec. 31, 2020
25,800
18,000
23,417
Number of shares delivered in 2021
22,992
Number of rights canceled in 2021
Number of rights outstanding as of
Dec. 31, 2021
425
0
2,318,140
28,000
42,000
2,086,639
2,043,374
43,265
0
28,000
24,687
3,313
0
Vesting date/vesting period
End of holding period
Presence condition
Mar. 26, 2021
3 years
Mar. 26, 2021
3 years
Oct. 24, 2021
3 years
Mar. 25, 2022
N/A
N/A
Yes
Performance conditions
• Yes for 70% of the shares/100% for the Corporate Officers and Executive Committee
members
• 2018, 2019, 2020 adjusted EBITA average achievement rate (40%)
• 2018, 2019, 2020 cash conversion rate average (25%)
• TSR ranking at end of 2020 (15%)
• 2018, 2019, 2020 Planet & Society barometer index (20%)
% achievement of the Performance
conditions
98.18%
Detailed achievement of the
Performance conditions
At its meeting of February 10, 2021, the Board of Directors assessed the achievement rate
of performance criteria for Plans n° 30, 31 and 31bis granted in 2018 based on the Group’s
performance over the three-year period 2018- 2020 and set the final rate of achievement
at 98.18%, i.e. a reduction of 1.82% in relation to the number of shares originally granted.
Performance conditions
Group organic adjusted EBITA
achievement rate
Reference
period
Weight (%)
Actual
achievement
Pay-out rate
Weighted
pay-out rate
2018
2019
2020
13.3% +0.5 pts
100%
32.00%
13.3% +0.7 pts
100%
13.3% +0.2 pts
40%
Group cash conversion average rate 2018-2020 25%
123.3%
150%*
37.50%*
Relative TSR
2018-2020 15%
1st rank
150%*
22.50%*
Planet & Society barometer/
Schneider Sustainability Impact
Total
2018
2019
2020
6.10
7.77
9.32
6.6%
6.6%
6.6%
100%
100%
18.18%
93.10%
79.60%
98.18%
* The good level of cash conversion exceeded the initial ambition and the over-performance of the relative TSR
performance condition off-set the under-performance of the adjusted EBITA condition (for 8%).
LTIP 2019
Plan number
Plan 32
Plan 33
Date of Annual Shareholders’ Meeting Apr. 25, 2016
Apr. 25, 2016
Plan 34
N/A
Plan 35
N/A
Date of the grant by the Board
Mar. 26, 2019
Mar. 26, 2019
Jul. 24, 2019
Oct. 23, 2019
Number of shares at grant of which:
– Jean-Pascal Tricoire
Number of rights outstanding as of
Dec. 31, 2020
Number of shares delivered in 2021
Number of rights canceled in 2021
25,800
18,000
20,817
0
0
2,313,650
42,000
2,185,422
1,800
94,170
87,110
84,080
0
3,370
17,450
17,450
0
0
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Chapter 4 – Corporate Governance Report
Corporate Governance
LTIP 2019 continued
Plan number
Number of rights outstanding as of
Dec. 31, 2021
Vesting date/vesting period
End of holding period
Presence condition
Plan 32
20,817
Plan 33
2,089,452
Plan 34
80,710
Plan 35
17,450
Mar. 28, 2022
3 years
Mar. 28, 2022
3 years
Mar. 27, 2023
N/A
Jul. 25, 2022
3 years
N/A
Oct. 24, 2022
3 years
N/A
Yes
Performance conditions
• Yes for 70% of the shares/100% for
• Yes for 70% of the shares/100% for
the Corporate Officers and Executive
Committee members
the Corporate Officers and Executive
Committee members
• 2019, 2020, 2021 adjusted EBITA average
• 2020, 2021 Adjusted EPS improvement
achievement rate (40%)
average achievement rate (40%)
• 2019, 2020, 2021 cash conversion rate
• TSR ranking at end of 2021 vs. bespoke
average (25%)
peer group and CAC 40 (30%)
• TSR ranking at end of 2021 (15%)
• 2019, 2020, 2021 Planet & Society
• 2019, 2020, 2021 Schneider Sustainability
External and Relative Index (30%)
barometer index (20%)
4.
% achievement of the Performance
conditions
96.86% for Plan 32 and 33
88% for Plan 34 and 35
Detailed achievement of the
Performance conditions of
Plan 32 and 33
At its meeting of February 16, 2022, the Board of Directors assessed the achievement
rate of performance criteria for Plans n° 32 and 33 granted in 2019 based on the Group’s
performance over the three-year period 2019-2021, and set the final rate of achievement
at 96.86%, i.e. a reduction of 3.14% in relation to the number of shares originally granted.
Detailed achievement of the
Performance conditions of
Plan 34 and 35
Performance conditions of Plan 32 and 33
Adjusted EBITA margin average
achievement rate
Reference
period
Weight (%)
Actual
achievement
Pay-out rate
Weighted
pay-out rate
2019
2020
2021
13.3% +0.7 pts
100%
31.5%
13.3% +0.18 pts
36%
13.3% +1.4 pts
100%
Group cash conversion average rate 2019-2021 25.0% 122.3%
150%*
37.5%*
Relative TSR
2019-2021 15.0% 1st rank
150%*
22.5%*
Planet & Society barometer/
Schneider Sustainability Impact
Total
2019
2020
2021
7.77
9.32
3.92
6.6%
6.6%
6.6%
100%
93.1%
16.86%
79.6%
80.2%
96.86%
* The good level of cash conversion exceeded the initial ambition and the over-performance of the relative TSR
performance condition off-set the under-performance of the adjusted EBITA condition (for 8.5%).
At its meeting of February 16, 2022, the Board of Directors assessed the achievement
rate of performance criteria for Plans n° 34 and 35 granted in 2019 based on the Group’s
performance over the three-year period 2019-2021, and set the final rate of achievement
at 88%, i.e. a reduction of 12% in relation to the number of shares originally granted.
Performance conditions of Plan 34 and 35
Reference
period
Weight (%)
Actual
achievement
Pay-out rate
Weighted
pay-out rate
Adjusted Earnings per Share (EPS)
improvement rate
2020
2021
20%
20%
-4.86%
0%
20%
+31.77% 100%
Relative Total
Shareholder Return
(TSR)
vs. CAC 40
companies
vs. Panel of peer
companies
Schneider Sustainability External and
Relative Index (“SSERI”)**
Total
2019-2021 15%
4th rank
120%*
18%*
2019-2021 15%
1st rank
150%*
22.5%*
2019
2020
2021
87.5%
100%
87.5%
10%
10%
10%
100%
87.5%
27.5%
100%
87.5%
88%
Plan n° 34 and 35 have not been granted under the legal framework of the Performance Shares provided by Article L. 225-197-1 of the French Commercial Code.
Consequently, the shares to be delivered will be only existing shares acquired through the buy-back program.
* The over-performance of the two relative TSR performance condition off-set the under-performance of the adjusted Earnings per Share (EPS) improvement
condition (for 10.5%).
** Plan rules n° 34 and 35 have been modified to replace FTSE4GOOD which is decommissioned by Ecovadis for 2021.
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4.2 Compensation Report
LTIP 2020
Plan number
Plan 36
Date of Annual Shareholders’ Meeting Apr. 25, 2019
Date of the grant by the Board
Mar. 24, 2020
Number of shares at grant of which:
– Jean-Pascal Tricoire
Number of rights outstanding as of
Dec. 31, 2020
18,000
18,000
18,000
Number of shares granted in 2021
Number of shares delivered in 2021
Number of rights canceled in 2021
0
0
0
Number of rights outstanding as of
Dec. 31, 2021
18,000
Vesting date/vesting period
End of holding period
Presence condition
Performance conditions
Mar. 24, 2023
3 years
Mar. 24, 2024
Yes
Plan 37
Apr. 25, 2019
Mar. 24, 2020
2,095,740
42,000
2,068,990
0
800
71,400
1,996,790
Mar. 24, 2023
3 years
N/A
Plan 37bis
Apr. 25, 2019
Oct. 21, 2020
103,051
102,861
0
0
4,110
98,751
Oct. 23, 2023
3 years
N/A
• Yes for 70% of the shares/100% for the Corporate officer and Executive Committee
• 2020, 2021, 2022 Adjusted EPS improvement average achievement rate (40%)
• TSR ranking at end of 2022 vs. bespoke peer group and CAC 40 (35%)
• 2020, 2021, 2022 Schneider Sustainability External and Relative Index (25%)*
Achievement of the Performance
conditions
To be assessed by the Board of directors in February 2023
* Plan rules n° 36, 37 and 37bis have been modified to replace FTSE4GOOD which is decommissioned by Ecovadis for 2021 and 2022.
LTIP 2021
Plan number
Plan 38
Plan 39
Plan 39bis
Plan 39bter
Date of Annual Shareholders’ Meeting Apr. 25, 2019
Apr. 25, 2019
Apr. 25, 2019
Apr. 25, 2019
Date of the grant by the Board
Mar. 25, 2021
Mar. 25, 2021
Jul. 29, 2021
Oct. 26, 2021
Number of shares at grant of which:
– Jean-Pascal Tricoire
Number of rights outstanding as of
Dec. 31, 2020
11,371
11,371
N/A
Number of shares granted in 2021
11,371
Number of shares delivered in 2021
Number of rights canceled in 2021
0
0
Number of rights outstanding as of
Dec. 31, 2021
11,371
1,463,997
26,532
N/A
1,463,997
0
14,873
1,449,124
48,720
33,082
N/A
48,720
0
380
48,340
N/A
33,082
0
0
33,082
Vesting date/vesting period
End of holding period
Presence condition
Performance conditions
Mar. 25, 2024
3 years
Mar. 25, 2024
3 years
Mar. 25, 2025
N/A
Jul. 29, 2024
3 years
N/A
Oct. 26, 2024
3 years
N/A
Yes
• Yes for 70% of the shares/100% for the Corporate officer and Executive Committee
• 2021, 2022, 2023 Adjusted EPS improvement average achievement rate (40%)
• TSR ranking at end of 2023 vs. bespoke peer group and CAC 40 (35%)
• 2021, 2022, 2023 Schneider Sustainability External and Relative Index (25%)
Achievement of the Performance
conditions
To be assessed by the Board of directors in February 2024
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Corporate Governance
4.
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Chapter 5 – Consolidated financial statements at December 31, 2021
We believe access to energy and digital is a basic
human right. Our generation is facing a tectonic
shift in energy transition and industrial revolution
catalyzed by a more electric world.
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
5
Consolidated
financial statements
at December 31, 2021
5.
5.1 Consolidated statement of income 344
5.2 Consolidated statement of
cash flows
5.3 Consolidated balance sheet
5.4 Consolidated statement of
changes in equity
5.5 Notes to the consolidated
financial statements
346
347
349
350
5.6 Statutory auditors’ report on the
consolidated financial statements 397
5.7 Extract of the management
report for the year ended
December 31, 2021
402
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.1 Consolidated statement of income
(in millions of euros except for earnings per share)
Note
Full Year 2021
Full Year 2020
Revenue
Cost of sales
Gross profit
Research and development
Selling, general and administrative expenses
Adjusted EBITA*
Other operating income and expenses
Restructuring costs
EBITA**
Amortization and impairment of purchase accounting intangibles
Operating income
Interest income
Interest expense
Finance costs, net
Other financial income and expense
Net financial income/(loss)
Profit from continuing operations before income tax
Income tax expense
Share of profit/(loss) of associates
PROFIT FOR THE YEAR
attributable to owners of the parent
attributable to non-controlling interests
Basic earnings (attributable to owners of the parent) per share (in euros per share)
Diluted earnings (attributable to owners of the parent) per share (in euros per share)
3
4
3
6
5
7
8
12
19
19
28,905
(17,062)
11,843
(855)
(6,001)
4,987
(21)
(225)
4,741
(410)
4,331
4
(99)
(95)
(81)
(176)
4,155
(966)
84
3,273
3,204
69
5.76
5.67
25,159
(15,003)
10,156
(718)
(5,512)
3,926
(210)
(421)
3,295
(207)
3,088
14
(126)
(112)
(166)
(278)
2,810
(638)
66
2,238
2,126
112
3.84
3.81
* Adjusted EBITA (Earnings Before Interest, Taxes, Amortization of Purchase Accounting Intangibles). Adjusted EBITA corresponds to operating profit before amortization
and impairment of purchase accounting intangible assets, before goodwill impairment, other operating income and expenses and restructuring costs.
** EBITA (Earnings Before Interest, Taxes and Amortization of Purchase Accounting Intangibles). EBITA corresponds to operating profit before amortization and impairment
of purchase accounting intangible assets and before goodwill impairment.
The accompanying notes are an integral part of the consolidated financial statements.
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
Other comprehensive income
(in millions of euros)
Profit for the year
Other comprehensive income:
Translation adjustment
Cash-flow hedges
Income tax effect of cash flow hedges
Net gains/(losses) on financial assets
Income tax effect of gains/(losses) on financial assets
Actuarial gains/(losses) on defined benefit plans
Income tax effect of actuarial gains/(losses) on defined benefit plans
Other comprehensive income for the year, net of tax
of which to be recycled in income statement
of which not to be recycled in income statement
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
attributable to owners of the parent
attributable to non-controlling interests
The accompanying notes are an integral part of the consolidated financial statements.
Note
Full Year 2021
Full Year 2020
3,273
2,238
19
19
20
19
1,839
130
(7)
40
(9)
451
(105)
2,339
1,962
377
5,612
5,212
400
(1,649)
(125)
(18)
(5)
1
(123)
21
(1,898)
(1,792)
(106)
340
271
69
5.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.2 Consolidated statement of cash flows
(in millions of euros)
Note
Full Year 2021
Full Year 2020
Profit for the year
Share of (profit)/losses of associates
Income and expenses with no effect on cash flow:
Depreciation of property, plant and equipment
Amortization of intangible assets other than goodwill
Impairment losses on non-current assets
Increase/(decrease) in provisions
Losses/(gains) on disposals of business and assets
Difference between tax paid and tax expense
Other non-cash adjustments
Net cash provided by operating activities
Decrease/(increase) in accounts receivables
Decrease/(increase) in inventories and work in progress
(Decrease)/increase in accounts payable
Decrease/(increase) in other current assets and liabilities
Change in working capital requirement
TOTAL I – CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES
Purchases of property, plant and equipment
Proceeds from disposals of property, plant and equipment
Purchases of intangible assets
Net cash used by investment in operating assets
Acquisitions and disposals of businesses, net of cash acquired & disposed
Other long-term investments
Increase in long-term pension assets
Sub-total
TOTAL II – CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES
Issuance of bonds
Repayment of bonds
Sale/(purchase) of own shares
Increase/(decrease) in other financial debt
Increase/(decrease) of share capital
Transaction with non-controlling interests*
Dividends paid to Schneider Electric’s shareholders
Dividends paid to non-controlling interests
TOTAL III – CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES
TOTAL IV – NET FOREIGN EXCHANGE DIFFERENCE
INCREASE/(DECREASE) IN NET CASH AND CASH EQUIVALENTS: I +II +III +IV
Net cash and cash equivalents, beginning of the year
Increase/(decrease) in cash and cash equivalents
NET CASH AND CASH EQUIVALENTS, END OF THE YEAR
3,273
(84)
726
688
34
(54)
(184)
(38)
108
4,469
(577)
(955)
418
261
(853)
3,616
(543)
59
(333)
(817)
(4,231)
16
(136)
(4,351)
(5,168)
–
(600)
(262)
(444)
216
(418)
(1,447)
(138)
(3,093)
346
(4,299)
6,762
(4,299)
2,463
2,238
(66)
698
512
54
266
(10)
(137)
96
3,651
326
(153)
344
267
784
4,435
(485)
55
(332)
(762)
(2,393)
11
(106)
(2,488)
(3,250)
2,444
(500)
(50)
1,032
43
1,141
(1,413)
(112)
2,585
(403)
3,367
3,395
3,367
6,762
11
10
21
11
10
2
22
22
19
2
19
18
18
*
*
In 2020, the Group received EUR 1,141 million of cash from AVEVA’s minority interests, following the increase of capital realized by the latter, to finance the acquisition
of OSIsoft (Note 2).
In 2021, transactions with non-controlling interests mainly relates to RIB Software SE (Note 2).
The accompanying notes are an integral part of the consolidated financial statements.
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
5.3 Consolidated balance sheet
Assets
(in millions of euros)
NON-CURRENT ASSETS:
Goodwill, net
Intangible assets, net
Property, plant and equipment, net
Investments in associates and joint ventures
Non-current financial assets
Deferred tax assets
TOTAL NON-CURRENT ASSETS
CURRENT ASSETS:
Inventories and work in progress
Trade and other operating receivables
Other receivables and prepaid expenses
Current financial assets
Cash and cash equivalents
TOTAL CURRENT ASSETS
TOTAL ASSETS
The accompanying notes are an integral part of the consolidated financial statements.
Note
Dec. 31, 2021
Dec. 31, 2020
9
10
11
12
13
14
15
16
17
18
24,723
6,486
3,826
1,234
1,034
1,820
39,123
3,971
6,829
1,998
4
2,622
15,424
54,547
19,956
5,033
3,619
598
776
1,984
31,966
2,883
5,626
2,094
18
6,895
17,516
49,482
5.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.3 Consolidated balance sheet
Liabilities
(in millions of euros)
EQUITY:
Share capital
Additional paid in capital
Retained earnings
Translation reserve
Equity attributable to owners of the parent
Non-controlling interests
TOTAL EQUITY
NON-CURRENT LIABILITIES:
Pensions and other post-employment benefit obligations
Other non-current provisions
Non-current financial liabilities
Deferred tax liabilities
Other non-current liabilities
TOTAL NON-CURRENT LIABILITIES
CURRENT LIABILITIES:
Trade and other operating payables
Accrued taxes and payroll costs
Current provisions
Other current liabilities
Current debt
TOTAL CURRENT LIABILITIES
TOTAL EQUITY AND LIABILITIES
The accompanying notes are an integral part of the consolidated financial statements.
Note
Dec. 31, 2021
Dec. 31, 2020
19
20
21
22
14
21
22
2,276
2,456
19,694
14
24,440
3,669
28,109
1,395
1,091
7,554
997
1,179
2,268
2,248
17,648
(1,541)
20,623
3,104
23,727
1,708
930
8,196
917
1,109
12,216
12,860
5,715
3,694
933
1,685
2,195
14,222
54,547
4,664
3,413
1,000
1,558
2,260
12,895
49,482
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Financial Statements
5.4 Consolidated statement of changes in equity
Translation
reserve
Equity
attributable
to owners of
the parent
Non-
controlling
interests
Total
65
21,561
1,579
23,140
(in millions of euros)
Dec. 31, 2019
Profit for the year
Other comprehensive income
Comprehensive income for
the year
Capital increase
Exercise of performance shares
Dividends
Change in treasury shares
Share-based compensation
expense
Other
Dec. 31, 2020
Profit for the year
Other comprehensive income
Comprehensive income for
the year
Capital increase
Exercise of performance shares
Dividends
Change in treasury shares
Share-based compensation
expense
Other
Dec. 31, 2021
Number
of shares
(thousands)
582,069
–
–
–
–
–
–
(15,000)
–
–
Additional
paid-in
capital
3,134
Capital
2,328
–
–
–
–
–
–
(60)
–
–
–
–
–
43
–
–
(929)
–
–
Retained
earnings
16,034
2,126
(249)
1,877
–
–
(1,413)
939
140
71
–
(1,606)
(1,606)
–
–
–
–
–
–
2,126
(1,855)
271
43
–
(1,413)
(50)
140
71
567,069
2,268
2,248
17,648
(1,541)
20,623
–
–
–
1,964
–
–
–
–
–
–
–
–
8
–
–
–
–
–
–
–
–
208
–
–
–
–
–
3,204
453
3,657
–
–
(1,447)
(262)
145
(47)
569,033
2,276
2,456
19,694
1,555
1,555
–
–
–
–
–
–
14
3,204
2,008
5,212
216
–
(1,447)
(262)
145
(47)
112
(43)
69
–
–
(112)
5
1,563
3,104
69
331
400
–
–
(138)
–
16
287
2,238
(1,898)
340
43
–
(1,525)
(50)
145
1,634
23,727
3,273
2,339
5,612
216
–
(1,585)
(262)
161
240
5.
24,440
3,669
28,109
The accompanying notes are an integral part of the consolidated financial statements.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
Contents
Note
1 Accounting policies
2 Changes in the scope of consolidation
3
Segment information
4 Research and development
5
Impairment losses, depreciation and amortization
expenses
Income tax expenses
6 Other operating income and expenses
7 Other financial income and expenses
8
9 Goodwill
10
11 Property, plant and equipment
12
13 Non-current financial assets
14 Deferred taxes by Nature
Intangibles assets
Investments in associates and joint ventures
Note
352
362
364
365
365
365
366
366
366
367
369
370
372
372
15
373
Inventories and work in progress
16 Trade and other operating receivables
373
17 Other receivables and prepaid expenses
374
18 Cash and cash equivalents
374
19 Shareholder’s equity
374
20 Pensions and other post-employment benefit obligations 378
21 Provisions for contingencies and charges
381
22 Total current and non-current financial liabilities
381
23 Classification of financial instruments
383
24 Employees
388
25 Related party transactions
389
26 Commitments and contingent liabilities
389
27 Subsequent events
389
28 Statutory Auditors’ fees
390
29 Consolidated companies
390
All amounts in millions of euros unless otherwise indicated.
The following notes are an integral part of the consolidated financial statements.
The Schneider Electric Group’s consolidated financial statements for the financial year ended December 31, 2021 were authorized for issue by
the Board of Directors on February 16, 2022. They will be submitted to shareholders for approval at the Annual General Meeting of May 5, 2022.
The Group’s main businesses are described in Chapter 1 of the Universal Registration Document.
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Financial Statements
COVID-19 pandemic
Impact of the COVID-19 on the Group’s activities
The COVID-19 pandemic and the actions taken by governments in response to its spread have resulted in disruptions to the Group’s
business operations, and supply chain in the course of 2020. Fiscal year 2021 saw a return to growth in business activity, in a context
of continued global supply chain pressures.
Risks and uncertainties
The Group demonstrated the agility and resilience of its global supply chain while coordinating and regionally managing supply chain
organization to maintain quick decision making and flexibility in 2021.
Balance sheet positions
The Group working capital was assessed with the same accounting policies, principles and methodologies used for the full year 2020
consolidated financial statements. There was no material impairment booked in the income statement as at December 31, 2021.
Impairment of assets
The Group performed the annual impairment test of all the Cash Generating Units (CGUs) using the same methodology as the one used
on previous periods, and described in Note 1.11. Following the performance of these tests, the Group concluded that there was no risk
of impairment at December 31, 2021.
5.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
Note 1: Accounting policies
1.1 – Accounting standards
The consolidated financial statements have been prepared in compliance with the international accounting standards (IFRS) as adopted
by the European Union as of December 31, 2021. The same accounting methods were used as for the consolidated financial statements
for the year ended December 31, 2020.
The following standards and interpretations that were applicable during the period did not have a material impact on the consolidated
financial statements as of December 31, 2021:
• amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform – Phase 2;
• amendments to IFRS 16 – Leases COVID-19-Related Rent Concessions;
The Group did not apply the following standards and interpretations for which mandatory application is subsequent to December 31, 2021:
• standards adopted by the European Union:
− amendments to IFRS 16 – Leases COVID-19-Related Rent Concessions beyond 30 June 2021;
− amendments to IFRS 3 – Business Combinations: Reference to the Conceptual Framework;
− amendments to IAS 16 – Property, Plant and Equipment: Proceeds before Intended Use;
− amendments to IAS 37 – Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts – Cost of Fulfilling a Contract;
− Annual Improvements to IFRS Standards 2018-2020.
• standards not yet adopted by the European Union:
− amendments to IAS 1 – Presentation of Financial Statements: Classification of Liabilities as Current or Non-current – Deferral of Effective
Date;
− amendments to IAS 1 – Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies;
− amendments to IAS 8 – Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates;
− amendments to IAS 12 – Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction;
The Group is currently assessing the potential effect on the Group’s consolidated financial statements of the standards not yet applicable
as of December 31, 2021. At this stage of analysis, the Group does not expect any material impact on its consolidated financial statements.
The Group is also looking at the potential effect of the final agenda decision issued by the IFRIC in the first half of 2021 with regards to
recognition of the cost of configuring and customising software provided in the cloud as part of a software as a service (SaaS) agreement.
At this stage of analysis, the Group does not expect any material impact on its consolidated financial statements.
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform – Phase 2
On September 26, 2019 and August 27, 2020, the IASB issued amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 related to the
reform of interest rate benchmarks used in many financial instruments. Those amendments are divided into two phases:
• phase 1, applicable starting January 1, 2020, allows uncertainties about the future of reference rates to be disregarded while assessing
the effectiveness of hedging relationships and/or while evaluating the highly probable nature of the hedged risk;
• phase 2, applicable starting January 1, 2021, specifies the accounting impacts of the effective replacement of interest rate benchmarks.
The application of phase 2 has no impact for the Group in the absence of any effective change in the benchmark indexes in the Group’s
contracts as of December 31, 2021. The transition to the new benchmarks will not have a material impact on the Group financial statements.
IFRIC decision – Attribution of benefits to periods of service IAS 19 – Employee Benefits
The Group has taken into account the impact of the IFRIC agenda decision issued in April 2021 when measuring employee benefit
obligations. This decision clarifies the periods over which employee benefits should be attributed in allocating the IAS 19 expense.
The impact as of December 31, 2021 represents a non-material decrease in this commitment (Note 20).
COVID-19-Related Rent Concessions amendments to IFRS 16 – Leases
On May 28, 2020, the IASB issued COVID-19-Related Rent Concessions amendment to IFRS 16 – Leases. The amendment provides relief
to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the
COVID-19 pandemic.
On March 31, 2021, the IASB published a second amendment to IFRS 16, extending by one year the period of application of the COVID-19-
Related Rent Concessions amendment to IFRS 16 – Leases published in May 2020. The amendment applied to annual reporting periods
beginning on or after January, 1, 2021.
As a practical expedient authorized by the amendment, the Group elected, for the concessions that meet the amendment’s criteria,
not to assess whether a COVID-19 related rent concession from a lessor is a lease modification.
This amendment had no significant impact on the consolidated financial statements of the Group.
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Financial Statements
Climate-related matters
The impacts of potential climate-related matters (including risks & opportunities, and legislation changes) which may affect the measurement
of assets & liabilities in the financial statements, as well as the impacts from the group Carbon Pledge to reach carbon neutral operations in
2025, have been analysed. The Group will adjust the key assumptions used in value-in-use calculations and sensitivity, should a change be
required. At present, the impact of climate-related matters is not material to the Group’s financial statements.
1.2 – Basis of presentation
The financial statements have been prepared on a historical cost basis, except for derivative instruments and certain financial assets, which
are measured at fair value. Financial liabilities are measured using the amortized cost model. The book value of hedged assets and liabilities,
under fair-value hedge, corresponds to their fair value, for the part corresponding to the hedged risk.
1.3 – Use of estimates and assumptions
The preparation of financial statements requires Group and subsidiary management to make estimates and assumptions that are reflected
in the amounts of assets and liabilities reported in the consolidated balance sheet, the revenues and expenses in the statement of income
and the commitments created during the reporting period. Actual results may differ.
These assumptions mainly concern:
5.
•
•
•
•
•
•
•
•
the measurement of the recoverable amount of goodwill, property, plant and equipment and intangible assets (Note 1.8 and 1.9)
and the measurement of impairment losses (Note 1.11);
the measurement of the recoverable amount of non-current financial assets (Note 1.12 and 13);
the realizable value of inventories and work in progress (Note 1.13);
the recoverable amount of trade and other operating receivables (Note 1.14);
the valuation of share-based payments (Note 1.20);
the calculation of provisions or risk contingencies (Note 1.21);
the measurement of pension and other post-employment benefit obligations (Note 1.19 and Note 20);
the recoverability of deferred tax assets related to tax loss carryforward (Note 14).
1.4 – Consolidation principles
Subsidiaries, over which the Group exercises exclusive control, either directly or indirectly, are fully consolidated.
Group investments in entities controlled jointly with a limited number of partners, such as joint ventures and companies over which the
Group has significant influence (“associates”) are accounted for by the equity method. Significant influence is presumed to exist when
more than 20% of voting rights are held by the Group.
Companies acquired or sold during the year are included in or removed from the consolidated financial statements as of the date when
effective control is acquired or relinquished.
Intra-group balances and transactions are eliminated.
The list of consolidated main subsidiaries, joint ventures and associates can be found in Note 29.
The reporting date for all companies included in the scope of consolidation is December 31, with the exception of certain immaterial
associates accounted for by the equity method. For the latter however, financial statements up to September 30 of the financial year
have been used (maximum difference of three months in line with the standards).
1.5 – Business combinations
Business combinations are accounted for using the acquisition method, in accordance with IFRS 3 – Business Combinations. Acquisition
costs are presented under “Other operating income and expenses” in the statement of income.
All acquired assets, liabilities and contingent liabilities are recognized at their fair value at the acquisition date, the fair value can be adjusted
during a measurement period that can last for up to 12 months from the date of acquisition.
The excess of the cost of acquisition over the Group’s share in the fair value of assets and liabilities at the date of acquisition is recognized
in goodwill. When the cost of acquisition is lower than the fair value of the identified assets and liabilities acquired, the badwill is immediately
recognized in the statement of income.
Goodwill is not amortized, but tested for impairment at least annually and whenever there is an indication that it may be impaired (see
Note 1.11 below). Any impairment losses are recognized under “Amortization expenses and impairment losses of purchase accounting
intangible assets”.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
1.6 – Translation of the financial statements of foreign subsidiaries
The consolidated financial statements are prepared in euros.
The financial statements of subsidiaries that use another functional currency are translated into euros as follows:
• assets and liabilities are translated at the official closing rates;
•
income statement, backlog and cash flow items are translated at average annual exchange rates.
Gains or losses on translation are recorded in consolidated equity under “Cumulative translation reserve”.
The Group applies IAS 29 – Financial Reporting in Hyperinflationary Economies to the Group’s subsidiaries in hyperinflation countries
(Venezuela and Argentina). The impacts are not significant for the Group in 2021.
1.7 – Foreign currency transactions
Foreign currency transactions are recorded using the exchange rate in effect at the transaction date or at the hedging rate. At the balance
sheet date, monetary items in foreign currency (eg. payables, receivables, etc.) are translated into the functional currency of the entity at the
closing rate or at the hedging rate. Gains or losses on translation of foreign currency transactions are recorded under “Net financial income/
(loss)”. Foreign currency hedging is described below, in Note 1.23.
However, certain long-term receivables and loans to subsidiaries are considered to be part of a net investment in a foreign operation,
as defined by IAS 21 – The effects of changes in foreign exchange rates. As such, the impact of exchange rate fluctuations is recorded
in equity and recognized in the statement of income when the investment is sold or when the long-term receivable or loan is reimbursed.
1.8 – Intangible assets
Intangible assets acquired separately or as part of a business combination
Intangible assets acquired separately are initially recognized in the balance sheet at historical cost. They are subsequently measured
using the cost model, in accordance with IAS 38 – Intangible Assets.
Intangible assets (mainly trademarks, technologies and customer lists) acquired as part of business combinations are recognized in the
balance sheet at fair value at the combination date, appraised externally for the most significant assets and internally for the rest, and that
represents its historical cost in consolidation. The valuations are performed using generally accepted methods, based on future inflows.
Intangible assets are generally amortized on a straight-line basis over their useful life or, alternatively, over the period of legal protection.
Amortized intangible assets are tested for impairment when there is any indication that their recoverable amount may be less than their
carrying amount.
Amortization expenses and impairment losses on intangible assets acquired in a business combination are presented on a separate
statement of income line item, “Amortization expenses and impairment losses of purchase accounting intangible assets”.
Trademarks
The trademarks fair value is determined using the royalty method at the date of acquisition.
Trademarks acquired as part of a business combination are not amortized when they are considered to have an indefinite life.
The criteria used to determine whether or not such trademarks have indefinite lives and, as the case may be, their lifespan, are as follows:
• brand awareness;
• outlook for the brand in light of the Group’s strategy for integrating the trademark into its existing portfolio.
Non-amortized trademarks are tested for impairment at least annually and whenever there is an indication they may be impaired.
When necessary, an impairment loss is recorded.
Internally-generated intangible assets
Research and development costs
Research costs are expensed in the statement of income when incurred. Development costs for new projects are capitalized if, and only if:
•
•
•
•
the project is clearly identified and the related costs are separately identified and reliably monitored;
the project’s technical feasibility has been demonstrated and the Group has the intention and financial resources to complete the project
and to use or sell the resulting products;
the Group has allocated the necessary technical, financial and other resources to complete the development;
it is probable that the future economic benefits attributable to the project will flow to the Group.
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Financial Statements
Development costs that do not meet these criteria are expensed in the financial year in which they are incurred.
Before the commercial launch, capitalized development projects are tested for impairment at least annually. From the date of the
commercial launch, capitalized development projects are amortized over the lifespan of the underlying technology, which generally
ranges from three to ten years. The amortization expenses of such capitalized projects are included in the cost of the related products
and classified into “Cost of sales” when the products are sold.
As for development-related assets which are in the amortization period, they are tested for impairment in case an impairment risk has
been identified.
Software implementation
External and internal costs relating to the implementation of Enterprise Resource Planning (ERP) applications are capitalized when they
relate to the programming, coding and testing phase. They are amortized over the applications’ useful lives. In accordance with paragraph
98 of IAS 38, the SAP bridge application currently being rolled out within the Group is amortized using the production unit method to reflect
the pattern in which the asset’s future economic benefits are expected to be consumed. Said units of production correspond to the number
of users of the rolled-out solution divided by the number of target users at the end of the roll-out.
1.9 – Property, plant and equipment
Property, plant and equipment is primarily comprised of land, buildings and production equipment and is carried at cost, less accumulated
depreciation and any accumulated impairment losses, in accordance with the recommended treatment in IAS 16 – Property, plant and
equipment.
Each component of an item of property, plant and equipment with a useful life that differs from that of the whole item is depreciated
separately on a straight-line basis. The main useful lives are as follows:
5.
• buildings: 20 to 40 years;
• machinery and equipment: 3 to 10 years;
• other: 3 to 12 years.
The useful life of property, plant and equipment used in operating activities, such as production lines, reflects the related products’
estimated life cycles.
Useful lives of items of property, plant and equipment are reviewed periodically and may be adjusted prospectively if appropriate.
The depreciable amount of an asset is determined after deducting its residual value, when the residual value is material.
Depreciation is expensed in the period and included in the production cost of inventory or the cost of internally-generated intangible assets.
It is recognized in the statement of income under “Cost of sales”, “Research and development costs” or “Selling, general and administrative
expenses”, as the case may be.
Items of property, plant and equipment are tested for impairment whenever there is an indication they may be impaired. Impairment losses
are charged to the statement of income under “Other operating income and expenses”.
Since 2019, property, plant and equipment also includes right-of-use assets, in accordance with the recommended treatment in IFRS 16
Leases, and as described in the following note.
1.10 – Leases
The Group has adopted IFRS 16 – Leases on January 1, 2019, according to the modified retrospective approach.
Scope of the Group’s contracts
The lease contracts identified within all the Group entities fall under the following categories:
• real estate: office buildings, factories, and warehouses;
• vehicles: cars and trucks;
•
forklifts used mainly in factories or storage warehouses.
The Group has retained the exemption for low-value assets (i.e. assets with a cost lower than USD 5,000). Thus, the defined scope does
not include small office or IT equipment, mobile phones or other small equipment, which all correspond to low-value equipment. Short term
contracts (i.e. less than 12 months without purchase option) are also exempted under the standard. In this case, for example, for occasional
vehicle or accommodation rentals.
Rental obligation:
At the inception date of the lease, the Group recognizes the lease liabilities, measured at the present value of the lease payments to be
made over the term of the lease. The present value of payments is calculated mainly using the marginal borrowing rate of the contracting
entity’s country, at the contract starting date.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
Rental payments include fixed payments (net of rental incentives receivable), variable payments based on an index or rate and amounts that
should be paid under residual value guarantees. Besides, the simplification allowing not to split services components has not been elected
by the Group. Therefore, only the rents are taken into account in the lease payments.
Lease payments also include, when applicable, the exercise price of a purchase option reasonably certain to be exercised by the Group
and the payment of penalties for the termination of a lease, if the term of the lease takes into account the fact that the Group has exercised
the termination option.
Variable lease payments that are not dependent on an index or rate are recognized as an expense in the period in which the event or
condition that triggers the payment occurs.
After the start date of the contract, the amount of rental obligations is increased to reflect the increase in interest and reduced for lease
payments made.
In addition, the carrying amount of the lease liabilities is revalued in the event of a reassessment or modification in the lease (e.g. change
in the term of the lease, change in lease payments, application of annual indexation, etc.).
The obligation is recorded under other current and other non-current liabilities.
Right-of-use assets:
The Group accounts for the assets related to the right-of-use on the lease starting date (i.e. the date on which the underlying asset is available).
Assets are measured at cost, less accumulated depreciation and impairment losses, and adjusted for the revaluation of lease liabilities.
The cost of right-of-use assets includes the amount of lease liabilities, initial direct costs incurred and lease payments made on or before
the effective date, minus lease inducements received. They are recognized as tangible assets, in the Balance Sheet.
Unless the Group is reasonably certain that it will become the owner of the leased asset at the end of the lease term, the recorded right-of-
use assets are depreciated using the linear method over the shortest period of time between estimated life of the underlying asset and the
duration of the lease. The assets related to the right-of-use are subject to depreciation.
Determining the duration of contracts:
The duration of the Group’s contracts varies according to geographies.
The real estate contracts have variable durations depending on the countries and local regulations. Vehicles and forklifts are generally
contracted between 3 and 6 years.
In certain geographies, the Group’s real estate contracts offer unilateral options for termination of contracts (particularly in France with
contracts 3-6-9).
According to the recommendation of IFRIC, on a case by case analysis and based on Real Estate teams’ expertise, experience strategy
and projects, the Group is determining the most probable duration to perform our calculations. In most of cases, the duration chosen is
the enforceable duration of the real estate contracts, in particular on the most strategic buildings and factories.
IFRS 16 debt by maturity:
(in millions of euros)
2021
2022
2023
2024
2025
2026
2027
2028
2029 and beyond
TOTAL
Dec. 31, 2021
Dec. 31, 2020
–
248
235
181
132
102
72
50
112
250
208
165
122
86
67
55
39
86
1,132
1,078
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
1.11 – Impairment of assets
In accordance with IAS 36 – Impairment of Assets, the Group assesses the recoverable amount of its long-lived assets as follows:
•
for all property, plant and equipment subject to depreciation and intangible assets subject to amortization, the Group carries out a review at
each balance sheet date to assess whether there is any indication that they may be impaired. Indications of impairment are identified based
on external or internal information. If such an indication exists, the Group tests the asset for impairment by comparing its carrying amount to
the higher of fair value minus costs to sell and value in use;
• non-amortizable intangible assets and goodwill are tested for impairment at least annually and whenever there is an indication that the
assets may be impaired.
Value in use is determined by discounting future cash flows that will be generated by the tested assets. These future cash flows are
based on Group management’s economic assumptions and operating forecasts presented in business plans over a period generally not
exceeding five years, and then extrapolated based on a perpetuity growth rate. The discount rate corresponds to the Group’s Weighted
Average Cost of Capital (WACC) at the measurement date. The WACC stood at 6.8% at December 31, 2021 (6.8% at December 31, 2020).
This rate is based on (i) a long-term interest rate of 0.0%, corresponding to the average interest rate for 10-year OAT treasury bonds over
the past year, (ii) the average premium applied to financing obtained by the Group in 2021, and is completed by, for CGUs WACC only,
(iii) the weighted country risk premium for the Group’s businesses in the countries in question.
The perpetuity growth rate is 2.0%, unchanged from the previous financial year.
5.
Impairment tests are performed at the level of the Cash-Generating Unit (CGU) to which the asset belongs. A cash-generating unit is the
smallest group of assets that generates cash inflows that are largely independent of the cash flows from other assets or groups of assets.
The cash-generating units are Low Voltage, Medium Voltage, Industrial Automation and Secure Power. CGUs net assets were allocated
to the CGUs at the lowest possible level on the basis of the CGU activities to which they belong; the assets belonging to several activities
were allocated to each CGU (Low Voltage, Medium Voltage and Industrial Automation mainly).
The WACC used to determine the value in use of each CGU was 7.5% for Low Voltage, 7.8% for Medium Voltage, 7.6% for Secure Power,
and 7.6% for Industrial Automation.
Goodwill is allocated when initially recognized. The CGU allocation is done on the same basis as used by Group management to monitor
operations and assess synergies deriving from acquisitions.
Where the recoverable amount of an asset or CGU is lower than its book value, an impairment loss is recognized for the excess of the book
value over the recoverable value. The recoverable value is defined as the highest value between the value in use and the fair value less
costs to sell. Where the tested CGU comprises goodwill, any impairment losses are firstly deducted from goodwill.
1.12 – Non-current financial assets
Investments in non-consolidated companies are initially recorded at their cost of acquisition and subsequently measured at fair value.
The fair value of investments listed in an active market may be determined reliably and corresponds to the listed price at balance sheet date
(Level 1 from the fair value hierarchy as per IFRS 7).
IFRS 9 standard allows two accounting treatments for equity instruments:
• change in fair value is recognized through “Other Comprehensive Income” in the comprehensive income statement, and in equity under
“Other reserves” in the balance sheet, with no subsequent recycling in the income statement even upon sale.
• change in fair value, as well as gain or loss in case of sale, are recognized in the income statement.
The election between those two methods is to be made from inception for each equity investment and is irrevocable.
Venture capital (FCPR)/Mutual funds (SICAV) are recognized at fair value through income statement, in accordance with IFRS 9.
Loans, recorded under “Non-current financial assets”, are carried at amortized cost. In accordance with IFRS 9, a depreciation is booked
from inception to reflect the expected credit risk losses within 12 months. In case of significant degradation of the credit quality, the initial
level of depreciation is modified to cover the entire expected losses over the remaining maturity of the loan.
1.13 – Inventories and work in progress
Inventories and work in progress are measured at the lower of their initial recognition cost (acquisition cost or production cost generally
determined by the weighted average price method) or of their estimated net realizable value.
Net realizable value corresponds to the estimated selling price net of remaining expenses to complete and/or sell the products. Inventory
impairment losses are recognized in “Cost of sales”.
The cost of work in progress, semi-finished and finished products, includes the cost of materials and direct labor, subcontracting costs, all
production overheads based on normal manufacturing capacity and the portion of research and development costs that are directly related
to the manufacturing process (corresponding to the amortization of capitalized projects in production and product and range of products
maintenance costs).
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5.5 Notes to the consolidated financial statements
1.14 – Trade and other operating receivables
Trade and other operating receivables are depreciated according to the simplified IFRS 9 model. From inception, trade receivables
are depreciated to the extent of the expected losses over their remaining maturity.
The credit risk of trade receivables is assessed on a collective basis country by country, as the geographical origin of receivables
is considered representative of their risk profile. Countries are classified by risk profile using the assessment provided by an external
agency. The provision for expected credit losses is evaluated using (i) the probabilities of default communicated by a credit agency,
(ii) historical default rates, (iii) aging balance, (iv) as well as the Group’s assessment of the credit risk considering actual guarantees
and credit insurance.
Once it is known with certainty that a doubtful receivable will not be collected, the doubtful account and its related depreciation are written
off through the income statement.
Accounts receivable are discounted in cases where they are due in over one year and the discounting impact is significant.
1.15 – Assets held for sale and liabilities of discontinued operations
Assets held for sale are no longer amortized or depreciated and are recorded separately in the balance sheet under “Assets held for sale”
at the lower of its amortized cost and net realizable value.
1.16 – Deferred taxes
Deferred taxes, related to temporary differences between the tax basis and accounting basis of consolidated assets and liabilities, are
recorded using the balance sheet liability method, based on tax rates and tax rules enacted before the balance sheet date. The effect of
any change in the tax rate is recognised in the income statement, apart from changes relating to items initially recognised directly in equity.
Future tax benefits arising from the utilization of tax loss carry forwards (including amounts available for carry forward without time limit) are
recognized only when they can reasonably be expected to be realized. The carrying amount of deferred tax assets is tested for impairment
at each balance sheet date and an impairment loss is recognised to the extent that it is no longer probable that sufficient taxable profits will
be available against which the deferred tax asset can be fully or partially offset.
Deferred tax assets and liabilities are not discounted and are recorded in the balance sheet under non-current assets and liabilities.
Deferred tax assets and liabilities related to the same unit and which are expected to reverse in the same period are offset.
1.17 – Cash and cash equivalents
Cash and cash equivalents presented in the balance sheet consist of cash, bank accounts, term deposits of three months or less and
marketable securities traded on organized markets. Marketable securities are short-term, highly liquid investments that are readily
convertible to known amounts of cash at maturity. They notably consist of bank deposits, commercial paper, mutual funds and equivalents.
Considering their nature and maturities, these instruments represent insignificant risk of changes in value and are treated as cash
equivalents.
1.18 – Treasury shares
Schneider Electric SE shares held by the parent company or by fully consolidated companies are measured at acquisition cost and
deducted from equity.
Gains/(losses) on the sale of own shares are canceled from consolidated reserves, net of tax.
1.19 – Pensions and other employee benefit obligations
Depending on local practices and laws, the Group’s subsidiaries participate in pension, termination benefit and other long-term benefit
plans. Benefits paid under these plans depend on factors such as seniority, compensation levels and payments into mandatory retirement
programs.
Defined contribution plans
Payments made under defined contribution plans are recorded in the income statement, in the year of payment, and are in full settlement
of the Group’s liability. As the Group is not committed beyond these contributions, no provision related to these plans has been booked.
In most countries, the Group participates in mandatory general plans, which are accounted for as defined contribution plans.
Defined Benefit plans
Defined Benefit plans are measured using the projected unit credit method.
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Financial Statements
Expenses recognized in the statement of income are split between operating income (for service costs rendered during the period)
and net financial income/(loss) (for financial costs and expected return on plan assets).
The amount recognized in the balance sheet corresponds to the present value of the obligation, and net of plan assets.
When this is an asset, the recognized asset is limited to the present value of any economic benefit due in the form of plan refunds or
reductions in future plan contributions.
Changes resulting from periodic adjustments to actuarial assumptions regarding general financial and business conditions or demographics
(i.e., changes in the discount rate, annual salary increases, return on plan assets, years of service, etc.) as well as experience adjustments
are immediately recognized in the balance sheet as a separate component of equity in “Other reserves” and in comprehensive income as
“Other comprehensive income/loss”.
Other commitments
Provisions are funded and expenses recognized to cover the cost of providing health-care benefits for certain Group retirees in Europe and
the United States. The accounting policies applied to these plans are similar to those used to account for Defined Benefit pension plans.
The Group also funds provisions for all its subsidiaries to cover seniority-related benefits (primarily long service awards for its French
subsidiaries). Actuarial gains and losses on these benefit obligations are fully recognized in profit or loss.
5.
1.20 – Share-based payments
The Group grants performance shares to senior executives and certain employees.
Pursuant to the application of IFRS 2 – Share-based payments, these plans are measured on the date of grant and an employee benefits
expense is recognized on a straight-line basis over the vesting period, in general three or four years depending on the country in which
it is granted.
The Group uses the Black & Scholes model to measure these plans.
For performance shares and stock options, this expense is offset in the equity. In the case of stock appreciation rights, a liability is recorded
corresponding to the amount of the benefit granted, re-measured at each balance sheet date.
As part of its commitment to employee share ownership, Schneider Electric gave its employees the opportunity to purchase shares at a
discounted price (Note 19).
1.21 – Provisions and risk contingencies
A provision is recognized when it is probable that the Group has a present legal or constructive obligation as a result of a past event,
it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation. If the loss or liability is not likely and cannot be reliably estimated, but remains possible, the Group discloses
it as a contingent liability. Provisions are calculated on a case-by-case or statistical basis, and discounted when the impact from
discounting is significant.
Provisions are primarily set aside to cover:
• economic risks: these provisions relate to probable tax risks arising on positions taken by the Group or its subsidiaries. Each position
is assessed individually and not offset, and reflects the best estimate of the risk at the end of the reporting period. Where applicable,
it includes any late-payment interest and fines. In accordance with IFRIC 23 – Uncertainty over income tax treatments, provisions covering
uncertainties over income tax treatment are presented under “Accrued taxes and payroll costs” as of 1st of January 2019;
• customer risks: provisions for customer risks mainly integrate the provisions for losses at completion for some of long-term contracts.
Provisions for expected losses are fully recognized as soon as they are identified;
• product risks: these provisions comprise
− statistical provisions for warranties: the Group funds provisions on a statistical basis for the residual cost of Schneider Electric
product warranties not covered by insurance. The provisions are estimated with consideration of historical claim statistics and
the warranty period;
− provisions to cover disputes concerning defective products and recalls of clearly identified products.
• environmental risks: these provisions are primarily funded to cover clean-up costs. The estimation of the expected future outflows is
based on reports from independent experts;
• restructuring costs, when the Group has prepared a detailed plan for the restructuring and has either announced or started to implement
the plan before the end of the year. The estimation of the liability includes only direct expenditure arising from the restructuring.
1.22 – Financial liabilities
Financial liabilities primarily comprise bonds, commercial paper and short and long-term bank borrowings. These liabilities are initially
recorded at fair value, from which any direct transaction costs are deducted. Subsequently, they are measured at amortized cost based
on their effective interest rate.
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5.5 Notes to the consolidated financial statements
1.23 – Financial instruments and derivatives
Risk hedging management is centralized. The Group’s policy is to use derivative financial instruments exclusively to manage and hedge
changes in exchange rates, interest rates or prices of certain raw materials. The Group uses instruments such as foreign exchange
forwards, foreign exchange options, cross currency swaps, interest rate swaps and commodities future, swaps or options, depending
on the nature of the exposure to be hedged.
All derivatives are recorded in the balance sheet at fair value with changes in fair value recorded in the statement of income, except when
they are qualified in a hedging relationship.
Cash flows from financial instruments are recognized in the consolidated statement of cash flows in a manner consistent with the underlying
transactions.
Foreign currency hedges
The Group periodically enters into foreign exchange derivatives to hedge the currency risk associated with foreign currency transactions.
Whenever possible, monetary items (except specific financing items) denominated in foreign currency carried in the balance sheet of Group
companies are hedged by rebalancing assets and liabilities per currency through foreign exchange spots realized with Corporate Treasury
(natural hedge). The foreign exchange risk is thus aggregated at Group level and hedged with foreign exchange derivatives. When foreign
exchange risk management cannot be centralized, the Group contracts foreign exchange forwards to hedge operating receivables and
payables carried in the balance sheet of Group companies. In both cases, the Group does not apply hedge accounting because gains and
losses generated on these foreign exchange derivatives naturally offset within “Net financial income/(loss)” with gains or losses resulting
from the translation at end-of-year rates of payables and receivables denominated in foreign currency.
The Group also hedges future cash flows, including recurring future transactions and planned acquisitions or disposals of investments.
In accordance with IFRS 9, these are treated as cash flow hedges. These hedging instruments are recognized at fair value in the balance
sheet. The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is accumulated in equity, under
“Other reserves”, and then recognized in the income statement when the hedged item affects profit or loss.
The Group also hedges foreign exchange risk financing receivables or payables (including current accounts and loans with subsidiaries)
using foreign exchange derivatives than can be documented either in Cash Flow Hedge or Fair Value Hedge depending on the nature of
the derivative.
The Group may also designate foreign exchange derivatives or borrowings as hedging instruments of its investments in foreign operations
(net investment hedge). Changes of value of those hedging instruments are accumulated in equity and recognized in the statement of
income symmetrically to the hedged items.
The Group documents foreign exchange derivative based on the spot rate. The Group adopted the cost of hedging option offered by IFRS 9
to limit volatility in the statement of income related to forward points:
• For foreign exchange derivatives hedging an item on the balance sheet: Forward points are amortized in statement of income on a straight-
line basis. Forward points related to foreign exchange derivatives hedging financing transactions are included in “Finance costs, net”;
• For foreign exchange derivatives hedging future transactions not yet recorded on the balance sheet: Forward points are recorded in the
statement of income when the hedged transaction impacts the statement of income.
Interest rate hedges
Interest rate swaps allow the Group to manage its exposure to interest rate risk. The derivative instruments used are financially adjusted to
the schedules, rates and currencies of the borrowings they cover. They involve the exchange of fixed and floating-rate interest payments.
The differential to be paid (or received) is accrued as an adjustment to interest income or expense over the life of the agreement. The Group
applies hedge accounting as described in IFRS 9 for interest rate swaps. Gains and losses on re-measurement of interest rate swaps at fair
value on the balance sheet are recognized in equity (for Cash Flow Hedges) or in profit or loss (for Fair Value Hedges).
Borrowings hedged by an interest rate derivative in a fair value hedge are reevaluated at fair value for the portion of risk being hedged,
with offsetting entry in the statement of income.
Cross-currency swaps may be presented both as foreign exchange hedges and interest rate hedges depending on the characteristics
of the derivative.
Commodity hedges
The Group also purchases commodity derivatives including forward purchase contracts, swaps and options to hedge price risks on all
or part of its forecast future purchases. Under IFRS 9, these qualify as cash flow hedges. These instruments are recognized in the balance
sheet at fair value at the period-end (mark to market). The effective portion of the hedge is recognized separately in equity (under “Other
reserves”) and then recognized in income (gross margin) when the underlying hedge affects consolidated income. The effect of this
hedging is then incorporated in the cost price of the products sold.
1.24 – Revenue recognition
The Group’s revenues primarily include transactional sales and revenues from services, and system contracts (projects).
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Financial Statements
Some contracts may include the supply to the customer of distinct goods and services (for instance contracts combining build followed
by operation and maintenance). In such situations, the contract is analyzed and segmented into several components (“performance
obligations”), each component being accounted for separately, with its own revenue recognition method and margin rate. The selling price
is allocated to each performance obligation in proportion to the specific selling price of the underlying goods and services. This allocation
should reflect the share of the price to which Schneider Electric expects to be entitled in exchange for the supply of these goods or services.
Revenue associated with each performance obligation identified within a contract is recognized when the obligation is satisfied,
i.e. when the control of the promised goods or services is transferred to the customer.
The following revenue recognition methods can be applied:
Recognition of revenue at a point of time
Revenue from sales is recognized at a point of time, when the control of the promised goods or services is transferred to the customer.
This method is applicable for all transactional sales and for specific services such as spare parts deliveries, or on-demand services.
Recognition of revenue over time
To demonstrate that the transfer of goods is progressive and recognize revenue over time, the following cumulative criteria are required:
the goods sold have no alternative use, and
•
• enforceable right to payment (corresponding to costs incurred, plus a reasonable profit margin) for the work performed to date exists,
in the event of early termination for convenience by the customer.
When these criteria are fulfilled, revenue is recognized using the percentage-of-completion method, based on the percentage of costs
incurred in relation to total estimated costs of the performance obligation. The cost incurred includes direct and indirect costs relating
to the contracts.
5.
Expected losses on contracts are fully recognized as soon as they are identified.
Penalties for late delivery or for the improper execution of a contract are recognized as a deduction from revenue.
This method is applicable for systems contracts (projects) as the constructed assets are highly customized, and thus the Group would incur
significant economic losses to redirect the built solutions to other customers.
Revenue from most services contracts is recognized over time, as the customer simultaneously receives and consumes the benefits of the
services provided. When costs incurred are stable over the contract’s period, revenue is linearized over the contract’s length.
Provisions for the discounts offered to distributors are accrued when the products are sold to the distributor and recognized as a deduction
from revenue. Certain Group subsidiaries also offer cash discounts to distributors. These discounts and rebates are deducted from sales.
Consolidated revenue is presented net of these discounts and rebates.
Backlog and balance sheet presentation
Backlog (as disclosed in Note 3) corresponds to the amounts of the selling price allocated to the performance obligations that are
unsatisfied (or partially unsatisfied) at closing date.
The cumulated amount of revenue accounted for, less progress payments and accounts receivable (presented on a dedicated line of the
balance sheet) is determined on a contract-by-contract basis. If this amount is positive, the balance is recognized under “contract assets”
in the balance sheet. If it is negative, the balance is recognized under “contract liabilities” (see Note16). Reserves for onerous contracts
(so called reserves for loss at completion) are excluded from contract assets and liabilities and presented among the “provisions for
customer risks” item.
1.25 – Earnings per share
Earnings per share are calculated in accordance with IAS 33 – Earnings Per Share.
Diluted earnings per share are calculated by adjusting profit attributable to equity holders of the parent and the weighted average number
of shares outstanding for the dilutive effect of the exercise of stock options outstanding at the balance sheet date. The dilutive effect of stock
options is determined by applying the “treasury stock” method, which consists of taking into account the number of shares that could be
purchased, based on the average share price for the year, using the proceeds from the exercise of the rights attached to the options.
1.26 – Statement of cash flows
The consolidated statement of cash flows has been prepared using the indirect method, which consists of reconciling net profit to net cash
provided by operations. The opening and closing cash positions include cash and cash equivalents, comprised of marketable securities,
net of bank overdrafts and facilities.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
Note 2: Changes in the scope of consolidation
The list of main consolidated companies can be found in Note 29.
2.1 – Scope variations
Acquisitions & disposals of the period
Acquisitions
OSIsoft LLC.
As announced on March 19, 2021, Schneider Electric’s majority-owned subsidiary, AVEVA Group Plc, has completed the acquisition of
OSIsoft, for a consideration of EUR 4.5 billion (USD 5.1 billion). OSIsoft is fully consolidated since the acquisition date, and reports within
the Industrial Automation reporting segment.
The consideration paid was funded by EUR 3.9 billion (USD 4.4 billion) of cash, and by a EUR 0.5 billion (USD 0.6 billion) issue of 13,655,570
ordinary shares from AVEVA Group Plc to Estudillo Holdings Corp.
The purchase accounting as per IFRS 3R is not completed as of December 31, 2021. OSIsoft carrying value at acquisition date for net
identifiable assets was EUR (1) million. The net adjustment of the opening balance sheet is EUR 1,460 million, resulting mainly from the
booking of identifiable intangible assets (technology for EUR 998 million, customer relationship for EUR 288 million and trademark for
EUR 150 million) and from a decrease in contract liabilities for EUR 71 million resulting from the remeasurement at fair value of the
deferred revenue following the business combination under IFRS 3R. The preliminary goodwill recognized amounts to EUR 3,001 million
at acquisition date.
ETAP
On June 28, 2021, the Group completed the transaction to purchase a controlling stake in Operation Technology Inc. (“ETAP”). As of June
30, 2021, the Group has acquired 80% of the capital of ETAP for a consideration of EUR 216 million, fully paid in cash. ETAP is consolidated
within Energy Management reporting segment. The Group holds an agreement to acquire the remaining 20% minority interests in 2025.
The related debt has been recognised in “Other non-current liabilities”.
The purchase accounting as per IFRS 3R is not completed as of December 31, 2021. ETAP carrying value at acquisition date for net
identifiable assets was EUR 13 million. The net adjustment of the opening balance sheet is EUR 26 million, resulting mainly from the booking
of a preliminary amount of identifiable intangible assets (technology, customer relationship and trademark). The preliminary goodwill
recognized amounts to EUR 260 million at acquisition date and includes the forward agreement for the acquisition of the remaining 20%
minority interests in 2025.
Uplight Inc.
The Group completed the acquisition of 29.6% of Uplight Inc. on July 27, 2021 for a consideration of EUR 378 million. In October 2021,
the Group subscribed to a capital increase EUR 20 million for the acquisition of Agentis by Uplight Inc., resulting in a dilution of the Group’s
interest to 29.4%. Uplight Inc. has been accounted for by the equity method since August 1, 2021.
I.G.E + X.A.O.
On November 24, 2021, the simplified tender offer for the shares of IGE+XAO, submitted to the AMF, has been closed. At the end of the
tender offer, the Group owns 83.93% of IGE+XAO’s share capital.
Qmerit
On December 20, 2021, the Group acquired 85.85% of the capital of Qmerit, fully consolidated in Energy Management reporting segment.
Qmerit is accelerating the shift away from traditional fossil fuel-powered systems, toward more sustainable, resilient electric technologies.
The Group holds an agreement to acquire the remaining 14.15% minority interests. The related debt has been recognised in “Other
noncurrent liabilities”. The purchase accounting as per IFRS 3R is not completed as of December 31, 2021.
Disposals
In 2021, the Group recorded a total amount of EUR 196 million of gain on business disposals, mainly related to the following:
Cable Support
On April 27, 2021, the Group announced the signing of the agreement to divest the Cable Support business which was consolidated
within Energy Management reporting segment. The transaction was finalized, on June 30, 2021.
IMServ
On July 28, 2021, the Group completed the sale of IMServ, a provider of metering and data services to the energy market. It was
consolidated within Industrial Automation reporting segment.
US Motion
On July 9, 2021, the Group completed the sale of the US Motion industrial, a manufacturer of motion control components for automation
equipment. It was consolidated within Industrial Automation reporting segment.
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Financial Statements
Follow-up on acquisitions and divestments occurred in 2020 with significant effect in 2021
Acquisitions
RIB Software SE
On February 13, 2020, the Group announced its intention to launch a voluntary public tender for the acquisition of 100% of the shares of RIB
Software SE for a total valuation of EUR 1.5 billion. On March 25, 2020, the Group acquired approximately 9.99% of the capital of the company,
outside the takeover offer. On July 10, 2020, the Group announced the successful completion of the voluntary public takeover offer. As of
December 31, 2020, the Group owned 87.64% of the capital of RIB Software, fully consolidated within Energy Management reporting segment.
The Group held a put option agreement on 9.1% of minority interests, valued at EUR 137 million, with a maturity date in 2024.
On June 10, 2021, the Group purchased 9.1% of the non-controlling interests for a consideration of EUR 223 million. The previous put
agreement and related debt have been cancelled.
On July 5, 2021, the Group submitted the formal request to RIB Software SE that the General Meeting of RIB Software SE shall resolve
to transfer the shares of the remaining shareholders (minority shareholders) to Schneider Electric Investment AG for an appropriate cash
compensation (so-called squeeze out under stock corporation law).
As of December 31, 2021, the squeeze out has been completed and the Group owns 100% of RIB Software SE.
The purchase accounting resulting from the acquisition is completed at the closing date. As of December 31, 2021, the purchase accounting
adjustments amount to EUR 211 million, and resulted mainly in the identification of intangible assets (technologies, trademark and customer
relationship). The Goodwill recognized amounts to EUR 1,128 million as of December 31, 2021.
5.
Larsen & Toubro
On May 1st, 2018, Schneider Electric, partnering with Temasek, a global investment company headquartered in Singapore, reached
an agreement to buy Larsen & Toubro’s Electrical & Automation business.
On August 31, 2020, the Group completed the transaction to combine Schneider Electric India’s Low Voltage and Industrial Automation
Products business and Larsen and Toubro (“L&T”) Electrical and Automation business, for a consideration paid of EUR 1,571 million.
Temasek took 35% stake in the combined business for EUR 530 million. The partnership with Temasek resulted in the dilution of the Group’s
interests within Schneider Electric India’s Low Voltage and Industrial Automation Products business, and in the recognition of a gain of
EUR 191 million in the Group’s share of equity in 2020.
L&T is fully consolidated since September 1, 2020, and reports within both Energy Management and Industrial Automation reporting
segments.
The purchase accounting as per IFRS 3R is completed as of December 31, 2021. At acquisition date, the net adjustment of the opening
balance sheet is EUR 286 million. The main identifiable intangible assets recognized as of December 31, 2021 are technology for
EUR 111 million, customer relationship for EUR 380 million and trademark for EUR 83 million. Contingent liabilities assumed mainly
relates to environment, health and safety (EHS) risk for EUR 78 million as of December 31, 2021. The goodwill recognized amounts to
EUR 1,117 million as of December 31,2021.
2.2 – Impact of changes in the scope of consolidation on the Group cash flow
Changes in the scope of consolidation at December 31, 2021, decreased the Group’s cash position by a net EUR 4,231 million outflow,
as described below:
(in millions of euros)
Acquisitions
of which OSISoft LLC
of which RIB Software SE
of which L&T
of which Uplight
of which ETAP
of which others
Disposals
FINANCIAL INVESTMENTS NET OF DISPOSALS
Full Year 2021
Full Year 2020
(4,577)
(3,534)
–
–
(398)
(205)
(440)
346
(4,231)
(2,441)
–
(1,075)
(983)
–
–
(383)
48
(2,393)
OSIsoft acquistion results in a net cash outflow for EUR 3,534 million including EUR 3,709 cash paid and a EUR 175 million net cash acquired
for full year 2021. The remaining cash outflow is due to Qmerit and other individually unmaterial acquisitions. Cash inflows is mainly due to
the disposals described in Note 2.1.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
Note 3: Segment information
The Group is organized into two reporting segments as follows:
Energy Management leverages a complete end-to-end technology offering enabled by EcoStruxure™ and gathers three operating
segments: Low Voltage, Medium Voltage and Secure Power that all share the same objective of managing efficiently and reliably the energy
and have similar economic characteristics. The Group’s go-to-market is oriented to address customer needs across its four end-markets of
Buildings, Data Centers, Industry and Infrastructure, supported by a worldwide partner network.
Industrial Automation includes Industrial Automation and Industrial Control activities, across discrete, process & hybrid industries.
Expenses concerning General Management that cannot be allocated to a particular segment are presented under “Central functions
& digital costs”.
Operating and reporting segment data is identical to that presented to the board of directors, which has been identified as the main
decision-making body for allocating resources and evaluating segment performance. Performance and decisions on the allocation
of resources are assessed by the board of directors and are mainly based on Adjusted EBITA.
Share-based payment is presented under “Central functions & digital costs”.
The board of directors does not review assets and liabilities by business.
The same accounting principles governing the consolidated financial statements apply to segment data.
Details are provided in the Management Report.
3.1 – Information by reporting segment
Full Year 2021
(in millions of euros)
Backlog
Revenue
Adjusted EBITA
Adjusted EBITA (%)
Energy
Management
Industrial
Automation
Central functions
& digital costs
9,088
22,179
4,501
20.3%
2,688
6,726
1,242
18.5%
–
–
(756)
On December 31, 2021, the total backlog to be executed in more than a year amounted to EUR 640 million.
Full Year 2020
(in millions of euros)
Backlog
Revenue
Adjusted EBITA
Adjusted EBITA (%)
Energy
Management
Industrial
Automation
Central functions
& digital costs
7,231
19,344
3,634
18.8%
1,765
5,815
992
17.1%
–
–
(700)
Total
11,776
28,905
4,987
17.3%
Total
8,996
25,159
3,926
15.6%
On December 31, 2020, the total backlog to be executed in more than a year amounted to EUR 639 million.
3.2 – Information by region
The geographic regions covered by the Group are:
• Western Europe;
• North America (including Mexico);
• Asia-Pacific;
• Rest of the World (Eastern Europe, Middle East, Africa, South America).
Non-current assets include net goodwill, net intangible assets and net property, plant and equipment.
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Financial Statements
(in millions of euros)
Revenue by country market
Non-current assets as of Dec. 31, 2021
(in millions of euros)
Revenue by country market
Non-current assets as of Dec. 31, 2020
Western
Europe
7,382
12,779
Western
Europe
6,636
12,676
of which
France
1,749
2,604
of which
France
1,512
1,889
Asia-
Pacific
8,995
5,866
Asia-
Pacific
7,509
5,517
of which
China
4,701
1,154
of which
China
4,009
960
North
America
8,267
15,094
North
America
7,241
9,103
of which
USA
Rest of the
World
7,148
12,721
of which
USA
6,303
6,651
4,261
1,296
Rest of the
World
3,773
1,312
Total
28,905
35,035
Total
25,159
28,608
The increase in non-current assets in both North America and the USA in 2021 is mainly attributable to the acquisition of OSIsoft.
Moreover, the Group follows the share of new economies in revenue:
(in millions of euros)
Revenue – Mature countries
Revenue – New economies
TOTAL
Full Year 2021
Full Year 2020
16,590
12,315
28,905
57%
43%
100%
14,763
10,396
25,159
59%
41%
100%
5.
Mature countries gather mainly Western Europe and North American countries.
Note 4: Research and development
Research and development costs are as follows:
(in millions of euros)
Research and development costs in costs of sales
Research and development costs in R&D costs*
Capitalized development costs
TOTAL RESEARCH AND DEVELOPMENT COSTS**
Full Year 2021
Full Year 2020
(377)
(855)
(307)
(378)
(718)
(311)
(1,539)
(1,407)
Including EUR 44 million of research and development tax credit in full year 2021 and EUR 50 million in full year 2020
*
** Excluding amortization of R&D costs capitalized
Amortization expenses of capitalized development booked in the cost of sales, amounted to EUR 239 million in 2021 and EUR 245 million
in 2020.
Note 5: Impairment losses, depreciation and amortization expenses
(in millions of euros)
Depreciation and amortization included in cost of sales
Depreciation and amortization included in selling, general and administrative expenses
Amortization expenses of purchase accounting intangible assets
Impairment losses of purchase accounting intangible assets
Full Year 2021
Full Year 2020
(539)
(486)
(389)
(21)
(534)
(469)
(207)
–
IMPAIRMENT LOSSES, DEPRECIATION AND AMORTIZATION EXPENSES
(1,435)
(1,210)
The impairment booked in 2021 is mainly related to intangible assets (developed technology and customer relationships) associated with
the announcement from AVEVA to retire its steel fabrication software in July 2021.
Note 6: Other operating income and expenses
Other operating income and expenses are as follows:
(in millions of euros)
Gains/(losses) on assets disposals
Gains/(losses) on business disposals & assets impairment
Costs of acquisitions and integrations
Others
OTHER OPERATING INCOME AND EXPENSES
Full Year 2021
Full Year 2020
(11)
175
(166)
(19)
(21)
(4)
(13)
(169)
(24)
(210)
In 2021, the costs of acquisitions and integrations are mainly related to the recent and ongoing acquisitions of the year. The gains on
disposals mainly relate to the 2021 divestments described in Note 2.
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5.5 Notes to the consolidated financial statements
Note 7: Other financial income and expenses
(in millions of euros)
Exchange gains and losses, net
Financial component of defined benefit plan costs
Dividends received
Fair value adjustment of financial assets
Financial interests – IFRS16
Other financial expenses, net
OTHER FINANCIAL INCOME AND EXPENSES
Note 8: Income tax expenses
Full Year 2021
Full Year 2020
(8)
(39)
3
8
(38)
(7)
(81)
(36)
(47)
5
(3)
(37)
(48)
(166)
Wherever the regulatory environment allows it, the Group entities file consolidated tax returns. Schneider Electric SE files a consolidated tax
return with its French subsidiaries held directly or indirectly through Schneider Electric Industries SAS.
8.1 – Analysis of income tax expense
(in millions of euros)
Current taxes
Deferred taxes
INCOME TAX EXPENSE
8.2 – Tax reconciliation
(in millions of euros)
Profit attributable to owners of the parent
Income tax expense
Non-controlling interests
Share of profit of associates
Profit before tax
Geographical weighted average Group tax rate
Theoretical income tax expense
Reconciling items:
Tax credits and other tax reductions
Impact of tax losses
Other permanent differences
INCOME TAX EXPENSE
EFFECTIVE TAX RATE
Full Year 2021
Full Year 2020
(861)
(105)
(966)
(785)
147
(638)
Full Year 2021
Full Year 2020
3,204
(966)
(69)
84
4,155
23.1%
(959)
89
(55)
(41)
(966)
23.2%
2,126
(638)
(112)
66
2,810
23.2%
(652)
31
8
(25)
(638)
22.7%
The Company’s consolidated income from continuing operations being predominantly generated outside of France, theoretical tax expense
from continuing operations is reconciled above from the Company’s weighted-average global tax rate (rather than from the French domestic
statutory tax rate).
Note 9: Goodwill
9.1 – Main items of goodwill
Group goodwill is broken down by CGUs as follows:
(in millions of euros)
Energy Management:
Low Voltage
Medium Voltage
Secure Power
Industrial Automation
TOTAL GOODWILL
Dec. 31, 2021
Dec. 31, 2020
13,944
8,496
2,245
3,203
10,779
24,723
12,831
7,981
1,780
3,070
7,125
19,956
The Group performed the annual impairment test of all the Cash Generating Units (CGUs) using the same methodology as the one used
on previous periods, and described in Note 1.11.
Impairment tests performed in 2021 did not trigger any impairment losses on the CGUs’ assets.
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Financial Statements
The sensitivity analysis on the test hypothesis shows that no impairment losses would be recognized in each of the following scenarios,
for each CGU:
• a 0.5 point increase of the discount rate;
• a 1.0 point decrease in the growth rate;
• a 0.5 point decrease in the margin rate.
9.2 – Movements during the year
The main movements during the year are summarized as follows:
(in millions of euros)
Net goodwill at opening
Acquisitions
Disposals
Reclassifications
Translation adjustment
NET GOODWILL AT END OF PERIOD
including cumulative impairment
Acquisitions & Disposals
Movements from acquisitions and disposals are described in Note 2.1.
Other changes
Translation adjustments mainly concern goodwill in US dollar and UK pound sterling.
Note 10: Intangibles assets
10.1 – Change in intangible assets
Gross value
(in millions of euros)
Dec. 31, 2019
Acquisitions
Translation adjustments
Reclassifications
Changes in scope of consolidation and other
Dec. 31, 2020
Acquisitions
Translation adjustments
Reclassifications
Changes in scope of consolidation and other
Trademarks
Software
Development
Projects (R&D)
Acquired
technologies
and customer
relationships
3,315
2,691
2,590
–
(166)
–
71
2,495
–
162
41
163
918
19
(31)
53
5
964
22
17
19
19
311
(100)
(64)
16
3,478
307
61
(14)
(9)
–
(223)
–
824
3,292
4
338
(101)
1,253
4,786
Dec. 31, 2021
2,861
1,041
3,823
Dec. 31, 2021
Dec. 31, 2020
19,956
3,717
(118)
–
1,168
24,723
(367)
18,719
2,287
–
–
(1,050)
19,956
(367)
5.
Other
202
2
(48)
11
(1)
166
–
18
28
4
Total
9,716
332
(568)
–
915
10,395
333
596
(27)
1,430
216
12,727
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
Amortization and impairment
(in millions of euros)
Dec. 31, 2019
Amortizations
Impairments
Translation adjustments
Reclassifications
Changes in scope of consolidation and other
Trademarks
Software
Development
Projects (R&D)
Acquired
technologies
and customer
relationships
(420)
(801)
(2,111)
(1,538)
(4)
–
–
–
–
(53)
–
23
–
(3)
(245)
(8)
72
–
–
(201)
–
93
–
(3)
Other
(199)
(9)
(9)
54
–
–
Total
(5,069)
(512)
(17)
242
–
(6)
Dec. 31, 2020
(424)
(834)
(2,292)
(1,649)
(163)
(5,362)
Amortizations
Impairments
Translation adjustments
Reclassifications
Changes in scope of consolidation and other
Dec. 31, 2021
Net value
(in millions of euros)
Dec. 31, 2019
Dec. 31, 2020
Dec. 31, 2021
(30)
–
(3)
(29)
–
(59)
–
(13)
38
10
(241)
(3)
(45)
(74)
1
(353)
(20)
(143)
90
6
(5)
–
(8)
2
–
(688)
(23)
(212)
27
17
(486)
(858)
(2,654)
(2,069)
(174)
(6,241)
Trademarks
Software
Development
Projects (R&D)
2,170
2,071
2,375
117
130
183
1,204
1,186
1,169
Acquired
technologies
and customer
relationships
1,153
1,643
2,717
Other
3
3
42
Total
4,647
5,033
6,486
In 2021, change in intangible assets is mainly related to the acquisitions of OSIsoft and ETAP.
The amortization expenses and impairment losses of intangible assets other than goodwill restated in statutory cash flow are as follows:
(in millions of euros)
Amortization expenses of intangibles assets other than goodwill
Impairments losses of intangible assets other than goodwill
TOTAL*
Full year 2021
Full year 2020
688
23
711
512
17
529
*
Includes amortization & impairment of intangible assets from purchase price allocation for EUR 410 million for the year 2021 (EUR 207 million in 2020)
10.2 – Trademarks
At December 31, 2021, the main trademarks recognized were as follows:
(in millions of euros)
Dec. 31, 2021
Dec. 31, 2020
APC (Secure Power)
Clipsal (Low Voltage)
OSIsoft (Industrial Automation)
Asco (Low Voltage)
Aveva (Industrial Automation)
Invensys – Triconex and Foxboro (Industrial Automation)
L&T (Low Voltage/Medium Voltage/Industrial Automation)
Digital (Industrial Automation)
Other
TRADEMARKS
1,637
163
146
110
91
49
65
42
72
2,375
1,512
160
–
102
78
45
58
43
73
2,071
In 2021, the Group reviewed the value of the main trademarks in accordance with valuation model describe in Note 1.8 – Intangibles
assets. Particularly, APC brand was tested using the royalty relief method. The future cash flows used are based on Group management’s
economic assumptions and operating forecasts presented in Secure Power’s business plan, and then extrapolated based on a perpetuity
growth rate of 2%.
Impairment tests carried out on main trademarks in 2021 did not show any impairment risk.
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Financial Statements
The sensitivity analysis on the test hypothesis shows that no impairment losses would be recognized in the following scenarios:
• a 0.5 point increase in the discount rate;
• a 1.0 point decrease in growth rate;
• a 0.5 point decrease in the royalty rate.
Note 11: Property, plant and equipment
Changes in property, plant and equipment in 2021 are mainly related to the scope changes mentioned in the Note 2 and include
the impacts of IFRS 16 – Leases.
Gross value
(in millions of euros)
Dec. 31, 2019
Acquisitions
Disposals
Translation adjustments
Reclassifications
Changes in scope of consolidation and other
Dec. 31, 2020
Acquisitions
Disposals
Translation adjustments
Reclassifications
Changes in scope of consolidation and other
Buildings
1,943
Machinery and
equipment
4,565
44
(41)
(79)
66
57
91
(158)
(183)
193
89
Rights of use
of assets
(IFRS 16)
1,407
296
(57)
(71)
–
44
Other
1,154
361
(78)
(64)
(262)
35
Total
9,210
795
(336)
(409)
(5)
278
5.
1,990
4,597
1,146
1,619
9,533
32
(81)
64
48
(10)
102
(198)
170
150
(26)
401
(109)
52
(234)
(3)
349
(113)
61
–
53
885
(504)
354
(32)
23
Land
141
3
(2)
(12)
(2)
53
181
1
(3)
7
4
9
Dec. 31, 2021
199
2,043
4,795
1,253
1,969
10,259
Amortization and impairment
(in millions of euros)
Dec. 31, 2019
Depreciation and impairment
Reversals
Translation adjustments
Reclassifications
Changes in scope of consolidation and other
Land
(18)
(1)
1
(3)
–
(2)
Buildings
Machinery and
equipment
(1,070)
(3,568)
(85)
29
29
(4)
(21)
(245)
137
130
2
(49)
Other
(582)
(67)
46
25
10
(24)
Dec. 31, 2020
(23)
(1,122)
(3,593)
(592)
Depreciation and impairment
Reversals
Translation adjustments
Reclassifications
Changes in scope of consolidation and other
Dec. 31, 2021
Net value
(in millions of euros)
Dec. 31, 2019
Dec. 31, 2020
Dec. 31, 2021
Reclassifications primarily correspond to assets put into use.
(7)
1
(1)
1
1
(93)
67
(35)
2
14
(255)
178
(125)
26
30
(79)
77
(23)
(2)
11
(28)
(1,167)
(3,739)
(608)
Land
123
158
171
Buildings
Machinery and
equipment
873
868
876
997
1,004
1,056
Rights of use
of assets
(IFRS 16)
1,115
1,035
1,078
Other
572
554
645
Rights of use
of assets
(IFRS 16)
(292)
(306)
4
16
–
(6)
(584)
(310)
18
(14)
–
(1)
(891)
Total
(5,530)
(704)
217
197
8
(102)
(5,914)
(744)
341
(198)
27
55
(6,433)
Total
3,680
3,619
3,826
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
The cash impact of purchases of property, plant and equipment in 2021 was as follows:
(in millions of euros)
Increase in property, plant and equipment
Of which non-cash impact related to IFRS 16
Changes in receivables and liabilities on property, plant and equipment
TOTAL
Full year 2021
Full year 2020
(885)
349
(7)
(543)
(795)
296
14
(485)
The depreciation and impairment of property, plant and equipment restated in the statement of cash flows were as follows:
(in millions of euros)
Depreciation of property, plant and equipment
Impairment of property, plant and equipment
TOTAL
Full year 2021
Full year 2020
726
18
744
698
6
704
Note 12: Investments in associates and joint ventures
Investments in associates and joint ventures can be analyzed as follows:
(in millions of euros)
% of interest
Dec. 31, 2020
Dec. 31, 2021
CLOSING VALUE DEC. 31, 2019
Net Income/(loss)
Dividends distribution
Perimeter changes
Translation impacts & others
CLOSING VALUE DEC. 31, 2020
Net Income/(loss)
Dividends distribution
Perimeter changes
Translation impacts & others
CLOSING VALUE DEC. 31, 2021
Delixi
Sub-Group
Uplight
Planon
Fuji
Electrics
Electroshield
Samara
Sunten
Electric
Equipments
Other
Total
50.0%
50.0%
320
73
(18)
–
(8)
367
81
(22)
–
38
464
29.4%
25.0%
–
–
–
–
–
–
(7)
–
398
(1)
390
–
–
–
–
–
–
(1)
–
113
–
112
36.8%
36.8%
141
5
(2)
–
(4)
140
13
(2)
–
–
151
60.0%
60.0%
25.0%
25.0%
–
(15)
–
33
(8)
10
(4)
–
–
1
7
42
4
–
–
(2)
44
2
(2)
–
(6)
38
30
(1)
(2)
3
7
37
–
(3)
–
38
72
533
66
(22)
36
(15)
598
84
(29)
511
70
1,234
In July 2021, Schneider Electric acquired a 29.6% strategic stake in Uplight for a consideration of EUR 378 million. In October 2021,
Schneider Electric subscribed to a EUR 20 million increase in capital in order to finance the acquisition of Agentis by Uplight, leading
to the dilution of Schneider Electric’s stake to 29.4%.
12.1 – Main entities consolidated under the equity method:
Delixi Electric Ltd.
In 2007, Schneider Electric joined Delixi Group to establish a win-win partnership in a joint-venture, Delixi Electric Ltd., aka “Delixi Electric”.
Delixi Electric is a specialist in manufacturing, retail and distribution of low voltage products.
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The key financial indicators for the Delixi Electric subgroup (on a 100% basis) are as follows:
(in millions of euros)
Non-current assets
Current assets
TOTAL ASSETS
Equity
Non-current liabilities
Current liabilities
TOTAL EQUITY AND LIABILITIES
Revenue
Adjusted EBITA
PROFIT FOR THE PERIOD
Dividends paid
Financial Statements
Dec. 31, 2021
Dec. 31, 2020
895
677
1,573
586
168
819
1,573
1,418
201
162
45
690
409
1,099
408
17
675
1,099
1,145
170
145
36
Uplight
Schneider Electric acquired a strategic stake in Uplight as part of its digitization and growth strategy. Uplight offers a comprehensive digital
platform for utility customer engagement and provides software and services to world’s leading electric and gas utilities, mainly in the U.S.,
with the mission of motivating and enabling energy users and providers to transition to cleaner energy ecosystems.
5.
Uplight’s financial results are driven by the rate of growth of new customers and the extension of additional services to existing customers.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
Note 13: Non-current financial assets
Non-current financial assets, primarily comprising investments, are detailed below:
(in millions of euros)
LISTED FINANCIAL ASSETS:
Gold Peak Industries Holding Ltd
Others (Unit gross value lower than
EUR 3 million)
TOTAL LISTED FINANCIAL ASSETS
UNLISTED FINANCIAL ASSETS:
Funds
Foundries
FCPR Aster II (part A, B, C and D)
Sensetime & Stalagnate Fund China
FCPR SEV1
SICAV SESS
FCPI Energy Access Ventures Fund
SICAV Livehoods Fund SIF
Direct investments
Planon
Alpi
Star Charge
Raise Fundation
Schneider Electric Energy Access
Itris Automation
Others (Unit gross value lower than
EUR 3 million)
TOTAL UNLISTED FINANCIAL
ASSETS
PENSIONS ASSETS
OTHER
TOTAL NON-CURRENT FINANCIAL
ASSETS
% of interest
Acquisitions
disposals
Dec. 31, 2021
Fair value
through
P&L
Fair value
through
Equity
4.4%
38.3%
51.0%
100.0%
63.1%
28.6%
15.2%
25.0%
100.0%
1.5%
4.8%
81.1%
100.0%
–
–
–
98
2
–
(5)
–
1
–
–
–
–
1
–
–
97
17
4
118
–
–
–
22
(5)
–
(9)
–
1
(1)
–
–
–
–
–
–
–
8
(5)
–
3
–
–
–
29
–
–
–
–
–
–
–
–
11
–
–
–
–
40
193
–
233
FX &
others
–
13
13
(17)
–
4
–
–
–
–
(113)
(26)
3
–
–
(3)
(6)
(158)
19
30
Dec. 31, 2020
Fair value
Fair value
2
13
15
278
33
44
6
11
14
3
–
–
29
9
5
–
2
434
370
215
2
–
2
146
36
40
20
11
13
3
113
26
15
9
4
3
8
447
146
181
776
(96)
1 034
The fair value of investments quoted in an active market corresponds to the stock price on the balance sheet date.
“Others” include mainly loans to non-consolidated companies, and security deposits.
Note 14: Deferred taxes by Nature
Deferred taxes by type can be analyzed as follows:
(in millions of euros)
Dec. 31, 2021
Dec. 31, 2020
Tax loss carryforwards (net)
Provisions for pensions and other post-retirement benefit obligations (net)
Non-deductible provisions and accruals (net)
Differences between tax and accounting depreciation on tangible assets (net)
Differences between tax and accounting amortization on intangible assets (net)
Differences on working capital (net)
Other deferred tax assets/(liabilities) (net)
TOTAL NET DEFERRED TAX ASSETS/(LIABILITIES)
of which total deferred tax assets
of which total deferred tax liabilities
689
240
515
10
(1,040)
187
222
823
1,820
997
738
371
405
37
(934)
171
279
1,067
1,984
917
Deferred tax assets recorded in respect of tax losses carried forward at December 31, 2021 essentially concern France (EUR 500 million).
These deficits can be carried forward indefinitely, and have been activated using the rate of 25.83%, in accordance with the applicable rate
in the expected consumption horizon of 7 years. Unrecognised deferred tax losses amount EUR 143 million as of December 31, 2021, and
are mainly related to Spain.
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Financial Statements
Note 15: Inventories and work in progress
Inventories and work in progress changed as follows:
(in millions of euros)
COST:
Raw materials
Production work in progress
Semi-finished and finished products
Finished goods
Solution work in progress
INVENTORIES AND WORK IN PROGRESS AT COST
IMPAIRMENT:
Raw materials
Production work in progress
Semi-finished and finished products
Finished goods
Solution work in progress
IMPAIRMENT LOSS
NET:
Raw materials
Production work in progress
Semi-finished and finished products
Finished goods
Solution work in progress
INVENTORIES AND WORK IN PROGRESS, NET
Note 16: Trade and other operating receivables
(in millions of euros)
Accounts receivable
Unbilled revenue
Notes receivable
Advances to suppliers
Accounts receivable at cost
Impairment
ACCOUNTS RECEIVABLE, NET
On time
Less than one month past due
One to two months past due
Two to three months past due
Three to four months past due
More than four months past due
5.
Dec. 31, 2021
Dec. 31, 2020
1,832
295
1,323
696
199
4,345
(187)
(9)
(165)
(8)
(5)
(374)
1,645
286
1,158
688
194
3,971
1,240
235
1,085
516
167
3,243
(191)
(6)
(151)
(8)
(4)
(360)
1,049
229
934
508
163
2,883
Dec. 31, 2021
Dec. 31, 2020
5,141
1,500
510
176
7,327
(498)
6,829
6,091
324
163
79
100
72
4,482
1,231
308
115
6,136
(510)
5,626
4,906
389
150
85
46
50
Accounts receivable result from sales to end-customers, who are widely spread both geographically and economically. Consequently,
the Group believes that there is no significant concentration of credit risk.
In addition, the Group takes out substantial credit insurance and uses other types of guarantees to limit the risk of losses on trade
accounts receivable.
Changes in provisions for impairment of short and long-term trade accounts receivable were as follows:
(in millions of euros)
Provisions for impairment on January 1
Additions
Utilizations
Reversal of surplus provisions
Translation adjustments
Changes in scope of consolidation and other
PROVISIONS FOR IMPAIRMENT ON DECEMBER 31
Full year 2021
Full year 2020
(510)
(82)
30
67
(25)
22
(498)
(459)
(141)
91
51
37
(89)
(510)
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
The contracts assets and liabilities, respectively reported within the “Trade and other operating receivables” and “Trade and other operating
payables”, are as follows:
(in millions of euros)
Unbilled revenue (contract assets)
Contract liabilities
NET CONTRACT ASSETS
Note 17: Other receivables and prepaid expenses
(in millions of euros)
Other receivables
Other tax receivables
Derivative instruments
Prepaid expenses
OTHER RECEIVABLES AND PREPAID EXPENSES
Note 18: Cash and cash equivalents
(in millions of euros)
Marketable securities
Negotiable debt securities and short-term deposits
Cash
Total cash and cash equivalents
Bank overdrafts
NET CASH AND CASH EQUIVALENTS
Dec. 31, 2021
Dec. 31, 2020
1,500
(1,570)
(70)
1,231
(1,193)
38
Dec. 31, 2021
Dec. 31, 2020
550
1,227
48
173
1,998
632
1,198
107
157
2,094
Dec. 31, 2021
Dec. 31, 2020
551
438
1,633
2,622
(159)
2,463
1,942
2,275
2,678
6,895
(133)
6,762
Non-recourse factorings of trade receivables were realized in 2021 for a total amount of EUR 50 million, compared with EUR 100 million in 2020.
Note 19: Shareholder’s equity
19.1 – Capital
Share capital
The company’s share capital at December 31, 2021 amounted to EUR 2,276,133,768 represented by 569,033,442 shares with a par value
of EUR 4, all fully paid up.
At December 31, 2021, a total of 595,320,658 voting rights were attached to the 569,033,442 issued shares. Schneider Electric’s capital
management strategy is designed to:
• ensure Group liquidity;
• optimize its financial structure;
• optimize the weighted average cost of capital.
The strategy must also ensure the Group has access to different capital markets under the best possible conditions. Factors taken into
account for decision-making purposes include objectives expressed in terms of earnings per share, ratings or balance sheet stability.
Finally, decisions may be implemented depending on specific market conditions.
Changes in share capital and cumulative number of shares
Changes in share capital since December 31, 2019 were as follows:
(in number of shares and in euros)
CAPITAL AT DEC. 31, 2019
Cancellation of own shares*
Employee share issue
CAPITAL AT DEC. 31, 2020
Cancellation of own shares
Employee share issue
CAPITAL AT DEC. 31, 2021
* Cancellation of 15 million treasury shares on May 31, 2020
Cumulative
number of shares
Share capital
582,068,555 2,328,274,220
(15,000,000)
–
(60,000,000)
–
567,068,555 2,268,274,220
–
1,964,887
–
7,859,548
569,033,442
2,276,133,768
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
On May 31, 2020, the Group decided to cancel 15 million of treasury shares, decreasing the share premium account by EUR 929 million.
On November 24, 2020, the Group issued a sustainability-linked convertible bond (convertible into or exchangeable for a new or existing
shares (OCEANEs)), with a nominal amount of EUR 650 million. This zero-coupon bond of maturity date in 2026 offers investors a premium
(0.5% of nominal amount) in case the company underperforms sustainability objectives. The equity component of this convertible bonds
has been valued at EUR 43 million and has been recognised in “Additional paid-in capital”.
In 2021, the share premium account increased by EUR 208 million following the increases in capital.
19.2 – Earnings per share
(in thousands of shares and in euros per share)
Issued shares (Net of treasury shares and own shares)
Performance shares
Bonds convertible into shares
AVERAGE WEIGHTED NUMBER OF SHARES
Earnings per share before tax
EARNINGS PER SHARE
19.3 – Dividends paid and proposed
Full Year 2021
Full Year 2020
Basic
Diluted
Basic
Diluted
556,432
–
–
556,432
7.47
5.76
556,432
4,566
3,684
564,682
7.36
5.67
553,767
–
–
553,767
5.07
3.84
553,767
135
3,684
557,586
5.04
3.81
5.
In 2021, the Group paid out the 2020 dividend of EUR 2.60 per share, for a total of EUR 1,447 million.
At the Shareholders’ Meeting of May 5, 2022, shareholders will be asked to approve a dividend of EUR 2.90 per share for fiscal year 2021.
At December 31, 2021 Schneider-Electric SE had distributable reserves in an amount of EUR 2,856 million (versus EUR 4,126 million at the
previous year-end), not including profit for the year.
19.4 – Share-based payments
Current stock grant plans
The Board of Directors of Schneider Electric SE and later the Management Board have set up performance shares plans for senior
executives and certain employees of the Group. The main features of these plans were as follows at December 31, 2021:
Plan no.
Plan 30
Plan 31
Plan 31 bis
Plan 32
Plan 33
Plan 34
Plan 35
Plan 36
Plan 37
Plan 37 bis
Plan 38
Plan 39
Plan 39 bis
Plan 39 ter
TOTAL
Date of the
Board Meeting
03/26/2018
03/26/2018
10/24/2018
03/26/2019
03/26/2019
07/24/2019
10/23/2019
03/24/2020
03/24/2020
10/21/2020
03/25/2021
03/25/2021
07/29/2021
10/26/2021
Vesting date
03/26/2021
03/26/2021
10/24/2021
03/28/2022
03/28/2022
07/25/2022
10/24/2022
03/24/2023
03/24/2023
10/23/2023
03/25/2024
03/25/2024
07/29/2024
10/26/2024
End of lock-up
period
Number of shares
initially granted
Grants cancelled
because
objectives not met
03/26/2022
03/26/2021
10/24/2021
03/28/2023
03/29/2022
07/26/2022
10/25/2022
03/24/2024
03/27/2023
10/24/2023
03/25/2025
03/25/2024
07/29/2024
10/26/2024
25,800
2,318,140
28,000
25,800
2,313,650
87,110
17,450
18,000
2,095,740
103,051
11,371
1,463,997
48,720
33,082
8,589,911
2,808
281,629
3,313
4,983
224,198
6,390
–
–
98,950
4,300
–
14,873
380
–
641,824
Rules governing the performance shares plans are as follows:
•
•
•
to receive the shares, the grantee must generally be an employee or corporate officer of the Group. Vesting is also conditional on the
achievement of performance criteria;
the vesting period is three to four years;
the lock-up period is zero or one year.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
Outstanding shares
In respect of subscription vesting conditions for current performance shares plans, Schneider Electric SE has not created shares in 2021
and used existing treasury shares.
Changes in the number of outstanding number of shares in 2021 were as follows:
Plan no.
Plan 30
Plan 31
Plan 31 bis
Plan 32
Plan 33
Plan 34
Plan 35
Plan 36
Plan 37
Plan 37 bis
Plan 38
Plan 39
Plan 39 bis
Plan 39 ter
TOTAL
Number of
performance
shares
at Dec. 31, 2020
Number of
shares granted
or to be granted
Number of
shares cancelled
in 2020
Number of
performance
shares
at Dec. 31, 2021
23,417
2,086,639
28,000
20,817
2,185,422
84,080
17,450
18,000
2,068,990
102,861
–
–
–
–
(22,992)
(2,036,511)
(24,687)
–
(1,800)
–
–
–
(800)
–
11,371
1,463,997
48,720
33,082
(425)
(50,128)
(3,313)
–
(94,170)
(3,370)
–
–
(71,400)
(4,110)
–
(14,873)
(380)
–
–
–
–
20,817
2,089,452
80,710
17,450
18,000
1,996,790
98,751
11,371
1,449,124
48,340
33,082
6,635,676
(529,620)
(242,169)
5,863,887
For performance shares to vest, the grantee must be an employee or corporate officer of the Group. In addition, vesting of some
performance shares is conditional on the achievement of annual objectives based on financial indicators.
Valuation of performance shares
In accordance with the accounting policies described in Note 1.20, the performance shares plans have been valued based on an average
estimated life of 3 to 5 years using the following assumptions:
• a pay-out rate of between 2.2% and 3.5%;
• a discount rate of between (0.8)% and 1.0%, corresponding to a risk-free rate over the life of the plans (source: Bloomberg).
Based on these assumptions, the expense recorded under “Selling, general and administrative expenses” breaks down as follows:
(in millions of euros)
Plans 2016
Plans 2017
Plans 2018
Plans 2019
Plans 2020
Plans 2021
TOTAL
Full year 2021
Full year 2020
–
–
6
40
37
35
118
11
10
41
43
28
–
133
In 2021, the Group also recorded an additional expense of EUR 43 million, mostly relating to AVEVA subgroup’s performance shares plan
for EUR 36 million, bringing the total Group expense to EUR 161 million.
Worldwide Employee Stock Purchase Plan
Every year, Schneider Electric gives its employees the opportunity to become group shareholders thanks to employee share issues.
Employees in countries that meet legal and fiscal requirements have been proposed the classic plan.
Under the classic plan, employees may purchase Schneider Electric shares at a 15% discount to the price quoted for the shares on the stock
market. Employees must then hold their shares for five years, except in certain cases provided for by law. The share-based payment expense
recorded in accordance with IFRS 2 is measured by reference to the fair value of the discount on the locked-up shares. The lockup cost is
determined on the basis of a two-step strategy that involves first selling the locked-up shares on the forward market and then purchasing
the same number of shares on the spot market (i.e., shares that may be sold at any time) using a bullet loan.
This strategy is designed to reflect the cost the employee would incur during the lock-up period to avoid the risk of carrying the shares
subscribed under the classic plan. The borrowing cost corresponds to the cost of borrowing for the employees concerned, as they are the
sole potential buyers in this market. It is based on the average interest rate charged by banks for an ordinary, non-revolving personal loan
with a maximum maturity of five years granted to a natural person with an average credit rating.
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Financial Statements
Year 2021
The table below summarizes the main characteristics of the 2021 plan, the amounts subscribed, the valuation assumptions and the
plan’s cost:
(in millions of euros)
Plan characteristics:
Maturity (years)
Reference price (euros)
Subscription price (euros)
Discount
Amount subscribed by employees
Total amount subscribed
Total number of shares subscribed (million of shares)
Valuation assumptions:
Interest rate available to market participant (bullet loan)*
Five-year risk-free interest rate (euro zone)
Annual interest rate (repo)
Value of discount (a)
Value of the lock-up period for market participant (b)
TOTAL EXPENSE FOR THE GROUP (a) - (b)
Sensitivity:
decrease in interest rate for market participant**
Full Year 2021
%
Value
5
129.64
110.19
216.5
216.5
2
–
–
–
38.2
44.6
–
6.9
15.0%
2.4 %
0,0%
1.0%
15.0%
26.4%
(0.5)%
5.
* Average interest rate charged on an ordinary, non-revolving personal loan, with a five-year maturity to an individual with an average credit rating.
** A decline in the interest rate for market participants reduces the lock-up cost and increases the expense booked by the issuer.
In 2021, Schneider Electric gave its employees the opportunity to purchase shares at a price of EUR 110.19 per share, as part of its
commitment to employee share ownership, on April 19, 2021. This represented a 15% discount to the reference price of EUR 129.64 calculated
as the average opening price quoted for the share during the 20 days preceding the Management Board’s decision to launch the employee
share issue.
Altogether, 2.0 million shares were subscribed, increasing the Company’s capital by EUR 216 million as of July 6, 2021. Due to significant
changes in valuation assumptions, specifically the interest rate available to market participant, the value of the lock-up cost is higher than
the discount cost since 2012. Therefore, the Group did not recognize any cost related to the transaction.
Year 2020
On April 20, 2020, the Management Board took the exceptional decision to cancel this year employee share issues as part of its strategy
to deal with the impacts of the COVID-19 pandemic.
19.5 – Schneider Electric SE shares
At December 31, 2021, the Group held 12,456,882 Schneider Electric shares in treasury stock, which have been recorded as a deduction
from retained earnings.
The Group has repurchased 1,809,054 shares for a total amount of EUR 262 million in 2021.
19.6 – Income tax recorded in equity
Total income tax recorded in Equity amounts to EUR 130 million as of December 31, 2021 and can be analyzed as follows:
(in millions of euros)
Dec. 31, 2021
Dec. 31, 2020
Change in tax
Cash-Flow hedges
Available-for-sale financial assets
Actuarial gains/(losses) on defined benefits obligations
Other
TOTAL
19.7 – Non-controlling interests
23
(15)
125
(3)
130
30
(6)
230
(3)
251
(7)
(9)
(105)
–
(121)
The main contributor is AVEVA subgroup’s, for which 41% of the shares correspond to non-controlling interests for the Group. AVEVA,
which remains a listed company, is publishing its financial statements on regular basis.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
Note 20: Pensions and other post-employment benefit obligations
The Group has set up various post-employment benefit plans for employees covering pensions, termination benefits, healthcare,
life insurance and other benefits, as well as long-term benefit plans for active employees.
Defined Benefit Pension Plans
The Group’s main Defined Benefit pension plans are located in the United Kingdom (UK) and the United States (US). They respectively
represent 62% (2020: 64%) and 22% (2020: 21%) of the Group’s total Defined Benefit Obligations (DBO) on pensions. The majority of
benefit obligations under these plans, which represent 93% of the Group’s total commitment at December 31, 2021, are partially or fully
funded through payments to external funds. These funds are never invested in Group assets.
United Kingdom
The Group companies operate several Defined Benefit pension plans in the UK. The main one is related to the Invensys Pension Scheme.
Pensions payable to employees depend on average final salary and length of service within the Group. These plans are registered schemes
under UK tax law and managed by independent Boards of Trustees. They are closed to new entrants, and for most of them, the vested
rights were frozen as they have been replaced by Defined Contributions plans.
These plans are funded by employer contributions, which are negotiated every three years based on plan valuations carried out by
independent actuaries, so that the long-term financing services are ensured.
In relation to risk management and asset allocation, the Board of Trustees’ aims of each plan are to ensure that it can meet its obligations
to the plan’s beneficiaries both in the short and long-term. The Board of Trustees is responsible for the plan’s long-term investment strategy
and defines and manages long-term investment strategies to reduce risks, including interest rate risks and longevity risks. A certain
proportion of assets hedges the liability valuation change resulting from the interest rates evolution. Those assets are primarily invested in
fixed income investments, particularly intermediate and longer-term instruments.
Following the agreement reached with the Trustee of the Invensys Pension Scheme on February 2014, Schneider Electric SE guaranteed all
obligations of the Invensys subsidiaries which participate in the scheme, up to a maximum amount of GBP 1.75 billion. As of December 31,
2021, plan assets exceed the value of obligations subject to this guarantee and thus this guarantee cannot be called.
Schneider UK pension plans contain provisions of pension called Guaranteed Minimum Pension (“GMP”). GMPs were accrued for
individuals who subscribed to the State Second Pension prior to April 6, 1997. Historically, there was an inequality in the benefits between
male and female members concerning GMP.
A High Court case concluded on October 26, 2018, confirmed that all UK pension plans must equalize “GMPs” between men and women.
In the light of these events and new information, the Group updated the related assumptions, leading to a net experience adjustment in
“Other Comprehensive Income” of EUR 56 million. Following a further High Court ruling in November 2020, an additional net experience
adjustment of EUR 7 million was recognized in other comprehensive income in 2020.
United States
The United States’ subsidiaries operate several Defined Benefit pension plans. These plans are closed to new entrants, frozen to future
accruals and have been replaced by Defined Contributions plans. Pensions payable to employees depend on the average final salary
and the length of service within the Group.
Each year, the Group companies contribute a certain amount to the Defined Benefit pension plans. This amount is determined actuarially
and is comprised of service costs, administrative expenses and payments toward any existing deficits. Since the plans are closed and
frozen, there is generally no service cost component.
The companies delegate various responsibilities to Pension Committees. These committees define and manage long-term investment
strategies to reduce risks, including interest rate risks and longevity risks. A certain proportion of assets hedges the liability valuation
change, resulting from the interest rates evolution. Those assets are primarily invested in fixed income investments, particularly intermediate
and longer-term instruments.
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
Assumptions
Actuarial valuations are generally performed each year. The assumptions used vary according to the economic conditions prevailing in the
country concerned, as follows:
Discount rate
Rate of compensation increases
2.12%
2.60%
1.57%
2.52%
2.05%
3.64%
1.40%
3.46%
2.77%
n.a.
2.42%
n.a
Group weighted average rate
Of which United Kingdom
Of which United States
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2021
Dec. 31, 2020
The discount rate is determined based on the interest rate for investment-grade (AA) corporate bonds or, if a liquid market does not exist,
government bonds with a maturity that matches the duration of the benefit obligation. In the United States, the average discount rate is
determined based on a yield curve for AA and AAA investment-grade corporate bonds.
In the Euro zone, the discount rate currently stands at 0.80%.
20.1 – Changes in provisions for pensions and other post-employment benefit obligations
Annual changes in obligations, the market value of plan assets and the corresponding assets and provisions recognized in the financial
statements can be analyzed as follows:
5.
(in millions of euros)
Dec 31, 2019
Service cost
Past service cost
Curtailments and settlements
Interest cost
Interest income
Net impact in P&L, (expense)/profit
of which UK
of which US
Benefits paid
Plan participants’ contributions
Employer contributions
Changes in the scope of consolidation
Actuarial gains/(losses) recognized in equity
Translation adjustment
Other changes
Dec. 31, 2020
of which UK
of which US
Service cost
Past service cost
Curtailments and settlements
Interest cost
Interest income
Net impact in P&L, (expense)/profit
of which UK
of which US
Benefits paid
Plan participants’ contributions
Employer contributions
Changes in the scope of consolidation
Actuarial gains/(losses) recognized in equity
Translation adjustment
Other changes
Dec. 31, 2021
of which UK
of which US
Defined benefit
obligations
Plan assets
Asset ceiling
Net Liability
(10,065)
8,633
(123)
(1,555)
(54)
–
1
(204)
–
(257)
(119)
(69)
554
(6)
–
(8)
(796)
562
–
(10,016)
(6,370)
(2,140)
(66)
2
25
(159)
–
(198)
(94)
(52)
532
(6)
–
9
701
(631)
(77)
(9,686)
(6,017)
(2,170)
–
–
(1)
–
159
158
118
38
(500)
6
106
–
621
(503)
–
8,521
6,459
1,535
–
–
(1)
–
121
120
86
30
(478)
6
136
–
(117)
606
77
8,871
6,524
1,692
–
–
–
(2)
–
(2)
(2)
–
–
–
–
–
52
6
–
(67)
(67)
–
–
–
–
(1)
–
(1)
(1)
–
–
–
–
–
(133)
(9)
–
(210)
(184)
–
(54)
–
–
(206)
159
(101)
(3)
(31)
54
–
106
(8)
(123)
65
–
(1,562)
22
(605)
(66)
2
24
(160)
121
(79)
(9)
(22)
54
–
136
9
451
(34)
–
(1,025)
323
(478)
The Group defined benefit obligations of EUR 9.686 million (2020: EUR 10.016 million) are broken down as EUR 9.470 million
(2020: EUR 9.802 million) for post-employment benefits and EUR 216 million (2020: EUR 214 million) for other post-employment
and long-term benefits.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
The total present value of Defined Benefit Obligations breaks down as follows between wholly or partly funded plans and wholly
unfunded plans:
(in millions of euros)
Dec. 31, 2021
Dec. 31, 2020
Present value of wholly or partly funded benefit obligation
Fair value on plan assets
Effect of assets ceiling
Net position of wholly or partly funded benefit obligation
Present value of wholly or partly unfunded benefit obligation
NET LIABILITY FROM FUNDED AND UNFUNDED PLANS
Balance Sheet impact:
surplus of plans recognized as assets*
provisions recognized as liabilities
(9,052)
8,871
(210)
(391)
(634)
(1,025)
370
(1,395)
(9,356)
8,521
(66)
(901)
(661)
(1,562)
146
(1,708)
* The surplus of plans recognized as assets represents the assets in excess of the liabilities, generally assumed to be recoverable, and after applying any asset ceiling
Changes in gross items recognized in equity were as follows:
(in millions of euros)
Full year 2021
Full year 2020
Actuarial (gains)/losses on Defined Benefit Obligations arising from demographic assumptions
Actuarial (gains)/losses on Defined Benefit Obligations arising from financial assumptions
Actuarial (gains)/losses on Defined Benefit Obligations from experience effects
Actuarial (gains)/losses on plan assets
Effect of asset ceiling
TOTAL RECOGNIZED IN EQUITY DURING THE PERIOD
of which UK
of which US
Plans asset allocation:
(in millions of euros)
Equity
Bonds
Others
TOTAL
(121)
(522)
(58)
117
133
(451)
259
116
(6)
853
(51)
(621)
(52)
123
(111)
(5)
Dec. 31, 2021
Dec. 31, 2020
6%
80%
14%
100%
9%
80%
11%
100%
20.2 – Sensitivity analysis
The effect of a ± 0.5% change in the discount rate on the 2021 Defined Benefit Obligations is as follows:
(in millions of euros)
DBO Impact
+0.5%
(591)
-0.5%
660
+0.5%
(385)
-0.5%
431
+0.5%
(117)
-0.5%
129
+0.5%
(89)
-0.5%
100
Total
United Kingdom
United States
Rest of the World
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
Note 21: Provisions for contingencies and charges
(in millions of euros)
Dec. 31, 2019
of which long-term portion
Additions
Utilizations
Reversals of surplus provisions
Translation adjustments
Changes in the scope of
consolidation and other
Dec. 31, 2020
of which long-term portion
Additions
Utilizations
Reversals of surplus provisions
Translation adjustments
Changes in the scope of
consolidation and other
Dec. 31, 2021
of which long-term portion
Economic risks
Customer risks
Products risks
Environmental
risks
Restructuring
Other risks
Provisions
292
155
35
(43)
(10)
(19)
20
275
161
52
(48)
(6)
13
(16)
270
169
76
50
33
(26)
–
(12)
83
154
103
12
(21)
–
9
(7)
147
104
499
139
322
(172)
(11)
(24)
16
630
137
206
(150)
(39)
31
(3)
675
150
293
256
8
(17)
(3)
(22)
–
259
226
8
(13)
–
23
73
350
315
151
11
324
(208)
(2)
(7)
(8)
250
15
130
(194)
(26)
5
(5)
160
12
423
329
128
(132)
(7)
(30)
(20)
362
288
126
(100)
(15)
21
28
422
341
1,734
940
850
(598)
(33)
(114)
91
1,930
930
534
(526)
(86)
102
70
2,024
1,091
5.
Provisions are recognized following the principles described in Note 1.21.
Reconciliation with cash flow statement:
(in millions of euros)
Full year 2021
Full year 2020
Increase of provision
Utilization of provision
Reversal of surplus provision
Provision variance including tax provisions but excluding employee benefit obligation
Employee benefit obligation net variance contribution to plan assets
INCREASE/(DECREASE) IN PROVISIONS IN CASH-FLOW STATEMENT
534
(526)
(86)
(78)
24
(54)
850
(598)
(33)
219
47
266
Note 22: Total current and non-current financial liabilities
The breakdown of net debt is as follows:
millions of euros)
Bonds
Other bank borrowings
Employee profit sharing
Short-term portion of bonds
Short-term portion of long-term debt
NON-CURRENT FINANCIAL LIABILITIES
Commercial paper
Accrued interest
Other short-term borrowings
Drawdown of funds from lines of credit
Bank overdrafts
Short-term portion of convertible and non-convertible bonds
Short-term portion of long-term debt
SHORT-TERM DEBT
TOTAL CURRENT AND NON-CURRENT FINANCIAL LIABILITIES
CASH AND CASH EQUIVALENTS
NET DEBT
Dec. 31, 2021
Dec. 31, 2020
8,234
51
–
(706)
(25)
7,554
950
38
317
–
159
706
25
2,195
9,749
(2,622)
7,127
8,773
32
–
(600)
(9)
8,196
1,302
43
173
–
133
600
9
2,260
10,456
(6,895)
3,561
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
22.1 – Breakdown by maturity
(in millions of euros)
2021
2022
2023
2024
2025
2026
2027
2028 and beyond
TOTAL
22.2 – Breakdown by currency
(in millions of euros)
Euro
US Dollar
Brazilian Real
Indian Rupee
Algerian Dinar
Other
TOTAL
22.3 – Bonds
Dec. 31, 2021
Dec. 31, 2020
Nominal
Interests
Nominal
–
2,195
1,325
996
1,045
1,397
1,240
1,551
9,749
–
78
58
49
41
35
19
2
2,260
673
1,295
996
1,045
1,396
1,240
1,551
282
10,456
Dec. 31, 2021
Dec. 31, 2020
8,803
737
13
84
22
90
9,749
9,537
698
13
112
23
73
10,456
(in millions of euros)
Dec. 31, 2021
Dec. 31, 2020
Interest rate
Maturity
Schneider Electric SE 2021
Schneider Electric SE 2022
Schneider Electric SE 2023
Schneider Electric SE 2023
Schneider Electric SE 2024
Schneider Electric SE 2025
Schneider Electric SE 2025
Schneider Electric SE 2026 (OCEANEs)
Schneider Electric SE 2026
Schneider Electric SE 2027
Schneider Electric SE 2027
Schneider Electric SE 2028
Schneider Electric SE 2029
–
706
499
798
997
746
300
651
746
497
744
757
793
600
651
498
797
996
745
300
651
745
496
743
758
793
2.500% fixed
2.950% fixed
0.000% fixed
1.500% fixed
0.250% fixed
0.875% fixed
1.841% fixed
0.000% fixed
0.875% fixed
1.000% fixed
1.375% fixed
1.500% fixed
0.250% fixed
September 2021
September 2022
June 2023
September 2023
September 2024
March 2025
October 2025
June 2026
December 2026
April 2027
June 2027
January 2028
March 2029
TOTAL
8,234
8,773
Schneider Electric SE has issued bonds on different markets:
•
in the United States, through a private placement offering following SEC 144A rule, for USD 800 million worth of bonds issued in September
2012, at a rate of 2.95%, due in September 2022;
• as part of its Euro Medium Term Notes (EMTN) program, bonds traded on the Luxembourg stock exchange. Issues that had not yet matured
as of December 31, 2021 are as follow:
− EUR 500 million worth of bonds issued in June 2020, at a rate of 0.0%, maturing in June 2023;
− EUR 800 million worth of bonds issued in September 2015 at a rate of 1.50%, maturing in September 2023;
− EUR 800 million worth of bonds issued in September 2016, at a rate of 0.25%, maturing in September 2024;
− EUR 200 million worth of bonds issued in July 2019, at a rate of 0.25%, maturing in September 2024;
− EUR 750 million worth of bonds issued in March 2015, at a rate of 0.875%, maturing in March 2025;
− EUR 200 million and EUR 100 million worth of Climate bonds issued successively in October and December 2015, at a rate of
− 1.841%, maturing in October 2025;
− EUR 750 million worth of bonds issued in December 2017, at a rate of 0.875%, maturing in December 2026;
− EUR 500 million worth of bonds issued in April 2020, at a rate of 1.00%, maturing in April 2027;
− EUR 750 million worth of bonds issued in June 2018, at a rate of 1.375%, maturing in June 2027;
− EUR 500 million worth of bonds issued in January 2019 and EUR 250 million worth of bonds issued in May 2019, at a rate of 1.50%,
maturing in January 2028;
− EUR 800 million worth of bonds issued in March 2020, at a rate of 0.25%, maturing in March 2029.
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
In addition, the Group has issued a bond that is convertible into or exchangeable for a new or existing shares (OCEANEs) for EUR 650 million
at a rate of 0.00%, maturing in June 2026. The OCEANE has a debt component, assessed on inception date on the basis of the market
interest rate applied to an equivalent non-convertible bond, is recognized in non-current financial debts and an optional component
recognized in equity. At end of December 2021, the debt component recorded amounts to EUR 651 million and the optional component
to EUR 42 million.
The initial conversion and/or exchange ratio of the Bonds is one share per Bond with a nominal value set at EUR 176.44. According to
Sustainability-Linked Financing Framework, if the average sustainability performance score (calculated as the arithmetic average of the
scores of the three key performance indicators) does not reach a certain level by December 31, 2025, the Group will pay an amount equal
to 0.50% of the face value.
The three key performance indicators from the 11 new Schneider Sustainability Impact (SSI) 2021-2025 indicators are the following:
• Climate: Deliver 800 megatons of saved and avoided CO2 emissions to our customers;
• Equality: Increase gender diversity, from hiring to front-line managers and leadership teams (50/40/30);
• Generation: Train 1 million underprivileged people in energy management.
The detailed rating methodology and approach are presented in the Group’s Sustainability-Linked Financing Framework.
For all those transactions, issue premium and issue costs are amortized per the effective interest rate method.
5.
22.4 – Reconciliation with cash flow statement
(in millions of euros)
Bonds
Bank overdrafts and other borrowings
Dec. 31, 2020
8,773
1,683
TOTAL CURRENT AND NON-CURRENT FINANCIAL LIABILITIES
10,456
Non-cash variations
Cash
variations
Scope
impacts
Forex
and others
Dec. 31, 2021
(600)
(8)
(608)
–
3
3
61
(163)
(102)
8,234
1,515
9,749
22.5 – Other information
As of December 31, 2021, the Group had confirmed credit lines of EUR 2,550 million all maturing after December 2022, all unused.
Loan agreements and committed credit lines do not include any financial covenants or credit rating triggers in case of downgrading
in the company’s long-term debt.
Note 23: Classification of financial instruments
The Group uses financial instruments to manage its exposure to fluctuations in interest rates, exchange rates and metal prices.
Financial assets and liabilities can be classified at the fair value following the hierarchy levels below:
1. Level 1: market value (non-adjusted) on active markets, for similar assets and liabilities, which the company can obtain on a given
valuation date;
2. Level 2: data other than the market rate available for level 1, which are directly or indirectly observable on the market;
3. Level 3: data on the asset or liability that are not observable on the market.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
23.1 – Balance sheet exposure and fair value hierarchy
(in millions of euros)
ASSETS:
Listed financial assets
Venture capital (FCPR)/mutual funds (SICAV)
Other unlisted financial assets
Other non-current financial assets
TOTAL NON-CURRENT ASSETS
Trade accounts receivables
Current financial assets
Marketable securities
Negotiable debt securities and short-term deposits
Cash
Derivative instruments – foreign currencies
Derivative instruments – interest rates
Derivative instruments – commodities
Derivative instruments – shares
TOTAL CURRENT ASSETS
LIABILITIES:
Long-term portions of non-convertible bonds*
Long-term portions of convertible bonds*
Other long-term debt
TOTAL NON-CURRENT LIABILITIES
Short-term portion of bonds*
Short-term debt
Trade accounts payable
Other
Derivative instruments – foreign currencies
Derivative instruments – interest rates
Derivative instruments – commodities
Derivative instruments – shares
TOTAL CURRENT LIABILITIES
Dec. 31, 2021
Carrying
amount
Fair value
through P&L
Fair value
through equity
Financial
assets/
liabilities
measured at
amortized cost
Fair
value
Fair value
hierarchy
15
111
323
585
1,034
6,829
4
551
438
1,633
41
–
7
–
9,503
(6,877)
(651)
(26)
(7,554)
(706)
(1,489)
(5,715)
(63)
(104)
–
–
–
(8,077)
–
111
79
–
190
–
–
551
438
1,633
40
–
–
–
2,662
–
–
–
–
–
–
–
–
(55)
–
–
–
(55)
15
–
244
–
259
–
4
–
–
–
1
7
–
12
–
–
–
–
–
–
–
–
(49)
–
–
–
(49)
–
–
–
585
585
6,829
–
–
–
–
–
–
–
–
6,829
(6,877)
(651)
(26)
(7,554)
(706)
(1,489)
(5,715)
(63)
–
–
–
–
(7,973)
15
111
323
585
1,034
6,829
4
551
438
1,633
41
–
7
–
9,503
(7,126)
(636)
(26)
(7,788)
(719)
(1,489)
(5,715)
(63)
(104)
–
–
–
(8,090)
Level 1
Level 3
Level 3
Level 2
Level 2
Level 2
Level 1
Level 2
Level 2
Level 2
Level 2
Level 2
Level 2
Level 1
Level 2
Level 2
Level 1
Level 2
Level 2
Level 2
Level 2
Level 2
Level 2
Level 2
* The majority of financial instruments listed in the balance sheet have a fair value close to their book value, except for bonds, for which the amortized cost in the balance
sheet represents EUR 8,234 million compared to EUR 8,481 million at fair value.
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
(in millions of euros)
ASSETS:
Listed financial assets
Venture capital (FCPR)/mutual funds (SICAV)
Other unlisted financial assets
Other non-current financial assets
TOTAL NON-CURRENT ASSETS
Trade accounts receivables
Current financial assets
Marketable securities
Negotiable debt securities and short-term deposits
Cash
Derivative instruments – foreign currencies
Derivative instruments – interest rates
Derivative instruments – commodities
Derivative instruments – shares
TOTAL CURRENT ASSETS
LIABILITIES:
Long-term portions of non-convertible bonds*
Long-term portions of convertible bonds*
Other long-term debt
TOTAL NON-CURRENT LIABILITIES
Short-term portion of bonds*
Short-term debt
Trade accounts payable
Other
Derivative instruments – foreign currencies
Derivative instruments – interest rates
Derivative instruments – commodities
Derivative instruments – shares
TOTAL CURRENT LIABILITIES
Dec. 31, 2020
Carrying
amount
Fair value
through P&L
Fair value
through equity
Financial
assets/liabilities
measured at
amortized cost
2
84
363
327
776
5,626
18
1,942
2,275
2,678
84
–
23
1
12,647
(7,522)
(651)
(23)
(8,196)
(600)
(1,660)
(4,664)
(54)
(19)
–
–
–
(6,997)
–
84
–
–
84
–
18
1,942
2,275
2,678
60
–
–
–
6,973
–
–
–
–
–
–
–
–
(19)
–
–
–
(19)
2
–
363
–
365
–
–
–
–
–
24
–
23
1
48
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
327
327
5,626
–
–
–
–
–
–
–
–
5,626
(7,522)
(651)
(23)
(8,196)
(600)
(1,660)
(4,664)
(54)
–
–
–
–
(6,978)
Fair
value
2
84
363
327
776
5,626
18
1,942
2,275
2,678
84
–
23
1
12,647
(7,956)
(652)
(23)
(8,631)
(611)
(1,660)
(4,664)
(54)
(19)
–
–
–
(7,008)
Fair value
hierarchy
Level 1
Level 3
Level 3
Level 2
Level 2
Level 2
Level 1
Level 2
Level 2
Level 2
Level 2
Level 2
Level 2
Level 1
Level 2
Level 2
Level 1
Level 2
Level 2
Level 2
Level 2
Level 2
Level 2
Level 2
5.
* The majority of financial instruments listed in the balance sheet have a fair value close to their book value, except for bonds, for which the amortized cost in the balance
sheet represents EUR 8,773 million compared to EUR 9,219 million at fair value.
23.2 – Derivative instruments
(in millions of euros)
Forwards contracts
Forwards contracts
Forwards contracts
Forwards contracts
Forwards contracts
Forwards contracts
Cross currency swaps
Cross currency swaps
TOTAL FOREIGN CHANGE
DERIVATIVES
Forwards contracts
Commodities derivatives
Options
Shares derivatives
TOTAL
Accounting
qualification
CFH
CFH
CFH
FVH
NIH
Trading
CFH
NIH
Maturity
< 1 year
< 2 years
> 2 years
< 1 year
< 1 year
< 1 year
< 1 year
< 2 years
CFH
< 1 year
CFH
< 1 year
Dec. 31, 2021
Nominal
sales
Nominal
purchases
Fair Value
Carrying
amount
in assets
Carrying
amount
in liabilities
Of which
carrying
amounts
in OCI
393
55
3
1,005
410
456
88
750
(305)
(24)
(3)
(539)
–
(2,402)
(39)
–
3,160
(3,312)
–
–
–
–
(400)
(400)
–
–
2
–
–
(22)
(10)
11
(3)
(41)
(63)
7
7
–
–
3,160
(3,712)
(56)
12
1
–
12
–
14
2
–
41
7
7
–
–
48
(10)
(1)
–
(34)
(10)
(3)
(5)
(41)
(104)
–
–
–
–
–
–
–
–
(10)
–
1
(39)
(48)
7
7
–
–
(104)
(41)
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
(in millions of euros)
Forwards contracts
Forwards contracts
Forwards contracts
Forwards contracts
Forwards contracts
Forwards contracts
Cross currency swaps
TOTAL FX DERIVATIVES
Forwards contracts
Commodities derivatives
Options
Shares derivatives
TOTAL
Accounting
qualification
CFH
CFH
CFH
FVH
NIH
Trading
CFH
Maturity
< 1 year
< 2 years
> 2 years
< 1 year
< 1 year
< 1 year
< 2 years
CFH
< 1 year
CFH
< 1 year
23.3 – Foreign currency hedges
Dec. 31, 2020
Nominal
sales
Nominal
purchases
Fair Value
Carrying
amount
in assets
Carrying
amount
in liabilities
Carrying
amounts
in OCI
242
19
7
997
1,102
536
–
2,903
–
–
–
–
(147)
(24)
(1)
(1,098)
–
(2,425)
(159)
(3,854)
(249)
(249)
(1)
(1)
2,903
(4,104)
1
–
–
25
21
7
11
65
23
23
1
1
89
10
1
–
30
21
11
11
84
23
23
1
1
(9)
(1)
–
(5)
–
(4)
–
(19)
–
–
–
–
108
(19)
1
–
–
1
22
–
–
24
23
23
1
1
48
Since a significant proportion of affiliates’ transactions are denominated in currencies other than the affiliate’s functional currency, the Group
is exposed to currency risks. If the Group is not able to hedge these risks, fluctuations in exchange rates between the functional currency
and other currencies can have a significant impact on its results and distort year-on-year performance comparisons. As a result, the Group
uses derivative instruments to hedge its exposure to exchange rates mainly through FX forwards and natural hedges. Furthermore, some
long-term loans and borrowings granted to the affiliates are considered as net investment in foreign operations according to IAS 21.
Schneider Electric’s currency hedging policy is to protect its subsidiaries against risks on transactions denominated in a currency other than
their functional currency. Hedging approaches are detailed in Note 1.23.
The breakdown of the nominal of foreign change derivatives related to operating and financing activities is as follows:
(in millions of euros)
US Dollar
Chinese Yuan
Euro
Danish Crown
Singapore Dollar
Swedish Crown
Japanese Yen
Swiss Franc
UAE Dirham
Canadian Dollar
Australian Dollar
Saudi Riyal
Russian Ruble
Norwegian Krone
British Pound
South African Rand
Hong Kong Dollar
Others
TOTAL
Sales
2,022
4
264
3
383
16
14
4
1
66
17
11
82
–
15
38
4
216
3,160
Dec. 31, 2021
Purchases
(685)
(529)
(206)
(120)
(383)
(206)
(114)
(136)
(67)
(15)
(65)
(17)
(4)
(14)
(455)
(6)
(34)
(256)
Net
2,926
656
859
156
599
152
53
253
77
107
87
46
68
19
202
48
54
470
(3,312)
(152)
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
23.4 – Interest rate hedges
Interest rate risk on borrowings is managed at the Group level, based on consolidated debt and taking into consideration market conditions
to optimize overall borrowing costs. The Group uses derivative instruments to hedge its exposure to interest rates through swaps or cross-
currency swaps. Cross-currency swaps may be presented both as foreign exchange hedges and interest rate hedges depending on the
characteristics of the derivative.
The Group did not use any derivative instrument to hedge its exposure to interest rates during the fiscal year 2021.
Dec. 31, 2021
Dec. 31, 2020
(in millions of euros)
Fixed Rates
Floating rates
Total
Fixed Rates
Floating rates
Total
Total current and non-current financial liabilities
Cash and cash equivalent
NET DEBT BEFORE HEDGING
Impact of Hedges
8,234
–
8,234
–
1,515
(2,622)
(1,107)
–
NET DEBT AFTER HEDGING
8,234
(1,107)
9,749
(2,622)
7,127
–
7,127
8,773
–
8,773
–
1,683
(6,895)
(5,212)
–
10,456
(6,895)
3,561
–
8,773
(5,212)
3,561
23.5 – Commodity hedges
The Group is exposed to fluctuations in energy and raw material prices, in particular steel, copper, aluminum, silver, lead, nickel, zinc and
plastics. If the Group is not able to hedge, compensate for or pass on to customers any such increased costs, this could have an adverse
impact on its results. The Group has, however, implemented certain procedures to limit exposure to rising non-ferrous and precious raw
material prices. The Purchasing departments of the operating units report their purchasing forecasts to the Corporate Finance and
Treasury department. Purchase commitments are hedged using forward contracts, swaps and, to a lesser extent, options.
All commodities instruments are futures and options designated as cash flow hedge under IFRS standards, of which:
5.
(in millions of euros)
Carrying amount
Nominal amount
Dec. 31, 2021
Dec. 31, 2020
7
(400)
23
(249)
23.6 – Financial assets and liabilities subject to netting
In accordance with IFRS 7 standards, this section discloses financial instruments that are subject to netting agreements.
(in millions of euros)
Financial assets
Financial liabilities
(in millions of euros)
Financial assets
Financial liabilities
Dec. 31, 2021
Gross amounts
offset in the
statement of
financial position
Net amounts
presented in the
statement of
financial position
Related amounts
not offset in the
statement of
financial position
–
–
48
104
17
17
Gross amounts
48
104
Gross amounts
offset in the
statement of
financial position
Dec. 31, 2020
Net amounts
presented in the
statement of
financial position
Related amounts
not offset in the
statement of
financial position
–
–
107
19
15
15
Gross amounts
107
19
Net amounts
as per IFRS 7
31
87
Net amounts
as per IFRS 7
92
4
The Group trades over-the-counter derivatives with tier-one banks under agreements which provide for the offsetting of amounts payable
and receivable in the event of default by one of the contracting parties. These conditional offsetting agreements do not meet the eligibility
criteria within the meaning of IAS 32 for offsetting derivative instruments recorded under assets and liabilities. However, they do fall within
the scope of disclosures under IFRS 7 on offsetting.
23.7 – Counterparty risk
Financial transactions are entered with carefully selected counterparties. Banking counterparties are chosen according to the customary
criteria, including the credit rating issued by an independent rating agency.
Group policy consists of diversifying counterparty risks and periodic controls are performed to check compliance with the related rules.
In addition, the Group takes out substantial credit insurance and uses other types of guarantees to limit the risk of losses on trade
accounts receivable.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
23.8 – Financial risk management
Foreign currency risk arises from the Group undertaking a significant number of foreign currency transactions in the course of operations.
These exposures arise from sales in currencies other than the Group’s presentational currency of Euro.
The main exposure of the Group in terms of currency exchange risk is related to the US dollar, Chinese Yuan and currencies linked to the
US dollar. In 2021, revenue in foreign currencies amounted to EUR 23.0 billion (EUR 20.1 billion in 2020), including around EUR 7.4 billion
in US dollars and EUR 4.4 billion in Chinese yuan (respectively EUR 6.6 and EUR 3.7 billion in 2020).
The Group manages its exposure to currency risk to reduce the sensitivity of earnings to changes in exchange rates. The financial
instruments used to hedge the Group’s exposure to fluctuations in exchange rates are described above.
The table below shows the impact of a 10% change in the US dollar and the Chinese Yuan against the Euro on Revenue and Adjusted EBITA.
It includes the impact from the translation of financial statements into the Group’s presentation currency, and assumes no scope impact.
(in millions of euros)
US Dollar
Chinese Yuan
(in millions of euros)
US Dollar
Chinese Yuan
Note 24: Employees
24.1 – Employees
The Group average number of permanent and temporary employees is as follows:
(number of employees)
Production
Administration
TOTAL AVERAGE WORKFORCE
of which Europe, Middle East, Africa and South America
of which North America
of which Asia-Pacific
24.2 – Employee benefit expense
(in millions of euros)
Payroll costs
Profit-sharing and incentive bonuses
Stock options and performance shares
EMPLOYEE BENEFITS EXPENSE
Increase/
(decrease) in
average rate
10%
(10)%
10%
(10)%
Increase/
(decrease) in
average rate
10%
(10)%
10%
(10)%
Dec. 31, 2021
Revenue
Adj. EBITA
743
(676)
438
(398)
106
(97)
109
(99)
Dec. 31, 2020
Revenue
Adj. EBITA
665
(604)
372
(338)
86
(78)
95
(87)
Full year 2021
Full year 2020
91,519
74,506
81,470
73,996
166,025
155,466
66,214
34,427
65,384
67,549
32,633
55,284
Full year 2021
Full year 2020
(8,207)
(66)
(161)
(8,434)
(7,082)
(57)
(145)
(7,284)
24.3 – Benefits granted to senior executives
In 2021, the Group paid EUR 1.8 million in attendance fees to the members of its Board of directors. The total amount of gross remuneration,
including benefits in kind, paid in 2021 by the Group to the members of Senior Management, excluding executive directors, totaled
EUR 25.2 million, of which EUR 5.5 million corresponded to the variable portion.
During the last three financial years, 696,839 performance shares have been allocated, excluding Corporate Officers. No stock options
have been granted during the last three financial years. In 2021, performance shares were allocated under the 2021 long-term incentive
plan 39. Since December 16, 2011, 100% of performance shares are conditional on the achievement of performance criteria for members
of the Executive Committee.
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
Net pension obligations with respect to members of Senior Management amounted to EUR 15 million at December 31, 2021 (EUR 17 million
at December 31, 2020).
Please refer to Chapter 4 of the Universal Registration Document for more information regarding the members of Senior Management.
Note 25: Related party transactions
25.1 – Transactions with associates
Companies over which the Group has significant influence are accounted through the equity method. Transactions with these related
parties are carried out on arm’s length terms.
Related party transactions were not material in 2021.
25.2 – Transactions with key management personnel
No transactions were carried out during the year with members of the supervisory board or management board. Compensation
and benefits paid to the Group’s top senior executives are described in Note 24.
5.
Note 26: Commitments and contingent liabilities
26.1 – Guarantees and similar undertakings
The following table discloses the maximum exposure on guarantees given and received:
(in millions of euros)
Market counter guarantees*
Pledges, mortgages and sureties**
Other commitments given
GUARANTEES GIVEN
Endorsements and guarantees received
GUARANTEES RECEIVED
Dec. 31, 2021
Dec. 31, 2020
3,702
81
314
4,097
64
64
3,367
117
253
3,737
54
54
* On certain contracts, customers require some commitments to guarantee that the contract will be fully executed by the subsidiaries of the Group. The risk linked to
the commitment is assessed and a provision for contingencies is recorded when the risk is considered probable and can be reasonably estimated. Market counter
guarantees also include the guaranteed obligations towards pension schemes.
** Some loans are secured by property, plant and equipment and securities lodged as collateral.
26.2 – Contingent liabilities
As part of its normal operations, the Group is exposed to a number of potential claims and litigations. Except for those for which it is
probable that the Group will incur a liability and for which a provision is established for such outcome (see Note 21), the Group is not
aware of other potentially material claims and litigations.
Investigations were conducted in September 2018 by the French judicial and antitrust authorities at Schneider Electric’s head office and
other premises concerning electrical distribution activities in France. Schneider Electric is cooperating with the French authorities. Such
investigations could lead to formal proceedings against the Group for which the probability and the potential impact, which could be
significant on the consolidated financial statements, cannot be determined at this time.
Note 27: Subsequent events
27.1 – IGE+XAO
Following the completion of a simplified public tender offer, the Group now holds 83.93% of the issued capital of IGE+XAO. In accordance
with the Group’s intentions as presented in the Information Note and the previously stated strategy to consolidate the various independent
software entities within the Energy Management Software Division, the Group intends to implement a merger of IGE+XAO with Schneider
Electric during fiscal year 2022.
The Boards of Directors of Schneider Electric and IGE+XAO have met on February 16, 2022 and approved the economic, financial and
legal terms of the merger, including the merger parity of 5 Schneider Electric shares for 3 IGE+XAO shares. The merger agreement as
well as the merger appraisers’ reports will be available on the websites of Schneider Electric and IGE+XAO.
The Group will seek confirmation from the AMF that the merger would not require Schneider Electric to file a buy-out offer for the shares
of IGE+XAO. In addition, the merger will be subject to the approval of the annual general shareholder meetings of the shareholders of
IGE+XAO and Schneider Electric to be held on May 4 and 5, 2022 respectively.
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5.5 Notes to the consolidated financial statements
Note 28: Statutory Auditors’ fees
Fees paid by the Group to the statutory auditors and their networks:
(in thousands of euros)
Statutory auditing
o/w Schneider Electric SE
o/w subsidiaries
Related audit services (“SACC”)
o/w Schneider Electric SE
o/w subsidiaries
TOTAL FEES
(in thousands of euros)
Statutory auditing
o/w Schneider Electric SE
o/w subsidiaries
Related audit services (“SACC”)
o/w Schneider Electric SE
o/w subsidiaries
TOTAL FEES
EY
12,290
106
12,184
1,368
317
1,051
13,658
EY
11,241
106
11,135
540
241
299
11,781
Full Year 2021
%
Mazars
90%
10%
9,602
106
9,496
439
439
%
96%
4%
100%
10,041
100%
Full Year 2020
Mazars
9,061
106
8,955
433
–
433
9,494
%
95%
5%
100%
%
95%
5%
100%
Total
21,892
212
21,680
1,807
317
1,490
23,699
Total
20,302
212
20,090
973
241
732
21,275
Note 29: Consolidated companies
The main companies included in the Schneider Electric Group scope of consolidation are listed below:
(in % of interest)
Europe
Fully consolidated
NXT Control GmbH
Schneider Electric Austria GmbH
Schneider Electric Power Drives GmbH
Schneider Electric Systems Austria GmbH
Schneider Electric Bel LLC
Schneider Electric Belgium NV/SA
Schneider Electric Energy Belgium SA
Schneider Electric ESS BVBA
Schneider Electric Services International SPRL
Schneider Electric Bulgaria EOOD
Schneider Electric d.o.o
Schneider Electric a.s.
Schneider Electric CZ sro
Schneider Electric Systems Czech Republic sro
Ørbaekvej 280 A/S
Schneider Electric Danmark A/S
Schneider Electric IT Denmark ApS
Schneider Electric Eesti AS
Schneider Electric Finland Oy
Schneider Electric Fire & Security OY
Schneider Electric Vamp Oy
Behar sécurité
Boissière Finance
Construction Electrique du Vivarais
Dinel
Eckardt
Eurotherm Automation
France Transfo
IGE+XAO SA (sub-group)
Merlin Gerin Alès
Merlin Gerin Loire
Muller & Cie
Newlog
Rectiphase
Sarel – Appareillage Electrique
Dec. 31, 2021
Dec. 31,2020
Austria
Austria
Austria
Austria
Belarus
Belgium
Belgium
Belgium
Belgium
Bulgaria
Croatia
Czech Republic
Czech Republic
Czech Republic
Denmark
Denmark
Denmark
Estonia
Finland
Finland
Finland
France
France
France
France
France
France
France
France
France
France
France
France
France
France
100
100
100
100
100
100
100
100
100
100
100
98.3
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
84.2
100
100
100
100
100
99
100
100
100
100
100
100
100
100
100
100
100
98.3
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
67.9
100
100
100
100
100
99
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Financial Statements
(in % of interest)
Dec. 31, 2021
Dec. 31,2020
Scanelec
Schneider Electric Alpes
Schneider Electric Energy France
Schneider Electric France
Schneider Electric Industries SAS
Schneider Electric International
Schneider Electric IT France
Schneider Electric Manufacturing Bourguebus
Schneider Electric SE (Mother company)
Schneider Electric Solar France
Schneider Electric Systems France
Schneider Electric Telecontrol
Schneider Toshiba Inverter Europe SAS
Schneider Toshiba Inverter SAS
Société d’Appareillage Electrique Gardy
Société d’Application et d’Ingenierie Industrielle et Informatique SAS – SA3I
Société Electrique d’Aubenas
Société Française de Construction Mécanique et Electrique
Société Française Gardy
Systèmes Equipements Tableaux Basse Tension
Transfo Services
Transformateurs SAS
ABN GmbH
Eberle Controls GmbH
Merten GmbH
ProLeit AG (sub-group)
RIB GmbH (sub-group)
Schneider Electric Automation GmbH
Schneider Electric Holding Germany GmbH
Schneider Electric GmbH
Schneider Electric Investment AG
Schneider Electric Real Estate GmbH
Schneider Electric Sachsenwerk GmbH
Schneider Electric Systems Germany GmbH
Schneider Electric AEBE
Schneider Electric Energy Hungary LTD
Schneider Electric Hungaria Villamossagi ZRT
SE – CEE Schneider Electric Közep-Kelet Europai KFT
Schneider Electric Ireland Ltd
Schneider Electric IT Limited
Schneider Electric IT Logistics Europe Ltd
Validation technologies (Europe) Ltd
Eliwell Controls S.r.l.
Eurotherm S.r.l.
Schneider Electric Industrie Italia Spa
Schneider Electric Spa
Schneider Electric Systems Italia Spa
Uniflair Spa
Lexel Fabrika SIA
Schneider Electric Baltic Distribution Center
Schneider Electric Latvija SIA
UAB Schneider Electric Lietuva
Industrielle de Réassurance SA
American Power Conversion Corporation (A.P.C.) BV
APC International Corporation BV
APC International Holdings BV
Clovis Systems B.V.
Schneider Electric Logistic Centre BV
Schneider Electric Manufacturing The Netherlands BV
Schneider Electric Systems Netherlands BV
Schneider Electric The Netherlands BV
ELKO AS
Eurotherm AS
Lexel Holding Norge AS
Schneider Electric Norge AS
Elda Eltra Elektrotechnika S.A.
Eurotherm Poland Sp. Z.o.o.
Schneider Electric Industries Polska Sp. Z.o.o.
Schneider Electric Polska Sp. Z.o.o.
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Greece
Hungary
Hungary
Hungary
Ireland
Ireland
Ireland
Ireland
Italy
Italy
Italy
Italy
Italy
Italy
Latvia
Latvia
Latvia
Lithuania
Luxembourg
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Norway
Norway
Norway
Norway
Poland
Poland
Poland
Poland
100
100
100
100
100
100
100
100
100
100
100
100
60
60
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
–
70
100
–
100
100
100
100
100
100
100
100
100
100
5.
100
100
100
100
100
100
100
100
100
100
100
100
60
60
100
100
100
100
100
100
100
100
100
100
100
100
87.6
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
–
100
100
100
100
100
100
100
100
100
100
100
100
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
(in % of interest)
Schneider Electric Systems Sp. Z.o.o.
Schneider Electric Transformers Poland Sp. Z.o.o.
Schneider Electric Portugal LDA
Schneider Electric Romania SRL
AO Schneider Electric
DIN Elektro Kraft OOO
FLISR LLC
OOO Potential
OOO Schneider Electric Zavod Electromonoblock
Schneider Electric Innovation center LLC
Schneider Electric Systems LLC
Schneider Electric URAL LLC
Schneider Electric DMS NS
Schneider Electric Srbija doo Beograd
Schneider Electric Slovakia Spol SRO
Schneider Electric Systems Slovakia SRO
Schneider Electric d.o.o.
Manufacturas Electricas SA
Schneider Electric Espana SA
Schneider Electric IT Spain, SL
Schneider Electric Systems Iberica S.L.
AB Crahftere 1
AB Wibe
Elektriska AB Delta
Elko AB
Eurotherm AB
Lexel AB
Schneider Electric Buildings AB
Schneider Electric Distribution Centre AB
Schneider Electric Sverige AB
Telvent Sweden AB
Feller AG
Gutor Electronic GmbH
Schneider Electric (Schweiz) AG
Schneider Electric Ukraine
Andromeda Telematics Ltd
Aveva Group plc (sub-group)
Avtron Loadbank Worldwide Co., Ltd
BTR Property Holdings Ltd
CBS Group Ltd
Eurotherm Ltd
Imserv Europe Ltd
Invensys Holdings Ltd
M&C Energy Group Ltd
N.J. Froment & Co. Limited
Samos Acquisition Company Ltd
Schneider Electric (UK) Ltd
Schneider Electric Buildings UK Ltd
Schneider Electric Controls UK Ltd
Schneider Electric IT UK Ltd
Schneider Electric Ltd
Schneider Electric Systems UK Ltd
Serck Control and Safety Ltd
Accounted for by equity method
Aveltys
Delta Dore Finance SA (sub-group)
Energy Pool Development
Schneider Lucibel Managed Services SAS
Planon Beheer B.V.
Möre Electric Group A/S
Custom Sensors & Technologies Topco Limited
AO Gruppa Kompaniy “Electroshield” – TM Samara
North America
Fully consolidated
Power Measurement Ltd.
Schneider Electric Canada Inc.
Schneider Electric Solar Inc.
Schneider Electric Systems Canada Inc.
Viconics Technologies Inc.
Poland
Poland
Portugal
Romania
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Serbia
Serbia
Slovakia
Slovakia
Slovenia
Spain
Spain
Spain
Spain
Sweden
Sweden
Sweden
Sweden
Sweden
Sweden
Sweden
Sweden
Sweden
Sweden
Switzerland
Switzerland
Switzerland
Ukraine
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
France
France
France
France
Netherlands
Norway
United Kingdom
Russia
Canada
Canada
Canada
Canada
Canada
Dec. 31, 2021
Dec. 31,2020
100
100
100
100
100
100
100
100
100
100
100
–
100
100
100
100
100
100
100
100
100
100
–
100
100
100
100
100
100
100
100
83.7
100
100
100
100
59
100
100
100
100
–
100
100
100
100
100
100
100
100
100
100
100
51
20
25
47
25
34
30
60
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
83.7
100
100
100
100
61.4
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
20
25
47
–
34
30
60
100
100
100
100
100
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
(in % of interest)
Dec. 31, 2021
Dec. 31,2020
Electronica Reynosa, S. de R.L. de C.V.
Industrias Electronicas Pacifico, S.A. de C.V.
Invensys Group Services Mexico S.C.
Schneider Electric IT Mexico, S.A. de C.V.
Schneider Electric Mexico, S.A. de C.V.
Schneider Electric Systems Mexico, S.A. de C.V.
Schneider Industrial Tlaxcala, S.A. de C.V.
Schneider Mexico, S.A. de C.V.
Schneider R&D, S.A. de C.V.
Square D Company Mexico, S.A. de C.V.
Telvent Mexico, S.A. de C.V.
Adaptive Instruments Corp.
American Power Conversion Holdings Inc.
ASCO Power GP, LLC
ASCO Power Services, Inc.
ASCO Power Technologies, L.P.
Charge Holdings, LLC
Echo HoldCo LLC
ETAP Automation Inc. (sub-group)
Foxboro Controles S.A.
Invensys LLC
Lee Technologies Puerto Rico, LLC
OSISoft (sub-group)
Power Measurement, Inc.
Pro-Face America, LLC
Schneider Electric Buildings Americas, Inc.
Schneider Electric Buildings Critical Systems, Inc.
Schneider Electric Buildings, LLC
Schneider Electric Digital, Inc.
Schneider Electric Engineering Services, LLC
Schneider Electric Grid Automation, Inc.
Schneider Electric Holdings, Inc.
Schneider Electric IT America Corp.
Schneider Electric IT Corporation
Schneider Electric IT Mission Critical Services, Inc.
Schneider Electric IT USA, Inc.
Schneider Electric Motion USA, Inc.
Schneider Electric Solar Inverters USA, Inc.
Schneider Electric Systems USA, Inc.
Schneider Electric USA, Inc.
SE Vermont Ltd
Siebe Inc.
SNA Holdings Inc.
Square D Investment Company
Stewart Warner Corporation
Summit Energy Services, Inc.
Veris Industries LLC
Accounted for by equity method
Uplight Inc.
Asia-Pacific
Fully consolidated
Clipsal Australia Pty Ltd
Clipsal Technologies Australia Pty Limited
Nu-lec Industries Pty. Limited
Scada Group Pty Limited
Schneider Electric (Australia) Pty Limited
Schneider Electric Australia Holdings Pty Ltd
Schneider Electric IT Australia Pty Ltd
Schneider Electric Solar Australia Pty Ltd
Schneider Electric Systems Australia Pty Ltd
Serck Controls Pty Limited
Tamco Electrical Industries Australia Pty Ltd
Beijing Leader & Harvest Electric Technologies Co. Ltd
CITIC Schneider Electric Smart Building Technology (Beijing) Co. Ltd
Clipsal Manufacturing (Huizhou) Ltd
FSL Electric (Dongguan) Limited
Proface China International Trading (Shanghai) Co. Ltd
Schneider (Beijing) Medium & Low Voltage Co., Ltd
Schneider (Beijing) Medium Voltage Co. Ltd
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
China
China
China
China
China
China
China
100
100
–
–
100
100
100
100
100
100
100
100
100
–
100
100
85.9
90.8
80
100
100
–
59
–
100
100
100
100
100
100
100
100
–
100
100
–
–
100
100
100
100
100
100
100
100
100
100
29.4
100
100
100
100
100
100
100
100
100
100
65
100
51
–
54
100
95
95
5.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
–
–
–
100
100
100
–
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
–
100
100
100
100
100
100
100
100
100
100
65
100
51
100
54
100
95
95
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
(in % of interest)
Dec. 31, 2021
Dec. 31,2020
Schneider (Shaanxi) Baoguang Electrical Apparatus Co. Ltd
Schneider (Suzhou) Drives Company Ltd
Schneider (Suzhou) Enclosure Systems Co Ltd
Schneider (Suzhou) Transformers Co. Ltd
Schneider Automation & Controls Systems (Shanghai) Co., LTD
Schneider Busway (Guangzhou) Ltd
Schneider Electric (China) Co. Ltd
Schneider Electric (Xiamen) Switchgear Co. Ltd
Schneider Electric (Xiamen) Switchgear Equipment Co., Ltd
Schneider Electric Equipment an Engineering (X’ian) Co., Ltd
Schneider Electric IT (China) Co., Ltd
Schneider Electric IT (Xiamen) Co., Ltd.
Schneider Electric Low Voltage (Tianjin) Co. Ltd
Schneider Electric Manufacturing (Chongqing) Co. Ltd
Schneider Electric Manufacturing (Wuhan) Co. Ltd
Schneider Great Wall Engineering (Beijing) Co. Ltd
Schneider Shanghai Apparatus Parts Manufacturing Co. Ltd
Schneider Shanghai Industrial Control Co. Ltd
Schneider Shanghai Low Voltage Term. Apparatus Co. Ltd
Schneider Shanghai Power Distribution Electric Apparatus Co. Ltd
Schneider Smart Technology., Ltd
Schneider South China Smart Technology (Guangdong) Co. Ltd.
Schneider Switchgear (Suzhou) Co, Ltd
Schneider Wingoal (Tianjin) Electric Equipment Co. Ltd
Shanghai ASCO Electric Technology Co., Ltd
Shanghai Foxboro Co., Ltd
Shanghai Invensys Process System Co., Ltd
Shanghai Schneider Electric Power Automation Co. Ltd
Shanghai Tayee Electric Co., LTD
Wuxi Proface Co., Ltd
Zircon Investment (Shanghai) Co., Ltd
Clipsal Asia Holdings Limited
Clipsal Asia Limited
Fed-Supremetech Limited
Himel Hong Kong Limited
Schneider Electric (Hong Kong) Limited
Schneider Electric Asia Pacific Limited
Schneider Electric IT Hong Kong Limited
Eurotherm India Private Ltd
Luminous Power Technologies Private Ltd
Schneider Electric India Private Ltd
Schneider Electric Infrastructure Limited
Schneider Electric IT Business India Private Ltd
Schneider Electric President Systems Ltd
Schneider Electric Private Limited
Schneider Electric Solar India Private Limited
Schneider Electric Systems India Private Limited
PT Schneider Electric Indonesia
PT Schneider Electric IT Indonesia
PT Schneider Electric Manufacturing Batam
PT Schneider Electric Systems Indonesia
PT Tamco Indonesia
Schneider Electric Japan Holdings Ltd.
Schneider Electric Japan, Inc.
Schneider Eletcric Solar Japan Inc.
Schneider Electric Systems Japan Inc.
Toshiba Schneider Inverter Corp.
Eurotherm Korea Co., Ltd.
Schneider Electric Korea Ltd.
Schneider Electric Systems Korea Limited
Clipsal Manufacturing (M) Sdn. Bhd.
Gutor Electronic Asia Pacific Sdn. Bhd.
Henikwon Corporation Sdn Bhd
Huge Eastern Sdn. Bhd.
Schneider Electric (Malaysia) Sdn. Bhd.
Schneider Electric Industries (M) Sdn. Bhd.
Schneider Electric IT Malaysia Sdn. Bhd.
Schneider Electric Systems (Malaysia) Sdn. Bhd.
Tamco Switchgear (Malaysia) Sdn Bhd
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
India
India
India
India
India
India
India
India
India
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Japan
Japan
Japan
Japan
Japan
Korea
Korea
Korea
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
70
90
100
100
100
95
100
100
100
100
100
100
75
100
100
100
100
80
75
80
100
100
58
100
100
100
100
100
74.5
100
74.5
100
100
54
100
100
100
100
100
100
65
75
100
79.5
100
100
100
100
100
100
95
65
100
100
100
100
60
100
100
100
100
100
65
100
30
100
100
100
65
70
90
100
100
100
95
100
100
100
100
100
100
75
100
100
100
100
80
75
80
100
100
58
100
100
100
100
100
74.5
100
74.5
100
100
54
100
100
100
100
100
100
65
75
100
79.5
100
100
100
100
100
100
95
65
100
100
100
100
60
100
100
100
100
100
65
100
30
100
100
100
65
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Financial Statements
(in % of interest)
Dec. 31, 2021
Dec. 31,2020
Schneider Electric (NZ) Limited
Schneider Electric Systems New Zealand Limited
American Power Conversion Land Holdings Inc.
Clipsal Philippines, Inc.
Schneider Electric (Philippines) Inc.
Schneider Electric IT Philippines Inc.
Schneider Electric Asia Pte. Ltd.
Schneider Electric Export Services Pte Ltd
Schneider Electric IT Logistics Asia Pacific Pte. Ltd.
Schneider Electric IT Singapore Pte. Ltd.
Schneider Electric JV2 Holdings Pte. Ltd.
Schneider Electric Overseas Asia Pte Ltd
Schneider Electric Singapore Pte. Ltd.
Schneider Electric South East Asia (HQ) Pte. Ltd.
Schneider Electric Systems Singapore Pte. Ltd.
Schneider Electric Lanka (Private) Limited
Schneider Electric Systems Taiwan Corp.
Schneider Electric Taiwan Co., Ltd.
Pro-Face South-East Asia Pacific Co., Ltd.
Schneider (Thailand) Limited
Schneider Electric CPCS (Thailand) Co., Ltd.
Schneider Electric Solar Thailand
Schneider Electric Systems (Thailand) Co. Ltd.
Clipsal Vietnam Co. Ltd
Invensys Vietnam Ltd
Schneider Electric IT Vietnam Limited
Schneider Electric Manufacturing Vietnam Co., Ltd
Schneider Electric Vietnam Co. Ltd
Accounted for by equity method
Delixi Electric LTD (sub-group)
Sunten Electric Equipment Co., Ltd
Fuji Electric FA Components & Systems Co., Ltd (sub-group)
Foxboro (Malaysia) Sdn. Bhd.
Rest of the World
Fully consolidated
Himel Algerie
Schneider Electric Algerie
Schneider Electric Argentina S.A.
Schneider Electric Systems Argentina S.A.
Eurotherm Ltda.
Schneider Electric Brasil Automação de Processos Ltda.
Schneider Electric Brasil Ltda.
Schneider Electric IT Brasil Industria e Comercio de Equipamentos Eletronicos Ltda.
Steck da Amazonia Industria Electrica Ltda.
Steck Industria Electrica Ltda.
Telseb Serviços de Engenharia e Comércio de Equipamentos Eletrônicos e
Telecomunicações Ltda
Inversiones Schneider Electric Uno Limitada
Marisio S.A.
Schneider Electric Chile S.A.
Schneider Electric Systems Chile Limitada
Schneider Electric de Colombia S.A.S.
Schneider Electric Systems Colombia Ltda.
Schneider Electric Centroamerica Limitada
Invensys Engineering & Service S.A.E.
Schneider Electric Distribution Company
Schneider Electric Egypt SAE
Schneider Electric Systems Egypt S.A.E
L&T Electricals & Automation FZE
Schneider Electric DC MEA FZCO
Schneider Electric FZE
Schneider Electric Systems Middle East FZE
Schneider Electric (Kenya) Ltd
Kana Controls General Trading & Contracting Company W.L.L
Schneider Electric Services Kuweit
Schneider Electric East Mediterranean SAL
Delixi Electric Maroc SARL AU
Schneider Electric Maroc
Schneider Electric CFC
New Zealand
New Zealand
Philippines
Philippines
Philippines
Philippines
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Sri Lanka
Taiwan
Taiwan
Thailand
Thailand
Thailand
Thailand
Thailand
Viet Nam
Viet Nam
Viet Nam
Viet Nam
Viet Nam
China
China
Japan
Malaysia
Algeria
Algeria
Argentina
Argentina
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Chile
Chile
Chile
Chile
Colombia
Colombia
Costa Rica
Egypt
Egypt
Egypt
Egypt
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Arab Emirates
Kenya
Kuwait
Kuwait
Lebanon
Morocco
Morocco
Morocco
100
100
100
100
100
100
100
100
100
100
65
100
100
100
100
100
100
100
–
100
100
100
100
100
100
100
100
100
50
25
36.8
49
–
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
87.4
91.9
60
65
100
100
100
100
31.9
49
96
100
100
100
5.
100
100
100
100
100
100
100
100
100
100
65
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
50
25
36.8
49
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
87.4
91.9
60
65
100
100
100
100
31.9
49
96
100
100
–
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.5 Notes to the consolidated financial statements
(in % of interest)
Dec. 31, 2021
Dec. 31,2020
Schneider Electric Free Zone Enterprise
Schneider Electric Nigeria Ltd
Schneider Electric Systems Nigeria Ltd
Schneider Electric O.M LLC
Schneider Electric Pakistan (Private) Limited
Schneider Electric Peru S.A.
Schneider Electric Systems del Peru S.A.
Electrical & Automation Saudi Arabian Manufacturing Company (LLC)
Schneider Electric Saudi Arabia Limited
Schneider Electric Saudi Arabia For Solutions & Services Co
Schneider Electric System Arabia Co., LTD
Schneider Electric South Africa (Pty) Ltd
Uniflair South Africa (Pty) Ltd
Gunsan Elektrik
Himel Elektric Malzemeleri Ticaret A.S
Schneider Elektrik Sanayi Ve Ticaret A.S
Schneider Enerji Endustrisi Sanayi Ve Ticaret A.S
Schneider Electric Uganda Ltd
Schneider Electric Systems de Venezuela, C.A.
Schneider Electric Venezuela, S.A.
Nigeria
Nigeria
Nigeria
Oman
Pakistan
Peru
Peru
Saudi Arabia
Saudi Arabia
Saudi Arabia
Saudi Arabia
South Africa
South Africa
Turkey
Turkey
Turkey
Turkey
Uganda
Venezuela
Venezuela
100
100
100
100
–
100
100
65
100
–
100
74.9
100
100
100
100
100
–
100
93.6
100
100
100
100
80
100
100
65
100
100
100
74.9
100
100
100
100
100
100
100
93.6
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
5.6 Statutory auditors’ report on the
consolidated financial statements
To the Annual General Meeting of Schneider Electric S.E.,
Opinion
In compliance with the engagement entrusted to us by your Annual General Meeting, we have audited the accompanying consolidated
financial statements of Schneider Electric S.E. for the year ended December 31, 2021.
In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the
group as at December 31, 2021 and of the results of its operations for the year then ended in accordance with International Financial Reporting
Standards as adopted by the European Union.
The audit opinion expressed above is consistent with our report to the audit and risks committee.
Basis for Opinion
Audit Framework
We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
5.
Our responsibilities under those standards are further described in the Statutory Auditors’ Responsibilities for the Audit of the Consolidated
Financial Statements section of our report.
Independence
We conducted our audit engagement in compliance with with independence requirement rules required by the French Commercial Code
(code de commerce) and the French Code of Ethics (code de déontologie) for statutory auditors for the period from January 1st, 2021 to
the date of our report, and specifically we did not provide any prohibited non-audit services referred to in Article 5(1) of Regulation (EU)
N° 537/2014.
Justification of Assessments – Key Audit Matters
Due to the global crisis related to the COVID-19 pandemic, the financial statements of this period have been prepared and audited under
specific conditions. Indeed, this crisis and the exceptional measures taken in the context of the state of sanitary emergency have had
numerous consequences for companies, particularly on their operations and their financing, and have led to greater uncertainties on their
future prospects. Those measures, such as travel restrictions and remote working, have also had an impact on the companies’ internal
organisation and the performance of the audits.
It is in this complex and evolving context that, in accordance with the requirements of Articles L. 823-9 and R. 823-7 of the French Commercial
Code (code de commerce) relating to the justification of our assessments, we inform you of the key audit matters relating to risks of material
misstatement that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current
period, as well as how we addressed those risks.
These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on specific items of the consolidated financial statements.
Measurement of goodwill
Notes 1.3, 1.8, 1.11, 5 and 9 to the consolidated financial statements
Risk identified
As at December 31, 2021, the carrying amount of goodwill is M€ 24,723, totaling 45% of the group consolidated assets.
As described in note 1.11 “Impairment of assets” to the consolidated financial statements, the Cash Generating Units
(CGUs), to which the goodwill is allocated, are tested for impairment at least once a year and whenever there is an
indication of impairment risk.
The group’s CGUs are Low Voltage, Medium Voltage, Industrial Automation, and Secure Power, and correspond to the
smallest identifiable groups of assets generating cash inflows that are largely independent from the cash inflows from
other assets or groups of assets.
The recoverable value of a CGU is defined as the highest value between its value in use and its fair value less costs to
sell. The value in use of a CGU is determined by discounting future cash flows that will be generated by its underlying
assets and which are based on the Group management’s economic assumptions and operating forecasts.
An impairment loss is recognized when the recoverable value of a CGU is lower than its book value, for the excess
amount of the book value over the recoverable value. When the tested CGU comprises goodwill, any impairment loss
is primarily deducted there from.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.6 Statutory auditors’ report on the consolidated financial statements
Risk identified
continued
We considered the measurement of goodwill to be a key audit matter as these assets account for a large part
of the group’s consolidated balance sheet and because of the level of management’s judgment required to:
• define the CGUs, as an improper mapping could lead your group to not recognize or under-estimate an impairment
of goodwill;
• determine the assumptions used for the impairment tests of goodwill, particularly the discount rates, perpetuity
growth rates and the expected margin rates or royalty rates.
Our response
Our audit work consisted in:
• assessing the group’s definition of the CGUs in light of the applicable accounting standards;
• comparing the carrying amount of assets tested with the accounting data;
• assessing the procedures implemented by the group to evaluate the future discounted cash flows underlying
the determination of the value in use of each CGU and check their consistency with the business plans/cash flow
projections;
• comparing the business forecasts underlying the future cash flows with actual performance;
• with the assistance of our valuation experts, assessing the assumptions used such as discount rates, perpetuity
growth rates and expected margin rates, as well as the sensitivity of tests results to a variation of these assumptions;
• reconciling the sensitivity analyses performed by the group with our sensitivity calculations;
• verifying the arithmetical accuracy of the computations underlying the impairment tests.
Finally, we verified that the notes to the consolidated financial statements contain the appropriate information.
Activation and measurement of development costs
Notes 1.3, 1.8, 4 and 10 to the consolidated financial statements
Risk identified
As at December 31, 2021, the group’s consolidated balance sheet includes capitalized development costs recognized
as intangible assets for M€ 1,169.
As described in note 1.8 to the consolidated financial statements, the costs the Group incurs as part of its new projects
are capitalized when certain criteria are strictly met and, in particular, when it is probable that future economic benefits
attributable to the project will flow to the group.
Development-related assets are amortized from the commercial launch and over the lifespan of the underlying
technology.
Development-related assets which are not amortized yet are tested for impairment at least on an annual basis and
whenever there is an indication of impairment risk. As for development-related assets, which are in the amortization
period, they are tested for impairment when an impairment risk has been identified. The group recognizes an impairment
loss when the recoverable amount of a development-related asset is lower than the corresponding capitalized costs.
The capitalization and the measurement of development costs are considered to be a key audit matter due to their
materiality when compared to the consolidated assets of the group, and to the management’s judgment exercised
when initially determining whether such development costs should be accounted for as intangible assets and when
subsequently carrying out impairment tests.
Our response
Our work consisted, for the development projects that we selected on the basis of qualitative and quantitative criteria, in:
• ensuring the criteria for recognizing an intangible asset, as set out in IAS 38, were met and consistently applied;
• reconciling, the costs capitalized as at December 31, 2021 with the underlying supporting documentation;
• assessing the data and assumptions used by the group when testing development-related assets for impairment,
mainly sales and profitability forecasts and discount rates, by inquiring of management and by comparing future
cash flows to past performance for capitalized projects for which the group is already generating revenues;
• comparing the sensitivity analyses performed by the group to our sensitivity calculations;
• verifying the arithmetical accuracy of these impairment tests.
Finally, we verified that the notes to the consolidated financial statements contain the appropriate information.
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
Recognition and recoverability of deferred tax assets related to tax losses carried forward
Notes 1.3, 1.16 and 14 to the consolidated financial statements
Risk identified
As at December 31, 2021, the deferred tax assets recognized in the group’s balance sheet, with regards to tax losses
carried forward, amount to M€ 689 and are mainly related to France for M€ 500.
As described in note 1.16 to the consolidated financial statements, the group recognizes future tax benefits, arising
from the utilization of tax losses carried forward, to the extent they can reasonably be expected to be achieved,
including when such amounts can be indefinitely carried forward.
Management assesses at year-end the recoverability by the group of its deferred tax assets on tax losses carried
forward. The recognition and appropriate estimation of deferred tax assets relies on the Group’s ability to accurately
forecast its future taxable income.
We considered the initial recognition and the subsequent recoverability of deferred tax assets on tax losses carried
forward to be a key audit matter due to the judgment exercised by management.
Our response
In considering the group’s capacity to benefit from its deferred tax assets on tax losses carried forward by offsetting
them with future taxable income, our audit approach consisted, with the assistance of our tax specialists when
necessary, in:
5.
•
inquiring about the consumption plans of tax losses carried forward for the subsidiaries or tax consolidation groups
at stake;
• assessing the data and assumptions underlying the consumption plans of tax losses carried forward supporting
the recognition and the measurement of related deferred tax assets by the group.
Finally, we verified that the notes to the consolidated financial statements contain the appropriate information.
Fair valuation of assets acquired and liabilities assumed following the acquisitions of Larsen & Toubro EA and OSIsoft
Notes 1.3, 1.5, 1.8 and 2.1 to the consolidated financial statements
Risk identified
As specified in note 2.1:
Acquisition of Larsen and Toubro "Electrical & Automation"
On August 31, 2020, the group completed the transaction to combine Schneider Electric India’s Low Voltage and
Industrial Automation Products business and Larsen and Toubro (“L&T EA”) Electrical and Automation business, for a
consideration paid of EUR 1,571 million. Temasek took 35% stake in the new entity combining L&T EA and the group’s
Low Voltage and Industrial Automation activities in India, for a consideration of M€ 530. L&T EA has been fully
consolidated by the group since the date of acquisition.
The group has determined the fair value of the identifiable assets acquired and liabilities assumed from L&T EA in
accordance with IFRS 3R. The acquisition resulted in the recognition of intangible assets and liabilities assumed for
a net amount of M€ 286 and final goodwill of M€ 1,117. The purchase price allocation is final as of December 31, 2021.
Acquisition of OSISoft
On March 19, 2021, the group announced, through its subsidiary AVEVA group Plc, that it had completed the acquisition
of OSIsoft for a consideration of M€ 4,500. OSIsoft has been fully consolidated by the group since the date of acquisition.
The group has determined the fair value of the identifiable assets acquired and liabilities assumed from OSIsoft
in accordance with IFRS 3R for a net amount of M€ 1,460, mainly relating to the recognition of intangible assets.
The resulting provisional goodwill at December 31, 2021 amounts to M€ 3,001.
The determination of the fair value of the assets acquired and liabilities assumed in these two acquisitions is a key audit
matter due to the significant amounts at stake and the level of judgment exercised by management.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.6 Statutory auditors’ report on the consolidated financial statements
Our response
As part of our audit, we obtained the legal documentation, as well as the reports issued by the external valuation experts
engaged by the group to assist the management with the identification of assets and liabilities recognized within the
scope of these two acquisitions.
The opening balance sheets of L&T EA and OSIsoft as their respective dates of acquisition of control have been audited
covering the main acquired entities included in the scope of consolidation.
Regarding the identification and assessment of the fair value of the assets and liabilities recognized in connection with
these acquisitions, with the involvement of valuation experts in our audit team, our work consisted in:
• assessing the appropriateness of the approach used to identify liabilities, contingent liabilities and intangible
assets acquired, corroborating them with our discussions with management and our understanding of the
acquired business;
• analyzing the valuation methods used by management to measure the fair value of assets and liabilities acquired;
• analyzing the valuation assumptions used by comparing them to the source data and sector market data;
• performing arithmetic controls on the various valuations carried out;
• analyzing the consistency of the purchase price allocation taken as a whole, and of the resulting residual goodwill.
Finally, we verified that the notes to the consolidated financial statements contain the appropriate information.
Specific Verifications
We have also performed, in accordance with professional standards applicable in France, the specific verifications required by laws and
regulations of the group’s information given in the management report of the Board of Directors.
We have no matter to report as to its fair presentation and its consistency with the consolidated financial statements.
We certify that the consolidated statement of non-financial performance provided for in Article L. 225-102-1 of the French Commercial Code
(code de commerce) is included in the information pertaining to the group provided in the management report, it being specified that, in
accordance with the provisions of Article L. 823-10 of this Code, the information contained in this statement has not been verified by us as to
its accuracy or consistency with the consolidated financial statements and must be the subject of a report by an independent third-party body.
Report on Other Legal and Regulatory Requirements
Format of presentation of the financial statements intended to be included in the annual financial report
We have also verified, in accordance with the professional standards applicable in France relating to the procedures performed by the
statutory auditor relating to the annual and consolidated financial statements presented in the European single electronic format, that the
presentation of the consolidated financial statements intended to be included in the annual financial report mentioned in article L451-1-2, I
of the French Monetary and Financial Code (code monétaire et financier), prepared under the responsibility of the Chief Executive Officer,
complies with the single electronic format defined in the European Delegated Regulation No 2019/815 of 17 December 2018. As it relates to
consolidated financial statements, our work includes verifying that the tagging of these consolidated financial statements complies with the
format defined in the above delegated regulation.
Based on the work we have performed, we conclude that the presentation of the consolidated financial statements intended to be included
in the annual financial report complies, in all material respects, with the European single electronic format.
We have no responsibility to verify that the consolidated financial statements that will ultimately be included by your company in the annual
financial report filed with the AMF are in agreement with those on which we have performed our work.
Appointment of the Statutory Auditors
We were appointed as statutory auditors of Schneider Electric S.E. by the annual general meetings held on May 6, 2004 for MAZARS and
on June 25, 1992 for ERNST & YOUNG et Autres.
As at December 31, 2021, MAZARS was in the eighteenth year of its engagement without interruption and ERNST & YOUNG et Autres
in the thirtieth year.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International
Financial Reporting Standards as adopted by the European Union and for such internal control as management determines is necessary to
enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is expected
to liquidate the Company or to cease operations.
The audit and risks committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and risks
management systems and where applicable, its internal audit, regarding the accounting and financial reporting procedures.
The consolidated financial statements were approved by the Board of Directors.
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
Statutory Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Objectives and audit approach
Our role is to issue a report on the consolidated financial statements. Our objective is to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material misstatement. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with professional standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As specified in Article L. 823-10-1 of the French Commercial Code (code de commerce), our statutory audit does not include assurance
on the viability of the Company or the quality of management of the affairs of the Company.
As part of an audit conducted in accordance with professional standards applicable in France, the statutory auditor exercises professional
judgment throughout the audit and furthermore:
•
Identifies and assesses the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, designs
and performs audit procedures responsive to those risks, and obtains audit evidence considered to be sufficient and appropriate to provide
a basis for his opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.
• Evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
5.
made by management in the consolidated financial statements.
• Assesses the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue
as a going concern. This assessment is based on the audit evidence obtained up to the date of his audit report. However, future events or
conditions may cause the Company to cease to continue as a going concern. If the statutory auditor concludes that a material uncertainty
exists, there is a requirement to draw attention in the audit report to the related disclosures in the consolidated financial statements or,
if such disclosures are not provided or inadequate, to modify the opinion expressed therein.
• Evaluates the overall presentation of the consolidated financial statements and assesses whether these statements represent the underlying
transactions and events in a manner that achieves fair presentation.
• Obtains sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group
to express an opinion on the consolidated financial statements. The statutory auditor is responsible for the direction, supervision and
performance of the audit of the consolidated financial statements and for the opinion expressed on these consolidated financial statements.
Report to the audit and risks committee
We submit a report to the audit and risks committee which includes in particular a description of the scope of the audit and the audit program
implemented, as well as the results of our audit. We also report, if any, significant deficiencies in internal control regarding the accounting and
financial reporting procedures that we have identified.
Our report to the audit and risks committee includes the risks of material misstatement that, in our professional judgment, were of most
significance in the audit of the consolidated financial statements of the current period and which are therefore the key audit matters that
we are required to describe in this report.
We also provide the audit and risks committee with the declaration provided for in Article 6 of Regulation (EU) No. 537/2014, confirming
our independence within the meaning of the rules applicable in France such as they are set in particular by Articles L. 822-10 to L. 822-14
of the French Commercial Code (code de commerce) and in the French Code of Ethics (code de déontologie) for statutory auditors. Where
appropriate, we discuss with the audit and risks committee the risks that may reasonably be thought to bear on our independence, and the
related safeguards.
Paris-La Défense, March 11, 2022
The Statutory Auditors
French original signed by
MAZARS
Loïc Wallaert Mathieu Mougard
ERNST & YOUNG et Autres
Alexandre Resten
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5.7 Extract of the management report
for the year ended December 31, 2021
Consolidated financial statements
Business and Statement of Income highlights
Acquisitions & disposals of the period
Acquisitions
OSIsoft LLC.
As announced on March 19, 2021, Schneider Electric’s majority-owned subsidiary, AVEVA Group Plc, has completed the acquisition of
OSIsoft, for a consideration of EUR 4.5 billion (USD 5.1 billion). OSIsoft is fully consolidated since the acquisition date, and reports within
the Industrial Automation reporting segment.
The consideration paid was funded by EUR 3.9 billion (USD 4.4 billion) of cash, and by a EUR 0.5 billion (USD 0.6 billion) issue of 13,655,570
ordinary shares from AVEVA Group Plc to Estudillo Holdings Corp.
The purchase accounting as per IFRS 3R is not completed as of December 31, 2021. OSIsoft carrying value at acquisition date for net
identifiable assets was EUR (1) million. The net adjustment of the opening balance sheet is EUR 1,460 million, resulting mainly from the
booking of identifiable intangible assets (technology for EUR 998 million, customer relationship for EUR 288 million and trademark for
EUR 150 million) and from a decrease in contract liabilities for EUR 71 million resulting from the remeasurement at fair value of the deferred
revenue following the business combination under IFRS 3R. The preliminary goodwill recognized amounts to EUR 3,001 million
at acquisition date.
ETAP
On June 28, 2021, the Group completed the transaction to purchase a controlling stake in Operation Technology Inc. (“ETAP”). As of June
30, 2021, the Group has acquired 80% of the capital of ETAP for a consideration of EUR 216 million, fully paid in cash. ETAP is consolidated
within Energy Management reporting segment. The Group holds an agreement to acquire the remaining 20% minority interests in 2025.
The related debt has been recognised in “Other non-current liabilities”.
The purchase accounting as per IFRS 3R is not completed as of December 31, 2021. ETAP carrying value at acquisition date for net
identifiable assets was EUR 13 million. The net adjustment of the opening balance sheet is EUR 26 million, resulting mainly from the booking
of a preliminary amount of identifiable intangible assets (technology, customer relationship and trademark). The preliminary goodwill
recognized amounts to EUR 260 million at acquisition date and includes the forward agreement for the acquisition of the remaining 20%
minority interests in 2025.
Uplight Inc.
The Group completed the acquisition of 29.6% of Uplight Inc. on July 27, 2021 for a consideration of EUR 378 million. In October 2021,
the Group subscribed to a capital increase EUR 20 million for the acquisition of Agentis by Uplight Inc., resulting in a dilution of the Group’s
interest to 29.4%. Uplight Inc. has been accounted for by the equity method since August 1, 2021.
I.G.E + X.A.O.
On November 24, 2021, the simplified tender offer for the shares of IGE+XAO, submitted to the AMF, has been closed. At the end of the
tender offer, the Group owns 83.93% of IGE+XAO’s share capital.
Qmerit
On December 20, 2021, the Group acquired 85.85% of the capital of Qmerit, fully consolidated in Energy Management reporting segment.
Qmerit is accelerating the shift away from traditional fossil fuel-powered systems, toward more sustainable, resilient electric technologies.
The Group holds an agreement to acquire the remaining 14.15% minority interests. The related debt has been recognised in “Other
noncurrent liabilities”. The purchase accounting as per IFRS 3R is not completed as of December 31, 2021.
Disposals
In 2021, the Group recorded a total amount of EUR 196 million of gain on business disposals, mainly related to the following:
Cable Support
On April 27, 2021, the Group announced the signing of the agreement to divest the Cable Support business which was consolidated
within Energy Management reporting segment. The transaction was finalized, on June 30, 2021.
IMServ
On July 28, 2021, the Group completed the sale of IMServ, a provider of metering and data services to the energy market.
It was consolidated within Industrial Automation reporting segment.
US Motion
On July 9, 2021, the Group completed the sale of the US Motion industrial, a manufacturer of motion control components for automation
equipment. It was consolidated within Industrial Automation reporting segment.
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Financial Statements
Follow-up on acquisitions and divestments occurred in 2020 with significant effect in 2021
Acquisitions
RIB Software SE
On February 13, 2020, the Group announced its intention to launch a voluntary public tender for the acquisition of 100% of the shares of RIB
Software SE for a total valuation of EUR 1.5 billion. On March 25, 2020, the Group acquired approximately 9.99% of the capital of the company,
outside the takeover offer. On July 10, 2020, the Group announced the successful completion of the voluntary public takeover offer. As of
December 31, 2020, the Group owned 87.64% of the capital of RIB Software, fully consolidated within Energy Management reporting segment.
The Group held a put option agreement on 9.1% of minority interests, valued at EUR 137 million, with a maturity date in 2024.
On June 10, 2021, the Group purchased 9.1% of the non-controlling interests for a consideration of EUR 223 million. The previous put
agreement and related debt have been cancelled.
On July 5, 2021, the Group submitted the formal request to RIB Software SE that the General Meeting of RIB Software SE shall resolve
to transfer the shares of the remaining shareholders (minority shareholders) to Schneider Electric Investment AG for an appropriate cash
compensation (so-called squeeze out under stock corporation law).
As of December 31, 2021, the squeeze out has been completed and the Group owns 100% of RIB Software SE.
The purchase accounting resulting from the acquisition is completed at the closing date. As of December 31, 2021, the purchase
accounting adjustments amount to EUR 211 million, and resulted mainly in the identification of intangible assets (technologies, trademark
and customer relationship). The Goodwill recognized amounts to EUR 1,128 million as of December 31, 2021.
5.
Larsen & Toubro
On May 1st, 2018, Schneider Electric, partnering with Temasek, a global investment company headquartered in Singapore, reached
an agreement to buy Larsen & Toubro’s Electrical & Automation business.
On August 31, 2020, the Group completed the transaction to combine Schneider Electric India’s Low Voltage and Industrial Automation
Products business and Larsen and Toubro (“L&T”) Electrical and Automation business, for a consideration paid of EUR 1,571 million.
Temasek took 35% stake in the combined business for EUR 530 million. The partnership with Temasek resulted in the dilution of the Group’s
interests within Schneider Electric India’s Low Voltage and Industrial Automation Products business, and in the recognition of a gain of
EUR 191 million in the Group’s share of equity in 2020.
L&T is fully consolidated since September 1, 2020, and reports within both Energy Management and Industrial Automation reporting
segments.
The purchase accounting as per IFRS 3R is completed as of December 31, 2021. At acquisition date, the net adjustment of the
opening balance sheet is EUR 286 million. The main identifiable intangible assets recognized as of December 31, 2021 are technology
for EUR 111 million, customer relationship for EUR 380 million and trademark for EUR 83 million. Contingent liabilities assumed mainly
relates to environment, health and safety (EHS) risk for EUR 78 million as of December 31, 2021. The goodwill recognized amounts to
EUR 1,117 million as of December 31,2021.
Exchange rate changes
Fluctuations in the euro exchange rate in 2021 led to an impact of EUR (273) million on consolidated revenue and of EUR (40) million
on adjusted EBITA mainly due to the devaluation of the U.S. dollar against Euro.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.7 Management report for the year ended December 31, 2021
Results of Operations
The following table sets forth our results of operations for 2021 and 2020:
(in millions of euros except for earnings per share)
Full Year 2021
Full Year 2020
Revenue
Cost of sales
Gross profit
% Gross profit
Research and development
Selling, general and administrative expenses
EBITA adjusted*
% EBITA adjusted
Other operating income and expenses
Restructuring costs
EBITA**
% EBITA
Amortization and impairment of purchase accounting intangibles
Operating income
% Operating income
Interest income
Interest expense
Finance costs, net
Other financial income and expense
Net financial income/(loss)
Profit from continuing operations before income tax
Income tax expense
Share of profit/(loss) of associates
PROFIT FOR THE YEAR
attributable to owners of the parent
attributable to non-controlling interests
Basic earnings (attributable to owners of the parent) per share (in euros per share)
Diluted earnings (attributable to owners of the parent) per share (in euros per share)
28,905
(17,062)
11,843
41.0%
(855)
(6,001)
4,987
17.3%
(21)
(225)
4,741
16.4%
(410)
4,331
15.0%
4
(99)
(95)
(81)
(176)
4,155
(966)
84
3,273
3,204
69
5.76
5.67
25,159
(15,003)
10,156
40.4%
(718)
(5,512)
3,926
15.6%
(210)
(421)
3,295
13.1%
(207)
3,088
12.3%
14
(126)
(112)
(166)
(278)
2,810
(638)
66
2,238
2,126
112
3.84
3.81
Variance
14.9%
13.7%
16.6%
19.1%
8.9%
27.0%
(90.0)%
(46.6)%
43.9%
98.1%
40.3%
(71.4)%
(21.4)%
(15.2)%
(51.2)%
(36.7)%
47.9%
51.4%
27.3%
46.2%
50.7%
(38.4)%
50.0%
48.8%
* Adjusted EBITA (Earnings Before Interest, Taxes, Amortization of Purchase Accounting Intangibles). Adjusted EBITA corresponds to operating profit before amortization
and impairment of purchase accounting intangible assets, before goodwill impairment, other operating income and expenses and restructuring costs.
** EBITA (Earnings Before Interest, Taxes and Amortization of Purchase Accounting Intangibles). EBITA corresponds to operating profit before amortization and impairment
of purchase accounting intangible assets and before goodwill impairment.
Revenue
Consolidated revenue totaled EUR 28,905 million for the period ended December 31, 2021, up 14.9% on a reported basis.
Organic growth was positive for 12.7%, acquisitions and disposals accounted for 3.5% and the currency effect for (1.3)%.
Evolution of revenue by reporting segment
The following table sets forth our revenue by business segment for years ended December 31, 2021 and 2020:
(in millions of euros)
Full Year 2021
Full Year 2020
Energy
Management
Industrial
Automation
22,179
19,344
6,726
5,815
Total
28,905
25,159
Energy Management generated revenues of EUR 22,179 million, equivalent to 77% of the Group’s revenues and was up 13.3% organically,
with double-digit growth across all regions. Sales growth was supported by price actions taken throughout the year, though impacted
by supply chain pressures mainly in the second half of the year. Residential buildings remained one of the group’s strongest markets.
Demand for the Group’s offers in non-residential buildings also remained strong, including recovery in hotels and commercial offices.
Data centers & networks showed double-digit growth with continued strong demand. Energy Management benefited from cross-sells
offers into Infrastructure and Industry end-markets. The Group benefited throughout the year from execution on a large project in Egypt.
In industrial end-markets, growth was strongest in discrete automation, particularly in OEMs. Later cycle industrial markets remained
challenged although with positive demand trends including in Metal, Mining and Minerals (MMM) and Oil and Gas (O&G).
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Financial Statements
Industrial Automation generated revenues of EUR 6,726 million, equivalent to 23% of the Group’s revenues and was up 10.7% organically,
with performance contrasted between strong growth from sales into Discrete automation markets and continued weaker sales into Process
& Hybrid markets, although with strong demand recovery towards the end of the year. Sales growth was supported by price actions taken
throughout the year, although impacted by supply chain pressures. Discrete automation markets saw strong demand with growth in many
markets including packaging and material handling and across all regions. Sales into Process & Hybrid markets remained challenged,
impacted by a slower recovery in mid-to-late cycle industries, although second semester saw a strong evolution in demand trends including
in Consumer Packaged Goods (CPG) and O&G.
Gross profit
Gross profit was up 12.5% organic with Gross margin reaching 41.0% in 2021 (down 10 bps organically) mainly driven by the pricing
actions, positive mix and industrial productivity, notwithstanding additional costs incurred due to raw material inflation and continued
pressures on global supply chains.
Support Function costs: Research and development and selling, general and administrative expenses
Research and development expenses, net of capitalized development costs and excluding research and development costs booked in
costs of sales, increased by 19.1% from EUR 718 million for 2020 to EUR 855 million for 2021. As a percentage of revenues, the net cost
of research and development increased slightly to 3.0% in 2021 (2.9% for 2020).
Total research and development expense, including capitalized development costs and development costs reported as cost of sales
(see Note 4 to the Consolidated Financial Statements) increased by 9.4% from EUR 1,407 million for 2020 to EUR 1,539 million for 2021.
As a percentage of revenues, total research and development expenses decreased slightly to 5.3% for 2021 (5.6% for 2020).
5.
In 2021, the net effect of capitalized development costs and amortization of capitalized development costs amounts to EUR 68 million
on operating income (EUR 66 million in 2020).
Selling, general and administrative expenses increased by 8.9% to EUR 6,001 million for 2021 (EUR 5,512 million for 2020). As a percentage
of revenues, selling, general and administrative expenses decreased slightly to 20.8% for 2021 (21.9% for 2020).
Combined, total support function costs, that is, research and development expenses together with selling, general and administrative costs,
totaled EUR 6,856 million for 2021 compared to EUR 6,230 million for 2020, an increase of 10.0%. Support functions costs to sales ratio
decreases at 23.7%.
Other operating income and expenses
For 2021, other operating income and expenses amounted to a net expense of EUR 21 million. This is mainly due to gains on disposal of
business for EUR 196 million being partially compensated by costs of acquisitions and integrations for EUR 166 million. The main scope
changes of the year are described in the 2021 highlights.
Restructuring costs
For 2021, restructuring costs amounted to EUR 225 million compared to EUR 421 million for 2020. In 2020, these costs were mainly
attributed to initiatives to decrease support function costs.
EBITA and Adjusted EBITA
EBITA is defined as earnings before interest, taxes and amortization of purchase accounting intangibles. EBITA comprises operating profit
before amortization and impairment of purchase accounting intangible assets and before goodwill impairment. Adjusted EBITA is adjusted
as EBITA before restructuring costs and before other operating income and expenses, which includes acquisition, integration
and separation costs.
Adjusted EBITA amounted to EUR 4,987 million for 2021, compared to EUR 3,926 million for 2020, an organic increase of 23.2%.
As a percentage of revenues, adjusted EBITA increased at 17.3% with margin improving 140 bps organically.
EBITA increased from EUR 3,295 million for 2020 to EUR 4,741 million in 2021. As a percentage of revenues, EBITA increases at 16.4%
in 2021 (13.1% for 2020).
Adjusted EBITA by business segment
The following table sets out EBITA and adjusted EBITA by business segment:
(in millions of euros)
Backlog
Revenue
Adjusted EBITA
Adjusted EBITA (%)
Energy
Management
Industrial
Automation
Central functions
& digital costs
Full Year 2021
9,088
22,179
4,501
20.3%
2,688
6,726
1,242
18.5%
–
–
(756)
Total
11,776
28,905
4,987
17.3%
On December 31, 2021, the total backlog to be executed in more than a year amounts to EUR 640 million.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.7 Management report for the year ended December 31, 2021
(in millions of euros)
Backlog
Revenue
Adjusted EBITA
Adjusted EBITA (%)
Energy
Management
Industrial
Automation
Central functions
& digital costs
Full Year 2020
7,231
19,344
3,634
18.8%
1,765
5,815
992
17.1%
–
–
(700)
Total
8,996
25,159
3,926
15.6%
On December 31, 2020, the total backlog to be executed in more than a year amounted to EUR 639 million.
Energy Management generated an adjusted EBITA of EUR 4,501 million, i.e. 20.3% of its revenues, up c. 140 bps organic (up 150 bps
on a reported basis and up c. 170 bps organically compared to 2019), mainly driven by the increase in volume, a good level of industrial
productivity, and a positive impact from mix.
Industrial Automation generated an adjusted EBITA of EUR 1,242 million, i.e. 18.5% of its revenues, up c. 90 bps organic (up 140 bps on
a reported basis and up c. 60 bps organically compared to 2019), due mainly to the increase in volume and positive net pricing, despite
a dilutive effect on mix from the lesser growth of AVEVA.
Central functions & digital costs in 2021 amounted to EUR 756 million (EUR 700 million in 2020), reducing slightly as a proportion of revenue
to 2.6%. Investment in the Group’s strategic priorities increased year-over-year, while the Corporate cost element continued to be an area of
focus and remained under tight control, decreasing to around 0.7% of Group revenues in 2021.
Amortization and impairment of purchase accounting intangibles
The amortization and impairment of purchase accounting intangibles amounted to EUR 410 million compared with EUR 207 million last year.
The increase is mostly driven by additional amortization linked with acquisitions completed in the second semester 2020 and the first semester
2021 (mainly RIB Software SE, Larsen & Toubro and OSIsoft LLC).
Operating income (EBIT)
Operating income or EBIT (Earnings Before Interest and Taxes), increased from EUR 3,088 million for 2020 to 4,331 million for 2021,
an increase of 40.3%.
Net financial income/loss
Net financial loss amounted to EUR 176 million for 2021, compared to EUR 278 million for 2020. Financial result has been improved
significantly, thanks to the decrease of the cost of net financial debt (from EUR 112 million in 2020 to EUR 95 million in 2021), as well
as a reduced impact from forex exchange fluctuations (from EUR 36 million in 2020 to EUR 8 million in 2021).
Income tax expense
The effective tax rate was 23.2% for 2021, and 22.7% for 2020. The corresponding income tax expense increased from EUR 638 million
for 2020 to EUR 966 million for 2021.
Share of profit/ (loss) of associates
The share of associates was a EUR 84 million profit for 2021, compared to EUR 66 million profit for 2020.
Non-controlling interests
Non-controlling interests in net income for 2021 totaled EUR 69 million, compared to EUR 112 million for 2020. This represents the share
in net income attributable to the non-controlling interests, mainly coming from the Group Chinese subsidiaries and AVEVA subgroup.
Profit for the year (attributable to owners of the parent)
Profit for the year attributable to the equity holders of our parent company amounted to EUR 3,204 million for 2021, compared
to EUR 2,126 million profit for 2020.
Earnings per share
Basic Earnings per share amounted to EUR 5.76 per share for 2021 and EUR 3.84 per share for 2020.
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
Comments to the consolidated Cash-flow
The following table sets forth our cash-flow statement for 2021 and 2020:
(in millions of euros)
Note
Full Year 2021
Full Year 2020
Profit for the year
Share of (profit)/losses of associates
Income and expenses with no effect on cash flow:
Depreciation of property, plant and equipment
Amortization of intangible assets other than goodwill
Impairment losses on non-current assets
Increase/(decrease) in provisions
Losses/(gains) on disposals of business and assets
Difference between tax paid and tax expense
Other non-cash adjustments
Net cash provided by operating activities
Decrease/(increase) in accounts receivables
Decrease/(increase) in inventories and work in progress
(Decrease)/increase in accounts payable
Decrease/(increase) in other current assets and liabilities
Change in working capital requirement
TOTAL I – CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES
Purchases of property, plant and equipment
Proceeds from disposals of property, plant and equipment
Purchases of intangible assets
Net cash used by investment in operating assets
Acquisitions and disposals of businesses, net of cash acquired & disposed
Other long-term investments
Increase in long-term pension assets
Sub-total
TOTAL II – CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES
Issuance of bonds
Repayment of bonds
Sale/(purchase) of own shares
Increase/(decrease) in other financial debt
Increase/(decrease) of share capital
Transaction with non-controlling interests*
Dividends paid to Schneider Electric’s shareholders
Dividends paid to non-controlling interests
TOTAL III – CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES
TOTAL IV – NET FOREIGN EXCHANGE DIFFERENCE
INCREASE/(DECREASE) IN NET CASH AND CASH EQUIVALENTS: I +II +III +IV
Net cash and cash equivalents, beginning of the year
Increase/(decrease) in cash and cash equivalents
NET CASH AND CASH EQUIVALENTS, END OF THE YEAR
5.
3,273
(84)
726
688
34
(54)
(184)
(38)
108
4,469
(577)
(955)
418
261
(853)
3,616
(543)
59
(333)
(817)
(4,231)
16
(136)
(4,351)
(5,168)
–
(600)
(262)
(444)
216
(418)
(1,447)
(138)
(3,093)
346
(4,299)
6,762
(4,299)
2,463
2,238
(66)
698
512
54
266
(10)
(137)
96
3,651
326
(153)
344
267
784
4,435
(485)
55
(332)
(762)
(2,393)
11
(106)
(2,488)
(3,250)
2,444
(500)
(50)
1,032
43
1,141
(1,413)
(112)
2,585
(403)
3,367
3,395
3,367
6,762
11
10
21
11
10
2
22
22
19
2
19
18
18
*
*
In 2020, the Group received EUR 1,141 million of cash from AVEVA’s minority interests, following the increase of capital realized by the latter, to finance the acquisition
of OSIsoft (Note 2).
In 2021, transactions with non-controlling interests mainly relates to RIB Software SE (Note 2).
Operating Activities
Net cash provided by operating activities before changes in working capital requirement reached EUR 4,469 million for 2021, increasing
compared to EUR 3,651 million for 2020. It represented 15.5% of revenues for 2021 (14.5% of revenues from 2020).
Change in working capital requirement consumed EUR 853 million in cash in 2021, compared to a positive contribution of EUR 784 million
in 2020.
In all, net cash provided by operating activities decreased from EUR 4,435 million in 2020 to EUR 3,616 million in 2021.
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Chapter 5 – Consolidated financial statements at December 31, 2021
5.7 Management report for the year ended December 31, 2021
Investing Activities
Net capital expenditure, which includes capitalized development projects, increased, at EUR 817 million for 2021, compared to
EUR 762 million for 2020, and representing 2.8% of sales in 2021 compared to 3.0% in 2020.
Free cash-flow (cash provided by operating activities net of net capital expenditure) amounted to EUR 2,799 million in 2021 versus
EUR 3,673 million in 2020.
Cash conversion rate (free cash-flow over net income attributable to the equity holders of the parent company on continuing operations)
was 87% in 2021 versus 173% in 2020.
The acquisitions net of disposals represented a cash out of EUR 4,231 million (net of acquired cash) for 2021, compared with
EUR 2,393 million for 2020. Those amounts correspond mainly to the acquisitions and disposals described in Notes 2.1 and 2.2
of the Consolidated Financial Statements (Chapter 5).
Financing Activities
Net cash outflow from financing activities amounted to EUR 3,093 million during the year 2021, compared to cash inflow of EUR 2,585 million
during the year 2020, mainly due to changes in net debt and to the cash received from AVEVA’s minority interests in 2020, following the
increase of capital realized by the latter, to finance the acquisition of OSISoft.
The net cash outflow from other financial debts amounted to EUR 444 million in 2021, compared to a net cash inflow of EUR 1,032 million
in 2020. The 2020 inflow is mainly due to a net commercial paper issuance of EUR 1,302 million.
The dividend paid by Schneider Electric was EUR 1,447 million in 2021, compared with EUR 1,413 million in 2020.
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Chapter 5 – Consolidated financial statements at December 31, 2021
Financial Statements
5.
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Chapter 6 – Parent Company Financial Statements
Electricity is the most efficient and best vector for
decarbonization; combined with circular economy
approach solutions, we will achieve climate-positive
impact as part of the United Nations Sustainable
Development Goals.
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Chapter 6 – Parent Company Financial Statements
Financial Statements
6
Parent Company
Financial Statements
6.
6.1 Balance sheet
6.2 Statement of income
6.3 Notes to the financial statements
6.3.1 Significant events of the financial year
6.3.2 Accounting principles
6.3.3 Notes
6.4 Statutory auditors’ report on the
annual financial statements
6.5 List of securities held at
December 31, 2021
6.6 Subsidiaries and affiliates
6.7 The company’s financial results
over the last 5 years
6.8 Extract of the management
report for the year ended
December 31, 2021
412
414
415
415
415
416
424
427
428
430
431
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Chapter 6 – Parent Company Financial Statements
6.1 Balance sheet
Assets
(in thousands of euros)
NON-CURRENT ASSETS
Intangible assets
Intangible rights
Property, plant and equipment
Land
Buildings
Other
Total intangible assets and property, plant and equipment
Financial investments
Shares in subsidiaries and affiliates
Other investment securities
Advances to subsidiaries and affiliates
Other
Total financial investments
Total non-current assets
CURRENT ASSETS
Accounts receivable
Accounts receivable – trade
Other
Total accounts receivable
Marketable securities and cash
Marketable securities
Advances to the Group cash pool
Other
Total marketable securities and cash
Total current assets
PREPAYMENTS AND OTHER ASSETS
Prepaid expenses
Deferred expenses
Call premiums
Translation losses
TOTAL ASSETS
Notes
Gross
A. & D. or Prov. Dec. 31, 2021 Net Dec. 31, 2020 Net
1.1
1.2
2.1
2.2
2.3
3
4
5
6.1
6.2
6.3
9
27,429
(27,429)
2,784
48
1,221
–
(48)
–
31,483
(27,477)
–
2,784
–
1,221
4,006
–
2,785
–
1,226
4,011
5,377,099
637,409
3,218,096
10
9,232,615
9,264,097
351,799
136,480
488,279
348,250
6,878,822
306
7,227,378
7,715,657
1,151
17,021
21,246
84,928
(19,468)
–
–
–
5,357,631
637,409
3,218,096
10
5,346,631
457,964
3 982,656
10
(19,468)
9,213,146
9,787,261
(46,945)
9,217,153
9,791,272
–
–
–
–
–
–
–
–
–
–
–
–
351,799
136,480
488 279
574,675
129,770
704,445
348,250
6,878,822
306
389,727
6,522,060
207
7,227,378
6,911,993
7,715,657
7,616,439
1,151
17,021
21,246
84,928
1,280
21,933
26,894
30,533
17,104,101
(46,945)
17,057,156
17,488,350
The notes form an integral part of these parent company financial statements.
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Chapter 6 – Parent Company Financial Statements
Financial Statements
Equity and liabilities
(in thousands of euros)
EQUITY
Share capital
Additional paid-in capital
Reserves
Legal reserve
Retained earnings
Net income for the financial year
Untaxed provisions
Total equity
PROVISIONS FOR CONTINGENCIES:
Provisions for contingencies
Total provisions for contingencies and expenses
LIABILITIES
Convertible bond
Bonds
Other borrowings
Amounts payable to subsidiaries and affiliates
Borrowings and financial liabilities
Accounts payable – trade
Accrued taxes and payroll costs
Other
Total liabilities
Deferred income
Call premiums
Translation gains
TOTAL EQUITY AND LIABILITIES
The notes form an integral part of these parent company financial statements.
Notes
Dec. 31, 2021
Dec. 31, 2020
7
7.1
7.2
7.3
8
9
9
10
11
6.3
2.3
2,276,134
2,411,613
2,268,274
2,203,758
243,027
444,780
1,498,235
2
6,873,791
243,027
1,922,675
(31,273)
2
6,606,463
350,596
350,596
391,880
391,880
650,000
7,700,665
80,249
–
1,150,000
31
109,426
5,998
650,000
8,246,269
84,814
–
1,302,000
680
107,252
5,677
9,696,369
10,396,692
–
51,472
84,928
40
62,743
30,533
17,057,156
17,488,350
6.
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Chapter 6 – Parent Company Financial Statements
6.2 Statement of income
(in thousands of euros)
Notes
Full year 2021
Full year 2020
Sales of services and other
Reversals of provisions, depreciation and amortization and expense transfers
Operating revenues
Purchases and external expenses
Taxes other than on income
Payroll expenses
Depreciation and provision expense
Other operating expenses and joint-venture losses
Operating expenses
Operating profit/(loss)
Dividend income
Interest income
Reversals of impairment provisions for long-term receivables and other
Financial income
14
Interest expense
Provision expense
Financial expenses
Net financial income/(loss)
Current result before tax
Proceeds from fixed asset disposals
Reinvoicing performance share
Provision reversals and expense transfers
Other
Non-recurring income
Carrying amount of fixed asset disposals
Provisions, depreciation and amortization
Other
Non-recurring expenses
Net non-recurring income/(loss)
Net income tax benefit
NET INCOME
The notes form an integral part of these parent company financial statements.
–
–
–
(11,317)
(2,014)
(1,922)
(4,943)
(2,127)
(22,322)
(22,322)
1,500,363
41,008
–
1,541,371
(87,130)
5,358
(81,772)
14
1,459,598
1,437,276
267
82,245
149,627
154
232,293
(1)
(97,153)
(126,522)
(223,676)
8,617
52,342
15
16
325
–
325
(9,666)
(2,604)
(2,606)
–
(2,000)
(16,875)
(16,550)
1,553
48,010
–
49,563
(112,516)
(6,766)
(119,282)
(69,719)
(86,269)
138,894
121,013
280,004
23,197
563,107
(219,983)
(134,516)
(185,901)
(540,400)
22,708
32,287
1,498,235
(31,273)
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Chapter 6 – Parent Company Financial Statements
Financial Statements
6.3 Notes to the financial statements
(All amounts are in thousands of euros unless otherwise indicated)
6.3.1 Significant events of the financial year
During the financial year, Schneider Electric SE carried out (i) a capital increase through the issue of company shares reserved for
employees participating in the PEG and (ii) a capital increase through the issue of shares reserved for Group employees based outside
France and for entities within the framework of employee shareholding or saving programs:
i.
0.55 million shares issued with a par value of 4 euros each, representing a capital increase of EUR 2.2 million and a share premium of
EUR 58.5 million (shares subscribed at 110.19 euros each);
ii. 1.41 million shares issued with a par value of 4 euros each, representing a capital increase of EUR 5.7 million and a share premium of
EUR 150.1 million (shares subscribed at 110.19 euros each).
The company redeemed a bond issue maturing in September 2021 for EUR 600 million.
In May 2021, the 2020 dividend was paid in the amount of EUR 1,447 million.
The company also proceeded to buy back 1.8 million of its own shares for EUR 262 million.
Finally, during 2021, share plans 30, 31 and 31bis expired, the company decided to serve 2.1 million shares for an amount of EUR 124 million
re-invoiced to the group companies concerned.
As of December 31, 2021, the company decided to fund some of its current share plans by using existing shares and to re-invoice the
related expense to the various entities of the Group. As a consequence, the provision for expenses on shares distribution has been adjusted
to EUR 348 million.
6.
6.3.2 Accounting principles
As in the prior financial year, the financial statements for the financial year ended December 31, 2021 have been prepared in accordance with
French generally accepted accounting principles and with the ANC no. 2014-03 code updated by ANC no. 2016-07 code on Nov. 04, 2016.
Non-current assets
Non-current assets of all types are stated at historical cost.
Intangible assets
Intangible rights are amortized over a maximum of 5 years.
Property, plant and equipment
Amortizable Items of property, plant and equipment are depreciated on a straight- line basis over their estimated useful lives, ranging from
3 to 10 years. Lands are not depreciated.
Shares in subsidiaries and affiliates
Shares in subsidiaries and affiliates are stated at acquisition cost.
Provisions for impairment may be funded where the carrying amount is higher than the estimated value in use at the end of the financial
year. This estimate is primarily determined on the basis of the underlying net assets, earnings outlook and economic forecasts. For listed
securities, the average stock price over the month before the closing is used.
Provisions may be reversed if the estimated value becomes higher than the carrying amount.
Unrealized gains resulting from such estimates are not recognized.
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Chapter 6 – Parent Company Financial Statements
6.3 Notes to the financial statements
Own shares
Treasury stocks are assessed by category (shares in subsidiaries and affiliates, marketable securities), according to the FIFO. method
“first-in, first-out”.
The accounting classification of treasury stocks depends on the purpose for which they are held:
• own shares are classified in marketable securities if they are the object of an explicit allocation to cover performance share distribution
plans or if they are bought to regulate the share price of the Group;
• own shares are classified in long-term investments if they are not the object of an explicit allocation to cover a performance share or if they
are bought with the aim of their use within the context of a liquidity contract by an investment services provider, or of their later cancellation
within the framework of a capital reduction.
The accounting of an impairment of own shares depends on the purpose for which they are held:
• when own shares are allocated to cover of performance share distribution plans, there is no reason to record a provision for impairment;
in other cases, it is necessary to book an impairment if the average stock market price of the month before the closing is lower than the
•
weighted average cost.
Pension obligations
The present value of termination benefits is determined using the projected unit credit method. Provisions are funded for the supplementary
pension benefits provided by the company on the basis of the contractual terms of top-hat agreements, granting a level of benefits
exceeding the general regimes. The company applies the corridor method to actuarial gains and losses arising from changes in estimates.
Under this method, the portion of net cumulative actuarial gains and losses exceeding 10% of the projected benefit obligation is amortized
over 10 years.
Currency risk
When necessary, a contingency provision is put in place for unrealized exchange losses. However, when there are unrealized exchange
gains and losses on back-to-back transactions in the same currency and with the same maturity, the amount of the provision is then limited
to the net loss.
Bonds
Issue costs are amortized over the life of the bonds and are booked under “deferred expenses”.Issuance premiums are booked under
“Call premiums” & amortized over the duration of the bonds.
In the case of convertible bond (OCEANE), at conversion, the bond will be reclassified as equity for its nominal conversion amount.
6.3.3 Notes
Note 1: Non-current assets
1.1 – Intangible assets
This item primarily consists of share issue and merger expenses, which are fully amortized.
1.2 – Property, plant and equipment
(in thousands of euros)
Property, plant and equipment
Cost
Depreciation
NET
Property, plant and equipment are mainly comprised of land not built.
Dec. 31, 2020
Additions
Disposals
Dec. 31, 2021
4,301
(290)
4,011
–
–
–
(247)
242
(5)
4,054
(48)
4,006
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Chapter 6 – Parent Company Financial Statements
Financial Statements
Note 2: Investments
2.1 – Shares in subsidiaries and affiliates
(in thousands of euros)
Shares in subsidiaries and affiliates
Cost
Provisions
NET
Dec. 31, 2020
Additions
Disposals
Dec. 31, 2021
5,377,099
(30,468)
5,346,631
–
–
–
–
11,000
11,000
5,377,099
(19,468)
5,357,631
During the financial year, the company reversed part of the provision of Schneider Electric Japan Holding for EUR 4 million and Muller SA
for EUR 7 million.
The main investments at December 31, 2021 were as follows:
Shares in subsidiaries and affiliates
Schneider Electric Industries SAS
Schneider Electric Japan Holding
Muller SAS
TOTAL
2.2 – Other investment securities
(in thousands of euros)
Other investment securities
Schneider Electric SE shares
Other
Provisions for other Shares and own shares
NET
Carrying value
5,343,544
6,049
8,038
5,357,631
6.
Dec. 31, 2020
Increases
Decreases
Dec. 31, 2021
457,964
–
–
457,964
261,660
–
–
261,660
(82,215)
–
–
(82,215)
637,409
–
–
637,409
Other investment securities primarily include Schneider Electric SE shares acquired for allocation of performance share distribution plans.
In compliance with the decision adopted by the Board of Director dated July 29, 2021, the company bought back 1,809,054 of its own
shares for a total of EUR 262 million.
In compliance with the Board’s decisions of February 2021, March 2021, April 2021 and July 2021 fund the performance shares of plans
30, 31, 31bis, 33 and 39 with Schneider Electric treasury shares, 1,521,169 shares for a total amount of EUR 97 million have been classified
as marketable securities. 238,101 shares for EUR 15 million were reclassified from marketable securities to “Other investment securities”
following the departure of the beneficiaries.
2.3 – Advances to subsidiaries and affiliates
(in thousands of euros)
Advances to subsidiaries and affiliates
Cost
NET
Dec. 31, 2020
Increases
Decreases
Dec. 31, 2021
3,982,656
3,982,656
54,868
54,868
(819,428)
3,218,096
(819,428)
3,218,096
At December 31, 2021, this item mainly consisted of a loan of EUR 2,500 million granted to Schneider Electric Industries SAS with a maturity
date of 2022, a loan granted in 2012 to Boissière Finance for a total amount of USD 800 million valued at EUR 706 million at the end of 2021
and with a maturity date of 2022, and accrued interests for a total amount of EUR 12 million.
During the financial year, a loan granted to Schneider Electric Investment AG for a total amount of EUR 819 million matured on March 5, 2021.
The revaluation of USD loan resulted in a translation gain of EUR 85 million.
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6.3 Notes to the financial statements
Note 3: Accounts receivables
(in thousands of euros)
Trade receivables
Other
NET
Dec. 31, 2021
Dec. 31, 2020
351,799
136,480
488,279
574,675
129,770
704,445
Trade receivables mainly include the reinvoicing of the performance shares to SEISAS.
At December 31, 2021, the “Other receivables” are mainly composed of tax receivables and R&D tax credits.
Note 4: Marketable securities
(in thousands of euros)
TREASURY SHARES
Gross
Provisions
TOTAL NET
Dec. 31, 2020
Acquisitions
Disposals
Dec. 31, 2021
Number of
shares
6,381,401
–
–
Value
Value
Value
Value
Number of
shares
389,727
–
389,727
97,153
(138,630)
–
348,250
–
5,570,816
–
97,153
(138,630)
348,250
–
Marketable securities primarily represent own shares held by the company for allocation to future performance shares plans and,
if appropriate, stock-options.
In 2021, following the decision of the board to fund the performance share distribution plans 30, 31, 31bis, 33 and 39 with existing shares.
1,521,169 shares for a total amount of EUR 97 million has been transferred into marketable securities. The performance shares plans,
30, 31 and 31bis have expired, the company has distributed 2 million shares for a total amount of EUR 124 million re-invoiced to the
concerned Group entities.
Following the loss of the rights of employees who left the group, the company switched back 238,101 shares for a total amount of
EUR 15 million to “Other investment securities”.
Note 5: Cash and cash equivalent group
This item consists of interest-bearing advances by Schneider Electric SE to the Group cash pool (Boissière Finance) that are immediately
recoverable on demand.
Note 6: Prepayment and other assets
6.1 – Prepaid expenses
The prepaid expenses relates mainly on insurance costs and fees.
6.2 – Bond issue expenses
(in thousands of euros)
Bond issue expenses
Sep. 27, 2012 due 2022 (USD 800 million)
Sep. 6, 2013 due 2021 (EUR 600 million)
Mar. 11, 2015 due 2025 (EUR 750 million)
Sep. 8, 2015 due 2023 (EUR 800 million)
Oct. 13, 2015 due 2025 (EUR 200 million)
Oct. 13, 2015 due 2025 (EUR 100 million)
Sep. 9, 2016 due 2024 (EUR 800 million)
Dec. 13, 2017 due 2026 (EUR 750 million)
June. 21, 2018 due 2027 (EUR 750 million)
Sept. 9, 2019 due 2024 (EUR 200 million)
Jan. 15, 2019 due 2028 (EUR 250 million)
Jan. 15, 2019 due 2028 (EUR 500 million)
Mar. 11, 2020 due 2029 (EUR 800 million)
Apr. 9, 2020 due 2027 (EUR 500 million)
Jun. 12, 2020 due 2023 (EUR 500 million)
Nov. 24, 2020 due 2026 (EUR 650 million)
TOTAL
Dec. 31, 2020
Increases
Decreases
Dec. 31, 2021
576
235
1,353
1,111
468
190
1,653
1,762
1,644
503
630
1,413
2,212
1,388
1,027
5,767
21,933
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(450)
(235)
(317)
(408)
(95)
(39)
(445)
(294)
(254)
(136)
(89)
(200)
(270)
(221)
(412)
(1,046)
(4,912)
126
–
1,036
703
373
151
1,208
1,468
1,390
367
541
1,213
1,942
1,167
615
4,721
17,021
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6.3 – Issuance premiums
(in thousands of euros)
Issuance premiums
Sep. 27, 2012 due 2022 (USD 800 million)
Sep. 6, 2013 due 2021 (EUR 600 million)
Mar. 11, 2015 due 2025 (EUR 750 million)
Sep. 8, 2015 due 2022 (EUR 800 million)
Oct. 13, 2015 due 2025 (EUR 100 million)
Sep. 9, 2016 due 2024 (EUR 800 million)
Dec. 13,2017 due 2026 (EUR 750 million)
June 21,2018 due 2027 (EUR 750 million)
Sept. 9, 2019 due 2024 (EUR 200 million)
Jan. 15, 2019 due 2028 (EUR 250 million)
Jan. 15, 2019 due 2028 (EUR 500 million)
Mar. 11, 2020 due 2029 (EUR 800 million)
Apr. 9, 2020 due 2027 (EUR 500 million)
Jun. 12, 2020 due 2023 (EUR 500 million)
Nov. 24, 2020 due 2026 (EUR 650 million)
TOTAL
Chapter 6 – Parent Company Financial Statements
Financial Statements
Dec. 31, 2020
Increases
Decreases
Dec. 31, 2021
216
141
3,808
1,549
(730)
3,752
3,446
5,230
(2,164)
(10,408)
98
5,090
2,585
979
(49,441)
(35,849)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(200)
(141)
(894)
(568)
148
(1,011)
(579)
(808)
585
1,479
(14)
(621)
(412)
(400)
9,059
5,623
Note 7: Shareholders’ equity and retained earnings
Share capital
Additional
paid-in capital
Reserves
and retained
earnings
Net income
for the year
Regulated
provisions
(in millions of euros)
December 31, 2019 before allocation of net
income for the year
Change in share capital
Allocation of 2019 net income
2019 dividend
Cancellation of own shares
Reimbursement withholding tax 2003
2020 net income
December 31, 2020 before allocation of net
income for the year
Change in share capital
Allocation of 2019 net income
2020 dividend
Charges on WESOP 2021
2021 net income
2,328
–
–
–
(60)
–
–
3,133
–
–
–
(929)
–
–
2,268
2,204
8
–
–
–
–
209
–
–
(1)
–
3,489
–
57
(1,413)
–
33
–
2,166
–
(31)
(1 447)
–
–
57
–
(57)
–
–
–
(31)
(31)
–
31
–
–
1 498
DECEMBER 31, 2021 BEFORE ALLOCATION
OF NET INCOME FOR THE YEAR
2,276
2,412
688
1,498
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6.
16
0
2,914
981
(582)
2,741
2,867
4,422
(1,579)
(8,929)
84
4,469
2,173
579
(40,382)
(30,226)
Total
9,007
–
–
(1,413)
(989)
33
(31)
6,607
217
–
(1,447)
(1)
1,498
6,874
7.1 – Capital
Share capital
The company’s share capital at December 31, 2021 amounted to EUR 2,276,133,768 consisting of 569,033,442 shares with a par value
of EUR 4, all fully paid up.
Changes in share capital
The increase in share capital of EUR 8 million recorded over the year corresponding to a (i) EUR 2.2 million capital increase through the
issue of company shares reserved for employees participating in the PEG and (ii) a EUR 5.65 million capital increase through the issue of
shares reserved for Group employees based outside France and for entities participating in employee shareholding or savings programs.
Own shares
At the reporting date, the total number of own shares held is 12,455,824 for a total net value of EUR 638 million
7.2 – Additional paid-in capital
Additional paid-in capital decreased by EUR 208 million over the financial year, coming from increase capital.
7.3 – Allocation of previous year net income
Pursuant to the 3rd resolution of the Ordinary and Extraordinary Shareholders’ Meeting of April 28, 2021, the 2020 gain of EUR 31 million was
allocated to retained earnings. EUR 1,474 million of dividends were distributed and EUR 27 million not distributed corresponding to SE own
treasury shares.
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6.3 Notes to the financial statements
Note 8: Provisions for contingencies and expenses
(in thousands of euros)
Dec. 31, 2020
Increases
Decreases
Dec. 31, 2021
PROVISIONS FOR CONTINGENCIES
Provision for fees on own shares distribution
Other
TOTAL
389,727
2,153
391,880
97,154
162
97,316
(138,600)
(138,600)
348,281
2,315
350,596
Management is confident that overall the balance sheet provisions for disputes of which it is currently aware and in which the company
is involved should be sufficient to ensure that these disputes do not have a material impact on its financial position or income.
A provision for risk of EUR 348 millions was booked to cover the decision of the board to allocate performance shares plans with SESE own shares.
Note 9: Bonds
(in thousands of euros)
Schneider Electric SE 2019
Schneider Electric SE 2022
Schneider Electric SE 2021
Schneider Electric SE 2025
Schneider Electric SE 2023
Schneider Electric SE 2025
Schneider Electric SE 2025
Schneider Electric SE 2024
Schneider Electric SE 2024
Schneider Electric SE 2026
Schneider Electric SE 2027
Schneider Electric SE 2028
Schneider Electric SE 2028
Schneider Electric SE 2029
Schneider Electric SE 2027
Schneider Electric SE 2023
TOTAL
Fixed: fixed rate.
Floating: floating rate.
Share capital
Dec. 31, 2021
Dec. 31, 2020
Interest rate
Maturity
94,325
706,340
–
750,000
800,000
200,000
100,000
800,000
200,000
750,000
750,000
500,000
250,000
800 000
500 000
500,000
94,325
651,944
600,000
750,000
800,000
200,000
100,000
800,000
200,000
750,000
750,000
500,000
250,000
800,000
500,000
500,000
Euribor + 0.60% Floating
2.95% Fixed
2.50% Fixed
0.875% Fixed
1.50% Fixed
1.841% Fixed
1.841% Fixed
0.25% Fixed
0.25% Fixed
0.875% Fixed
1.375% Fixed
1.5% Fixed
1.5% Fixed
0.25% Fixed
1% Fixed
0% Fixed
July 23, 2022
Sep. 27, 2022
Sep. 06, 2021
Mar. 11, 2025
Sep. 08, 2023
Oct. 13, 2025
Oct. 13, 2025
Sep. 09, 2024
Sep. 09, 2024
Dec. 13, 2026
June 21, 2027
Jan. 15, 2028
Jan. 15, 2028
Mar. 11, 2029
Apr. 09, 2027
Jun. 12, 2023
7,700,665
8,246,269
The revaluation of USD bonds Schneider Electric SE 2022 resulted in a translation loss of EUR 85 million
Convertible bonds (OCEANE)
(in thousands of euros)
Schneider Electric SE 2026
TOTAL
Share capital
Dec. 31, 2021
Dec. 31, 2020
Interest rate
Maturity
650,000
650,000
650,000
650,000
0%
Jun. 15, 2026
Schneider Electric SE has issued bonds during past years on different markets:
•
in the United States, through a private placement offering following (SEC 144A rule) for USD 800 million worth of bonds issued in
September 2012, at a rate of 2.950%, due in September 2022;
• as part of its Euro Medium-Term Notes (EMTN) program, for which bonds are traded on the Luxembourg stock exchange.
During the year, the company reimbursed one bond amounting EUR 600 million matured on September 6, 2021.
The Group has issued in November 2020 a bond that is convertible into or exchangeable for a new or existing shares (OCEANEs)
for EUR 650 million at a rate of 0.00%, maturing in June 2026.
The initial conversion and/or exchange ratio of the Bonds is one share per Bond with a nominal value set at EUR 176. According to
Sustainability-Linked Financing Framework, if the average sustainability performance score (calculated as the arithmetic average of the
scores of the three key performance indicators) does not reach a certain level by December 31, 2025, the Group will pay an amount equal
to 0.50% of the face value.
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Financial Statements
The three key performance indicators from the 11 new Schneider Sustainability Impact (SSI) 2021-2025 indicators are the following:
• Climate: Deliver 800 megatons of saved and avoided C02 emissions to our customers;
• Equality: Increase gender diversity, from hiring to front-line managers and leadership teams (50/40/30);
• Generation: Train 1 million underprivileged people in energy management.
The detailed rating methodology and approach are presented in the Group’s Sustainability-Linked Financing Framework.
For all those transactions, issue premium and issue costs are amortized per the effective interest rate method.
At December 31, 2021, the other remaining bonds are as follows:
• EUR 100 million worth of 1.841% bonds issued in October 2015 and maturing on October 13, 2025;
• EUR 800 million worth of 0.25% bonds issued in September 2016 and maturing on September 9, 2024 and described above;
• EUR 200 million worth of 1.841% bonds issued in October 2015 and maturing on October 13, 2025;
• EUR 800 million worth of 1.50% bonds issued in September 2015 and maturing on September 8, 2023;
• EUR 750 million worth of 0.875% bonds issued in March 2015 and maturing on March 11, 2025;
• EUR 750 million worth of 0.875% bonds issued in December 2017 and maturing on December 13, 2026;
• EUR 750 million worth of 1.375% bonds issued in June 2018 and maturing on June 21, 2027;
• EUR 200 million worth of 0.25% bonds issued in September 2019 and maturing on August 09, 2024;
• EUR 500 million worth of 1.5% bonds issued in January 2019 and maturing on January 15, 2028;
• EUR 800 million worth of 0.25% bonds issued in March 2020 and maturing on March 11, 2029;
• EUR 500 million worth of 1% bonds issued in April 2020 and maturing on April 9, 2027;
• EUR 500 million worth of 0% bonds issued in June 2020 and maturing on June 12, 2023;
• EUR 94 million worth of Euribor 0,60% bonds issued in July 2020 and maturing on July 23, 2022;
• EUR 250 million worth of 1.5% bonds issued in January 2019 and maturing on January 15, 2028.
The issue premiums and issuance costs are amortized in line with the effective interest method.
Note 10: Other borrowings
Other borrowings at December 31, 2021 included accrued interest on bonds and other debt issued by the company.
Accrued interest amounted to EUR 38 million, compared to EUR 43 million at end-2020.
Other debt issued by the company correspond to an intercompany loan amounted to EUR 42 million.
Note 11: Borrowings and financial liabilities
Interest-bearing liabilities
(in thousands of euros)
Commercial paper
Borrowings
Overdrafts
Other
NET
Dec. 31, 2020
Increase
Decrease
Dec. 31, 2021
1,302,000
–
–
–
6,454,000
200,000
–
–
(6,806,000)
–
–
950,000
200,000
–
–
1,302,000
6,654,000
(6,806,000)
1,150,000
During the financial year, the company took out a conventional loan with HSBC on December 9, 2021 for EUR 200 million, maturing on January 10, 2022.
Note 12: Maturities of receivables and payables
6.
(in thousands of euros)
NON-CURRENT ASSETS
Advances to subsidiaries and affiliates
CURRENT ASSETS
Accounts receivable – trade
Other receivables
Marketable securities
Prepaid expenses
DEBT
Bonds
Other borrowings
Commercial paper
Accounts payable – trade
Accrued taxes and payroll costs
Other
Deferred income
Total
Due within
1 year
Due in 1 to
5 years
Due beyond
5 years
3,218,096
3 218,096
351,799
136,480
348,250
1,151
8,350,865
80,249
1,150,000
31
112,569
5,998
–
351,799
104,754
348,250
1,151
706,340
80,249
1,150,000
31
112,569
5,998
–
–
31,726
–
–
4,844,525
–
–
–
–
–
–
–
–
–
–
2,800,000
–
–
–
–
–
–
Invoices received and issued during the period have not been subject to late payment.
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6.3 Notes to the financial statements
Note 13: Related-party transactions (minimum 10% stake)
(in thousands of euros)
Shares in subsidiaries and affiliates
Advances to subsidiaries and affiliates
Accounts receivable
Cash and cash equivalents
Revenues:
• rebilled performance shares
•
interest
Note 14: Net financial income/(loss)
(in thousands of euros)
Dividends
Net interest income (expense)
Other
NET FINANCIAL INCOME/(LOSS)
Gross
Net
5,377,099
3,218,096
351,799
6,878,936
5,357,631
3,218,096
351,799
6,878,936
82,245
1,541,212
Full year 2021
Full year 2020
1,500,362
(46,122)
5,358
1,459,598
1,553
(64,355)
(6,917)
(69,719)
In 2021, the company receive EUR 1,500 million of dividends from Schneider Electric Industries SAS. In 2020, dividends received from
Schneider Electric Japan Holding Ltd were EUR 1.6 million.
Note 15: Net non-recurring income/(loss)
(in thousands of euros)
Net gains/(losses) on fixed asset disposals
Provisions net of reversals
Other non-recurring income/(expense)
NET NON-RECURRING INCOME/(LOSS)
Full year 2021
Full year 2020
35
11,000
(2,418)
8,617
(81,089)
80,897
22,900
22,708
As a reminder, the company received EUR 23 million of interest relative to reimbursement of withholding tax at December 31, 2020
Note 16: Net income tax benefit
The “income tax expense” line item in the statement of income mainly consists of the Group tax relief recorded by the tax group headed
by Schneider Electric SE, net of 2021 income tax due, for EUR 54 million.
Schneider Electric SE is the parent company of the tax group comprising all French subsidiaries that are over 95%-owned. Tax loss carry
forwards available to the company in this capacity totaled EUR 1,939 million at December 31, 2021.
Note 17: Pension benefit commitment
The company had taken commitments towards its executives, active managers and retirees. In 2015, the company closed the top-hat
executive pension plans. Since 2015, there is no more active beneficiary. The company has outsourced to AXA France VIE the commitments
towards the retires beneficiaries the top-hat executive pension plans.
Note 18: Off-balance sheet commitments
18.1 – Partnership obligations
The share of liabilities of “SC” non-trading companies attributable to Schneider Electric SE as partner is not material.
The share of liabilities of “SNC” flow-through entities attributable to Schneider Electric SE as partner is not material.
18.2 – Guarantees given and received
Commitments given
Counter-guarantees of bank guarantees: None.
Other guarantees given: EUR 2,127 million, mainly to Group companies.
Commitments received
Bank counter-guarantees: None.
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Financial Statements
18.3 – Financial instruments
Schneider Electric Group hedging transactions, exchange guarantees and the establishment of financial instruments are carried out by
the manager of the Group cash pool, Boissière Finance, a wholly- owned subsidiary of Schneider Electric Industries SAS, which in turn
is wholly-owned by Schneider Electric SE.
Schneider Electric SE does not hold any hedging instruments at December 31, 2021.
Note 19: Contingencies
As part of its normal operations, the Group is exposed to a number of potential claims and litigations. Except for those for which it is
probable that the Group will incur a liability and for which a provision is established for such outcome, the Group is not aware of other
potentially material claims and litigations.
Investigations were conducted in September 2018 by the French judicial and antitrust authorities at Schneider Electric’s head office
and other premises concerning electrical distribution activities in France. Schneider Electric is cooperating with the French authorities.
Such investigations could lead to formal proceedings against the Group for which the probability and the potential impact, which could
be significant on the financial statements of Schneider Electric SE, cannot be determined at this time.
Note 20: Other information
20.1 – Workforce
The average number of employees is 1 over 2021.
6.
20.2 – Consolidated financial statements
Schneider Electric SE is the parent company of the Group and accordingly publishes the consolidated financial statements of the
Schneider Electric Group.
20.3 – Subsequent events
Trademark Schneider Electric
As the temporary transfer of usufruct for the Schneider Electric trademark made by Schneider Electric SE in 2007 to the Belgian company
Schneider Electric Services International ends contractually on 31 December 2021, Schneider Electric SE once again holds full ownership
of the Schneider Electric trademark. Consequently, as of 1 January 2022, the royalties for the Schneider Electric trademark will be invoiced
to all group companies by Schneider Electric SE.
IGE+XAO
Following the completion of a simplified public tender offer, the Group now holds 83.93% of the issued capital of IGE+XAO. In accordance
with the Group’s intentions as presented in the Information Note and the previously stated strategy to consolidate the various independent
software entities within the Energy Management Software Division, the Group intends to implement a merger of IGE+XAO with Schneider
Electric during fiscal year 2022.
The Boards of Directors of Schneider Electric and IGE+XAO have met on February 16, 2022 and approved the economic, financial and
legal terms of the merger, including the merger parity of 5 Schneider Electric shares for 3 IGE+XAO shares. The merger agreement as well
as the merger appraisers’ reports will be available on the websites of Schneider Electric and IGE+XAO.
The Group will seek confirmation from the AMF that the merger would not require Schneider Electric to file a buy-out offer for the shares
of IGE+XAO. In addition, the merger will be subject to the approval of the annual general shareholder meetings of the shareholders of
IGE+XAO and Schneider Electric to be held on May 4 and 5, 2022 respectively.
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Chapter 6 – Parent Company Financial Statements
6.4 Statutory auditors’ report on the
annual financial statements
To the Annual General Meeting of Schneider Electric S.E.,
Opinion
In compliance with the engagement entrusted to us by your Annual General Meeting, we have audited the accompanying financial statements
of Schneider Electric S.E. for the year ended December 31, 2021.
In our opinion, the financial statements give a true and fair view of the assets and liabilities and of the financial position of the Company as at
December 31, 2021 and of the results of its operations for the year then ended in accordance with French accounting principles.
The audit opinion expressed above is consistent with our report to the audit and risks committee.
Basis for Opinion
Audit Framework
We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Statutory Auditors’ Responsibilities for the Audit of the Financial
Statements section of our report.
Independence
We conducted our audit engagement in compliance with independence requirements of rules required by the French Commercial Code (code
de commerce) and the French Code of ethics (code de déontologie) for statutory auditors for the period from January 1st, 2021 to the date of
our report, and specifically we did not provide any prohibited non-audit services referred to in Article 5(1) of Regulation (EU) N° 537/2014.
Justification of Assessments – Key Audit Matters
Due to the global crisis related to the Covid-19 pandemic, the financial statements of this period have been prepared and audited under
specific conditions. Indeed, this crisis and the exceptional measures taken in the context of the state of sanitary emergency have had
numerous consequences for companies, particularly on their operations and their financing, and have led to greater uncertainties on their
future prospects. Those measures, such as travel restrictions and remote working, have also had an impact on the companies’ internal
organisation and the performance of the audits.
It is in this complex and evolving context that, in accordance with the requirements of Articles L. 823-9 and R.823-7 of the French Commercial
Code (code de commerce) relating to the justification of our assessments, we inform you of the key audit matters relating to risks of material
misstatement that, in our professional judgment, were of most significance in our audit of the financial statements of the period, as well as how
we addressed those risks.
These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do
not provide a separate opinion on specific items of the financial statements.
Valuation of investments in subsidiaries and affiliates and advances to subsidiaries and affiliates
Paragraph “Shares in subsidiaries and affiliates” of the section “Accounting principles” and note 2 “Investments” of the notes to the parent
company financial statements
Risk identified
As at December 31, 2021, investments in subsidiaries and affiliates and the related advances amount to M€ 5,358 and
M€ 3,218 respectively in the balance sheet of Schneider Electric SE, net of any impairment loss.
As described in the paragraph “Shares in subsidiaries and affiliates” of the section “Accounting principles” of the notes
to the financial statements, investments are recognized at their acquisition cost and impaired, should their carrying
amount exceed their estimated value in use at closing date. The estimated value in use of investments is determined
primarily based on the subsidiaries’ and affiliates’ net assets as well as on their earnings outlook and the underlying
economic forecasts. Regarding listed securities, the average stock price over the month before the closing is used.
Due to the judgment exercised by management as part of these estimates, especially when relying on forecasts,
we considered the valuation of investments in subsidiaries and affiliates, as well as the valuation of related advances,
to be a key audit matter.
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Financial Statements
Our response
As part of our audit, we analyzed the procedures implemented by your Company to determine the value in use of
investments in subsidiaries and affiliates. Our work consisted in:
• comparing the shares in the subsidiaries’ and affiliates’ net assets, when used as a proxy for their value in use,
with their underlying accounting data, which were subject to an audit or to analytical procedures;
• assessing the appropriateness of the valuation method used to determine the value in use when based on forecasts;
• assessing the reasonableness of key assumptions used to estimate values in use, mainly the long-term growth rate
and the discount rate, with the assistance of our experts, when needed;
• verifying the arithmetical accuracy of the computations performed by your Company.
We also assessed the recoverability of advances to subsidiaries and affiliates, based on the impairment tests results
of the corresponding investments.
Specific verifications
We have also performed, in accordance with professional standards applicable in France, the specific verifications required by French law
and regulations.
Information provided in the management report and in the other documents with respect to the financial position and the financial
statements provided to the Shareholders
We have no matters to report as to the fair presentation and the consistency with the financial statements of the information given in the Board
of Directors’ management report and in the other documents with respect to the financial position and the financial statements provided to the
Shareholders.
6.
In accordance with French law, we report to you that the information relating to payment times referred to in Article D. 441-6 of the French
Commercial Code (code de commerce) is fairly presented and consistent with the financial statements.
Information relating to corporate governance
We attest that the Board of Directors’ section of the management report devoted to corporate governance sets out the information required
by Articles L.225-37-4, L.22-10-10 et L.22-10-9 of the French Commercial Code (code de commerce).
Concerning the information given in accordance with the requirements of Article L. 22-10-9 of the French Commercial Code (code de commerce)
relating to remunerations and benefits received by or allocated to the directors and any other commitments made in their favor, we have verified
its consistency with the financial statements, or with the underlying information used to prepare these financial statements and, where applicable,
with the information obtained by your Company from controlled companies which are part of its consolidation perimeter. Based on this work, we
attest the accuracy and fair presentation of this information.
With respect to the information relating to items that your company considered likely to have an impact in the event of a takeover or exchange
offer, provided pursuant to Article L. 22-10-11 of the French Commercial Code (code de commerce), we have verified their compliance with
the source documents communicated to us. Based on our work, we have no observation to make on this information.
Other information
In accordance with French law, we have verified that the required information concerning the identity of the shareholders and holders of the
voting rights has been properly disclosed in the management report.
Report on Other Legal and Regulatory Requirements
Format of presentation of the financial statements intended to be included in the annual financial report
We have also verified, in accordance with the professional standard applicable in France relating to the procedures performed by the statutory
auditor relating to the annual and consolidated financial statements presented in the European single electronic format, that the presentation
of the financial statements intended to be included in the annual financial report mentioned in Article L. 451-1-2, I of the French Monetary
and Financial Code (code monétaire et financier), prepared under the responsibility of the Chief Executive Officer, complies with the single
electronic format defined in the European Delegated Regulation No 2019/815 of 17 December 2018.
Based on the work we have performed, we conclude that the presentation of the financial statements intended to be included in the annual
financial report complies, in all material respects, with the European single electronic format.
We have no responsibility to verify that the financial statements that will ultimately be included by your company in the annual financial report
filed with the AMF are in agreement with those on which we have performed our work.
Appointment of the Statutory Auditors
We were appointed as statutory auditors of Schneider Electric S.E. by the Annual General Meetings held on May 6, 2004 for MAZARS and on
June 25, 1992 for ERNST & YOUNG et Autres.
As at December 31, 2021, MAZARS was in the eighteenth year of its engagement without interruption and ERNST & YOUNG et Autres in the
thirtieth year.
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Chapter 6 – Parent Company Financial Statements
6.4 Statutory auditors’ report on the annual financial statements
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with French accounting
principles and for such internal control as management determines is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is expected to liquidate
the Company or to cease operations.
The audit and risks committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and risks
management systems and where applicable, its internal audit, regarding the accounting and financial reporting procedures.
The financial statements were approved by the Board of Directors.
Statutory Auditors’ Responsibilities for the Audit of the Financial Statements
Objectives and audit approach
Our role is to issue a report on the financial statements. Our objective is to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with professional standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As specified in Article L. 823-10-1 of the French Commercial Code (code de commerce), our statutory audit does not include assurance on
the viability of the Company or the quality of management of the affairs of the Company.
As part of an audit conducted in accordance with professional standards applicable in France, the statutory auditor exercises professional
judgment throughout the audit and furthermore:
•
Identifies and assesses the risks of material misstatement of the financial statements, whether due to fraud or error, designs and performs
audit procedures responsive to those risks, and obtains audit evidence considered to be sufficient and appropriate to provide a basis for
his opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.
• Evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made
by management in the financial statements.
• Assesses the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue
as a going concern. This assessment is based on the audit evidence obtained up to the date of his audit report. However, future events or
conditions may cause the Company to cease to continue as a going concern. If the statutory auditor concludes that a material uncertainty
exists, there is a requirement to draw attention in the audit report to the related disclosures in the financial statements or, if such disclosures
are not provided or inadequate, to modify the opinion expressed therein.
• Evaluates the overall presentation of the financial statements and assesses whether these statements represent the underlying transactions
and events in a manner that achieves fair presentation.
Report to the audit and risks committee
We submit a report to the audit and risks committee which includes in particular a description of the scope of the audit and the audit program
implemented, as well as the results of our audit. We also report, if any, significant deficiencies in internal control regarding the accounting and
financial reporting procedures that we have identified.
Our report to the audit and risks committee includes the risks of material misstatement that, in our professional judgment, were of most
significance in the audit of the financial statements of the current period and which are therefore the key audit matters that we are required
to describe in this report.
We also provide the audit and risks committee with the declaration provided for in Article 6 of Regulation (EU) No. 537/2014, confirming our
independence within the meaning of the rules applicable in France such as they are set in particular by Articles L. 822-10 to L. 822-14 of
the French Commercial Code (code de commerce) and in the French Code of Ethics (code de déontologie) for statutory auditors. Where
appropriate, we discuss with the audit and risks committee the risks that may reasonably be thought to bear on our independence, and the
related safeguards.
Paris-La Défense, March 11, 2022
The Statutory Auditors
French original signed by
MAZARS
Loïc Wallaert Mathieu Mougard
ERNST & YOUNG et Autres
Alexandre Resten
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Chapter 6 – Parent Company Financial Statements
Financial Statements
6.5 List of securities held at December 31, 2021
Number of securities
(in thousands of euros)
A. MAJOR INVESTMENTS
(Carrying amounts over EUR 5 million)
58,018,657
2,497
6,885,008
B. OTHER INVESTMENTS
(Carrying amounts under EUR 5 million)
C. INVESTMENTS IN REAL ESTATE COMPANIES
D. INVESTMENTS IN FOREIGN COMPANIES
Total
MARKETABLE SECURITIES
5,570,816
TOTAL
Company
Carrying amount
of securities
Schneider Electric Industries SAS
Muller SAS
Schneider Electric SE own shares
Schneider Electric SE own shares
5,343,544
8,038
637,409
5,988,991
–
–
6,049
5,995,040
348,250
6,343,290
6.
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Chapter 6 – Parent Company Financial Statements
6.6 Subsidiaries and affiliates
Company
(in thousands of euros)
I. DETAILED INFORMATION ON SUBSIDIARIES AND
AFFILIATES WITH A CARRYING AMOUNT OF OVER 1%
OF THE SHARE CAPITAL OF SCHNEIDER ELECTRIC SE
A. Subsidiaries (at least 50% owned)
Reserves and
retained earnings
& retained
earnings prior to
appropriation
of earnings*
Capital
Share interest
held (%)
Schneider Electric Industries SAS 35, rue Joseph-Monier 92500 Rueil-Malmaison, France
928,299
6,112,705
100.00
B. Affiliates (10 to 50%-owned)
II. OTHER SUBSIDIARIES AND AFFILIATES
A. Subsidiaries not included in Section I: (+50%)
a) French subsidiaries (aggregate)
b) Foreign subsidiaries (aggregate)
B. Affiliates not included in Section I: (0-50%)
a) French companies (aggregate)
b) Foreign companies (aggregate)
*
Including income or loss in prior financial year.
38
–
–
766
8,217
–
–
136,217
99.84
–
–
4.8
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Chapter 6 – Parent Company Financial Statements
Financial Statements
Gross value
Net value
Loans and advances
provided by the
company and still
outstanding
Amount of
guarantees given
by the company
2021 Revenues
(ex. VAT)
2021 Profit
or loss (-)
Dividends received
by the company
during 2021
5,343,544
5,343,544
2,506,319
12,305
–
–
21,249
8,038
–
–
6,048
–
–
–
–
–
–
–
–
–
3,939,530
1,688,631
1,500,362
–
–
–
–
(29,251)
–
–
20,847
–
–
–
–
6.
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Chapter 6 – Parent Company Financial Statements
6.7 The company’s financial results over the
last 5 years
Description
2021
2020
2019
2018
2017
FINANCIAL POSITION AT DECEMBER 31
Share capital (in thousands of euros)
Number of shares in issue
Number of convertible bonds in issue
Maximum number of shares to be created:
•
•
through conversion of bonds
through exercise of rights
RESULTS OF OPERATIONS
(in thousands of euros)
Sales (ex. VAT)
Investment revenue, interest income and other revenue
Earnings before tax, depreciation, amortization and provisions
Income tax
Earnings after tax, depreciation, amortization and provisions
Dividends paid(1) excluding tax credit and withholdings
RESULTS OF OPERATIONS PER SHARE
(in euros)
Earnings before depreciation, amortization and provisions
Earnings after tax, depreciation, amortization and provisions
Net dividend per share
EMPLOYEES
Average number of employees during the financial year
Total payroll for the financial year (in thousands of euros)
Total of employee benefits paid over the financial year
(Social security, other benefits, etc.) (in thousands of euros)
2,276,134
569,033,442
3,683,972
2,268,274
2,328,274
567,068,555 582,068,555
2,316,675
579,168,769
2,387,665
596,916,242
3,683,972
–
–
–
–
–
–
–
8,371
–
8,271
–
1,500,362
1,392,930
52,342
1,498,235
1,650,197(2)
450
1,553
(201,902)
32,287
(31,273)
1,474,378
2,385
49,896
(18,659)
71,684
57,108
1,413,455
174
4,551,232
4,412,483
1,215
4,457,994
1,361,047
170
147,031
(22,861)
55,213
121,488
1,313,216
2.54
2.63
2.90(2)
1
1,130
–
795
(0.30)
(0.06)
2.60
1
1,961
–
916
0.09
0.1
2.55
1
3,693
–
944
7.62
7.70
2.35
1
2,544
–
1,010
0.05
0.20
2.20
2
1,670
–
796
(1) For 2021, estimate based on existing shares at December 31, 2021, including treasury shares.
(2) Pending approval by the Annual Shareholders’ Meeting of May 5, 2022.
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Financial Statements
6.8 Extract of the management report for the
year ended December 31, 2021
Review of the parent company financial statements
In 2021, Schneider Electric SE reported an operating loss of EUR 22 million compared with EUR 17 million the previous year.
Interest expense net of interest income amounted to EUR 46 million versus EUR 65 million the previous year.
Income from ordinary activities before tax stood at EUR 1,437 million in 2021 compared with a loss of EUR 86 million in 2020, mainly due
to the dividends of EUR 1,500 million received in 2021.
The net income stood at EUR 1,498 million in 2021 compared with EUR (31) million in 2020.
Net equity amounted to EUR 6,874 million at December 31, 2021 versus EUR 6,606 million at the previous year-end, after taking into account
2021 profit and dividend payments of EUR 1,447 million.
6.
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Chapter 7 – Information on the Company and its capital
Our integrated solutions are built with safety,
reliability and cybersecurity for your homes,
buildings, data centers, infrastructures and industries.
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Chapter 7 – Information on the Company and its capital
Shareholder Information
7
7.1 Shareholding
7.1.1 Ownership structure
7.1.2 Employee shareholding
7.2 Capital
7.2.1 Share capital and voting rights
7.2.2 Potential capital
7.2.3 Authorizations to issue and cancel shares
7.2.4 Three-year summary of changes in capital
7.2.5 Share buybacks
7.2.6 Pledge
7.3 General information
on the Company
7.4 Shareholders’ rights
and obligations
7.4.1 Annual Shareholders’ Meetings
(Article 19 of the Articles of Association)
7.4.2 Voting rights
7.4.3 Allocation of income
(Article 22 of the Articles of Association)
7.4.4 Holding of shares
Information
on the Company
and its capital
434
7.5 Stock market data
7.
443
445
445
445
445
7.6 Investor relations
7.6.1 Person responsible for financial information
7.6.2 Contacts
7.6.3 Shareholders’ Advisory Committee
434
435
436
436
436
436
437
438
438
439
440
440
440
441
(Article 7 Paragraph 1 of the Articles of Association)
441
7.4.5 Disclosure thresholds
(Article 7 Paragraph 2 of the Articles of Association)
441
7.4.6 Identifiable holders of bearer shares
(Article 7 Paragraph 3 of the Articles of Association)
442
7.4.7 Disposal of shares
(Article 8 of the Articles of Association)
7.4.8 Publication of information of Article L. 22-10-11
of the French Commercial Code
442
442
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Chapter 7 – Information on the Company and its capital
This chapter includes elements of the Board of Directors’ Corporate Governance Report.
The table of section 7.2.3 (Pending delegations relating to share capital increase and decrease), sections 7.4.1 (Annual Shareholders’
Meetings), 7.4.2 (Voting rights), 7.4.8 (Publication of information of Article L. 22-10-11 of the French Commercial Code), and Chapter
4 constitute the Board of Directors’ Corporate Governance Report prepared in accordance with Article L. 225-37 of the French
Commercial Code. They are indicated with a special mention.
7.1 Shareholding
7.1.1 Ownership structure
Major Shareholders at 12/31/21(1)
11.0%
2.2%
3.6%
0.3%
5.1%
30.0%
48.4%
Western Europe
North America
Asia Pacific
Rest of World
Employee holdings
Treasury shares
Other (mainly individual shareholders)
80.9%
7.0%
6.3%
3.6%
2.2%
Sun Life
BlackRock, Inc.
Employees
Treasury shares
Public
(1) Charts lists ownership stakes to the best of the Company’s knowledge.
Three-year summary of changes in capital(2)
At December 31, 2021, the share capital of Schneider Electric was €2,276,133,768, divided into 569,033,442 common shares, to which
595,320,658 theoretical voting rights are attached. The following table presents, to the best of the Company’s knowledge, changes in
the distribution of the Company’s share capital and voting rights over the last three years.
Sun Life Financial, Inc.(3)
BlackRock, Inc.
Employees(4)
Treasury shares
Public
Capital
%
7.0
6.3
3.6
2.2
80.9
Dec. 31, 2021
Number of
Voting rights
shares
39,681,766
35,703,751
20,321,627
12,456,882
460,869,416
%
6.8
6.1
6.3
–
80.8
Dec. 31, 2020
Dec. 31, 2019
Number of
voting rights
Capital
%
Voting rights
%
Capital
%
Voting rights
%
39,681,766
35,703,751
36,557,595
–
470,920,335
8.3
6.4
3.7
2.3
79.3
7.9
7.7
6.1
–
78.3
8.5
6.2
3.7
5.3
76.2
8.1
6.0
6.3
–
79.6
TOTAL
100.0
569,033,442
100.0
582,863,776(5)
100.0
100.0
100.0
100.0
(2) Table lists ownership stakes that have breached 5% ownership voting rights threshold in the previous three years, to the best of the Company’s knowledge.
(3) These shares are mainly held by funds managed by MFS Investment Management which is part of Sun Life Financial, Inc.
(4) The total number of shares held by employees include:
– 8,392,000 shares held by the FCPE Actionnariat (France), corresponding to 1.5% of capital and 2.9% of voting rights,
– 5,102,400 shares held by the FCPE Actionnariat Mondial (International), corresponding to 0.9% of capital and 1.6% of voting rights, and
– 6,827,227 shares held directly by employees, corresponding to 1.2% of capital and 1.8% of voting rights.
(5) Number of voting rights excluding shares deprived of voting rights.
Disclosure thresholds
To the best of the Company’s knowledge, no shareholders other than Sun Life Financial, Inc. and BlackRock Inc., both listed above, hold,
either directly or indirectly, more than 5% of Schneider Electric’s capital or voting rights.
Changes in holdings (for stake equal to or greater than 5%)
To the best of the Company’s knowledge, no additional shareholders have made a change in holding during 2021 that crosses 5% threshold
for either capital or voting rights.
Control of the Company
At December 31, 2021, to the best of its knowledge, the Company was not controlled and has not been subject to any agreement binding
on one or more shareholders or any other individual or legal entity, acting alone or in concert, concerning the direct or indirect holding of
its capital or its control, or for which the implementation thereof might subsequently involve a change in the Company’s control.
Shareholder pacts or agreements involving Schneider Electric shares
The Company has no knowledge of shareholder pacts or agreements, nor of shareholders acting in concert with regard to the shares
comprising its share capital.
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Shareholder Information
7.1.2 Employee shareholding
7.1.2.1 Profit-sharing plans
Most of the Group’s French companies have profit-sharing and other profit-based incentive plans. The amounts paid by the Group’s French
entities over the last five years were:
Profit-based incentive plans and profit-sharing plans (in millions of euros)
2021
57.0
2020
57.0
2019
59.3
2018
66.9
2017
71.7
In 2021, 60% of the total from incentives and profit-sharing was invested in the Schneider Electric shareholder fund and 13% was received
by employees in cash.
7.1.2.2 The “Schneider Electric” employee shareholding
The Worldwide Employee Share Ownership Plan (WESOP) is one of the Group’s recurring key annual reward programs, offering employees
across the world an opportunity to become owners of the Company, at preferred conditions.
Through the WESOP, Schneider Electric shares Company value creation with employees, thus aligning both Company and employees’
interests. In countries where regulations permit, Schneider Electric offers its employees the opportunity to invest during share capital
increases reserved for its employees.
In 2021 the Group reintroduced WESOP in 40 countries, after cancelling 2020 operation due to the COVID-19 crisis. Success has been
confirmed for this 25th campaign achieving 59% subscription rate; a higher rate than in 2019 at 50%.
On December 31, 2021, Group employees were holding a total of 20.3 million Schneider Electric SE shares either directly, through the
corporate mutual funds (FCPE), or through Performance Share plans, representing 3.6% of the share capital and 6.3% of the voting rights,
taking into account double voting rights.
Voting rights attached to shares held by corporate mutual funds are exercised by the supervisory boards of these corporate mutual funds.
The Group’s employee shareholders are spread across over 50 countries, as follows: 23% in France, 13% in China, 15% in India, 10% in
the United States, and 39% elsewhere. Approximately 60% of all employees are shareholders of the Group.
7.
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Chapter 7 – Information on the Company and its capital
7.2 Capital
7.2.1 Share capital and voting rights
The Company’s share capital at December 31, 2021 amounted to EUR 2,276,133,768 represented by 569,033,442 shares with a par value
of EUR 4, all fully paid up. 595,320,658 voting rights were attached to the 569,033,442 outstanding shares as at December 31, 2021.
7.2.2 Potential capital
At December 31, 2021, the potential capital consisted of:
• 293,071 Performance shares part of which remains subject to the achievement of performance conditions (plans 32, 34, 37bis, 38, 39bis
and 39ter which delivery either in existing shares or shares to be issued have not been determined yet by the Board). If all Performance
Shares were vested, this would lead to the issuance of 293,071 shares. Schneider Electric SE capital would be composed of 569,326,513
ordinary shares i.e. a 0.05% increase of the number of shares as of December 31, 2021; and of
• 3,683,972 OCEANEs. If all OCEANEs were exercised, this would lead to the issuance of 3,683,972 shares. Schneider Electric SE capital
would be composed of 572,717,414 ordinary shares i.e. a 0.65% increase of the number of shares as of December 31, 2021.
7.2.3 Authorizations to issue and cancel shares
Table summarizing the outstanding delegations relating to share capital increase and
decreases granted by the Annual Shareholders’ Meeting
This table is part of the Board of Directors’ Corporate Governance Report.
Issues with preferential subscription rights
Issuance of ordinary shares or securities giving
access to share capital of the Company
(16th resolution of the AGM of April 28, 2021)
Capitalizing additional paid-in capital,
reserves or earnings other
(21st resolution of the AGM of April 28, 2021)
Issues without preferential subscription rights
Issuance, in cash or in compensation of listed
securities, shares or other securities giving access
immediately or in the future to the capital
(17th resolution of the AGM of April 28, 2021)
Issuance of shares and other securities through
an offer referred to in Article L. 411-2 1° of
the French Monetary and Financial Code
(18th resolution of the AGM of April 28, 2021)
Issuance of shares and other securities as
consideration for unlisted securities
(20th resolution of the AGM of April 28, 2021)
Maximum
par value of
authorized capital
increases
(in euros) Number of shares
800 million(1) 200,000,000
800 million(1) 200,000,000
Authorization
date/authorization
expiration date
Apr. 28, 2021/
Jun. 27, 2023
Apr. 28, 2021/
Jun. 27, 2023
Use of
the resolution
(number of
shares whose
issuance has
been authorized)
Amount available
(in number of
shares)
None
200,000,000(3)
None
200,000,000(3)
224 million(1)(2)
56,000,000
Apr. 28, 2021/
Jun. 27, 2023
None
56,000,000(3)
120 million(1)
30,000,000
Apr. 28, 2021/
Jun. 27, 2023
None
56,000,000
224 million(1)(2)
56,000,000
Apr. 28, 2021/
Jun. 27, 2023
None
56,000,000
Overall limits on issuance made
under the above resolutions
800 million(1) 200,000,000 Apr. 28, 2021/
Jun. 27, 2023
None
200,000,000(3)
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Maximum
par value of
authorized capital
increases
(in euros) Number of shares
46 million(6)
11,500,000
24 million(4)(6)
6,000,000
46 million(7)
11,584,000
Authorization
date/authorization
expiration date
Apr. 28, 2021/
Jun. 27, 2023
Apr. 28, 2021/
Oct. 27, 2022
Apr. 25, 2019/
Jun. 24, 2022
Shareholder Information
Use of
the resolution
(number of
shares whose
issuance has
been authorized)
Amount available
(in number of
shares)
7,800,000(3)
2,300,000(3)
3,725,241
7,858,759(5)
Employee share issues
Company Savings Plan
(22nd resolution of the AGM of April 28, 2021)
Share issues to promote share ownership among
employees in foreign companies of the Group
(23rd resolution of the AGM of April 28, 2021)
Free shares or Performance Shares
(21st resolution of the AGM of April 25, 2019)
Maximum amount of the
authorized cancellation
(in euros)
Number of shares
Authorization
date/ authorization
expires
Amount
available (in
number of shares)
Reduction in capital through cancellation of shares
Cancellation of own shares
(24th resolution of the AGM of April 28, 2021)
224 million per
56,000,000
24-month period
Apr. 28, 2021/
Apr. 27, 2023
56,000,000
(1) The overall ceiling for issues is capped at EUR 800 million in aggregate.
(2) All issuance made without preference right (17th, 18th, and 20th resolutions) are globally limited to EUR 224 million.
(3) The 20th resolution of the AGM held on April 23, 2020 specifies that any issuance based this resolution will be deducted from the limit set by the 15th resolution of the
AGM held on April 25, 2019. Using the authorization of the 20th resolution of the AGM held on April 23, 2020 and the delegation of the Board of Directors granted on
December 14, 2020, 550,918 shares were issued in 2021 for French employees participating in a company savings plan. At its meeting of December 15, 2021, the
Board of Directors authorized capital increases within a limit of 3.7 million shares, i.e. 0.65% of the capital.
(4) Issuances of shares reserved for employees in non-French subsidiaries will be deducted from the ceiling for capital increases reserved for employees participating
7.
in a company savings plan.
(5) At the Board of Directors’ meeting of March 24, 2020, 2,113,740 shares were granted under the 2020 Long-term incentive plan. At the Board of Directors’ meeting
of October 21, 2020, 103,051 shares were granted under the 2020 Long-term incentive plan. At the Board of Directors’ meeting of March 25, 2021, 1,475,368 shares
were granted under the 2021 Long-term incentive plan. At the Board of Directors’ meeting of October 26, 2021, 33,082 shares were granted under the 2021 Long-term
incentive plan.
(6) On the date of the 2021 Annual Shareholders’ Meeting, the share capital was EUR 2,268 million.
(7) On the date of the 2019 Annual Shareholders’ Meeting, the share capital was EUR 2,317 million.
7.2.4 Three-year summary of changes in capital
The following table shows changes in Schneider Electric SE’s share capital and additional paid-in-capital since December 31, 2018 through
capital increases/decreases and the exercise of stock options:
Capital as of Dec. 31, 2018(1)
Employee share issue
Exercise of stock options and Performance Shares issued
Capital as of Dec. 31, 2019(2)
Decrease in capital
Performance Shares issued
Capital as of Dec. 31, 2020(3)
Employee share issue
Performance Shares issued
CAPITAL AS OF DEC. 31, 2021(4)
Number of shares issued
or cancelled
Cumulative number
Total amount
of shares
of the capital (in EUR)
579,168,769
2,316,675,076
2,676,018
223,768
15,000,000
–
1,964,887
–
582,068,555
2,328,274,220
567,068,555
2,268,274,220
569,033,442
2,276,133,768
(1) Decrease in share capital (EUR 71 million) and in additional paid-in-capital (EUR 2,171 million).
(2) Increase in share capital (EUR 11.6 million), increase in additional paid-in-capital (EUR 156.2 million).
(3) Decrease in share capital (EUR 60 million) and in additional paid-in-capital (EUR 929.4 million).
(4) Increase in share capital (EUR 7.86 million) and in additional paid-in-capital (EUR 208.6 million).
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7.2 Capital
7.2.5 Share buybacks
7.2.5.1 Current share buyback program
We remind you that on February 14, 2019 Schneider Electric initiated a new EUR 1.5 billion to EUR 2.0 billion share buyback program over
the period 2019 – 2021. The program has been launched under the 15th resolution approved at the 2018 Annual Shareholders’ Meeting and
pursued under the 14th, 17th, and 15th resolutions approved respectively at the 2019, 2020, and 2021 Annual Shareholders’ Meetings. These
buybacks were part of a policy to neutralize the dilution resulting from capital increases reserved for employees or from Long-term Incentive
Plans. All the shares acquired by the Company as part of the share buyback program are held to cover Long-term Incentive Plans.
At the beginning of 2021, due to the economic uncertainty, and considering the on-going acquisitions, the share buyback program
remained on-hold after its suspension due to the COVID-19 crisis in 2020. The share buyback program re-started at the end of July
2021 with the time frame for completion extended by 12 months, to run until the end of 2022. Since the beginning of the program in
2019, a total of €577,499,243 of share buyback corresponding to 5,941,783 shares bought back by the Company had been completed
including €261,659,633 of share buyback in 2021 corresponding to 1,809,054 shares bought back by the Company pursuant to the last
authorizations.
7.2.5.2 Share buyback program to be submitted to the Annual Shareholders’ Meeting
of May 5, 2022
Details of this share buyback program are as follows:
Number of shares and percentage of share capital held
directly and indirectly by Schneider Electric SE*
• own shares: 12,455,824 shares, i.e. 2.19% of share capital
•
•
treasury shares: 1,058 shares
total: 12,456,882 shares, i.e. 2.19% of share capital
Overview of purposes for which shares have been held*
•
for all own shares* held: allocation of Performance Shares
Share buyback program objectives
• allotment to employees or Corporate Officers as a long-term
compensation tool
• delivery as a result of the exercise of rights attached to securities
giving access to the Company’s capital
• cancellation
• delivery in connection with external growth operations
• disposal in the course of a share management agreement
Maximum number of shares that may be acquired
• 10% of the issued share capital at any moment:
–
on the basis of the issued share capital*: 56,903,344
Schneider Electric SE shares with a nominal value of €4
− taking into account treasury stock and own shares*:
44,446,462 shares or 7.80%
Maximum purchase price and maximum aggregate amount
of share purchases
•
the maximum purchase price is set at €250 per share,
i.e. €14,225,836,000
Duration of the buyback program
• 18 months maximum, expiring on November 4, 2023
Transactions carried out pursuant to the program authorized
by the Annual Shareholders’ Meeting 2021 between April 29,
2021 and February 16, 2022
• Number of shares acquired: 1,809,954
• Average purchase price: €144.64
• Number of shares transferred: 27,287
• Average transfer price: €61.01
* As of January 31, 2022.
7.2.6 Pledge
Pledges on Schneider Electric SE shares
391,184 shares are pledged.
Pledges on subsidiaries’ shares
Schneider Electric SE has not pledged any shares in significant subsidiaries.
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Chapter 7 – Information on the Company and its capital
Shareholder Information
7.3 General information on the Company
As a European Company (Societas Europaea) with a Board of Directors (since June 18, 2014), domiciled in France, Schneider Electric SE
is governed by European Council Regulation (EC) No. 2157/2001 of October 8, 2001, governing the status of European Companies (“SE
Regulation”). Issues not covered by the SE Regulation are governed by the provisions of the French Commercial Code (Code de commerce)
applicable to limited-liability companies (société anonyme), as well as by their Articles of Association. The provisions of the French
Commercial Code regarding the management and governance of limited-liability companies are applicable to the European Company.
As of December 31, 2021, the Company’s share capital was EUR 2,276,133,768. Its head office is located at 35, rue Joseph Monier, 92500
Rueil-Malmaison, France, telephone: +33 (0)1 41 29 70 00.
Schneider Electric SE is registered with the commercial court registry of Nanterre under No. 542 048 574, APE code (principal activity code)
7010Z, Legal Entity Identifier (LEI) 969500A1YF1XUYYXS284.
The Company was incorporated in 1871. It is due to expire on July 1, 2031. It was first called Spie Batignolles, then changed its name to
Schneider SA when it merged with Schneider SA in 1995, and then to Schneider Electric SA in May 1999, before becoming Schneider
Electric SE in 2014.
As stated in Article 2 of its Articles of Association, the Company has the following corporate purpose, directly or indirectly, in any form,
in France and in all other countries:
(i) the design, development, and sale of products, equipment, and solutions related to the metering, management, and use of energy
in all its forms and delivering reliability, efficiency, and productivity, in particular through engaging in, whether by creating, acquiring,
or otherwise, all activities related to:
electrical equipment manufacturing, electrical distribution, and secured power supply,
building control, automation, and safety,
industrial control and automation, including software,
−
−
−
− management of all types of data centers, networks, equipment, and other infrastructure;
7.
(ii) the acquisition, purchase, sale, and use of any intellectual and/or industrial property rights relative to these industries; and
(iii) involvement, in any way, in any enterprise, company, or consortium, whatever the type, undertaking activities related to the Company’s
business or such as to encourage its industry and commerce, and, more generally, all industrial, commercial, and financial, asset and
real estate operations related directly or indirectly in any way to the above objective.
The Company may enter into any transactions that fall within the scope of its objectives either alone for its own account or on behalf of third
parties, either by having an interest in, or by the purchase, subscription, contribution, or exchange of company shares, partnership shares and
the purchase of any company, irrespective of type, in pursuance of a similar or related purpose, or that promote its expansion or development.
The Articles of Association, minutes of Annual Shareholders’ Meetings, statutory auditors’ reports and other legal documents concerning
the Company are available for consultation at the Company’s head office (office of the Secretary to the Board of Directors) located at
35, rue Joseph Monier, 92500 Rueil-Malmaison, France.
The Articles of Association, regulated information, registration documents, sustainable development reports, notice of the Shareholders’
Meeting, and other documents are also available on the Company’s website (www.se.com).
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Chapter 7 – Information on the Company and its capital
7.4 Shareholders’ rights and obligations
7.4.1 Annual Shareholders’ Meetings (Article 19 of the Articles
of Association)
This section is part of the Board of Directors’ Corporate Governance Report.
Annual Shareholders’ Meetings are called and run in accordance with the conditions prescribed by law.
The meetings are held at the head office or any other address provided in the call to meeting. The Board may decide, when each meeting
is called, to organize the public transmission of all or part of the meeting by video conference and/or using teletransmission techniques.
All shareholders may attend meetings, in person or by proxy, after providing proof of identity and share ownership in accordance with
applicable laws and regulations.
When the decision is made to call an Annual Shareholders’ Meeting, the Board of Directors may also decide to allow shareholders to
participate or vote at Annual Shareholders’ Meetings using video conferencing facilities and/or any other telecommunication medium
allowed under applicable legislation.
Remote voting procedures are governed by the applicable laws and regulations. In particular, shareholders may send proxy and mail
ballot forms before Annual Shareholders’ Meetings either in paper form or, if approved by the Board of Directors and stated in the meeting
announcement and/or notice, electronically.
When the decision is made to call an Annual Shareholders’ Meeting, the Board of Directors may authorize shareholders to fill out and sign
these forms electronically through a secure site set up by the Annual Shareholders’ Meeting organizer using a process that complies with
applicable laws and regulations (Paragraph 2 of Article 1367 of the French Civil Code) and consisting of a username and password.
Proxies or votes so submitted electronically before the Annual Shareholders’ Meeting, as well as the related acknowledgments of receipt,
will be considered irrevocable and binding documents. However, in the event that shares are sold before the applicable record date
(midnight Paris time two business days before the meeting date), the Company will cancel or amend, as appropriate, any related proxy
or electronic votes submitted before the Annual Shareholders’ Meeting.
Meetings shall be chaired by the Chairman of the Board of Directors or in his absence by the Vice-Chairman, or in his absence by
a member of the Board of Directors specially appointed for that purpose by the Board of Directors. In the event that no chairman has
been selected, the Annual Shareholders’ Meeting elects its chairman.
The two shareholders present who hold the largest number of votes and who accept shall act as scrutineers. The Board appoints
a secretary, who is not required to be a shareholder.
As required by law, a register of attendance is kept.
Copies or extracts of the meeting’s minutes are certified either by the Chairman or Vice-Chairman of the Board of Directors, or the
Annual Shareholders’ Meeting’s secretary.
7.4.2 Voting rights
This section is part of the Board of Directors’ Corporate Governance Report.
7.4.2.1 Double voting rights (Article 20 of the Articles of Association)
Voting rights attached to shares are proportionate to the equity in the capital they represent, assuming that they all have the same nominal
value. Each capital share or dividend share confers the right to one vote except where compulsory legal provisions limit the number of votes
a shareholder may have. Notwithstanding the foregoing, double voting rights are attributed to fully paid-up shares registered in the name of
the same holder for at least two years prior to the end of the calendar year preceding that in which the Annual Shareholders’ Meeting takes
place, subject to compliance with the provisions of the law. In the case of a bonus share issue paid up by capitalizing reserves, earnings, or
additional issue premiums, each bonus share allotted in respect of shares carrying double voting rights will also have double voting rights.
The shares are stripped of their double voting rights if they are converted into bearer shares or transferred, except in the case of the transfer
from one registered holder to another as part of an inheritance or family gift.
Double voting rights may also be stripped by a decision of the Extraordinary Annual Shareholders’ Meeting after ratification by a Special
Shareholders’ Meeting of beneficiaries benefiting from double voting rights.
The minimum holding period to qualify for double voting rights was reduced from four to two years by decision of the Ordinary and
Extraordinary Shareholders’ Meeting of June 27, 1995.
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Shareholder Information
7.4.2.2 Ceiling on voting rights (Article 20 of the Articles of Association)
At the Annual Shareholders’ Meeting, no shareholder may exercise, either in person or through a proxy, by virtue of single voting rights
conferred by the shares they hold directly and indirectly and by virtue of the proxy votes entrusted to them, more than 10% of the total
number of the voting rights conferred by shares in the Company. However, if a shareholder also holds double voting rights directly or
indirectly and/or as proxy, the limit set may be exceeded taking into consideration only the resulting additional voting rights, without the
total voting rights thereby held exceeding 15% of the total number of the voting rights conferred by the shares in the Company.
To apply these provisions:
•
•
the total number of voting rights allowed are calculated as of the date of the Annual Shareholders’ Meeting and announced to the
shareholders at the beginning of such Annual Shareholders’ Meeting;
the number of voting rights held directly and indirectly are understood to include those conferred by shares held personally by a
shareholder, those conferred by shares held by a legal entity controlled by a shareholder as defined by Article L. 233-3 of the French
Commercial Code, and those shares that are assimilated to the shares owned, as defined by the provisions of Articles L. 233-7 et seq.
of the Code; and
• shareholders’ proxies returned to the Company that do not appoint a representative are subject to the above ceilings. However, these
ceilings do not apply to the meeting chairman voting on behalf of such proxies.
The above ceilings will no longer apply, without it being necessary to put the matter to the vote again by the Extraordinary Shareholders’
Meeting, if any individual or legal entity, acting alone or jointly with one or other individuals or legal entities, acquires or increases its stake
to at least two-thirds of the Company’s capital through a public tender offer for all the Company’s shares. The Board of Directors takes note
of this nullity and undertakes the formalities necessary to amend the Articles of Association. The ceiling on voting rights was approved by
the Ordinary and Extraordinary Shareholders’ Meetings of June 27, 1995.
In accordance with Article L. 225-96, Paragraph 1 of the French Commercial Code, any amendment to the Articles of Association must be
approved by the Extraordinary Shareholders’ Meeting, by a majority of at least two-thirds of the voting rights represented by shareholders
in attendance or participating by proxy.
7.
7.4.3 Allocation of income (Article 22 of the Articles of Association)
Net income for the year less any losses brought forward from prior years is appropriated in the following order:
• 5% to the legal reserve (this appropriation is no longer required once the legal reserve represents one-tenth of the capital, provided
that further appropriations are made in the case of a capital increase);
to discretionary reserves, if appropriate, and to retained earnings; and
to the payment of the balance in the form of a dividend.
•
•
The Shareholders’ Meeting may decide to offer shareholders the opportunity to receive the dividend in cash or in the form of new shares.
Dividends not claimed within five years from the date of payment are forfeited and paid to the government, in accordance with the law.
7.4.4 Holding of shares (Article 7 Paragraph 1 of the Articles
of Association)
Shareholders may elect to hold their shares in registered or bearer form. To establish proof of ownership, the shares must be recorded in
the shareholder’s account in accordance with the procedures and conditions defined by current legislation and regulations.
7.4.5 Disclosure thresholds (Article 7 Paragraph 2 of the Articles
of Association)
The Articles of Association stipulate that any individual or legal entity that owns or controls (as these terms are defined in Article L. 233-9 of
the French Commercial Code) directly or indirectly, shares or voting rights representing at least 1% of the total number of shares or voting
rights outstanding, or a multiple thereof, is required to disclose the total number of shares, voting rights and share equivalents held directly,
indirectly or in concert to the Company by registered letter with return receipt requested, within five trading days of the disclosure threshold
being crossed. In addition, effective November 1, 2009 the shareholder must notify the Company, in the disclosure letter, the number of
existing shares it is entitled to acquire by virtue of agreements or financial instruments referred to in point b) of the third paragraph of Article
L. 233-7 of the French Commercial Code and of the number of existing shares covered by any agreement or financial instrument referred to
in point c) of said paragraph. Shareholders are also required to notify the Company if the number of shares or voting rights held falls below
one of the thresholds defined above. In the case of failure to comply with these disclosure obligations, the shares in excess of the disclosure
threshold will be stripped of voting rights at the request of one or several shareholders owning at least 2.5% of the share capital, subject
to compliance with the relevant provisions of the law. These provisions are from the Ordinary and Extraordinary Shareholders’ Meetings
of June 27, 1995, May 5, 2000, and April 23, 2009.
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Chapter 7 – Information on the Company and its capital
7.4 Shareholders’ rights and obligations
7.4.6 Identifiable holders of bearer shares (Article 7 Paragraph 3
of the Articles of Association)
The Company may at any time request Euroclear to identify holders of bearer securities conferring immediate or future voting rights.
This provision was adopted by the Ordinary and Extraordinary Shareholders’ Meetings of June 30, 1988 and May 5, 2000.
7.4.7 Disposal of shares (Article 8 of the Articles of Association)
Shares in the Company are freely negotiable and transferable.
7.4.8 Publication of information of Article L. 22-10-11 of the
French Commercial Code
This section is part of the Board of Directors’ Corporate Governance Report.
Items that could have an impact in the event of a public tender offer include:
• agreements calling for payments to the Chairman & Chief Executive Officer (see section 4.2.3.1 of the Universal Registration Document)
or to employees if they resign or are terminated without real cause or if their employment ends due to a public tender offer;
• certain financing arrangements with conditional provisions of anticipated reimbursement or cancellation in the event of change of control.
Under these provisions, the debt holders may request for repayment or cancellation if a shareholder or shareholders acting together hold
more than 50% of the Company’s shares. As of December 31, 2021, back-up facilities with this type of condition amount EUR 2.5 billion,
fully undrawn. Bonds include such a change of control event if the change of control triggers a down grading of the Company’s rating.
As of December 31, 2021, EUR 8.3 billion of bonds were subject to this type of conditions; and
• statutory restrictions in the Articles of Association on the exercise of voting rights (see section 7.4.2 of this Chapter of the Universal
Registration Document) relating to the non-application of the ceiling on voting rights when a public tender offer is successfully completed.
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Chapter 7 – Information on the Company and its capital
Shareholder Information
7.5 Stock market data
In France, Schneider Electric is listed on Euronext Paris (sub-fund A), where it is traded on a per-share basis under ISIN code
FR0000121972. Schneider Electric SE shares are included on the CAC 40 index established by Euronext.
18-month trading data in Paris
Year
2020
2021
2022
Number of
securities traded
(in thousands
of shares)
Value
(in millions of
euros)
26,036
18,138
25,932
22,107
28,820
21,589
21,484
22,131
24,085
16,660
17,862
18,472
17,368
16,446
20,232
18,274
19,723
16,898
229,635
22,112
2,584
1,880
2,726
2,369
3,364
2,501
2,665
2,778
3,029
2,250
2,314
2,453
2,368
2,471
3,048
2,608
3,066
2,787
31,837
3,547
Month
July
August
September
October
November
December
January
February
March
April
May
June
July
August
September
October
November
December
Total 2021
January
High(1)
104.70
108.20
108.90
111.75
121.80
121.15
128.15
130.70
130.50
140.62
135.36
137.32
143.10
155.38
159.30
150.94
163.44
173.78
173.78
178.78
Low(1)
trading sessions
Number of
95.34
98.26
100.65
101.25
104.20
112.25
119.10
121.60
121.40
129.82
124.42
129.36
130.48
139.56
142.10
136.30
148.44
157.22
119.10
144.82
23
21
22
22
21
22
20
20
23
20
21
22
22
22
22
21
22
23
258
21
7.
(1) Data corresponds to trading volumes on NYSE Euronext.
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Chapter 7 – Information on the Company and its capital
7.5 Stock market data
Five-year trading summary
Average daily trading volume on the Paris stock exchanges
(NYSE Euronext):
• Number of shares (in thousands)
•
in millions of euros
High and low share prices (in euros)
• high
•
low
Year-end closing price (in euros)
Yield (%)
2021
2020
2019
2018
2017
890.06
123.40
1,426.11
134.90
1,347.22
100.98
1,608.40
110.98
1,317.91
91.37
173.78
119.10
172.46
1.68
121.80
61.72
118.30
2.20
94.58
57.58
91.50
2.79
78.56
57.54
59.72
3.94
75.94
63.36
70.86
3.10
The Schneider Electric SE share results versus the CAC 40 index (rebased) over five years
Schneider Electric
CAC 40
180
160
140
120
100
80
60
40
Jan 2017
Monep
Jan 2018
Jan 2019
Jan 2020
Jan 2021
Dec 2021
Schneider Electric SE shares have been traded on the MONEP market since December 20, 1996.
Ordinary bonds
The information is disclosed in note 9 of the company financial statements (pages 420 and 421).
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Chapter 7 – Information on the Company and its capital
Shareholder Information
7.6 Investor relations
7.6.1 Person responsible for financial information
Hilary Maxson
Chief Financial Officer
35, rue Joseph Monier – CS 30323
92506 Rueil-Malmaison Cedex (France)
Tel: +33 (0)1 41 29 71 34
7.6.2 Contacts
Any information or document may be requested from:
Amit Bhalla – Head of Investor Relations
For institutional investors and financial analysts:
Tel: +44 (0)20 7592 8747
For individual investors:
• email: actionnaires@se.com or via the contact form available on institutional website www.se.com.
7.6.3 Shareholders’ Advisory Committee
7.
The Committee is the voice of Schneider Electric’s individual shareholders. The Committee consists of eight to ten independent volunteers
appointed by Schneider Electric.
The Shareholders’ Advisory Committee meets three to four times a year to discuss various topics with a strong emphasis on the Company’s
strategy towards individual shareholders (enhancing communication material and defining dedicated events). The Committee also plays a
role in the Annual Shareholders’ Meeting as one of its members opens the Q&A session with the Chairman & CEO.
Shareholder documents
the annual report;
The Company provides the following documents to its shareholders:
•
• newsletters to shareholders; and
•
information on financial results, corporate governance and strategic updates through specific press releases, videos, and presentations
available in a dedicated section on the corporate website: www.se.com.
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Chapter 8 – Annual Shareholders’ Meeting
Chapter 8 – Annual Shareholders’ Meeting
We are advocates of open standards and partnership
ecosystems to unleash infinite possibilities of a global,
innovative community that is passionate about
our shared Meaningful Purpose, Inclusive and
Empowered values.
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Chapter 8 – Annual Shareholders’ Meeting
Shareholder Information
Meeting8
Annual
Shareholders’
8.1 Explanatory comments & draft
resolutions submitted to the
Annual Shareholders’ Meeting
8.1.1 Ordinary Shareholders’ Meeting
8.1.2 Extraordinary Meeting
8.2 Statutory Auditors’
special reports
8.2.1 Statutory Auditors’ report on the authorization
to grant free shares existing or to be issued
8.2.2 Statutory auditors’ report on the issuance of shares
or securities giving access to capital reserved for
members of a company savings plan
8.2.3 Statutory Auditors’ report on the issuance of shares
or securities reserved for a category of beneficiaries
with cancellation of preferential subscription rights
448
449
456
468
468
469
470
8.
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Chapter 8 – Annual Shareholders’ Meeting
8.1 Explanatory comments & draft resolutions
submitted to the Annual Shareholders’ Meeting
This section presents the draft resolutions that will be submitted to
the Annual Shareholders’ Meeting of the Company that will be
convened on May 5, 2022 and the report of the Board of Directors
(explanatory comments) for those resolutions. The Board of
Directors’ report and the draft resolutions are the one approved by
the Board of Directors in its meeting of February 16, 2022. They
may be subject to further amendments in the final Notice of Meeting
to be published in the BALO official journal, where necessary, in
order to take into account subsequent decisions of the Board of
Directors.
Agenda
ORDINARY SHAREHOLDERS’ MEETING:
Resolution 1
Approval of statutory financial statements for the 2021 fiscal year
Resolution 2
Approval of consolidated financial statements for the 2021
fiscal year
Resolution 3
Appropriation of profit for the fiscal year and setting the dividend
Resolution 4
Approval of regulated agreements governed by Article L. 225-38
et seq. of the French Commercial Code
Resolution 5
Reappointment of Mazars as statutory auditor; no reappointment
and no replacement of Mr. Thierry Blanchetier as substitute
statutory auditor
Resolution 6
Appointment of PricewaterhouseCoopers Audit as statutory
auditor; no reappointment and no replacement of Auditex as
substitute statutory auditor
Resolution 7
Approval of the information on the Directors’ and the Corporate
officer’s compensation paid or granted for the fiscal year ending
December 31, 2021 mentioned in Article L. 22-10-9 of the French
Commercial Code
Resolution 8
Approval of the components of the total compensation and benefits
of all types paid during the 2021 fiscal year or awarded in respect
of the said fiscal year to Mr. Jean-Pascal Tricoire
Resolution 9
Approval of the Corporate Officer (Chairman and Chief executive
officer)’s compensation policy
Resolution 10
Approval of the Directors’ compensation policy
Resolution 11
Renewal of the term of office of Mrs. Linda Knoll
Resolution 12
Renewal of the term of office of Mr. Anders Runevad
Resolution 13
Appointment of Mrs. Nivedita Krishnamurthy (Nive) Bhagat
as a Director
Resolution 14
Authorization granted to the Board of Directors to buy back
Company shares
EXTRAORDINARY SHAREHOLDERS’
MEETING:
Resolution 15
Authorization granted to the Board of Directors to freely allocate
shares to the employees or to a category of employees and/or
the Corporate Officers of the Company or of companies affiliated
therewith as part of the Long-Term Incentive Plan up to a limit of
2% of the share capital
Resolution 16
Delegation of authority to the Board of Directors to undertake
capital increases reserved for participants in a company savings
plan without shareholders’ preferential subscription right
Resolution 17
Delegation of authority to the Board of Directors to undertake
capital increases reserved for employees of certain non-French
subsidiaries of the Group, directly or via entities acting to offer
those employees benefits comparable to those offered to
participants in a company savings plan without shareholders’
preferential subscription right
Resolution 18
Review and approval of the plan to merge IGE+XAO into
Schneider Electric
Resolution 19
Powers for formalities
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Chapter 8 – Annual Shareholders’ Meeting
Shareholder Information
8.1.1 Ordinary Shareholders’ Meeting
1st, 2nd, and 3rd resolutions: Approval of annual financial statements and setting
the distribution
Explanatory statement
Under the 1st and the 2nd resolutions, shareholders are invited to approve:
•
•
the statutory financial statements of Schneider Electric SE for the year 2021 which show a profit of €1,498,235,274.60; and
the consolidated financial statements for the year 2021 which show a net income for the Group of €3,204 million.
The activity and the results for the 2021 fiscal year are presented in the 2021 Universal Registration Document as well as in the Notice
of meeting available on the Company’s website.
Under the 3rd resolution, we recommend a distribution of €2.90 per share, representing a distribution rate of 47% of the Group’s net
adjusted income and an estimated total distribution of €1,614,075,092.20(1) (based on the number of shares ranking for dividends at
December 31, 2021). No dividend will be paid on treasury shares held by the Company on the payment date. This distribution will be
paid out of the distributable earnings amounting to €1,943,015,112.95. The proposed dividend is an integral part of Schneider Electric’s
policy to reward shareholders over the long term. It represents an increase of 11.5 % versus last year (and of more than 70% since
2012).
The distribution will be paid according to the following schedule:
• Dividend ex-date:
May 17, 2022
May 18, 2022
• Record date:
• Dividend payment date: May 19, 2022
For individual beneficiaries who are tax resident in France, the dividend is subject upon payment to a social security tax of 17.2%
and, in principle, to a mandatory non-definitive levy of 12.8%. This tax is levied at source and is computed on the gross amount of
the dividend.
8.
For its taxation in 2023, this dividend will fully be eligible for the 40% tax rebate referred to in Article 158.3.2° of the French Tax Code
where an express, global, and irrevocable election is made for taxation under the progressive scale of personal income tax. Where this
option is not made, the dividend will be taxed at a final flat-rate income 12.8% and will not be eligible for this 40% rebate. In both cases,
the levy of 12.8% borne at the time of the payment of the dividend is deducted from the individual income tax due.
Text of the first resolution
(Approval of statutory financial statements for the 2021 fiscal year)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having heard the Board
of Directors’ report and the statutory auditors’ report, approves the statutory financial statements for the 2021 fiscal year as presented,
as well as the transactions reflected in these statements or summarized in these reports showing a net profit of €1,498,235,274.60.
In addition, pursuant to Article 223 quater of the French Tax Code (Code général des impôts), the Shareholders’ Meeting approves the
value of expenses and charges non-deductible from taxable result liable to corporate income tax and amounting to €2,508.02 as well
as the theoretical tax borne as a result of these charges amounting to €666.89.
Text of the second resolution
(Approval of consolidated financial statements for the 2021 fiscal year)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having heard the Board
of Directors’ report and the statutory auditors’ report, approves the consolidated statements for the 2021 fiscal year as presented, as well
as the transactions reflected in these statements or summarized in these reports.
Text of the third resolution
(Appropriation of profit for the financial year and setting the dividend)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having noted that the
Company’s fiscal year ending December 31, 2021 closed with a net profit of €1,498,235,274.60 and, considering the retained earnings
amounted to €444,779,838.35, the distributable earnings amounted to €1,943,015,112.95, upon proposal of the Board of Directors, decides:
•
the distribution to the shareholders of a dividend of €2.90 per share, i.e., €1,614,075,092.20(1) on the basis of the number of shares
ranking for dividends at December 31, 2021 paid from the distributable earnings; and
the allocation of the balance of the distributable earnings after distribution to the retained earnings.
•
(1) This amount is calculated based on the number of shares ranking for dividends at December 31, 2021 and could therefore change if this number varies between
January 1, 2022 and the ex-dividend date.
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Chapter 8 – Annual Shareholders’ Meeting
8.1 Explanatory comments & draft resolutions submitted to the Annual Shareholders’ Meeting
The ex-dividend date will be May 17, 2022 and the dividend will be payable from May 19, 2022. If, at the time of payment of the dividend,
the number of treasury shares held by the Company has changed compared to that held on December 31, 2021, the fraction of the dividend
relating to this variation will either increase or reduce retained earnings.
For individual beneficiaries who are tax resident in France, the dividend is subject upon payment to a social security tax of 17.2% and, in
principle, to a mandatory non-definitive levy of 12.8%. This tax is levied at source and is computed on the gross amount of the dividend.
For its taxation in 2023, this dividend will fully be eligible for the 40% tax rebate referred to in Article 158.3.2° of the French Tax Code where
an express, global, and irrevocable election is made for taxation under the progressive scale of personal income tax. Where this option is
not made, the dividend will be taxed at a final flat-rate income 12.8% and will not be eligible for this 40% rebate. In both cases, the levy of
12.8% borne at the time of the payment of the dividend is deducted from the individual income tax due.
Dividends/coupons paid by Schneider Electric SE for the three most recent fiscal years are as follows:
Net dividend paid per share (in euros)
2018
2.35
2019
2.55
2020
2.60
4th resolution: Regulated agreements
Explanatory statement
In the 4th resolution, you are invited to take due note of the absence of any new regulated agreement concluded during the fiscal year
ending December 31, 2021.
Text of the fourth resolution
(Approval of regulated agreements governed by Article L. 225-38 et seq. of the French Commercial Code)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, and having considered
the statutory auditors’ special report on related party agreements referred to in Article L. 225-38 of the French Commercial Code, approves
this report in all its provisions and notes that no new agreement has been concluded during the fiscal year ending December 31, 2021.
5th and 6th resolutions: Appointment of a new board of statutory auditors
Explanatory statement
The current board of statutory auditors is composed as follows:
• Mazars has been appointed statutory auditor of the Company for the first time on May 6, 2004 and lastly renewed on April 25, 2016
for a 6-year term which expires at the closing of this Shareholders’ Meeting;
• Ernst & Young et Autres has been appointed statutory auditor of the Company for the first time on June 25, 1992 and lastly renewed on
April 25, 2016 for a 6-year term which expires at the closing of this Shareholders’ Meeting and cannot be renewed according to applicable
regulations.
The terms of office of Auditex and Mr. Thierry Blanchetier, as substitute statutory auditors, also expire at the closing of this
Shareholders’ Meeting.
In order to ensure that the high-quality audit of the Group is maintained through the implementation of a tailored transition plan between
the former and new board of statutory auditors, the Audit & Risks Committee of Schneider Electric SE has decided to proceed with the
selection of the new board of statutory auditors whose terms will start at the closing of the 2022 Shareholders’ Meeting.
The situation of your statutory auditors has been carefully examined by the Audit & Risks Committee, in particular with regard to
the quality of work carried out; the regular rotation of the two firms in the Group’s entities; and robust quality control procedures.
The selection process carried out by the Audit & Risks Committee led to the recommendation to the Board of Directors:
•
to renew the term of office of Mazars as statutory auditor considering the quality and efficiency of Mazars’s contribution, especially
on a technical level, which is highly appreciated both inside and outside the Company, and of its in-depth knowledge of the Group; and
to appoint PricewaterhouseCoopers Audit (in replacement of Ernst & Young et Autres), whose teams have demonstrated, through a
competitive process, their capacity to undertake the audit of the accounts of Schneider Electric’s Group according to international
best practices.
•
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Shareholder Information
Therefore, the Board of Directors decided to propose to the 2022 Annual Shareholders’ Meeting the appointment for a 6-year term of
a new board of external auditors composed of Mazars and PricewaterhouseCoopers Audit in replacement of Ernst & Young et Autres
whose term will end at that date.
Regarding the substitute statutory auditors, pursuant to Article L. 823-1 of the French Commercial Code, it is no longer required
for Schneider Electric SE to have substitute statutory auditors. Therefore, it is proposed that you decide to neither renew nor replace
Auditex and Mr. Thierry Blanchetier.
Under the 5th resolution, you are invited to renew Mazars, statutory auditor, for a six-year (6) term, acknowledge the term of office of
Mr. Thierry Blanchetier, substitute auditor, at the closing of this Annual Shareholders’ Meeting and decide not to renew nor replace him.
Under the 6th resolution, you are invited to acknowledge the term of office of Ernst & Young et Autres, statutory auditor, at the closing
of this Annual Shareholders’ Meeting, and decide not to renew it and to appoint in replacement PricewaterhouseCoopers Audit for a
six-year (6) term. You are also invited under this resolution to acknowledge the term of office of Auditex, substitute statutory auditor,
at the closing of this Annual Shareholders’ Meeting, and decide not to renew nor replace it.
Text of the fifth resolution
(Reappointment of Mazars as statutory auditor; no reappointment and no replacement of
Mr. Thierry Blanchetier as substitute statutory auditor)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having taken note that the
term of office of Mazars, statutory auditor, expires at the closing of this Annual Shareholders’ Meeting, decides to renew it for a six-year (6) term
expiring at the closing of the Annual Shareholders’ Meeting to be held in 2028 to approve the financial statements for the 2027 fiscal year.
The statutory auditor has indicated in advance to the Company that it would accept this term of office.
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having taken note that the
term of office of Mr. Thierry Blanchetier, substitute statutory auditor, expires at the closing of this Annual Shareholders’ Meeting, decides not
to renew nor to replace him, in accordance with the option provided for by Article L. 823-1 of the French Commercial Code.
8.
Text of the sixth resolution
(Appointment of PricewaterhouseCoopers Audit as statutory auditor; no reappointment and
no replacement of Auditex as substitute statutory auditor)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having taken note that the
term of office of Ernst & Young et Autres, statutory auditor, expires at the closing of this Annual Shareholders’ Meeting, decides not to renew
it and to appoint in replacement PricewaterhouseCoopers Audit for a six-year (6) term expiring at the closing of the Annual Shareholders’
Meeting to be held in 2028 to approve the financial statements for the 2027 fiscal year.
The statutory auditor has indicated in advance to the Company that it would accept this term of office.
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having taken note that the
term of office of Auditex, substitute statutory auditor, expires at the closing of this Annual Shareholders’ Meeting, decides not to renew nor to
replace it, in accordance with the option provided for by Article L. 823-1 of the French Commercial Code.
7th and 8th resolutions: Approval of the information on the Directors’ and the
Corporate Officer’s compensation paid or granted for 2021 (Say on pay ex-post)
Explanatory statement
Under the 7th resolution, in pursuance of Article L. 22-10-34 I of the French Commercial Code, you are invited to approve the
information listed in Article L. 22-10-9 of the French Commercial Code relating to the compensation of Directors and the Corporate
Officer that are presented to you in the corporate governance report referred to in Article L. 225-37 of the French Commercial Code.
You will find all this information set out in detail in section 4.2.2 of Chapter 4 of the 2021 Universal Registration Document and in section
2.2.2 of the Notice of meeting.
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Chapter 8 – Annual Shareholders’ Meeting
8.1 Explanatory comments & draft resolutions submitted to the Annual Shareholders’ Meeting
Under the 8th resolution, in pursuance of Article L. 22-10-34 II of the French Commercial Code, you are asked to approve fixed,
variable and exceptional components of the total compensation and benefits of all types paid during the last fiscal year or awarded
in respect of the said year, to the Chairman & CEO, Mr. Jean-Pascal Tricoire. They have been paid or awarded in accordance with
the compensation policy approved by the Annual Shareholders’ Meeting of April 28, 2021. These components are detailed in section
4.2.2.2 of Chapter 4 of the 2021 Universal Registration Document and in section 2.2.2.1 of the Notice of meeting.
Text of the seventh resolution
(Approval of the information on the Directors’ and the Corporate officer’s compensation paid
or granted for the fiscal year ending December 31, 2021 mentioned in Article L. 22-10-9 of the
French Commercial Code)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings and reviewed the
corporate governance report referred to in Article L. 225-37 of the French Commercial Code, approves, in pursuance of Article L. 22-10-
34 I of the said Code, the information mentioned in Article L. 22-10-9 I of the French Commercial Code as stated in the 2021 Universal
Registration Document, Chapter 4, Section 4.2.2.
Text of the eighth resolution
(Approval of the components of the total compensation and benefits of all types paid during the 2021
fiscal year or awarded in respect of the said fiscal year to Mr. Jean-Pascal Tricoire)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings and reviewed the
corporate governance report referred to in Article L. 225-37 of the French Commercial Code, approves, in pursuance of Article L. 22-10-34
II of the said Code, the fixed, variable, and exceptional components of the total compensation and benefits of all types paid during the 2021
financial year or awarded in respect of the 2021 fiscal year to the Chairman & Chief executive officer, Mr. Jean-Pascal Tricoire as stated in
the 2021 Universal Registration Document, Chapter 4, Section 4.2.2.2.
9th and 10th resolutions: Approval of the 2022 compensation policy applicable
to Directors and the Corporate Officer (Say on pay ex-ante)
Explanatory statement
Under the 9th resolution, in pursuance of Article L. 22-10-8 II of the French Commercial Code, shareholders are invited to approve the
compensation policy for the Corporate officer, the Chairman & CEO. This policy as well as the manner in which it serves the corporate
interest, supports the Company strategy, and contributes to the sustainability of the Company are presented in section 4.2.3.1 of
Chapter 4 of the 2021 Universal Registration Document and in section 2.2.3.1 of the Notice of meeting.
Under the 10th resolution, in pursuance of Article L. 22-10-8 II of the French Commercial Code, we ask you to approve the
compensation policy of the Directors, which means, firstly, the maximum amount that is proposed to be allocated to the Board
members annually and secondly, the allocation rules of this amount. These elements are presented in detail in section 4.2.3.2 of
Chapter 4 of the 2021 Universal Registration Document and in section 2.2.3.2 of the Notice of meeting.
Text of the ninth resolution
(Approval of the Corporate Officer (Chairman & Chief executive officer)’s compensation policy)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings and reviewed
the corporate governance report referred to in Article L. 225-37 of the French Commercial Code, approves, in pursuance of Article
L. 22-10-8 II of the said Code, the compensation policy of the Corporate Officer (Chairman & Chief executive officer) as stated in the
2021 Universal Registration Document, Chapter 4, Section 4.2.3.1.
Text of the tenth resolution
(Approval of the Directors’ compensation policy)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings and reviewed
the corporate governance report referred to in Article L. 225-37 of the French Commercial Code, approves, in pursuance of Article
L. 22-10-8 II of the said Code, the compensation policy of the Directors as stated in the 2021 Universal Registration Document,
Chapter 4, Section 4.2.3.2.
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Chapter 8 – Annual Shareholders’ Meeting
Shareholder Information
11th, 12th, and 13th resolutions: Renewal of Mrs. Linda Knoll and Mr. Anders Runevad,
appointment of Mrs. Nivedita Krishnamurthy (Nive) Bhagat
Explanatory statement
As of March 29, 2021, the Board of Directors had fifteen members, including nine who are deemed independent within the meaning
of the AFEP-MEDEF Corporate Governance Code, two Directors representing the employees and one Director representing the
employee shareholders.
Each year, the Board of Directors conducts a review to ensure that there is an appropriate balance in its composition and that of its
committees. In particular, the Board seeks to ensure gender balance and broad diversity in terms of skills, experience, nationality,
and age, as described in its diversity policy (see section 4.1.1.2 of Chapter 4 of the Universal Registration Document). The Board
investigates and evaluates not only potential candidates, but also whether existing directors should seek reappointment based on
their performance assessment. Above all, the Board seeks directors who show independence of mind and are competent, dedicated
and committed, with compatible and complementary personalities.
Mr. Willy Kissling, member of the Board of Directors for 21 years, and Mrs. Fleur Pellerin, member of the Board of Directors since 2018,
have decided not to seek the renewal of their terms of office which expire at the closing of this Shareholders’ Meeting. The Board of
Directors expressed its gratitude to Mr. Willy Kissling’s and Mrs. Fleur Pellerin’s dedication to the Board of Directors’ work and to their
long-term commitment.
As part of the Board’s continuous review of its composition, the Board of Directors asked the Governance & Remunerations Committee
to make a recommendation on the renewal of Mrs. Linda Knoll and Mr. Anders Runevad, as well as search for complementary
candidates in line with the skillset highlighted by its Board skills matrix and the challenges of the Company (see section 4.1.1.6 of
Chapter 4 of the Universal Registration Document describing the directors recruitment process).
In that respect, the Committee has analyzed Mrs. Linda Knoll’s and Mr. Anders Runevad’s situation with regards to their time
commitment and availability to fulfill their duties. Neither of them holds an excessive number of directorships, and their individual
attendance rates at Board and Committee meetings are high as indicated in their biography (see section 4.1.1.2 of Chapter 4 of
the Universal Registration Document). The Board also assessed their respective contributions to the work of the Board and of the
committees to which they belong, and decided that keeping them as directors was in the interests of the Company and consistent with
the targeted composition of the Board as identified in the process described above. As a Director, Mrs. Linda Knoll brings to the Board
of Directors experience in senior Human Resources executive roles with international groups. Mr. Anders Runevad brings to the Board
the benefit of his experience as the former CEO of Vestas Wind Systems A/S and a strong profile on sustainability matters.
The Governance & Remunerations Committee also identified the skills that would be necessary to diversify and strengthen the Board
composition and hired an external recruitment firm (Heidrick & Struggles) to search for suitable candidates. Among these candidates,
the Governance & Remunerations Committee preselected a short list and the members of the Committee interviewed the short-
listed candidates. Following these interviews, the Committee recommended a candidate to the Board of Directors, Mrs. Nivedita
Krishnamurthy Bhagat, also known as Nive Bhagat, who, on February 16, 2022, was appointed as an Observer with the aim to propose
her appointment to the Shareholders’ Meeting. Mrs. Nive Bhagat, a British citizen, is currently Global Chief Executive Officer for Global
Cloud Infrastructure Services of Capgemini and a member of its group executive committee. She will bring to the Board the experience
and additional skillset based on her wide-ranging finance and business background especially in the field of digital and will further
add to the gender diversity of the Board of Directors. She will also strengthen the profile of the Schneider Electric Board through her
excellent knowledge of the Asian market. She will qualify as an independent Director with regard to all the criteria set by Article 9.5
of the AFEP-MEDEF Corporate Governance Code and, if appointed, will join the Digital Committee.
Acting upon recommendation of the Governance & Remunerations Committee, the Board of Directors propose to shareholders:
•
•
•
in the 11th resolution, to renew the term of office of Mrs. Linda Knoll for a four-year (4) term;
in the 12th resolution, to renew the term of office of Mr. Anders Runevad for a four-year (4) term; and
in the 13th resolution,, to appoint Mrs. Nive Bhagat as a Director for a four-year (4) term.
Should these resolutions be approved, the Board of Directors would consist of 14 members (including one Director representing
the employee shareholders and two Directors representing the employees), with an independence rate of 82% and 45% of women
(excluding the three Directors who are also employees) and 79% being of non-French origin or nationalities.
Mrs. Linda Knoll, Mr. Anders Runevad, and Mrs. Nive Bhagat’s biographies are provided in section 4.1.1.2 of Chapter 4 of the 2021
Universal Registration Document.
Text of the eleventh resolution
(Renewal of the term of office of Mrs. Linda Knoll)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having heard the Board
of Directors’ report, takes note that the term of office of Mrs. Linda Knoll as a Director expires at the closing of this Shareholders’ Meeting
and decides to renew it for a four-year (4) term expiring at the closing of the Annual Shareholders’ Meeting to be held in 2026 to approve
the financial statements for the 2025 fiscal year.
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8. Chapter 8 – Annual Shareholders’ Meeting
8.1 Explanatory comments & draft resolutions submitted to the Annual Shareholders’ Meeting
Text of the twelfth resolution
(Renewal of the term of office of Mr. Anders Runevad)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having heard the Board of
Directors’ report, takes note that the term of office of Mr. Anders Runevad as a Director expires at the closing of this Shareholders’ Meeting
and decides to renew it for a four-year (4) term expiring at the closing of the Annual Shareholders’ Meeting to be held in 2026 to approve
the financial statements for the 2025 fiscal year.
Text of the thirteenth resolution
(Appointment of Mrs. Nivedita Krishnamurthy (Nive) Bhagat as a Director)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having heard the Board of
Directors’ report, decides to appoint Mrs. Nivedita Krishnamurthy (Nive) Bhagat as a Director for a four-year (4) term expiring at the closing
of the Annual Shareholders’ Meeting to be held in 2026 to approve the financial statements for the 2025 fiscal year.
14th resolution: Share buy-backs
Explanatory statement
As the pre-existing authorization comes to its term in October 2022, it is hereby proposed, in the 14th resolution submitted to the
Annual Shareholders’ Meeting, to reconduct, for a new eighteen-month period starting after the present Annual Shareholders’ Meeting,
the authorization given to the Board of Directors to purchase the Company’s shares as part of a share buy-back program pursuant to
the provisions of Article L. 22-10-62 of the French Commercial Code and European Regulation (EU) no. 596/2014 of April 16, 2014 on
market abuse.
We remind you that on February 14, 2019 Schneider Electric initiated a new €1.5 billion to €2.0 billion share buy-back program over the
period 2019-2021. The program has been launched under the 15th resolution approved at the 2018 Annual Shareholders’ Meeting and
pursued under the 14th, 17th, and 15th resolutions approved respectively at the 2019, 2020, and 2021 Annual Shareholders’ Meetings.
These buy-backs were part of a policy to neutralize the dilution resulting from capital increases reserved for employees or from Long-
term Incentive Plans. All the shares acquired by the Company as part of the share buy-back program are held to cover Long-term
Incentive Plans.
At the beginning of 2021, due to the economic uncertainty, and considering the on-going acquisitions, the share buy-back program
remained on-hold after its suspension due to the COVID-19 crisis in 2020. The share buy-back program re-started at the end of July
2021 with the timeframe for completion extended by 12 months, to run until the end of 2022. Since the beginning of the program in
2019, a total €577,499,243 of share buy-back corresponding to 5,941,783 shares bought back by the Company had been completed
including €261,659,633 of share buyback in 2021 corresponding to 1,809,054 shares bought back by the Company pursuant to the
last authorizations.
All the 12,455,824 treasury shares held on December 31, 2021 (representing 2.19% of the share capital) are allocated to employees
and Corporate Officers as a long-term compensation tool.
The authorization that you would give to the Board would allow to proceed to purchase shares for the purposes, amongst others, of:
•
•
•
•
•
their allotment to employees or Corporate Officers as a long-term compensation tool;
their delivery as a result of the exercise of rights attached to securities giving access to the Company’s capital;
their cancellation;
their delivery in connection with external growth operations; and
their disposal in the course of a share management agreement.
Shares bought back may be canceled under the authorization adopted by the Annual Shareholders’ Meeting of April 28, 2021
(24th resolution).
The number of shares thus purchased, and the number of shares held may not exceed 10% of the share capital at any time
(for reference purposes, based on the issued capital on December 31, 2021: 56,903,344 shares). The maximum purchase price
of the shares would be set at €250 and the total amount allocated to the share repurchase program will not exceed €14.2 billion.
As for previous years, the resolution prevents that the authorization be used during a public offering on the Company’s shares.
Further information on the Company’s share buy-back programs can be found in section 7.2.5 of Chapter 7 of the 2021 Universal
Registration Document.
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Chapter 8 – Annual Shareholders’ Meeting
Shareholder Information
Text of the fourteenth resolution
(Authorization granted to the Board of Directors to buy back Company shares)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having heard the Board of
Directors’ report, hereby authorizes the Board of Directors, pursuant to the provisions of Article L. 22-10-62 of the French Commercial Code,
Regulation (EU) no. 596/2014 of April 16, 2014 on market abuse and its delegated regulations and the French Financial Market Authority’s
General rules, to buy-back or arrange for the buy-back of the Company’s shares for the purpose of:
•
the allotment or transfer of shares to employees or Corporate Officers of the Company and/or of current or future related companies, for
the purposes of implementing any stock option or Performance Share plan, or any other grant, allocation, or disposal to employees and
Corporate Officers of the Company;
the delivery of shares as a result of the exercise of rights attached to securities giving access to the Company’s capital by redemption,
conversion, exchange, presentation of a warrant or by any other mean;
the cancellation by way of share capital decrease of all or part of these repurchased shares;
the delivery of shares (for exchange, payment or otherwise) in connection with external growth operations (up to a limit of 5% of the share
capital);
their provision for the purposes of a share management agreement entered into with an investment services provider in order notably
to maintain a liquid market; or
the implementation of any market practice which would be allowed by the French Financial Market Authority.
•
•
•
•
•
This authorization also allows the Company to trade in its shares for any other purposes authorized or that may be authorized by law or
regulation. In such a case, the Company would inform its shareholders through a public release.
Shares acquired may also be canceled, subject to compliance with the provisions of Articles L. 225-204 and L. 225-205 of the French
Commercial Code and in accordance with the 24th resolution of the Annual Shareholders’ Meeting of April 28, 2021.
The number of shares that may be purchased shall be subject to following limits:
(i) the number of shares that the Company may purchase during the term of the buy-back program should not exceed 10% of the
Company’s share capital at any time (i.e. for information purposes, 56,903,344 shares, on the basis of the share capital as of
December 31, 2021), it being specified that the number of shares acquired in view of their retention and their future delivery for
the purpose of an external growth operation cannot exceed 5% of the Company’s share capital; and
(ii) the number of shares that the Company can hold at any time may not exceed 10% of the Company’s share capital.
8.
The maximum share purchase price is set at €250 per share (excluding acquisition costs) without exceeding the maximum price set by
applicable laws and regulations. The total amount allocated to the share repurchase program will not exceed €14.2 billion (excluding
acquisition costs).
The purchase, exchange, disposal or transfer of shares can be decided by the Board of Directors on one or more occasions, at any time
except during takeover bid involving the Company’s shares, and by any means, provided that laws and regulations in force are complied
with, on or off the stock market, over the counter, in whole or in part in blocks of shares, by takeover bid in cash or in shares, by using
options or derivatives, either directly or indirectly through the intermediation of an investment services provider, or in any other way.
The Annual Shareholders’ Meeting grants authority to the Board of Directors, which may further delegate as permitted by law, to adjust
the price set forth above in the event of transactions on the Company’s share capital, and in particular an increase in capital through the
capitalization of reserves, the allocation of free shares, a stock split or reverse stock split, the distribution of reserves or any other assets,
impairment of share capital or any other transaction involving share capital or shareholders’ equity, to take into account the impact of these
transactions on the stock value.
The Annual Shareholders’ Meeting gives full powers to the Board of Directors with powers to subdelegate under the conditions set out by
law, to use this authorization, in particular to give any and all orders, enter into any and all agreements, allocate or reallocate the shares
acquired to the objectives pursued under the applicable legal and regulatory conditions, set the terms and conditions under which the
rights of holders of securities giving access to the share capital or other rights giving access to the share capital will be preserved, if
applicable, in accordance with legal and regulatory provisions and, if applicable, contractual provisions providing for other cases of
adjustment, prepare all documents and press releases, carry out any and all formalities and make all appropriate declarations to the
authorities, and in general take all necessary measures.
This authorization supersedes, for the unused portion, the authorization given to the Board of Directors by the Shareholders’ Meeting
of April 28, 2021 in its 15th resolution and is granted for an eighteen (18)-month period as from this Annual Shareholders’ Meeting.
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8.1 Explanatory comments & draft resolutions submitted to the Annual Shareholders’ Meeting
8.1.2 Extraordinary Meeting
15th resolution: Authorization granted to the Board of Directors to freely allocate
shares to the employees or to a category of employees and/or the Corporate Officers
of the Company or of companies affiliated therewith as part of the Long-Term
Incentive Plan up to a limit of 2% of the share capital
Explanatory statement
Under the 15th resolution, you are asked to give authority to the Board of Directors, pursuant to the provisions of Articles L. 225-129
et seq., L. 229-197-1 to L. 229-197-5, and L. 22-10-59 of the French Commercial Code (Code de commerce), to proceed, on one or
more occasions, with the allocation of shares, issued or to be issued, to the benefit of employees and Corporate Officers of the Group.
The Board of Directors, upon recommendation of the Human Resources & CSR and Governance & Remunerations Committees, has
determined the following guidelines for granting free shares under this resolution.
Context of the request for authorization
The Company wishes to mobilize its management in order to carry out its 2022-2024 Strategic Plan announced in November 2021,
upon which the development of the Group relies. In this context, the requested authorization would make it possible for the Board of
Directors to put in place plans for the grant of shares, to the benefit of Corporate Officers and employees of the Group, both in France
and abroad, and to involve the employees in the Group’s performance and development as part of the 2022-2024 Strategic Plan.
These plans would also allow to ensure the competitiveness of the compensation offered by the Group, in dynamic and competitive
international markets, and in sectors where the ability to attract talents is a key factor to success.
Overall, the Board decided to keep the same design as the one of the previous Long-Term Incentive Plan approved by more than 93%
of the shareholders during the 2019 Annual Shareholders’ meeting where a complete new framework of the plan had been proposed.
The Board considers that the design of the plan is well balanced and ensures the alignment of the management with the shareholders’
long-term interests and that is why it wishes to favor the stability of the compensation principle of the Group. Nevertheless, hearing the
concerns expressed by some shareholders during the governance roadshow conducted by the Vice-Chairman & Lead Independent
Director, the Board proposes to introduce two important changes in order to further strengthen the alignment of pay and performance.
If you approve this resolution:
•
the scale of vesting of the criterion of TSR compared to a bespoke industry panel of 11 companies would be made more stringent,
with no vesting at ranks 7 and below in the bespoke peer group (with an anticipated application of this change in the 2022 LTIP
to be issued), no vesting below the median of the group would therefore be allowed; and
the Board would also commit to disclose ex-post the targets of improvement of the adjusted Earnings per share set by the Board
which will allow shareholders to ensure the stringency of these targets set by the Board.
•
Nature of the authorization
You are being asked to authorize the Board of Directors to proceed, on one or more occasions, with the grant of shares of the
Company, issued or to be issued, to the benefit of employees and Corporate Officers of the Group.
As part of the long term compensation plans of the Company, two different types of grant would be made:
• a maximum of 30% of the shares granted would be subject only to a presence condition, without performance condition
(the “Restricted Shares”); and
• all other shares granted would be subject to a presence condition and to performance conditions (the “Performance Shares”).
The Corporate Officer and members of the Executive Committee would be entitled to receive only Performance Shares.
It is envisaged that the number of persons benefiting from such grants will be around 3,500 people.
Besides, the Board of Directors could decide the grant of Restricted Shares as part of the shareholding plans of the Company,
in addition to the shares subscribed.
Term of the authorization
The authorization would be valid for a duration of 36 months, as from the date of this Shareholders’ Meeting.
Maximum amount of the authorization
The grants of shares carried out pursuant to this authorization should not involve a number of shares, issued or to be issued,
exceeding 2% of the Company’s share capital on the date of this Annual Shareholders’ Meeting.
The Board of Directors reminds you that the Group’s policy regarding grant of stock options, share purchase, and free and
performance shares is to have a limited impact over time in terms of dilution of the share capital. For information purposes, we
remind you that, as of December 31, 2021, a total of 5,863,887 shares could be vested to employees and Corporate Officers subject
to performance conditions set under the performance share plans (for details of these plans, see section 4.2.5 of Chapter 4 of the
Universal Registration Document).
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If all shares in the plans were delivered, this would lead to the issuance of 293,071 shares (other plans are already qualified and
will be delivered from existing shares) and Schneider Electric’s share capital would be composed of 569,326,513 ordinary shares,
i.e., a 0.05% increase in the number of shares from December 31, 2021.
Under the Long-Term Incentive Plan, Performance Shares allocated to the Corporate Officer could not exceed each year 0.03% of
the total share capital and allocation to the members of the Executive Committee would not represent more than 20% of the grant.
In addition, the Corporate Officer’s compensation policy provides that the long-term instruments, valued in accordance with IFRS
standards, should not represent a disproportionate percentage of his overall compensation (meaning no more than 200% of the
combined fixed and targeted variable compensations at the date of grant).
Vesting period
The grant of shares to their beneficiaries would become final at the end of a vesting period, the duration of which would be set by
the Board of Directors, it being understood that such duration will be of no less than three (3) years.
The Board of Directors would submit the Corporate Officer to an obligation of retaining a significant number of their shares. He would
have to retain at least 50% of the Performance Shares granted to him until he holds a number of shares representing 5 years of fixed
compensation.
Presence condition in the Group
The vesting of Restricted and Performance Shares would be subject to achievement of a presence condition in the Group. Restricted
and Performance Shares granted to a beneficiary who would leave the Group before the expiry of a minimum three-year vesting period
would be forfeited, except in case of death, retirement or other customary exceptions decided upon by the Board of Directors. For the
Corporate Officer, the case of retention of unvested Performance Shares awards would be determined by the Compensation policy
applicable to him at the date of his departure.
Performance conditions
The final vesting of Performance Shares would be subject to performance conditions, to be set by the Board of Directors (the
“Performance Conditions”) the outline of which would be as follows:
• 40%, improvement of Adjusted Earnings per share (EPS):
Adjusted EPS is a key long-term performance metric which promotes the execution of Schneider Electric’s strategy to deliver
profitable growth, thus reinforcing alignment with shareholders. 40% of the Performance Shares could vest subject to the
achievement of the following targets as set by the Board of Directors:
− a minimum Adjusted EPS improvement threshold under which there would be no vesting;
− an intermediary targeted Adjusted EPS improvement objective that the Company would have to achieve in order to vest 75%
of the shares under this condition;
− a targeted Adjusted EPS improvement objective that the Company would have to achieve in order to vest all shares under this
condition; and
− the Performance Shares would vest progressively, on a linear basis, if the Adjusted EPS improvement is between these
objectives.
As explained above, the Board commits to disclose ex-post, at the end of each Long-Term Incentive Plan, the minimum Adjusted
EPS improvement thresholds and the targeted Adjusted EPS improvement objectives.
Adjusted EPS performance is published in the external financial communications and its annual variance will be calculated using
adjusted EBITA at constant FX from year N-1 to year N. Foreign exchange impacts below adjusted EBITA will be taken in full.
Significant unforeseen scope impact could be restated from this calculation upon decision of the Board.
• 35%, relative TSR performance:
This criterion strengthens the alignment between the shareholders’ interests and compensation of the beneficiaries of LTIP.
− For 17.5% of the shares, Schneider Electric TSR would be compared to a bespoke industry panel of 11 companies (ABB,
Legrand, Siemens, Eaton, Emerson, Honeywell, Johnson Controls, Rockwell Automation, Fuji Electric, Mitsubishi Electric, and
Yokogawa) with a vesting scale as follows: 0% at rank 7 or below, 50% at median (rank 6), 100% at rank 4, 150% for ranks 3 to 1,
and linear between these points, as explained above, the Board proposes to strengthen the vesting scale for a better alignment
with performance.
− For the remaining 17.5%, Schneider Electric TSR would be compared with the TSR of the companies in CAC 40 index to reflect
the macro-economic and stock-market specific trends which influence the performance of the share and in turn, the return to
shareholders with a vesting scale as follows: 0% below median, 50% at median (rank 20), 100% at rank 10, 120% in ranks 4 to 1,
and linear between these points.
In case of over-performance, if Schneider Electric’s TSR is ranked within the top quartile of the bespoke industry panel or within the
top 9 of the CAC 40 companies, this criterion could compensate the under-performance under the criterion of improvement of the
Adjusted EPS up to the same number of shares. If the Schneider Electric TSR is closely clustered with that of other companies in
the panel, then the Board of Directors would apply its judgment to decide whether Schneider Electric’s TSR shall be deemed to be
ranked in the same position as those companies.
8.
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Chapter 8 – Annual Shareholders’ Meeting
8.1 Explanatory comments & draft resolutions submitted to the Annual Shareholders’ Meeting
• 25%, based on Schneider Sustainability External & Relative Index (SSERI):
The Schneider Sustainability External and Relative Index measures the long-term sustainability performance of the Group in terms
of relative performance, through a combination of external indices which cover a range of environmental, social, and governance
indicators wider than and different from the Schneider Sustainability Impact (SSI). Using external indices would also ensure that the
sustainability priorities governing the assessment of the long-term sustainability performance of the Group are at all times those
which matter the most to the stakeholders. As their content is dynamic and includes new and more relevant topics as they emerge,
it forces participants to constantly anticipate the most demanding trends in global sustainability. The Board has selected some of
the most challenging external indices which are objective, recognized, and independent, covering main geographies in line with
the Group’s global footprint and which complement each other as they cover different sustainability dimensions:
− DJSI World which covers three dimensions: economic, environmental, and social;
− Euronext Vigeo which covers environment, community involvement, business behavior, human rights, corporate governance,
and human resources;
− Ecovadis which covers four dimensions: environment, labor and human rights, sustainable procurement, and ethics; and
− CDP Climate Change which covers climate change, water, and forests and represents a major reference for climate change
leadership globally.
The table below summarizes the Performance Conditions that would apply to the plan:
40% Improvement of adjusted Earnings Per Share (EPS)
• 0% at the minimum Adjusted EPS improvement
35% Relative TSR
17.5% vs. CAC 40
threshold
• 75% at the intermediary Adjusted EPS
improvement objective
• 100% at the targeted Adjusted EPS
improvement objective
Vesting linear between these points
• 0% below median
• 50% at median (rank 20)
• 100% at rank 10
• 120% at ranks 4 to 1
Vesting linear between these points
17.5% vs. a panel of 11 companies
(ABB, Legrand, Siemens, Eaton, Emerson,
Honeywell, Johnson Controls, Rockwell
Automation, Fuji Electric, Mitsubishi Electric and
Yokogawa)
• 0% at rank 7 and below
• 50% at median (rank 6)
• 100% at rank 4
• 150% at ranks 3 to 1
Vesting linear between these points
25% Schneider
Sustainability External &
Relative Index (SSERI)
6.25% DJSIW
6.25% Euronext Vigeo
6.25% Ecovadis
6.25% CDP Climate Change
• 0%: not in World
• 50%: included in World
• 100%: sector leader
• 0%: out
• 50%: included in World 120 or Europe 120
• 100%: included in World 120 & Europe 120
• 0%: Silver Medal or less
• 50%: Gold Medal (top 5%)
• 100%: Platinum Medal (top 1%)
• 0%: C score
• 50%: B score (25% at B-)
• 100%: A score (75% at A-)
For each grant, the performance conditions will be determined by the Board. and, although the Board favors stability, they could be
adapted from the ones presented above. Depending on the evolution of the Group’s strategic objectives, should they cease to be
relevant or new criteria be deemed more appropriate based on their review by the Board of Directors, the latter would elect for criteria
with similar long-term stringency, that will ensure a strong link between pay and performance.
Best practices
The Board of Directors shall inform Shareholders every year of the number of shares granted or/and vested pursuant to the Long-Term
Incentive Plan. The grant of Performance Shares would also be consistent with the principles and best practices applied by the Board,
including, in particular:
•
involvement at each stage (allocation, review of the satisfaction of performance conditions, etc.) of the Human Resources &
CSR Committee;
• demanding performance conditions in line with the Company’s financial communication which provide incentive, for 100% of the
shares granted to the Corporate Officer and members of the Executive Committee; and
• demanding rules of business ethics, including, a prohibition for beneficiaries who are members of the Executive Committee to use
hedging instruments for the Performance Shares.
All these elements, taken together, demonstrate that the Group is aligned itself with best market practices regarding Performance
Shares and responds to the expectations of its shareholders.
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Text of the fifteenth resolution
(Authorization granted to the Board of Directors to freely allocate shares to the employees or to a
category of employees and/or the Corporate Officers of the Company or of companies affiliated therewith
as part of the Long-Term Incentive Plan up to a limit of 2% of the share capital)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for extraordinary shareholders’ meetings,
having heard the Board of Directors’ report and the statutory auditors’ special report:
1. authorizes the Board of Directors, pursuant to the provisions of Articles L. 225-197-1 to L. 225-197-5 and L. 22-10-59 of the French
Commercial Code, on one or several occasions, to allocate free shares, existing or to be created (other than preferred shares), to the
beneficiaries that it shall determine among the employees of the Company or the Corporate Officers of the Company or of companies
that are related to the Company under the conditions provided for in Article L. 225-197-2 of said Code under in the conditions
defined hereinafter;
2. resolves that the number of shares already existing or to be issued by this authorization cannot represent more than 2% of the share
capital existing on the date of this Shareholders’ Meeting, the number of shares allocated to the Corporate Officers cannot exceed
annually 0.03% of the total share capital existing, further specified that (i) this ceiling is set without taking into account any adjustments
of the shares that could be allocated in case of Company’s equity operations and, that (ii) the total number of shares allocated cannot
exceed 10% of the share capital on the date of the Board of Director’s decision to allocate them;
3. resolves that the entirety of the final vesting of the shares allocated to the Corporate Officers and to members of the Executive Committee
of the Company will be subject to the attainment of the performance conditions determined by the Board of Directors;
4. resolves that the grant of shares to their beneficiairies could be subject to the holding of Company’s shares;
5. resolves that the allocation of the shares to their beneficiaries will be final at the term of a vesting period, the duration of which will be
set by the Board of Directors, with the understanding that this duration cannot be less than two years and that the Board of Directors
will have the power to set a holding period;
8.
6. resolves that in the case of the disability of a beneficiary corresponding to a classification in the second or third of the categories
specified in Article L. 341-4 of the French Social Security Code, the shares will be definitively allocated to them prior to the end of the
vesting period (in this case, said shares may be freely disposed starting from their delivery);
7. grants full powers to the Board of Directors to implement this authorization and, in particular, to:
a. determine the identity of the beneficiaries of the allocation of the shares among the employees of the Company or companies or
above-mentioned groups, as well as the number of shares allocated to each of them,
b. determine whether the allocated free shares are shares that already exist or that will be issued,
c. set the conditions of performance and/or the criteria for allocation of the shares, in particular the vesting period and the minimum
holding period required for each beneficiary,
d. for the issuance of new shares, as the case may be, charge against any reserves, profits, or issue premiums, the amounts necessary
to release said shares,
e. register the free allocated shares on a registered share account in the name of their owner, stating the vesting period and its duration,
f. carry out, if it deems necessary, to adjustments of the number of free allocated shares to preserve the rights of the beneficiairies
depending on the potential Company’s equity operations occurred during the vesting period as specified in Article L. 225-181
paragraph 2 of the French Commercial Code, under the conditions that it will set,
e. and more generally, set the dates of entitlement to dividends from the new shares, record the completion of the capital increase,
amend the by-laws as necessary, to carry out any procedures necessary for the issuance, listing and any financial service related
to the securities issued by virtue of this resolution and do everything useful and necessary pursuant to all applicable laws
and regulations;
8. acknowledges that, in the event that the Board of Directors makes use of this authorization, it will inform the Ordinary Shareholders
Meeting, each year, of the transactions thus made pursuant to the requirements of Article L. 225-197-4 of the French Commercial Code;
9. acknowledges that this delegation of authority legally implies, for the beneficiaries of the free shares, waiver of preferential subscription
rights in the case of the issuance of new shares.
This authorization (i) supersedes, for the portion not yet used, the authorization granted by the Combined Shareholders’ Meeting of April 25,
2019 in its 21st resolution and (ii) is granted for a period of thirty-six (36) months from today.
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Chapter 8 – Annual Shareholders’ Meeting
8.1 Explanatory comments & draft resolutions submitted to the Annual Shareholders’ Meeting
16th and 17th resolutions: Capital increases reserved for employees
Explanatory statement
Schneider Electric is convinced of the importance of developing the Company’s employee shareholder base in order to align employee
interests with those of shareholders and also stabilize the Company’s share capital. The Board of Directors wishes to continue making
the Company’s share capital accessible to a large number of employees, in particular through employee share ownership plans
(“WESOP”). As of December 31, 2021, employees held 3.57% of the capital either directly or through the corporate mutual funds
(FCPE).
The Company carried out capital increases reserved for Group employees in 2021 (WESOP 2021). These transactions are presented
in section 7.1.2.2 of Chapter 7 of the 2021 Universal Registration Document.
As part its offer policy to Group employees on an annual basis, the Board decided that there will be a new employee share ownership
plan implemented in 2022. As part of the 22nd and the 23rd resolutions of the Annual Shareholders’ Meeting of April 28, 2021, the Board
of Directors, at its meeting of December 15, 2021, decided to renew the annual employee shareholder plan in 2022, within a limit of
3.7 million shares (approximately 0.65% of the capital). This plan, which will not include a leveraged offer, will be offered in 43 countries
representing more than 84% of the Group’s employees. The shares will be offered with a discount of 15% on the share price to all
subscribers and a maximum employer contribution of €1,400.
To allow for the implementation of a new global employee share ownership plan in 2023, you are requested to approve:
•
the 16th resolution which will grant the Board of Directors the authority to carry out capital increases reserved for employees
participating in the company savings plan within the limit of 2% of the Company’s capital, with the provision that the maximum
discount at which the shares could be offered is set at 30% (it will be valid for a period of twenty-six (26) months; the authority
in force as voted by the Annual Shareholders’ Meeting of April 28, 2021 in its 22nd resolution shall cease to be effective as from
August 1st, 2022(1));
the 17th resolution which will grant the Board of Directors the authority to carry out capital increases reserved for employees and
Corporate Officers of non-French Group companies or to entities acting on their behalf, this authorization will not exceed 1% of the
capital and will be deducted from the ceiling of 2% of the capital set for the issuance of shares to employees who are members
of the company savings plan (this authorization will be valid for a period of eighteen (18) months and may only be used on or after
August 1st, 2022(2)).
•
(1) The maximum amount of subscription applicable to the employee share ownership operations carried out before July 31, 2022 will be the ceiling applicable
to the 22nd resolution of the Annual Shareholders’ Meeting of April 28, 2021.
(2) The maximum amount of subscription applicable to the employee share ownership operations carried out before July 31, 2022 will be the ceiling applicable
to the 23rd resolution of the Annual Shareholders’ Meeting of April 28, 2021.
Text of the sixteenth resolution
(Delegation of authority to the Board of Directors to undertake capital increases reserved for participants
in a company savings plan without shareholders’ preferential subscription right)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for extraordinary shareholders’ meetings, having
heard the Board of Directors’ report and the statutory auditors’ special report, and in accordance with the provisions of Article L. 3332-1 et
seq. of the French Labor Code and Articles L. 225-129 to L. 225-129-6, L. 225-138-1, and L. 228-91 et seq. of the French Commercial Code
and in accordance with the provisions of that Code:
1. delegates to the Board of Directors the authority, with the power to subdelegate, for a period of twenty-six (26) months from the date of
this Annual Shareholders’ Meeting, to undertake a capital increase on one or more occasions at its discretion by issuing ordinary shares
or securities providing access through any means, immediately and/or in the future, to ordinary shares of the Company, under the terms
and conditions set forth in Article L. 225-180 of the French Commercial Code and Article L. 3344-1 of the French Labor Code, reserved
for participants in a company savings plan and French or non-French companies affiliated with the Company in a maximum nominal
amount of 2% of the share capital on the date of this Shareholders’ Meeting, with the possibility to issue shares against cash or by
capitalizing reserves, profits or premium in case of grants of free shares or of securities granting access to share capital on account for
the discount and/or the matching contribution, it being specified that this authorization may be used only from and after August 1st, 2022;
2. set the maximum discount to be offered in connection with company savings plan at 30% of an average of the trading price of the
Company’s shares on Euronext Paris during the twenty (20) trading sessions preceding the date of the decision of the Board of Directors
or of its authorized representative setting the date to begin taking subscriptions, it being specified that the Board of Directors may
reduce the aforementioned discount within applicable legal and regulatory requirements, or not to grant one, in particular so as to take
into account the laws and regulations applicable in countries where such offering may be implemented;
3. authorizes the Board of Directors, in application of Article L. 3332-21 of the French Labor Code, to make grants of free ordinary shares
or other securities granting immediate or differed access to ordinary share capital under all or part of the discount and/or, as the case
may be, for the matching contribution, provided that the value of the benefit resulting from this grant on account for the discount and/or
the matching contribution, shall not exceed the limits imposed by applicable law and regulations;
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4. decides to waive, in favor of the above-mentioned beneficiaries, the shareholders’ preferential subscription rights with respect to the
shares or equity-linked securities that are the subject of this delegation which entails waiver of the shareholders’ preferential subscription
right to shares to which securities that may be issued under this resolution would give right;
5. decides that the Board of Directors shall have full powers to use this delegation, with the power to subdelegate as permitted by law,
within the limits and subject to the conditions specified above in order to, and in particular:
a. set in accordance with applicable laws and regulations the scope of companies whose above mentioned beneficiaries may subscribe
to the shares or equity-linked securities issued hereby and benefit, as the case may be, from shares or equity-linked securities,
b. decide that the subscriptions may be made directly or through Company mutual funds (fonds commun de placement d’entreprise)
or other structures or entities as permitted by applicable laws and regulations,
c. determine the conditions, in particular those relating to seniority, which shall have to be met by the beneficiaries of the capital
increases,
d. set the opening and closing dates of the subscription periods,
e. set the amounts of the issuances to be undertaken pursuant to this authorization and determine, in particular, the issuance prices,
dates, time-periods, terms and conditions for the subscription, payment, settlement and dividend rights of the securities (which may
be retroactive) as well as the other terms and conditions of the issuances, in accordance with applicable laws and regulations,
f. when granting free shares or equity-linked securities, set the number of shares or equity-linked securities to be issued, the number
to be granted to each beneficiary, and determine the dates, time periods, terms and conditions of granting such shares or equity-
linked securities in accordance with applicable laws and regulations and, in particular, choose either to fully or partially substitute the
granting of such shares or equity-linked securities for the discount to the reference price provided for above, or to allocate the value
of such shares or equity-linked securities to the total amount of the employer contribution, or to combine these two possibilities,
g. acknowledge the completion of capital increases in the amount of the shares that are subscribed (after possible reduction in the
event of over-subscription),
h. as the case may be, allocate the expenses of capital increases to the amount of premiums related thereto and deduct from
this amount the sums necessary to increase the legal reserve to one-tenth of the new share capital resulting from such capital
increases, enter into any agreements, carry out directly or indirectly through an agent all transactions and terms, including any
formalities following the capital increases and subsequent modifications to the Company’s Articles of Association, generally, enter
into any agreement in order to successfully complete the contemplated issuances, take all measures and decisions and carry out
all formalities necessary for the completion of the issuance, listing and financial servicing of the securities issued pursuant to this
authorization as well as the exercise of rights attached thereto or subsequent to the completed capital increases.
8.
This delegation (i) cancels, effective August 1st, 2022, the authorization given by the Annual Shareholders’ Meeting of April 28, 2021, in
its 22nd resolution, for its amounts unused by the Board of Directors and (ii) is granted for a period of twenty-six (26) months as from this
Shareholders’ Meeting.
Text of the seventeenth resolution
(Delegation of authority to the Board of Directors to undertake capital increases reserved for employees
of certain non-French subsidiaries of the Group, directly or via entities acting to offer those employees
benefits comparable to those offered to participants in a company savings plan without shareholders’
preferential subscription right)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for extraordinary shareholders’ meetings, having
heard the Board of Directors’ report and the statutory auditors’ special report, and in accordance with the provisions of Articles L. 225-129
to L. 225-129-6, L. 225-138 ,and L. 228-92 et seq. of the French Commercial Code:
1. delegates to the Board of Directors, with the power to subdelegate, in compliance with applicable laws and regulations, the necessary
powers to decide one or several capital increases through the issue, in the proportions and at the times it deems appropriate up to a
maximum of 1% of the share capital on the date of this Shareholders’ Meeting, by issuing ordinary shares or securities providing access
through any means, immediately and/or in the future, to ordinary shares of the Company, such issue to be reserved for persons meeting
the characteristics of the class defined below; it being specified that (i) such limit shall be charged against the limits set forth in the
16th resolution of this Annual Shareholders’ Meeting, and (ii) this delegation may be used only from and after August 1st, 2022;
2. decides to waive the shareholders’ preferential right to subscribe for shares or other securities granting access to the share capital
pursuant to this resolution and to reserve the right to subscribe to one and/or another class of beneficiaries or recipients having the
following characteristics: (i) employees and officers of companies of Schneider Electric Group affiliated with the Company under the
terms and conditions set forth in Article L. 225-180 of the French Commercial Code and Article L. 3344-1 of the French Labour Code
and the head office of which is located outside France; (ii) and/or OPC mutual investment funds or other entities, with or without legal
personality, of employee shareholders invested in equity securities of the Company, the unit holders or shareholders of which consist
of persons described in (i) of this paragraph; (iii) and/or any banking institution or affiliate or subsidiary of such institution acting at the
Company’s request for purposes of implementing and giving effect to a shareholder incentive or investment or savings plan for the
benefit of the persons described in (i) of this paragraph, to the extent that subscription of the person authorized in accordance with this
resolution would make it possible for employees of subsidiaries located outside France to benefit from and take advantage of forms of
shareholder incentive or investment or savings plans equivalent in terms of economic benefit to those from which the other employees
of the Group benefit;
3. takes note that this authorization shall constitute automatically and by law an express waiver by the shareholders, in favor of the holders
of securities granting access to Company capital, of their preferential right to subscribe for ordinary shares of the Company which such
securities carry the right to acquire;
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4. decides that the amount payable to the Company for all shares issued, or to be issued, and pursuant to this resolution shall be set by the
Board of Directors on the basis of the trading price of the Company’s shares on Euronext Paris; the issue conditions shall be determined
at the discretion of the Board of Directors on the basis of either (i) the first or last quoted trading price of the Company’s shares at
the trading session on the date of the decision by the Board of Directors or the authorized representative there of setting the issue
conditions, or (ii) of an average of the quoted prices for the Company’s shares during the twenty (20) trading sessions preceding the
date of the decision by the Board of Directors or the authorized representative thereof setting the issue conditions under this resolution
or setting the issue price under the 16th resolution of this Annual Shareholders’ Meeting; the Board of Directors may set the issue price
by applying a maximum discount of 30% of the trading price of the Company’s shares determined in accordance with either of the two
methods set forth in clauses (i) and (ii) of this paragraph; the percentage of such discount applied to the trading price of the Company’s
shares shall be determined by the Board of Directors taking into consideration, among other things, legal, tax, and regulatory provisions
of foreign law applicable, as the case may be, to the persons benefiting from the issue;
5. hereby resolves that the Board of Directors shall have full authority, on the terms and conditions provided by law and within the limits set
forth hereinabove, to implement and give effect to this authorization and determine the list of the beneficiaries and recipients within the
classes described in this resolution and the number of securities to be offered to each thereof, provided that the Board of Directors may
decide that the capital increase shall be completed for the amounts subscribed, on the condition that a minimum of 75% of the shares or
other offered securities providing access to capital have been subscribed, as well as, among other things:
•
to determine the characteristics of the securities to be issued, to decide on the issue price, dates, time periods, terms and conditions
of subscribing, therefore, paying the paid-in capital, or nominal amount thereof, delivery and effectiveness of the shares and equity
securities, the lock-up, and early release period, within applicable limits of the law and regulations,
to record and determine the capital increase, to undertake the issuance of the shares and other securities carrying the right to acquire
shares, to amend the Articles of Association accordingly,
•
• and, as a general rule, to enter into any agreement, in particular to ensure the due and proper completion of the contemplated
issuances, take all steps and complete any required formalities in connection with the issue, the listing and financial servicing of
the securities issued under and this authorization, as well as the exercise of the rights attaching thereto, and, more generally, to do
whatever may be necessary.
This delegation (i) cancels, effective August 1, 2022, the authorization given by the Annual Shareholders’ Meeting of April 28, 2021, in
its 23rd resolution, for its amounts unused by the Board of Directors and (ii) is granted for a period of (18) eighteen months as from this
Shareholders’ Meeting.
18th resolution: Merger between IGE+XAO and Schneider Electric
Explanatory statement
Presentation of the merger plan
Schneider Electric acquired, through its subsidiary Schneider Electric Industries SAS (“SEISAS”), 61.90%(1) of the share capital of
IGE+XAO after a public tender offer initiated in November 2017 for the shares of IGE+XAO, pursuant to a combination agreement
formed on November 7, 2017.
To proceed with its plan to integrate IGE+XAO into the Schneider Electric group, SEISAS initiated a simplified public tender offer for
the shares of IGE+XAO(2) in November 2021.
At that time, Schneider had announced its intention:
•
to proceed with a squeeze-out in the event that SEISAS hold at least 90% of IGE+XAO’s capital and voting rights at the end of the
offer; or alternatively
to merge in 2022 IGE+XAO into Schneider Electric SE, the listed holding company (the “Merger”).
•
At the end of the offer, the shareholding of SEISAS in the share capital of IGE+XAO increased to 83.93%(3).
In accordance with its stated intentions, Schneider Electric announced its Merger plan in a press release dated November 29, 2021.
All IGE+XAO shares currently held by SEISAS would be reclassified by transferring them to Schneider Electric immediately before
the Merger takes place.
In this context, the Board of Directors invites you, under the 18th resolution, to approve the Merger. In accordance with applicable law,
if the absorbing company holds less than 90% of the voting rights of the absorbed subsidiary, the merger must be approved by the
Extraordinary General Meetings of both companies.
As provided in the draft merger agreement (the “Draft Merger Agreement”) approved by the Schneider Electric’s Board of Directors
and IGE+XAO’s Board of Directors, the Merger would imply the issuance of 342,023 Schneider Electric’s shares representing an
increase of 0.06% of the share capital(4), it being specified that the amount of the capital increase would be adjusted in the event of
a change in the number of IGE+XAO shares held by Schneider Electric and/or in the number of shares comprising the share capital
of Schneider Electric that may impact the exchange ratio.
(1) Based on its share capital comprising 1,427,800 shares, representing at most 1,428,855 voting rights, at January 31, 2018.
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Shareholder Information
Presentation of IGE+XAO
IGE+XAO, a subsidiary of Schneider Electric, designs, produces, markets, and maintains a range of Computer Aided Design (CAD)
and Product Lifecycle Management (PLM) software. The purpose of its range of software is to help manufacturers design and maintain
the electrical component of any type of installation.
In the financial year ended December 31, 2021, IGE+XAO generated consolidated revenue of €36.4 million. It employs more than 389
people around the world across 30 sites in 22 countries, and has more than 98,649 licenses in force worldwide. IGE+XAO is a leading
player in its sector.
IGE+XAO shares are listed on Euronext Paris. Its shares are admitted to trading on Euronext Paris under the ISIN code FR0000030827,
compartment B.
Reasons for and purpose of the Merger
The Merger is intended to (i) position the IGE+XAO group’s entities as purely operational entities of Schneider Electric’s Energy
Management Software Division, it being stipulated that the IGE+XAO group would retain its main role as an agnostic software
producer and (ii) extend the IGE+XAO group’s remit, including pulling together software activities that are currently dispersed within
the Schneider Electric Group and gradually becoming a center of excellence for R&D. The Merger would also enable non-controlling
shareholders of IGE+XAO to continue benefiting from the value created by this strategy by holding shares in the Company.
Rules governing the Merger
In accordance with Articles L. 236-1 and following of the French Commercial Code, the Merger would entail the transfer of all of
IGE+XAO’s assets and liabilities to Schneider Electric (a “transmission universelle du patrimoine”) and IGE+XAO would be dissolved
but not liquidated.
Merger appraisers
Finexsi, acting through Olivier Péronnet, and BM&A, acting through Pierre Béal, were appointed as merger appraisers (certified
public accountants appointed to assess M&A transactions) by order of the Presiding Judge of the Nanterre Commercial Court dated
December 14, 2021, with the task of examining the terms of the Merger and more specifically assessing the value of the contributions
in kind to be made and of any special privileges, as well as checking the accuracy of relative values attributed to IGE+XAO and
Schneider Electric shares and the fairness of the exchange ratio.
The merger appraisers’ reports which are available to shareholders on the Schneider Electric website (www.se.com) concluded that:
“The exchange ratio of 5 Schneider Electric shares for 3 IGE+XAO shares (...) agreed by the parties is fair.
The value of the contributions retained, amounting to €38,693,042, is not overvalued and, consequently, that the net assets contributed
are at least equal to the amount of the capital increase of the company receiving the contributions, plus the merger premium.”
Completion date and effective date
Completion of the Merger is subject to the following conditions precedent being met:
• completion of the sale of IGE+XAO shares to Schneider Electric;
• approval of the Merger by shareholders in IGE+XAO’s extraordinary shareholders’ general meeting (including approval of the
decision to dissolve but not liquidate IGE+XAO and of the transfer of all of IGE+XAO’s assets and liabilities to Schneider Electric);
and
• approval of the Merger by shareholders in Schneider Electric’s extraordinary shareholders’ general meeting (including approval
of the net carrying amount of net assets transferred, the exchange ratio and the capital increase to be carried out by Schneider
Electric as remuneration for the Merger).
The Merger and the resulting dissolution of IGE+XAO will take place on the day on which the last of the conditions precedent is fulfilled
(the “Completion Date”). That date must fall after the expiry of the creditor objection period and, unless the parties agree otherwise in
writing, at the latest on June 30, 2022. If the Merger does not take place by that date, the Draft Merger Agreement will be void.
In accordance with Article 236-4(2) of the French Commercial Code, it is intended that the Merger will have retroactive effect from
January 1, 2022 for accounting and tax purposes.
(2) Based on an Enterprise Value of €286 million.
(3) Based on its share capital comprising 1,304,381 shares, representing at most 2,256,580 voting rights at October 31, 2021.
(4) Based on the number of IGE+XAO shares held by Schneider Electric amounting to 1,094,733.
8.
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Financial statements used in the Merger and methods for valuing transfers
and determining the net assets transferred
The transfer values mentioned in the Draft Merger Agreement are based on the following financial statements:
• as regards Schneider Electric, the parent company financial statements for the year ended December 31, 2021 and the
consolidated financial statements for the year ended December 31, 2021, as finalized by the Board of Directors on February 16,
2022; and
• as regards IGE+XAO, the parent company financial statements for the year ended December 31, 2021 and the consolidated
financial statements for the year ended December 31, 2021, as finalized by the Board of Directors on February 16, 2022.
In accordance with French accounting standard-setter ANC’s regulation 2014-03 of June 5, 2014 relating to France’s general
accounting plan(5), the assets and liabilities transferred by IGE+XAO to Schneider Electric as part of the Merger will be recognized
in Schneider Electric’s financial statements at their net carrying amounts at December 31, 2021.
On that basis, the net carrying amount of the net assets transferred by IGE+XAO would amount to €38,693,042, determined as follows:
Total amount of assets transferred:
Total liabilities assumed:
Net assets transferred:
€39,650,407
€399,112
€39,251,295
Net carrying amount of the 4,434 IGE+XAO shares held in treasury by IGE+XAO at December 31, 2021:
€558,253
Giving net assets transferred to Schneider Electric (minus the net carrying amount of the 4,434 IGE+XAO shares held
in treasury by IGE+XAO at December 31, 2021):
€38,693,042
Exchange ratio and capital increase
The exchange ratio proposed to IGE+XAO and Schneider Electric shareholders is 5 (five) Schneider Electric shares for every 3 (three)
IGE+XAO shares.
In accordance with Article L. 236-3 of the French Commercial Code, there will be no exchange of either the IGE+XAO shares held by
Schneider Electric, i.e., 1,094,733 IGE+XAO shares at the signing date of the Draft Merger Agreement, nor of the IGE+XAO shares held
by IGE+XAO itself, i.e., 4,434 IGE+XAO shares at the signing date of the Draft Merger Agreement, which will be canceled by operation
of law after the Merger is completed.
In consideration for the assets transferred by IGE+XAO, Schneider Electric would carry out a capital increase, applying the exchange
ratio, in a nominal amount of €1,368,092, taking its share capital from €2,276,133,768 to €2,277,501,860, through the creation of
342,023 new shares, with par value of €4 each, allotted to IGE+XAO shareholders in proportion to their interest in the share capital,
with the exception of Schneider Electric (in respect of the IGE+XAO shares held by Schneider Electric) and IGE+XAO (in respect of
the IGE+XAO shares held by IGE+XAO itself).
However, it is provided in Article 7.2 of the Draft Merger Agreement that in the event of a change in the number of IGE+XAO shares held
by Schneider Electric and/or in the number of shares comprising the share capital of Schneider Electric that may impact the exchange
ratio, the number of Schneider Electric shares to be issued in consideration for the Merger and, correlatively, the nominal amount of the
resulting share capital increase would be automatically adjusted accordingly.
Thus, in view of the adjustment related to the acquisition by SEISAS of 34,629 IGE+XAO shares after the signing date of the Draft Merger
Agreement, the amount of the capital increase would amount, as of February 28, 2022, to €1,137,232 (i.e., 284,308 newly issued Schneider
Electric shares) and the amount of the merger premium would amount to €3,940,246 and to €260,018,556 for the merger loss.
The final amounts will be communicated on the date of the combined shareholders’ meeting.
Following this capital increase and on the basis of information available to the Company, the distribution of capital would be,
as of February 28, 2022, as follows:
Shareholder
Free Float
Sun Life Financial, Inc.
Blackrock, Inc.
Employees
Group-owned stock
Former shareholders of IGE+XAO
Total
Before the capital increase
resulting from the Merger
After the capital increase
resulting from the Merger
(resolution #18)
(resolution #18)
Number of
shares
% of capital
Number of
shares
460,869,416
39,681,766
35,703,751
20,321,627
12,456,882
0
80.992% 460,869,416
39,681,766
35,703,751
20,321,627
12,456,882
284,308
6.974%
6.274%
3.571%
2.189%
0.000%
569,033,442
100% 569,317,750
% of capital
80.951%
6.970%
6.271%
3.569%
2.188%
0.045%
100%
(5) As amended, particularly by regulation no. 2017-01 of May 5, 2017 and regulation no. 2019-06 of November 8, 2019.
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The valuation methods used and criteria adopted to value Schneider Electric and IGE+XAO in order to determine the exchange ratio
are set out in Schedule 7 to the Draft Merger Agreement.
Merger premium
The merger premium is the difference between (i) the proportion of the net carrying amount of the transferred net assets corresponding
to the IGE+XAO shares not held by Schneider Electric or IGE+XAO on the Completion Date, i.e., €6,108,214 at the signing date of the
Draft Merger Agreement, and (ii) the nominal amount of Schneider Electric’s capital increase, i.e., €1,368,092 at the signing date of the
Draft Merger Agreement.
The amount of the merger premium would consequently be €4,740,122 based on the number of shares making up IGE+XAO’s share
capital (excluding IGE+XAO shares held by IGE+XAO itself) at the signing date of the Draft Merger Agreement, it being specified that
this amount would be adjusted automatically in the event of a change in the number of IGE+XAO shares held by Schneider Electric
and/or in the number of shares comprising Schneider Electric’s share capital that may impact the exchange ratio.
The merger premium may be appropriated in any manner decided by shareholders in Schneider Electric’s shareholders’ general
meeting that is consistent with principles in force. In particular, you will be asked to authorize the Board of Directors to make any
appropriations from the merger premium with a view to (i) reconstituting, on the liabilities side of Schneider Electric’s balance sheet,
the regulated reserves and provisions existing on IGE+XAO’s balance sheet, (ii) deducting from the merger premium all fees,
duties and levies incurred or due with respect to the Merger, (iii) deducting from the merger premium all excess tax depreciation,
(iv) deducting from the merger premium the sums necessary to ensure that the statutory reserve is fully constituted, and (v) deducting
from the merger premium any liabilities relating to the transferred assets that were omitted or not disclosed.
Loss on canceled shares in the acquired company
The cancellation of IGE+XAO shares held by Schneider Electric will produce a loss equal to the difference between (i) the net carrying
amount of the IGE+XAO shares held by Schneider Electric on the Completion Date, i.e., €284,630,580 at the signing date of the Draft
Merger Agreement, and (ii) the portion of the net assets transferred by IGE+XAO that corresponds to the IGE+XAO shares held by
Schneider Electric on the Completion Date, i.e., €32,584,828 at the signing date of the Draft Merger Agreement.
8.
The amount of that loss would consequently be €252,045,752 based on the number of shares making up IGE+XAO’s share capital
(excluding IGE+XAO shares held by IGE+XAO itself) at the signing date of the Draft Merger Agreement, it being specified that this
amount would be adjusted automatically in the event of a change in the number of IGE+XAO shares held by Schneider Electric.
Since this is a technical merger loss which does not translate into a loss of value for the shareholders, it will be recognized on the asset
side of Schneider Electric’s balance sheet and appropriated according to French accounting and tax rules.
Double voting rights
IGE+XAO shareholders holding double voting rights before the Completion Date would retain those double voting rights within
Schneider Electric after the Merger.
Similarly, the holders of IGE+XAO registered shares who have not acquired double voting rights by the Completion Date would see,
after the Merger, the amount of time for which they have held their shares as of the Completion Date count towards the ownership
period required by Schneider Electric to qualify for double voting rights.
Consultation with staff representative bodies
The competent staff representative bodies of IGE+XAO and Schneider Electric have been consulted and have delivered the following
opinions:
•
favorable opinion from the social and economic committee of the economic and social unit to which IGE+XAO belongs on
December 8, 2021; and
favorable opinion from the social and economic committee of the economic and social unit to which SEISAS belongs on December
9, 2021.
•
In addition, the European committee of the group to which Schneider Electric belongs was informed of the Merger in a meeting on
December 14, 2021.
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8.1 Explanatory comments & draft resolutions submitted to the Annual Shareholders’ Meeting
Request for a declaration that a buyout offer is not required and request
for a dispensation from the obligation to make a mandatory public offer
In accordance with Article 236-6 of the AMF’s general regulation, Schneider Electric has asked the AMF for a declaration that
Schneider Electric is not required to make a buyout offer for shares in IGE+XAO.
In accordance with Articles 234-8 and 234-9(7) of the AMF’s general regulation, Schneider Electric has also asked the AMF for
dispensation from the obligation to make a mandatory public tender offer arising from the increase in Schneider Electric’s ownership
of IGE+XAO’s share capital and voting rights to above 30% as a result of the sale of IGE+XAO shares by SEISAS to Schneider Electric.
Creditor objections
The creditors of Schneider Electric and IGE+XAO whose claims predate the publication of the Draft Merger Agreement are able to
make objections for a period of 30 days from the final publication of the notice relating to the Draft Merger Agreement in France’s
official journal of legal notices (Bulletin des Annonces Légales Obligatoires).
In accordance with statutory and regulatory provisions in force, no objection by any creditor would have the effect of preventing the
Merger from going ahead.
Text of the eighteenth resolution
(Review and approval of the plan to merge IGE+XAO into Schneider Electric)
The Annual Shareholders’ Meeting, acting in accordance with the quorum and majority requirements for ordinary meetings, having heard:
•
•
the Board of Directors’ report;
the draft merger agreement including its appendices (the “Merger Agreement”), established as a private deed on February 17, 2022
between Schneider Electric and IGE+XAO, a public limited company (société anonyme) whose registered office is located at
16 boulevard Déodat de Séverac, 31770 Colomiers (France) and which is registered with the Toulouse trade and companies register
under number 338 514 987 (“IGE+XAO”) relating to the merger of IGE+XAO into Schneider Electric (the “Merger”);
the reports on the Merger terms and the value of the contributions prepared by Olivier Péronnet and Pierre Béal, the merger appraisers
appointed by order of the Presiding Judge of the Nanterre Commercial Court on December 14, 2021, in accordance with articles
L. 236-10 and L. 225-147 of the French Commercial Code; and
that the employee representative bodies of the Company and of IGE+XAO have been consulted and have delivered their opinion;
•
•
1. approves all the provisions of the Merger Agreement, pursuant to which it is agreed that IGE+XAO will transfer to the Company,
by way of merger by absorption, all its assets and liabilities, and in particular:
•
the valuation of the assets transferred, the liabilities assumed and the resulting net assets transferred at December 31, 2021,
with the net carrying amount of the net assets transferred by IGE+XAO (excluding the net carrying amount of IGE+XAO shares held
by IGE+XAO itself) to the Company amounting to €38,693,042;
the consideration for the contribution made as part of the Merger, based on an exchange ratio of five (5) shares in the Company for
every three (3) shares in IGE+XAO, corresponding to the issue of 342,023 new shares in the Company to be created through a capital
increase, subject to a possible adjustment as provided for in article 7.2 of the Merger Agreement;
the determination of the legal completion date of the Merger and the date on which IGE+XAO is wound up by operation of law when
the last of the conditions precedent stipulated in Article 8.1 of the Merger Agreement (“Merger Completion Date”) has been fulfilled;
the determination of the date on which the Merger will take effect from an accounting and tax point of view, i.e., January 1, 2022;
•
•
•
2. notes that:
•
•
•
•
in accordance with Article L. 236-3 of the French Commercial Code, there will be no exchange of either the IGE+XAO shares
held by the Company or the IGE+XAO shares held by IGE+XAO itself, which will be canceled by operation of law after the Merger
is completed, and note accordingly, based on a number of IGE+XAO shares held by the Company amounting to 1,094,733 and
a number of treasury shares held by IGE+XAO amounting to 4,434, and subject to the adjustments provided for in the Merger
Agreement that the Company will increase, on the Merger Completion Date, its share capital by €1,368,092 through the creation
of 342,023 new shares in the Company with a par value of €4 each;
IGE+XAO shareholders holding double voting rights before the Merger Completion Date will retain those double voting rights within
the Company after the Merger. Similarly, the holders of IGE+XAO registered shares who have not acquired double voting rights by
the Merger Completion Date will see, after the Merger, the amount of time for which they have held their shares as of the Merger
Completion Date count towards the ownership period required by the Company to qualify for double voting rights;
the new shares in the Company issued as remuneration for the Merger (i) will rank for dividends from the time they are created and
will be immediately fungible with existing shares in the Company, (ii) will confer the same rights and will be subject, from the time they
are created, to all provisions of the articles of association, laws and regulations in force and of shareholders’ general meetings and
(iii) will confer an entitlement to distributions of any kind decided after they are issued;
the new shares in the Company will be fully paid up and free of any security interest and, as soon as possible after they are issued,
admitted for trading on compartment A of Euronext Paris under the same identification number as the previously issued ordinary
shares that make up the Company’s share capital (ISIN FR0000121972);
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Shareholder Information
•
•
to the extent that IGE+XAO shareholders do not hold the required number of IGE+XAO shares to obtain a whole number of shares in
the Company by applying the Merger exchange ratio, the IGE+XAO shareholders concerned may make arrangements to buy or sell
any fractional shares in order to arrive at a whole number. However, if at the Merger Completion Date some IGE+XAO shareholders
do not hold a number of IGE+XAO shares that would enable them to obtain, applying the Merger exchange ratio, a whole number
of shares in the Company, the intermediaries mentioned in Article L. 542-1(2)-(7) of the French Monetary and Financial Code
(i) will sell on the Euronext Paris regulated market unallocated shares in the Company corresponding to the fractional entitlements
in accordance with Articles L. 228-6-1 and R. 228-12 of the French Commercial Code and (ii) will distribute the funds thus obtained
between the holders of fractional entitlements in proportion to their entitlements;
the difference between (i) the proportion of the net carrying amount of the net assets transferred by IGE+XAO, corresponding to the
IGE+XAO shares not held by the Company or IGE+XAO, i.e., €6,108,214 and (ii) the nominal amount of the Schneider Electric capital
increase, i.e., €1,368,092, will represent a merger premium in an amount of €4,740,122 that will be added to the Company’s liabilities
and to which all of the Company’s shareholders will have an entitlement; being specified that the amount of the merger premium shall
be adjusted automatically in the event of a modification of the number of IGE+XAO shares held by the Company and/or the number
of shares comprising the Schneider Electric’s share capital that may impact the exchange ratio;
3. confers all powers on the Board of Directors, including the power to subdelegate to all persons authorized by applicable statutory and
regulatory provisions and provisions of the articles of association, for the purpose of:
• confirming the fulfillment of the conditions precedent stipulated in Article 8.1 of the Merger Agreement and accordingly the final
completion of the Merger and the resulting capital increase;
• confirming the final number of shares of the Company to be issued in consideration of the Merger and, correlatively, the final amount
and completion of the capital increase on the Merger Completion Date, as well as the final amounts of the merger premium;
• making any appropriations from the merger premium with a view to (i) reconstituting, on the liabilities side of the Company’s balance
sheet, the regulated reserves and provisions existing on IGE+XAO’s balance sheet, (ii) deducting from the merger premium all fees,
duties and levies incurred or due with respect to the Merger, (iii) deducting from the merger premium all excess tax depreciation,
(iv) deducting from the merger premium the sums necessary to ensure that the statutory reserve is fully constituted, and (v) deducting
from the merger premium any liabilities relating to the transferred assets that were omitted or not disclosed;
taking all necessary steps to create the new shares in the Company and having them admitted for trading on Euronext Paris;
•
• selling any unallotted new ordinary shares in the Company that correspond to fractional entitlements; and
• more generally, make any findings, carry out any communications and complete any formalities that may be necessary for the
purpose of completing the Merger.
8.
19th resolution: Power for formalities
Explanatory statement
Finally, under the 19th resolution we request that you grant us the powers necessary to carry out the formalities.
Text of the nineteenth resolution
(Powers for formalities)
The Annual Shareholders’ Meeting confers full powers upon the bearer of a copy or excerpts of the minutes confirming these resolutions
for the purposes of carrying out all legal and administrative formalities.
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Chapter 8 – Annual Shareholders’ Meeting
8.2 Statutory auditors’ special reports
8.2.1 Statutory Auditors’ report on the authorization to grant free
shares existing or to be issued
To the Shareholders,
In our capacity as statutory auditors of your company and in compliance with Article L. 225-197-1 of the French Commercial Code (Code
de commerce), we hereby report on the proposed authorization to grant free shares, existing or to be issued, to the beneficiaries that the
board of directors shall determine among the employees or the corporate officers of the Company or of companies that are related to the
Company under the conditions provided for in Article L. 225-197-2 of the French Commercial Code (Code de commerce), an operation upon
which you are called to vote.
The number of shares already existing or to be issued that may be granted cannot represent more than 2% of the share capital existing
on the date of this shareholders’ meeting, with the number of shares that may be granted to the corporate officers not exceeding annually
0.03% of the existing total share capital, it being specified that the total number of shares allocated cannot exceed 10% of the share capital
on the date of the board of director’s decision to allocate them.
Your board of directors proposes that, on the basis of its report, it be authorized, for a period of thirty-six months from the date of this
shareholders’ meeting, to grant free shares existing or to be issued.
It is the responsibility of the board of directors to prepare a report on this operation with which it wishes to proceed. It is our responsibility
to give you our comments, if any, on the information that you have been provided about the proposed operation.
We have performed those procedures which we considered necessary to comply with the professional guidance issued by the French
national auditing body (Compagnie Nationale des Commissaires aux Comptes) for this type of engagement. These procedures consisted
in particular in verifying that the methods planned and set out in the board of directors’ report comply with the provisions of the law.
We have no comments to make on the information set out in the board of director’s report on the proposed authorization to grant free shares.
Paris-La Défense, March 11, 2022
The Statutory Auditors
French original signed by
MAZARS
Loïc Wallaert Mathieu Mougard
ERNST & YOUNG et Autres
Alexandre Resten
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8.2.2 Statutory auditors’ report on the issuance of shares
or securities giving access to capital reserved for members
of a company savings plan
To the Shareholders,
In our capacity as statutory auditors of your company and in compliance with Articles L. 228-92 and L. 225-135 et seq. of the French
Commercial Code (Code de commerce), we hereby report on the proposal to authorize the board of directors to decide whether to proceed
with an issue of shares or securities giving access to the share capital of the company with cancellation of preferential subscription rights,
reserved for participants in a company savings plan of the company and of the French or non-French companies affiliated with it, in
accordance with article L. 225-180 of the French Commercial Code (Code de commerce) and article L. 3344-1 of the French Labor code
(Code du travail), an operation upon which you are called to vote.
The maximum nominal amount of the increase in capital that may result from these issues is 2 % of the share capital on the date of this
shareholders’ meeting.
Your board of directors proposes that, on the basis of its report, it be authorized for a period of twenty-six months, to decide on whether
to proceed with issues and proposes to cancel your preferential subscription rights to the shares and securities to be issued. If applicable,
it shall determine the final conditions of these operations.
It is the responsibility of the board of directors to prepare a report in accordance with articles R. 225-113 et seq. of the French Commercial
code (Code de commerce). Our role is to report on the fairness of the financial information taken from the accounts, on the proposed
cancellation of preferential subscription rights, and on other information relating to these issues provided in this report.
We have performed those procedures which we considered necessary to comply with the professional guidance issued by the French
national auditing body (Compagnie Nationale des Commissaires aux Comptes) for this type of engagement. These procedures consisted
in verifying the information provided in the board of director’s report relating to this operation and the methods used to determine the issue
price of the equity securities to be issued.
8.
Subject to a subsequent examination of the conditions for the issues that would be decided, we have no matters to report as to the methods
used to determine the issue price of the equity securities to be issued provided in the board of director’s report.
As the final conditions for the issues have not yet been determined, we cannot report on these conditions and, consequently, on the
proposed cancellation of preferential subscription rights.
In accordance with article R. 225-116 of the French Commercial Code (Code de commerce), we will issue a supplementary report,
if necessary, when your board of directors has exercised this authorization, in the event of the issue of shares or securities giving access
to other equity securities and of the issue of securities giving access to equity securities to be issued.
Paris-La Défense, March 11, 2022
The Statutory Auditors
French original signed by
MAZARS
Loïc Wallaert Mathieu Mougard
ERNST & YOUNG et Autres
Alexandre Resten
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Chapter 8 – Annual Shareholders’ Meeting
8.2 Statutory auditors’ special reports
8.2.3 Statutory Auditors’ report on the issuance of shares or
securities reserved for a category of beneficiaries with cancellation
of preferential subscription rights
To the Shareholders,
In our capacity as Statutory auditors of your company and in compliance with articles L. 228-92 and L. 225-135 et seq. of the French
Commercial Code (Code de commerce), we hereby report on the proposal to delegate to the board of directors the competence to
decide on the issue of ordinary shares or securities giving access to the share capital of the company, with cancellation of preferential
subscription rights, reserved for (i) employees and officers of companies of the Schneider Electric Group affiliated with the Company under
the terms and conditions set forth in Article L. 225-180 of the French Commercial Code (Code de commerce) and Article L. 3344-1 of the
French Labour Code (Code du travail) and the head office of which is located outside France; (ii) and/or OPC mutual investment funds or
other entities, with or without legal personality, of employee shareholders invested in equity securities of the company, the unit holders or
shareholders of which consist of persons described in (i) of this paragraph; (iii) and/or any banking institution or affiliate or subsidiary of
such institution acting at the Company’s request for purposes of implementing and giving effect to a shareholder incentive or investment
or savings plan for the benefit of the persons described in (i) of this paragraph, an operation upon which you are called to vote.
The maximum nominal amount of the increase in capital that may result from these issues is 1% of the share capital on the date of this
shareholders’ meeting, it being specified that this amount shall be deducted from the ceiling set under the sixteenth resolution of this
annual shareholders’ meeting.
Your board of directors proposes that, on the basis of its report, it be authorized, for a period of eighteen months, to decide on whether to
proceed with an increase in capital and to cancel your preferential subscription rights to the ordinary shares and securities to be issued.
If applicable, it shall determine the final conditions of these operations.
It is the responsibility of the board of directors to prepare a report in accordance with articles R. 225-113 et seq. of the French Commercial
code (Code de commerce). Our role is to report on the fairness of the financial information taken from the accounts, on the proposed
cancellation of preferential subscription rights, and on other information relating to the share issues provided in this report.
We have performed those procedures which we considered necessary to comply with the professional guidance issued by the French
national auditing body (Compagnie Nationale des Commissaires aux Comptes) for this type of engagement. These procedures consisted
in verifying the information provided in the board of director’s report relating to these operations and the methods used to determine the
issue price of the equity securities to be issued.
Subject to a subsequent examination of the conditions for the issues that would be decided, we have no matters to report as to the methods
used to determine the issue price of the equity securities to be issued provided in the board of director’s report.
As the final conditions for the issues have not yet been determined, we cannot report on these conditions and, consequently, on the
proposed cancellation of preferential subscription rights.
In accordance with article R. 225-116 of the French Commercial Code (Code de commerce), we will issue a supplementary report,
if necessary, when your board of directors has exercised this authorization.
Paris-La Défense, March 11, 2022
The Statutory Auditors
French original signed by
MAZARS
Loïc Wallaert Mathieu Mougard
ERNST & YOUNG et Autres
Alexandre Resten
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Chapter 8 – Annual Shareholders’ Meeting
Shareholder Information
8.
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Chapter 9 – Persons responsible for the Universal
Registration Document and audit of the financial statements
We are the most local of global companies.
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Chapter 9 – Persons responsible for the Universal
Registration Document and audit of the financial statements
Shareholder Information
Persons responsible
for the Universal
Registration Document
and audit of the
financial statements
9
9.
Persons responsible for the
Universal Registration Document
Persons responsible for the audit
of the financial statements
Universal Registration Document
cross-reference table
Annual Financial Report
cross-reference table
Cross-reference table referring to the
elements of the Management Report
Cross-reference table referring
to the elements of the Corporate
Governance Report
Cross-reference table pursuant
to Articles L. 225-102-1, L. 22-10-36
and R. 225-105 (disclosure on
extra-financial performance), and
Article L. 225-102-4 (vigilance plan)
of the French Commercial Code
474
475
476
479
480
481
482
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Chapter 9 – Persons responsible for the Universal
Registration Document and audit of the financial statements
Persons responsible for the
Universal Registration Document
Attestation
I declare that the information contained in the Universal Registration Document is, to the best of my knowledge, in accordance with the facts
and contains no omission likely to affect its import.
I declare that, to the best of my knowledge, the financial statements have been prepared in accordance with applicable accounting standards
and that they present fairly the assets, financial position and results of the Company and the consolidated Group. To the best of my knowledge,
the business review accurately presents the changes in business, results and financial position of the Company and the consolidated Group
and describes their principal risks and contingencies.
March 29, 2022
Chairman and CEO of Schneider Electric SE
Jean-Pascal Tricoire
Pursuant to Article 19 of Regulation (EU) 2017/1129 of the European Parliament and of the Council, the following information is
incorporated by reference in the present Universal Registration Document:
•
•
•
•
•
•
the consolidated financial statements and corresponding auditors’ reports provided in Chapter 5 of the Universal Registration
Document for the year ended December 31, 2019, registered with the Autorité des Marchés Financiers (AMF) under number
D.20-0137 on March 17, 2020;
the consolidated financial statements and corresponding auditors’ reports provided in Chapter 4 of the Universal Registration
Document for the year ended December 31, 2020, registered with the AMF under number D.21-0178 on March 23, 2021;
the parent company financial statements and corresponding auditors’ reports provided in Chapter 6 of the Universal Registration
Document for the year ended December 31, 2019, registered with the AMF under number D.20-0137 on March 17, 2020;
the parent company financial statements and corresponding auditors’ reports provided in Chapter 5 of the Universal Registration
Document for the year ended December 31, 2020, registered with the AMF under number D.21-0178 on March 23, 2021;
the management report provided in Chapter 3 of the Universal Registration Document for the year ended December 31, 2019,
registered with the AMF under number D.20-0137 on March 17, 2020;
the management report provided in the Universal Registration Document for the year ended December 31, 2020, registered with
the AMF under number D.21-0178 on March 23, 2021;
• Passages not incorporated in these documents are either irrelevant for the investor or covered in another section of the
Universal Registration Document.
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Chapter 9 – Persons responsible for the Universal
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Shareholder Information
Persons responsible for the
audit of the financial statements
Statutory auditors
Ernst & Young et Autres Tour First – 1, place des Saisons – 92037 Paris-la-Défense-Cedex
Represented by Alexandre Resten
Mazars Tour Exaltis – 61, rue Henri-Regnault – 92400 Courbevoie
Represented by Loïc Wallaert and Mathieu Mougard
Alternate auditors
Auditex
Thierry Blanchetier
Date
appointed
Appointment
expires
1992
2004
2010
2010
2022
2022
2022
2022
Ernst & Young et Autres and Mazars are members of the Auditors’ Regional Company of “Versailles et du Centre”.
9.
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Chapter 9 – Persons responsible for the Universal
Registration Document and audit of the financial statements
Universal Registration Document
cross-reference table
To facilitate the reading of the Annual Report, filed as Universal Registration Document, the following table allows the identification
of the main headings required by Regulation (EU) 2017/1129 of the European Parliament and of the Council.
Information required under Appendix 1 and 2 of Commission Delegated Regulation (EU) 2019/980
Corresponding sections and chapters of
the Universal Registration Document
Page no.
1.
1.1
1.2
1.3
1.4
1.5
2.
2.1
2.2
3.
4.
4.1
4.2
4.3
4.4
5.
5.1
PERSONS RESPONSIBLE, THIRD PARTY INFORMATION,
EXPERTS’ REPORTS AND COMPETENT AUTHORITY APPROVAL
Identity of the persons responsible for the information
Declaration by the persons responsible
Statement of experts and declaration of interest
Certification on information provided by third parties
Declaration of deposit to the competent authority
STATUTORY AUDITORS
Names and addresses
Resignation or departure of statutory auditors
RISK FACTORS
INFORMATION ABOUT THE ISSUER
Legal and business name
Place of registration and registration number
Issuer’s incorporation date and length of life
Domicile, legal form, applicable legislation, country of incorporation,
registered office’s address and telephone number
BUSINESS OVERVIEW
Principal activities
5.1.1
Nature of transactions made by the Company and its principal activities
5.1.2 New products/services launched on the market
Principal markets
Exceptional events
Strategy and objectives
5.2
5.3
5.4
5.5
5.6
5.7
Chapter 9
Chapter 9
N/A
N/A
Table of contents
Chapter 9
474
474
N/A
N/A
1
475
Chapter 8, section 8.1
Chapter 3, section 3.4
450-451
254-264
Chapter 7, section 7.3
Chapter 7, section 7.3
Chapter 7, section 7.3
Chapter 7, section 7.3
Integrated Report
Integrated Report
Integrated Report
Chapter 3, section 3.4
439
439
439
439
15-23
15-19
14-19
264
Integrated Report
Chapter 1, section 1.3
2-3, 22-23
50-55
Dependence on patents, licenses, contracts or new manufacturing processes
Chapter 3, section 3.4
259, 262
Competitive position
Investments
N/A
N/A
5.7.1
Principle investments realized during each year of the period covered by the
historical financial information until the date of the Universal Registration Document
Chapter 5, section 5.7
402-403
5.7.2 Major investments planned by the issuer and for which the management bodies
N/A
N/A
have already taken a firm commitment
5.7.3
Information on significant shareholdings in companies
Chapter 5, section 5.5
390-396
5.7.4
Environmental issues potentially affecting the use of the tangible fixed assets
N/A
N/A
6.
6.1
ORGANIZATIONAL STRUCTURE
Brief description of the Group
6.2
List of main subsidiaries
Integrated Report
Chapter 7, section 7.3
20-21
439
Chapter 5, section 5.5
390-396
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Chapter 9 – Persons responsible for the Universal
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Shareholder Information
Information required under Appendix 1 and 2 of Commission Delegated Regulation (EU) 2019/980
Corresponding sections and chapters of
the Universal Registration Document
Page no.
7.
7.1
OPERATING AND FINANCIAL REVIEW
Financial condition
7.1.1
Evolution and result of activities
Chapter 5, section 5.7
402-408
7.1.2
Future expected development of the activities and R&D activities
Integrated Report
26-27
7.2
Operating results
7.2.1
Significant factors affecting the income from operations
7.2.2
Reasons for material changes in net sales or revenues
8.
8.1
CASH AND CAPITAL
Information concerning capital resources (short and long-term)
8.2
Sources, amounts and description of cash flows
8.3
Information on borrowing conditions and financing structure
Restrictions on use of capital resources that have materially affected,
or could materially affect, directly or indirectly, the operations
Expected sources of financing
REGULATORY ENVIRONMENT
TREND INFORMATION
Integrated Report
Chapter 5, section 5.7
Integrated Report
Chapter 5, section 5.7
Chapter 5, section 5.4
Chapter 5, section 5.5
Chapter 5, section 5.2
Chapter 5, section 5.7
Chapter 5, section 5.5
Chapter 6, section 6.3
Chapter 3, section 3.4
9
402-406
9
404-405
349
374-377
346
407-408
381-388
420-421
260
Integrated Report
8, 26-27
N/A
N/A
Main trends in production, sales and inventory, and in costs and selling prices,
since the end of the last fiscal year to the date of the Universal Registration
Document
Known trends, uncertainties, demands, commitments or events that might have
a material effect on prospects for the current fiscal year
Integrated Report
Integrated Report
26
26
9.
PROFIT FORECASTS OR ESTIMATES
N/A
N/A
ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND
SENIOR MANAGEMENT
Information concerning members of the administrative and management bodies
(list of mandates performed during the last five years)
12.2
Conflicts of interest in administrative and management bodies
REMUNERATION AND BENEFITS
Remuneration paid and benefits in kind
Amounts of provisions booked or otherwise recognized for the payment of
pensions, retirement annuities or other benefits
BOARD PRACTICES
Expiry date of current terms of office
Service contracts with members of administrative bodies
Information about the Audit Committee and the Remuneration Committee
Integrated Report
Chapter 4, section 4.1
Chapter 4, section 4.1
28-29
270-287
284
Chapter 4, section 4.2
Chapter 5, section 5.5
311-340
378-380
Chapter 4, section 4.1
270-280
Chapter 4, section 4.1
284
Chapter 4, section 4.1 269, 294-295,
301-304
Declaration – corporate governance applicable in the home country of the issuer
Chapter 4, section 4.1
268
Potential material impacts on corporate governance
Chapter 4, section 4.1
286-287
EMPLOYEES
15.1
Number of employees
15.2
Profit sharing and stock options
15.3
Agreements for employees’ equity stake in the capital of the issuer
Chapter 2 section 2.8
Chapter 5 section 5.5
Chapter 4, section 4.2
Chapter 7, section 7.1
Chapter 7, section 7.1
232-239
388-389
337-340
435
434-435
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8.4
8.5
9.
10.
10.1
10.2
11.
12.
12.1
13.
13.1
13.2
14.
14.1
14.2
14.3
14.4
14.5
15.
Chapter 9 – Persons responsible for the Universal
Registration Document and audit of the financial statements
Universal Registration Document cross-reference table
Information required under Appendix 1 and 2 of Commission Delegated Regulation (EU) 2019/980
Corresponding sections and chapters of
the Universal Registration Document
Page no.
MAJOR SHAREHOLDERS
Shareholders owning more than 5% of the share capital or voting rights
Existence of specific voting rights
Control of the Company
Agreement known to the Company which could lead to a change in control if
implemented
Chapter 7, section 7.1
Chapter 7, section 7.1
Chapter 7, section 7.1
Chapter 7, section 7.1
RELATED PARTY TRANSACTIONS
Chapter 5, section 5.5
FINANCIAL INFORMATION CONCERNING THE ISSUER’S ASSETS AND
LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES
16.
16.1
16.2
16.3
16.4
17.
18.
18.1
18.2
18.3
Historical financial information
Interim financial information
Auditing of historical annual financial information
18.3.1 Statement of audit of historical financial information
18.3.2 Other information contained in the Universal Registration Document that has been
audited by the auditors
18.3.3 Financial data contained in the Universal Registration Document and not extracted
from the issuer’s audited financial statement
18.4
18.5
Pro forma financial information
Dividend policy
18.5.1 Dividend distribution policy
18.5.2 Dividend amount per share for each year of the fiscal year covered
by the historical financial information
18.6
Legal and arbitration proceedings
18.7
Significant change in the financial or business situation
19.
ADDITIONAL INFORMATION
19.1
Share capital
19.1.1 Amount of issued capital
19.1.2 Shares not representing capital
19.1.3 Treasury shares
434
434
434
434
389
430
N/A
397
424
224-225
310
468-470
N/A
N/A
Chapter 6, section 6.7
N/A
Chapter 5, section 5.6
Chapter 6, section 6.4
Chapter 2, section 2.7
Chapter 4, section 4.1
Chapter 8, section 8.2
N/A
N/A
Integrated Report
Chapter 8, section 8.1
8-9
449-450
Chapter 5, section 5.5
Chapter 6, section 6.7
Chapter 3, section 3.4
Chapter 5, section 5.5
Chapter 6, section 6.3
N/A
Chapter 7, section 7.2
Chapter 7, section 7.2
Chapter 5, section 5.5
Chapter 6, section 6.3
Chapter 6, section 6.5
375
430
259
389
423
N/A
436
436
377
419
427
19.1.4 Convertible securities, exchangeable securities or securities with warrants
Chapter 5, section 5.5
Chapter 6, section 6.3
375, 382-383
420
19.1.5 Terms of any acquisition right and/or commitment in respect of authorized
Chapter 4, section 4.2
337-340
but non-issued capital
19.1.6 Information about the capital of any group member which is under option or
Chapter 7, section 7.2
437
agreed
conditionally or unconditionally to be put under option
19.1.7 History of the share capital
19.2
Articles of incorporation and bylaws
19.2.1 Corporate purpose
Chapter 7, section 7.1
Chapter 7, section 7.2
Integrated Report
Chapter 7, section 7.3
434
437
2
439
19.2.2 Rights, privileges and restrictions attached to shares
Chapter 7, section 7.4
440-442
19.2.3 Actions necessary to change the rights of shareholders
20.
21.
MATERIAL CONTRACTS
DOCUMENTS AVAILABLE
Chapter 7, section 7.4
N/A
Chapter 7, section 7.3
Chapter 7, section 7.6
440
N/A
439
445
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Chapter 9 – Persons responsible for the Universal
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Shareholder Information
Annual Financial Report cross-reference table
This Universal Registration Document includes all the information of the Annual Financial Report as mentioned in Articles L. 451-1-2 of the
French Commercial Code and 222-3 of the AMF’s General Regulations.
Annual Financial Report
STATEMENT OF THE PERSON RESPONSIBLE FOR THE
UNIVERSAL REGISTRATION DOCUMENT
MANAGEMENT REPORT
Corresponding sections and chapters
of the Universal Registration Document
Chapter 9
Analysis of results, financial conditions, key performance indicators (financial and non-
financial), parent company and consolidated Group risks, climate change risks, internal
control and risk management procedures for the Company and its consolidated subsidiaries
(Articles L. 225-100-1 and L. 22-10-35 of the French Commercial Code)
Information about share buybacks (Article L. 225-211, paragraph 2 of the French
Commercial Code)
FINANCIAL STATEMENTS
Statutory financial statements
Statutory auditors’ report on the statutory financial statements
Consolidated financial statements
Statutory auditors’ report on the consolidated financial statements
Integrated Report
Chapter 3, section 3.3
Chapter 3, section 3.4
Chapter 5, section 5.7
Chapter 7, section 7.2
Chapter 6
Chapter 6, section 6.4
Chapter 5
Chapter 5, section 5.6
Page no.
474
4, 9, 12
249-253
254-264
402-408
438
412-423
424-426
344-396
397-401
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Chapter 9 – Persons responsible for the Universal
Registration Document and audit of the financial statements
Cross-reference table referring to the
elements of the Management Report
This Universal Registration Document includes all the information of the Management Report required by Articles L. 225-100 et seq.,
L. 232-1, I and II, and R. 225-102 et seq. of the French Commercial Code.
Information in the Management Report
Objective and exhaustive analysis of the business, results trend and financial situation
including the debt situation of the Group during the fiscal year (Articles L. 225-100-1
and L. 233-6 of the French Commercial Code)
Report on the subsidiaries’ activity and results (Article L. 233-6, paragraph 2 of the
French Commercial Code)
Analysis of the Company’s situation during the last fiscal year, its expected development
and the important events occurred since the closing date (Article L. 232-1-II of the
French Commercial Code)
Activities in research and development (Article L. 233-26 and L. 232-1-II of the
French Commercial Code)
Non-financial key performance indicators (environmental information) (Articles L. 225-100-1,
L. 225-102-1, V. and R. 225-105 of the French Commercial Code)
Corresponding sections and Chapters
of the Universal Registration Document
Integrated Report
Integrated Report
Chapter 5, section 5.5, note 29
Chapter 6, section 6.5
Integrated Report
Chapter 3, section 3.4
Chapter 5, section 5.5
Chapter 6, section 6.3
Integrated Report
Chapter 5, section 5.5
Chapter 2, section 2.8.1
Page No.
3-9
3-9
390-396
427
26, 27
264
389
423
14-19
354, 365
226-231
Non-financial key performance indicators (social information) (Article L. 225-100-1,
L. 225-102-1, V. and R. 225-104 of the French Commercial Code)
Chapter 2, section 2.8.2
232-239
Financial key performance indicators (Article L. 225-100-1 of the French Commercial Code)
Integrated Report
4, 9
Financial risks linked to climate change and what has been implemented to reduce them
(Article L. 22-10-35 of the French Commercial Code)
Characteristics of internal control procedures and risk management (Article L. 22-10-35
of the French Commercial Code)
Chapter 2, section 2.3.1
128,129
Chapter 3, sections 3.1-3.3
244-253
Main risks and uncertainties (Article L. 225-100-1 of the French Commercial Code)
Chapter 3, section 3.4
254-264
Information on the risks in the event of interest rate fluctuation, exchange rate fluctuation
and market price fluctuation (Article L. 225-100-1 of the French Commercial Code)
Transactions executed by the Executive Officers on the shares of the Company
(Article L. 621-18-2 of the Monetary and Financial Code)
Retention requirement by the Executive Directors of free shares and/or stock options
which were awarded (Article L. 225-197-1-II paragraph 4 and L. 225-185 paragraph 4
of the French Commercial Code)
Stock Options awarded to employees and Executive Officers (Article L. 225-197-1 and
L. 225-185 of the French Commercial Code)
Chapter 3, section 3.4
Chapter 4, section 4.1.1
260
285
Chapter 4, sections 4.1.1, 4.2.5
286, 337-340
N/A
N/A
Shares held by employees (Article L. 225-102 of the French Commercial Code)
Chapter 7, section 7.1.1
434, 435
Items of calculation and results of adjustment in case of an issuance of securities giving
access to capital (Article L. 225-181, paragraph 2 of the French Commercial Code)
Distribution of share capital and information on the crossing thresholds declared to the
Company (Article L. 233-13 of the French Commercial Code)
Amount of dividends and distribution for the last three fiscal years (Article 243 bis of the
French Tax Code)
Parent company’s results over the last five fiscal years (Article R. 225-102 of the
French Commercial Code) and comments on the results
Information on payment terms (Article L. 441-14 of the French Commercial Code)
Information on the number of treasury shares on transactions executed during the
fiscal year (Article L. 225-211, paragraph 2 of the French Commercial Code)
Information on participations acquired in the share capital of French companies
(Article L. 233-6 of the French Commercial Code)
Chapter 7, section 7.2.2
436
Chapter 7, sections 7.1.1, 7.1.5
434, 441
Chapter 8, section 8.1
Chapter 6, section 6.7
Chapter 6, section 6.1
Chapter 7, section 7.1.1
N/A
List of main consolidated subsidiaries
Chapter 5, section 5.5
Additional tax information (Articles 34-9 and 223 quater and quinquies of the French Tax Code)
Chapter 8, section 8.1.1
Policy for preventing technological accidents risks, including the Company’s ability to cover
its responsibility and means to manage the indemnification of victims (Article L. 225-102-2
of the French Commercial Code)
N/A
450
430
421
434
N/A
390
449
N/A
480
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Chapter 9 – Persons responsible for the Universal
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Shareholder Information
Cross-reference table referring to the
elements of the Corporate Governance Report
This Universal Registration Document includes all the information of the Corporate Governance Report required by Articles L. 225-37-2
et seq. of the French Commercial Code.
Information in the Corporate Governance Report
Remuneration policy for Corporate Officers (Article L. 22-10-8, I, paragraph 2 of the
French Commercial Code)
Directors’ compensation of any kind (Article L. 22-10-9, I, 1° of the French Commercial
Code)
Relative proportion of fixed and variable compensation (Article L. 22-10-9, I, 2° of the
French Commercial Code)
Chapter 4, section 4.2
Chapter 4, section 4.2.3.2
Chapter 4, section 4.2.2.1
Use of the possibility of claiming back variable remuneration (Article L. 22-10-9, I, 3° of the
French Commercial Code)
Chapter 4, section 4.2.3.1
311
335
313
328
Corresponding sections and chapters
of the Universal Registration Document
Page no.
Directors’ commitments of any kind (Article L. 22-10-9, I, 4° of the French Commercial Code)
Chapter 4, sections 4.1.1.4, 4.1.7
284, 310
Remuneration paid or granted by an undertaking included in the scope of consolidation
(Article L. 22-10-9, I, 5° of the French Commercial Code)
Chapter 4, section 4.2.2
Ratios between executive compensation and the compensation of employees other
than Corporate Officers (Article L. 22-10-9, I, 6° of the French Commercial Code)
Evolution of compensation, Company performance, average compensation of
non-executive employees and ratios referred to above (Article L. 22-10-9, I, 7°
of the French Commercial Code)
Explanation of the way in which the total compensation complies with the adopted
compensation policy (Article L. 22-10-9, I, 8° of the French Commercial Code)
Manner in which the vote of the last general shareholders’ meeting provided for
in Article L. 225-100 of the French Commercial Code has been taken into account
(Article L. 22-10-9, I, 9° of the French Commercial Code)
Chapter 4, section 4.2.2.4
Chapter 4, section 4.2.2.4
Chapter 4, section 4.2
Chapter 4, section 4.2.2
Any deviation from the procedure for implementing the remuneration policy and any waiver
applied (Article L. 22-10-9, I, 10° of the French Commercial Code)
Chapter 4, section 4.2
Application of the provisions of the second paragraph of Article L. 225-45 of the French
Commercial Code relating to the suspension of the remuneration of the Board of Directors
in the event of non-compliance with the parity rules (Article L. 22-10-9, I, 11° of the French
Commercial Code)
Chapter 4, section 4.2.2.3
313
323
324
311
313
311
322
9.
List of directorships or functions performed by each Director during the last fiscal year
(Articles L. 225-37-4, 1° and L. 22-10-10 of the French Commercial Code)
Chapter 4, section 4.1.1.2
272-280
Regulated agreements (Articles L. 225-37-4, 2° and L. 22-10-10 of the French Commercial
Code)
Chapter 4, section 4.1.7
310
Table of the delegations granted to the Board of Directors by the shareholders’ meetings
and the use of those delegations (Articles L. 225-37-4, 3° and L. 22-10-10 of the French
Commercial Code)
Chapter 7, section 7.2.3
436, 437
Distinction made or not between the Chief executive officer and the Chairman of the Board
of Directors (Articles L. 225-37-4, 4° and L. 22-10-10 of the French Commercial Code)
Chapter 4, section 4.1.2.1
287
Board of Directors’ composition, condition for preparing and organizing the work of the
Board (Article L. 22-10-10, 1° of the French Commercial Code)
Application of the balanced representation of women and men at the Board of Directors
level (Article L. 22-10-10, 2° of the French Commercial Code)
Chapter 4, sections 4.1.1-4.1.2
270-299
Chapter 4, sections 4.1.1 269, 281, 287
Limits to the powers of the Chief executive officer (Article L. 22-10-10, 3° of the
French Commercial Code)
Corporate Governance Code to which the Company adheres, including comply or
explain detail (Article L. 22-10-10, 4° of the French Commercial Code)
Participation to Shareholders meeting by shareholders (Article L. 22-10-10, 5° of the
French Commercial Code)
Assessment process of regulated agreements (Article L. 22-10-10, 6° of the
French Commercial Code)
Factors likely to affect the outcome of a takeover bid (Article L. 22-10-11 of the
French Commercial Code)
Chapter 4, section 4.1.2.1
Chapter 4
Chapter 7, section 7.4.1
Chapter 4, section 4.1.7.2
Chapter 7, section 7.4.8
287
268
440
310
442
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Chapter 9 – Persons responsible for the Universal
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Cross-reference table pursuant to Articles
L. 225-102-1, L. 22-10-36 and R. 225-105
(disclosure on extra-financial performance),
and Article L. 225-102-4 (vigilance plan)
of the French Commercial Code
This Universal Registration Document includes all the information required by Articles L. 225-102-1, L. 22-10-36 and R. 225-105 (disclosure
on extra-financial performance), and Article L. 225-102-4 (vigilance plan) of the French Commercial Code.
Corresponding Sections and Chapters
of the Universal Registration Document
Page No.
ARTICLES L. 225-102-1 AND R. 225-105
Company business model
Main CSR risks linked to the Company’s business
SOCIAL INFORMATION
Employment
Chapter 1, section 2
Chapter 2, section 1.6
Total workforce and breakdown of employees by gender, age and geographical region
Chapter 2, section 8.2
Hiring and Layoffs
Compensation and its evolution
Work organization
Worktime organization
Absenteeism
Labor relations
Chapter 2, section 8.2
Chapter 2, section 5.4
Chapter 2, section 8.2
Chapter 2, section 8.2
46
81
233
235
182
233
233
Organization of concertation, notably information and consultation procedures
for personnel and negotiation with the latter
Summary of collective bargaining agreements signed with trade unions or workers’
representatives regarding occupational health and safety
Chapter 2, sections 5.5 and 8.2
185 and 236
Chapter 2, sections 5.5 and 8.2
185 and 236
Health and safety
Health and safety conditions
Chapter 2, sections 2.8 and 8.2
109 and 237
Work accidents (including frequency and severity rates) and occupational illnesses
Chapter 2, section 8.2
237
Training
Training policies implemented
Total number of training hours
Equal opportunities
Measures regarding gender equality
Measures regarding employment and integration of disabled people
Anti-discrimination policy
ENVIRONMENTAL INFORMATION
General policy regarding environmental matters
Organization of the Company to take into account environmental matters, and,
when appropriate, assessment and certification policies regarding environment
Means devoted to the prevention of environmental risks and pollution
Amount of provisions and guarantees for environment-related risks, provided that
this information would not be likely to cause the Company serious damage within
the framework of ongoing litigation
Pollution
Chapter 2, sections 5.3 and 8.2
179 and 238
Chapter 2, section 8.2
Chapter 2, section 5.2
Chapter 2, section 5.2
Chapter 2, section 5.2
Chapter 2, section 3.1
Chapter 2, section 4.2.3
Chapter 5, section 1.21
238
171
173
170
128
151
359
Measures for prevention, reduction or repair of emissions in the air, water and ground
with serious environmental effects
Chapter 2, sections 4.2 and 8.1
155 and 228
Consideration of any form of pollution specific to an activity, particularly noise
and light pollution
Chapter 2, sections 4.2 and 8.1
155 and 228
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Shareholder Information
Corresponding Sections and Chapters
of the Universal Registration Document
Page No.
Circular economy
Waste prevention and management
Measures relative to waste prevention, recycling, reuse, other forms of recovery
and disposal
Chapter 2, section 4.3
162
Measures for combatting food waste
Sustainable usage of resources
N/A
Water consumption and supply adapted to local constraints
Chapter 2, sections 4.2 and 8.1
153 and 228
Consumption of raw materials and measures implemented for more efficient use
Chapter 2, section 4.3
156
Energy consumption and measures implemented to improve energy efficiency
and the use of renewable energy
Chapter 2, sections 3.3 and 8.1
134 and 229
Land use
Climate change
N/A
Significant sources of greenhouse gas emissions generated as a result of the Company’s
activities, particularly through the use of the goods and services it produces
Chapter 2, sections 3.2 and 8.1
130 and 230
Measures taken to adapt to the consequences of climate change
Chapter 2, section 3.2
133
Reduction targets set voluntarily in the medium and long term to reduce GHG emissions
and means implemented for this purpose
Chapter 2, sections 3.2 and 8.1
130 and 230
Biodiversity protection
Measures implemented to protect or develop biodiversity
Chapter 2, sections 4.1 and 8.1
146 and 228
SOCIETAL INFORMATION
Societal commitments regarding sustainable development
Impact regarding regional employment and development
Impact on local and neighboring communities
Relations with stakeholders and conditions surrounding dialogue with them
Partnership or sponsorship activities
Subcontracting and suppliers
Chapter 2, section 6.4
Chapter 2, section 2.12
Chapter 2, section 1.5
Chapter 2, section 6.1
Consideration within the Company’s purchasing policy of social and environmental issues
Chapter 2, section 2.2.10
Consideration within relations with subcontractors and suppliers of their social and
environmental responsibility
Chapter 2, section 2.2.10
Fair operating practices
Measures implemented to promote consumer health and safety
Chapter 2, section 2.5
COMPLEMENTARY INFORMATION
Actions implemented to prevent any kind of corruption
Chapter 2, section 2.3
Actions implemented to promote human rights
Promotion and respect with the provisions of the International Labour Organization’s
fundamental conventions:
regarding the freedom of association and the right to collective bargaining
regarding elimination of discrimination in respect of employment and occupation
regarding elimination of all forms of forced or compulsory labor
regarding effective abolition of child labor
Other actions implemented to promote human rights
Fight against food insecurity, respect for animal welfare and a responsible, fair,
and sustainable food system
ARTICLE L. 22-10-36
Chapter 2, section 5.5
Chapter 2, section 5.2
Chapter 2, section 2.7
Chapter 2, section 2.7
Chapter 2, section 2.7
N/A
Actions implemented to prevent tax evasion
Chapter 2, section 2.4
ARTICLE L. 225-102-4
Vigilance plan
Chapter 2, section 2.9
9.
200
124
75
190
116
116
102
101
185
170
106
106
106
102
112
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Financial Calendar
Investor Relations
May 5, 2022
Shareholders’ Meeting
Financial Releases
February 17, 2022 2021 Annual Results
April 27, 2022
July 28, 2022
October 27, 2022 Q3 2022 Revenues
Q1 2022 Revenues
2022 Half Year Results
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Investor Relations
Amit Bhalla
Tel.: +44(0)20 7592 8216
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Jenny Chan
Tel.: +852 96 213 180
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Schneider Electric SE
Headquarters:
35, rue Joseph Monier - CS 30323
F-92506 Rueil-Malmaison Cedex (France)
Tel.: +33 (0) 1 41 29 70 00
Fax: +33 (0) 1 41 29 71 00
Incorporated in France,
governed by a board of directors with a share
capital of EUR 2,276,133,768
Registered in Nanterre, R.C.S. 542 048 574
Siret no.; 542 048 574 01791
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its subsidiaries and affiliated companies. All other trademarks are the property of their respective owners. 998-21811496